Betsson Ab Class B · OMXSTO:BETS_B
Betsson Ab Class B — Q3 2010 Earnings Presentation
38 slides from Betsson Ab Class B's earnings presentation, 2010
Slide 1: Presentation Q3 2010
Presentation Q3 2010 Pontus Lindwall CEO
Slide 2: Betsson agenda
Betsson • Introduction • Q3 Financial Presentation • Product and Geographical Split • Key Performance Indicators - Sportsbook margin - Customer deposits • Legal • Events after Q3 • Q&A
Slide 3: Introduction
Betsson Introduction t "4 betsson gx
Slide 4: Betsson
Betsson • 45 years of accumulated competence • 276 employees • Listed on Nasdaq OMX Nordic, Mid Cap (BETS) • Market Cap of approximately € 400 000 000 • Betsson competes with national monopolies but also with peers, such as Unibet, Ladbrokes, Expekt, Bwin and similar
Slide 5: Betsson website
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Slide 6: Live Casino
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Slide 9: Sahkoposti
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Slide 10: Cherry Casino
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Slide 11: High Growth and Profitability
High Growth and Profitability Revenue Growth EBIT-margin 2007 121% 29.3% 2008 60% 26.7% 2009 25% 24.4% 2010 (Jan-Sep) 22% 22.6% • High growth in combination with strong margins • Manage to ”invest during operation”, constantly investing in IT-infrastructure and partnerships while managing operations
Slide 12: Financial Presentation Q3 2010
Betsson Financial Presentation Q3 2010
Slide 13: Q3 Highlights
Q3 Highlights • Revenues increased by 22% to SEK 385.1 M (316.7) • Operating income increased to SEK 80.7 M (79.4) • Operating margin 21.0% (25.1) • Customer deposits increased by 11% Numbers in gray = Q3 2009
Slide 14: Q3 Highlights
Q3 Highlights • Operating income was negatively impacted by a net cost of SEK 13.1 (2.3) million referring to the currency revaluation of balance sheet items • The net effect from capitalizations and amortizations of capitalized development costs amounted to a cost of SEK 2.8 (revenue 4.2) million •
Slide 15: Q3 Highlights
Q3 Highlights • The Gross Turnover in Sportsbook amounted to 1 215.7 M (634.9), an increase of 91% • The Gross Turnover in Live betting amounted to SEK 733.7 M (194.2), an increase of 278% • Earnings per Share SEK 1.94 (1.93) • Cash by end of period SEK 377.3 M (396.0) Numbers in gray = Q3 2009
Slide 16: Q3 Highlights
Q3 Highlights • Active customers increased by 16% to 255 700 (220 900) • Late stage discussions in our B2B pipeline • Due to legal requirements, Betsson is forced to shut down the Betsson shop at Götgatan in Stockholm Numbers in gray = Q3 2009
Slide 17: Interim report
Interim report • Revenues increased by 22% to SEK 1 118.9 M (916.8) • Operating income increased to SEK 252.9 M (223.4), an increase of 13% • Operating margin 22.6% (24.4) • Earnings per Share SEK 6.13 (5.44) Numbers in gray = Interim report 2009
Slide 18: Sportsbook
Sportsbook • Strategically important product • Launched in 2006, it contributes to 30% of Gross Profit with continued growth • One of the broadest product offering on the market • Growing faster than industry average – 91% growth in Turnover, 278% in live betting – Strong growth on all key markets
Slide 19: Betsson sportsbook
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Slide 20: Revenues
M SEK Revenues 450 385.1 400 350 300 250 200 150 100 50 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2005 2006 2007 2008 2009 2010
Slide 21: Product and geographical split
Betsson Product and geographical split
Slide 22: Gross Profit per Product
Gross Profit per Product M SEK 350 300 Growth (%) 250 Other + 25 (Y) - 7 (Q) 200 Poker - 11 (Y) - 4 (Q) 150 Sportsbook + 116 (Y) + 15 (Q) 100 Casino + 1 (Y) + 0 (Q) 50 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2009 2010
Slide 23: Gross Profit per Product
Gross Profit per Product Casino Sportsbook Poker Other Q3 2010
Slide 24: Gross Profit per Geographical Area
Gross Profit per Geographical Area M SEK 350 300 Growth (%) 250 Rest of World +5 (Y) +0 (Q) 200 EU, outside Nordic -6 (Y) - 16 (Q) 150 Other Europe + 96 (Y) 100 + 13 (Q) Nordic Countries -7 (Y) 50 +1 (Q) 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2009 2010
Slide 25: Gross Profit per Geographical Area
Gross Profit per Geographical Area Nordic Countries Other Europe EU, outside Nordic region Rest of the world Q3 2010
Slide 26: Key Performance Indicators
Key Performance Indicators SB Margins Deposits
Slide 27: Growth Indicators
Growth Indicators Growth Q3 2010 Y/Y Q/Q Active Customers 16% -11% Registered Customers 48% 4% Revenues 22% 5% Customer Deposits 11% 0% Gross Turnover SB 91% -1% • The measure active customers shall be seen in a longer perspective
Slide 28: Active Customers
Active Customers 350 300 255 700 250 200 150 100 50 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2008 2009 2010 • +16% compared to Q3 2009 • - 11% compared to Q2 2010
Slide 29: Registered customers
Registered customers 3 000 2 833 900 2 500 2 000 1 500 1 000 500 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2008 2009 2010 • + 48% compared to Q3 2009 • + 4% compared to Q2 2010
Slide 30: Sportsbook Margins
Sportsbook Margins 2010 2009 2010 2009 2008 Q3 Q3 Q2 FY FY Gross Turnover SB 1215.7 634.9 1233.1 2571.5 1567.1 Gross Margin SB¹ 7.4% 6.5% 6.3% 8.0% 10.1% Gross Profit 89.5 41.4 78.0 206.6 159.0 1) Margin after direct and allocated costs
Slide 31: Live Betting Increases – Fueling Betting Turnover
Live Betting Increases – Fueling Betting Turnover Q3 2010 Q3 2009 Pre-match betting Live betting SEK 1 216 M SEK 635 M SEK M SEK M Share of Gross Turnover in Sportsbook
Slide 32: Legal
Betsson Legal t "4 betsson gx
Slide 33: Legal
Legal NAFTA Open minded Protectionistic (Time) Neglect Forbid Regulate Harmonize Not sustainable • Regulate more games More sustainable • Less protectionistic/global understanding • Sustainable tax levels • ECJ vs monopolistic arguments
Slide 34: Legal
| T 7 Legal Finland's gambling reforms, which came into effect on October 1 2010, it seeks to clampdown on gambling operators, which are licensed elsewhere than in Finland, by tightening the law on gambling adverts and make it a criminal offence to run the advertising of foreign gaming companies Pay
Slide 35: Legal
Legal Continued discussions about legalising internet gaming both on federal and state level Legislation in place which does not discriminate foreign operators. Italy plans to also include poker cash game and casino products in the near future ECJ has said in several Opinions issued 8/9-10 that Germ
Slide 36: Events after Q3
Betsson Events after Q3 t "4 betsson gx
Slide 37: Events after the third quarter
Events after the third quarter • October has started strong with all time high in revenues and deposits • On the first of October 2010 the Finnish legislation regarding marketing of online games was strengthened – Betsson is now evaluating if this also impacts TV and internet commercials broadcasted
Slide 38: What's your thrill?
What's your thrill? - betsson 9x