Betting growth leads Betsson to 31.5% revenue rise in Q3

Group revenue for the three months to 30 September amounted to SEK1.68bn (£147.2m/€161.7m/$191.5m), up from SEK1.28bn posted in the corresponding period last year.

Casino remained the main source of income for Betsson, with revenue totalling SEK1.31bn, an increase of 38.8% on the previous year, and accounted for 78% of total revenue in the quarter.

The operator’s sports betting performance also improved, with revenue rising 12.1% from SEK314.6m to SEK352.6m, representing 21% of all revenue in Q3.

Revenue from other products stood at SEK17.6m, while total customer deposits across all Betsson products during the quarter reached SEK7.55bn, an increase of 53.0% on Q3 of 2019.

In terms of performance by region, the Nordics were Betsson’s core source of revenue. Nordic revenue amounted to SEK558.9m, up 17.2% on Q3 last year and representing 33% of all revenue in the quarter.

Western Europe revenue was up 22.6% year-on-year, while revenue from Central and Eastern Europe and Central Asia (CEECA) increased 39.9%.

Betsson also saw significant growth from it rest of world activities, with revenue in these markets jumping 124.1% to SEK184.2m.

Betsson chief executive Pontus Lindwall praised the business’ ability to post growth despite having to contend with challenges related to the novel coronavirus (Covid-19) pandemic.

“Despite this, Betsson has both expanded into new markets and developed new products and features,” Lindwall said. “The positive development is partly attributable to the increased demand for digital entertainment through the pandemic.

“The online gambling industry has more clearly than ever demonstrated its resilience to market fluctuations during the pandemic when compared to many other sectors.”

Looking at spending in Q3, cost of services climbed 33.0% to SEK590.9m, while operating expenses jumped 22.4% to SEK756.7.

Personnel expenses were up 20.9% to SEK232.3 as the operator increased the average number of full-time employees to 1,070 (942), with new staff added to payroll as a result of recent acquisitions – including the purchase of GiG’s B2C assets in Q2.

Marketing expenses were up 32.4% to SEK282.5m, while other external costs climbed 25.2% to SEK214.2m. Amortisation and depreciation expenses were slightly down to SEK87.5m, though capitalised development costs increased to SEK60.7m.

Operating income for Q3 stood at SEK329.1m, up  54.9% on last year, while after including financial costs, profit before tax was SEK314.0m, some 59.4% more than last year.

Betsson paid SEK23.4m in income tax during Q3, leaving it with a net profit of SEK290.6m, up 59.9% on SEK181.8m on 2019. Earnings before interest, tax, deprecation and amortisation (EBTIDA) for the quarter also increased 37.0% to SEK416.6m

“Betsson’s strong corporate culture has continued to support the performance of the organisation during the pandemic,” Lindwall said. “I am immensely proud of all the ‘Betssonites’ who rapidly adapted to the new circumstances with sustained productivity and service levels to our customers.”

Looking at how Q3 impacted Betsson’s year-to-date performance, revenue for the nine months to 30 September amounted to SEK4.63bn, up 19.1% on the same period last year.

Cost of services stood at SEK1.64bn and operating expenses SEK2.18bn, which in turn left an operating profit of SEK807.4m, up 21.5% on last year. After finance costs, profit before tax was SEK762.4m, an increase of 22.2%.

Betsson paid SEK45.0m in tax during the first nine months of 2020, leaving it with a net profit of SEK713.0m for the period, up 22.4% on the same point in 2019. In addition, EBTIDA climbed 14.6% year-on-year to SEK1.07bn.

“Betsson has a strong financial position, a diversified portfolio with a global footprint, strong brands with local expertise, flexible and scalable proprietary technology, along with highly dedicated and talented teams,” Lindwall said.

“I look forward, with confidence, to the future of both B2C and Betsson’s ambitions in B2B as a sportsbook supplier.”