888 trading update
The top line
- Revenues rose 7% (+3% on constant currency) YoY to $229.9m; gaming revenues were up 11% to $193.5m, sports betting was down 15% to $26.8m. B2B revenues were up 4% to $9.6m.
- YTD revenues were up 28% to $758.3m, with B2C gaming up 27% to $622.3m and B2C betting up 41% to $107.1m. Daily active players were up 6% on average.
- The group ceased trading in the Netherlands, which will cost c$10m in EBITDA in FY22.
Drive-by: Germany and the Netherlands dominated the Q&A session. CFO Yariv Dafna said 888 expects to launch in the Netherlands in 2022 and would have to once again “ramp up” its presence in the market. He added that the impact on FY22 EBITDA was “almost a one-time” hit as the company doesn’t expect any impact on FY23 EBITDA.
Mein Walkman ist kaputt: CEO Itai Pazner said 888’s recently-launched German sportsbook was almost
“like a relaunch of a new product” with Germany seen as “a very attractive market going forward, because it’s a large scale, regulated sports betting-led market that also provides gaming”. However, the company said nothing further about the continuing impact on its gaming revenues in the country due to the new regulatory regime that launched in the summer.
Regulatory headwinds: 888 has previously said that the new Dutch and German regimes would hit group EBITDA by $70-$1000m and Dafna said he expected the impact to be “at the upper end” of that range. By way of mitigation, the group will ramp up marketing efforts to drive volumes in other markets to make up for the shortfall in Holland and Germany.
Transformers: The acquisition of William Hill’s non-US businesses was “transformational” for 888 as it would enable it to be a “top 3 operator across key regulated markets,” said Pazner. With the transaction expected to close in early 2022, he added that it was “business as usual” and the group would “focus on integration plans” set to start next year.
