Betsson AB

Good morning, everyone, and welcome to Betsson's earnings presentation for the fourth quarter and full year of 2024. I'm Pontus Lindvall, the president and CEO of Betsson. With me presenting today is also our CFO, Martin Örman, who has a little bit of a cough. I'm very pleased to report yet another strong quarter for Betsson with continued high customer activity and record figures across the board. In the fourth quarter group revenue increased by 22% and operating income or EBIT increased by 23% year over year. This means new all-time high levels for group revenue and EBIT at 307 million euro and 70 million euro. The EBIT margin increased to 22.9% in the quarter. New quarterly records were also set for customer deposits and gaming turnover as well as casino and sportsbook revenue. Customer deposits increased by 14% year-over-year. Casino turnover increased by 6% year-over-year and sportsbook turnover increased by 2% year-over-year. Casino revenue was up 17% year-over-year and sportsbook revenue was up 36% year-over-year. supported by a strong sportsbook margin at 9.8% for the quarter. Growth was broad-based with continued high activity in Latin America, Western Europe, and in the SEKA region. Looking at the full year 2024, as we can see on this slide, new records were set for the group revenue and earnings, as well as cash flow. For 2024, we passed 1 billion euros in revenue for the first time and landed 17% higher than the previous year. At the same time, EBIT was up 22% year over year at 257 million euros. The EBIT margin went up to over 23% thanks to our scalable business model and continued cost control. EBITDA and operating cash flow were up 20% and 18%. year over year, respectively, also at all time high. Net income and earnings per share only increased by 6% and 2%, respectively, as the group's corporate tax rate moved up during 2024 due to the application of the Pillar 2 rules. When we sum up 2024, we can conclude that it was the best year ever for Betsson, where we continue to strengthen our position as one of the global leaders in the gaming and betting industry. The year was characterized by high growth, strength and profitability and strategic investments in line with our long-term goals and our vision to offer the best gaming experience in the industry. Our investments in the Latin America and SEACA regions continue to be a key driver of the group's growth and we have successfully built a strong position in several key markets using our expertise in online gaming and our proprietary technology platform and sportsbook. Our commitment to sports and marketing through strategic sponsorships has also played an important role in strengthening Betsson's brand and engaging our players globally. Geographic expansion, diversification and disciplined capital allocation remain key success factors for Betsson. We maintain a positive outlook going forward and see continued structural growth for the online gaming industry globally over the years to come, driven by the migration from offline to online gaming. I am proud to see that Betsson's involvement in sports continues. Football is by far the most popular sport among sports betting customers. Recently we announced that the jersey sponsorship with the iconic club Boca Juniors in Argentina will be extended through 2028. Another popular sport for betting is tennis and in October last year Betsson was one of the main sponsors of the ATP 250 Nordic Open in the Royal Tennis Hall in Stockholm which was a great event with several top 10 ranked players taking part. Betsson continues investing in product and technology. Betsson's gaming sites are mainly operated on our proprietary platform, the so-called player account management system or PAM, which makes up the core of the offering and user experience. The platform manages payments, customer information and account management, as well as the games. Our sports book is also operated on in-house technology. Geographical expansion continues to be a key theme and currently the organization is preparing for a launch on the newly regulated market in Brazil. In Italy several new suppliers of games were integrated and a new form of electronic identification was introduced during the quarter in order to create a smoother registration process for new customers. In Denmark, one of the biggest jackpots in the industry was integrated and launched during the quarter. This strengthens the casino offering for Betsson in Denmark. For the sportsbook, the BetBuilder function was further developed during the quarter as new betting and combination possibilities were added, as well as bonus functionality. BetBuilder is a feature allowing players to set up their own bets from the same match in football and another of other sports. The feature allows players to customize their bets by choosing two or more selections within the same match and combining these into one single bet with higher odds. With the latest additions, Betsson can now offer one of the most attractive bet builder tools for football on the market. Sustainability is an integrated part of Betsson's business strategy since many years. Betsson holds the AAA rating by Morgan Stanley Capital International, or MSCI ESG ratings after an upgrade in 2024. In the fourth quarter, a TV campaign was launched in Argentina together with players from Boca Juniors. The TV commercial is promoting safe, legal and secure gaming practices in Argentina. Recently some changes in the group management were announced. Two new roles operational CEO and operational CFO will form part of the group's management going forward. Jesper Svensson and Chris Saliba both have a long background in the group in these roles. And now I will hand over to Martin for a closer look at the financials in the fourth quarter. Go ahead Martin.

