• Group Revenue: EUR307 million, a 22% increase year over year.
• Operating Income (EBIT): EUR70 million, a 23% increase year over year.
• EBIT Margin: 22.9% for the quarter.
• Customer Deposits: Increased by 14% year over year.
• Casino Revenue: Up 17% year over year.
• Sportsbook Revenue: Up 36% year over year, with a margin of 9.8%.
• Full Year Revenue 2024: Exceeded EUR1 billion, a 17% increase from the previous year.
• Full Year EBIT 2024: EUR257 million, a 22% increase year over year.
• EBITDA and Operating Cash Flow: Up 20% and 18% year over year, respectively.
• Net Income and EPS: Increased by 6% and 2% respectively, affected by higher corporate tax rate.
• Operating Cash Flow Q4: EUR84.6 million, compared to EUR47.6 million last year.
• Net Cash Position: EUR140 million at the end of December.
• Equity Ratio: 63%.
• Proposed Dividend for 2024: EUR0.757 per share, a 17% increase.

• Warning! GuruFocus has detected 3 Warning Sign with STU:V72.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Betsson AB (STU:V72) reported a 22% increase in group revenue and a 23% increase in operating income (EBIT) year over year for Q4 2024, reaching all-time high levels.
• The company achieved record figures in customer deposits, gaming turnover, and revenue from both casino and sportsbook segments.
• Betsson AB (STU:V72) surpassed EUR1 billion in revenue for the first time in 2024, marking a 17% increase from the previous year.
• The company's scalable business model and cost control efforts resulted in an EBIT margin increase to over 23% for the year.
• Betsson AB (STU:V72) continues to expand geographically, with significant growth in Latin America and the CEECA region, contributing to its strong market position.

Negative Points

• Net income and earnings per share only increased by 6% and 2% respectively, due to a higher corporate tax rate from the application of the Pillar two rules.
• The Nordic region experienced a 14% decline in revenue compared to the previous year, primarily due to lower activity in the casino product.
• The company has stopped accepting customers in Norway and other markets that show no signs of moving towards local regulation, which could impact future revenue.
• Increased marketing and personnel expenses were noted, with marketing spend rising by EUR9 million and personnel costs increasing due to geographic expansion and acquisitions.
• The share of revenue from locally regulated markets increased, which led to higher gaming taxes and impacted the cost of services provided.

Q & A Highlights

Q: Can you discuss the impact of discontinuing B2C operations in certain markets, like Norway, and how you plan to mitigate any effects? A: We aim to focus on markets with local regulation. Exiting some markets, including Norway, has a financial impact, but our diverse market presence mitigates this. The first quarter performance shows minimal impact on our overall results.

Q: What are your plans for entering the Brazilian market, and how do you plan to navigate the competitive landscape there? A: We anticipate a competitive environment in Brazil and plan to enter cautiously. Our strategy is to start slowly, analyze the market, and avoid risking our profitability by not going all-in immediately.

Q: Can you explain the increase in costs, particularly in Q4, and whether there are any non-recurring impacts? A: Increased costs are primarily due to higher marketing investments and personnel expenses, reflecting our growth strategy. Some costs are related to bonuses and provisions typical for Q4, but overall, costs remain under control with a strong EBIT margin.

Q: How do you view the decline in registered customers, and is it related to market exits like Norway? A: The decline is due to exiting several markets, including Norway, Kenya, and Colorado. This aligns with our strategy to focus on regulated markets, and it reflects a shift rather than a significant concern.

Q: Regarding the sportsbook margin, do you plan to maintain competitive pricing despite industry trends towards higher margins? A: Our goal is to provide the best customer experience, not necessarily the highest sportsbook margin. We aim to enhance our offering with features like bet builder while maintaining competitive pricing to ensure customer satisfaction.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.