SGHC - Earnings call transcript Q1 2024 | Super Group (SGHC) Limited

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Jake Pisano

Good morning, everyone, and thank you for joining us today to discuss Super Group's results for the first quarter of 2024. My name is Jake Pisano, Vice President of ICR.

During this call, Super Group may make comments of a forward-looking nature that are subject to risks, uncertainties and other factors discussed further in its SEC filings that could cause its actual results to differ materially from historical results or from the company's forecast.

Super Group assumes no responsibility to update forward-looking statements other than as required by law. On today's call, Super Group may refer to certain non-GAAP financial measures. are of to accordance financial measures substitute not with financial measures for performance non-GAAP in and addition a GAAP. These prepared in financial page comparable has to today press and Group provided the reconciliation Group's earlier the Super Investor website. on Relations a release issued the Super figures GAAP non-GAAP most available in of the of measures

going investment its Group's In Super internally and addition, business separately into highlighting metrics Super how profitable in with guidance cash-generative and U.S. report the from Super both XXXX its Group has that the its is financial will forward. aligns Group This Super how Super X results consistent views with speak provided business and to and global annual Group parts, for Group will

recommends session, presentation refer Neal? Executive joined like On will Group And Neal. and by that website. their Chief am now Q&A supplementary the Commercial Chief Officer. by Neal Van and call, Chief would Menashe, to the we call President as this during to to over Financial Hasson, posted I I Officer; Officer. Wyk, Richard be turn Alinda to And joined investors Super

Neal Menashe

Group's Thank and you. everyone, to Quarter welcome Good Earnings XXXX Call. Super morning, First

each this questions to detailed but on before, this posting for we like discuss be and our are as time use more today, quarter, our Before I earnings Starting than to investor dialogue to a quickly a I'd quarter to with website. the touch change presentation calls. possible. of our will format prepared shorter remarks many sell-side hope greater to as answer community the We

into dive the now quarter. Let's

is The was highest record growth a first at for quarter strong million. EUR a million. Adjusted quarter start margin into of currency first a which That's to largely ex even We represents XX%. are for Total core ever more impressive and markets. attributed QX. XX%. focused revenue off year EUR EBITDA XX%, constant investment over healthy growth at can our This from the ex XXX be continued in at U.S. U.S. last of also XX phenomenal performance set a quarter and XX% this to

net We and into This back highest growth full the continue approach ROI. we the trend always year. year, XX%. areas percentage the is ratio by first simple. of to our in expect in that was future this higher the half the as for revenue enhance We ongoing a towards marketing, of invest yielding Thus, reinvestment here is and XX% profile are to

progress efficiencies. We we are have with of the the on made cost realization pleased

Our operating more our our streamlining optimize we our our in bit then This inherent QX to the model. operating margin. is the we globe, operating contributing further of continue expenses This efficient leaner, business continue every revenue as focused expenses, meaningfully business, remain a below to for to to percentage high-growth fell XXXX. XX% compared as areas in process. ongoing And enhances of an we that incremental the footprint. net on to into the is revenue creating of Across EBITDA leverage while invest quarter XX% with

a the in handful profitability to down. process where of U.S., them long-term a we of identified see Outside path markets the not do and have shutting we smaller

our of U.S., the Within review the strategy continues.

the We we you forward near look our of full into in inform definitive sportsbook the updating to assume that I'm options analyzing to are technology. midst and to the control of software range enter glad broad of agreements future. in you

technology into put necessary to to closely be are agreed dedicated release, we'll the a on press this we our working business. excited regulatory we earnout. bed, risk-sharing structure, team deal includes have today's highlighted our a which to favorable Apricot deal contingent and an the with upfront As in consideration further Pending approvals, integrate and

quarter. As position balance the sheet, EUR financial of unrestricted XXX million for the and no at cash end of really our with strong remains debt our

use We momentum And right continue our best to final the of terrific returning balance, to a April. cash extended of assess note, into this including QX possibility our shareholders. the

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

Jake Pisano

of [Operator first Our line of Jed question from the Instructions] comes Kelly Oppenheimer.

