Betsson AB

First, a quick look at the outline for today's presentation. First, we'll give a business update looking at the key financial highlights for the quarter as well as some activities in our markets. I will also provide a regulatory update for some of the markets that are relevant for Betsson. Martin will then present our financials in more detail. After that, I will show a trading update for the start of the second quarter 2023 and the end presentation with a summary. After the presentation, we will open up for questions from the audience. In the past years, we have invested in geographical expansion to new markets and to strengthen the product offering and the competitive position for the group. We can see that these efforts continue to pay off. Betsson started 2023 with yet another record quarter, again delivering all-time high figures for revenue and EBIT, even though the first quarter has historically often had less activity than the other quarters. We saw continued positive development in both sports betting and casino. Geographically, revenue increased in all regions except for the Nordics. On this slide, you can see some key figures for the first quarter 2023. Total revenue amounted to 222 million euros, up 30% versus the same quarter last year. Organically, the growth was 38% for the quarter. EBIT was 43 million euros, which is up 82% year on year. 82%. This represents an EBIT margin of 19.4%. We also set new quarterly records for both casino turnover, which was up 51% year on year, and for casino revenue, which was up 37%. Customer deposits across all gaming solutions were also at new all time high level for the quarter, well above 1 million euro and up 47% year on year. Sportbook turnover was up 40% year on year and the Sportbook margin was 8%, which was below the 8.3% recorded in the first quarter 2022. This resulted in 19% growth in Sportsbook revenue for the quarter. So this slide highlights some of the activities in the past quarter. We are proud that Betsson's involvement in sports is continuing together with clubs, athletes, fans, and customers. During the quarter, Betsson was the main sponsor of the tennis tournament ATP 250 Chile Open, which took place in February and March in Santiago, Chile. In Italy, we continue to see great activity and we continue to invest in marketing. During the quarter, a new partnership was signed for our local brand Star Casino Sport as the VAR partner for the second Italian Football League Serie B. Argentina. The new business in Argentina is developing well. Revenue increased strongly during the quarter and Betsson continues to make significant investments in marketing to build brand awareness in this regulated market. In Colombia, which is a regulated market, the group recently increased its ownership stake in the operator Coolbet from 88% to 71%. We view Colombia as an interesting regulated market in the longer term. During the quarter, the ambassador partnership was entered with the TV presenter Sara Uribe. Betsson continued to invest resources into product and technology development to ensure that the product offering is competitive and that the tech platform is scalable for all its markets. During the quarter, development of native apps continued. In February, BetSafe was launched on the regulated market in Ontario, Canada. The B2C offering, which includes casino and sports betting, is available in native apps for both Android and iOS. Development work has also continued to adapt and further strengthen Betsson's platform and Sportsbook to support the D2D offering. Work to migrate Betsson's brands to the cloud to optimize the proprietary platform also continued during the quarter. So here's a brief regulatory update. In Norway, the implementation of the cease and desist order by the Norwegian Gambling Authority has been further deferred by the NGA until the 15th of May, considering the changes to its offering that the company has carried out and will continue to carry out. In Peru, the publishing of the new online gambling regulation, which is a step required for the new licensing regime to enter into force, continues to be delayed following the recent political changes in the country. In Brazil, the Ministry of Finance confirmed a series of recent reports that Brazil's government is finally gearing up to implement the federal law from December 2018 that authorized fixed odds sports betting. In the Netherlands, it was recently announced that an advertising ban for gambling will enter into force on 1st of July 2023. Gambling operators in the Netherlands will be prohibited from advertising on TV, radio and in public spaces, both indoor and outdoor. The ban will also apply to sports sponsorships. We continue to monitor the developments in these markets closely. And now I will hand over to Martin, who will take a closer look at the financials in the quarter.

