Stockholm-listed Betsson AB has declared a strong start to 2019 trading, as the company reports ‘strong regional growth’ offsetting adjustments within its home market of Sweden.
Publishing its Q1 2019 trading update (period ending 31 March), Betsson records a 10% group revenue increase to SEK 1,330.6 million (Q12018: SEK 1,210m), detailing growth across its casino (+10%) and sportsbook (+13%) verticals.
Updating the market, Betsson reports that slower Nordic growth (+1%), has been countered by robust growth reported across its Western Europe (+10%) and Central & Eastern Europe (+15%) divisions.
“Betsson continued to show revenue growth and solid results while at the same time facing challenges in Sweden and the Netherlands,” commented Pontus Lindwall President and CEO Betsson AB.
Betsson revenue growth has been supported by ‘efficiencies gained from the firm’s ‘back-on-track’ programme, reporting a 22% increase in EBITDA to SEK 346 million (Q12018: SEK 282m).
The firm maintains its positive earnings momentum, despite detailing a 36% increase in betting duties to SEK 422 million (32% of group revenues), attributed to servicing the re-regulated Swedish marketplace.
Mirroring its competitors, Swedish adjustments would dominate Betsson AB’s trading update, with CEO Pontus Lindwall issuing the following statement.
“We have now seen the effects from the new Swedish gaming law for a full quarter. Even though we are reporting a solid first quarter, we see that both revenue and operating profit was negatively impacted by the new regulation in Sweden. The market has experienced a challenging start, however, we believe it is too early to draw any long-term conclusions.
“During the first half of the first quarter, there were high costs for welcome bonuses to customers as well as a difference in the dynamics of customer behaviour. During the second half of the quarter, the situation stabilised, primarily regarding customer volumes and the number of new customers.
“In addition, there are ongoing discussions regarding rules for marketing volumes and content in Sweden. Betsson still sees Sweden as an important market long-term, however, we now also see the advantage of having a geographical spread that enables scalability. As a result of changing market conditions in Sweden, we also see increased M&A activities.”