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Betsson AB
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Good morning, and welcome to today's presentation from Betsson. My name is Olle Qvarnström, and I will be handling the Q&A session after today's presentation. First, we will have from Pontus Lindwall, CEO; and Martin Öhman, CFO from Betsson. [Operator Instructions]With that, I want to hand the word over to Pontus. Please go ahead.
Thank you. Hello, everybody. Welcome to the presentation of the first quarter, Betsson's first quarter. So we're going to go through some highlights and operational update. Financials by Martin, a trading update, regulation and a summary. And as Olle said, we're going to have a Q&A afterwards. So some highlights for the quarter. We had revenues of on SEK 1.6 billion, EBIT of SEK 276 million, a healthy EBIT margin of 17%. Casino revenues up 16%, Sportsbook turnover, up 28%. Sportsbook revenue, up 2%, with a little bit lower Sportsbook margin compared to the comparison quarter. So an operational update. The Betsson strategy that supports growth consists of several elements. I'm going to talk a bit about those here today. So if you look at the blocks in the middle of this picture, you see existing markets, that's where we make the bulk of our revenue. Of course, a really important part to take care of and increase. Then we have new markets where we look forward to go into new markets, create new opportunities for revenues. This is something that we invest in and that I'm going to talk a bit about today. B2B I'm going to go into this one as well. This is an area where we explore our technology by providing them to external other operators. And then also, our growth is supported by M&A, which we have done successfully for many, many years. Starting off with the existing markets, we do a lot of initiatives to improve our current operation. And as a few examples, this quarter, we have launched -- we have moved the platforms for the operations in Balticum, make it a little bit better. And we have received a license for sports betting in Germany during the quarter. In the new markets, we have a lot of initiatives. And this is where we put a lot of efforts and also money in order to improve and grow our future business. We have launched Fantasy Sports in Brazil to build up some customer base there, while we await regulation. We have expanded into several Lat am markets. We have done a partnership with Big Bola in Mexico. And we are about to establish a service hub in Bogotá to support the expansion in this region. We are already quite much in place in Peru. And we are now the proud sponsors of the Premier League in Peru. We have also entered into sponsorships in Chile's second division. And we are the sponsor of Chile's national team. On the B2B side, we have made a strategic investment during the quarter. In the company, which is the U.S. facing part of TG Labs, where they build PAM that we are going to launch in Colorado. We have also made an investment in a payment company that secures our ability to perform payments in the very important LATAM market going forward. So this is a strategic investment to make sure that we will be very strong within payments, which is important for success there. In terms of collaborations, we have, as we already mentioned before, signed contracts with TG Labs for the PAM for the U.S. market, where we hope to launch by the end of this year. So on the B2B side, we have been a B2B supplier for a very long time, actually more than 10 years. And we have experience in doing that. And as you can see from the report, the revenues from our B2B part is increasing strongly. So we know how to do this. We have also put a lot of efforts into the Sportsbook development. We own our proprietary Sportsbook, which means we are in control of the development of this product. It's engaging 170 people for the time being, and we experienced a great interest in our Sportsbook from other operators. So we look forward to the U.S. entry on the B2B side. Currently, there are 120 people within Betsson working on this project. We have been working on the front end for the U.S. market for the year now. This market will become the largest gaming market in the world shortly. And with this B2B setup, we will be able to address a large part of this market. So we are building a totally new front-end for the Sportsbook, which is done to fit for the U.S. market. And we have received feedback from the tests we have done over 12 months' time now. And they show high scores for the product that we are developing. The B2B organization is scaling up. And as I said before, the U.S. project engaged 120 people. So we put a lot of efforts into this. This is close to 5% of our -- of the staff or around 5% of the Betsson staff is engaged in this. So what will we do? We will open our B2C operation on Betsafe in Colorado and showcase the sportsbook to the U.S. market, then we will sell the Sportsbook to numerous companies. There are a lot of operators out there that hasn't yet started to set up their technical platforms. We see that we will have a strong offering, a modern Sportsbook, easy to use interface. And we have a track record and know-how to operate the Sportsbook B2B. So we think that we have a strong offering. So what else do we do apart from the sports bet? And there's a lot of technical innovation going on. And just to mention a few things we have done recently. We have launched a tool for optimizing time to market so that we