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Betsson AB
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Good morning, and welcome to Betsson Q2 2022 Conference Call. We have with us Mr. Pontus Lindwall, CEO; and Mr. Martin Ohman, CFO. [Operator Instructions] Please note this event is being recorded.
I'd now like to turn the conference over to Mr. Pontus Lindwall. Thank you and over to you, sir.
Thanks a lot. Good morning, everybody, and welcome to the presentation of Betsson's results for the second quarter 2022. My name is Pontus Lindwall and I'm the CEO of Betsson. And with me today, I have our CFO, Martin Ohman.
Hi, everyone.
And Jesper Svensson, who is the CEO of Betsson Operations in Malta, who happens to be in Sweden.
Good morning, everyone.
So here's the outline for today's presentation. First, I will go through some highlights in the quarter before presenting some progress and activities in the period. Then I will hand over to Martin for a closer look at our financials. After that I will talk about our trading update for July, I will give a regulatory update and then round off the presentation with a summary. And then we are happy to answer your questions. So here are some key figures for the second quarter 2022. We set 3 new records as you can see; all-time high for group revenue, sportsbook revenue and casino turnover in the quarter. I'm particularly pleased to see the good underlying growth in the business. Despite the loss of revenue from Netherlands, group revenue was up 8% year-over-year reported and up 13% organically. The key growth drivers in the quarter were Latin America and the CEECA region as well as strong development in the sportsbook.
Profitability was still at healthy levels despite continued investments for growth and considering the negative effects from the mix shift in revenue compared to last year with no revenue from the Netherlands this past quarter. EBIT amounted to EUR 29 million and the EBIT margin was 15.7%. The main negative factor was the FX changes so adjusted for FX and acquisitions, underlying EBIT was actually up 21% year-over-year. At the end of the quarter we had a net cash position of EUR 20 million, which gives us strategic flexibility to continue investing in growth initiatives. Looking at our existing markets. It's worth mentioning Italy where we have renewed the sponsorship with AC Milan and also added 3 new Serie A club sponsorships; Roma, Sassuolo and Torino. In Sweden, we have developed a native app for our brand Jalla Casino, which is soon being launched. In Georgia, we have adapted our product and commercial strategy because of new stricter regulations.
These changes supported the solid performance in the quarter. Moving over to Germany. Since last year, the regulated market in Germany has been marked by a low level of channelization due to extensive restrictions, high taxes and an unclear licensing process. During the quarter, a decision was taken to only apply for one online casino license in Germany. On the sports side, Betsson continues to offer betting on horses through the Racebets brand and has a sportsbook license, which is currently not operated. When it comes to new markets, I'd like to mention Croatia, Greece and LatAm. In Croatia, we had marketing activity across all channels with new TV commercials featuring our brand Rizk. The brand has reached a podium position in less than 2 years after having launched in the Croatian market. In Greece, we continue to see solid performance with successful TV commercials in the second quarter and more to come in the third quarter.
We renewed our sponsorship with the Greek second league in football called Betsson Super League 2. We also signed a sponsorship deal for the World Rally Championship Akropolis set for September this year. For the LatAm region, Betsson has now become the official regional sponsor for AC Milan. Also a sponsorship was entered with CONMEBOL Copa Femenina 2022, which is the regional championship in women's football and takes place in July at the same time as the Women's Euro [ 2022 ] tournament. The interest in women's football is growing strongly and the previous championship had more than 20 million TV viewers. With regards to B2B initiative to offer our proprietary sportsbook to other gaming operators, discussions are currently being held with several potential sportsbook customers in both North America and other parts of the world. The group's ownership in the technology platform provider Strive focused on North America increased from 35% to 40% during the quarter.
