SGHC Super Group SGHC Limited

First Quarter Highlights:

• Revenue of €338.5 million
• Loss after tax of €1.9 million includes €2.2 million change in fair value of option liability
• Operational EBITDA of €34.7 million includes Operational EBITDA of €51.3 million from ex-US and a loss of €16.6 million from the US
• Cash and cash equivalents was €246.3 million at March 31, 2023

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 first quarter 2023 consolidated financial results.

Neal Menashe, CEO of Super Group, commented: “Super Group has delivered another solid quarter and we remain focused on growing revenue and profits. During the month of March, net gaming revenue was a record high, along with the Operational EBITDA margin of over 20% and this is a strong reminder of the value of operating leverage in our business. We are confident that we will continue to build on another strong quarter across iGaming and sports betting across the world.”

Alinda van Wyk, CFO of Super Group commented, “Our results for the quarter demonstrate the benefits of our continued investment in growth. Our balance sheet remains robust and gives us a very strong foundation to continue to scale our business. We are always optimizing our costs efficiencies, further enhancing future profitability.”

Financial Highlights

• Revenue increased by 1% to €338.5 million for the first quarter 2023 from €334.5 million in the same period from the prior year driven by growth from Africa and the Middle East and European markets partially offset by declines from North America (predominantly in Canada due to the regulatory changes in Ontario) and Asia-Pacific markets.
• Loss after tax for the first quarter 2023 was €1.9 million which included a non-cash charge of €2.2 million related to the increase in fair value of a liability for a call option granted to a third-party to purchase the B2B division of Digital Gaming Corporation Limited ("DGC"), which Super Group acquired in January 2023. The loss after tax of €163.2 million for the first quarter of 2022 included costs and changes in fair values associated with the business combination and listing as a public company which was completed in January 2022.
• Operational EBITDA of €34.7 million for the first quarter 2023, included the investment in the US business after the acquisition of DGC on January 1, 2023. Operational EBITDA was €63.0 million in the first quarter of 2022. The measure for the first quarter of 2023 was comprised of €51.4 million ex-US and a loss of €16.6 million in the US .
• Monthly Active Customers increased 34% to 3.5 million during the first quarter 2023 from 2.6 million in the first quarter of 2022.
• Cash and cash equivalents was €246.3 million at March 31, 2023, down slightly from €254.8 million at December 31, 2022. This net reduction during the first quarter of 2023 was the result of:
  • Inflows from operating activities amounting to €39.6 million;
  • Outflows from investing activities of €57.3 million, mainly attributable to an increase in restricted cash of €18.1 million, expenditures on tangible and intangible assets of €13.1 million, issuance of loans of €24.8 million, mainly attributable to the Apricot loan as well as the net of cash paid on the acquisition of DGC of €11.7 million and cash acquired from DGC of €7.7 million;
  • Cash generated from financing activities of €15.4 million was primarily due to DGC drawing against its bank lending facility; and
  • A loss of €6.1 million was a result of foreign currency fluctuations on foreign cash balances held over this period.

Recent Company Events

• On January 3, 2023, Super Group closed the acquisition of DGC, an online sports betting and iGaming company with market access in up to thirteen US states, eight of which are live today. The results for the US business are disclosed as Operational EBITDA, US.

Revenue by Geographical Region for the Three Months Ended March 31, 2023 in € ‘000s:

 

Betway

 

Spin

 

Total

 

Africa and Middle East

87,424

 

455

 

87,879

 

Asia-Pacific

35,048

 

22,949

 

57,997

 

Europe

34,489

 

21,338

 

55,827

 

North America

37,655

 

92,550

 

130,205

 

South/Latin America

3,676

 

2,937

 

6,613

 

Total revenue

198,292

 

140,229

 

338,521

 

%

 %

% 

Africa and Middle East

44

%

0

%

26

%

Asia-Pacific

18

%

16

%

17

%

Europe

17

%

15

%

16

%

North America

19

%

67

%

39

%

South/Latin America

2

%

2

%

2

%

Revenue by Geographical Region for the Three Months Ended March 31, 2022 in € ‘000s:

 

Betway

 

Spin

 

Total

 

Africa and Middle East

63,786

 

1,337

 

65,123

 

