Betsson matches FY revenue record in 2021 despite Q4 challenges

Revenue for the 12 months to 31 December 2021 reached SEK6.67bn (£540.6m/€640.5m/$731.7m), a 4.4% year-on-year increase from 2020’s SEK6.39bn. This was aided by its expansion into new markets, strategic acquisitions, new product launches and its ability to adapt to regulatory headwinds, the operator said.

Casino remained Betsson’s primary source of income, with revenue from the vertical amounting to SEK4.84bn. Sportsbook revenue reached SEK1.75bn, while other revenue from products including poker and bingo came to SEK85.4m.

Betsson’s operations in the Central and Eastern Europe and Africa region contributed the most revenue during the year, with the SEK2.15bn recorded just ahead of SEK2.11bn from the Nordics.

Western Europe revenue reached SEK1.34bn, while Rest of World revenue was SEK1.07bn.

This growth was aided by a number of acquisitions. In April Betsson purchased a 50% stake in JDP Tech, a software development business that owns a proprietary technology platform for handling payments in Latin America.

That month Betsson also acquired a 35% stake in TG Lab’s Strive Platform, in a strategic venture aimed at supporting its expansion plans in the North American market, while in August it purchased 28% of Canadian start-up Slapshot Media Inc.

In addition, the group’s SW Nordic Limited subsidiary completed its acquisition of the B2C online gambling business of Latin American sportsbook and casino operator Inkabet in October.

Growth was also driven by the operator’s expansion into new markets, having in March secured an online sports betting licence from the Regional Council of Darmstadt, granting it access to the German market.

Betsson also expanded into a number of other territories. It secured a licence in Greece, went live in Mexico through a partnership with local land-based operator Big Bola Casinos and launched its Europebet brand in Belarus.

This was followed by its launch in Argentina after the year-end.

However, this expansion was offset by its withdrawal from the Dutch market. It was one of the high-profile names to announce it would cease operating in the Netherlands, ahead of the country’s igaming market opening on 1 October.

“For Betsson, 2021 ended up a record year in terms of revenue and a result that matches the record result from 2018,” Betsson chief executive Pontus Lindwall said.

“In 2021, Betsson’s offering has been launched in several new markets, the company has made several strategic acquisitions, developed its offering and implemented adaptations in response to regulatory changes.”

Looking at costs for the year and operating expenses grew 5.0% to SEK3.12bn, though financial expenses remained level at SEK56.8m. This meant pre-tax profit increased 6.4% to SEK1.14bn, while earnings before interest, tax, depreciation and amortisation (EBITDA) was 5.1% higher at SEK1.56bn.

Betsson paid SEK82.5m in tax, leaving a net profit of SEK1.05bn, up 6.4% year-on-year.

The year ended on what Lindwall and Betsson described as a “challenging” fourth quarter. For the three months to 31 December, group revenue was down 9.5% year-on-year to SEK1.59bn, partly due to a low sportsbook margin in October, unfavourable football results and the Dutch withdrawal.

Casino revenue declined 9.2% to SEK1.17bn in Q4, while sportsbook revenue slipped 11.4% to SEK406.7m, the lowest quarterly total for a number of years. However, other revenue from products such as poker and bingo climbed 15.2% to SEK22.8m.

Operating costs were 2.1% lower at SEK778.1m though finance expenses were up 47.0% to SEK16.9m. The revenue decline meant pre-tax profit fell 36.8% to SEK193.7m, while EBITDA also declined 25.1% to SEK207.5m.

After paying SEK4.5m in tax, this left a net profit for the quarter of SEK189.2m, a year-on-year drop of 31.9%.

“2021 was another year where we could see the importance of a strong global and diversified product portfolio featuring local expertise and strong brands,” Lindwall said. “The year 2022 will entail continued investments both in technology and the existing product portfolio. 

“A scalable and flexible technical platform combined with highly competent employees and strong commitment create the right conditions for taking full advantage of Betsson’s business model.”

Incidentally, Lindwall had been expected to leave the business late last year, but the board reversed its earlier decision. Lindwall announced his exit in September with Betsson at the time saying he had “completed” his goals in the role.

However, due to his handling of Lindwall’s exit, former chair Patrick Svensk then announced his resignation after a no-confidence vote.