- Second Quarter 2022 Revenue of €320.8 million
- Profit after tax of €298.6 million for the second quarter of
2022 includes €283.3 million of non-cash fair value gains
associated with the mark to market of the warrant and earnout
liabilities
- Second Quarter 2022 Adjusted EBITDA of €63.6 million
- Cash and cash equivalents was €220.0 million at June 30,
2022
- Management to host conference call today at 8:30 a.m. ET
Super Group (SGHC) Limited (NYSE: SGHC) (“SGHC” or “Super
Group”), the parent company of Betway, a leading online sports
betting and gaming business, and Spin, the multi-brand online
casino, today announced second quarter 2022 financial results for
its operating subsidiary, SGHC Limited.
Neal Menashe, CEO of Super Group, commented: “The current macro
environment may provide near term headwinds but Super Group’s
balance sheet remains strong and our business remains fundamentally
sound.” Mr. Menashe continued, “By investing in our global
business, we continue to focus on organic and strategic growth
opportunities in pursuit of long-term sustainable profits.”
Alinda van Wyk, CFO of Super Group stated, “Super Group is a
profitable and debt free company with a continuing track record of
consistent cash generation. Despite some current challenges, we
have increased monthly active users, while focusing on financial
discipline to maintain profitability and we continue to invest in
the future growth of Super Group.”
Financial Highlights
- Revenue decreased by 10% to €320.8 million for second quarter
of 2022 from €355.2 million over the same period in the prior year
primarily as a result of a decline in online casino net gaming
revenue and brand license fee income, partially offset by an
increase in sports betting net gaming revenue. The decrease in
casino net gaming revenue was driven by the impact of inflationary
factors on disposable income. The prior year quarter casino net
gaming revenue also included a positive impact from the global
shutdowns during the COVID pandemic. Brand license fee income
declined due to renegotiated contract terms. Sports betting net
gaming revenue increased due to growth in Africa and Asia-Pacific
regions.
- Profit after tax for the second quarter of 2022 was €298.6
million compared to a profit of €63.9million in the same period of
the prior year. Profit for the second quarter of 2022 was
positively impacted by non-cash adjustments related to the business
combination and the listing on January 27, 2022 as follows:
- €219.3 million for fair value gains of earnout liabilities;
and
- €64.0 million of fair value gains of warrant liabilities.
- EBITDA, a non-GAAP measure, increased to €319.3 million in the
second quarter of 2022 compared to €91.4 million in the same period
from the prior year.
- Adjusted EBITDA, which excludes transaction costs, share
listing expenses, changes in valuations of warrants and earnout
liabilities and associated foreign exchange movements, gains on
derivative contracts and bargain purchases, decreased 30% to €63.6
million compared to €90.8 million in the same period from the prior
year.
- Monthly Average Customers for the quarter increased 3% to 2.7
million during the second quarter of 2022 from 2.6 million in the
second quarter of 2021.
- Cash and cash equivalents was €220.0 million at June 30, 2022
and €293.8 million at December 31, 2021. The decrease was primarily
the result of cash used to redeem shares in connection with closing
the business combination, offset in part by cash released from
SEAC’s trust account to Super Group upon the closing.
- During the second quarter of 2022, approximately 6.7 million
Restricted Stock Units were granted across the employee base and
will vest in equal tranches over the next three years on December
31, 2022, 2023 and 2024.