Strive provides a new purpose-built and modern U.S. iGaming platform, a Player Account Management System or a PAM. The partnership with Strive supports Betsson's U.S. strategy. The B2C launch in Colorado, as you know, is being done to showcase our sportsbook with a live customer offering on the North American market. There we continue to focus on fine-tuning the product after the launch in March and we are getting ready for a bigger push as we get closer to the new NFL season after the summer. On the product side, we continue to invest in product and tech development to secure that we have a competitive product for all our markets. Just to recap, Betsson's gaming sites are largely run on our proprietary platform Techsson, which is a Player Account Management System, which makes up the core of the offering and user experience. Techsson manages payments, customer information and account management and games.
The proprietary platform provides flexibility and enables rapid adaption to new market conditions or as part of preparing for launches in new jurisdictions and of new brands. Work to migrate Betsson's brands to the cloud to optimize the proprietary platform continued during the quarter. The cloud migration provides both improved system capacity and an overall improved customer experience in the form of faster and more responsive websites and mobile apps. During the quarter, development and launch of native apps have continued in some markets. As an example, a native app was developed for the brand Jalla in Sweden. In the second quarter, Betsson broadened its sportsbook offering in motorsports, table tennis and esports. The new content provides a significant increase in the number of live events offered with availability 24/7 and also complemented by live video streaming for these events.
Further, the live casino offering was strengthened for the Italian market and the casino games catalog was extended in Greece. Adaptations and further development of Betsson's tech platform and sportsbook are also being made to support our B2B offering. In addition to the positive financial development in the second quarter, we also won 6 industry awards in different categories related to an attractive customer offering and a sustainable business model for gaming. For example, we walked away with 2 highly contested awards in the prestigious International Gaming Awards which were in London in April. Here are some selected KPIs related to responsible gaming, which are measured on a quarterly basis. Our interactions with customers remained on a high level in the quarter. Compared to the same quarter last year, deposit limit for NDCs and customers using nonmandatory responsible gaming tools are both up, which is due to overall communications and activities across our teams.
And now I will hand over to Martin, who will take a closer look at the financials in the quarter.
Thanks a lot, Pontus. Today I will take you through the financials of the second quarter, which was another good quarter following the good trend we saw in Q1. In Q2 we see good growth in active customers year-on-year by 21%, growth of 17% in deposits, growth in sportsbook turnover of 20%, an all-time high casino turnover, sportsbook revenue and reported and organic revenue. Overall, we are very proud of the results achieved and the performance of the organization in the quarter. Reported revenue for the second quarter amounts to EUR 186.3 million, an increase of 8% year-on-year with 13% organic growth amounting to EUR 194.9 million, making it the highest reported and organic revenue ever. Casino turnover increased by 11% year-on-year and was all-time high in the second quarter. Casino revenue was EUR 122.2 million, an increase of 1% year-on-year and 10% quarter-on-quarter. This despite that Betsson stopped accepting Dutch customers in the third quarter of 2021.
The gross turnover in sportsbook across all Betsson gaming solutions was EUR 991.3 million, an increase of 21% compared to the second quarter last year. Corporate margin was 8.3%, which is lower than the 8.5% margin last year, but higher than the 2-year rolling average margin of 7.5%. Some of the contributing factors to the margin were strong returns from domestic football leagues and strong returns from the World Cup qualification matches. Sportsbook revenue increased by 22% compared to last year and amounted to EUR 61.6 million, which is a new all-time high. Sportsbook revenue now represents 33% of the group's total revenue. Breaking down revenue by region. We see a decrease in the Nordics and Western Europe the Rest of the world region being flat while Latin America and the CECCA region show growth. Starting off with the Nordic region. We see a decrease of EUR 3.1 million representing 5.7% year-on-year explained by decreased sportsbook revenue in Norway and Sweden.
