Bet-at-home Q1
The top line
GGR was down 5.5% to €30.5m with NGR down 7.4% to €23.6m. EBITDA fell by 23.1% to €6.9m. Consolidated profit was down 24.7% to $4.4m.
Guidance for the rest of the year is for GGR of between €106-118m and EBITDA of between €18-22m.
Looking to the future in Germany: In common with other operators in Germany (circa 36% NGR mix), Bet-at-home suffered a significant reversal in casino revenues after the introduction of the transitional regime in advance of the new Interstate Treaty coming into force in July. But the company was keen to suggest the long-term benefits of being an “established provider with a high-profile in a core market” would “outweigh” the short-term hit.
Gaming down: Still, the gaming hit was significant, down 28.5%. Analysts at Edison suggested Germany contributed circa 36% of NGR in 2020 with Austria worth a further 30%. Percentages for Q1 were not broken out. The company only said the new regime rules being adhered to meant that revenue losses in the online casino segment were “significant.” For reference, Flutter said Germany would cause a £20m hit to EBITDA going forward while 888 said it had seen a 40-50% decline in Germany. Market leader Entain said it had seen a “ballpark” 45% decline.
Carry on marketing: In the face of gaming revenue falls BAH increased its marketing spend by 12% to €7.4m. Advertising and sponsorship increases accounted for the rise as bonusing fell slightly (down to €2.2m and still the largest element of marketing at nearly 30% of total spend.)
M&A newsline
Better Collective and Catena Media acquisitions
Better Collective has smashed previous M&A records in the gaming affiliate sector with its $240m acquisition of Action Network. The cash plus shares deal will be financed by bank debt and the deal cements BC’s place at the very pinnacle of the gaming affiliate tree. Meanwhile, Catena Media has splashed out $39.6m ($25m up front) on Lineups.com.
The deals enhance each company’s positions in the US gaming affiliate scene as BC sees its revenue contribution from the US lift to circa $100m a year. Its guidance for 2021 revenues has also been increased to €180m from €160m.
Action Network itself is expected to achieved revenues in 2021 of “approaching” $40m (100% up on prior year) and will be “earnings positive”. The multiple of over 6x revenues confirms the impression that multiples being achieved in the US on revenues are higher than those being achieved on EBITDA in Europe.
A conference call will be held this afternoon at 15:00CET and Better Collective Q1 results are due on May 12. Catena Media is scheduled to report on May 19.