Thanks for that Pontus. I will now give you some more details of the financials of the first quarter, which again was a good quarter, and the fifth consecutive quarter with revenue and EBIT growth, and the best quarter ever in Betsson's history, both in terms of revenue, organic revenue, and profit. The result is underpinned by year-over-year growth of 47% in deposits, or by 1.1 billion euro, which makes it all-time high in deposits, as well as all-time high in casino turnover and casino revenues. Active customer decreased by 11% year on year and is mainly explained by changes in the offering in the Latam region. This defines the right customer acquisition strategy and to make the offering more sustainable in the long run, which is part of our ongoing work to improve our operations across the business and especially in new markets. Reported revenue for the first quarter amounted to 221.9 million euro, an increase of 30% year on year and organic growth of 38%. Both the B2B and the B2C business contributed to growth, with 164.6 million revenue coming from B2C and 57.3 million coming from B2B. Casino turnover increased by 51% year-on-year, and casino revenue was 152 million, an increase of 37% year-on-year. The gross turnover in Sportbook across all Betsons gaming solutions was 1.3 billion euro, which is an increase of 40% compared to the first quarter last year. Sportbook margin was 8.0%, which is lower than the 8.4% margin in the first quarter last year, but slightly higher than the two-year rolling average margin of 7.8%. Sportbook revenue increased by 19% compared to last year and amounted to 67.2 million, being the second highest revenue for a single quarter ever after Q4 last year, which was impacted by the World Cup in football. Sportbook revenue represented 30% of the group's total revenue, in the quarter and casino sum 69%. Breaking down revenue by region, we see growth in all regions except for the Nordics. In the Nordics, we see slight decrease of 2.2 million Euro representing 4% year-on-year decrease. Finland and Denmark show growth driven by increased sport book revenue in the case of Finland and both casino and sport book for Denmark. Sweden reported decreased revenue in the quarter, explained by decreased casino and sport book revenue. Revenue in Norway also declined as a consequence of the changes made to comply with the Norwegian authorities' requirements. The Nordic region represented 23% of the group's total revenue in the first quarter. Revenue from Western Europe increased by 5 million euro, correlating to an increase of 22% year on year. The Italian market is continuing to perform well and reported all-time highs in turnover, deposits and revenue during the first quarter. Revenue from the German market is following the same trend as in the past quarters and years and continues to decline for Betsson, driven by the market restrictions that have been implemented in the past years. The Western Europe region represented 12% of the total revenue in the quarter, The Zika region increased by 75% year-on-year and reports a new all-time high, driven by strong underlying activity in both casino and sport procurations. Croatia and Greece showed continued positive trends in activity and revenue performance. Georgia reported growth compared to the corresponding period last year, driven by the casino products. Lithuania reported all-time high revenue in the first quarter, mainly driven by the casino products. Estonia reported decreased revenue in the quarter, explained by a lower margin in the casino product compared with the corresponding period last year. The Sika region represented 42% of the group's total revenue, making it the largest region by revenue. Reported revenue in the Latin America region amounts to 45.2 million euro, representing an increase of 23% compared to the same period last year. where all countries in the region reported revenue growth driven by underlying activity with deposits and turnover for both sport book and casino grew in the region. The Latin America region represented 21% of the group's total revenue in the first quarter. Revenue from rest of the world increased by 0.5 million or 13% compared to the same period last year and is mainly driven by the Nigerian operations. Revenue from markets with bets on paid local betting duties increased by 31% compared to last year and constituted 36% of total group revenue in the first quarter. Digging into more details of the composition and development of EBIT year on year, we see that revenue has increased by €52 million and following that also cost of services provided. Gross profit increased by 40.4 million euro compared to the same period last year, responding to a gross profit margin of 66.5% compared to 62.9% last year. Changes in the margin is a result of increased revenue and a mix of revenue, where the affiliate and partner commission marketing cost decreased as percentage to total revenue. Marketing spend was higher in absolute numbers compared to the same quarter last year. to increase brand awareness on new markets. Focus in the quarter has been towards the Latin region and especially in the new markets such as Argentina. Marketing costs in percent of B2C revenue amounted to some 22% and 26% when including affiliate marketing as well, which is in line with previous year. Personal expenses increased by 7.3 million euro in the first quarter compared to last year due to increased number of employees. yearly salary revisions, performance-related compensation, geographic expansion, and increased investment in product and technology developments. Other costs increased by €4 million, where the majority relates to other external expenses and is mainly driven by sustained increased investment in product development and technology, specifically from increased investments in cloud-based environments and from extension of the Sportbook's offering. When breaking out costs related to development on new markets, this sums up to €12.5 million in the quarter, of which €2 million was attributed to the US expansion. The remaining €10.5 million consists of €7 million in marketing costs and €3.5 million in other costs, where the bulk of the cost relates to external consultant funds within the tech development. EBIT amounts to €43 million, which is all-time high, and an increase of 82%. compared to the same period last year. The EBIT margin is 19.4%. Moving on to the cash flow and financial position of Betsson, we see cash flow from operating activities amounting to 48.8 million euro driven by operating income and changes in working capital. Negative impact from working capital of some 3 million comes from increased accounts receivable from B2B customers following increased revenue in the quarter. Cash flow from investing activities amounts to 10 million euro, which the largest part relates to investment in capitalized development costs. Cash flow from financing activities impacted the cash flow by 1.9 million euro, mainly explained by lease payments. Betsson has as of end of March a net cash position of 105 million euro and an equity ratio of 64%. And by that I hand over to you Pontus again to take us through the trading updates.

Thank you Martin. Now let's have a brief look at how the second quarter of 2023 has started. The average daily revenue up to and including the 23rd of April was 26% higher than the average daily revenue of the full second quarter in 2022. Organically, the average daily revenue during the start of Q2 2023 has been 35% higher than the average daily revenue of the full second quarter 2022. During the period in April, the sportsbook margin has been more or less in line with the historical average. And finally, here is the summary of the first quarter 2023. Betsson has again reported all-time high levels for group revenue and EBIT. The organic revenue growth was 38% per year. We saw strong performance across the business with all-time high levels for casino turnover and casino revenue. Revenue increased in all regions except for the Nordics, with Latin America and CERCA as key growth drivers. Customer deposits were up 47% year on year, reaching about 1 million euro for the quarter. B2B, 1 billion euro. B2B continues to perform well. This is a sign of strength that reflects the investments made in the past years in product and tech development, as well as M&A. Betsson keeps investing for future growth. With a scalable business model, such investments can be absorbed with maintained or higher profitability over time. For the first quarter, a significant increase in the EBIT margin was reported compared to the first quarter 2022. Betsson's business continues to generate strong cash flows, and we ended the quarter with a strong balance sheet and a significant net cash position. Looking ahead, we maintain our focus on profitable growth, The second quarter has started well with average daily revenues up 26% compared to the average daily revenues for the full second quarter 2022. Thanks everyone for listening to the presentation. Now let's move over to Q&A where we welcome your questions.