Jed Kelly

Great. view you the just we the accelerating half? EUR Can reason we feel about as think stack And about raise our to beat comps EBITDA I need and aware did any talk the the talk XX betting? you that then sports your -- then XQ should million that then should we above didn't to decision also, And any guidance? tech back balance year, in you of in-house, beat the can about bring estimate, your be think given of how you you potentially

Neal Menashe

it's here. Okay, Neal

sports. for So important get talked to it -- Betway to teams company. it the time. allows about And deliver is as a what road the can in long listen, the lies negotiations software for everything to our us remember, been in The customers. decide want. -- on And basis tech more exactly it's and think we've the us maps, are I long the to decide we customer this the We sort one. we together our we we experience out obviously super manage stack. a deliver We've tech got We've now because for global

So in a for been making, time this. the about and we're super long it's us, excited

Alinda Van Wyk

raising of your question. -- thank for the you Regarding guidance

the April, position we QX. has such very days that still a consider and continuing started end good off we said, into early with for of we the year, momentum expected QX but our it's towards As will

Jed Kelly

it. us if then success potential you Where coming that your casino high give is how a of Got can just from? can in view as should to speak betting? And Canada? Alberta follow-up, any then legalizes we you And just impact

Neal Menashe

here. It's Neal

remains seen we're we've we us. pleased growth market performance. obviously, very good are Canada good Ontario, and in So our In for year-on-year a -- with

was were. they it better before is than now regulation our as as are customer values retention and Our ever customer in good Ontario

see by province So province. we for Canada remember, us,

way we'll to that the it in same any well we that learned other obviously regulated provinces what about. apply Ontario, did we've we just as didn't, can come then, what So and

Jake Pisano

question comes of next from Our Tilchen Canaccord. Jason

Jason Tilchen

I about there strong First to thing momentum ask been There's several really for now. is wanted quarters Africa.

Your sort you like up enter if look market. I'm anything just next additional from significantly or that in additional in a revenue Africa the over in year-over-year you wondering mix is year road what's markets And provide the there's there working of does product that terms could perspective? map of for what could X.

Neal Menashe

Neal It's again.

casino. us. launched recently only So we've Member Africa, Africa our well really is just across for City doing pure-play Jackpot

ahead it. of So that's growth got lots of

great obviously seeing, acquisition, -- in X great X in more obviously, the customer others. still retention. markets. them customer are growth there's individual We across markets of than excelling or are those X Africa, We more

think work ones. to our is I But the as super the there, again, is other own X we that region. product So stack unique. sure every make and market there the tech for We our localized largest as offering be can good our are as own

Jason Tilchen

Great. helpful. One or X quick really That's other follow-ups.

cost full you basis of generate In sort was sort to terms I of by of the licensor. to an ownership that way can as pay the having sort a Apricot annual wondering expect you of there's the a deal, than quantify savings rather on having if

Alinda Van Wyk

here. Alinda Jason,

expectations. planning and we significant very on teams the and previously resourcing teams are working more tracking are possibility because one set as work output against of ahead work better And teams The with as far a together. about different well We to you together. sides quite effectively around to that effectively excited have have X together integrating now just now better just

deal is as So that was this definitely a to for doing of cost make on efficient more it the forefront company. us

Neal Menashe

got then tech our we able then need I'll on to Africa there's just plus business, that when if into any I'll and offer just M&A feel to available, can also here, with comes And the tech to, we deliver Neal add the maybe stack can that. -- we be stack, we've that

a it's finally done. time but So are in been long negotiations, we

Jason Tilchen

Okay. cleanup question quick just one here. final Great. helpful. really That's And

the expanded the of sort terms In of loss U.S., year-over-year.

any anything you the there's if review. sort wondering can call onetime in strategic on color additional provide anything of there Just Was that quarter? out. And to

Richard Hasson

Jason, during QX, Technologies Betway during the quarter the than we completion into it at during as marketing end it so the onto be the investment was was happened investment we quarter then Global the expect look to looking some the And of X, March, lower quarter. that X. of migration to

Jake Pisano

next Hickey question from of The Mike comes Benchmark.

Michael Hickey

Congrats, guys. Great quarter.

growth to study, curious opportunities. talk M&A any and you're potential out. benefit flexibility that, and you trying of then if like burn piece, incremental, Just on there, again on Neal. there it have longevity the to anything out some I'm rather Apricot, payment. for on maybe about figure And curious unique there's to looks the if USP organic of sort sort obviously you I'm a that

Neal Menashe

Okay.

