Earnings call transcript Q1 2023

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Operator

Good day. And welcome to the Super Group Results for the First Quarter of 2023. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]

is event this note being recorded. Please now Lisa Kampf, would like Relations. to to over conference the Vice turn I President Investor of Please go ahead.

Lisa Kampf

today XXXX. Good joining results thank And the to call for of morning, Group’s discuss quarter you first Super everyone. our for

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

Additionally, measures measures performance prepared on non-GAAP financial are certain in to in accordance addition of financial with not we today’s for may GAAP. to refer substitute non-GAAP financial measures. These and call, a

of provided available had GAAP comparable earlier in We financial non-GAAP reconciliation the the on the Investor Group’s today a measures release most to page the Super issued and website. press figures of Relations

for provided a supplementary In speak to XXXX will results presentation investment both U.S. internally and and with that refer quarter to highlighting the from the financial report addition, generative business we recommend investors that we how for going our view posted our annual separately This guidance our have is of with -- we we consistent XXXX parts, two the global in how our will and and business forward. first cash XXXX in metrics profitable aligns website. our We to

and Neal Officer. Chief Alinda Hasson, call, Officer; and joined COO; Richard Financial by this Executive Wyk, Chief I’m On Menashe, Van President

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

Neal Menashe

and Good for thank Lisa. joining us. morning, you Thank everyone, you,

€XX we was financial U.S. for Separately, net quarter strong investment the million. reported excluding of for €XX and million results For million. the with operational U.S., the net quarter EBITDA Betway, our the of €XXX revenue, first

reasons. Year-over-year this difficult quarter three for comparisons for our non-U.S. business are

benefiting still XXXX Canada quarter in Firstly, our from in COVID one were business lockdowns.

against many are the XXXX, currency. which materially thirdly, currencies trade, And in the euro the of local has in we meaningfully reporting reduced. Betway including Secondly, depreciated dollar Canadian our

fourth sequentially quarter the it’s look have fourth net so in on moment top was So to of more appreciate that. our boosted financial of the quarter made. today XXXX. and to up our that and on operational the Even will through you and results Alinda we greater managed is XXXX revenue it’s additional increased Net to Cricket World the detail XX% Richard here growth U.S. provide for quarter have the EBITDA quarter first by the at of progress impressive, an significantly, achievement our us go from FIFA an of one revenue Cup, for update XXXX helpful results with to

of evidenced software continue second opportunities our half the excess and growth goal in a strengthen to new discussions Apricot remain economies medium-term Operationally, towards the up our bringing even more with partner focused as in achieving markets and in company continued scale of of our a efforts EBITDA XX%. Our towards operational we on targeted of ongoing by current take in world. around manner margin evaluation

it is sector largest average of spend are ensure XX% support of we I’m spending very to Currently, seeing the Our is line to to revenue business. the than the long-term we item returns. carefully more expense net market. This growth conscious are and a watching decision

operating rise to do is leverage This scale, not Key a staffing generally I in. out want ensures of directly and technology such with kicks business objective. this costs disciplined economies revenue. Therefore, On spending model. line revenue key in as point as our regulatory, is growth, to market-by-market that

was margin well I’m operational resulted whole over Once more and is profitable EBITDA where our margin. say the significantly revenue of customer and in EBITDA very far our revenue in illustrated improve this incremental net of month for then fixed for costs record XX% pleased are March, covered, month. numbers to the

other multiple far year, monthly active for well daily breaking So one the have comfortably for exceeded the month. customers after this with March we record set the X.X records million

For the quarter, million prior average increased X.X a in month per active from X.X the customers significantly quarter, increase. XX% to

well we our unrestricted using gaining control expansion further is as our back There of our U.S. remain markets, which Financially, set of footprint the our in on sheet, support are business. strong and million of of growth the support and €XXX flexible. to cash other balance as of continued we’re

and as flexibility profitability our to to opportunities, consistent returning shareholders. capital us explore allowed In potential to M&A addition in cash generation also well this, as

