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Better Collective Interim report January 1 – December 31, 2020

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Better Collective: Nomination committee Proposal to the Annual General Meeting 2022
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Highlights fourth quarter 2020 

  • Q4 Revenue increased by 88% to 36,714 tEUR (Q4 2019: 19,579 tEUR). Organic growth was 32%. Revenue doubled from Q3 2020.
  • Q4 EBITA before special items increased 92% to 13,670 tEUR (Q4 2019: 7,117 tEUR). The group EBITA-margin before special items was 37%. EBITA-margin was 52% in Publishing and 13% in Paid Media. In Q4, significant costs were added in Paid Media to shift the business model towards revenue share and new market openings.
  • Earnings per share (EPS) increased by 143% to 0.18 EUR/share (Q4 2019: 0.07 EUR/share)
  • Cash Flow from operations before special items was 10,148 tEUR (Q4 2019: 7,532 tEUR), an increase of 35%. The cash conversion was 71%. End of Q4, capital reserves were 43 mEUR consisting of cash of 28 mEUR and unused bank credit facilities of 15 mEUR.
  • New Depositing Customers (NDCs) was above 153,000 in the quarter, a growth of 30%.
  • Better Collective acquired the Atemi Group for 44 mEUR on October 1 and has completed a successful integration. Atemi Group is one of the World’s largest companies specialised in lead generation for iGaming through paid media and social media advertising. The acquisition is a major strategic move for Better Collective with significant synergistic opportunities.

 

Financial highlights full year 2020 

  • Revenue grew by 35% to 91,186 tEUR (FY 2019: 67,449 tEUR), with organic growth of 8%.
  • EBITA before special items increased 34% to 36,604 tEUR (FY 2019: 27,231 tEUR). The EBITA-margin before special items was 40%.
  • Cash Flow from operations before special items was 38,321 tEUR (FY 2019: 26,585 tEUR), an increase of 44%. Cash conversion rate before special items was 99%.
  • Earnings per share (EPS) increased by 46% to 0.47 EUR/share (2019: 0.32 EUR/ share)
  • New Depositing Customers (NDCs) exceeded 437,000 in 2020, similar to 2019. Performance was maintained despite the cancellation and postponement of major sports events due to the Covid-19 pandemic.
  • During 2020, Better Collective completed acquisitions of approximately 80 mEUR:
  • In March 2020, Better Collective established a strong position within the esports betting market through the acquisition of HLTV.org ApS. The purchase price was agreed at up to 34.5 mEUR on a cash and debt free basis.
  • In October 2020, the acquisition of The Atemi Group was completed for 44 mEUR.
  • In November 2020, the smaller acquisitions of Irishracing.com and Zagranie. com were completed for just above 1 mEUR.
  • COVID-19 had a significant impact from the last part of Q1 as the pandemic set a halt on major sports events and thereby also online sports betting. Q2 was the most affected until some of the major sports in Europe resumed in June. In Q3, sports calendars were still affected with amended and reduced tournament formats, whereas Q4 has been largely back on track.

 

Significant events after the closure of the period 

  • January revenue reached 13 mEUR, a growth of 78% vs. 2020, of which 16% was organic growth. The organic growth was recorded despite a strong comparison towards January 2020 and was partly driven by the US business where total revenue in local currency almost doubled. In revenue from the affilliate business from sportsbetting and casino, the growth exceeded 200%.
  • On January 1, 2021, Better Collective exercised its option to acquire a further 70% of the shares in Mindway AI for a total price of 2.3 mEUR (17 mDKK), bringing the ownership to 90%. Mindway AI specialises in software solutions based on artificial intelligence and neuroscience for identifying, preventing, and intervening in at-risk and problem gambling.

 

Financial targets 2021 
With the expiration of the 2018-2020 targets and the introduction of segment reporting, the Board of Directors have decided on new targets for the financial year 2021: Revenue >160 mEUR, EBITDA >50 mEUR, Organic growth >20%, Net interest bearing debt/EBITDA <3.0. See page 13 of the report for more detail.