So I'll go first.

that's Apricot, So mean currently see, on earn-out it's obviously can on. I a it's double the that than we to contingent have more you -- the got as revenue and

So a the earnouts I revenue itself net approach gaming sportsbook of that And NGR, it's think on based different delivers. then. risk-sharing thresholds

that payment So that's I XXX million and getting think on really stack I long comes the ourselves. we're million, term. a initial XX that it's of EUR think based But in the good all for EUR tech I plus incentivized the the under deal think

forward, managed deliver So be good and it deal. as And find on them I to a to, to us it's this think between -- going able think to us we overall, any on ground allows we new going, then. to the teams, able or other if integrate integrate business, to fit our priorities add be businesses and our see understand said, Alinda on African trading platform get the I

makes great give long this term, I On now. So a us great Richard. M&A, and think sense foundation

Richard Hasson

making should the the those M&A, to is acquire. was able think that proceed is the that we're any with to point that I So sportsbook that apply our now to own ability Neal businesses technology apply ability may we we we

Michael Hickey

guess your U.S. broad sort Is stack, the your that business, of organic help of question this thinking the reshape is does of about play that business? growth strokes the and I you was, does how with potentially? M&A own U.S. that sort brush and that part into the Yes, tech

Richard Hasson

Yes.

technology our of evaluation. So definitely part the forms

in we we're we and process. before, as consider the a part something our analysis the technology As of of through said U.S. which going be that will detailed options

Michael Hickey

in it some just, the strokes here, options considering guess of your laying sort U.S. about just worth of I is terms out broad again, guys, of thinking on business? you're brush

Richard Hasson

Sure.

right? and the from So is exit from table evaluating, the status we're and apart not high status everything this way quo. the you we complete release, it between. a everything status quo, in in ranges stage, quo So level, we last as say, to the at happy off with say, are the told Nothing let's all

extensive back the as as soon we're So point with can. this intention you analysis going to of coming through at we

Michael Hickey

as you you the -- on environment background for the The in the guess business regulatory long have. I running quite enough. Fair global Okay. have U.S., as the guys

sort again, curious innings pressure Just sort of on environment, how of U.S. to that of sort the your and updates into approach U.S. the that's here looking of sort regulatory how that of you're, any sort the plays business reshape impacts of your how sort to early here,

Neal Menashe

Yes.

regulation So of and -- less they here, seen absolutely, I Spain. absolutely and becomes Neal relaxed from so et of same regulation which harder, some are we've cetera, now we've then think has it -- the the seen restrictions it's as hard, some U.K., it come

think still also the in tax the it's rates. dependent that journey. U.S. I regulations, So And days early is the on

all negotiate are And really, without into it a no us, that we've account. different taking we're states countries. obviously, for seen But to U.S. that. the the through So

these and them. to profitability, take And bit EBITDA achieve much every take making the here about. country. the last what the sure have the way this If can. right. And will and But potential all states have that's operating make in we a it, effectiveness at the we've is do leverage again, our we're maximum marketing if best about every the years we been returns to again, it's that our action. we working business and into as of can margins. cost structure is getting we what to in each X margins margins, we worldwide extra we're can't, revenue, and for then at what we we those I extra we revenue, of said see other is then because countries really And of do that's these higher marketing, take in getting investment And deliver can And our bit

Michael Hickey

working states? U.S. that particular states and your of so the sort When you're sportsbook, of and in has the got in profitability you've Betway What's casino Spin together. those

Neal Menashe

XX% look of a because today, is think state we up profitable overall, for it and casino up we probably Spin I better. they're make the casinos. that's Any got in us. much is if more Betway even And revenue state that's between of made

Jackpot targeting. that And world is, think that's ought revenue and across starting into obvious where quite launch super to that because target casino and that's why we'll excited the be we've money the to We we're that's or what -- all more about City I it's mix. So more. Africa launched the added

Michael Hickey

I think, only U.S. your casino. I guess, X% it of legalized is here maybe which of sportsbook stage market, spot. that the of, is population Neal, there view is is on sort lead The that a seems of the sort like of growth is with legalization but the second feeling the casino,

both maybe legalization do of growth. of the that those sort U.S. Spin working the you and you your of profitability do I'm curious, where of sort Betway over that, in you position sort inflection have the is time? that think that, So your to elevate be a fact, And accelerate believe could and together in you point potential would vehicles, and casino

