Chile and Peru as well as existing operations in Colombia, Panama, and Argentina are all being targeted as potential key expansion points across the Latin American region, noted Aviv Sher, CEO of Codere Online, at the recent SBC Summit Barcelona.
Amid the sweltering heat of the Catalan capital, Sher set time aside to address a region that has been a hot topic for quite some time, in addition to elaborating on projections shared during the group’s Q2 report.
This saw Mexican operations surpass net gaming revenue of its Spanish counterpart for the first time, with much confidence also elaborated upon that the company expects to be in the black in 2024.
LatAm: the land of opportunity
The first stop of Sher’s whistle stop tour of continent-wide promise first landed in Argentina. With a licence not yet possessed by the operator in the province of Buenos Aires, this was logically cited as the first key step, however, should this be secured, confidence was projected that the country could become a very relevant market for Codere Online.
Should that not be the case, Codere Online will shift its immediate focus back to its dominant region, as well as Colombia, where maintained investments would be witnessed.
“Then we will continue to nourish Panama. In Chile right now the regulation is not clear. So we are basically sitting on the fence and waiting to see what’s happening,” Sher noted.
“Peru, as it moves forward, we are exploring potential partnerships that would allow us to launch operations in the country.
“And Brazil is for me, as I said before, it’s a super growth market and we need to approach it differently with the correct capital in the correct [way].”
Regarding a country that has more than captured the industry’s imagination in recent times, Sher pinpointed a joint venture with a local partner as being the perfect way to “launch strong”, capture market share, and, most importantly, become “a big player”.
However, Sher acknowledged that “currently, we don’t have enough capital to do that, so we are working on a parallel path in order to be able to cater to that strategy.”
Cash flow and EBITDA positive goals
As previously alluded to, Codere Online has huge aspirations of being EBITDA and cash flow positive for the full year in 2024, following a trend witnessed among online gaming operators over recent times.
However, as Sher elaborated on, this has been built on a number of key milestones that helped drive the company’s performance through the second quarter of the current year.
“So, the first key milestone we see is the stability in our platform and technology,” he commented.
“This will give us the ability to continue to generate revenues. After that we focus on our product and delivering a better and improved one, both in sports and casino, which is something that we are continuously doing.
“The third key is that we are able to continue to invest the same amount of money into media, and to keep bringing the amount of new customers required by our plans in order to support the revenue that we said that we will deliver by the end of this year. And of course to continue to capture this same amount of new customers and retain active players towards next year.”
Built on this foundation, Sher remained bullish in the prospects of the company becoming cash flow and EBITDA positive during 2024.
Building on Q2’s foundation
Faced with budgetary restraints and a tough macroeconomic environment, Mexico has become the focus market for Codere Online.
As Sher acknowledged that the group is “on track to achieve positive EBITDA in 2024”, confidence, a common theme of the conversation, is stressed that revenue trends witnessed through H1 2023 will be maintained until the end of the year and beyond to achieve the group’s much established goals.
“In the last couple of years we have heavily invested there [Mexico], and right now we are seeing the return on this investment,” he said.
“So, we continue to move money to Mexico in order to continue the revenue growth and ROI delivery that we saw so far, which will allow us to become cash flow positive.”
Travelling across the North Atlantic, and attention soon switched to Spain. Once Codere Online’s most dominant market, how does growth continue to be commonplace across the established jurisdictions?
“What we are doing is trying to defend our market share and to grow organically”, Sher noted, with a particular focus being placed upon digital efforts as TV falls by the wayside due to an advertising ban.
“…we have the support of our land-based presence to continue to expose the Codere brand to the top of mind of our customers,” he continued.
“So, we are using basically the omni-channel approach here to maintain and strengthen our position.”
Future ambitions
“Our ambition, because of the macroeconomic situation, is to become EBITDA positive during 2024,” Sher concluded. “We think this will give us a strong market position and improved valuation.
“With that, hopefully we are able to raise the funds needed to tackle Brazil and other emerging markets in LatAm and continue to grow at the pace we have since becoming a public company.
“For now, we continue to manage the company with a strict focus on becoming cash flow positive, so that we are able to navigate through these tides in a calm and peaceful environment and continue to deliver our promises to our investors.”
