Earnings call transcript Q2 2023

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Operator

Good morning. And welcome to Super Group’s Second Quarter of 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Following management’s prepared remarks, we will open the call for Q&A. [Operator Instructions]

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

Lisa Kampf

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

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

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

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

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

Van am joined Chief I call, Menashe, Executive and this Neal Wyk, On Chief Officer; Financial Officer. by Alinda

we Chief President session, be Hasson, and the by Officer. will joined also Q&A Richard Operating During

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

Neal Menashe

XX% results delighted was we strong of revenue set million. investment report of our for XX% Lisa. the EBITDA the quarter XXXX. for was year-on-year. Good you, €XX strongly more morning, Thank two to increase quarter grew a you and €XX ex-U.S. million, for €XXX thank quarter to for for Total joining U.S., Today, us. net are everyone, operational Ex-U.S. EBITDA even increase year-on-year. a Separately, an million, the financial

of from customer with a growth active really one continued of on good, base month. experienced left momentum continuing record the strong in monthly quarter million We X.X new our customers off. April with was where

we month, achieved active to in X.X the X.X For of year million XX% the average new customers a increase. record compared quarter, prior quarter, a per million

the of Our last strategy three is reflected EBITDA the see solid for of with the four results. our least June margin in we achieved into quarter strong at in greatest investing averaging EBITDA the margins to months where markets second We of a quarterly return XX% up XX%.

further scale Our that cost our over business the quarterly longer are the synergies of sustaining ultimately we market-by-market at reiterate margin operating model, combined greater than of demonstrate is to with term. achieving. the results core leverage the to is an I key when want EBITDA additional of economies which that XX%

a the As to investing XX% the revenue quarter. was committed our this spend, to net of which [ph] is for strategy long-term. Standstill business, for marketing we remain

our in last level target this achieving does quarter specific investment factors the not from rather market While the prevent of not quarter, to do full for in lower our change we any strategy, marketing slightly it than expect is but year. us reflect some that

brand National the recognition. international further will Betway expand partnerships of we major U.S. weeks, recent enhanced partner cricket global Toronto’s impressive the league In partner portfolio, and Bank tennis of official strengthened official audience These betting Open. really brand also partnership our and becoming cricket and further

the adverse and fluctuations EBITDA, of despite currency to some Now Africa net during key quarter. performer, strong a markets. turning for be customer numbers, to our setting records some continues new revenue

impressive efforts, an results. our awareness a and to generate through brand platform combination localized increasing that We of proprietary global technology continue also marketing to continues refine by approach

strength faced momentum we in U.K. benefited pressures but sports Spain. the recent this the also largely market. the Jumpman sign Europe, In regulatory saw an following the saw Gaming, the In inclusion we driven of casino continuing from in and U.K., product, by encouraging

for of Canada an is line is remains In quarter, growth encouraged well year-over-year Ontario, expectations. region well our ex-Ontario performance comparators dollar tough performed year. important Canadian in the adverse despite the we last despite with with and us. Canada our euro tracking remain against movement and this

this now the live with U.S., gone having in earlier we’re nine to Moving states month. Louisiana live

that I onto marketing and Our optimizing before the priority that Technology a remain something ramping two we begin -- big confident investment. and approach. stages time states the it know then is our take spend, and Betway Global we in successfully of have for done decades these and with remains migrating is will up we noted tech last But this undertaking all all the

Looking million at €XXX unrestricted debt. with our continue show strong to of balance and sheet, a position cash we cash no

discussed Our unchanged calls. from in for previous our remain earnings have priorities using what we cash

this earlier announce be end, that will a and content will acquisition sporting help majority provider as Group our the improvements in great content. to in media o believe strong driving that month, customer pleased a We this we’re that acquisition sports stake tool. Super ultimately data-enabled Sports.cc, bought a serve of in

soft a good acquisition provider, them. sports making completion towards of our On software and in dedicated progress same advancing sports from book discussions Apricot our the -- front, are the of we’re with

turn in now call results detail. to will greater Alinda to discuss the financial I the