Net Gaming Revenue by Geographical
Region for the Three Months Ended June 30:
2022
2022
2022
€ '000s
€ '000s
€ '000s
Betway
Spin
Total
Africa and Middle East
62,914
660
63,574
Asia-Pacific
50,756
26,632
77,388
Europe
28,516
1,993
30,509
North America
32,616
109,513
142,129
South/Latin America
3,893
3,323
7,216
178,695
142,121
320,816
% % %
Africa and Middle East
35%
0%
20%
Asia-Pacific
28%
19%
24%
Europe
16%
1%
10%
North America
19%
78%
44%
South/Latin America
2%
2%
2%
2021
2021
2021
€ '000s
€ '000s
€ '000s
Betway
Spin
Total
Africa and Middle East
52,940
1,350
54,290
Asia-Pacific
57,047
22,741
79,788
Europe
35,013
3,870
38,883
North America
36,692
136,346
173,038
South/Latin America
4,014
5,186
9,200
185,706
169,493
355,199
%
%
%
Africa and
Middle East
29%
1%
15%
Asia-Pacific
31%
13%
22%
Europe
19%
2%
11%
North America
19%
81%
49%
South/Latin America
2%
3%
3%
Net Gaming Revenue by Geographical
Region for the Six Months Ended June 30:
2022
2022
2022
€ '000s
€ '000s
€ '000s
Betway
Spin
Total
Africa and Middle East
126,700
1,996
128,696
Asia-Pacific
105,410
50,620
156,030
Europe
58,708
4,520
63,228
North America
67,679
225,498
293,177
South/Latin America
7,178
6,986
14,164
365,675
289,620
655,295
%
%
%
Africa and
Middle East
35%
1%
20%
Asia-Pacific
29%
17%
24%
Europe
16%
2%
10%
North America
18%
78%
44%
South/Latin America
2%
2%
2%
2021
2021
2021
€ '000s
€ '000s
€ '000s
Betway
Spin
Total
Africa and Middle East
87,521
3,269
90,790
Asia-Pacific
111,469
45,436
156,905
Europe
70,014
12,018
82,032
North America
67,246
255,347
322,593
South/Latin America
6,250
8,440
14,690
342,500
324,510
667,010
%
%
%
Africa and
Middle East
26%
1%
14%
Asia-Pacific
33%
14%
24%
Europe
20%
4%
12%
North America
19%
78%
48%
South/Latin America
2%
3%
2%
Net Gaming Revenue by Product for the
Three Months Ended June 30:
Betway
Spin
Total
2022
2022
2022
€ '000s
€ '000s
€ '000s
Online casino1
62,139
142,174
204,313
Sports betting1
110,740
(53)
110,687
Brand licensing2
5,766
-
5,766
Other3
50
-
50
Total Group revenue
178,695
142,121
320,816
Betway
Spin
Total
2021
2021
2021
€ '000s
€ '000s
€ '000s
Online casino1
63,202
168,921
232,123
Sports betting1
104,626
572
105,198
Brand licensing2
17,482
-
17,482
Other3
396
-
396
Total Group revenue
185,706
169,493
355,199
Net Gaming Revenue by Product for the
Six Months Ended June 30:
Betway
Spin
Total
2022
2022
2022
€ '000s
€ '000s
€ '000s
Online casino1
119,595
289,220
408,815
Sports betting1
219,777
400
220,177
Brand licensing2
25,656
-
25,656
Other3
647
-
647
Total Group revenue
365,675
289,620
655,295
Betway
Spin
Total
2021
2021
2021
€ '000s
€ '000s
€ '000s
Online casino1
123,630
322,290
445,920
Sports betting1
184,235
939
185,174
Brand licensing2
34,635
136
34,771
Other3
-
1,145
1,145
Total Group revenue
342,500
324,510
667,010
1Sports betting and online casino revenues are not within the scope
of IFRS 15 'Revenue from Contracts with Customers' and are treated
as derivatives under IFRS 9 'Financial Instruments'. 2 Brand
licensing revenues are within the scope of IFRS 15 'Revenue from
Contracts with Customers'. 3 Other relates to rebates received from
external processors.
Reorganization Timeline
Over the last three years, the business conducted a
restructuring by combining existing, stand-alone companies into the
newly formed Super Group.
SGHC Limited was formed on July 6, 2020.
The following transactions took place during 2021 and 2022 as
part of the reorganization:
- January 11, 2021 - Raging River Trading was deemed to have been
acquired.
- April 9, 2021 - Webhost, Partner Media and Buffalo Partners
were acquired.
- April 14, 2021 - DigiProc Consolidated was acquired.
