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Net Gaming carries out restructuring and issues forecast for Q2 2020

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Net Gaming carries out restructuring and issues forecast for Q2 2020
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Net Gaming’s operations have performed well during Q2, showing both organic growth and improved underlying profitability in adjusted EBITDA. The Company is in an intensive transformation phase, after Robert Andersson took over as CEO, which means that a reorganisation has been initiated. The reorganisation, which is aimed at creating better conditions for future growth, means that the second quarter has been affected by non-recurring costs.

The reorganisation of the business and transformation to Acroud AB have begun during Q2. The reorganisation involves, among other things, closing the Swedish office and centralising the business to Malta, in order to create a more efficient and cost-effective organisation. The reorganisation will bring annual savings of EUR 0.3m, with full effect from Q3. The reorganisation will give rise to non-recurring costs of EUR 0.5m during Q2 2020, charged to operating profit (EBITDA). The Company has also decided to recognise an impairment loss of EUR 0.5m on assets related to the PokerLoco brand, which will not be included in the new growth strategy adopted in 2020, focusing on fewer products. In parallel, refinancing of the business has been successfully secured in Q2, also resulting in non-recurring costs of approximately EUR 0.3m related to a consent fee, charged to net financial items. Net financial items have also been adversely affected by EUR/SEK exchange rate fluctuations of approximately EUR 1.2m in the first two months of the quarter, as the bond loan is denominated in SEK. The Company’s reported profit after tax for Q2 has been negatively affected by the above factors.

“The underlying operations have shown positive development during Q2, with sequential organic growth of 14%, but also compared with the previous year. It should be noted that a large proportion of the items having a negative impact on Q2 earnings are non-cash items and of an accounting nature. The offensive initiatives and the reorganisation we are now implementing create the conditions for future growth and a brand new Acroud AB that will stand stronger in the future. With Sports betting on the doorstep and a company that is now optimised for the future, we feel strong as we embark on the growth journey we have begun. As proposed to the AGM, we also hope to be able to change our track to the new Acroud AB, which will be a new milestone,” says CEO Robert Andersson.

Forecast Q2 2020

Revenue is expected to amount to EUR 3.6m in Q2 2020, 14 percent higher than in Q1 2020 and 4 percent higher than in Q2 2019.
Adjusted EBITDA (adjusted for non-recurring costs related to reorganisation and rebranding) is expected to amount to EUR 2.1m, 21 percent higher than in Q1 2020 and 4 percent higher than in Q2 2019. The adjusted EBITDA margin for Q2 2020 is expected to be 58 percent.
Reported EBITDA is expected to amount to EUR 1.6m, 10 percent lower than in Q1 2020 and 23 percent lower than in Q2 2019. The EBITDA margin for Q2 2020 is expected to be 43 percent
Reported profit after tax is expected to amount to EUR -1.2m, compared with EUR 2.8m in Q1 2020 and EUR 1.2m in Q2 2019, which was adversely affected by the above-mentioned non-recurring costs and exchange rate fluctuations related to the loan financing. Adjusted for non-recurring costs and exchange rate fluctuations, Adjusted profit after tax for Q2 2020 amounts to EUR 1.4m.
At 30 June 2020, the cash position is estimated at EUR 3.0-3.2m. The Company’s interest-bearing net debt is expected to be EUR 21.5m, corresponding to a debt/equity ratio, defined as net debt/EBITDA, of 3.0x, based on estimated LTM EBITDA at 30 June 2020.
Robert Andersson, President and CEO

All figures are unaudited and based on management accounts. The next financial update is scheduled to take place in connection with this year’s Q2 report on 13 August 2020.

About Net Gaming:
Net Gaming owns, operates and develops high-quality comparison sites, mainly in iGaming affiliation, for the purpose of helping our partners by channelling high-quality users to the Company’s customers – primarily iGaming operators. Through the sites, Net Gaming generates high-quality users, primarily to global iGaming operators. The Company, which was founded in 2003, has just over 70 employees and is headquartered in Malta.

Industry News

SKS365 keeps investing in people: GROW People Management Program took the next level

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11 experienced people managers from the SKS365 group’s 4 locations gathered last week in Belgrade for the new GROW People Management Program. From 15 th to 19 th of April, through trainings, discussions, and social connections, people had the opportunity to further grow individually and as a team, while enjoying Belgrade’s city center and rivers.

Created in 2023 with the purpose of building foundation people management skills across the organization, GROW initiative evolved this year by including a new, advanced program for experienced people managers to further consolidate their skills and prepare for future opportunities.

Building and fostering connections, sharing experiences, and enjoying team building experiences – all these activities have been part of the GROWpmp agenda for the 11 people managers coming from Commercial, Product and Development, Finance, and Sportsbook departments of the group’s 4 locations – Malta, Italy, Austria, Serbia.

