Kambi Group plc

Good morning, everyone. My name is Mia Nordlander. I'm Senior Vice President, Investor Relations. And today I'm here with our CEO, Christian Nyland, and our CEO for David Kenyon. And they will present our Q4 2021 result. After the presentation, you will be able to either call in your questions through the telephone conference or write your question in the web chat here. But first, start over to you, Christian.

Thank you, Mia. So, yeah, please get the agenda. So, yeah, we will go through first the highlights as usual, and then I will hand over to David for a short while to go through the financial highlights, and then I will come back and talk a little bit more about Camby. So you can take the next slide. I'm extremely pleased with the performance we have shown in Q4. Talking about headwinds, I think this has been probably the toughest comparable we have ever had. We're comparing quarters where we lost in Q4 2020. We had... The top three operators, according to our annual report, was about 64% of our revenues. And that was DraftKings. It's not with us anymore. It's a data where we have the majority of revenues. But for us, their most important market, Netherlands, we have not got any revenues in this quarter. And on top of that, we also have still quite a good margin in 7.8%, but compared to a year ago, it's roughly 80% worse. And still we come in with quite a good result and still showing a great operating margin of 20%. Of course, the big event for us at the moment, it was announced on Tuesday. Sorry, it's some song coming in. So in, yeah, sorry for that. Yes, the big news coming out Tuesday night, where we had two news in the same press release. First of all, we extended our partnership with Kindred until the end of 2026. And of course, for us, that is really important. It shows that we will have financial strength for another three years up until the end of 2026. And of course, it also gives some more transparency about our relationship with our largest customer for the long term. On top of that, we also announced that we now have met the financial targets to be able to pay the convertible bond at our own discretion. If and when that will happen, we don't know at this point. Now we have a full control over that situation. Together, these two events, I think, creates a very strong foundation for Cambie and gives us full control how to plan our strategic direction going forward. Our news during quarter. We have signed five new partners in Q4 and in the beginning of 2022, which illustrates our market-leading position in North America. And finally, we have gained the license in New York State, and in early 2022, we also launched in the state of New York. So that's obviously one of the largest states in the U.S., so a great achievement for us. With that, I'm handing over to David, and I will come back later.

Thank you, Christian. I'm really pleased to present some strong financial results for Q4, albeit up against some tough comparatives, which I'll give you some more detail of shortly. But firstly, the Q4 numbers. So 34.9 million in revenue. We had OPEX of 27.8 million this quarter, giving an operating profit of 7.1 million, a very healthy margin at over 20%. If we take the next slide, we'll give you the full year figures. So revenue for the full year was 162.4 million, up from 117.7 million last year. I think we can be really proud of that 38% increase in the face of losing the business of DraftKings at the end of Q3. I think 38% is a very healthy growth number there. In terms of operating profit, we saw the scalability of our business model really shining through again this year. with operating profits up from 32 million to 57 million, a 77% increase. And this year, it's an operating margin at over 35% versus 27% last year. On the next slide, we have the turnover index, which is an analysis of the underlying operator performance, which really builds up our revenue model. So the blue columns you see here is the aggregated operator turnover. On an index basis, we set that index at 100 when we first listed back in 2014. And the line is the aggregated operator trading margin, which you can see fluctuates quarter by quarter depending on the sporting results. It's a very typical seasonal pattern for us that Q4 is a strong sporting calendar. It's a pattern we've seen throughout as you look back through the years and the quarters. And obviously, we have a full quarter of the European soccer leagues and also in the US, the American football and basketball seasons in full swing. And this contributed to a 32 percent sequential growth from Q3. If you look at versus Q4 last year, we are down 23 percent. But I think there's some key factors that Christian touched on, which we should flesh out a bit more to actually see the underlying growth of the business. So firstly, those DraftKings, major customer of ours, which transitioned away in full by the end of Q3. And 888, which transitioned a large part of their business away in the early part of this year. And the third factor really is the Netherlands, where we have key operators currently applying for a license in the new regulation, which started effective October this year. So I think you need to adjust for those three major factors if you want to see the underlying growth of the business. And adjusting for those, you get to an underlying growth and operator turnover of 38%. Let's go back to the last slide. The operator trading margin this quarter, it recovered really from a week. I think we commented in the Q3 results that it had started in a weak fashion. The start of October was was a weak margin, but it did recover through the quarter and we ended up at 7.8% for the full quarter, up against a very tough comparative 9.4%, which was unusually high. And we'll see that now on the next slide when we look at our revenue growth. So this is the conversion from the operator turnover growth to our revenue growth. Normally, This is maybe a waterfall, but obviously this is now starting from a negative, so everything looks slightly upside down to how we normally present. So the operator turnover was down 23%, as discussed, and the lower trading margin versus that tough comparative meant that operator GGR was down by 37% year on year. However, this was offset to a quite significant degree by a couple of other factors shown here in the other column. being that the lower ggr compared to last year meant that we actually saw slightly higher effective commission rates which supported which kind of props up our revenue growth here and also we had income both from abios and and other various fixed revenue streams which are not directly linked to the level of operator turnover that pushed up our revenues to some degree the net effect was a 26 decrease in revenue versus q4 last year Moving finally to the balance sheet. We remain in a very strong position in terms of the balance sheet with almost 80 million in cash in the bank. And the cash inflow outside of financing and working capital movements of almost 5 million. And we're very pleased to have completed our first share buyback program during the quarter worth 12 million euros. I'd say the balance sheet remains in excellent position to really support both our organic growth and further acquisitions in the future. And with that, I'll hand back to Christian.