During the corresponding period last year the Euros in football took place, which brought with it favorable results for the sportsbook margin and high activity level as well. The Nordic region represents 27% of the group's total revenue in the second quarter. Revenue from Western Europe decreased by EUR 16 million affected by decreased casino revenue and is explained by the decision to stop accepting Dutch customers as of end of September last year. The regulatory landscape in the German market is still challenging, as we heard Pontus saying, and therefore Betsson decided to only apply for one online casino license in Germany for the Rizk brand. On the sports side, Betsson continues to offer betting on horse racing through its brand Racebets. The Italian market is continuing to perform well and reported all-time high revenue, active customer also, deposits and casino turnover. Western Europe region now represents 13% of total revenues.
The CECCA region increased by 23%, which is all-time high for this region, mainly driven by casino operations. Croatia and Greece showed continued positive trends in activity and revenue performance. The Baltics continued to perform well during the second quarter where Lithuania and Latvia reported growth from both the casino and the sportsbook products. Estonia reported decreased revenue in the quarter mainly driven by lower sportbook activity compared to the corresponding period last year. Georgia reported growth in revenue in the second quarter mainly driven by the casino operations. Our B2B business also contributed positively to the region's revenue growth in the quarter. The CECCA region now represents 33% of the group's total revenue making it the largest region by revenue. Reported revenue in the Latin America region amounts to EUR 45.7 million representing an increase of 86% compared to the same period last year, which is of course all-time high revenue, where more or less all countries in the region reported growth.
The sportsbook segment is the main contributor to the growth in this quarter following some high profile events such as World Cup qualifying games in football, which Betsson sponsor. The Latin America region represents 25% of the group's total revenue in the second quarter. Revenue from Rest of the World decreased by EUR 0.2 million compared to the same period last year and is mainly explained by a decline from the Canadian operations. Revenue from markets where Betsson pay local betting duties increased by 18% compared to last year and constitutes 35% of the group's total revenue in the quarter. When looking at EBIT development year-on-year, we can see that revenue has increased and following that, also cost of services provided. The increase to cost of services provided of EUR 10.4 million is mainly explained by higher cost of betting duties following increased share of revenue from locally regulated markets and increased payment provider costs.
Gross profit increased by EUR 3.1 million compared to the same period last year corresponding to a gross profit margin of 63.8%. Marketing spend was slightly lower than the same quarter last year and constitutes some 20% of B2C revenue and 26% when including affiliate marketing as well. Focus in the second quarter has been towards the LatAm region while investments were reduced somewhat in some of the more expensive European markets where Betsson for the time being see less return on investments. Personnel expenses have increased by EUR 5.4 million during the second quarter compared to the same period last year due to geographic expansion and increased focus on the tech side from developing our proprietary technology, but also due to annual salary reviews. Number of employees has increased from 1,852 in Q2 last year to 1,942 employees this year.
Other costs increased by EUR 6 million and is mainly driven by sustained increased investments in product development technology, specifically from increased investments in cloud-based environment. For comparison, the costs in the second quarter last year were positively impacted by a reversal of a provision for a sanction fee of SEK 20 million. When breaking out costs related to development in new markets, this sums up to approximately EUR 9.5 million in the quarter, of which EUR 1.5 million are attributable to the U.S. expansion. The remaining EUR 8 million consists of EUR 6.3 million in marketing costs and EUR 1.7 million in other costs where the bulk of the cost relates to external consultants within the tech development. EBIT amounts to EUR 29.2 million and the EBIT margin was 15.7%. EBIT and EBIT margin is lower than the same quarter last year, but higher than the previous quarter. Organically, EBIT actually increased by 21% to EUR 45.6 million corresponding to an organic EBIT margin of 24.5%.
Moving on to the cash flow and the financial position of Betsson. We see cash flow from operating activities amounting to EUR 37.8 million driven by operating income. Working capital impacted the cash flow positively by EUR 1.1 million compared to EUR 13.1 million in the same period last year. The division is explained by a one-off related to collection of a VAT receivable last year. Cash flow from investing activities amounted to EUR 14.8 million, of which some EUR 4 million relates to the Inkabet acquisition. However, the largest part relates to investment in capitalized development costs. Cash flow from financing activities impacted the cash flow by EUR 4.4 million explained by 3 larger events apart from leasing costs. Firstly, we have issued a new senior unsecured bond of EUR 90 million with a floating rate of EURIBOR 3 months plus 650 basis points. The bond will mature in June 2025 and is traded on Nasdaq Stockholm.