can launch more quickly on new markets. We have moved several brands to the cloud operation, and we have implemented biometric log in, in several markets. On the native side, we have launched more games in the native apps, both the Google apps and the Apple apps. We have integrated Playtech live casinos so that we have more than one supplier on the live casino side. And we have several new payment providers being launched in several markets. So a lot of activity going on with innovation and development. We have updated our sustainability framework, which mainly consists of 5 parts. Employee impact, social impact, climate impact, responsible gaming and business compliance. For more details on this, I refer to the annual report where this is described more in detail. We measure a lot of different KPIs on an ongoing basis, and some of them we publish quarterly and some annually. And if you want to dig deeper into the responsible gaming KPIs, I refer to the annual report on the printed version of the quarterly report. To mention a few, we have had close to 80,000 interactions with customers during this quarter. And we have had 13% of the customers using the nonmandatory responsible gaming tools. So that shows that this is an important part of our offering. Some other activities during the first quarter, we have done investigations amongst our employees as we are still working from home, to a large extent. And to summarize, I can say that we come out pretty well as a company, of that. We have also done some activities within climate impact. We have invested in units to make our climate impact neutral. So we are a climate neutral company. So now I'm going to leave over to Martin for the financials.
Yes. Thank you, Pontus. Pontus will be back in a few minutes to wrap up the presentation and also, of course, stay for the Q&A. But first, we will listen to the financials from CFO, Martin Öhman. Welcome.
Thank you, Olle. As seen from historical figures, revenue has priorly been impacted from changes in specific markets due to changes in regulatory framework and shift in the competitive landscape following that. Betsson's ambition is to create a diversified revenue base that can absorb such changes from individual markets from time to time and still achieve revenue growth higher than the underlying market growth, in line with Betsson's long-term ambition to outgrow the market. The first quarter is due to seasonality, normally somewhat weaker than the fourth quarter, which we have also seen this year. This is all in line with historical patterns and our expectation, and is partly explained by the generally lower activity in the first quarter of the year, but also due to pauses in some of the important sport leagues in our major markets. Revenue for the first quarter was close to SEK 1.6 billion, an increase of 12% year-over-year, although impacted by negative currency fluctuations of almost SEK 210 million. The increase in revenue comes from all regions, except Western Europe and from both Sportsbook and Casino. Betsson processed almost 4 billion casino game rounds on the in-house platform in Q1, an increase of 24% compared to the first quarter previous year. Casino revenue was SEK 1.177 billion, an increase of 16%. The gross turnover in Sportsbook was SEK 8.7 billion, which is an increase by 28% compared to the first quarter last year. Sportsbook margin was 7.2%, which is lower than the 8.5% seen last year, but in line with the 8-quarter rolling average margin of 7.4%. The license revenue from our B2B business grew from SEK 230 million in Q1 2020 to SEK 321 million in Q1 2021 and corresponds to 20% of the group's total revenue. When looking at revenue by region, we see that the Nordic region is more or less flat year-over-year, where casino revenue increases and Sportsbook revenue decreases. Sweden continues to develop well. And despite the corona-related restrictions on online casino, Betsson has increased its market share. The Danish operation is also developing well and shows growth year-over-year. In point of supply regulated markets such as Norway, efficient payment solutions is a bit more challenging and places higher demands from commercial adaptation and technical solutions for integration of new payment methods and can, from time to time, affect Betsson's revenue streams. This, in combination with lower sport book margin, unfortunately, have had negative impact on the Norwegian revenue in the first quarter. Revenue from Western Europe decreased by 6%, and the decrease comes from both Casino and Sportsbook. Italy continued to develop well and reported all-time high revenue in the first quarter. The Netherlands also continued to generate good revenue and the authorities have now eased the announced ban on using of old customer databases, which is positive for Betsson. We hope to be able to apply for license in the beginning of 2020 and will operate as usual in the meantime. Revenue from the U.K. decreased compared to previous years, all in line with the strategic decision Betsson took in 2020. German revenue is lower than last year, in line with the early communicated information as a consequence of the restriction of online casinos introduced in December last year, and also a consequence of Betsson's decision to close down several brands at the same time. The assessment is that gaming volumes bottom out during the first quarter and that we now see a slight decrease in revenue, again, however, from very low levels. The CEECA region increased by 27%, with both