Super group reports third quarter 2022 financial results
New york--(business wire)--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 2022 financial results for its operating subsidiary, sghc limited. neal menashe, ceo of super group, commented: “super group’s online-only business model and ongoing focus on improved customer experience through enhanced global technology platforms continues to ensure optimal customer engagement and value. together with effective investment in our brands and efficient allocation of our capital, this provides us with a sound path for long-term growth.” alinda van wyk, cfo of super group stated, “super group remains financially strong and we continue to optimize our global footprint and operate more efficiently to leverage our scale. we remain focused on investing into technology and marketing, as well as other opportunities that will provide us with long-term growth and profitability.” financial highlights revenue decreased by 2% to €307.8 million for third quarter of 2022 from €312.6 million over the same period in the prior year primarily as a result of a decline in online casino net revenue and brand license fee income, partially offset by an increase in sports betting net revenue. profit after tax for the third quarter of 2022 was €34.9 million compared to a profit of €50.5 million in the same period of the prior year. ebitda, a non-gaap measure, was €60.9 million in the third quarter of 2022 compared to €75.9 million in the same period for the prior year. adjusted ebitda, which excludes transaction fees, share listing expense, changes in valuations of warrants and earnout liabilities and associated foreign exchange movements, gains on derivative contracts, recognition of fair value option, bargain purchases and rsu expenses, decreased 26% to €56.1 million compared to €75.9 million in the same period from the prior year. monthly average customers for the quarter increased 7% to 2.7 million during the third quarter of 2022 from 2.5 million in the third quarter of 2021, excluding customers of jumpman gaming which was acquired on september 1, 2022. cash and cash equivalents was €266.0 million as of september 30, 2022 and €293.8 million as of december 31, 2021. this net reduction in cash for the 9 months to september 30, 2022 is comprised as follows: inflows from operations amounting to €135.0 million; offset by outflows from investing activities of €70.5 million mainly attributable to an increase in restricted cash of €69.5 expenditure on tangible and intangible assets of €23.8 million offset by loan settlements of €18.9 million; cash used in financing activities of €96.2 million primarily due a cash outflows for share repurchases of €222.3 million offset by an inflow or shares issued of €172.1 million; and a gain of €3.9 million as a result of foreign currency fluctuations on foreign cash balances held over this period. inflows from operations amounting to €135.0 million; offset by outflows from investing activities of €70.5 million mainly attributable to an increase in restricted cash of €69.5 expenditure on tangible and intangible assets of €23.8 million offset by loan settlements of €18.9 million; cash used in financing activities of €96.2 million primarily due a cash outflows for share repurchases of €222.3 million offset by an inflow or shares issued of €172.1 million; and a gain of €3.9 million as a result of foreign currency fluctuations on foreign cash balances held over this period. net revenue by geographical region for the three months ended september 30: betway spin total 2022 2022 2022 € '000s € '000s € '000s 69,693 413 70,106 41,929 26,559 68,488 29,125 9,298 38,423 24,412 98,629 123,041 3,653 4,110 7,763 168,812 139,009 307,821 % % % 41% 0% 23% 25% 19% 22% 17% 7% 12% 15% 71% 40% 2% 3% 3% betway spin total 2021 2021 2021 € '000s € '000s € '000s 55,212 8,414 63,626 48,037 27,044 75,081 27,286 4,896 32,182 26,736 106,037 132,773 4,139 4,796 8,935 161,410 151,187 312,597 % % % 34% 6% 20% 30% 18% 24% 17% 3% 10% 16% 70% 43% 3% 3% 3% net revenue by geographical region for the nine months ended september 30: betway spin total 2022 2022 2022 € '000s € '000s € '000s 195,259 1,966 197,225 147,340 77,179 224,519 87,833 13,809 101,642 91,442 324,131 415,573 12,613 11,543 24,156 534,487 428,628 963,115 % % % 37% 0% 20% 28% 18% 23% 16% 3% 11% 17% 76% 43% 2% 3% 3% betway spin total 2021 2021 2021 € '000s € '000s € '000s 147,168 25,099 172,267 146,973 70,294 217,267 100,069 17,464 117,533 97,068 350,848 447,916 11,658 12,966 24,624 502,936 476,671 979,607 % % % 29% 5% 18% 29% 15% 22% 20% 4% 12% 20% 73% 45% 2% 3% 3% net revenue by product for the three months ended september 30: betway spin total 2022 2022 2022 € '000s € '000s € '000s 57,770 138,822 196,592 104,635 - 104,635 5,439 - 5,439 968 187 1,155 168,812 139,009 307,821 betway spin total 2021 2021 2021 € '000s € '000s € '000s 53,709 150,689 204,398 90,889 498 91,387 16,614 - 16,614 198 - 198 161,410 151,187 312,597 net revenue by product for the nine months ended september 30: betway spin total 2022 2022 2022 € '000s € '000s € '000s 177,364 428,060 605,424 324,412 381 324,793 31,096 - 31,096 1,615 187 1,802 534,487 428,628 963,115 betway spin total 2021 2021 2021 € '000s € '000s € '000s 172,476 476,131 648,607 278,421 540 278,961 51,446 - 51,446 593 - 593 502,936 476,671 979,607 1sports 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 rebates received from external processors. reorganization timeline over the last three years, the business conducted a restructuring by combining existing, stand-alone companies into the newly formed super group. sghc limited was formed on july 6, 2020. the following transactions took place during 2021 and 2022 as part of the reorganization: january 11, 2021 - raging river trading was deemed to have been acquired. april 9, 2021 - webhost, partner media and buffalo partners were acquired. april 14, 2021 - digiproc consolidated was acquired. april 16, 2021 – digiprocessing (mauritius) was acquired. april 19, 2021 - raichu investments was acquired. september 2, 2021 - sghc purchased 100% of the outstanding shares of smart business solutions s.a. december 1, 2021 - sghc purchased 100% of the outstanding shares in haber investments, and red interactive. january 27, 2022 - business combination with seac. since the reorganization, the following transaction has taken place: september 1, 2022 – acquired a majority ownership interest in jumpman gaming. non-gaap financial information this press release includes non-gaap financial information not presented in accordance with the international financial reporting standards (“ifrs”). ebitda and adjusted 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 listing expense, fair value adjustments on warrant liabilities and earnout liabilities and associated foreign exchange movements, recognition of fair value of option and the expense for the award of restricted stock units. 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 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 to adjusted ebitda for: for the three months ended september 30 for the nine months ended september 30 2022 2021 2022 2021 € '000s € '000s € '000s € '000s 34,877 50,473 170,216 152,956 10,639 4,346 25,221 10,357 (587 ) (333 ) (1,252 ) (1,021 ) 276 286 939 6,041 15,742 21,091 46,907 62,986 60,947 75,863 242,031 231,319 - - 21,612 - (2,435 ) - (4,147 ) - - - - (10,661 ) - - 126,252 - 5,714 - 29,743 - 870 - (33,744 ) - 2,722 - (192,214 ) - (21,983 ) - (21,983 ) - 10,308 - 13,683 - 56,143 75,863 181,233 220,658 1 the recognition of the fair value of the option relates to the exercising of the option to acquire verno holdings, the ultimate holding company of jumpman gaming, on september 1, 2022. the valuation of the business as required in terms of ifrs3 is provisional at the time of this press release and is subject to change once finalized. webcast details the company will host a webcast at 8:30 a.m. et today to discuss the third quarter 2022 financial results. for ease of year-over-year comparison and analysis the company may discuss pro-forma consolidated results, including adjusted ebitda, which pro-forma results are included in the 3q 2022 earnings review presentation posted on investor relations section of www.sghc.com. 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, including as a result of the covid-19 pandemic; (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 20, 2022, 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 consolidated statements of profit or loss and other comprehensive income for the periods ended september 30, 2022 and september 30, 2021 three months ended september 30, nine months ended september 30, 2022 2021 2022 2021 € '000s € '000s € '000s € '000s 307,821 312,597 963,115 979,607 (226,921 ) (204,708 ) (693,338 ) (652,860 ) (36,918 ) (33,034 ) (109,373 ) (112,094 ) 1,853 1,008 7,146 6,005 - - (21,612 ) - (15,742 ) (21,091 ) (46,907 ) (62,986 ) 30,093 54,772 99,031 157,672 587 333 1,252 1,021 (276 ) (286 ) (939 ) (6,041 ) 2,435 - 4,147 - (5,714 ) - (29,743 ) - - - (126,252 ) - (870 ) - 33,744 - (2,722 ) - 192,214 - 21,983 - 21,983 - - - - 10,661 45,516 54,819 195,437 163,313 (10,639 ) (4,346 ) (25,221 ) (10,357 ) 34,877 50,473 170,216 152,956 243 - 243 - 34,634 50,473 169,973 152,956 34,877 50,473 170,216 152,956 - - - - (1,784 ) (2,091 ) (4,159 ) (2,262 ) (1,784 ) (2,091 ) (4,159 ) (2,262 ) 33,093 48,382 166,057 150,694 490,197,468 483,715,048 489,580,095 468,281,267 0.07 0.10 0.35 0.33 super group (sghc) limited consolidated statements of financial position as of september 30, 2022, and december 31, 2021 september 30, december 31, 2022 2021 € '000s € '000s 242,760 197,977 14,403 12,498 12,167 14,541 27,939 24,108 10,198 8,594 11,045 25,516 1,687 1,686 320,199 284,920 147,365 169,252 33,923 35,806 136,813 60,296 265,955 293,798 584,056 559,152 904,255 844,072 10,692 10,896 7,521 9,248 - 764 18,213 20,908 19,379 - 81,143 - 3,091 5,353 - 13,200 1,217 3,008 163,416 147,353 55,457 51,959 48,682 47,715 49,833 40,524 422,218 309,112 440,431 330,020 273,435 269,338 (6,253 ) (2,094 ) 17,562 - (249,955 ) - 429,035 246,808 463,824 514,052 904,255 844,072
