Earnings call transcript Q4 2022

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Operator

Good morning and welcome to Super Group’s Fourth Quarter and Full Year 2022 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions]. Please also note that this event is being recorded today. I would now like to turn the conference over to Lisa Kampf, Head of Investor Relations. ahead. go Please

Lisa Kampf

and to everyone quarter for our joining full Good Super thank Group’s today discuss of fourth results call year morning, XXXX. you for and the

we update from uncertainties and our differ to factors forward-looking no call, statements During that of SEC in materially our historical other than as assume make actual could responsibility subject risks, are from cause discussed a our this forecast. other to We nature may by forward-looking our that or filings law. further results comments to results required

Additionally had refer Group’s we in on financial measures posted additional of of release certain These suggest the the a website, non-GAAP the provided to that issued for Relations of figures a today’s that section to are call, the financial financial Investor measures We to earlier which investors call for this performance we reconciliation most of during page referring prepared not the information may non-GAAP comparable measures and GAAP substitute quarter. the non-GAAP our today includes press financial available refer in financial in We accordance the website. the on to IR addition to information GAAP. supplemental measures. are Super and all and to presentation with

when Financial questions After Operating Officer. prepared for remarks, Chief our Today, I open Richard will am Van call Hasson, joined by joined Neal by up Menashe, Officer. and Alinda Wyk, we Chief Executive also Officer Chief President and the be will we

like to turn And call the to would now, Neal. over I

Neal Menashe

for fourth year. today. Welcome company in thank and discuss quarter everyone and traded a for including publicly to the significant XXXX a morning for very was us to full Good year Super becoming joining Lisa. you January. Thank the our call XXXX’s Group results you

came operational €XXX revenue for range our million. of our EBITDA the €X.X year at exceeded at in and billion guidance Total mid-range

the long-term. focusing invest continued the in to we many grow year on markets During

revenues level XXXX XX% to decreased above XXXX and Our but cash. XXXX continue remained we profits and X% from generate

results macro COVID a financial and inflation to contractor in a difficult impacted the and XXXX by We from began because brand benefitted feel markets. license because decrease certain consumers had factors; of few effects comps lockdowns our fee. significant in were were The factors XXXX

Some being we significant key new introduced markets incurred overhead regulation, additional due public and costs company. a to

average FIFA these World quarter the monthly to the and increase of of Cup Cup Jumpman active XX% towards million World Gaming acquisition increased by million the Despite from €X.X for the XXXX. prior Soccer year, and Cricket challenges customers the in €X.X end a fourth held TXX QX

in monthly the XX% year, For from at X.X €X.X full we million XXXX. customers average active

last truly ground are business the over XX in in languages. We supporting on a countries XX team XX -- global that jurisdictions

opening opportunity which no longer new global means to being markets to We existing close footprint and attractive. where our see we continue prepared optimize markets that are

XXXX, in exits part class with course clearly our Corporation Super global A of grow an Of Group it’s stage footprint now being digital aboard and file. with DGC additional gaming will

Difficulty] welcome [Technical to family. of being DGC these fully back licensed Super Group the the On in Super Group

the is believe in uniquely company the industry embark We we XXXX. positioned on as

for allocate we aligned how Our strategic cash. year priorities the our with are

market and experience adapting to optimize an each remain on order operate. full sports the new of closer will with and technology of product. the control customer ultimately in business end front localizing enhancements direction give we even are which our book and only focused ownership improving enhancements cost providers only is control take in into of of to therefore customer we end online to both technology to Achieving Apricot Firstly, Discussions platforms this and us which deployment and the back our we on-going as are our the product on-going global engagement, the possible key with look markets. value of and technology,

soon updates conversations we’ll additional provide available. as and well are progressing Our as

on Secondly, optimizing focused footprint. our we’re global

the We with we disciplined have that sites approaching TAM; that will market are entering the approach. eight a U.S. $XX and is measured market activate be will which billion

that apply last markets the toolkit decades. will that globe the implemented built We same and to successfully over use those these across the were two

the be by To what is the a U.S. we’re opportunity. U.S. creating state optionality for simply the investment we to us. clear, basis. on attractive returns see as From invest generated state going spending re-evaluating And being an an constantly perspective, entry

ex not in to on Keep top and grow growth guests, potential disciplined and tend in that we U.S. upside all way. U.S. scenario. to continues We’ve manage global business inception, at the enough this Our been it’s a mind presents that. spending of expense generate same and cost the since

we The customer to and globe. marketing for U.S. investment way five same years going markets in significant directly required require of of by that that over elsewhere is worldwide. service, remainder areas next to three the will funded the the investment The DGC that’s number strategies be cash a business apply generates flow our into around proven constant the including tech, in the we other market have our U.S.

