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Betsson acquisitions push net profit close to SEK1bn in 2020

| By Robert Fletcher
Betsson posted net profit just short of SEK1bn (£86.8m/€98.9m/$119.6m) in 2020, after a series of new acquisitions in 2020 helped drive a year-on-year increase in revenue.
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Overall revenue for the 12 months to 31 December stood at SEK6.39bn, which was 23.5% more than the SEK5.17bn posted in the previous year.

Betsson noted the impact of new acquisitions in the first three quarters of the year, including its purchase of Zecure Gaming Limited, the B2C subsidiary of Gaming Innovation Group (GiG), in April.

The operator also said it felt the benefit of securing new licences in countries around the world, most recently in the province of Buenos Aires, with Betsson one of the first operators to gain approval in the Argentine capital province. The operator also launched in Kenya towards the end of 2020 through the Betsafe brand.

Together, Betsson said the new acquisitions and licences will support its ongoing expansion plans to move into more regulated markets as they open.

“During the first nine months of 2020 Betsson made several acquisitions, which together with licenses obtained in other countries, entailed expansion with new brands to new markets while we continued to develop products and functions in existing markets,” Betsson president and chief executive Pontus Lindwall said.

Cost of services offered in 2020 reached SEK2.29bn, leaving a gross profit of SEK4.10bn, and after accounting for SEK2.98bn in operating expenses and SEK56.5m in finance costs, Betsson reported a profit before tax of SEK1.07bn, up 31.8% on 2019.

Betsson paid SEK78.0m in tax during the year, leaving a net profit of SEK990.8m, just shy of SEK1.0bn and up 25.9% from SEK787.1m in the previous year.

“There are several reasons for Betsson’s success,” Lindwall said. “The transition to digital entertainment has been further accelerated during the pandemic, which has benefited us, but in the long run Betsson’s underlying strengths are crucial in creating growth and shareholder value.

“Our long experience and the strong financial position mean that we can continue to implement our strategy with a focus on growth despite current challenges.”

Betsson also published figures for its fourth quarter, during which revenue was up 36.7% year-on-year to SEK1.76bn.

Breaking down these figures, Betsson said mobile revenue totalled SEK1.39bn, accounting for 79.0% of total revenue for the three months to 31 December.

Licence revenue for system delivery to B2B customers was SEK301.5m, while locally taxed revenue from markets where it pays local betting duties was SEK606.6m.

In terms of product performance, casino revenue was up 33.2% year-on-year to SEK1.28bn, with mobile casino revenue hiking 56.3% to SEK1.02bn. Sportsbook revenue was up 47.3% to SEK459.0m, 80% of which was attributed to mobile, while other products made up the remaining SEK19.8m in revenue.

Betsson drew most of its revenue from the Nordics, with this region accounting for SEK573.5m in Q4. Some SEK511.4m came from Central and Easter Europe and Central Asia, with SEK462.1m generated in Western Europe. A further SEK215.6 was derived from its rest of world operations.

Cost of services in Q4 was SEK649.8m, resulting in a gross profit of SEK1.11bn, up 32.7% on the previous year. Betsson paid SEK795.0m in operating expenses, leaving an operating profit of SEK317.8m, an increase of 58.5% on 2019.

After accounting for SEK11.5m in financial spending, Betsson had SEK306.3m in profit before tax. The operator paid SEK28.6m in taxes in Q4, leaving a net profit of SEK277.8m for the period, up 35.9% on the previous year.

“We still face challenges, but we leave 2020 behind and continue with determination to benefit from our strengths to create a strong global and diversified product portfolio of strong brands and local expertise,” Lindwall said.

“The strong financial position enables investments in technology and existing product portfolio. And we are confident in our ambition with a scalable and flexible proprietary technology as well as highly dedicated and talented teams.”

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