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Betsson Group – strong full-year operating profit thanks to geographical spread and efficient organisation


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Betsson Group - strong full-year operating profit thanks to geographical spread and efficient organisation
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QUARTER OCTOBER – DECEMBER 2019

  • Group revenue was SEK 1,289.5 (1,436.6) million, a decrease of 10 percent with an organic  decrease of 11 percent.
  • Casino revenue declined by 10 percent and Sportsbook revenue declined by 9 percent. The sportsbook margin was 6.8 (7.3) percent.
  • Operating income (EBIT) was SEK 200.5 (341.5) million. The variance was mainly due to decreased revenue. The EBIT margin was 15.5 (23.8) percent.
  • Operating cash flow amounted to SEK 237.8 (289.3) million.

FULL YEAR 2019

  • Group revenue was SEK 5,173.0 (5,419.8) million, a decrease of 5 percent, reported and organic.
  • Operating income (EBIT) was SEK 865.0 (1,193.8) million, corresponding to an operating margin of 16.7 (22.0) percent.
  • Net income was SEK 787.1 (1,078.1) million, corresponding to SEK 5.69 (7.79) per share.
  • Operating cash flow amounted to SEK 1,150.3 (1,273.3) million.
  • The Board of Directors proposes to the AGM that SEK 393.1 (538.4) million, which corresponds to SEK 2.84 (3.89) per share, is distributed to shareholders.

FOURTH QUARTER

Revenue for the fourth quarter was SEK 1,289.5 million, a decrease compared to the same quarter last year but an increase compared to the previous quarter. Development in Sweden, Norway and the Netherlands have continued to be weak, while other markets in which Betsson operates, locally regulated and non-locally regulated, have performed well. The sportsbook margin for the fourth quarter at 6.8 percent is slightly lower than the previous two quarters, which impacted the sportsbook’s revenue for the quarter negatively. Sportsbook gross turnover on the other hand, have developed strongly both during the fourth quarter and the full year 2019, with an increase during the quarter of 15 percent compared with the same period last year and 6 percent for the full year. Operating profit (EBIT) for the fourth quarter amounted to SEK 200.5 million, which corresponds to an operating margin of 15.5 percent.

CEO COMMENTS

2019 full-year operating profit of SEK 865 million shows that  Betsson can deliver despite several market challanges

“We are proud to present an operating profit for the full year 2019 of SEK 865 million. The operating profit shows Betsson’s ability to deliver profitability, also during the challenges that 2019 entailed. We had expected some recovery in the closing fourth quarter, above all in the Swedish market, but we did not reach our objectives there. Up until now, one year after the Swedish re-regulation, we have still not seen the market consolidation that we expect due to the great number of operators, many of them showing no profitability. On the other hand, we have seen declining channelisation, which makes it difficult for the licensed operators who pay 18 percent gaming tax and it also jeopardizes consumer protection. High channelisation contributes to competition on equal terms for the companies in the sector that operate in the Swedish market.

During its long history, Betsson has grown more than the market. In 2019, we had a notch in this curve, but our long-term ambition to grow more than the market, organically and through acquisitions, remains. Our efficient organisation, the strong cash flow and the strong financial position provide a good foundation for acquisitions. During the fourth quarter we made a minor strategic acquisition and continue to analyse several opportunities, both in locally regulated markets and in markets that will be regulated. By further increasing the geographical distribution, we can reduce the impact of temporary downturns in individual markets.

The geographical and product distribution provide stability and also gives us the opportunity to be sustainable in our long-term efforts to run a profitable business with growth and good margins. Betsson is continuously investing in the development of the product offering and it is gratifying to get an acknowledgment that we do the right things. We saw an increase in active customers during the fourth quarter by 3 percent compared to the fourth quarter of last year 9 percent compared to the third quarter. Our in-house developed sportsbook with constantly improved performance delivers good customer experiences, sales growth and good profitability. The high performance also makes it an attractive third-party product. We have previously stated that our ambition is to offer the sportsbook to external customers and we have concluded the first deal with a third party at the beginning of the current year. We are now looking forward to the European Football Championship in June.”

ABOUT BETSSON:

Betsson AB (publ) is a holding company that invests in and manages fast-growing companies within online gaming. The company is one of the largest in online gaming in Europe and has the ambition to outgrow the market, organically and through acquisitions. This should be done in a profitable and sustainable manner, primarily in locally regulated markets. Betsson AB is listed on Nasdaq Stockholm Large Cap (BETS).

Betsson’s operational subsidiaries’ vision is to deliver the best customer experience in the industry. They offer casino, sportsbook and other games via gaming licences in twelve countries in Europe and Central Asia. The business model is to offer gaming under multiple brands, including Betsson, Betsafe, NordicBet and Casinoeuro. The brands are operated on a proprietary platform, which is the core of the offer and the customer experience.

Being a responsible operator in relation to customers, suppliers, authorities, investors and other stakeholders is a cornerstone of the Betsson’s business. Betsson is a member of the European Gaming and Betting Association (EGBA), ESSA (Sports Betting Integrity) and G4 (The Global Gambling Guidance Group).

Learn more about the Group on www.betssonab.com

Compliance Updates

Pagcor’s efforts POGO-related crimes

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On January 31, 2023, the Philippine Amusement and Gaming Corporation (PAGCOR) learned through a news report that Soleil Chartered Bank issued a statement denying the issuance of a bank certification to Global ComRCI, PAGCOR’s third-party auditor for offshore gaming licensees, whose contract commenced in December 2017.