- April 16, 2021 – Digiprocessing (Mauritius) was acquired.
- April 19, 2021 - Raichu Investments was acquired.
- September 2, 2021 - SGHC purchased 100% of the outstanding
shares of Smart Business Solutions S.A.
- December 1, 2021 - SGHC purchased 100% of the outstanding
shares in Haber Investments, and Red Interactive.
- January 27, 2022 - Business combination with SEAC.
Non-GAAP Financial Information
This press release includes non-GAAP financial information not
presented in accordance with the International Financial Reporting
Standards (“IFRS”).
EBITDA and Adjusted EBITDA are non-GAAP company-specific
performance measures that Super Group uses to supplement the
Company’s results presented in accordance with IFRS. EBITDA is
defined as profit before depreciation, amortization, financial
income, financial expense and income tax expense/credit. Adjusted
EBITDA is defined as EBITDA less gain on derivative contracts and
gain on bargain purchase plus transaction costs, share listing
expense, fair value adjustments on warrant liabilities and earnout
liabilities and associated foreign exchange movements, and the
expense for a once off award of Restricted Stock Units.
Super Group believes that these non-GAAP measures are useful in
evaluating the Company’s operating performance as they are similar
to measures reported by the Company’s public competitors and are
regularly used by securities analysts, institutional investors and
other interested parties in analyzing operating performance and
prospects.
Management does not consider these non-GAAP measures in
isolation or as an alternative to financial measures determined in
accordance with IFRS. The principal limitation of these non-GAAP
financial measures is that they exclude significant expenses that
are required by IFRS to be recorded in Super Group’s financial
statements. In order to compensate for these limitations,
management presents non-GAAP financial measures together with IFRS
results. Non-GAAP measures should be considered in addition to
results and guidance prepared in accordance with IFRS, but should
not be considered a substitute for, or superior to, IFRS
results.
Reconciliation tables of the most comparable IFRS financial
measure to the non-GAAP financial measures used in this press
release are included below. Super Group urges investors to review
the reconciliation and not to rely on any single financial measure
to evaluate its business. In addition, other companies, including
companies in our industry, may calculate similarly named non-GAAP
measures differently than we do, which limits their usefulness in
comparing our financial results with theirs.
Reconciliation of Profit to Adjusted EBITDA for:
Three Months Ended June 30, Six Months Ended June
30,
2022
2021
2022
2021
€ '000s
€ '000s
€ '000s
€ '000s
Profit for the period
298,561
63,912
135,337
102,487
Income tax expense
5,623
3,091
14,582
6,011
Finance income
(352)
(350)
(665)
(688)
Finance expense
314
2,876
663
5,755
Depreciation and amortization expense
15,175
21,873
31,169
41,981
EBITDA
319,321
91,402
181,086
155,546
Transaction fees
207
-
21,611
-
Gain on derivative contracts
-
-
(1,712)
-
Share based payment expense
-
-
126,252
-
Foreign exchange loss on revaluation of warrants and earnouts
24,029
-
24,029
-
Change in fair value of warrant liability
(63,988)
-
(34,614)
-
Change in fair value of earnout liability
(219,321)
-
(194,936)
-
RSU expense
3,376
-
3,376
-
Gain on bargain purchase
-
(614)
-
(10,661)
Adjusted EBITDA
63,624
90,788
125,092
144,885
Webcast Details
The Company will host a webcast at 8:30 a.m. ET today to discuss
the second quarter 2022 financial results. For ease of
year-over-year comparison and analysis the Company may discuss
pro-forma consolidated results, including Adjusted EBITDA, which
pro-forma results are included in the Q2 2022 Earnings Review
presentation posted on Investor Relations section of SGHC.com.
Participants may access the live webcast and supplemental
earnings presentation on the events & presentations page of the
Super Group Investor Relations website at:
https://investors.sghc.com/events-and-presentations/default.aspx.
