SGHC - Earnings call transcript Q2 2024 | Super Group (SGHC) Limited

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Operator

Good day, and welcome to the Super Group Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Brett Milotte, ICR. Please go ahead.

Unknown Executive

Good morning, everyone, and thank you for joining us today to discuss Super Group's results for the second quarter of 2024.

filings Group subject comments other materially to further its Super nature a factors from call, its in are cause from that risks, SEC forecast. historical this results may to the of make forward-looking discussed actual or During results could company's differ that uncertainties and by Super Group update to responsibility forward-looking statements law. assumes no have been required

a not of measures. a and may website. press These provided release Super has for page on with today's Group financial Group the refer comparable today earlier addition to Relations to reconciliation non-GAAP Group's accordance available in call, financial and measures most financial to Super non-GAAP of financial the issued substitute measures measures in in performance the non-GAAP are On certain measures prepared GAAP Investor Super GAAP. the of

speak in Group parts: global financial In investments its highlighting will Group's and X business profitable Super addition, to and cash-generative the metrics from in its Super U.S. separately results

aligns us with consistent Super going annual how has Group and both with and Super Group for forward. that XXXX business Super provided Group is internally how report This its guidance the

presentation recommend refer investors we it to to So website. the sequential that posted

and joined am Commercial On this President Chief be And Executive Officer. Officer. the Neal call, I Q&A by Van Chief by and Wyk, Hasson, Officer; Richard Menashe, Alinda during joined we'll session, Chief Financial

will over I Neal. call now turn the to

Neal Menashe

growth. XX a U.S. set of growth XX% million, EUR ex a margin one Group's which the to XXX revenue record and and strongest everyone, year-on-year Adjusted ex Super Thank EBITDA XXXX the new EUR record and welcome also strong morning, exceptional, XX%. Quarter year-on-year a some representing hit of records. we of of QX in you. very our Earnings million, reflecting Good Second quarter U.S. ever set Total quarterly Call. was X%

been of integration have the efficiencies, including prioritizing we year, sportsbook. Apricot This operational the successful

for redundancy these associated costs would million. XX%. of our costs margin been we EUR Adjusting have the salaries, X.X X, quarter incurred During and

we Our strategy of on highest of and being our way investments into that nimble deployed and markets the over this and returns, capital consistent optimize further continually our margins is and that decisive to XX%. leading across markets We generate into assess paying core are well off ensuring globe. footprint, is to the is EBITDA

continued We obsessively we our And a that to leading market. tailor pivot. a our U.S. happy into market, the brand, where extensive an path review see don't last We after and the forward, includes rollout markets Jackpot were casino to local announced we with existing month markets. U.S. which offerings sports each we new In quo City we plan betting status in the exit of

divesting the U.S. We are, from however, totally

brands, spin We to we X our in and are gaming Pennsylvania, where operate New Jackpot maintaining from plan portfolio. City our Journey high presence including

focus on our gaming of with revenue non-U.S. is high gaming. which our XX% high Our aligns about business from in

parts the our other expanding footprint we to open for are any Like the opportunities. right world, of U.S.

XX million, estimate existing sportsbook of This EUR redundancy which obligations resources. and bulk easily will the the down shutting we financial costs costs, our of our not within contract U.S. terms In is of business existing manageable that comprises exceed figure cash costs.

the EBITDA iGaming. and U.S. business just we'll loss the incurred an XXXX, process, across Two sports the both provide updated in adjusted million of beginning We XX exit of are QX. in EUR and figure costs days has shutdown an

our XX million year, looking loss by of rest And gaming the adjusted ahead to of the expect an operations. only EUR incur to EBITDA we

partner. League, current official of betting most Adding multichannel pace one which Africa's global solidifies part premnership become our Betway sponsor recently as to sport. only marketing growth the to Betway's popular across the team [ up this ] We Premier world's new known becoming is portfolio official to X our have exciting driver now like global Branding teaming South [indiscernible] [indiscernible] the brand Soccer with business. and Betway City further is highlight. strategy recognition the brand marketing their announced deals key I'd across for of Champions the Manchester a

spent our a business. This net approach marketing, revenue higher quarter, is on figure we and long-term to than reflects the XX% industry average of which our

focused year are we However, ensure returns respect. on every we that are to from the appropriate also this extracting number

on sheet. Moving balance to the

EUR share quarter our with paid a Our allow. announced million financial June, remains will if of maintain dividend strong. debt. intend $X.XX cash July. We this We position per and in of no business dividend to and XXX unrestricted the paying we larger ended cash first In dividend consider conditions

forward part our We year strong for a a to XXXX first greater our the of and Super remainder of X%. performance XXXX, given EUR to look year, the confident the super raising are XXX XXXX EBITDA feel for ex guidance representing the margin over year Group. making U.S. we than adjusted of about million. Finally,