promising still eight that those higher, the to and the very days launch early technology is tech. Betway states three live this global the operating some And showing Betway proof-of-concept. Of of metrics currently latest days literally are in, on on while are

the our look technology working all components allowed. and are correctly to and into investments optimizing are forward customer on journeys in the stage markets what’s further We other

about are on sharing U.S. more in data months. We coming the planning the

to market costs provides line with and development German on online market incurred the The are markets betting betting in markets. tracking Moving We’ve continues. optimize and customer both transition [Indiscernible] transition easy experience the to to regulated an the sports expectations. non-U.S. casinos sports and a

possibility stakes performing markets sizable of the more but recreational profit. majorities’ the proprietary other Our taken learn U.K. Jumpman We’ve to about this this contributing its around well world. and segment using customer market tech to take Gaming is from of base a of gaming a more opportunity segment, the adding our in

footprint we our a should global selected, and we and process operated. really that as our re-evaluate strategic is market continually we’re the that Overall, market enter

market a a market only and leave the us for doesn’t If larger we in stay never will to a profitability that continue growth market. present long-term of then sake for with footprint. will a case feasible We

brands and invest casinos future and front, marketing On in and marketing other around continue on we the the campaigns includes of portfolio reinforce online Spin that and with marketing the brands to on-going brand Spin ensure ROI. our targeted of spend careful Betway channel this world to to analysis now detailed Jumpman focuses both growth.

portfolio marketing and continually of brands brand the brand globally. betting sports scale, for XX at Betway our partnerships, Betway allow reinforcing over boasts thus a

strategies to evaluating shareholder continually are deliver We returns. in order meaningful

Given within in our approved the liquidity authorization intend share we be position, disciplined repurchase the program and provide. to the Board of Directors January

In we exchange point any that all and that pre earnouts instruments. outstanding cost warrant warranty listing successfully shelf and shareholders company. in the like participated year, and from very to completed December a moderate cost, therefore potential at structure all last our capital cleaning right our these zero to evaluation out a exchange future would up I at

our remaining we the on generative while world. XXXX In opportunities excited number the successful expand have strategic opportunities both path to addition, conclusion, profitable, and the to acquisition debt of cash and business we’re strengthen we of In free. around about the continue set

in of We a are increased running the value. continued outlook pursuit business shareholder long-term with

to here profitable over well I’ll our to the our as as Alinda Alinda? XXXX turn call talk quarters now about discussing guidance.

Alinda Van Wyk

our you, driving referencing for included on projections. the the posted assumptions website. results and underlying also will discuss in Today guidance I Thank I Neal. be XXXX presentation operational will our the

€X.XX Neal billion. As €X.X revenue above mentioned, range XXXX guidance upper total the our was of billion of

XXXX in guidance. of in X% driven The and the total EBITDA first quarter XXXX, was In XXXX. lower license first decline line with for changes than some was €XXX revenue the midpoint in quarter of regulatory million the by brand lower of fee €XXX million revenue markets. was our

license brands increased excludes income which million. revenue, X% €XXX to Net

the segments. licenses this million break well from as offerings book X%. includes book revenue sports fourth as in increased the some Sports generated under into revenue sports, in growing revenue certain by jurisdictions. Sports €X Let’s other quarter business down

are strong and to impressive, growth continue active be in Growth in numbers. customer we Africa seeing

have to they by Ontario was however Europe also progresses. did month We We growth Ontario. from offset This transition markets revenues to as excluding growth regulated in month and strong the experience Betway’s the Canada by to throughout driven ordinary efforts of out in but margins attract impacted, fourth negatively December. unfortunately quarter. the and our This the during predominantly growth was November and growth soccer retain support customers lower worldwide

impacting As new can and customers. any know, revenues and the term volatile book XX% and you was sports numbers fourth versus numbers XXXX results active potentially up with that’s Customer book quarter profitability. the record compare XX% for in you if XXXX short for monthly be sports

or but million improving on slightly revenue disruptions transitioning in of Moving to due business The online X% prior compared term decreased is on €X net year. the quarter inventory the into by as four regulated market, month. short to casino, month to