Alinda Van Wyk

our quarter you we our last to results Thank of where the for now quarter take first and through you, year I materially financial Neal. exceeded have will performance compared the XXXX.

million. record brand fees a XX% quarter €XXX include million, to the total strengthened Excluding license increase year. was U.S. last from doesn’t all-time results, €XXX revenue which an Net revenue, of for

due in €XX growth while Africa record book or prior period increase markets, increased of growth outside in in Canada the to Spain, this driven to is our regions, in Ontario our against segment. of ongoing U.K. in transition book increased both X%. Ontario market led second revenue growing million million growth Sports APAC revenue markets, revenue in casino in a results by sports the decline at certain revenue by euro. and was by partially European offset Net the Looking devaluation expansion and net lower XX%, by consistent by was currencies €XX an and the and the revenue robust regulated quarter, and revenue casino in by with

Moving increased on XX% to for sports largely Customer substantial strong driven both in new the investment and in customer acquisition growth the sports XX% book customers. book We the strategies. year-on-year for saw segment, numbers by retention casino. casino and by and consistent

customer new further gaming remained ongoing to continued our enhancements Thanks gaming of content from positive Despite experienced platforms. active we the improvement rollouts to calendar, seasonal and quieter momentum and customers our sporting overall in experience.

This an Looking the for year-on-year. increase quarter. We XX% at achieved came EBITDA of is the margin EBITDA bottomline in operational million XX%. for ex-U.S. for business. the strong at the €XX quarter of

combination we laser-focused come operating and from to this margin investment cost will base. of the of a of Neal As drive in overall earlier, leverage which at into our the business cost not But on growth. reduced remain improvement alluded inherent the rationalization our long-term areas

Now looking base. our at cost

was revenue with which a revenue strong as a run XX%. in ratio of spend current quarter in lower schedule, to For and growth. compared of quieter is due spend reflection net percentage This XXXX a rate to one our sporting the resulted along not marketing quarter, a marketing was lower

for highest and where can on long-term and this the to we We invest the best full marketing in be diligently our assessing return work ratio investment normalized expect year. continue to over spend growth

Turning to costs. operating

this have appreciate starting we We that consolidated come continue numbers, on are made now assumptions I’m into expect expected may not to and savings. and the outlined the into we Gaming as remain very our clear Jumpman now in we invest track realize more with our that through. we our to progress quarterly Nevertheless, synergies that importantly, We our operating be to XXX% guidance in key markets. we XXXX growth results cost have happy

for guidance reaffirming the business, into revenue of we had billion, ex-U.S. in outlook feel XXXX the year, some key for consideration our comfortable €X.XX our book to the sports a reference the start to total markets. and revenue taking generating fluctuations strong of of volatility million. We With margins our year-to-date total of currency €XXX our

ex-U.S. to operational on Moving EBITDA

us months of gives million. ability We previously guidance €XXX first year. our this have our stated generated to six exceed €XXX million This during of in confidence the

So we at EBITDA for XX%. to of year the least for raising margin EBITDA operational ex-U.S. our around are an €XXX expectations million, implying

For the and revenue projections remainder continued year-on-year anticipate realization the without performance. the any year, of efficiencies with line in we overall growth our our cost fundamental degradation of in

of remain marketing €XX incremental lower investment our in for million In and year. be half accounts to-date of the to guidance on this the EBITDA for spend for the EBITDA making year, EBITDA expected €XX net investment U.S., we the up quarter. projected the track the million totals spend for now Our second

generate sheet a business Finally, and cash. our strong ex-U.S. to healthy of level remains our balance continues

cash used to our As discussed last restricted DGC’s quarter. equivalent of we in quarter’s €XXX quarterly million pay -- debt this value off call,

As concluded is we €XXX balance million. free an XXth, quarter for and Super again of the Group debt June unrestricted cash with

are a including revenue quarter. the in EBITDA multiple here thoughts conclude, our my highest on set To records, We new quarter. total

