Bet-at-Home 2019 forecasts unchanged despite Q1 struggles

Betclic Everest Group subsidiary Bet-at-Home has reported a 17.9% year-on-year decline in net revenue for the first quarter of 2020, with the business’ performance impacted by novel coronavirus (Covid-19) and struggles in certain markets.

However, the company’s management board still expects gross betting and gaming revenue for the year to come in between €120m (£105.6m/$131.2m) and €132m.

Gross betting and gaming revenue fell 13.4% to €32.4m, which the operator blamed on the loss of revenue from the re-regulated Swiss market, and a significant decline on the contribution from Poland.

After betting fees and gaming levies of €5.6m (up 5.4%) and value added tax of €1.1m (up 32.7%), this left net revenue of €25.5m.

This broke down to €11.2m in sports betting revenue – a 6.7% decline – and a €14.3m contribution from online gaming, down 24.9% year-on-year.

For sports betting, the operator said it had been impacted by the suspension of almost all global sports from mid-March as a result of the Covid-19 pandemic. However, Bet-at-Home added that the short-term expansion of esports, as well as betting on events in “more exotic” leagues partially offset this decline.

Despite this substitution, amounts wagered were down 19.9% to €114.4m.

Online gaming, on the other hand, was unaffected by Covid-19, though did face an impact from the Swiss withdrawal and Polish slow-down, with customer states down 17.7% at €563.4m.

Bet-at-Home reported €166,000 in other income, down 59.4%, while personnel costs rose 6.5% to €4.9m. Marketing expenditure, as a result of major sporting events including the summer’s Uefa Euro 2020 tournament being postponed, declined 20.1% to €6.6m.

The operator said bonus uptake had declined as a result of these suspensions. The Euro 2020 suspension forced it to immediately adjust its marketing agreements to focus on a big push in Q2 2021, when the tournament will now take place.

Despite the reduction in advertising, the operator grew its registered customer base to 5.3m as of 31 March, up 3.9%.

Other operating expenses declined 13.3% to €5.2m, which left earnings before interest, tax, depreciation and amortisation (EBITDA) of €9.0m, down 28.8%. After depreciation and amortisation charges of €460,000, earnings before interest and tax declined 29.9% to €8.6m.

Financial costs of €25,000 left a pre-tax profit of €8.5m, while net profit was down 24.8% at €5.8m once taxes of €2.7m were paid.

Despite the business’ Q1 struggles, its management board reiterated its full-year revenue forecast of between €120m and €132m for the 2019 calendar year. It said this would largely be down to the re-regulation of Switzerland, and a significant decline in the Polish market.

However, the operator admitted that it could also see German revenue hit as a result of regulatory changes, though as the financial impact could not be quantified, it had not yet been factored into planning.

EBITDA for the year is still projected to come in the range of €23m and €27m.