We a in also decline region. APAC saw

On of we the which growth Gaming. full from significant the upside, quarter U.K. revenue had a included in Jumpman

XXXX Continued compare Canada, for excluding quarter if was numbers Ontario. casino the up growth growth Customer XXXX XX% for in and and Africa in four XX% versus you results.

for historically for last This a the general had of with in a in mix license lower bottom quarter of company, net revenue and revenue high of quarter increase further administrative of impact which higher €XX of is we a investment brand spent. marketing country the fees, four business Looking in public profit at margin, by due due from EBITDA fourth year slight cost in technology and driven a line, increase drop achieved Betway, XXXX. increase coming million costs and of to being an percentage operational a the from lower largely to shift the

the balance was unrestricted Looking capital €XXX cash sheet generating of at our assets end income financial and balanced of growth with of our structure now... healthy December. million remains positive at position, A

the how To is on I going a of forecast figures, the disclosing to be we acquisition year. moving first January including give to part overview of forward, recap, group. DGC will we this the on given as Now XXXX. now DGC quick on our closed want

business, we and up business and global the to split our U.S. be presenting will now results super Going group DGC. between guidance being our forward, up ex-U.S. the

shareholders DGC provides and to figures one, horizon a rest the to cash is our of split opportunity also of view to the U.S. of these at us insightful business, scale rest markets business. development flow potential and opportunity stage funded the and United investment and of multiple by the and from attractive as different very helpful upside more out information States Group both investment investors. the the our Super the worldwide in to the We ample

to on for XXXX. expectations our Moving

represents growth from predict Excluding our which U.S. single revenue business, be XXXX. to for €X.XX XXXX we digit billion,

We are cost top a control. and combination of of €XXX by projecting stronger driven better million, EBITA growth growth in modest operational line

is revenue revenue which to affecting approximately X%. net operate. Some XXXX of various grow in the macro local of expected the underpinning material on uncertainty and the include; for average the we account customers Brand in for our license markets assumptions our is guidance month. continued to XXXX expected be million the Taking into by currencies environment, €X.X both

all reflecting lower Marketing revenue, net to expected marketing, be operating continued €X are finally, be of than investment XXXX. brand. is costs expected million And XX% into of including to channels

financial costs an We XXXX on in is which part cost with included selected the strong for by Jumpman have XXXX identified basis. in next This like four like year expected growth months along efficiencies are full to revenue investment offset for versus the the deliver compared a for markets, to earmarked million being of year. €XX additional in based

efficiencies This margin our margins net focused in EBITDA XX%. businesses, eventually therefore XX% EBITDA We from XXXX. increasing efforts remain we margins. on to the and effect margin to closer of up across EBITDA return target our Part of to operating that step is all improving our expect

the to On DGC. U.S. or

sports much As states its and both business in at X the DGC offering X live and noted sports stages development. remaining a states is previously, iGaming. only very is are early where two This have of have

be not over. yet these Some technology the on of operating and states migrated to are Betway need global

investment. on begin investing produce more those focusing successfully that will on always this areas the we best As markets, is return into done,

DGCs for the five a year even the our being from footprint the and world. operating the XXXX. dependent loss on funded expect million easily that’s of operations significant without to remain based break minimal for around €XX expected And new states. by net revenue U.S. years the we level. to This opportunity But we EBITDA in Timing of regulation investment speed us. for next on is on the rest the expect within current is

the support In future remarks. technology Super for call we financially conclusion, now back and to his our remains while run continue growth. Group business will strong to to turn final marketing I investing and profitably in Neal

