Kambi Group plc

Welcome to Canby's Q3 report. My name is Mia Nordlander. I am Senior Vice President, Investor Relations. And I'm here with our CEO, Christian Nylén, and our CFO, David Kenyon. Today, you will hear David and Christian talk about the quarter, and then we will have time for questions. You can either call them into the studio here or send them directly in the web. So once again, very welcome and over to you, Christian.

Thank you, Mia, and good morning. Yes, I will go through the highlights quickly, and then I will hand over to David, who will go through the financial highlights, and then I will come back and give you some more meat on the commercial and strategic updates and the summary, and then we'll do Q&A. So first quarter, as usual in Q3, it's quite a slow quarter when it comes to sporting events, of course. But nevertheless, we have a revenue growth of 15%. It's boosted to some extent by certain non-recurring fees that David will go through in more detail later on. We have a few exciting contract extensions in ATG and Rank Group, which takes our partner renewals for 2023 to 7, which we are very pleased with. The two big things to talk about this quarter, or actually happened after the quarter, is our agreement with Svenska Spel and LiveScore, which is two very important new deals for us, very exciting. And it's the two deals ever with the highest revenues from sports betting at contract signing. With those two deals and of course with Bali, we have now done 10 CanBeComplete partner signings so far in 2023. I now hand over to David and I will come back later.

Thank you, Christian. Good morning, everyone. Okay, so Q3 2023, I'd say it's a robust financial performance this quarter in what's effectively our first quarter without Penn Online. So we had revenue of 42.1 million euros. This was boosted by some non-recurring items, which I'll talk about, in the form of transition fees from Penn and a one-off license fee for Shape. Earnings before interest tax amortization on acquisitions was 6 million, up from 4.2 million this time last year. This increase is driven by the increase in revenue, which we see there, partially offset by a full quarter of costs from the shape business and a negative impact of foreign exchange on our P&L versus last year. And excluding FX, this metric is up from 3.3 million to 6.3 million this year. Our net cash at the end of the quarter is 62.4 million, a significant increase from Q3 last year, and I'll talk through the main changes in that balance. But our balance sheet is in a really healthy position as we move into Q4. This is the turnover index I present each quarter. It's an aggregation of the portfolio's performance. The blue columns are an indexed turnover across all operators, an index we set at 100 back in 2014. And the orange line there is the aggregated operator trading margin for the quarter. Operator turnover is down 6% from Q3 2022. And of course, the biggest impact is the migration of the PEN online business in early July. And turnover actually grew 9% if you strip out the impact of this PEN migration. Turnover was also impacted by foreign exchange, with the dollar and the Swedish crown weakening against the euro versus last year, offset partly by a stronger Colombian peso. We saw actually a sporting calendar which was a little quieter this time, this year than last year, when there was an increased number of soccer matches due to that Winter World Cup. So that did have a slight dampening effect also on our turnover versus last year. The operator trading margin was 8.8% compared to the very high 9.5% we saw in Q3 last year. which takes us to our revenue conversion graph. And first, a couple of comments on this graph. It looks kind of unusual this quarter. Firstly, we've moved shape business into the other column here. It's been more than a year now since the acquisition, so we look at that more as a BAU, so we don't want to just keep separating that out. So that's now into the other column. And also, I mean, it's fair to say that with all the various revenue streams and business models we now have across the business, as well as the repeatedly kind of large items we see in other that I always have to explain, I think it's fair to say that we will assess whether this remains the best format to present our revenue conversion information. Onto the numbers themselves, turnover at constant FX rates was down 3.4% from last year. and was also negatively impacted by those foreign exchange movements I mentioned, taking us down to the 6% overall turnover decrease. The margin dropping from 9.5% to 8.8% contributed to an overall net gaming revenue decrease of 12.8%. However, this was offset by a number of items which you see there in the other column. Firstly, the impact of fixed revenues and minimum guarantees on our business, where our revenue is boosted by factors outside of the turnover growth. We had the transition fees relating to the migration of Penn. That was 3.4 million recognised in the quarter, and we'll keep seeing those fees through to July 2024. There was a one-off license fee in respect to the Shape business of 2.6 million. And we also had a full quarter of revenues from Shape, so three months versus one month this quarter last year. So that had a positive impact of 2 million on that other column there. And all in all, adding together all these factors, this led to a 15% revenue growth for the business overall. There's been a lot of movements in our cash position on a year-to-date basis, and actually that is kind of a more interesting story, I think, than just looking at the quarter. So we're showing here a year-to-date position on the cash flow. We started at 60.7 million at the start of the year. This has been boosted by 12.8 million of operating profit. Working capital has increased our cash by just over 10 million due to some debtor balances on a couple of larger accounts which built up at the end of 2022 and were paid off in Q1. Then we used 7.2 million in Q2 to repurchase some of our own shares. And we also in Q2 repaid the 7.5 million convertible bond, which was our only external debt and is now fully extinguished. The tax paid year-to-date is 8.7 million, but at the end of the quarter, we have a tax recoverable position of 3.5 million, which we expect to recover in due course and will increase our cash balance. And also offsetting that operating profit is 3.9 million of amortisation on the acquired intangibles. That's, of course, a non-cash item, so our cash balance actually increases due to that. The net effect of all these movements I talk about here is to increase our cash by 1.7 million since the start of the year, giving us a closing balance of 62.4 million euros. And with that, I pass you back to Christian.