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

Operator

from from Instructions] question Jed first The Oppenheimer. [Operator Kelly comes

Jed Kelly

just Alberta some experience thinking legal just just about betting some results. and I trending goes should your if the legalizing results? interpreting talk chatter betting. are India. Couple given of sport ex is know that How Ontario. is about you Can you you in you just be of potentially market where and India sports that and talk things. with exited And sports we globally then about there with just how then Can about your

Neal Menashe

It's Neal, yes. Yes.

consistent of listen, have is think fair sports So to us. going we results is is business XX% Obviously, across But the iGaming. betting been our within part well sports our casino still business globe. our at

is So in there. regulation coming it's In Alberta. obviously, good really Canada, there

-- we We ready learned it we've are in Ontario, We to for everything super learned, better. even it. we've did do how

across are waiting are teams these in and everywhere. board So optimizing Alberta when we And ready all markets, the regulates. the

So same no business different Canada, Alberta would Ontario, in same be as Africa.

bottom of are happy we line. results and our efficiencies cost our the this super down from So to how quarter, listen, dropping

Jed Kelly

a just we capital how you're obviously ex flow U.S. Jumpman should you're dividend. to like just allocation cash be EBITDA policies? record thinking And a broadly as acquisitions follow-up, Okay. you just Do amount international target think your about decent generating more Can markets. want do of implementing the then you

overall capital Just just can an allocation strategy? on you give your update us

Richard Hasson

here. Richard

So also like constantly we are previously, we across said we opportunities looking existing potential new and that and for markets. doing keep acquisitions, markets for potentially within

we you at all it. would And seen, broader part the to that capital was that's least dividend allocation, going it the have On paid, be there forward. and our as maintain of announced intention dividend that mentioned a would

cash. more advantageous, we'll is best of ways look cash, nothing that continue If there uses generate to returning we . that As we'll shareholders. for look the of at to

Jed Kelly

question. Okay. And my then final just

about Just year, was as markets you in anything of had terms October we maybe we European of some September favorable be terms I should football. half, think some about thinking comps it outcomes opening, in markets in last closing, in the back think and

thinking So whole just can talk anything should about you about there the we how comps. be and

Neal Menashe

Okay.

second think a we some had, in half, I bit and quarter quite for of obviously, So mentioned, I in as X. the costs quarter redundancy X

are obviously, one-offs. those So

a out. margin. get should even you hoping base, can sports second sometimes in months second in be able should on just had good of that the the But have we some a we the we're that with bad half depends to again, year, bigger So optimization last half you customer

XXX into July and large we from the very April, of are is million, think June. our and view, I that point EUR the important And But July, continued have budget momentum of part even is marketing a said of that. we best May optimizing I got

We are looking that. at

can we bottom focus. more We over we hope line, sure as hence the that every our with effective are with rest bring even turning that, why to campaign increased that And the make optimization we make possible. all to EBITDA as there to

Alinda Van Wyk

Alinda here.

or Just markets, and continuous [indiscernible] to will for But assessing we question the was that Africa. new we've we on investments. spend and has which back movements and But a profitability the on markets margins to us no on of add long few is marketing like markets X have investing run. higher on at X is have market markets, into in always our continuously return also There assessment extra where the the a that small highest eliminated. this looked

Operator

Graham next from Canaccord from Michael Genuity. question comes The

Michael Graham

of couple questions, I A if could.

to states over of made it out, do that, frame expand on could time about iGaming talk different decision goes just -- your is related just is iGaming iGaming you you of currently have the in you your of you keep presence the operate maybe in? if compared we could, first think to see that if terms cost other The what footprint more U.S. for you well. economics, to And your and to acquisition markets the how some unit in the

Richard Hasson

Michael, Richard here.

iGaming and very Like in with of a view and returns completed all and New in the extensive Pennsylvania. to Jersey markets. to we remaining apply we of those need Neal As full being before, said footprint generated appropriate mentioned, obviously we see with markets, the ended review we

in And forward. so of course, expecting basis to forecast. continuous what budget a July the on far, we track the running in But were we'll according that going

where the but it's of no business And in generated about iGaming. the that's XX% the also So much aligned very iGaming. of different, is a revenue rest with just focus on

when will iGaming other rest of then the opportunities terms within look appropriate country, see within to of for expand footprint across states are those we U.S., regulated. In as if at the the we and sure, footprint the the

Michael Graham

Okay. wondering of Canada in your seen environment generally like evolving just some That U.K., competitive you some sounds recent good. Netherlands, over can is if regulatory quarters, I can the markets. environment the ask for just mature markets, the comment we've on on comment then And some those the how a competitive and changes of

