Betsson declares record Q3 following sequential revenue growth

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Betsson has declared record numbers in the third quarter of 2023, as well as sequential growth in revenue and earnings attributing to key gains in several markets.

Commenting on the results, CEO Pontus Lindwall highlighted that “continued high customer activity, strong financial development and further investments in product and new markets” supported its high revenue growth in all major regions except for the Nordics.

Casino leads the way for Betsson

Publishing its Q3 financials, Betsson declared group revenue of €237.6m, a 19 per cent increase year-over-year (2022: €200.3m) and an organic increase of 39 per cent, largely ‘driven by casino games’.

Per segment, casino revenue improved by 27 per cent YoY to €172.1m (2022: €135.4m) to occupy 72 per cent of the group’s revenue (2022: 68 per cent). 

Sportsbook revenue rose slightly by two per cent to €63.3m (2022: €61.9m) and comprised 27 per cent (2022: 31 per cent) of the group revenue, with a margin after free bets of 7.3 per cent (2022: 8.3 per cent). Its sportsbook was ‘negatively affected by many favourite wins and goal-rich games during the start of the European football leagues’.

Revenue from other products – poker, bingo and other – amounted to €2.1m (2022: €3m) while active customers for all segments increased by 17 per cent to 1,237,238 (2022: 1,056,400).

“The revenue and EBIT, which include the acquisition of betFIRST, were the highest ever for Betsson in a single quarter and mark the seventh quarter in a row with sequential growth.”

Betsson CEO Pontus Lindwall

EBITDA for Betsson in Q3 was €68.9m, up 42 per cent YoY (2022: €48.6m) with a margin of 29 per cent (2022: 24.3 per cent).

Operating income at the end of the quarter stood at €56m, a 46 per cent uptick YoY (2022: €38.4m) with a margin of 23.6 per cent (2022: 19.2 per cent).

The operator’s net income came in at €46.2m (2022: €32.6m), corresponding to €0.35 per share (2022: €0.24). Operating cash flow was €44.9m (2022: €38.5m), while net debt was €65.5m (2022: €54.7m).

Reflecting on the results, Lindwall noted that revenue and EBIT were the ‘highest ever’ for Betsson in a single quarter, with Q3 also being the seventh consecutive quarter of sequential growth for the operator. 

The CEO commented: “Betsson’s third quarter 2023 featured continued high customer activity, strong financial development and further investments in product and new markets. 

“Revenue increased by 19 per cent, driven by casino games, while earnings before interest and taxes increased by 46 per cent compared to the corresponding quarter of the previous year.

“The revenue and EBIT, which include the acquisition of betFIRST, were the highest ever for Betsson in a single quarter and mark the seventh quarter in a row with sequential growth. 

“Active customers and deposits increased significantly during the quarter, and turnover was high in both casino and sports betting. The sportsbook margin was 7.3 (8.3) per cent.”

Revenue takes hit in Nordics

Taking a look at Betsson’s performance region, Lindwall stated that high revenue growth occurred in all major regions except for the Nordics.

This region declined by 14.3 per cent YoY to €46.1m (2022: €53.8m) and represented 19 per cent of the group’s revenue. Sweden reported revenue declines due to ‘decreased marketing activities’ resulting in lower sportsbook and casino activity.

Finland’s revenue also dropped YoY, while Denmark reported an increase thanks to growth in sportsbook and casino following the launch of the Betsson brand in the country.

Western Europe revenue improved by 56.9 per cent to €39.2m (2022: €25m) and represented 16 per cent of the group’s revenue.

Italy continues to grow thanks to a strong casino product, while Belgian operator betFIRST was consolidated into the group’s accounts following the acquisition of the operator being completed in July.

Meanwhile, in Germany, revenue declined due to “market restrictions that have been implemented in the past years”.

Representing 41 per cent of the group’s revenue, Central & Eastern Europe and Central Asia revenue rose by 23 per cent to €97m (2022: €78.8m) thanks to “strong underlying activity and revenue growth in casino”. Although sportsbook activity was strong, the margin was significantly lower, which led to decreased revenue.

Betsson’s casino product helped Croatia and Greece produce new quarterly revenue records, while Georgia, Latvia and Estonia also improved. However, revenue in Lithuania fell.

In addition, the group was granted a local gaming licence for online casino in Serbia, launching its offering in the market by the end of the quarter.

In Latin America, revenue increased by 33.2 per cent to €51.7m (2022: €33.8m), representing 22 per cent of the group’s revenue. Growth occurred in Argentina and Colombia, while Peru had revenue decreases due to “lower activity in the casino product and a lower sportsbook margin”.

For the rest of the world, revenue decreased by 6.5 per cent to €3.6m (2022: €3.8m) following a lower sportsbook margin in Nigeria and a lower activity in Canadian operations.

French spotlight

On the subject of regional performances, Lindwall spotlighted Betsson’s future in France, where it has recently obtained a local licence for sports betting and is expected to go live in the region before the end of the year.

The group also announced a new strategic partnership with listed French casino operator Groupe Partouche to offer online casino games in regulated markets.

Lindwall continued: “The geographical expansion continues and several new milestones were passed during the quarter; betFIRST in Belgium was included in the Betsson Group, a launch took place on the locally regulated market in Serbia and a local licence for sports betting was obtained in France, where go-live is expected in the fourth quarter. 

“France is an important gaming market in Europe with large long-term potential for online gaming and we now take a first step to be able to offer French players a first-class experience in sports betting. At the end of the summer, the brand Betsson was also introduced in Denmark, which strengthens the Group’s position on the Danish market.”

Strengthening its B2B offering, Betsson’s sportsbook solution was launched with the operator Bethard during the quarter.

The group also launched its first-ever global advertising campaign in Q3 – ‘A bet makes the difference’ – focusing on the excitement and entertainment that comes from placing a bet rather than the chances of winning, and as part of the marketing strategy to establish Betsson as the group’s global main brand.

Looking ahead, Betsson has reported a good start to the fourth quarter with average daily revenue up 11.9 per cent YoY, but the sportsbook margin remains below average.

Lindwall concluded: “I look forward with confidence to the final sprint of the year. Geographical diversification, a solid balance sheet and strong cash flows create good conditions for continued investments in profitable growth to deliver long-term value creation for our shareholders.”