Release Date: July 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue increased by 15% year over year to EUR271 million.
- Operating income increased by 18% to EUR64 million, marking the 10th consecutive quarter of growth.
- Active customers increased by 25% and deposits increased by 15% year over year.
- Betsson AB (FRA:V720, Financial) obtained local licenses in Peru, expanding its market presence.
- The company received an AAA rating from Morgan Stanley Capital International for its ESG efforts.
Negative Points
- Increased revenue from locally regulated markets led to higher gaming taxes, impacting gross profit margin.
- The Nordic region saw a decline in revenue due to lower activity in the casino product.
- Marketing expenses remained high, constituting 16% of B2C revenue and 22% when including affiliate marketing.
- Personnel expenses increased due to higher employee numbers, salary revisions, and geographic expansion.
- The regulatory environment remains uncertain, with potential changes in various markets affecting operations.
Q & A Highlights
Q: Can you comment on the current regulatory environment and its impact on Betsson?
A: Pontus Lindwall, CEO: The regulatory environment is always changing, and we may see swings back in the future. Some regions may adjust overly stringent regulations to maintain the benefits of regulation.
Q: Any updates on capital allocation policies, especially regarding M&A and share buybacks?
A: Pontus Lindwall, CEO: M&A remains a priority, but share buybacks and dividends are also considered. Martin Ohman, CFO: We are open to leveraging if necessary for the right opportunities.
Q: How will the sponsorship deal with Inter impact your marketing spend?
A: Pontus Lindwall, CEO: Sponsoring Inter is significant but aligns with our historical marketing spend as a percentage of revenue. We do not expect major deviations from past figures.
Q: Can you elaborate on the strong start to Q3 and the impact of recent football tournaments?
A: Pontus Lindwall, CEO: The EUROs and Copa America contributed to high activity in early Q3. We expect a typical pattern with a brief calm period before major leagues resume.
Q: What drove the growth in the Latin America region, particularly in Argentina?
A: Pontus Lindwall, CEO: We have obtained licenses in three regions in Argentina, which is driving growth. We continue to focus on expanding in Latin America.
Q: Can you explain the difference between the reported 15% revenue increase and the 38% organic growth?
A: Martin Ohman, CFO: The difference is due to FX implications and acquired growth. Detailed breakdowns are provided in our reports, with significant impact from currencies like the Argentine peso.
Q: Why was the tax rate in Q2 higher than the 15% required by Pillar 2 regulations?
A: Martin Ohman, CFO: The higher tax rate is due to revenue from countries with local taxes exceeding 15%, such as Belgium. This level is indicative of future tax rates.
Q: What is the outlook for active player growth following the recent football tournaments?
A: Pontus Lindwall, CEO: We expect a similar pattern to previous tournaments, with efforts to retain active players into the next quarter.
Q: Can you comment on the B2B revenue growth slowdown in the quarter?
A: Pontus Lindwall, CEO: B2B revenues fluctuate over time. We are pleased with overall growth and remain focused on both B2B and B2C diversification.
Q: Are there any specific markets where you plan to reduce marketing spend due to the Inter sponsorship?
A: Pontus Lindwall, CEO: We cannot comment on specific markets or channels for reduced marketing spend.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