Secondly, we have redeemed SEK 700 million out of a total of SEK 1 billion in the 2019-2022 SEK bonded series corresponding to EUR 65.8 million. The remaining SEK 300 million has been redeemed in July at par by using the early redemption clause in the bond agreement. Thirdly, we have paid out dividend of SEK 269.5 million corresponding to EUR 25.4 million, which is the first of the 2 automatic redemption procedures of the shares that we decide -- that was decided upon in the Annual General Meeting on May 10, 2022. Betsson has as of end of June a net cash position of EUR 20 million and an equity ratio of 65%.
And by that, I hand over to Pontus again to take us through the trading update followed by a regulatory update.
Thank you, Martin. That's a lot of figures. Now let's have a quick look at how the third quarter 2022 has started. The average daily revenue up until and including the 17th of July was 9.4% higher than the average daily revenue of the full third quarter last year. Adjusted for currency effects and acquisitions, the average daily revenue was 21% higher than the average daily revenue of the full quarter last year. In other words, I am happy that July has started more or less in line with the strong growth rate of the second quarter. Now let's look at some regulatory developments in the quarter. In Norway in the pending complaint regarding the cease-and-desist order of the Norwegian regulator against our company BML Group Limited, the company has requested that the implementation of the order be deferred during the administrative dispute proceedings.
The Ministry of Culture, which is the body reviewing the complaint, decided to defer the implementation of the cease-and-desist order until the complaint is finally decided by the administrative review bodies. In Peru, the Congress recently passed a new gaming bill, which will regulate both online sports betting and casino in Peru once it's approved by the President. The new law imposes a direct tax applied to a gross gaming revenue of 12%. In Sweden, there have been a few regulatory developments. Firstly, the government announced several proposals in May addressing the licensing of gambling software companies, B2B licensing, prohibition of promotion of illegal gambling and new requirements for moderate marketing. Most of the amendments are intended to take effect in January 2023 and aiming at decreased gaming at our unlicensed sites.
In Argentina, there is positive news from the Province of Cordoba where it has been decided to open a national and international public license tender through the local regulator, Loteria de Cordoba. Participants will bid for 1 of 10 online gaming licenses on offer with each lasting 15 years. Betsson has decided to participate in the tender through a new joint venture with a local partner named Casino de Victoria. And finally, a few words about Germany. In April, the State Administration Office in Saxony-Anhalt granted the first German virtual slot and online poker license to a company belonging to the Gauselmann Group. More licenses are expected to follow in the summer of 2022. After the recent court clarification of the financial guarantee requirement of the virtual slot license, 2 Betsson operational subsidiaries withdrew their license applications and only 1 operational subsidiary will proceed with the license application process for online casino. Betsson find the German framework not sustainable.
So just to wrap up the presentation with a brief summary of the second quarter 2022. Betsson reported all-time high group revenue and organic revenue growth of 13% year-over-year. We saw strong underlying performance across the business with all-time high levels for sportsbook revenue and casino turnover. Active customers and deposits were up 21% and 17%, respectively. The key growth drivers in the quarter were Latin America and the CECCA region.
Further, profitability was still at healthy levels despite continued investment for growth and considering the negative effect from the mix shift in revenue compared to last year with no revenue from the Netherlands this past quarter. We ended the quarter with a strong balance sheet with a net cash position. In June we refinanced our bond until 2025. So we have a strong balance sheet to support continued growth investments, both organic and M&A.