Thanks Pontus and hello everyone. Betsson continues to deliver stable revenue growth, and we can conclude the 12th consecutive quarter with EBIT growth. The EBIT margin is stable around 23% and has been so for the past seven quarters, although the shareholder regulated revenue has increased from 36% in the beginning of 2023 to 60% in the fourth quarter in 2024. Managing to keep margins constant over time, although changing the revenue mix, is a good testimony to the scalability in the Betsson business model. The fourth quarter was yet another record quarter with growth and a lot of all-time highs. The Q4 result is supported by year-over-year growth of 14% in deposits, which is also the highest deposit levels ever for a single quarter, and also all-time high in gross turnover with year-over-year growth of 6% and growth of 11% in active customers. The gross turnover in Sportbook across all bets on gaming solution was almost 1.71 billion euros, which is all time high. Sportbook margin was 9.8%, which is higher than the 6.2% margin in the fourth quarter last year and above the two year rolling average margin of 7.8%. Sportbook revenue increased by some 36% compared to last year and amounted to 91 million. which is also a new all-time high. The casino turnover is the highest ever and increased by 6% year-on-year, and casino revenue increased by 17%, which is the highest casino revenue ever for an individual quarter. Casino revenue represented 69% of the group's total revenue in the quarter, and sport books some 30%. Reported revenue for the fourth quarter amounted to 307 million euro, the highest revenue ever in a single quarter, and an increase of 22% year-on-year and 49% organic growth. Growth is coming from both the B2C and the B2B business in the quarter, where the B2C business contributed with 224 million in revenue, while some 82 million came from the B2B operations, corresponding to some 27% of the total revenue for the group. Revenue from locally regulated markets increased by 58% compared to last year and now constitutes 60% of total revenue in the fourth quarter. Splitting revenue by region, we see growth compared to previous year in all regions except for the Nordics, which is down compared to last year, a trend we have seen for some time now. The decline in the Nordic in this quarter of 14% compared to last year is primarily driven by lower activity in the casino product. The Nordic region represented 13% of the group's total revenue in the fourth quarter. Revenue from Western Europe increased by 16% year on year or by 11 million euro and is mainly driven by increased casino revenue. Revenue from Belgium increased compared with both the corresponding period last year and the previous quarter, mainly driven by the casino product. The Italian market is also contributing to the growth in the Western Europe region, driven by strong underlying growth with new records for both deposits and turnover. The reported revenue is all-time high, and the increase compared to last year is mainly driven by the casino product. The Sportbook product reported increased activity and increased revenue, both compared with the corresponding period last year and the previous quarter, but is still comparably lower than the group's casino revenue unit. The Western Europe region represented 17% of total revenue in the quarter. Revenue from the Sika region increased by 25 million, representing an increase of 24% and reported all-time high in the quarter. Georgia, Lithuania, Croatia and Greece reported all-time high revenue in the fourth quarter, mainly driven by the casino product. Estonia reported revenue in line with the corresponding period last year. The Sportbook product reported growth, whilst the Casino product reported lower activity. Latvia reported decreased revenue compared to last year, driven by lower activity in the Casino product. The Sika region represented 43% of the group's total revenue. Revenue in Latin America region increased by 25 million euro, which is a new all-time high, representing an increase of 47% compared to last year. Peru and Argentina reported growth, both compared to the corresponding period last year and the previous quarter, mainly driven by the casino product. Colombia reported increased revenue compared to last year and also compared to previous quarter. The Latin America region represented 26% of the group's total revenue in the fourth quarter, compared to 18% in the first quarter this year. The development in operating income in this picture is broken down and explained by the different line items in the P&L. Revenue has increased by some 55 million euro and following that increased cost of services provided as well. The increase in cost of services provided is, apart from revenue growth, mainly explained by higher gaming taxes, following increased revenue from locally regulated markets. Gross profit increased by €35 million compared to the same period last year and amounts to €200 million, which corresponds to a gross profit margin of 65.3% compared to 65.6% last year. Marketing spend increased by €9 million compared to last year. Increased marketing spend is primarily explained by enhanced marketing efforts in Western Europe and Latin America. Personnel expenses increased by some €6 million in the fourth quarter compared to last year due to some 300 additional employees following geographic expansion and acquisitions, yearly salary revisions, performance-related compensation and increased investments in product and technology development. Depreciation and amortization cost is more or less flat compared to last year. Other items include other external expenses which has slightly increased, driven by sustained increased investments in technology and product development on the Sportbox side. Other items also include capitalized development costs and other operating income and expenses, which are more or less in line with the previous period last year. Operating income amounts to 70.2 million euro, which is all-time high, and an increase of 23%. The EBIT margin was 22.9% compared to 22.6% last year and 23% in the previous quarter. Operating cash flow amounts to 84.6 million euro compared to 47.6 million euro in the same period last year. Operating cash flow is driven by increased operating income and slightly positively impacted by changes in working capital by some 5 million euro. The positive effect from working capital comes from decreased accrued expenses. Cash flow from investing activities sums up to 24.5 million and relates to investments in home product and technology development and acquisition of sporting solutions and payment of gaming licenses in Brazil. Cash flow from financing activities impacted the cash flow by 90 million euro, mainly explained by paid out dividend to shareholders and by repayment of the remaining bonds in the series 2022-2025. Betsson has S end of December, a net cash position of 140 million euro and an equity ratio of 63%. Now back to you Pontus to present the suggested dividend distribution, the trading updates, and to summarize the fourth quarter and the full year 2024.

Thank you, Martin. strong cash flows of our business and the solid balance sheets allows us to continue paying out attractive dividends to our shareholders and at the same time invest in future growth for 2024 the board has proposed a 17 increase in the total dividend to 0.757 euros per share consisting of 0.657 euros per share as ordinary dividend and 0.10 euros per share as a special dividend. The proposed total dividend for 2024 amounts to euro 104.4 million. The dividend will be paid out in Swedish kronor in two parts in June and in October. Now let's look at how the first quarter of this year has started. The average daily revenue in the first quarter of 2025 up to until and including the 31st of January has been 19.9% higher than the average daily revenue of the entire first quarter of 2024. During the measurement period in the first quarter 2025 the sportsbook margin has been higher than the historical average. Now let's briefly summarize the highlights in the fourth quarter of 2024. The high customer activity continued during the quarter and was supported by a high sportsbook margin which led to record KPIs across the board. We delivered new quarterly all-time highs in revenue, EBIT, gaming turnover and revenue in both casino and the sportsbook. This was the 12th quarter in a row with sequential growth in EBIT. The business continues to generate strong cash flow, and we have a robust balance sheet supporting attractive shareholder cash returns and investments for future growth. We continue on new paths and act as pioneers in everything we do and look forward to continuing our growth journey in 2025. January has started well, as mentioned before. Geographic expansion and diversification remain keywords for us, and we have a full pipeline of activities to support continued growth. Thanks, everyone, for listening in to this presentation, and now it's time for Q&A. We welcome your questions.