NGG contributes to Betsson Q4 recovery
Group revenues up 27% year-on-year with mobile contributing 7% - operator withdraws from Schleswig Holstein licensing process.
The acquisition of Nordic Gaming Group (NGG) has started to bear fruit for Betsson, with the brand contributing to a 74% year-on-year increase in gross sportsbook turnover in the company’s fourth quarter results.
NGG, which was acquired in April 2012, generated 575.1m Swedish Kroner (SEK – £56.9m) to overall sportsbook turnover of SEK3.78bn, while group revenues for the three months ending 31 December 2012 rose to SEK651.9m, up 27% from SEK515.2m in 2011. The company saw similar growth in full-year revenues, which also rose 27% year-on-year to SEK2.2bn
Commenting on the company’s fourth quarter performance, chief executive Magnus Silfverberg (pictured) said: “The strong organic growth of 27% in revenues, 30% in sportsbook turnover and more than 100% in mobile revenues from last quarter, shows that Betsson is on the right track.”
Mobile is becoming an increasingly important channel for the brand, with mobile revenues contributing to around 7% of total revenues, with users betting SEK308.5m through the channel, and 8% of sportsbook gross turnover, and 7% of total revenues “ a 100% rise from 2011.
After the integration of Betsafe “ acquired in May 2011 “ onto the Betsson platform led to a drop in Q3 revenues, with operating income down 21.4% to SEK120m, Silfverberg revealed in an analyst presentation that the company has resolved the issues, describing the project as “back on track.”
However, Betsson only saw slight growth in its income, which rose just 0.6% year-on-year for the quarter, and 3% in its full-year figures, to SEK577.1m. This marginal growth was attributed to costs associated with the operator’s entry into China, where Silfverberg has said he hopes to secure one of the first online gambling licences in the market. Software development for the Chinese project accounted for SEK4.1m in costs in Q4, and SEK15.3m for the full year “ up 428% from the previous year.
The company’s other high-profile market entries of 2012, into Denmark and Italy, were also discussed, with the former described as “developing well” and providing a positive net contribution during Q4. In Italy Betsson has launched a marketing campaign to capitalise on regulation of slot games, though today’s earnings statement warned that it was “too early to fully evaluate the activity in [the market].”
Discussing other potential new markets, Silfverberg admitted that Betsson would not complete its application for a Schleswig Holstein licence due to the lack of clarity surrounding licences, with the breakaway state looking to return to treaty signed by Germany’s other 15 federal states. As a result, he explained, it was “not valuable” to hold a Schleswig Holstein licence.
On the subject of Holland, while he welcomed the progress towards regulation, he described the proposed 29% tax rate as “commercially unviable”, pledging to push for a lower rate.
“Betsson’s growth is built on historical investments, and the company continues to invest large amounts in marketing and technology, which intends to secure a future growth rate above that of the market growth,” Silfverberg concluded.
Last week the operator made its first move into the social casino sector, launching the social sports app MyFootball Connect in partnership with the California-based OneUp Games.