Neal Menashe

keep right? I honing and have in your in where on we your think is always that's And -- we competitive it. marketing and and there, product, environment to becomes it keep the So on

took allows too we'll returns. the that the on path had in in markets we past, probably closed few where us think ones. not we see we other a we in do same them, rather of go and profitability, that than a Sportsbook. honed are to focus I were the so we countries and that was And other then in U.S. If seeing the we process to many

Again, they the to far little worse. be seem And U.K., a was in in Netherlands these the up easing part. bit, obviously, where the make markets, big a regulations

would black that We've black the so it literally the just going our not regime. the be mean for, There, better onerous this to decided be it's just results probably go goes been I your the been, Netherlands, worst So to would the the they've one not right? build market work, hadn't that's market. customer but got Germany. done we if just is It's it to all the even product. and

we So we can't could past. the in compete as

that -- understand reasonable that, But using to people to think to and And they're I battle. time, get the who be regulator will our that's market with be and industry more going a going be black last the the that's over always been the years. And story that's the of the XX regulated. customers on the to for are

Operator

Benchmark The the from comes from Company. Hickey next question Mike

Michael Hickey

Great quarter, guys.

U.S. running on First, just looks on the exit, it X states just iGaming. Neal, like

expecting of you're second 'XX. saying loss EUR half the a You're XX million for

looked to compare You with million. it lost like you EUR that year last XX the Sportsbook,

you an here. incremental So X EUR maybe million

more optionality, I I just side. Sportsbook losing would be bit million. the the worth on the guess, Is and X it guess, incremental Just, EUR savings two, one, with thought I a

Neal Menashe

Okay. It's Neal here.

the that's The of as we said, couple in for But for So targets be spend things. is [indiscernible] only in marketing this is have there. of including But getting the course, right? X next iGaming I month. to and a each months,

have reassess net we do then we target, those not get if markets. that X to So our win

X last overall and that can year. those New we're larger are XX did Pennsylvania million and around or it be for and say million markets, We concerned, compete to we're because think as far complete. the and XX would EUR going try than we Jersey EUR there Ontario As go the product year

the sports for our the literally investment And is U.S., in halved So the coming costs now redundancy have book. down. workforce. we've the just We

shot country again, to other people a give But the New like we've months. in I a to Jersey Pennsylvania right and is each X one, profitability every good as not. in got think path it which the of the is and So country or by next number themselves

Michael Hickey

the think EUR investment U.S. Just to annualized in we should of so here... million-ish then, clarify XX an

Neal Menashe

yes. for For XXXX, Yes, XXXX, Yes, yes.

Michael Hickey

Still guess, I can the in sort past. dig of feels like a number. big on

Neal Menashe

that to get not Well, you're won't your you hitting actually targets. number if monthly

monthly targets, monthly we not, we So And would EBITDA if monthly network, set back. scale then losses. it's

So do XX maximum. would the

Michael Hickey

less investment million is EUR be XX after that. So than it just significantly when would XXXX, less the in than XXXX, forecast

Can So running U.S., more talk to that sort and going years focusing to over rationale. X than gaming states? one side. that us the would be on would the you're mass brands the brand the next the X operate X brands said continue spend of It like X just in in through you expensive seems on be just you

Neal Menashe

listened we've XX we've game our seems and know been casino Don't one the need more years, business business, you brand. than for

one the the run who look the brands the and [indiscernible], we So up isn't Jackpot are make really because remember it's -- others we few the same X and bulk and running team a or just of have it. second and in slightly different. of And X our also them, Cities, of [indiscernible] feel expensive

strategy. So it's the same

your in optimize how the CPAs, view, cetera. point of our of it. need for from that's et effectively you we've And to done rate X always So always

you I one clear, other this it's But if I'll U.S. at just quite do point. in look sorry, the think --

EUR that said most million the we next XX would be You year. would invest

month in we Just existing to put it perspective, made profit June, in almost business. that of the our

are we are optimizing, So we clever.

ways are optimistic to then profitability, are we business looking will we but can ability at obviously to We this pivot and to that cannot bring away, work. it we if come have the

Michael Hickey

Pennsylvania I the relative mean take do fairly obviously guess that pretty sort this and Neal. right, these states? environment? Jersey, of in mature expect last U.S. I given is which states topic, new. of How question here, you expansion, are mean, share I these not they're to maturity new on New

Unknown Executive

of lot was from of from a were the seeing states come sports revenue was lot I live -- the while think we a Mike, that and So, those gaming gaming.