Our in of customer future numbers business. driver our are stronger growth be will than ever a and key

than it markets a when focus slowing term XX%. consistent we in margin not scale each our realizing remain our in of to and back a journey the cost achieving key are comes We greater efficiencies for investing EBITDA as down continue long and getting to of

now the back call turn will I Neal. to

Neal Menashe

an to closing combined with Thanks, positive model. happy XX%. continues Alinda. previous of delivered delivered proud leverage year. growth, has quarter the Group margin on outstanding momentum be an continued our of quarter, of costs, EBITDA with Super the was say and a of operating we’re Revenue business July ahead This to focus benefits our demonstrating and

quarter guidance our about delivering We’ve and operational long-term raised growth are prospects for shareholders. excited our year. and the for We our are the the EBITDA for of performance committed remainder our to

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

Operator

Needham [Operator Thank Company. & comes question with go first McTernan from Please ahead. Instructions] you. The Bernie

Bernie McTernan

in the players, you’re doing of of just the just what to any if I’d states very early in out Great. terms Just how and on types for indication the taking love U.S. better? kind can seeing acquiring topline? that are in you provide of of you start is hear some questions. opportunity the players that U.S., Thank Maybe flying the much to success any

Richard Hasson

Hi, Bernie. here. Richard

you five are states nine in know, think, plan the that we on four the on we I migration. and as the currently have just states Global there, Technology with live of place Betway for So the the U.S., other

and place technology across marketing High the to are have very begin there the we all we technology, level numbers encouraging without is, once state-by-state the new plan say, the the in like, up going I states. to on detail, ramping seeing some

Bernie McTernan

Understood.

Okay.

on going for that so while. And discussion with progress on maybe point, mentioned but a good been and discussions these you Apricot, have

points potential any sticking about deal So be being... a thinking we like major should or timeframes

Richard Hasson

by are the the quite hoping it’s We’re make excited very it’s It quarter by quarter are sure all everything we is complicated four, three, but of IP and big track IP as well own technology. everything -- and do, been process beginning in getting to of with is on that the to is we there and place, to quarter done. this bring are but a we four, to

Bernie McTernan

Great. for And acquisition? in why any can and me, provide just it on information could additional think be you lastly you helpful Sport.cc maybe customer

Neal Menashe

Sure.

a of, which a content, but our offering. can customer way It’s help It’s specifically. business way to enhance sporting how a content the effectively that’s look experience long our it’s the in we strategy going we’re we’ve us change doing, not and improve of another a customer what time. known any obviously, So to in for business

Bernie McTernan

both. Thank you it. Got

Operator

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

Michael Graham

of for outlook unchanged, the maybe profitability went acceleration I and into then user to around talk recent more you about that decision you just little guidance user the are markets differently what decision? about what think can too? color just over but attribute a a done leave highlight that just you just the the I raise Could U.S., is morning. Good the revenue ask have little there growth, biggest And you growth? wanted talked driving but bit you the Hi. know anything quarters to

Neal Menashe

Okay.

That’s with I’ll business, a Effectively, year devaluation America North Ontario, the we’re is, line is with seen So that In countries. expectations. to the growth. compared talk we’ve dollar the even the Canadian the to North America, And predominantly of in I well. ago. about euro Canada, would remember, after right, ex-U.S. that material and our say going

the we growth said, transition seeing and the especially to with as across of Africa, the Germany a controls bit difficult the new numbers. all is Germany. record And are as good systems offering Spain application license all because U.K. Europe in still Netherlands, user only you have our And place waiting still there. and there not regime we still in have and on we regulatory and to casino put do well,

the world, seeing So for across stuff. we’re us, it’s

which impact, with movement. just biggest the Our to Alinda currency the is then revenue come

have So because on currency, well. bear really to that we mind, doing constant these in are markets

Alinda Van Wyk

Michael. Thanks, Yeah.

reiterate Just just what to Neal said.

see why rise So to our to impact we definitely -- the that’s the dropping operational leverage EBITDA, operating guidance. improved we straight and that the bottomline comfortable coming feel of

we’re book the alluded Neal, the just just raising we’re that like, obviously guidance. conservative as sporting and see of make the mainly we take and are on as effect, does not consideration sure bit But that’s to volatility back sports revenue well why into side, of year, we’ve two we is, that revenue part effect, on growing we reasons, the events to calendar, sporting this margins the the got more currency due the in the a countries we like