In relation to this report, PAGCOR would like to reiterate that since the assumption of its new management in August 2022, all contracts – including that of Global ComRCI – were put under review last September 2022.

PAGCOR’s new management is revalidating the veracity of the documents submitted by its third-party auditor, Global ComRCI. Should PAGCOR be able to prove that the documents submitted were spurious, it will immediately take legal action and cancel the contract of its third-party auditor, if found warranted.

PAGCOR would like to thank Senator Sherwin Gatchalian for shedding light on this issue during the senate investigation on January 23, 2023.

The state-run gaming firm reassures the public that it is conscientiously looking into the matter and will take the necessary actions to safeguard public interest. Further, PAGCOR upholds strict adherence of its offshore licensed operators and accredited service providers to whatever laws which may be applicable to them.

 

On offshore gaming-related crimes

Meanwhile, the Philippine National Police (PNP) reported during the Senate Hearing on January 31, 2023 that there was a rise in the number of recorded crimes related to offshore gaming operations in the country from 2019 to 2022.

PAGCOR denounces these criminal acts and will not sit idly in the face of these injustices.

Hence, to safeguard the integrity of the offshore gaming industry in the country, PAGCOR will continue to monitor the lawfulness of the activities of its accredited licensees and service providers. Should they be found guilty of engaging in criminal acts, the state-run gaming agency will not hesitate to impose sanctions and penalties, as provided by the law.

Further, PAGCOR will continue to strengthen its collaboration with concerned government agencies such as the PNP, National Bureau of Investigation (NBI), Department of Justice (DOJ) and the Department of Interior and Local Government (DILG) to combat all crimes being linked to offshore gaming operations.

PAGCOR would like to underscore that as a result of the inter-agency cooperation meeting held last September 2022 involving abovementioned agencies, there have been no reported criminal activities or kidnapping-related incidents of workers in the offshore gaming industry for over three months.

PAGCOR believes that while gaming operations – including offshore gaming – contribute significantly to government revenues, they must not be used as a vehicle for abuse and injustices. As the country’s gaming regulator, PAGCOR condemns these dreadful acts and will ensure that the local gaming industry will maintain the integrity of its operations.

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Gaming

Fractured Sanity – a heart-wrenching VR survival horror experience coming soon on Steam and Oculus App Lab

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Imagine you wake up in a cell in the Triton Institute, an experimental asylum led by Dr. Matthew Simmons. Lately, the clinic has been surrounded by rumors of abuse and inhumane working conditions and it seems that most of the staff has gone missing. All you know is that Dr. Simmons has been conducting research into the tripartite psyche on how to break someone’s id, ego and superego apart. How far has he gone?

Brazilian studio, United Games, invites you to embark on an intense and fully immersive VR adventure. Fractured Sanity is a single-player game developed exclusively for VR where all mechanics and puzzles are realistic and interactive. In this horror survival game, you will engage in a thrilling story and uncover the dark truth about the clinic and how you got there. 

The release date for Fractured Sanity will be announced soon. It’s a dream come true for the developers at United Games to finally be able to share their game with the world. 

Gabriel Marques, co-developer at United Games commented: “Ever since I was 14 when I first read an RPG Maker magazine, I’ve been dreaming of making games for a living. Now, with our first release, I feel like I’ve taken the first big step towards that goal.” 

United Games co-developer Gustavo Longhi added: “Two years ago I wouldn’t have dreamt of developing games, it always seemed so hard and complex to me. Looking back on this process and releasing our first game might be the biggest accomplishment of my life so far.” 

Check Fractured Sanity’s trailer: https://www.youtube.com/watch?v=Ya8EDrp6QPQ

Wishlist Fractured Sanity on Steam: https://store.steampowered.com/app/1954840/Fractured_Sanity/
Wishlist Fractured Sanity on Oculus App Lab: https://www.oculus.com/experiences/quest/5347273738669610/
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Gaming

OKTO’s paytech and global team take center stage at ICE London

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Global omnichannel payment provider OKTO will be at ICE London (stand S8-210) with a commitment to improve payment interactions for online and retail gaming and introduce frictionless digital payments with its local knowledge, sector expertise and international capabilities.

A global team of 30 senior executives will present the company’s entire ecosystem of top-performing payment methods powered by OKTO’s unified payment platform, including its flagship, OKTO.CASH, an embedded and frictionless eVoucher payment method and OKTO.WALLET, the company’s omnichannel payment solution that covers all verticals and touchpoints.

In a move that brings further innovation to the retail space, OKTO selects ICE as a platform to launch its brand-new payment solution which comes to revolutionise the retail gaming landscape. Alongside, the payment brand fully aligned with the operators’ requirement to build new and enhanced customer journeys, will showcase its embedding financial services as well as the capabilities of the wallet solution for a fully branded solution.

Over three action-packed days, OKTO’s team from LatAm will be ready to give a full picture of how the company can power operators in the region to stay ahead of the competition via local payments. OKTO will show its Payment Aggregator Solutions, offering local payments via a single restful API integration which can be blended with the brand’s cross-border services, powering growth for operators irrespective of geographical location.

Filippos Antonopoulos, Founder and CEO of OKTO said: “ICE London is back to its very best with all the major supplier brands returning after what is a three-year Covid-enforced absence, and appropriately OKTO is making its’ exhibition commitment with powerful and innovative solutions on display.

We look forward to welcoming our friends, partners, and industry peers to the global meeting point for the industry, listening to their needs and sharing with them our vision.”

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