Now key our markets. turning of over to some

proposed reforms gaming April. Firstly, end after released U.K. anticipation, at of the were the much

We on that operators. result further pleased the level and for for all Group this proactively steps early to industry clarity in playing to for this. a are a Super field prepare

U.K. our So that minimal a pro-reform have business. we expect some impact on will

U.K., Overall, looking particular, has in The has Betway, Spin, markets well inclusion the are growth Jumpman in for of strong European Gaming. Group, up. from as which Super as seen benefited

reduced Ontario’s in to encouraging are and Ontario currency transition. short-term fluctuations our Canada regulatory in Ontario. has unfavorable and the year-on-year including remains Trend revenue Canada, In profitable, business and due impact robust on

casino us and negative in EBITDA highlights performance revenue has Europe, both net with to strong currency of despite for new well. brand This growth this improved realized has business continues evolve marketing. complemented and given very our by balance. record awareness and are to quickly in an spend in Africa Betway markets geographic continue diversify. records Together led we and our localized targeted betting African global marketing example customer sports perform where Africa’s The in efficiencies fluctuations. resulted global worldwide to numbers great multiple

I very am competitive proud in globally of with March. and progress the results happy achieved I’m they record Overall,

to All April, of even less which month. exceeded a were in I’m of one in month pleased with the day say

turn the the Richard U.S. to discuss progress I’ll over to our now call in

Richard Hasson

attractive U.S. the of Betway about quarter the and presents. are billion one you, Thank in a at eight currently excited way course, very be size. access is, operating of beginning big size with the states, The $XX recap, Neal. The TAM is is opportunity acquisition U.S. market day, closed further of To very that and Brand Good everyone. too market, we DGC the one the to ignored. of that of to the

stages, and three in With early five years €XX its the years million to million to €XX including DGC estimated next investments, year an still are next significant for for going this require year. around

ever look this spent look will and we at you single at much it of but that ask we Some market, way. if a in that have investment don’t

for in the us, state For in that normal us. is this is and market, quite context, and each exciting

easily more profitable cash flow. is investment top global of our it manageable expansion business. see state-by-state existing XX source our and we on grown existing of great how on for us market-by-market, and funded Why? is by this for as very a years for than basis this business highly upside we’ve The Because a opportunity

will We and enter states those. attractive realistic are bias to see after us and path more profitability. to only online continue and a sports we where to betting growth that gaming we both States towards

dual we of is our and key XX% the offering out It wherever casino in globe, will afraid part a focus up Around as our less Same for focus this world, do markets around can. the maintain put of the strategy over we this will the returns revenues us. everywhere U.S., and we clear. we is will where to not be evaluate makes same continuously implementing else

in secured have Pennsylvania, Jersey We aim year. therefore to petite, brand, second our both we White’s launch New iGaming Jack where schemes Spin and this leading later

platform. existing on is the For much now DGC, onto our migration the priority, and Global very focus Technology states Betway internal a key within with the

we this to relatively expect per and that economics state ensure small up. unit localized During time, the marketing keep stack

After and investment will Global marketing, about fully expect into basis, On our the within significant that leave state-by-state roll another from out months. reach months begin when breakeven XX a assess order liability which, we we we to that XX date for aim in we to Betway state. Tech

Overall, as for first XXXX to the we in we expect EBITDA XXXX positive now, quarter be our year. be expect U.S. to EBITDA and our of first positive

these will footprint accessible accordingly. course, should or expand, change then numbers live the Of states of

takes investment our to the And is way call essentially thesis. a view, me to see DGC option U.S. the that our In best in

continue as will business to run global before. Our

to cash acquisition on for the to upside of and is opportunity DGC We expect generate that. continue and to it top an grow

the U.S. is over the we profitability do different. look all no world shown that require We’ve not to and achieve to updating significant forward share our We journey. market through you

financial turn now in will the detail. discuss I over call more Alinda, who will to our results

