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Interim report January 1 – September 30, 2020

Better Collective A/S
·5-min read

Regulatory release no. 42


Highlights third quarter 2020

  • Q3 Revenue increased by 7% to 18,298 tEUR (Q3 2019: 17,131 tEUR). Organic growth declined by 3%. Compared to Q2 2020, revenue increased by 20%. The quarter showed record high sports wagering in revenue share accounts, however, it was impacted by a low sports betting margin that reduced revenue by approx. 2 mEUR compared to historical average.

  • Q3 EBITA before special items increased 18% to 8,002 tEUR (Q3 2019: 6,804 tEUR). The EBITA-margin before special items increased to 44% as cost levels were still kept relatively low.

  • Cash Flow from operations before special items was 8,359 tEUR (Q3 2019: 4,892 tEUR), an increase of 71%. The cash conversion was 100%. End of Q3, capital reserves were 70.9 mEUR consisting of cash of 47.8 mEUR and unused bank credit facilities of 23.1 mEUR.

  • New Depositing Customers (NDCs) was approximately 97,000 in the quarter, a growth of 13%. From mid-September most major sports leagues were active again, and NDCs came back to levels that are comparable to the time before major sports were halted in Q1.

  • The Majority shareholders (and founders) of Better Collective resolved a direct share sale of 3.1 million shares, bringing in both Nordic and international institutional investors. The founders remain committed as long term shareholders, with remaining combined ownership of >46%, and have undertaken a voluntary lock-up of minimum 360 days from the day of the transaction.


Financial highlights first nine months 2020

  • In the first nine months of 2020, revenue grew by 14% to 54,472 tEUR (YTD 2019: 47,870 tEUR), with organic growth declining by 2%.

  • In the first nine months of 2020, EBITA before special items increased 14% to 22,933 tEUR (YTD 2019: 20,114 tEUR). The EBITA-margin before special items was 42%.

  • Cash Flow from operations before special items was 28,173 tEUR (YTD 2019: 19,052 tEUR), an increase of 48%. The cash conversion rate before special items was 116%. End of Q3 2020, cash and unused credit facilities amounted to 70.9 mEUR.

  • New Depositing Customers (NDCs) exceeded 283,000 in the first nine months (decline of 10% compared to last year). The decline was mainly due to the cancellation of major sports events. In total, it is estimated that the cancellation and postponements of major sports events have resulted in approximately 90,000 fewer NDC’s during H1 2020, compared to a “pre-COVID-19 estimate”.


Significant events after the closure of the period

  • Better Collective completed the acquisition of Atemi Group for 44 mEUR on October 1. Atemi Group is one of the World’s largest companies specialised within lead generation for iGaming through paid media (PPC) and social media advertising. The acquisition is a major strategic move for Better Collective with significant synergistic opportunities.

  • October revenue was 12.4 mEUR, a growth of 87% vs. 2019, of which 33% was organic. Atemi Group is included in the Group accounts from October 1, 2020, and without Atemi, revenue growth for October was 20% vs. 2019.

  • On November 2, Better Collective acquired the platforms zagranie.com, a Polish sports betting media brand, and irishracing.com, a leading horse racing platform in Ireland, in two separate transactions for a combined price just above 1 mEUR.

  • In Germany, a new interim regulation was implemented mid-October mostly affecting online operators that do not have licenses for certain casino games. Better Collective do not expect any major business impact from this as most of the Group’s revenue from German operators stems from sports betting. A more permanent regulation is expected to be implemented as from July 1, 2021, which can affect the revenue models for future customers. However, Better Collective believes that the value and revenue from the German market will remain the same.


Financial targets for 2020 maintained
The recovery and growth seen in October is expected to continue throughout the year. The financial targets for 2020 are maintained with total revenue growth of
>30%, whereof >10% is organic growth. The EBITA-margin is expected to be >40% even after the inclusion of the lower margin business of Atemi in Q4.
For 2021, the general expectation is a normalised situation for major sports. In addition, several major events, that were postponed from 2020 including the EURO 2020 (now EURO 2021), are planned to take place. Financial targets for 2021 will be provided in connection with the Full Year Report for 2020.

Conference call

A telephone conference will be held at 10.00 a.m. CET on the same day 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: 7536909
Denmark: +45 32 72 04 17
Sweden: +46 (0)8 56618467
United Kingdom: +44 (0)8444819752

Webcast link https://edge.media-server.com/mmc/p/dbov356u


Jesper Søgaard, CEO of Better Collective, commented: “Q3 turned out to be a quarter marked by high sports betting activity as major sports returned over the summer. We had some headwind in terms of a low sports win margin, but Q3 was overall a satisfactory quarter and I am proud to see the continued strong work across the group, which has ensured a strong underlying business performance”


Contacts
CEO: Jesper Søgaard
CFO: Flemming Pedersen
Investor Relations: Christina Bastius Thomsen +45 2363 8844
e-mail: investor@bettercollective.com

This information is such information as Better Collective A/S is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above on November 11, 2020 at 8.00 am CET.



About Better Collective
Better Collective is a global sports betting media group that develops digital platforms for betting tips, bookmaker information and iGaming communities. Better Collective’s vision is to empower iGamers through innovative products and technologies and by creating transparency in the online betting market. Its portfolio of platforms and products include bettingexpert.com, the trusted home of tips from expert tipsters and in depth betting theory, HLTV.org, the world’s leading esports media and community focusing on competitive Counter Strike: Global Offensive (CS:GO), and vegasinsider.com, a leading source for sports betting information in the US. Better Collective is headquartered in Copenhagen, Denmark, and listed on Nasdaq Stockholm (BETCO).

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