Neal Menashe

could uniquely consistent the profitability. and The business say was another the investing and healthy an the of help in scale won’t for amazing tech model Thanks achieve revenue Alinda. marketing EBITDA global short-term I’m proud on to in achieve be our marketing XXXX extra investments and us is business down Group key our and gaming easily the today, in cut remains year space at and universe. higher investments Super But look to back road. to We We order for that efficient to technology that margins in longer-term as positioned in profit. the future. in to

and includes a happy to a customers. new continue to X.XX million important almost we with profitable grow our revenue of a of leverage progress unique far more it’s record customers, perspective, [Indiscernible]. note the as As high incremental which becomes as I’m from business, unique that number XXXX, daily margin operating

the We us. the again for But and revenue which from that currency book, in in worldwide euro subject continued February. to casino online against focus fluctuations of area the want are the however of comes we our to remind at volatility impact everyone XX% sports I still saw

So across global diverse iGaming. to sports and summarize, betting we a footprint have

online stack even an of with that business degree high working extending control tech our on only a are We of further. and

sheet. highly healthy debt are free, balance profitable, cash a with generative We

continue after with will growth highly We to long-term profitable experienced a team. go

about building and prospects our brings, We foundation a footprint the XXXX are excited that the including U.S. in establishing

for over questions. We to will now operator turn the

Operator

Instructions] begin And ahead. Thank go you. with question first the [Operator session. we Please time, will will Jed now Kelly our here At question-and-answer from come Oppenheimer. this

Jed Kelly

great. Thanks Thanks. taking Hey, for questions. my

in two month just strategy large the about Can we I And guiding terms really talk see you in when of, I think can, us million new share. the strategy? just guidance, seeing if kind two losses. of to to continue your a launches? you us? market any of you’re $XX overgrowth One, how that the in XXXX? lot in Can It’s you you investing see kind into then on for may. of help Just trending can you that’s the talk I about, we’re market players of state give Canada. sense consolidate can mentioned U.S. month

So can the talk Thanks. in the market about share you with U.S. strategy dynamics? the

Neal Menashe

so Okay, go first. I’ll

month and So on Canada, we month Ontario. Ontario, have increasing growth in Canada seen in month on month to in

time changes, regime that when we new As put in you the migrate you to a know, go in to from customer with have to with expectations. over. the existing takes it line regulatory base But is all our

Alinda Van Wyk

And XXXX. continuing into

Neal Menashe

XXXX. into continue And

Richard Hasson

Richard Jed, And here.

on U.S. So the

around on I to the the we’re world. think a the Neal in bit have markets way more more touched U.S. we detail, be looking that same the of at effectively going

the to And a going off finding investment You’re correct, to on not the to assessed that And be sense. feasible. very lie applying we’re for states the time, €XX to referred Alinda basis just brands million in XXXX an footprint, of applying the investment. across going commercially toolkit terms And of sake same be stage the going will we’re that to key looking of have states which are be on-going country. large that sooner makes at the given way, the in for is technology having same a the which ultimately part a

Jed Kelly

we at partnerships U.S. talk that markets and helpful. of of aware And Thanks there you anything just the where year? those. you your are of And terms landscape be this then you how in is in on that’s your some Great, should partnerships media about in sort regulatory can of then, your international look

Neal Menashe

have other brand channels investment marketing in by the the into will a that U.S. approach which to way On applied be that the supported again, significant the all same a is we similar U.S.

be partnerships also, other a the basis. by of course, marketing return will state of the it’s again And it’s of the state You were U.S., over portfolio brand the of driven the already it’s partnerships XX and brand with on but number not that that around then exists those, nationally, in world. reinforcing global just

Richard Hasson

come And in. then I’ll

we so for conservative U.K., the waiting that Betway published. for in got paper, been the U.K. the But are we’ve again, years. will in the yes, -- world, – last white the across So the very so five you’ve be

to us, the back. regime. while one significant And one what the other we to a regime seeing Germany that white casino to regulated the had we forward paper was for in look the off software So to had says. compliant now getting we member, over move turn and

back to Netherlands, still we operators still the So in still waiting regulator, a then and we waiting back. And whole there. of get lot from foreign

and market get And margin, remember, is learned covered. everyone those marketing country. is made of we to this the the everyone, has markets. all business and driven about or our keeps up we’ve get revenue of because get is always already software, the lots get extra in jurisdictions. got these it’s that hitting business technology how that about the returns country the it by costs other And But huge a you’ve And

Jed Kelly

you. Thank

Operator

And Needham from and our come go Company. question McTernan next will Bernie with ahead. Please

Bernie McTernan

taking you U.S. what’s Great, then successful, that country the and you’ve you’ve up just any Do from think you previously questions. investment challenging like be on for to what been follow been just anticipated. U.S. the maybe early thanks the for more had XX learning’s the and the peak year will than than, Maybe

Richard Hasson

Hi, Bernie.