Asia-Pacific

55,250

 

23,989

 

79,239

 

Europe

30,192

 

2,525

 

32,717

 

North America

34,467

 

115,984

 

150,451

 

South/Latin America

3,285

 

3,663

 

6,948

 

Total revenue

186,980

 

147,498

 

334,478

 

 

% 

% %

Africa and Middle East

34

%

1

%

19

%

Asia-Pacific

30

%

16

%

24

%

Europe

16

%

2

%

10

%

North America

18

%

79

%

45

%

South/Latin America

2

%

2

%

2

%

Revenue by product line for the Three Months Ended March 31, 2023 in € ‘000s:

 

Betway

Spin

Total

Online casino1

66,145

139,975

206,120

Sports betting1

118,282

45

118,327

Brand licensing2

8,832

—

8,832

Other3

5,033

209

5,242

Total revenue

198,292

140,229

338,521

Revenue by product line for the Three Months Ended March 31, 2022 in € ‘000s:

 

Betway

Spin

Total

Online casino1

57,456

147,046

204,502

Sports betting1

109,037

452

109,489

Brand licensing2

19,890

—

19,890

Other3

597

—

597

Total revenue

186,980

147,498

334,478

1 Sports 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 profit share, royalties and outsource fees from external customers.

Non-GAAP Financial Information This press release includes non-GAAP financial information not presented in accordance with the International Financial Reporting Standards (“IFRS”).

EBITDA, Adjusted EBITDA and Operational 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-based payment expense, change in fair value of option, adjusted RSU expense and fair value adjustments on warrant liabilities and earnout liabilities and associated foreign exchange movements. Operational EBITDA is Adjusted EBITDA further adjusted to exclude unrealized foreign currency gains and losses and other non-recurring adjustments outside of the current year’s operations as may be deemed appropriate by the company’s audit committee.

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 and supplemental materials 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 Loss after tax to EBITDA and Adjusted EBITDA and Operational EBITDA for the Three Months Ended March 31, in € ‘000s:

 

2023

 

2022

 

Loss for the period

(1,924

)

(163,222

)

Income tax expense

6,437

 

8,959

 

Finance income

(1,195

)

(313

)

Finance expense

547

 

349

 

Depreciation and amortization expense

21,445

 

15,990

 

EBITDA

25,310

 

(138,237

)

Transaction fees

—

 

21,405

 

Gain on derivative contracts

—

 

(1,712

)

Share listing expense

—

 

126,252

 

Change in fair value of warrant liability

—

 

29,374

 

Change in fair value of earnout liability

—

 

24,385

 

Change in fair value of option

2,191

 

—

 

Adjusted RSU expense

3,107

 

—

 

Adjusted EBITDA

30,608

 

61,467

 

Unrealized Foreign Exchange

3,350

 

149

 

Non recurring and non operational adjustments

715

 

1,365

 

Operational EBITDA

34,673

 

62,982

 

 

 

 

 

 

Operational EBITDA, ex-US

51,255

 

62,982

 

Operational EBITDA, US

(16,582

)

—

 

Webcast Details The Company will host a webcast at 8:30 a.m. ET today to discuss the first quarter 2023 financial results. 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; (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 27, 2023, 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

Unaudited Consolidated Statements of Profit or Loss and Other Comprehensive Income

for the three months ended March 31, 2023 and 2022

(€ in '000s, except for share and loss per share)

   

 

 

 

2023

 

 

2022

 

Revenue

 

 

338,521

 

 

334,478

 

Direct and marketing expenses

 

 

(275,710

)

 

(240,717

)

Other operating income

 

 

1,281

 

 

2,407

 

General and administrative expenses

 

 

(36,591

)

 

(34,701

)

Transaction fees

 

 

—

 

 

(21,405

)

Depreciation and amortization expense

 

 

(21,445

)

 

(15,990

)

Profit from operations

 

 

6,056

 

 

24,072

 

Finance income

 

 

1,195

 

 

313

 

Finance expense

 

 

(547

)

 

(349

)

Gain on derivative contracts

 

 

—

 

 

1,712

 

Share listing expense

 

 

—

 

 

(126,252

)

Change in fair value of warrant liability

 

 

—

 

 

(29,374

)