Conference call

A telephone conference will be held at 10.00 a.m. CET today by CEO Jesper Søgaard and CFO Flemming Pedersen. The presentation will simultaneously be webcasted, and both the telephone conference and the webcast offer an opportunity to ask questions.

Dial in details for participants:

Confirmation Code:            6573033
Denmark:                            +45 32 72 04 17
Sweden:                +46 (0)8 56618467
United Kingdom: +44 (0)8444819752

Webcast link https://edge.media-server.com/mmc/p/msczk4rq

Jesper Søgaard, CEO of Better Collective, commented: “Looking back at an unusual year, I am pleased to see that our business has proven resilient and I am proud that we come out strong on performance. We have entered 2021 in great shape and are well-positioned for an eventful 2021”

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Leon Secures Sponsorship of Four MMA Fighters for Increased Brand Exposure

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Leon, the internationally-renowned online sports and casino entertainment brand, has agreed a partnership to support a quartet of up-and-coming mixed martial arts (MMA) fighters; Justin Tafa, Junior Tafa, Hakaraia Wilson and Joshua Culibao.

In a thrilling expansion of the operator’s sports collaboration portfolio, the four Australasian athletes will be endorsed through a range of promotional activities and fan engagement opportunities while advertising the Leon brand, all aimed at bringing fans closer to the intense world of MMA.

The six-month long promotional journey will culminate in a major fight night in Australia in August.

Both Tafa brothers and Culibao are already a familiar name on the UFC circuit while Wilson is a pro MMA fighter on an upward trajectory. They will all create regular blog updates on Leon’s platform about their progress and preparation and will interact with fans through personal calls or special online events.

Leon remains steadfast in its commitment to provide a reliable, comfortable and innovative space for casino, sports and eSports enthusiasts, ensuring both entertainment and safety while promoting responsible gaming.

“By aligning with the electrifying world of combat sports, Leon not only supports the athletic dreams of talented young fighters but also strengthens our commitment to bringing exciting and immersive experiences to its audience,” the Brand Communications Director for Leon said. “This partnership is a testament to Leon’s dedication to innovation and community engagement, echoing the roars of victory that resonate through the vibrant world of sports.

“Our objective is to help young talents and to support emerging athletes. We know the tough path that lies ahead and the effort that goes into being a top fighter and through this sponsorship we want to inspire our audience to believe in their dreams and work towards achieving their goals. We wish the four fighters the best of luck over the next six months as they prepare for their bouts.”

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Interviews

Tom Galanis: giving a First Look at the Top of the Slots

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Tom Galanis: giving a First Look at the Top of the Slots
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Gone are the days when we would spend a Thursday evening waiting for Top of the Pops to come on our televisions so that we could see who would be performing that week. The music show may no longer be running, but First Look Games has taken inspiration from the long-running staple and added a slot spin, to create Top of the Slots.

To give us more insight, First Look Games Founder Tom Galanis walks us through the ideation process behind Top of the Slots and how this is helping to give an accurate representation of the top-performing slot titles each month.

 

You launched Top of the Slots by First Look Games a couple of weeks ago. For those that may have missed the launch, what does this involve?

Tom Galanis: Top of the Slots is a showcase for the top 10 games launched by game studios via the First Look Games platform over the previous 90 days. It’s a never-before-seen take on game popularity and one our game studio partners, and affiliate users are already loving!

 

What was the thought process behind launching Top of the Slots?

Tom Galanis: First Look Games captures unique data for our game studio partners and Top of the Slots is designed to illustrate the most successful games, benchmarked by this unique data insight, to the industry.

 

What do game providers have to do to make it into the top ten releases for the month? What metrics do you use to evaluate success?