So the probably XXXX of same the in investment terms figure. ballpark in expect we

mentioned, kind is pits Neal bottomless as of a investment. not that, Beyond this of

appropriate assess investing and state level, the that returns. where state at at we economics sense, continue are look sure basis, a by the that make we and XXXX if markets each While can to in make on we we generate state where

is of you’re this seeing the on are we seeing plan in also, place, come promising which talk of coming the that bit technology, do year, beneficial out strategy implementing. with and live and some we’re out light, Betway having very learnings, unfortunately a the global right technology to Again, in more that to the around terms and in point the we’re earlier metrics In U.S. [Indiscernible]. that coming us higher, detail that, mentioned went to we again, if last months

Bernie McTernan

Understood I insourcing Apricot? on update was missed stack and potential relationship of in any tech it, if but the with the there apologies

Neal Menashe

him. still Yes, so mentioned, with are I discussions in as we

We are making good progress.

your the business So to away get the your budget. in on this you us remember can’t you investing key and as that to regulation be do back we it’s need that people, owning And we you comes technology. that will your that, changes, from here come that’s stuff we technology, marketing But that. is for and to technology, controlling available, as us. why and new have super And important is part in

Bernie McTernan

you. Thank Understood.

Neal Menashe

And it the also allows yourself you to competitors. from differentiate

Operator

question [Operator Our go Canaccord. here of Please next ahead. Graham from Instructions] Michael will come

Michael Graham

a Hey, had two thanks questions. just I lot.

little The in first Could of of be on we one in you we about sort bit for terms which of year is and year to out X.XX anything heavier others. the your guidance just about anything might than maybe a the seasonality as revenue. out parts should, talk should the know call billion plays

to spend you do play go you could out kind and XXXX in just talk time you a Thanks. depth this And some wonder a I quantify about closing that then that unattractive. how are more layer And of forward? important as part think we how of talking be XXXX like, of markets maybe sort of will and that your and become add prepared that remarks about if

Alinda Van Wyk

have presentation way I’ll take the a given -- first investor’s here. the part. Alinda predominantly the Michael. the around The We in seasonality breakdown. we Thanks, offerings. of the quarterly on sports is

how can a easily seasonality on level see you business. the high So impacts

the in as is the economic modest my the up see. projections going interesting company, to volatility consideration is sports. world in at currencies that can’t due XXXX. well that that impacts And outcomes it’s also the you what also we’ve But we such around But taken of starting we the industry into [Indiscernible] time the is really XXXX December we’ve fact that predominantly in as revenue sports for on the the seen our break based don’t our we that happened November to macro the multinational this format of in said and on on and on a for revenue we’ve projects So the the as forecast guidance point forward. just volatility -- results for thing

Neal Menashe

because I’ll on after that one in And consider there them. your we world one answer here. you’ve other stack, into and in technology was own technology more and stack and on the Africa still And these we and based one how can have stack either regime get questions our markets [ph] costs you then the the the your your tax revenue. all we’ve we your group like seen then any that operate one mortgage give on We got markets the or that next across based really in from country you Neal was all need that And in actually exiting basically country. the Europe and then benefits also then one formally

country looks us we’ve we based decades. how ever then their we look to from money last operating there that’s it EBITDA And two per it making to how And see country. or the going are So not? for get or, done an on from we at

Michael Graham

that a color. perfect. Okay, for Thanks extra lot

Operator

session, thus participation. We and you thank for gentlemen, today. and question-and-answer our this our call concludes interest concludes and Ladies your

disconnect now lines. your may You

Super Group (SGHC) 14 Mar 232022 Q4 Earnings call transcript