Change in fair value of earnout liability

 

 

—

 

 

(24,385

)

Change in fair value of option

 

 

(2,191

)

 

—

 

Profit/(loss) before taxation

 

 

4,513

 

 

(154,263

)

Income tax expense

 

 

(6,437

)

 

(8,959

)

Loss for the period

 

 

(1,924

)

 

(163,222

)

 

 

 

 

 

 

(Loss)/profit for the period attributable to:

 

 

 

 

 

Owners of the parent

 

 

(2,406

)

 

(163,222

)

Non-controlling interest

 

 

482

 

 

—

 

 

 

 

(1,924

)

 

(163,222

)

Other comprehensive (loss)/income items that may be reclassified subsequently to profit or loss

 

 

 

 

 

Foreign currency translation

 

 

(1,982

)

 

1,117

 

Other comprehensive (loss)/income for the period

 

 

(1,982

)

 

1,117

 

Total comprehensive loss for the period

 

 

(3,906

)

 

(162,105

)

 

 

 

 

 

 

Total comprehensive (loss)/profit for the period attributable to:

 

 

 

 

 

Owners of the parent

 

 

(4,388

)

 

(162,105

)

Non-controlling interest

 

 

482

 

 

—

 

 

 

 

(3,906

)

 

(162,105

)

 

 

 

 

 

 

Weighted average shares outstanding, basic and diluted

 

 

498,154,854

 

 

488,324,769

 

 

 

 

 

 

 

Loss per share, basic and diluted (cents)

 

 

(0.48

)

 

(33.42

)

 

Super Group (SGHC) Limited

Consolidated Statements of Financial Position

as at March 31, 2023 and December 31, 2022

(€ in '000s)  

   

 

 

Unaudited

 

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

Non‐current assets

 

 

 

 

Intangible assets

 

216,465

 

 

164,676

 

Goodwill

 

139,526

 

 

61,553

 

Property, plant and equipment

 

16,048

 

 

14,031

 

Right-of-use assets

 

15,096

 

 

14,165

 

Deferred tax assets

 

25,302

 

 

23,294

 

Regulatory deposits

 

11,762

 

 

11,809

 

Loans receivable

 

49,276

 

 

25,524

 

Investments in non-listed equity

 

1,781

 

 

1,781

 

 

 

475,256

 

 

316,833

 

Current assets

 

 

 

 

Trade and other receivables

 

129,668

 

 

116,800

 

Income tax receivables

 

35,017

 

 

40,349

 

Restricted cash

 

169,976

 

 

148,240

 

Cash and cash equivalents

 

246,341

 

 

254,778

 

 

 

581,002

 

 

560,167

 

TOTAL ASSETS

 

1,056,258

 

 

877,000

 

 

 

 

 

 

Non-Current liabilities

 

 

 

 

Lease liabilities

 

10,400

 

 

10,308

 

Deferred tax liability

 

7,602

 

 

8,707

 

Interest-bearing loans and borrowings

 

136,882

 

 

—

 

Derivative financial instruments

 

17,082

 

 

15,129

 

 

 

171,966

 

 

34,144

 

Current liabilities

 

 

 

 

Lease liabilities

 

7,476

 

 

6,951

 

Interest-bearing loans and borrowings

 

901

 

 

1,203

 

Trade and other payables

 

187,930

 

 

155,304

 

Customer liabilities

 

49,831

 

 

50,246

 

Provisions

 

43,301

 

 

43,745

 

Income tax payables

 

59,209

 

 

50,761

 

 

 

348,648

 

 

308,210

 

TOTAL LIABILITIES

 

520,614

 

 

342,354

 

EQUITY

 

 

 

 

Issued capital

 

289,753

 

 

289,753

 

Treasury stock

 

(377

)

 

—

 

Foreign exchange reserve

 

(7,991

)

 

(6,009

)

Retained profit

 

237,208

 

 

234,333

 

Equity attributable to owners of the parent

 

518,593

 

 

518,077

 

Non-Controlling Interest

 

17,051

 

 

16,569

 

SHAREHOLDERS' EQUITY

 

535,644

 

 

534,646

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

1,056,258

 

 

877,000

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230523006045/en/

Investors: investors@sghc.com

Media: media@sghc.com