Super Group (SGHC) Ltd

Good morning and welcome to Supergroup's third quarter of 2022 earnings conference call. Following management's prepared remarks, we will open the call for a question and answer session. I would now like to turn the call over to Lisa Kampf, Vice President of Investor Relations.

Good morning, everyone, and thank you for joining our call today to discuss Supergroup's results for the third quarter of 2022. During this call, we may make comments of a forward-looking nature that are subject to risk, uncertainties, and other factors discussed further in our SEC filings that could cause our actual results to differ materially from our historical results or from our forecasts. We assume no responsibility to update forward-looking statements other than as required by law. Additionally, on today's call, we may refer to certain non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for measures of financial performance prepared in accordance with GAAP. We have provided a reconciliation of the non-GAAP financial measures to the most comparable GAAP figures in the press release issued earlier today and available on the investor relations page of Supergroup's website. We suggest that all investors refer to the supplemental presentation posted to the IR section of our website which includes the financial information that will be referred to during this call and additional information for the quarter. Today, I am joined by Neil Menashe, Chief Executive Officer, and Melinda VanVeek, Chief Financial Officer. After our prepared remarks, we will open the call up for questions when we will also be joined by Richard Hasson, President and Chief Operating Officer. And now, I would like to turn the call over to Neil.

Thank you, Lisa. Good morning, everyone, and thank you for joining us today. Our results for the third quarter of 2022 demonstrate the benefits of our global footprint and our positioning of the company for the longer term. Total revenue was 308 million euros and operational EBITDA was 50 million euros. On a life-for-life basis, meaning not including Jumpman Gaming, which we acquired on September 1st, we entertained on average 2.7 million customers per month this quarter, up 6% from the prior year quarter. Alinda will discuss the financial results in greater detail in a moment. I will first elaborate on the progress we have made this quarter. In Canada, we successfully transitioned Betway and Spin to Ontario's regulated environment. Performance since then has been in line with our expectations, including the activation and engagement of historic Ontario customers with the new Ontario-specific platforms. Overall, Canada continues to perform and remains profitable for us. Our African business continues to operate at scale on our proprietary technology, and we recently launched in our eighth regulated market on the continent. In the United States, we hope to close the DGC acquisition in January. Betway is currently live in seven states through DGC, with Louisiana and Ohio expected to launch in the first quarter of next year. Both will be launching on Betway's global tech, taking the total number of states using this platform up to four. I want to now talk about three ways we invest in our business. One, investment in technology. Two, investment in our brands. Three, investment in expanding our product offering through M&A. Firstly, in line with who we are, an online-only technology business, we remain focused on improving the customer experience with ongoing enhancements to our global platform in order to optimize engagement and customer value. As a result, our demands for dedicated tech resources are high and our requirements have increased over time. Consistent with these requirements, we've entered into an arrangement with Apricot, a major sportsbook provider outside of Africa, to increase the resources dedicated to Betway's platform. To cover the spending, we've provided a funding facility to Apricot in the amount of €42 million, which can be drawn down until March 2023. And we have started discussion with Apricot to explore the possibility of obtaining full ownership of the sportsbook technology for our Betway global products. Well, in the early days of these talks, I can't say how long they were gone for or the eventual outcome. Next, we are investing to reinforce the Betway and Spoon brands around the world. Spoon's best-known brand, Jackpot City, enjoyed its first sports sponsorship with the Toronto Maple Leafs and the Toronto Raptors during quarter three and went live in October. On the Betway side, following the crisis sports calendar in Q3, marketing has picked up its plan in the fourth quarter to leverage the international audiences of the T20 Cricket World Cup, which ended last weekend, and the FIFA World Cup, which kicked off on Sunday. The third way we expect investment growth in our business is through M&A. As we previously announced, we're quite a majority stake in JumpBank Gaming during the third quarter, a profitable UK-focused online casino business in an all-cash transaction. In addition to the opportunity that we see for JumpBank in the UK, given its focus on a more recreational segment of the online casino market, we are also excited about the future expansion of the business into other markets with its proprietary technology platform. Turning now to our capital structure, just under two weeks ago, we launched an SEC-registered exchange offer for publicly held warrants, and we're also seeking consent of the warrant holders to amend the agreements to cancel the outstanding private warrants. If the exchange and consent solicitation are successfully completed, then the SPAC sponsor and their affiliates and the pre-merger supergroup shareholders will cancel their warrants and their rights to receive shares as part of the earner. The purpose of this exchange offer is to simplify capital structure and reduce the potential diluted impact of the warrant and earn-out rights. We also expect that eliminating the outstanding warrant and earn-out rights will increase our free float and result in less overall volatility in our quarterly results, since we no longer have to revalue those liabilities each quarter. We are pleased with the progress we made during the third quarter and so far in the fourth quarter of this year. a monthly average customer number that picked up materially from August. During October, even excluding Jumpman Gaming customers, we recorded a daily record in excess of 1.2 million customers and reached 3.2 million customers for the month. Supergroup is a global, online-only sports betting and online gaming business with continuing opportunity for growth, strong financial fundamentals, and an exciting future ahead. I'll now turn the call over to Linda for detailed discussion of our financial results.