GROWpmp included a variety of topics that people managers in SKS365 recognized as the key areas for management development. Topics such as influence through communication, team effectiveness, DEI, through to presentation skills and business topics like understanding finance and management reporting, were delivered with the support of external professionals and internal experts, while designed and organized by the SKS365 People & Culture team.

 

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Industry News

Kindred’s Share of Revenue from High-risk Players Shows Slight Increase

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Kindred Group plc’s (Kindred) share of revenue from high-risk players showed a slight increase to 3.2% (Q4 2023 3.1%) in the first quarter of 2024. Compared to the first quarter of 2023, the high-risk revenue share decreased marginally. The percentage of detected customers who exhibited improved behaviour after interventions came in at 87.1% (compared to 87.4% in Q4 2023 and 83.0% in Q1 2023). This sustained trajectory in the improvement effect after interventions, observed over an extended period, serves as a testament to the strong dedication and collective efforts throughout the company. It reflects Kindred’s ongoing commitment to fostering positive change within the industry.

“We continue to see our share of revenue from high-risk players fluctuate quarter to quarter, and we are working closely with all teams across the company to support customers towards a more sustainable gambling experience. However, it is encouraging to see that our Journey towards Zero data has steadily decreased since 2020. A similar trend can be seen across the healthier gambling behaviour effect after interventions. This tells us two things: our work is paying off, but we need to continue to push ourselves to propel a sustainable progression,” Alexander Westrell, Director of Communications at Kindred Group, said.

“It was very encouraging to witness the open and transparent discussions at the Sustainable Gambling Conference in London on 20 March, where those with lived experience shared their important stories. Also, it is evident that technology is moving forward, and will provide greater opportunities to detect and intervene in the future. We hope to see more regulators engage with the industry and with experts to secure a more sustainable industry for everyone,” Alexander Westrell added.

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PENN Entertainment Names Aaron LaBerge as Chief Technology Officer

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PENN Entertainment announced that Aaron LaBerge has been named Chief Technology Officer (CTO) effective July 1, 2024, subject to customary regulatory approvals. Mr. LaBerge will report directly to PENN CEO & President Jay Snowden.

In his new role, Mr. LaBerge will be responsible for driving the technology strategy and execution for PENN, while leading the multinational team of technologists and serving as the key business leader for the company’s Interactive division.

Mr. LaBerge spent more than 20 years at The Walt Disney Company, in two stints separated by five and a half years as a technology entrepreneur. He was most recently President & Chief Technology Officer for Disney Entertainment and ESPN where he was responsible for driving all technology and product development in support of The Walt Disney Company’s two media divisions. In that role, he helped set the vision and strategic leadership for how Disney uses technology to enable storytelling and innovation, drive its business, and create unparalleled consumer experiences with entertainment and sports content.

“We are thrilled to have someone of Aaron’s caliber join our PENN executive team. Having overseen a global organization of thousands of engineers, product developers, designers, technologists, and data scientists that created some of the largest scale and most successful media properties in the world, there is no better candidate to lead our Technology and Interactive division into its future. I know Aaron is looking forward to working with Todd George, our head of operations, and our entire Executive Team to continue growing our position as a leader in online gaming, sports betting, and digital sports media,” Mr. Snowden said.

“I’m excited to join another talented team at PENN Interactive and lead our technology strategy. PENN Entertainment is at the forefront of the fast-changing gaming and sports media industry. I plan to use my experience from Disney and ESPN to help make ESPN BET an essential piece of the sports fan experience. Together, we’ll push the limits and redefine how fans interact with sports and gaming,” Mr. LaBerge said.

Prior to his most recent role at the Walt Disney Company, Mr. LaBerge was Executive Vice President and Chief Technology Officer at ESPN from 2015 to 2018. At ESPN he played an instrumental role in the growth of ESPN’s consumer-facing digital media products and services – leading many of ESPN’s most ambitious and challenging projects and helping establish ESPN’s position as the leader in digital sports and innovative sports technology development. He was a key architect in the design, development, and engineering of ESPN’s state-of-the-art facilities in Bristol, CT; Los Angeles, CA; Charlotte, NC; and Austin, TX, as well as data centers and infrastructure that connect those facilities around the world, as well as the technology design and development to support the launch of the multi-platform SEC Network.

Between 2007 and 2012, LaBerge was co-founder and CEO of Fanzter, Inc. – a venture-funded consumer software and digital product development company. At Fanzter, he directed all day-to-day operations and led the development and launch of a variety of consumer-focused internet and mobile products, ground-breaking social and commerce technologies and more.

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