Michael Graham

Okay. Perfect. a lot. Thanks

Operator

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

Jed Kelly

Thanks question. Great. my Hey. taking for

Just North in your looking increased sequentially. America at revenue, iGaming, it particularly

just space have about Can of entering any talk you. just out all year back larger changed? circling the can you’re know the recent to that So the you time. Thank I at strategically player you the targets just seeing of going your some how have you that’s gave profitability the or thinking talk brand. you’re larger this beginning you that some trends they of And But a get in area? the the given stabilized another market dynamics and question competitive that of then U.S., on about about

Neal Menashe

Okay.

North I’ll So America. do the

we have across currencies. our have retention would offerings mean the digital better North and are those fruit I techniques there. we’re So iGaming I America, been in we these and devaluation promotions been in and around think see globe, even the only hadn’t casino and not targeted had the we that if I on doing bearing focusing the campaigns all our markets fruits of marketing

is we’re got which our obviously and globe So about our that. as excited across major Casino, well. launched being brand We’ve City the Jackpot that’s

one way economies seeing that. So Same we’re got we’ve also brand. got big Betway We’ve there. the

step-by-step, a sports a as iGaming total I said, it’s we just and in business that’s and customer, I And and towards or working, this we’re ecosystem, the about customer-by-customer whether goes why keep this investments is all customer. it’s sports tech or enhancing mean, everything customer

that been So to really been right. working lot get that on we’ve a

Richard Hasson

Hi, Jed.

necessarily our on another the and just over a points we competitive all competition and attractive is obviously on very we market. multiyear we And U.S. a remains on It’s Yeah, basis So multiyear have applying have market, of touching ROI then. opportunity, continue big it us U.S. as It’s toolkit everything it the applying same to that us. the your that an world, us, now and same not really not for see progress a a assessing for about market, driven remains on else, a That is affect to operator basis. plan day-by-day we’ll rest but we as world what right while state-by-state entering for like doesn’t the the the basis strategy. anywhere a a the commitment

Neal Menashe

across And the can is to the casino of the casino Yeah. add within well. our resonating then offerings book as also -- sports attractiveness that our I having something adding and just a globe

is working the and these that all that all coming key strategy. is of in operate taking So obviously a and the U.S. it countries on of well part into together across -- that the offerings all we pushing our we’re

Jed Kelly

half you. revenue guidance. the follow-up, on back just a Thank And just

-- factors some is Can Thank touch or year’s the the the last the relative FX to around half back by sort just critical conservatism, you driven the growth? more of Cup. on comping of World that you. some being Just conservative XQ around

Alinda Van Wyk

Yeah. last the in -- end calendar Yeah. sports never there this be towards worst some before. of seen is sporting we the of then It in it one the back February, Thanks. relevance remember, the unprecedented ever, on and we’ve quarter had -- of margin is year, might

that. the multinational on this much our offering America regions. especially North I growth. it currencies the don’t in just year around because some company, got out of Africa, had involved I you think understand across But our based that, this really so an So But on currencies we’ve risk think world, impact

is to around comfortable make to So if local reporting you been our impact on with and just which obviously in we track euros, the these want growth guidance. countries exceptional, seeing. than you then we currencies, it even has sure see have do we more the we’re feel that when currency, But our what state the

Jed Kelly

just are of coming Great. -- my the of Africa geopolitical of And you final question. then that’s some to any out And the exposed risks recently?

Neal Menashe

Listen, countries lots of is Yeah. our view of in lots across Africa, in countries Europe. -- we

business, So been that’s always So just we’ve right? the there.

countries, So actually we’ve new et got cetera.

Europe So different. it’s the no is -- same. yeah, it’s

Alinda Van Wyk

Right.

Neal Menashe

But that’s first wings efficient to is the as be in spread model as basically many of that’s countries can priority. you across, business your these to

Jed Kelly

you. Thank

Operator

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

may now lines. your disconnect You

Super Group (SGHC) 17 Aug 232023 Q2 Earnings call transcript