Interim report January 1 – March 31, 2020
Regulatory release no. 23
Highlights first quarter 2020
- Q1 Revenue grew by 40% to 20,921 tEUR (Q1 2019: 14,905 tEUR). Organic revenue growth was 21%. The growth was supported by strong sports win margins and high activity up until the COVID-19 crisis started impacting societies and sports events from mid-March.
- Q1 EBITA before special items increased 32% to 8,626 tEUR (Q1 2019: 6,521 tEUR). The EBITA-margin before special items was 41%.
- Cash Flow from operations before special items was 9,451 tEUR (Q1 2019: 7,559 tEUR), an increase of 25%. The cash conversion was 103%. End of Q1, capital reserves stood at 70.4 mEUR including cash of 18.9 mEUR and unused bank credit facilities of 51.5 mEUR.
- New Depositing Customers (NDCs) was 116.000 in the quarter (same as last year), delivering flat growth due to a significant drop from mid-March.
- Better Collective has established a strong position within the esports betting market through the acquisition of HLTV.org ApS. The purchase price was agreed at up to 34.5 mEUR (257 mDKK) on a cash and debt free basis. Out of the total purchase price, 26.4 mEUR (197 mDKK) was paid upfront, of which 23.7 mEUR (177 mDKK) in cash and shares of Better Collective A/S with a market value of 2.7 mEUR (20 mDKK).
- Better Collective initiated a share buyback program for up to EUR 5,000,000, to be executed during the period from March 19, 2020 to June 30, 2020. As per May 8 the amount of the buyback program executed was 3.2 mEUR. The purpose of the buyback program is to cover debt related to prior acquisitions.
- Better Collective was named Affiliate of the Year at EGR Nordics Awards 2020.
Significant events after the closure of the period
- Second quarter trading update:
- From mid-March to date the business has been negatively impacted by the COVID-19 crisis, as all major sports events have been cancelled or postponed.
- The business has to date performed in line with the trading update issued on March 17, 2020, where sports betting revenue has been reduced, whereas esports and casino have seen stronger performance.
- April revenue was approximately 4.6 mEUR (negative growth of 17%, of which negative organic growth 41% compared to April 2019) affected by the COVID-19 crisis.
- As a consequence of the reduced activity level, management has decided upon a cost saving program that was initiated with effect from April 1, 2020. The total cost base in Q2 2020 will expectedly be reduced by approx. 2 mEUR compared to Q1 2020. For now, the program is planned to run throughout the second quarter.
- The German Bundesliga was the first to confirm starting on May 16, 2020. This is in line with current market expectations for some of the major European sports leagues to resume without physical spectators in Q2 2020, with the intention of finalising national leagues during the summer. Other major sports events have been postponed until after the summer.
- The full year financial targets are reiterated, based on the past and current performance and the expectation that some major sports leagues and events will be resumed during Q2 2020. Based on these assumptions, financial performance in Q2 2020, isolated, is expected to show flat to negative revenue growth. The operational earnings are expected to be positive, however, at lower earning margins than normal.
- After the end of Q1, Better Collective topped EGR Power Affiliates 2020 list for the third consecutive year.
- On April 2, 2020, the Board of Directors has resolved to complete the payment of the third and last instalment relating to the acquisition of Ribacka AB in cash and shares combined. Better Collective has made a payment of 6 mEUR in cash, and will settle the remaining 3 mEUR no later than May 15, 2020, in a combination of shares and cash. Any settlement in shares will take place with treasury shares acquired in Better Collective’s share buyback program initiated on March 19, 2020.
A telephone conference will be held at 10.00 a.m. CET today by CEO Jesper Søgaard and CFO Flemming Pedersen. The presentation will simultaneously be webcasted, and both the telephone conference and the webcast offer an opportunity to ask questions.
Dial in details for participants:
Confirmation Code: 9638546
Denmark: +45 32 72 80 42
Sweden: +46 (0)8 50692180
United Kingdom: +44 (0)8445718892
Jesper Søgaard, CEO of Better Collective, commented: “In Q1, the business has shown strong performance at record levels up until mid-March. COVID-19 has halted most sports events, which will have a significant impact on Q2, but we are adjusting operations accordingly and we stay optimistic that normal sports betting activity levels will be restored in the second half of 2020.”
CEO: Jesper Søgaard
CFO: Flemming Pedersen
Investor Relations: Christina Bastius Thomsen +45 2363 8844
This information is such information as Better Collective A/S is obliged to make public pursuant to the EU Market Abuse Regulation.
About Better Collective
Better Collective’s vision is to empower iGamers through transparency and technology – this is what has made them the world’s leading developer of digital platforms for betting tips, bookmaker information and iGaming communities. Better Collective’s portfolio includes websites and products, among other bettingexpert.com, the trusted home of tips from expert tipsters and in depth betting theory. Better Collective is headquartered in Copenhagen, Denmark, and listed on Nasdaq Stockholm (BETCO).
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