SBC News Voice of the Sports Betting Industry
Better Collective is on track to achieve its vision of becoming the sector’s leading digital sports media group, CEO Jesper Søgaard informed investors following the group’s record-breaking Q1 earnings call.
Addressing shareholders and media, Søgaard and Group CFO Flemming Pedersen provided a market-by-market breakdown of Better Collective’s operations during the first three months of the year and beyond.
“We continue our strong focus on recurring revenue and are proud to see this grow 75% year-on-year,” Søgaard remarked. “We are now also beginning to see encouraging developments in the US after changing parts of our business, from upfront payments, also called CPA, to now recurring revenue share.
“In Latin America, we have laid out a clear strategy for how to become the market leader just like we have done in Europe and North America. This is paying off as our strong growth continues.”
This ‘strong growth’ referred to by Søgaard was broken down further by Pedersen, who explained that of Better Collective’s revenue upsurge, Europe drove 50% and North America 19%, with organic growth accounting for 23% of the group-wide increase.
Revenue share contracts have played a large role in Better Colective’s success, the CFO continued, coupled with a ‘vast database’ of recurring revenue accumulated over the past 20 years.
Lastly, Pedersen also expressed enthusiasm for the Nasdaq enterprise achieving what he labelled as ‘The Mother of All KPIs’, that being earnings per share, which was up a record 52% during the quarter.
Back to examining market-by-market growth, Søgaard emphasised to investors that Better Collective’s strategy remains unchanged after formulating a blueprint for success in Europe and North America.
Reflecting that some long-term investors ‘will have heard this song before’, he expanded on the group’s situation in Latin America, where it has appointed a regional CEO in Simon Hovmand-Stilling and built up a ‘strong local organisation’.
“Moving forward we will focus on utilising our Affiliation Foundation, as well as our other media capabilities,” he said. “On top of this, we already have several media partnerships in the region. And we expect to sign more in the near future.”
Responding to a question from SBC later in the call, the CEO further elaborated on what he believes are the defining characteristics of Latin America, and why the region has potential for Better Collective.
He said: “I think there are definitely more similarities between Latin America and Europe than, for example, North America and Europe. It’s because of the nature of sports interests.
“So soccer, or as we call it here in Europe, football, is the main sport. When you look at the mix of sportsbooks, it’s also more similar between Europe and Latin America than compared to North America and Europe.
“In some ways, it feels more like our home turf, Latin America, but still with cultural differences between the countries. But, I think it’s more of a similar market to Europe than when you compare North America and Europe.”
Another aspect of Better Collective’s song, for which the notes will remain unchanged, is its approach to growth from a business development perspective relating to M&A and organic expansion.
The group’s commercial history has seen acquisitions of Midway AI and a recent shareholding in Catena Media. Growth has also occurred via partnerships with digital soccer platform Goal, the Polish news portal Wirtualna Polska, and Nigeria’s leading news media, PUNCH in Q1 of this year.
“I think if you look back at the last five years since we listed the company, there has been a mix of organic growth and acquired growth, and there’s nothing fundamentally changing when we look ahead,” Søgaard informed SBC on the call.
Latin America – especially the ‘very exciting’ Brazilian sector – will provide strong growth for Better Collective, Pedersen informed one investor, highlighting its legacy business in Europe as a continuing source of opportunity in particular the UK despite the market’s standing at a regulatory crossroads.
Again turning west but this time looking to the north, some investors were keen to address an increasingly hostile attitude towards revenue share among some US regulators, with both New York and Massachusetts looking to clamp down on said arrangements.
“It is a political process across each state and the regulators will have to find their feet and so we will likely return and revisit regulation once they have implemented the first go,” the CFO said.
“We are positive about working on revenue share. Our partners actually also, many of our partners are also preferring that model going forward and supporting it.
“We’ll have to see how it all pans out, but I think we have to accept that as some of the new territory here.”
Regardless of regulatory and market developments across numerous territories, the two executives remained highly confident in Better Collective’s abilities to achieve full-year targets, encompassing revenue of between €305m-€315m and EBITDA between €95m-€105m.
Søgaard emphasised to shareholders: “After another great quarter, I believe we’ve never been better positioned and prepared for the future as we expect to realise our vision of becoming the leading digital sports media group.”