Sportsbook and Casino contributed to the growth. The operations in the Baltics are developing well, primarily driven by revenue growth in Lithuania. Revenue in Georgia has also increased, and the newly started licensed operations in Croatia show high activity. Revenue from the rest of world grew by 75% compared to same period last year, and the growth comes from both Sportsbook and Casino. The regions' growth is mainly driven by Peru and Chile, where Peru is one of Betsson's largest market for sports betting. The level of activity in Peru is normally low in January and February. As a result of some local leagues having a break. And this is the explanation why we also see a slight decrease in Sportsbook revenue quarter-over-quarter. In Peru, Betsson has a leading market position and has also now, as Pontus mentioned, became the name sponsor of the Peruvian First League, which is now called Liga Uno Betsson. The business in Chile is also growing and Betsson on sponsors, both the national football team and the second league in football. Revenue from markets were bets and pay local betting duties increased by 9% compared to the same period last year and now constitutes 34% of the group's total revenue. Cost of services provided increased in the first quarter by SEK 83 million, mainly following increased revenue, but also partly impacted by increased gaming taxes and repayment -- increased payment costs. Gross profit amounts to SEK 1.36 billion, which is an increase of SEK 92 million compared to the same period last year. Gross profit margin is 65%, which is lower than in the first quarter of 2020, explained by the previous mentioned increase in gaming taxes and increased payment costs. Marketing spend increased by some SEK 40 million compared to last year and constitute some 18% of revenue and 25% when including affiliate marketi0ng as well. 2 examples of marketing and branding activities are the name sponsorships in the leagues in Peru and Chile. Cost in absolute numbers have slightly increased, both in terms of personnel cost and other operating costs in the first quarter compared to same period last year. We have earlier heard Pontus talking about investments in developing our technology, broadening the product offering, improve the user experience, scaling up the B2B organization and the geographical expansion, including M&A. This is all examples of initiatives that explains the cost increase. And to give you some more flavor on the growth initiatives, costs spent on development of new markets, including the U.S. market, amounts to approximately SEK 50 million in the quarter. And the business acquired in last year has contributed with some 140 new employees. EBIT amounts to SEK 276 million, an increase of 6% year-over-year, driven by revenue growth, and shows that we are able to absorb short-term increased costs from the growth initiatives and still deliver EBIT growth. EBIT margin is 17%. Cash flow from operating activities amounts to SEK 328 million, driven by operating income. Impact from working capital is close to 0. The positive effect from decreased payment provider balances is offset by increased prepaid expenses and decreased other liabilities. Cash flow from investing activities mainly related to investment in our proprietary technology. Cash flow from financing activities impacted the cash flow by SEK 13 million and relates to property lease payments. As of end of March, SEK 74 million was used over the total credit framework of SEK 880 million. Betsson has a low leverage, and as of end of March, a net debt position of SEK 45 million. And net debt-to-EBITDA ratio of 0.1 and an equity ratio of 62%.
Thank you, Martin. Martin will be back in a few minutes also to stay for the Q&A. But first, we will hear from Pontus to give a trading update and then also concludes today's presentation. So please welcome back Pontus.
Thank you. So the second quarter until the date of the 25th of April, we were 12% up compared to the average daily revenue for the full quarter last year. So a little bit upwards. So feeling good, looking forward to the rest of the quarter. On the regulatory side, there has been a lot of activities happening. In Denmark, there was a tax increase from 20% to 28%. In Sweden, there's been -- -- the temporary restrictions for COVID has been prolonged. And they are now proposed to expire on the 14th of November this year. Finland has announced that they will look into the possibility to strengthen the monopoly. And in Netherlands, we have got info that we will be able to continue to use the customer databases of the existing clients when we get the license. In Kenya, the marketing ban due to COVID is still active, which is a little bit unfortunate because we can't do the commercial launch there as we had planned. But we hope to -- that those restrictions will be removed shortly. So a short summary of the first quarter, there's a lot of focus on growth, expansion into new markets, primarily LatAm. We're scaling up the B2B organization. We have done some strategic investments and partnerships, and we do a lot of investments in the Sportsbook for the U.S. market. So a lot of efforts and money going into forward-looking projects. We have the earnings and financial position, which allows us to do all this and execute on the growth strategy. And we do investments in technology to support the expansion going forward and also to enhance the customer experience, which is good also for the existing business and the new business to come. So that's...