Looking ahead, we continue to see growth potential in existing and new markets with a very active calendar in the second half of this year with planned new market entries and the FIFA World Cup in the seasonally strongest fourth quarter of the year.
Thanks, everyone, for listening to the presentation. And now it's time for Q&A and we welcome your questions. Both myself, Martin and Jesper are here to answer your questions.
[Operator Instructions] First question is from the line of Oscar from ABG.
First off, I need to say it's quite impressive numbers especially given, I'd say, the trading update for the beginning of Q2 where one might think that the latter part of Q2 should be I mean slower in particular if you compare it to Q2 last year with the Euro Championship for example. So could you just walk me through the momentum in the quarter? You also had a very, very strong sportsbook margin in the beginning of the quarter and I believe in the latter part of the quarter, it's below the trading update number for the beginning of Q2. So could you just walk me through how you could develop the remaining part of Q2 so well?
Yes. We didn't expect really Q2 to perform as well in the second -- or June in the second half as it did, but it was strong. Despite the lack of big sport events, we managed to keep up the activity, I'd say, at a pretty good level. So we are happy at the outcome at the end of the quarter. And then to see that we have continued into the third quarter with quite some good activity is also very -- we're happy to see that.
All right. So one of your operator peers, Entain, explained a part of their lowered NGR guidance partly due to the macro environment where they see 4% to 5% decrease in gambling spend per head. Could you share your thoughts on this and perhaps comment on the implications for Betsson?
We don't really see that same pattern as of now and I have no explanation why that is. But obviously we don't have the same composition of customers as our competitors. And we have been going through several different challenging periods in our history and we have always remained quite stable during these periods. So I don't have an answer to why, but I can conclude that we don't see any weakening patterns amongst our clients as of yet.
Okay. Understood. So if we look forward to Q3, so one might expect here also that the beginning of Q3 is kind of low season particularly in the sports calendar. So how should we think about full Q3 relative to the trading update just looking in general terms?
It's very hard to give any prediction in terms of -- we don't give that kind of outlook. But you're right in the sense that we can conclude that as of right now in the very near future, the sports calendar will be quite weak. But in just a couple of weeks' time, it will kick off and once it kicks off and we have more events, normally the activity goes up as well. But I must say that we are pleased with the activity so far in July as well.
Okay. Understood. Next one just on the Peru regulation. Could you like share any additional comments about the size of Peru in your LatAm regional sales? And also how do you expect margins will be impacted, including potential changes in payment costs, betting duties and marketing? So you said 12% tax on GGR, but I also think it's a 2% maintenance tax on revenues, right?
No, I don't think there is a tax on the revenues. I think that the 12% is the one that we expect to pay. And obviously when we get a tax like that, it kind of has an impact on the margin. But as you mentioned, on the other hand there are other effects as well, potentially payment services and ways of marketing and things like that. So it's hard to tell the long-term impact on the margin. But definitely we're happy to see that we get the sustainable regulation to work in that market.
Okay. Understood. I have a final one if there's time. Just how should we think about the Netherlands going forward? So I know that you have [indiscernible] license of course, it should be ready in Q3 I suppose. But how could we think even if you secure a license given the, I would say, lower profitability or lower margin levels in the Netherlands comparing for example to LatAm, how should we think about your strategic efforts in the Netherlands if you secure a license?
That's a very good question I think and you're spot on in the sense that we will have to fine-tune our ambitions in each market depending on what kind of potential for revenues and profits we see there. Obviously we have been quite big in the Netherlands before. We have some good assets in our brands that we want to commercialize on. But on the other hand, we will always look at all different markets in relation to other possibilities in other markets and we will keep on putting our effort into the markets where we see that we can create long-term profits over time. So I can't give any figures, but we will definitely balance our step into the Netherlands and compare it to other markets. So I think I said it in the previous quarter presentation. As you can see from the results this quarter, we are not dependent on the Netherlands as a market. There are plenty of markets out there where we can perform strongly. But we want to be in the Netherlands market.
