Better Collective

Regulatory release no. 26/2022

Highlights second quarter 2022

• Q2 Group revenue grew by 40% to 56.0 mEUR (Q2 2021: 40.0 mEUR). Organic revenue growth was 22%.
  • Strong organic growth despite an exceptional Q2 2021 and low season especially in the US.
  • Revenue share income at an all-time high of 22 mEUR.
  • The sports win margin increased from Q1 but was still below last year. The estimated impact was 7 mEUR vs. Q2 2021, and 16 mEUR vs. H1 2021. For long-term comparison, the H1 2022 EBITDA margin was impacted by 13.7 mEUR vs. historical H1 average indexed from Q1 2018.
• Q2 Group EBITDA before special items was 12.2 mEUR or down 3% y-o-y (Q2 2021: 12.7 mEUR). The Group EBITDA-margin before special items was 22%, where Publishing was 26% and Paid Media was 12%.
  • The US business that now includes Action Network for the full quarter (only June in Q2 2021) shows an EBITDA loss of 1.8 mEUR. This is as expected and reflects the normalized seasonality on Group revenue and further the ongoing change from CPA to revenue share in our partner contracts. We expect these deals to be transformational for our US business, and the short-term costs estimated to impact EBITDA with more than 5 mEUR for the full year have been absorbed by the continued strong growth. 
  • We still expect to meet the anticipated market growth in the US with revenues exceeding 100 mUSD by the end of 2022, and we also expect the US business to deliver full year profitability in line with the Group.
• Cash flow from operations before special items more than doubled y-o-y, to 22.5 mEUR (Q2 2021: 11.1 mEUR). The cash conversion was 182% due to significant im- provement in net working capital, as expected from the strong Q1. By the end of Q2, capital reserves stood at 41 mEUR of which cash of 33 mEUR and unused bank credit facilities of 8 mEUR.
• New Depositing Customers were >387,000 in the quarter implying growth of 93% y-o-y. NDCs sent on revenue share contracts were >317,000 (growth of 110%).
• Better Collective made its second largest acquisition to date by acquiring FUTBIN and related domains, constituting world-leading esports media brands within esoccer. Total purchase price was up to 105 mEUR.
• A new media partnership was established with the Philadelphia Inquirer to deliver engaging sports betting content, data and statistics to the publication’s readership of approx. 10 million monthly visitors. The partnership will be co-branded with Action Network that will supply premium content, proprietary tools and in-depth analytics.
• Canada’s largest province, Ontario, launched online sports betting in April 2022. Better Collective acquired Canada Sports Betting in March 2022, in order to make a strong entry into the Canadian market. In connection with the acquisition, Better Collective upgraded its targets and we have been very satisfied with the development of the asset.
• Better Collective took the first place in the EGR Power Affiliate 2022 ranking for the fifth consecutive year.
• Better Collective hosted its Bookmaker Awards. Together with its local flagship brands, Betarades and Pariurix, Better Collective honoured the winners in different categories including “Player’s Choice” and “Best Overall Bookmaker” in Greece and Romania.
• Mikkel Munch-Jacobsgaard was appointed Director of Investor Relations June 1st. He brings insight and network in the international capital markets through long experience from a role as Institutional Equity Sales at both Danske Bank and SEB.
  

Financial Highlights first six months 2022

• Group revenue grew by 57% to 123.4 mEUR (YTD 2021: 78.8 mEUR). Organic revenue growth was 33%.
• Group EBITDA before special items was 35.3 mEUR, a 37% increase y-o-y (YTD 2021: 25.9 mEUR). The Group EBITDA-margin before special items was 29%, where Publishing was 35% and Paid Media was 14%.
• Cash flow from operations before special items grew 31% to 35.6 mEUR (YTD 2021: 27.2 mEUR). The cash conversion was 99%. By the end of Q2, capital reserves stood at 41 mEUR of which cash of 33 mEUR and unused bank credit facilities of 8 mEUR.
• New Depositing Customers were >737,000, doubling from 371,000 YTD 2021.
  

Significant events after the closure of the period

• July revenue reached almost 17 mEUR, a total growth of 36% vs. 2021, of which 26% was organic growth. This is slightly above our expectations.
• Better Collective partnered with the Chicago Tribune - a leading source of news and information in the Midwest - to bring engaging sports betting content to the publication’s readership of more than 18 million monthly visitors, who rely on the newspaper for insightful and award-winning sports journalism. The partnership will be co-branded with Action Network that will supply premium content, proprietary tools and in-depth analytics, and the plan is to become operational for the start of the NFL season.
• Better Collective signed an agreement with the leading German multi-channel sports platform SPORT1 to bring the best in sports betting content to its approxi- mately 9 million monthly users. The agreement includes delivery of content, data and statistics for a new online sports betting section, and the partnership will be co-branded with our German brand Wettbasis.com.
• Today, Better Collective signed an agreement with Boston.com, part of the Boston Globe Media Partners. Boston Globe Media (BGM) is a multimedia organization that provides news, entertainment and commentary across multiple brands and platforms. Boston.com is the region’s leading digital destination for trusted, round-the-clock information on breaking news, sports and entertainment, and as such serve millions of readers each month. Some of BGM’s properties include the Boston Globe, Globe.com and Boston.com. The partnership with Boston.com will be co-branded with Better Collective’s brand VegasInsider in order to provide content, data and statistics for a new online sports betting section.
• At the SBC Awards North America, Better Collective was awarded with the new title “Sports Media Company of the year”.
  

Jesper Søgaard, Co-founder & CEO of Better Collective, commented: 
“Q2 was a productive quarter. Revenues from revenue share contracts as well as NDCs were an all-time high of 22 mEUR and >387.000, respectively. Our geographical diversification really proved its worth as the Europe & RoW”Publishing business continued its strong momentum for both revenue and earnings. Our US business showed 90% topline growth and a negative EBITDA, which runs in line with our strategy to continue large scale investments in what rapidly has become our largest single market.”

Conference call
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.
Webcast link: https://edge.media-server.com/mmc/p/7qwr5fau