So obviously part decision our of review. informed that's was and our full

the internal have of about The in come other are at from of year. this those seeing beginning through a we also where lot improvements number we're we thing a moment. And at forecast the assumed is were KPIs

that's So today forecasts, line are from just previous obviously that. in we of gaming we're and those and tracking where gaming the with seeing on stand improvements the now which operations focusing in KPIs from part

Neal Menashe

here. Neal And

And Ontario you seeing there's us, not in markets completing are know, in that's we And not all for really member, any are right? As if compete new markets. we we're everywhere. -- bringing all it's market or U.K., everywhere, these growth the Canada countries then results you just we most we that's revenue to we in April, for revenue other and see. our extra And from of why that take good see June. May have operate, And operators, extra which the is such operating leverage.

Michael Hickey

share What Jersey, Pennsylvania in is your New market and iGaming?

Neal Menashe

just started. mean, I we No. because time

the share. So let of XX% the market. a at is me have look All care not we're our market all

go a profitability. cetera, be But million in few your eventually, Spain, ever going making that million market can have get market X, if markets, start take and to just each we you working. are million revenue to a if is few good X, et to we XX that, get targets to not then to in So you're in get margins. X, to of to making sure you going a But revenue few be other for months,

Michael Hickey

topic. A follow-up on the cap allocation

authorized. Sorry you you said Richard, I if have buyback this, think a

You're flow. obviously cash driving

your Your make business is be stock where confidence on you're here Does trading back sense growth. expanding to given today? buying it

Richard Hasson

have So the in shareholders. ended that the we relatively leaned dividend that return the and we to up from the part We away considered low proceeding is float that of as of it business with given something capital route.

Michael Hickey

expanded more maybe you growth you've move your makes margin room here progression margin medium-term The us a higher. or XX%. on perspective your question few to years? here the over got guide some to the in sense. -- that give opportunity It maybe next and Neal, Okay. sounds Can That like, topic, last you the

Alinda Van Wyk

more What in to month-on-month plan consistently we've referred we're It's full that XX% that over the seeing margin operating about XX%, and than consistently months the of then. is Alinda. everything EBITDA leverage the margin last larger so realized couple was that being now been into you coming really

is as almost we comfortable -- XX%, the has we're [indiscernible], -- So we quicker. even for realized note, just reaching around you that with We our at haven't target guidance -- the that also what been feel looking revenue. we've much and

tracking just as HX that well. we're So of remainder in the

Unknown Executive

[indiscernible] and of marketing a the marked ratio still of into for XX%, other is, out XX% net win And point we've got year.

in that's to and and that make ideas -- there efficient sure So stuff. and that's

if course, at marketing in do, they then Of we is go the lots our of XX% I XX%, up, budgets. had drop down, that know competitors margin to would come which

So are comfortable it looking investment you're now marketing, we're how from marketing in seeing that's this year's paying the and investments that is but we we that just at year. you're last making and long -- returning the off same term, feel

we're So X. those just balance trying to

Alinda cost going in get target that But to that's think efficiencies through we're And we come that said these a pushing easily business, for. and I more exceed. efficiencies we're and what be our can should

Operator

The comes next from Needham. McTernan question from Bernie

Stefanos Crist

is Bernie. Crist This calling in Stefanos for

states. seen across recently, in opportunities the players Are there So that other OSB some sell certain business? their any we've for licenses U.S.

Richard Hasson

here. Richard

on So possibility the mentioned we'll on is of but much that state-by-state points, early Part there, Neal that that sportsbook basis depending very active QX there; on that we of we b, the are number and in we possibility still shutdown but a when the are of numbers something contract a, on the on numbers. those are that depending of considering. on at recouping again, it who's that, looking a there's days. access investments of costs negotiations update the was And and going some report

Stefanos Crist

there? expectations wanted Can us ask you just what markets Latin your remind maybe you in then America. And it. and on Got participate to

Richard Hasson

through -- example we're world, don't other any and of markets parts we at, So make -- something we looking going like for licenses there is Brazil the we course, to application is process. if there's of launch I'll which one it. normally look and commercial breakdown. But we're SPX sense, think that the give give [indiscernible] Mexico country-by-country

of wherever we're considering we do part optimization going a carefully As the that the profitability. and go footprint sure and moment, more is to lot that geographic we're this live, -- sustainable through path at -- the there a making

Neal Menashe

No.

profitability not market the rigs we to just made in the that [indiscernible], which us. one way opposed this onerous software has the province, a and to only work as a decided the wasn't like for that's and just path So to like city a market the

side. that's So another

So in that favorable regulators if we're regulated to But so they all come that turn players we're can the not because that it. and they are or want opening in process. they're up

Operator

concludes for This you this the our now question is our -- attending question-and-answer conference concludes and today's presentation. Thank concluded. session,

You disconnect. now may

Super Group (SGHC) 7 Aug 242024 Q2 Earnings call transcript