Next question is from the line of Georg from Pareto Securities.
Congrats on a very strong quarter. Just my first question would be on the personnel costs, which are up 15% sequentially. Is this just a result of the wage pressure from inflation or are there any other factors that contribute to the increased personnel costs?
You can say that there are 2 factors. One is that we've had the annual salary review, which we would have had anyway regardless of any inflation, and that has an impact. But more I would say the fact that we take on more employees to fuel our growth in different markets and it's an investment. We see such good opportunities for growth in certain markets so we take on more people to create possibilities for future growth.
Okay. And then on the B2B side in the U.S., would you say that the sportsbook is completely ready to launch if you find the right customers or are there any other plans you have to make before it's completely ready? And also on the discussions with potential customers, could you just explain how these discussions are going and what feedback you're getting from the potential customers on the B2B follow-up?
Yes. I think I would say that a product like this is never finalized, it's never finished. So we will keep on developing. The product is ready to launch as is of today. We can launch it, but that doesn't mean that it will look the same in 12 months' time from now. So we have further ambitions and we have further features that we want to develop. What we know from this kind of business is that it's very long sales cycles so it's hard to tell how long and where we are in the process. But we have plenty of discussions ongoing with different customers. Do you want to add something, Jesper, on that?
No. I think we're very positive of it to see the interest we have seen lately. Since we launched our B2C Betsafe brand in the Colorado market, we can see an increase in interest and there is a lot of exciting conversations happening. But also, as you said Pontus, it takes time. But we feel that we are well positioned as we are standing today.
Okay. And just a follow-up on that. Now that you've built the -- adapted the sportsbook to the U.S. market, do you think that you could further launch that in other regions like in LatAm or in Europe potentially or is it even for the longer term strictly to the U.S?
There's definitely functionality that has been developed for the U.S. market that we will be able to use in other markets as well. Even though the user interfaces may not look the same, there are things that we have developed that will fuel the growth of the sportsbook also in other markets.
Okay. And then just a final question from me on the bond. I know the size hasn't increased drastically, but it's still quite a big bond considering your balance sheet even adjusted for the bond and this obviously carries cost in terms of interest. Can you just explain the rationale for having this big liquidity? Is it to -- do you see like better M&A potential or opportunities now or how come you want to have such strong liquidity?
Maybe Martin wants to comment on the bond as such. But before he does that, we have a lot of interesting M&A opportunities. We have done -- historically, we have done a lot of interesting acquisitions and that has been a great part of our success stories. So we will continue to do that. And we see new markets where we want to enter and build up. We see -- we have so much possibilities to keep on growing so we need to have financing to do that.
I fully agree on that, Pontus, and to add to that as well. I think when you're going into a bit of uncertain times in capital markets, et cetera, it's good to have everything in place before. So I think having a solid balance sheet and a strong cash position going forward is very important for us as a company.
And great to have it in combination with a good cash flow.
Exactly.
The next question is from the line of Martin from DNB Markets.
I hope you can hear me.
Yes.
Just on the trends in the market and your Q2 growth performance aside, sort of what trends are you seeing in the market now given the weaker macro picture?
We don't see much. Lucky enough, we don't see much impact from the negative sentiment in the general market. I mean, we are in some kind of -- we are in the entertainment industry, we have a broad customer base. Spending per customer is not very high. This is not a very expensive entertainment for a large part of our clients. So we don't really see an impact. And sometimes I get the feeling that when it's bad in the world, then people; they want to entertain themselves, they want to see a good soccer game, they want to put in a bet and feel some excitement. So we don't see much negative effects.
Okay. And I think that might be different from companies Max and the other. But if you look at past crisis, what were the key lessons that you learned from them?
Key lessons were that we were a little bit surprised that we were not really impacted by general crisis and we don't take that for granted for sure that it will always remain like that. But as you can see from the second quarter, which was fully impacted by bad things in the world and the start of the third quarter, we still don't see an impact.