Tom Galanis: In order to make it in to the top 10, game studios need to release titles via our platform that successfully resonate with the 850+ affiliates that utilise First Look Games, making full use of the suite of tools we offer on and outside of the platform to engage affiliate marketers in the promotion of their game. The rankings are based on the First Look Games Index for all games launched to the market in the preceding 90 days, which combines:

  1. a) Downloads – which is the aggregated total of download sessions amongst affiliates on the platform. Affiliates download assets including logos, game sheets, video files, screenshots, banners and game artwork;
  2. b) Hits – this is the aggregated total number of game reviews for the game, created by affiliates using the First Look Games platform;
  3. c) Reach – this is the aggregated unique visitor count of the websites containing the Hits;
  4. d) Demo Game Sessions – this is the number of free to play demo game sessions that have taken place from iFrames placed on Hits.
  5. e) Sentiment Score – this is the average sentiment score from Hits

The games that rank well in this index are obviously commercially successful in their own right but are also being reviewed by affiliates because of the engagement of the game studio with the First Look Games platform, and consequently, with affiliates.

Our most active game studios are not just releasing great games with frequency but are also ensuring their game and studio news is distributed across the First Look Games platform and social channels and that a full and diverse range of marketing assets and game information is being provided through the platform prior to a game’s release. This best equips affiliates to understand the features of a game so that they can successfully convey this to their player audience, which, collectively amongst FLG affiliates, is very significant, totalling more than 20 million slots players worldwide.

 

Tell us a bit more about the First Look Games sentiment analysis – how is this helping to remove the biases from the ranking process? What data do you use to inform this analysis?

Tom Galanis: Once our technology has identified a new game review, First Look Games uses Natural Language Processing to ‘read’ the review and assess what the affiliate makes of the game. We share a short snapshot of this with the game studio and assign a score to the review based on how positive the affiliate has been in their review of the game. The more positive the language used in the review, the higher the score.

Sentiment scores are then aggregated across all reviews of the game to give a score for the game, and across all games to give the studio a score to benchmark against peers. Using AI, we are able to objectify the subjective to provide true 360 analysis on how affiliates are promoting a game.

 

What can we expect to see from First Look Games for the remainder of this year?

Tom Galanis: We have a perpetual roadmap of both new studio launches and technical advancements of the platform for affiliates and game studios to look forward to!

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Industry Awards

Gibraltar Gambling Commission Attends International Olympic Committee and UEFA Workshop

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A representative from the Gibraltar Gambling Division, who specialises in sports integrity matters, has attended a high- level workshop hosted jointly by the International Olympic Committee and UEFA at Olympic House in Lausanne Switzerland. The cost of the trip was funded by the international sports governing bodies.

With both the Olympics and the Euros being held later this year, the meeting was an opportunity for all stakeholders, including gambling regulators in a number of jurisdictions (including Gibraltar) to discuss a coordinated strategy to identify suspicious betting activity and to prevent match (competition) fixing on a proactive basis.

In 22/23, the Gambling Division received 42 betting integrity reports from gambling operators, 13 requests for assistance from the Olympic movement Unit of the Prevention of Manipulation of Sports competitions and was involved with a large number of disseminations to domestic and international sports governing bodies (including FIFA and UEFA); as well as engagement with law enforcement authorities.

Last month, the GFA hosted a UEFA Seminar on match fixing in Gibraltar which was also attended by representatives from the Gambling Division.

Gibraltar Gambling Commissioner Andrew Lyman said: “Sports integrity work and liaising with stakeholders on match fixing is an important, but often unseen part of our work. Operators are obliged to report suspicious activity in this area and the Gambling Division applies its expertise to enhance intelligence and support the lawful flow of information to the appropriate authorities, including sports governing bodies, for further investigation.

“The manipulation of sports competition by spot fixing or match fixing undermines the very essence of fair and unpredictable sporting outcomes. The forthcoming Gambling Bill will introduce a criminal offence of cheating at gambling which will serve to further deter such activity.”

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