Third Quarter Highlights:
- Revenue increased by 16% to €356.9 million, being Super Group's
highest ever revenue for the third quarter
- Profit for the period of €10.6 million includes a non-cash
charge of €14.2 million arising from the change in fair value of
option liability
- Operational EBITDA ex-US of €64.1 million and a loss of €10.3
million from the US amounted to Operational EBITDA of €53.8
million
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 third quarter 2023 consolidated financial
results.
Neal Menashe, Chief Executive Officer of Super Group, commented:
“Super Group has delivered yet another quarter of solid results,
having achieved our highest ever revenue for a third quarter, as
well as new all-time highs for both our customer numbers and
deposits. I remain encouraged by our very strong customer
engagement and continued expansion of our global iGaming
offering.”
Alinda van Wyk, Chief Financial Officer of Super Group, stated:
“For the third quarter, we delivered ex-US Revenue of €348.9
million and ex-US Operational EBITDA of €64.1 million, which
resulted in a strong margin of 18%. We continue to focus on
investing for future growth and the further realization of cost
efficiencies. Despite some headwinds experienced this quarter,
while tight, we are reaffirming our guidance, assuming a normalized
margin for the remainder of the year."
Financial Highlights:
- Revenue increased by 16% to €356.9 million for the third
quarter 2023 (constant currency: 27% to €390.8 million) from €307.8
million in the same period from the prior year driven by growth
from Africa and Middle East, European and North American markets
partially offset by declines from the South/Latin America and
Asia-Pacific markets.
- Profit for the period was €10.6 million for the third
quarter 2023, which included a non-cash charge of €14.2 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. Profit for the period of €34.9 million
for the third quarter of 2022 included the positive impact of
non-cash adjustments of €22.0 million related to the change in fair
value of option liability.
- Operational EBITDA was €53.8 million for the third
quarter 2023 compared to €49.6 million in the third quarter of
2022. The measure for the third quarter 2023 was comprised of €64.1
million ex-US and a loss of €10.3 million in the US.
- Monthly Active Customers increased 44% to 4.0 million
during the third quarter 2023 from 2.7 million in the third quarter
of 2022.
- Cash and cash equivalents was €245.3 million at
September 30, 2023, down from €254.8 million at December 31, 2022.
This net reduction during the third quarter 2023 was the result
of:
- Inflows from operating activities amounting to €112.1
million;
- Inflows from investing activities of €13.9 million. This was
mainly attributable to a transfer of €138.5 million of restricted
cash for the DGC bank lending facility into the available cash
balance, reduced by a preceding injection into the facility of
€18.6 million. There was an additional increase of €7.3 million
resulting from interest and receipts from loans receivable. These
increases were offset by the further investment in tangible and
intangible assets of €47.5 million, predominantly due to the
capitalization expenditure on software, issuance of loans of €55.9
million, cash paid on the acquisition of SportCC of €6.4 million as
well as the cash paid on the acquisition of DGC of €11.7 million
net of €7.7 million acquired from DGC;
- Outflows from financing activities of €129.3 million primarily
due to DGC settling its bank lending facility of €139.4 million as
well as lease payments of €5.7 million and share repurchases of
€2.6 million, offset by proceeds from interest-bearing borrowings
of €18.5 million; and
- A loss of €6.3 million as a result of foreign currency
fluctuations on foreign cash balances held over this period.
Revenue by Geographical Region for the
Three Months Ended September 30, 2023 in € ‘000s:
Betway
Spin
Total
Africa and Middle East
99,381
673
100,054
Asia-Pacific
35,014
26,968
61,982
Europe
34,823
19,197
54,020
North America
33,645
100,443
134,088
South/Latin America
3,538
3,206
6,744
Total revenue
206,401
150,487
356,888
%
%
%
Africa and Middle East
48 %
0 %
28 %
Asia-Pacific
17 %
18 %
17 %
Europe
17 %
13 %
15 %
North America
16 %
67 %
38 %
South/Latin America
2 %
2 %
2 %
Revenue by Geographical Region for the
Three Months Ended September 30, 2022 in € ‘000s:
Betway
Spin
Total
Africa and Middle East
69,693
413
70,106
Asia-Pacific
41,929
26,559
68,488
Europe
29,125
9,298
38,423
North America
24,412
98,629
123,041
South/Latin America
3,653
4,110
7,763
Total revenue
168,812
139,009
307,821
%
%
%
Africa and Middle East
41 %
0 %
23 %
Asia-Pacific
25 %
19 %
22 %
Europe
17 %
7 %
12 %
North America
15 %
71 %
40 %
South/Latin America
2 %
3 %
3 %
Revenue by Geographical Region for the
Nine Months Ended September 30, 2023 in € ‘000s:
Betway
Spin
Total
Africa and Middle East
296,834
1,425
298,259
Asia-Pacific
111,205
77,888
189,093
Europe
105,831
61,143
166,974
North America
108,889
292,510
401,399
South/Latin America
10,871
9,602
20,473
Total revenue
633,630
442,568
1,076,198
%
%
%
