SBC News Voice of the Sports Betting Industry
The impact of developments in the low countries over the past year has been felt by many international betting firms and Kindred Group is no exception to this, in both a positive and negative sense.
Group CEO Nils Andén, and CFO interim Patrick Kortman, outlined how market conditions in the Netherlands and Belgium had influenced Kindred’s Q2 financial performance in a webcast to investors.
During the quarter, the Unibet and 32Red operator reported a 29% uptick to £307m (Q2 2022: £238m). Growth was recorded in Western Europe, the CIS region and North America, but Andén outlined in no uncertain words that the Netherlands was vital to success in the region.
“We saw a change in market mix,” he said. “For example, France and the Netherlands took a larger share of the revenues compared to last year. Those two markets especially have a higher underlying margin than other markets.”
Breaking down the figures, the CEO explained that Western Europe saw a 51% increase in revenue, but again underscoring the importance of the Netherlands, noted that excluding this market, it marked a decline of 2%.
This was largely due to market changes in Belgium, where new regulations – including a ban on advertising – have come into force. Growth in Denmark was also impacted by changes in Norway, where the firm has had to adjust its offering in line with regulatory demands, although CIS revenue grew 26%.
Despite advertising restrictions having also come into force in the Netherlands – on the same day as its neighbour Belgium, 1 July – Kindred is confident of its continued prospects in the country.
The firm has worked ‘diligently’ to secure ‘key deals’ in the market before the regulations came into force to maintain continued visibility, such as a partnership with ESPN, Andén detailed.
He continued: “The Netherlands is a very pleasant topic to discuss, as you’d imagine, as we are continuing to see a really strong performance in The Netherlands. We had roughly 218,000 active customers in Q2 2023 and we reached a gross winnings revenue just north of £63m. This was a sequential increase of 13% in local currency.
“We estimate that we have now reached the number one position in the market, that we communicated we wanted to reach at the end of the year. This is based on our internal reassess data and google search data. The official market data will come out in data, but we are very confident that we have reached the number one position.”
Offering his own take on the Dutch market in response to an investor question as to whether Kindred was ‘satisfied’ with its European performance, CFO Kortman asserted the difficulties in marking nation-by-nation comparisons.
He continued: “Obviously we exclude the Netherlands now for comparison reasons, but the Netherlands is our most important market at the moment in terms of size, and it’s very much part of our business.
“I think it’s sometimes even a little bit unfair to exclude it, because that’s also where we put a lot of focus and really see a good return on the focus that we put in.”
However, the challenges of the Belgian market were also on the agenda, and Andén acknowledged that the market will most likely be Kindred’s ‘number one’ challenge moving forward.
When quizzed on the firm’s plans for the sector, he explained that the group has been engaged in ‘close dialogue’ with the Belgian Gambling Commission (BGC). There is now a ‘level playing field’ in Belgium, he continued, and Kindred continues to adhere strictly to the regulator’s guidelines.
“We need all the operators within that ecosystem to do tha, but also a dedicated focus similar to what we’ve had in the Netherlands, to ensure that we turn every stone in our Belgium business and optimise both marketing, spend rewards and our offering on a day to day basis.”
On a different note, Andén also reflected on recent leadership changes at Kindred. The newly appointed CEO started his role last month, replacing long-term CEO Henrik Tjärnström. Meanwhile, Kortman also assumed his role last month, taking the reins from outgoing Johan Wilsby.
“It’s a little bit daunting, of course,” Andén commented on his assumption of leadership duties, and the departure of Tjärnström. “He was the longest tenured CEO on the NASDAQ Stock Exchange, but it’s also super exciting.
“I think we have a very well run company here. We have a very, very strong organisation and I think, the Q2 results that we’re able to deliver in a time of change is really a testament to the organisation’s ability to continue to deliver.”
