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Betsson AB (publ) Interim report January - September and Q3 2018

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Revenue increased by 21% in Q3
EBIT increased by 57% in Q3

Quarter: July - September

  • Group revenue was SEK 1,426.8 (1,180.6) million, an increase of 21 percent with an organic growth of 16 percent. 
  • All regions showed growth in the quarter.
  • Casino revenue grew by 22 percent and Sportsbook revenue grew by 23 percent, with a sportsbook margin of 7.4 (7.1) percent.
  • 1.8 percent of the Group revenue in the third quarter was related to the FIFA World Cup that ended on 15 July 2018.
  • Operating income (EBIT) was SEK 340.2 (216.0) million, an increase of 57 percent. The increase is mainly due to better economies of scale. 
  • The operating margin was 23.8 (18.3) percent.

Period: January - September

  • Group revenue was SEK 3,983.2 (3,460.0) million, an increase of 15 percent with an organic growth of 11 percent. 
  • Operating income (EBIT) was SEK 852.3 (663.8) million, an increase of 28 percent. 
  • Net income was SEK 764.5 (587.6) million, corresponding to SEK 5.52 (4.25) per share, an increase of 30 percent.
  • Operating cash flow amounted to SEK 984.0 (667.7) million.


Key data

SEK m Q3 2018    Q3 2017    ∆    Jan-Sep 2018    Jan-Sep 2017    ∆    Jan-Dec 2017 
             
Revenue 1 426,8   1 180,6   21%   3 983,2   3 460,0   15%   4 716,5
Gross profit 1 009,5   859,0   18%   2 841,9   2 516,4   13%   3 419,4
EBITDA 423,5   285,1   49%   1 085,8   861,0   26%   1 149,8
EBITDA margin 29,7%   24,1%   -    27,3%   24,9%   -    24,4%
Operating income (EBIT) 340,2   216,0   57%   852,3   663,8   28%   882,2
EBIT margin 23,8%   18,3%   -    21,4%   19,2%   -    18,7%
Net income 305,1   187,0   63%   764,5   587,6   30%   786,5
Earnings per share (SEK) 2,20   1,35   63%   5,52   4,25   30%   5,68
Operating cash flow 400,8   220,4   82%   984,0   667,7   47%   946,7
Casino revenue 1 066,3   871,1   22%   3 005,8   2 570,6   17%   3 437,9
Sportsbook gross turnover 6 151,3   5 391,0   14%   18 150,9   17 152,1   6%   23 117,5
Sportsbook revenue 338,9   275,1   23%   902,7   781,0   16%   1 140,3
Sportsbook margin after free bets 7,4%   7,1%   -    6,7%   6,5%   -    6,9%
Deposits 4 853,4   4 100,1   18%   13 708,4   11 945,6   15%   16 308,0
Active customers 687 390   619 032   11%          


Message from the CEO, Pontus Lindwall:

"Revenue for the third quarter 2018 was SEK 1,426.8 (1,180.6) million, an increase of 21 percent compared to the same quarter 2017. The organic growth was 16 percent for the quarter. All regions showed growth in the quarter, but the strongest growth was in Western Europe and Nordics. Sportsbook revenue increased by 23 percent with a sportsbook margin of 7.4 percent, which is slightly higher than the same quarter last year. Casino revenue increased by 22 percent.

Operational income (EBIT) for the quarter was SEK 340.2 (216.0) million, an increase of 57 percent compared to the same quarter in 2017. The improved earnings are a result of the scalability in Betsson’s business, showing that improved products and keeping focus on efficiencies results in higher earnings. 

Economies of scale
The increased revenue is achieved by a combination of product improvements and more efficient marketing spend. In the third quarter, re-allocation of marketing investments between different markets, and also in the mix of traditional marketing and affiliate marketing, made it possible to efficiently grow revenue. Going forward, we expect marketing investments to increase as online gaming licences are introduced in Sweden. Betsson was one of the first to apply for online gaming licences in Sweden.

Betsson’s subsidiary Corona Ltd has been fined 300,000 euro by the Dutch gaming authorities (KSA). Corona has appealed the fine. Betsson sees the Netherlands as an important market long-term and has the ambition to channel Dutch customers into the licenced system when the market re-regulates.

The second and the third quarter 2018 showed strong growth partly driven by activity during the FIFA World Cup. We continue to execute on the “back on track” plan which includes a number of product and technology improvements, additional efficiencies and focus on core markets. The fourth quarter has begun with daily revenues higher than the average daily revenue for the full fourth quarter last year.”


Information on the presentation
Betsson invites media, analysts and investors to Betsson's office in Regeringsgatan 28, Stockholm, Sweden on Wednesday, 24 October, 2018 at 09:00 CET, for the presentation of the interim report with CEO Pontus Lindwall and CFO Kaaren Hilsen. 

The presentation will be held in English and followed by a questions and answers session. It is also available via webcast and conference call.

To participate by phone, please dial:
UK: +44 2033645374
SE: +46 850556474
US: +1 8557532230

To watch the webcast of the presentation, visit www.betssonab.com or
https://edge.media-server.com/m6/p/cwxamqw4


Contacts
Pontus Lindwall, President and CEO
+46 (0)8 506 403 00

Kaaren Hilsen, CFO
+46 (0)8 506 403 00, kaaren.hilsen@betssonab.com

Pia Rosin, VP Corporate Communications
+46 (0)736 00 85 00, pia.rosin@betssonab.com


This information is information that Betsson AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 07.30 CET on 24 October 2018.

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