Africa and Middle East
46 %
0 %
27 %
Asia-Pacific
18 %
18 %
18 %
Europe
17 %
14 %
16 %
North America
17 %
66 %
37 %
South/Latin America
2 %
2 %
2 %
Revenue by Geographical Region for the
Nine Months Ended September 30, 2022 in € ‘000s:
Betway
Spin
Total
Africa and Middle East
195,259
1,966
197,225
Asia-Pacific
147,340
77,179
224,519
Europe
87,833
13,809
101,642
North America
91,442
324,131
415,573
South/Latin America
12,613
11,543
24,156
Total revenue
534,487
428,628
963,115
%
%
%
Africa and Middle East
37 %
0 %
20 %
Asia-Pacific
28 %
18 %
23 %
Europe
16 %
3 %
11 %
North America
17 %
76 %
43 %
South/Latin America
2 %
3 %
3 %
Revenue by product line for the Three
Months Ended September 30, 2023 in € ‘000s:
Betway
Spin
Total
Online casino1
68,818
150,215
219,033
Fixed Odds Contingencies1
58,073
—
58,073
Sports betting1
64,566
—
64,566
Brand licensing2
8,294
—
8,294
Other3
6,650
272
6,922
Total revenue
206,401
150,487
356,888
Revenue by product line for the Three
Months Ended September 30, 2022 in € ‘000s:
Betway
Spin
Total
Online casino1
57,770
138,822
196,592
Fixed Odds Contingencies1
14,908
—
14,908
Sports betting1
89,727
—
89,727
Brand licensing2
5,439
—
5,439
Other3
968
187
1,155
Total revenue
168,812
139,009
307,821
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’. Fixed
Odds Contingencies has been reclassified from sports in the prior
period in order to align to the current year classification. Fixed
Odds Contingencies are casino style games in respect of which the
odds are agreed at the time of the bet and accepted under the
sports licenses in certain jurisdictions. This will be grouped
together under Online Casino revenue moving forward.
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.
Revenue by product line for the Nine
Months Ended September 30, 2023 in € ‘000s:
Betway
Spin
Total
Online casino1
206,990
441,812
648,802
Fixed Odds Contingencies1
143,721
—
143,721
Sports betting1
240,213
44
240,257
Brand licensing2
25,441
—
25,441
Other3
17,265
712
17,977
Total revenue
633,630
442,568
1,076,198
Revenue by product line for the Nine
Months Ended September 30, 2022 in € ‘000s:
Betway
Spin
Total
Online casino1
177,364
428,060
605,424
Fixed Odds Contingencies1
34,129
—
34,129
Sports betting1
290,283
381
290,664
Brand licensing2
31,096
—
31,096
Other3
1,615
187
1,802
Total revenue
534,487
428,628
963,115
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’. Fixed
Odds Contingencies has been reclassified from sports in the prior
period in order to align to the current year classification. Fixed
Odds Contingencies are casino style games in respect of which the
odds are agreed at the time of the bet and accepted under the
sports licenses in certain jurisdictions. This will be grouped
together under Online Casino revenue moving forward.
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 as issued by the International Accounting Standards Board
(“IASB”, hereafter "IFRS").
EBITDA, Adjusted EBITDA, revenue on a constant currency basis
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 EBITDA
adjusted gain on derivative contracts, transaction costs, share
listing expense, change in fair value of option, adjusted RSU
expense, change in fair value of warrant liabilities and earnout
liabilities and associated foreign exchange movements, unrealized
foreign currency gains and losses and other non-recurring
adjustments. Operational EBITDA is Adjusted EBITDA further adjusted
to exclude other non-operational adjustments outside of the current
year’s operations as may be deemed appropriate by the company’s
audit committee. Constant currency growth is calculated by
translating non-Euro performance for 2022 and 2023 using 2022
exchange rates.
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 Profit after tax to
EBITDA and Adjusted EBITDA and Operational EBITDA
in € ‘000s:
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Profit for the period
10,626
34,877
36,262
170,216
Income tax expense
4,748
10,639
25,387
25,221
Finance income
(2,535
)
(587
)
(5,800
)
(1,252
)
Finance expense
695
276
1,779
939
Depreciation and amortization expense
19,848
15,742
61,603
46,907
EBITDA
33,382
60,947
119,231
242,031
Transaction fees
—
—
—
21,612
Gain on derivative contracts
—
(2,435
)
—
(4,147
)
Share listing expense
—
—
—
126,252
Foreign exchange on revaluation of
warrants and earnouts
—
5,714
—
29,743
Change in fair value of warrant
liability
—
870
—
(33,744
)
Change in fair value of earnout
liability
—
2,722
—
(192,214
)
Change in fair value of option
14,217
(21,983
)
22,495
(21,983
)
Adjusted RSU expense1
5,803
10,308
14,429
13,683
Unrealized foreign exchange1
(907
)
(8,219
)
3,168
(18,897
)
Non-recurring adjustments1
803
1,667
7,116
4,679
Adjusted EBITDA
53,298
49,591
166,439
167,015
Non-operational adjustments
457
(38
)
(5,135
)
(496
)
Operational EBITDA
53,755
49,553
161,304
166,519
Operational EBITDA, ex-US
64,075
49,553
200,851
166,519
Operational EBITDA, US
(10,320
)
—
(39,548
)
—
1 Unrealized foreign exchange movements, additional RSU expenses
and other non-recurring adjustments have been reclassified from the
Operational EBITDA calculation to the Adjusted EBITDA calculation.