Alinda Van Wyk

quarter, through investment financial year. I our take the momentum for continued into we start results four global Thank from financial U.S. last from you, results have our where by separate discussing quarter I seen you will will our the Richard. now

include not a from fees brand total which was results, €XXX to quarter U.S. revenue, year. revenue €XXX Excluding X% Net does million. the grew for increase last million, license

mentioned, to currency the directly the quarter due comparable is fluctuations to current fee. XXXX the our and not change brand quarter in Neal As of first

in revenue behind includes, drivers increase stronghold net book a quarter, the €X net million overall March €X February, continued in in addition during positively and by which U.K., positive Africa, month most markets, the record growth of The In key decreased in by by the a following Sports strong casino, growing revenue Gaming. European was Jumpman and the first X%. or hold the customer impacted million increased including X%. in acquisition worst revenue by retention boosted poor

from the from Canada as that in due by the the offset strengthening as lower euro, transition dollar region. we a trade Ontario’s partially and was against well euro to revenue The local growth regulated revenues to This other ongoing weakening against lower APAC of impact market. currencies the Canadian

QX increased sports to XX% Customer of numbers book for XXXX. compared

due This continued growth this first the buyback and We numbers strong results effective of first month-on-month during retention are largely to year. initiatives. this marketing XXXX, customer pleased good of quarter was quarter to the strong see of from strategies, momentum with

growth though Ontario. due The casino customer and compared in helped in impressive, marketing our XX% quarter slight Even to customers, solid year. year-on-year, grew up last saw in Canada, returns a in customer a to was new first strong by numbers which in uplift revenue remains the we increase decline numbers, of good the acquisition XX% including

costs, which we the which cost ex-U.S. lower expenses. at first and impacted fees, and €XX regulatory the in EBITDA well operation XXXX. to last was taxes, to and EBITDA the operational year, mainly general inflationary increase was revenue, of includes administrative fees license in infrastructure bottomline, as by Compared for higher brand agencies due of first Ontario as increases business an of million Looking higher quarter for achieved quarter

more effective was This and investment by in marketing. lower levels offset of

decision sits in of net spend the the growth conscious we revenue, made that long-term marketing a is business. Our have of result at which XX% to of invest

spending, the are additional of equivalent to we marketing short-term substantially more in increasing don’t us revenue, this that EBITDA interest reduce the our the could with best our in what result an To in of our this, net to X% contextualize we competitors much long-term. in would quarter net by €XX our then X% one X% an business align marketing in reduce which amount we of While the if would bottomline. million revenue, and believe is this have adopted would by closely

the XXXX and beyond. bulk EBITDA over was focused margins margin to strategies and higher saving drive for quarter. growth on We in back cost to remain XX% levels

EBITDA sequentially our we in Our resulted margin delivery leverage business, In operating the of XX% expected improved in already of March, of results of for and an how fourth customer-friendly from that reaching XX% our month. quarter a EBITDA scale some despite than prove efficiencies. in in level work early greater last the days sports year, cost margin comfortably has the

our business. U.S. now Turning to

cash quarter investment remain and expansion for we U.S. €XXX ended for net very manageable of with was million. in Our unrestricted €XX balance our us an quarter Funding reserves million. the internal from

sheet, Our stake the sheet following The consolidated acquisition in for remain offset cash balance Group’s of to and which of separately balance $XXX directly coming continues DGC been the a resulted Super on restricted acquisition. with announced same value the balance of is DGC has we DGC. million accounted the strong acquisition to since

the date therefore with restricted the are will setting balance and in sheet remind process debt the cash of free. the We

it. about think I how here’s conclude, To

our numbers breaking revenue. is customers record one key engines of of Our for

in world We cost the the remains around to the throughout growth driving a business key efficiencies for business focus. invest continue and

we and U.S. We guidance are, the both for for non-U.S. reaffirming business the therefore, in confident XXXX. our year our outlook for and are