Neal Menashe

I much casino, different that's for they sports, us So casino to than think on -- our casino. the the states sweet absolutely. right? and whenever and views regulations different sometimes spot. is sports across But countries longer seems and have sports obviously, globe in take But different the and

all and black those action operators what a regulated regulators because people market unregulated. we've thing -- seen to misalignment these and is before, is in between do So markets will the then European some having get the the you about but continue regulated they've with regulate my it and and black countries and the -- the the we've total market market talked biggest where what can black then markets operators operators us,

we've business then, us Spin. big And that sports great got brand that we've a is Betway. of So it. of And there's -- a and got casino with we've in regulations. that's for and the again, But course, within got course, being

right to are us and got to we take be the returns. give So the perfectly but to we've profitability take on right on right able poised these opportunities, and opportunities the

Michael Hickey

for last question Neal, Yes. me.

you of would I crucial and think the don't You've sort running your how probability, sort know for guess, the sweet awaken losses they're can weight market to the opportunity casino assets the both been gracious. together. I U.S. side given mean, those really spot I given how you exit maybe which and full getting just is deal, and of recalibration U.S. minimize your a states in transformational concentrate potential a versus and/or out the appetite of a the I M&A, there. I of where but your mean

how particular just of said, It be given potential like takes there upside casino, idea seems it like the time, but is here in tremendous. exiting, some could the you much maybe

work So could you through... of sort us help just

Neal Menashe

Yes.

perfectly think is the I explained So correct. it way you

deal Of other course, well you a number to comes the parties when M&A, it overvalued. can't transformational do That's one. if

drive, a get transformational it's you it value You've to only and to both at to got one chance deal going be fair got sides. and

first point. the that's So

to the comes long we're and say the best make And the of all is a options, that is options. butter. term as casino all looking at again, got U.S., We it decision absolutely, when point, bread out, to second understand in the it. our you and is you we've pointed The what interest

and it being that success, understand got to to place is we is states and for a So listen, you absolutely make those up. A want waiting But in to to can -- a sure to way that. just time, in what and that's to -- be have we make fully And game, -- this don't want in over got cost weigh find chance a markets. be to profitability to and a able there's game. different of we we play cost regulate and

Jake Pisano

from next Needham. question Our of comes McTernan Bernie

Stefanos Crist

This Crist in is calling for Stefanos Bernie.

acquire its of kind in-house? there. looking owning Africa, of on build tech. or thoughts to there question, you're brings Super Are to First goal its Group so a wording, that other of transaction the tech maybe the nitpicky but and stack fully Just the controlling your closer parts

Neal Menashe

Yes. Yes.

our parts on some business, some remember of our So just different PAM them that don't. of and own

regulatory is now we I once suppose this get sportsbook owned completely the -- is So approval.

why that's that to. was -- referring So so

of So that businesses but don't there are own, there it. PAM we that some the own are do

in So tech got the that now we actually everything stack we've need.

Stefanos Crist

onto completed it. of Global migration Betway And the the March. then Technology the end Got at

since guess Just anything I you it's over could now. speak integration, been month a that to a little

Richard Hasson

Yes. It's data using exact migration is just short relatively that what for and that we're getting in order now we're data, that all the the about analyzing and it a best of has right which U.S. post been period decision make exactly time strategy the the is to of

matter a what's at that's about level the is of that we're data from obviously, forward. that feed process, best the prioritized to And And decision it's platform. highest still going ultimate into weeks. the new through So way that being going this

Neal Menashe

definitely I we what that were in mean just add I'll it than is on there, significantly. but before much better

Stefanos Crist

then for come you're regulation it. last Got near in Brazil or me. on any And updates to just the If there looking anything are one term?

Richard Hasson

profits are others, fit. to through if like licensing. about we market, guess, And which the process I a we ability many for apply the understanding view through looking there -- that's license about forming process see then regulating long-term the a at and with we'll make going any actively the market

Jake Pisano

for joining time, no this today's call has questions. ended. you more At are there call. Thank again now Conference

Super Group (SGHC) 8 May 242024 Q1 Earnings call transcript