This has resulted in a restatement of Adjusted EBITDA for all prior
periods.
Webcast Details
The Company will host a webcast at 8:30 a.m. ET today to discuss
the third 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 and Nine
Months Ended September 30, 2023 and 2022
(€ in '000s, except for share
and profit per share)
Three Months Ended September
30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenue
356,888
307,821
1,076,198
963,115
Direct and marketing expenses
(270,839
)
(226,921
)
(823,879
)
(693,338
)
Other operating income
360
1,853
2,669
7,146
General and administrative expenses
(38,810
)
(36,918
)
(113,262
)
(109,373
)
Transaction fees
—
—
—
(21,612
)
Depreciation and amortization expense
(19,848
)
(15,742
)
(61,603
)
(46,907
)
Profit from operations
27,751
30,093
80,123
99,031
Finance income
2,535
587
5,800
1,252
Finance expense
(695
)
(276
)
(1,779
)
(939
)
Gain on derivative contracts
—
2,435
—
4,147
Foreign exchange on revaluation of
warrants and earnout liabilities
—
(5,714
)
—
(29,743
)
Share listing expense
—
—
—
(126,252
)
Change in fair value of warrant
liability
—
(870
)
—
33,744
Change in fair value of earnout
liability
—
(2,722
)
—
192,214
Change in fair value of option
(14,217
)
21,983
(22,495
)
21,983
Profit before taxation
15,374
45,516
61,649
195,437
Income tax expense
(4,748
)
(10,639
)
(25,387
)
(25,221
)
Profit for the period
10,626
34,877
36,262
170,216
Profit for the period attributable
to:
Owners of the parent
9,876
34,634
34,050
169,973
Non-controlling interest
750
243
2,212
243
10,626
34,877
36,262
170,216
Other comprehensive income items that
may be reclassified subsequently to profit
Foreign currency translation
5,251
(1,784
)
4,459
(4,159
)
Other comprehensive income for the
period
5,251
(1,784
)
4,459
(4,159
)
Total comprehensive income for the
period
15,877
33,093
40,721
166,057
Total comprehensive profit for the
period attributable to:
Owners of the parent
15,127
32,850
38,509
165,814
Non-controlling interest
750
243
2,212
243
15,877
33,093
40,721
166,057
Weighted average shares outstanding,
basic
498,360,431
490,197,468
498,336,881
489,580,095
Weighted average shares outstanding,
diluted
500,333,127
490,197,468
500,478,521
489,580,095
Profit per share, basic (cents)
1.98
7.07
6.83
34.72
Profit per share, diluted (cents)
1.97
7.07
6.80
34.72
Super Group (SGHC)
Limited
Consolidated Statements of
Financial Position
as at September 30, 2023 and
December 31, 2022
(€ in '000s)
Unaudited
2023
2022
ASSETS
Non‐current assets
Goodwill and Intangible assets
333,300
226,229
Property, plant and equipment
15,486
14,031
Right-of-use assets
23,577
14,165
Deferred tax assets
32,662
23,294
Regulatory deposits
12,038
11,809
Loans receivable
80,313
25,524
Investments in non-listed equity
958
1,781
498,334
316,833
Current assets
Trade and other receivables
154,445
116,800
Income tax receivables
11,837
40,349
Restricted cash
42,710
148,240
Cash and cash equivalents
245,326
254,778
Assets held for sale
38,846
—
493,164
560,167
TOTAL ASSETS
991,498
877,000
Non-Current liabilities
Lease liabilities
21,395
10,308
Deferred tax liability
6,004
8,707
Derivative financial instruments
2,059
15,129
29,458
34,144
Current liabilities
Lease liabilities
4,675
6,951
Interest-bearing loans and borrowings
102
1,203
Deferred consideration
1,038
—
Trade and other payables
184,046
155,304
Customer liabilities
55,498
50,246
Provisions
42,250
43,745
Income tax payables
37,386
50,761
Derivative liability associated with
assets held for sale
38,074
—
Liabilities associated with assets held
for sale
13,768
—
376,837
308,210
TOTAL LIABILITIES
406,295
342,354
EQUITY
Issued capital
289,753
289,753
Treasury stock
(2,632
)
—
Foreign exchange reserve
(1,550
)
(6,009
)
Retained profit
280,876
234,333
Equity attributable to owners of the
parent
566,447
518,077
Non-controlling Interest
18,756
16,569
SHAREHOLDERS' EQUITY
585,203
534,646
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
991,498
877,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231108302052/en/
Investors: investors@sghc.com
Media: media@sghc.com
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