About Super Group (SGHC) Limited
Super Group (SGHC) Limited is the holding company for leading
global online sports betting and gaming businesses: Betway, a
premier online sports betting brand, and Spin, a multi-brand online
casino offering. The group is licensed in multiple jurisdictions,
with leading positions in key markets throughout Europe, the
Americas and Africa. The group’s sports betting and online gaming
offerings are underpinned by its scale and leading technology,
enabling fast and effective entry into new markets. Its proprietary
marketing and data analytics engine empowers it to responsibly
provide a unique and personalized customer experience. For more
information, visit www.sghc.com.
Forward-Looking Statements
Certain statements made in this press release are “forward
looking statements” within the meaning of the “safe harbor”
provisions of the United States Private Securities Litigation
Reform Act of 1995.
These forward-looking statements include, but are not limited
to, expectations and timing related to market entries and
expansion, projections of market opportunity, growth and
profitability expected growth of Super Group’s customer base,
expansion into new markets.
These forward-looking statements generally are identified by the
words “believe,” “project,” “expect,” “anticipate,” “estimate,”
“intend,” “strategy,” “future,” “opportunity,” “plan,” “pipeline,”
“may,” “should,” “will,” “would,” “will be,” “will continue,” “will
likely result,” and similar expressions. Forward-looking statements
are predictions, projections and other statements about future
events that are based on current expectations and assumptions and,
as a result, are subject to risks and uncertainties. Many factors
could cause actual future events to differ materially from the
forward-looking statements in this press release, including but not
limited to: (i) the ability to implement business plans, forecasts
and other expectations, and identify and realize additional
opportunities; (ii) the ability to maintain the listing of Super
Group’s securities on a national securities exchange; (iii) changes
in the competitive and regulated industries in which Super Group
operates; (iv) variations in operating performance across
competitors; (v) changes in laws and regulations affecting Super
Group’s business; (vi) Super Group’s inability to meet or exceed
its financial projections; (vii) changes in general economic
conditions, including as a result of the COVID-19 pandemic; (viii)
changes in domestic and foreign business, market, financial,
political and legal conditions; (ix) future global, regional or
local economic and market conditions affecting the sports betting
and gaming industry; (x) changes in existing laws and regulations,
or their interpretation or enforcement, or the regulatory climate
with respect to the sports betting and gaming industry; (xi) the
ability of Super Group’s customers to deposit funds in order to
participate in Super Group’s gaming products; (xii) compliance with
regulatory requirements in a particular regulated jurisdiction, or
Super Group’s ability to successfully obtain a license or permit
applied for in a particular regulated jurisdiction, or maintain,
renew or expand existing licenses; (xiii) the technological
solutions Super Group has in place to block customers in certain
jurisdictions, including jurisdictions where Super Group’s business
is illegal, or which are sanctioned by countries in which Super
Group operates from accessing its offerings; (xiv) Super Group’s
ability to restrict and manage betting limits at the individual
customer level based on individual customer profiles and risk level
to the enterprise; (xv) the ability by Super Group’s key
executives, certain employees or other individuals related to the
business, including significant shareholders, to obtain the
necessary licenses or comply with individual regulatory obligations
in certain jurisdictions; (xvi) protection or enforcement of Super
Group’s intellectual property rights, the confidentiality of its
trade secrets and confidential information, or the costs involved
in protecting or enforcing Super Group’s intellectual property
rights and confidential information; (xvii) compliance with
applicable data protection and privacy laws in Super Group’s
collection, storage and use, including sharing and international
transfers, of personal data; (xviii) failures, errors, defects or
disruptions in Super Group’s information technology and other
systems and platforms; (xix) Super Group’s ability to develop new
products, services, and solutions, bring them to market in a timely
manner, and make enhancements to its platform; (xx) Super Group’s
ability to maintain and grow its market share, including its
ability to enter new markets and acquire and retain paying
customers; (xxi) the success, including win or hold rates, of
existing and future online betting and gaming products; (xxii)
competition within the broader entertainment industry; (xxiii)
Super Group’s reliance on strategic relationships with land based
casinos, sports teams, event planners, local licensing partners and
advertisers; (xxiv) events or media coverage relating to, or the
popularity of, online betting and gaming industry; (xxv) trading,
liability management and pricing risk related to Super Group’s
participation in the sports betting and gaming industry; (xxvi)
accessibility to the services of banks, credit card issuers and
payment processing services providers due to the nature of Super
Group’s business; (xxvii) the regulatory approvals related to
proposed acquisitions and the integration of the acquired
businesses; and (xxviii) other risks and uncertainties indicated
from time to time for Super Group including those under the heading
“Risk Factors” in our Annual Report on Form 20-F filed with the SEC
on April 20, 2022, and in Super Group’s other filings with the SEC.
