Tough comparatives and European headwinds sends Kindred revenue down 34%
Stockholm-listed firm looking to the future with Unibet now averaging £150,000 in revenue per day from 30,000 actives in the Netherlands
Kindred has announced a 34% year-on-year (YoY) drop in B2C gross winnings revenue for Q2 as tough comparatives and continued absence from the Netherlands impacted operations.
While the Swedish operator has since re-entered the Dutch market with its Unibet brand, the quarter saw YoY revenue plunge from £363.7m to £238.7m. Excluding the Netherlands, revenue was down 12%.
Tough comparatives were also highlighted with Q2 2021 seeing higher sports betting margins, the postponed Euro 2020 tournament and with Q2 2022 also seeing “Covid-19 normalisation”.
EBITDA plunged 81% from £114.5m in Q1 2021 to 21.6m in Q2 2022, while underlying EBITDA was down 78% to £25.3m from £113.7m.
Post-tax profit also tumbled from £87.1m to £5.8m.
Meanwhile, active customers decreased by 30% (19% excluding the Netherlands) from 1,907,276 to 1,336,706.
By region, Western Europe accounted for 51% of revenue, followed by the Nordics on 32%, although Western Europe revenue was down 51% YoY. The Nordics were down 2% as a strong casino performance offset declines in sports betting.
In terms of verticals, sports betting accounted for 42% of all revenue, while sports betting margin was 9.3%, down from 10.7%.
Casino was attributable for 53% of revenue. Poker and other games accounted for 3% and 2%, respectively, of the revenue pie.
Providing an update on the first part of Q3, CEO Henrik Tjärnström pointed to the launch of operations in the Netherlands with its Unibet brand in early July.
He said: “We opened our doors to Dutch players on 4 July and have seen strong customer intake and activity in the period between 4 and 19 July. I am very pleased with this initial performance and expect to see our Unibet brand gradually reclaim a leading position in the Netherlands.”
In that period, revenue in the country has averaged £150,000 per day and Unibet has around 30,000 active customers, the company revealed.
With that hurdle now cleared, all eyes shift to the publishing of the white paper following the review of the Gambling Act 2005, and Tjärnström said that stricter self-regulating measures have hit revenue in the UK.
The CEO said that while these measures will undoubtedly have an impact in the short-term, they will “ensure a more sustainable customer base” as Kindred looks to achieve its ambition of 0% revenue from harmful gambling. That figure currently stands at 3.3%.
“Long term, we have been on a downward trend and we expect this to continue over the coming quarters,” Tjärnström said. Kindred has set 2023 as the target for 0% revenue derived from harmful gambling.
Tjärnström also said Kindred is coming to the end of a period of “very tough Covid comparatives” which have been giving a “skewed view of performance” and he is “look[ing] to the future with confidence”.
He also revealed that the development of the propriety sportsbook as Kindred migrates away from Kambi “continues at pace and according to plan”.
“Once operational, our KSP [Kindred Sportsbook Platform] will give us a unique and important flexibility to tailor our offering towards our customers across the world […] providing Kindred with a highly scalable platform while reducing our cost base.”
Kindred’s share price remained flat at SEK82.30 after a slight dip in early trading.