to you. the turn back now Thank will Neal. I call

Neal Menashe

financially Thanks, and has solid and delivered strong. Alinda. Group profitable Super another remain quarter

let have me growth across be about. was we We are. record globe month up, To to the future even and avenues where of April better. was a wrap many cited summarize March

was local global of them strong. really Africa well such and are Key markets as Europe growing in Canada, currency, some their

a It’s not for Our it. to according got the a marathon, business is sprint developing plan. U.S. we’ve leg and

in through in on leverage benefits strongly, March coming We as have saw a firm operating and and again are we synergy hand cost our April.

long continue to we take We as optimize and of to our upside which add will the will our control run in costs. debt, products better

this have for we well the quarter done future. Overall, and in optimistic I’m

wait still I’m us. great we work First, the that lies glass I have CEO. to of looking in more achieved. all I’m any a far ahead what of time that we don’t back opportunities empty the of at interested and do kind

I’ll now the turn open up the for call call Operator? Operator the over questions. to to

Operator

go from [Operator The ahead. comes Jed Please Instructions] first with question Kelly Oppenheimer.

Jed Kelly

Hey. question. Thanks for taking Great. my

on one guidance. first the outlook the Just and

we you was you tell said, I And access, seeing some kind us If down, sort growth you to you’re a consolidation. in and May mean, market are just cost expect month. are trending, do So sequential of the correctly, seeing access how for understand U.S., then go is April on record market you reaffirming the Can your of guidance. I we see XQ?

think think U.S., competing thing you about guess, leverage do you. all states, regulations advertising the that and amortize players when that with about one you states XX the how against Thank about spend you the to an the I different as as actually can it? think it’s there -- Just are across XX well, highlight

Alinda Van Wyk

then Yes. over to for Thanks, start U.S. and Ted. question. hand I’ll off I’ll Richard

for So, either. looks not good a April, is promising good two. as bad XXX% May really and start looking quarter

to for But these But really be it’s is comfortable months into our obviously, for set only I we mean four reached. feel that going guidance, the year. ourselves regarding we that, targets

to early but make are beyond, say, three very projection the quarter to So results then and looking a about the still promising. it’s

Richard Hasson

Jed. Hi, Alinda. Thanks,

world. the at the look we to on applying the U.S., we same have markets is across other coming that it to way applied tool the So kit

actually as we sports know, global and terms In spend Betway, eyeballs the brand we ability have, betting online branding, of you the then global our for that single across world. the spend have where to amortize

global in So localized just into spend with not other the and course, that complementing of then, U.S., very markets marketing.

Jed Kelly

regulatory follow-up, last this there Got mean I tougher year and comping comps, are be know in I on the they’re it. we was year? the with on easier comps Thanks. have some regulatory And regulatory Germany about in you regulatory will what’s like terms of or as the year, a going headwinds then Netherlands. front. just -- the but this the U.K., as think

Neal Menashe

Netherlands, it’s license Germany, has there is dealt firstly, the for and are in been you to and paper obviously, no But how the still can still our markets are the other Well, been white which Okay. with compared licenses, now we there. U.K. other to plan waiting different markets for. in before.

got think a has outlook. brighter I this year actually

very come we -- So as a position. good the and on earlier, in the soon U.K., it’s -- for I about legislation the just final to mentioned, and wait we’re back

Jed Kelly

Thank you.

Operator

Please comes next with The ahead. question Needham Bernie Company. & from McTernan go

Bernie McTernan

last Anything to start peel product Maybe geographic questions. the taking driving to of standpoint results either strong strong terms April. following from for of in what’s what question, the the and just in up really terms onion a or March you standpoint into a Thank the in Great. results? back on Jed’s

Neal Menashe

your these come revenue, huge operating then Alinda mentioned, focus customer that in is on it’s hold It’s a and to casino. April. as and we you things obviously, happens numbers. in in think of what together, good saw Well, get March all And these I and when And key continued our businesses, this what increases obviously good leverage. sports

being now operationally it’s about each our per of revenue profitable it’s portfolio, us, and country vast global country mostly majority making operating being global up them with region. about And every one for quarter

very is So get bit true… of every is and margins -- it’s at we to and revenue means extra it high business high this key our

Bernie McTernan

Understood.

