SBC News Betsson delivers on 2021 targets but can't hide scars of deep Euro impacts

Betsson delivers on 2021 targets but can’t hide scars of deep Euro impacts

Betsson AB has published its fourth-quarter update and FY2021 snapshot report, citing a tough closing to Q4 trading, with the Stockholm online gambling group still managing to deliver on its financial and corporate objectives. 

The group praised its diversified business model and a geographical make-up that helped ease trading difficulties within mature markets.

Headline Q4 metrics saw Betsson register group revenues of SEK 1.59 billion (€151 million) down 10% on corresponding Q4 2020 results of SEK 1.76 billion (€172 million). 

Period trading saw Betsson Casino revenues decrease by 9% to SEK 1.16 billion (Q42020: SEK 1.28 billion). The performance of the flagship division was dragged by cessation of all Dutch business services in-line with market commands, and significant platform/product adjustments undertaken to accommodate German regulatory changes.

Q4 Sportsbook revenues declined by 11% to SEK 406 million (Q42020: SEK 459 million). Trading against tough comparatives, the unit was hindered by ‘unfavourable results’ and a ‘below average trading margin’ recorded during the month of October.

Of further significance, during the trading period Betsson registered an 8.4% revenue decline within its home Nordic markets – attributed to ‘payment challenges’ in Norway and a temporary performance decline in Finland.

However, the biggest regional decline was registered in Western Europe where revenues halved to SEK 200 million, accounting for Dutch and German adjustments. 

Nordic and European challenges saw Betsson’s Q4 EBIT results decline by 34% to SEK 210 million (Q42020: SEK 317 million) as period net income dragged to SEK 189 million (Q42020: SEK 277 million).  

Betsson Group CEO and President Pontus Lindwall remarked: “Significant changes are taking place in how European markets are being regulated. Betsson has an efficient way to handle such changes that, for example, enabled the rapid closure of Dutch operations.

“The fourth quarter of 2021 begun in a headwind. This was partly due to an exceptionally low sportsbook margin in October following an unusually high number of instances of favourites winning, especially in football.”

Providing a snapshot of its full-year 2021 results, Betsson maintained revenue growth of SEK 6.67 billion, up 4% on FY2020 results of SEK 6.38 billion.

The group’s consolidated statement revealed a 5% increase in FY2020 operating costs to SEK 3.1 billion, primarily attributed to a higher group marketing expenditure and personnel costs as the group’s global headcount nears +2000 employees.

 Despite accounting for higher operational costs, Betsson maintained a 6% increase in FY2021 EBIT to SEK 1.19 billion (FY2020: SEK 1.12bn) as group net income stood at SEK 1 billion.

Closing year-end trading, the Stockholm-listed online gambling group branded 2021 as a year of technical achievements.

Investors were also updated on LatAm developments with the group having laid the foundation for aggressive expansions in the underpenetrated South American markets of Argentina, Mexico, Chile and Colombia.

Of significance, group growth directives will continue to be led by Pontus Lindwall, as Betsson settled its leadership succession dispute during Q4 trading.

Lindwall remarked on year-end results: “2021 was another year where we could see the importance of a strong global and diversified product portfolio featuring local expertise and strong brands. The year 2022 will entail continued investments both in technology and the existing product portfolio.

“During the year, significant progress was made in Latin America and the ambition is to cement and strengthen these developments in 2022. The acquisitions and investments that were made are developing according to plan and the company is becoming even more efficient in the region, not least thanks to the hub that has been established in Bogotá.”

He concluded: “Betsson’s offering was recently launched in the city of Buenos Aires and in the province of Buenos Aires – two separately regulated areas in Argentina. The plan is also to launch in Mexico during the coming year through our partnership with Big Bola Casinos.”

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