That's helpful color. And on the U.S., we discussed it a little bit already. But assuming that you will find a partner for your sportsbook, how quickly do you think that you could plug in and be up and running with B2B revenues?
It's hard to tell because it depends on us and it depends on the customer and it depends on third-party things like licensing and things like that. And we know for sure that it takes time to plug in and fine-tune and get going. So it will take a number of months for sure. I don't know how many, but I guess it would.
Okay. And you have ongoing discussions, is that fair to assume?
Yes, we have several discussions ongoing. But these are lengthy discussions and there's a lot of evaluations that's going to happen. But we are in some really interesting discussions.
And how do you feel about the competitive landscape for sportsbook systems as of today in that market?
I hand that one to Jesper.
I think we believe that we are well positioned with our product versus the competition and that's also the feedback we are getting from a lot of the discussions we are having today. Of course some of them are more established than we are so it will take us time to be seen as an established operator over there. But all in all we have developed a product that we fully stand behind and believe has a very good opportunity.
Okay. Jesper, while you are there, I want to ask you what are the trends now in Malta when it comes to for example the recruitment potential, salary inflations, competitive environment for new employees and finally also the regulatory trends down there with the tax situation, et cetera?
As you know, Malta has been competitive on the employee market for quite some time so we haven't really seen any change this year versus last year. I think the main positive thing that has happened recently in Malta is that Malta is no longer under greylisting. So that has been very well received in the country and for our industry of course, this is good news. If that in itself will lead to more companies now being attracted by Malta again, then we could expect some more competition. But for us, it's business as usual in Malta for the time being.
Okay. And my final question is on Latin America. What would you say are the key drivers? Is it the existing markets or is it new ones?
For now it's I would call it existing markets although the whole region is still relatively new for us. We have recently launched in Argentina for example so it is still early days there, but we are happy with the recent traction we are seeing. But I would say the main driver today is the business we have had longer establishment in.
And what could be the markets that you enter next in that region?
I mean we heard Pontus talking about Argentina as a new province. I think there are several interesting opportunities that we are looking into. We are about to launch in Mexico. So there is also interesting new markets on top of the ones that we're already in.
We're monitoring each market closely and the next in line, as you said, is Mexico coming up shortly.
Sir, we don't have any further questions. Would you like to make any closing comments?
We've actually received 1 or 2 questions from the audience on the web. So first off, if we could make a comment on Nigeria and the acquisition of Betbonanza and whether that will have any impact in the short term or if that's more sort of a long-term play? Any color or comment on that?
It's very much a long-term play where we position us for the long term in the market. So we don't expect a short-term impact from Nigeria.
That is part of our strategy to be very diversified.
There was another question about buybacks. With the strong results and low valuation of the stock, are there any plans for share buybacks? Martin, perhaps?
Yes. That's a question we commonly get and I think to be a bit boring here, the answer will be the same that we are always evaluating share buybacks and comparing that to doing new M&As. So it is something that is on the radar.
Yes, I echo that. But as I mentioned before, we have a lot of interesting M&As where we see potential upsides which looks interesting. So we have to put share buybacks in relation to such activities.
There is a final question from the web. What effects have you seen from the changes to regulation from -- in Georgia?
On the revenue side, we have seen minimal effect of this. We are growing solidly in Georgia year-over-year. The main impact has been on internal work in order to adapt to the regulation.
Okay. So that's it for the questions from the web. And are there any more questions on the phone line?
No, sir, we don't have anyone in the queue.
Okay. Thanks, everybody. Thank you for listening in to the presentation of Betsson's second quarter and we look forward to talk to you again when we're going to present the third quarter. Now we're going to head back to work and make the third quarter a success.
Thank you very much. On behalf of Betsson, we will conclude today's conference call. Thank you for attending the presentation today and you may now disconnect. Thank you.