Neal Menashe

of to .. each our countries.

Bernie McTernan

down revenue large and XX%. of able the some the Understood. being of And down? to marketing much EBITDA the March especially investment versus sales comments then Just growth XX% getting moving just on coming coming being up or Is pieces operational to -- versus above. the there, of on of above context is medium-term to about get that trying that following think U.S. in how

Alinda Van Wyk

is That if to will say, down in to scenario trying our an why Bernie. I of we That’s straight bottomline. illustrate. we Thanks, go tried and to run put that cut potentially business Yeah. kind not X% illustrative the that’s we’re what how to

we Neal, guide. and those want spend We hone countries countries are reinvest said cut see didn’t really we short-term the reinvest -- where this the want we for returns marketing to make sure in like, We in just long-term for that marketing gain. can to

Bernie McTernan

comments one in terms of XXXX a a U.S. from last quarter me. just full access to online? market in in contemplate profitability of for coming on then that getting XXXX, the basis The states does in And new year regulatory or Understood. first standpoint what

Richard Hasson

Hi, Bernie.

lines reassess those additional geographic to as path state to are very finding time launched a the be in next that each come again we of will we said, footprint So markets additional And online, then, and current in based on much as months. profitability our the basis three those on plus states. state-by-state an

Bernie McTernan

Understood. Thank you all.

Operator

next Please ahead. Graham with question Genuity. from Canaccord comes The Michael go

Michael Graham

Thanks. Hey.

sort was on unseasonably of I Just strong a growth, customer really it guess. the growth

I about the able linear just the marketing, how there? the on did a growth efficient a should had good fashion but did you think accomplish and geographies sort you quarter some the saw front that unlock so, or a come customers there, were what more we maybe to know during you just and can And were you where marketing level of in you go what customer mentioned you deeper

Alinda Van Wyk

Yes. Hi, Michael. Alinda here.

just growth also I’ve starting strategy predominantly you casino. to the is I growing, there geography the is and level high -- review to can XX% as the because element work, us a the website, customer well. customers mentioned So, it’s good is like for obviously, mean newly acquired marketing we which also on share go But up the which

is seen there But it of Europe market due in to is part the changing jurisdictions volume as with and world responsible We’ve the as Europe where as input. that’s lower customers part but the predominantly. is in measures. and gaming the the -- higher is and obviously, of growth changing is -- Africa U.K., value mainly

Ontario quarter a more Jumpman then remember, added has model customer whole also different is comparative business big with between value business, We’ve which part kind but in in transitioning just obviously to on the base. quarter XXXX one, lower which numbers, XXXX, of the forthcoming impact is non-regulated a of a our And base. had an as recreational, also we the growth had customer one is

Michael Graham

I like And just ask going, competitive there? landscape how is the into particular, on sort for Can actually in you. Ontario, wanted shaping up you Thank Okay. about how comment a year to of it. that’s you

Neal Menashe

Yeah. This is here. Neal

money So, Ontario. customer in we’re again, our the still of optimization good making experience,

transitioned September We with and are nine very talked been that eight months, months, last happy six there. months. how XX August year to we since It’s months

making understand and regulation, understand up and compete in across we understand everyone we has is markets, good the the about, market progress globe. we with product regulated the are we what us the all it’s So we and to do

for Ontario us. no is So different

Michael Graham

All lot. right. Thanks a

Operator

first the for attending you quarter Super This our today’s Group session XXXX. question-and-answer the of Thank for concludes presentation. and results

You now may disconnect.

Super Group (SGHC) 24 May 232023 Q1 Earnings call transcript