The foregoing list of factors is not exhaustive. You should
carefully consider the foregoing factors and the other risks and
uncertainties described in other documents filed or that may be
filed by Super Group from time to time with the SEC. These filings
identify and address other important risks and uncertainties that
could cause actual events and results to differ materially from
those contained in the forward-looking statements. Forward-looking
statements speak only as of the date they are made. Readers are
cautioned not to put undue reliance on forward-looking statements,
and Super Group assumes no obligation and does not intend to update
or revise these forward-looking statements, whether as a result of
new information, future events, or otherwise. Super Group does not
give any assurance that it will achieve its expectations.
Super Group (SGHC) Limited Consolidated Statements of
Profit or Loss and Other Comprehensive Incomefor the periods ended
June 30, 2022 and June 30, 2021 Three Months
Ended June 30, Six Months Ended June 30,
2022
2021
2022
2021
€ '000s
€ '000s
€ '000s
€ '000s
Revenue
320,816
355,199
655,295
667,010
Direct and Marketing Expenses
(225,700)
(233,703)
(466,417)
(448,062)
General and Administration Expenses
(37,754)
(35,442)
(72,455)
(79,060)
Other Operating Income
2,886
4,734
5,293
4,997
Transaction fees
(207)
-
(21,611)
-
Depreciation and Amortization Expense
(15,175)
(21,873)
(31,169)
(41,981)
Profit from Operations
44,866
68,915
68,936
102,904
Finance Income
352
350
665
688
Finance Expense
(314)
(2,876)
(663)
(5,755)
Gain on derivative contracts
-
-
1,712
-
Fx on revaluation of warrants and earnouts
(24,029)
-
(24,029)
-
Share based payment expense
-
-
(126,252)
-
Change in fair value of warrant liability
63,988
-
34,614
-
Change in fair value of earnout liability
219,321
-
194,936
-
Gain on bargain purchase
-
614
-
10,661
Profit Before Taxation
304,184
67,003
149,919
108,498
Income Tax Expense
(5,623)
(3,091)
(14,582)
(6,011)
Profit for the period
298,561
63,912
135,337
102,487
Profit for the period attributable to owners of the
parent
298,561
63,912
135,337
102,487
Other comprehensive (loss)/income Items that may be
reclassified subsequently to profit or loss Foreign currency
translation
(3,492)
(697)
(2,375)
(171)
Other comprehensive (loss)/income for the period
(3,492)
(697)
(2,375)
(171)
Total comprehensive loss for the period attributable to
owners of the parent
295,069
63,215
132,962
102,316
Weighted average shares outstanding, basic
490,197,468
460,476,661
489,266,292
462,979,116
Earnings per share, basic
0.60
0.14
0.27
0.22
Super Group (SGHC) Limited Consolidated
Statements of Financial Positionas at June 30, 2022 and December
31, 2021
2022
2021
June
December
€ '000s
€ '000s
ASSETS Non-current assets Goodwill
24,982
25,023
Intangible assets
159,715
172,954
Property, plant and equipment
12,926
12,498
Right-of-use assets
13,142
14,541
Deferred tax assets
30,859
24,108
Regulatory deposits
9,132
8,594
Loans receivable NC
11,179
25,516
Financial asset
1,687
1,686
263,622
284,920
Current assets Trade and other receivables
156,618
169,252
Income tax receivables
33,923
35,806
Restricted cash
109,365
60,296
Cash and cash equivalents
220,020
293,798
519,926
559,152
TOTAL ASSETS
783,548
844,072
LIABILITIES Non-current liabilities Lease
liabilities NC
9,939
10,896
Interest-bearing loans and borrowings NC
-
764
Deferred tax liability
8,666
9,248
18,605
20,908
