Better Collective

Regulatory release 21/2024
Flash highlights

• Strong revenue performance of 95m EUR, growth of 8% 
• Recurring revenue of 53 mEUR; growth of 14% 
• Strong EBITDA of 29 mEUR, 31% margin; as expected down 13% despite the extraordinary performance last year 
• Net debt to EBITDA of 1.7x 
• Announced the acquisition of leading UK sports betting media AceOdds post Q1 for 42 mEUR 
• Financial targets were upgraded by 5 mEUR on revenue and EBITDA following the acquisition

Highlights Q1, 2024

• Group revenue expectedly increased by 8% to 95 mEUR (Q1 2023: 88 mEUR) with organic growth down 6%. The growth was attained despite extraordinary performance last year, which included the launch of online sports betting in two major US states. These state launches operated on a CPA-based model, resulting in significant one-off upfront revenues. The state launch in North Carolina during this quarter entailed a blend of recurring revenue share and CPA. 
• Recurring revenue was 53 mEUR, posting 14% growth, implying higher quality revenue. Recurring revenue makes up 56% of total group revenue. This was achieved while the sports win margin was lower than last year. Additionally, during Q1, our core revenue share markets (Europe & South America) saw a reduction of over 10% in the number of soccer games in major leagues compared to last year. 
• Group EBITDA before special items was 29 mEUR (Q1 2023: 33 mEUR) down 13% as expected due to extraordinary performance last year. The group EBITDA-margin before special items was 31%. Group EBITDA margin was impacted by the two recent acquisitions in Playmaker Capital and Playmaker HQ being short term margin dilutive. 
• Cash flow from operations before special items was 22 mEUR (Q1 2023: 33 mEUR). The cash conversion was 73%. By the end of Q1, capital reserves stood at 164 mEUR of which cash of 61 mEUR, and other current financial assets of 6 mEUR and unused credit facilities of 97 mEUR. 
• New depositing customers (NDC) numbered more than 450,000 where 77% was sent on revenue share contracts. 
• Better Collective announced the completion of the Playmaker Capital acquisition, making it the second-largest acquisition to date. The integration has developed as planned. Playmaker Capital and its advertising business sees its lowest season during Q1. Due to this as well as the business being taken over from February the impact from the two months of Q1 was muted with revenues of 7 mEUR and EBITDA around breakeven. The performance is expected to pick up over the course of the year with the strongest quarter in Q4. 
• Q1 was as expected and following the acquisition of AceOdds after Q1 the group’s 2024 financial targets were upgraded as follows: 
  • Revenue of 395-425 mEUR, up from 390-420 mEUR, implying 21-30% growth 
  • EBITDA of 130-140 mEUR, up from 125-135mEUR, implying 17-26% growth. 
  • Net/debt to EBITDA stay below 3x (unchanged) 
• The long-term 2023-2027 financial targets were updated following the acquisition of Playmaker Capital. 
  • Revenue CAGR of +20% (unchanged). 
  • EBITDA margin before special items of 35-40% (previously 30-40%). 
  • Net debt to EBITDA before special items of <3 (unchanged). 
• Better Collective raised 10% or approximately 145 mEUR in an accelerated book building process to prepare for future M&A. The demand in the placing was substantial. 
• Better Collective announced a new major shareholder as BLS Capital Fondsmæglerselskab A/S now has 11.7% of the voting rights. 
• Better Collective is now included in the Nasdaq Stockholm and Nasdaq Copenhagen Large Cap Index with companies that have a market cap higher than 1 bnEUR. 
• Better Collective hosted its annual HLTV Award Show gathering important people from the Counter Strike community. The show had more than 100K peak viewers and had more than 1.2 million views in total. In Sweden, Better Collective hosted the popular Swedish sports journalism award show “Guldskölden”. 

Significant events after the close of the quarter

• Better Collective acquired UK sports betting media AceOdds for a total consideration of 42 mEUR implying 4x last twelve months EBITDA. AceOdds offers a comprehensive range of betting tools, odds, reviews, and streaming schedules through its web and app-based platforms. With a robust presence in the UK market, Better Collective’s global reach through local expertise aligns perfectly with AceOdds’s vision of expanding its influence outside the borders of the UK. Following the acquisition Better Collective upgraded its 2024 full year financial targets as mentioned. 
• On May 5, Google activated a new policy focusing on third-party content across a variety of commercial categories. This impacted the rankings and thereby traffic to some of Better Collective’s media partnerships. Better Collective remain proud of its media partnerships and is working closely together with all parties involved to address the changes. Consequently, some of Better Collective’s owned and operated sports media portfolio has seen an increase in traffic and rankings. 
• The Annual General Meeting 2024 was held electronically on April 22, 2024. 

Co-founder & CEO of Better Collective, Jesper Søgaard comments:
“Thanks to a fantastic team performance, we had a good start to 2024 with strong revenue performance and growth in recurring revenue. Organic revenue was down due to the extraordinary delivery during Q1 last year. We continued diversifying our revenue streams to future proof our business while investing in our Adtech platform, AdVantage and AI projects, which will support us in our journey towards becoming the leading digital sports media group. Looking forward, I am excited for the Summer with many major sports events ahead of us.”