Current liabilities Warrant Liability
17,418
-
Earnout Liability
73,798
-
Lease liabilities
4,918
5,353
Deferred consideration
-
13,200
Interest-bearing loans and borrowings_C
1,233
3,008
Trade and other payables
124,678
147,353
Customer liabilities
49,498
51,959
Provisions
48,162
47,715
Income tax payables
42,134
40,524
361,839
309,112
TOTAL LIABILITIES
380,444
330,020
EQUITY Issued capital
273,435
269,338
Earnout reserve
(249,955)
-
Foreign exchange reserve
(4,469)
(2,094)
Accumulated profit
384,093
246,808
403,104
514,052
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
783,548
844,072
SGHC LimitedConsolidated Statements of Cash Flowsfor the Six
months ended June 30, 2022 and June 30, 2021
2022
2021
€ '000s
€ '000s
Cash flows from operating activities Profit for the period
135,337
102,487
Add back: Income tax expense
14,582
6,011
Profit on disposal of assets
-
(3,093)
Change in fair value of warrant liability
(34,614)
-
Change in fair value of earnout liability
(194,936)
-
Fx on revaluation of warrants and earnouts
24,029
-
Share based payment expense
126,252
-
Depreciation of property, plant and equipment
2,704
1,398
RSU expense
3,376
-
Gain on bargain purchase
-
(10,661)
Amortization of right-of-use assets
2,379
1,223
Amortization of intangible assets
26,087
39,360
Increase in provisions
257
1,895
Finance income
(665)
(688)
Finance expense
473
5,755
Unrealized foreign currency gain
(11,857)
(526)
Changes in working capital: Decrease in trade and other
receivables
12,825
29,210
Decrease in trade and other payables
(46,028)
(26,733)
Increase in customer liabilities
(2,461)
3,335
Change in restricted cash
(7,621)
(9,087)
Cash from operating activities
50,119
139,886
Dividends tax paid
(5,569)
-
Corporation tax rebates received
1,846
-
Corporation tax paid
(13,781)
(9,746)
Net cash flows from operating activities
32,615
130,140
Cash flows from investing activities Cash received in
interest
519
464
Acquisition/disposals of intangible assets
(12,762)
-
Acquisition of property, plant and equipment
(2,740)
(1,334)
Acquisition of businesses, net of cash acquired
-
5,151
Cash used in financial assets
-
(848)
Restricted cash guarantee
(41,448)
-
Receipts from loans receivable
18,485
-
Issuance of loans receivable
(3,749)
(25)
Receipt of repayment of loans and borrowings
-
34,449
Cash used in regulatory deposits
(538)
(5,650)
Net cash flows from/(used in) from investing activities
(42,233)
32,207
Cash flows from/(used in) financing activities Shares
repurchased
(222,345)
(10,731)
Proceeds from shares issued net of transaction costs
(1,487)
-
Cash paid for deferred consideration
(13,200)
(2,089)
Proceeds from shares issued
172,119
3,570
Repayment of interest-bearing loans and borrowings
(4,761)
(16,815)
Repayment of lease liabilities - interest
(468)
(205)
Repayment of lease liabilities - principal
(2,573)
(2,566)
Net cash flows used in financing activities
(72,715)
(28,836)
(Decrease)/increase in cash and cash equivalents
(82,333)
133,511
Cash and cash equivalents at beginning of the period
293,798
138,540
Effects of exchange rate fluctuations on cash held
8,555
(225)
Cash and cash equivalents at end of the period
220,020
271,826
View source
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Investors: investors@sghc.com Media:
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Super Group SGHC (NYSE:SGHC)
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From Sep 2023 to Sep 2024