That's your last slide.
That's my last slide.
Perfect. Then it's the time to open up for the Q&A session. In a few seconds, I will hand the word over to the operator. [Operator Instructions]But before I hand over to our operator, I want to ask first Pontus is, what's your key takeaway from this quarter? Can you name maybe one thing specifically?
Yes. One thing, it's not one word, but maybe one sentence. Key takeaway is that I think we're doing really well with operations. We see strong traction underlying in most markets. At the same time, we put a lot of efforts into new things. So we're really putting a lot of seeds in the ground to have future markets to grow on. So broad activity.
And the same question for you, Martin, what's your key takeaway? Is it the same or something else?
No, it's basically the same. I mean, I think it's -- I'm really happy to see that we can still deliver EBIT growth, although doing a lot of investment and adding on cost -- on the cost side and still grow EBIT. That's -- yes, that's my main takeaway.
Perfect. Let's try to hand the word over to our operator to see if there's anyone on our phone line.
[Operator Instructions]Our first question is from Martin Arnell of DNB Markets.
I just want to start off with the organic growth in the quarter. You're writing 2% organic in the report, but you don't adjust for FX in that. So your organic growth should be 17%, that should be correct, right?
That's correct, yes.
Perfect. And then you'll start to Q2. What number should we compare the 17% growth, is 24% comparison? Or I know that you consolidated GIG in middle of Q2 last year, so it might not be perfectly comparable?
Actually -- it was actually included early in the quarter. So we've been looking into that, of course. And I think that this will -- this gives a very good picture of comparable to last year.
Okay. Excellent. And can you give some color on the growth acceleration, what's driving that? Is it mainly the Sportsbook? Or...
I would say underlying the Sportsbook is performing well. It may not look that strong when you look at the figure as such compared to the same quarter last year, but we see a lot of activity in the Sportsbook. We are doing well in many different markets. And as mentioned in the report, we have headwind in a few markets as well.
Okay. And what is your view on casino growth outlook once we see more reopenings in Europe? What effect do you think that will have on your growth rates?
We don't think -- what people refer to as a COVID effect, we don't think that will disappear once the pandemic develops or disappears. We believe that what has happened has brought new ways of playing to many markets, and we think that players will stick with a new way of playing that they have learned during this period.
Okay. So you haven't seen any trend shifts in the casino in the latter part of April, for example?
No. And we don't expect any kind of bounce back in casino activity due to that.
Okay. And on the U.S. B2B expansion, the Strive Platform. Could you -- I understand it's important for you to have. What will that mean for your U.S. offering? Just give some more color on why that is so important.
We have chosen to go with the Strive platform developed by TG Lab. And it's a platform which no one else has as of today. We believe a lot in that technology, it's modern. And we think it will support our entrance into the U.S. in a good way.
And correct me if I'm wrong, but you used TG Lab in other markets, right? Is that why you have so strong confidence for them?
Yes. We've been cooperating for many, many years. And we have a good cooperative climate, and we have been successful with their products in other markets. So we find them very professional.Perhaps he disappeared or passed out from that answer.
Oh, you're still there.
No, I'm here. Sorry, I had a mute button. But yes, you mentioned that you had 5% of your staff dedicated now for the U.S. expansion, but how much of your tech staff is dedicated in terms of percentage?
I would say that on -- if you look at the Sports betting part of the product development, 50% to 60% of the developers are engaged in the U.S. projects. So it's a really serious thing that we do here. And we're seeing great -- we see great -- each week, we move ahead, and I see new things coming every week. So we're really going forward with this.
And then you mentioned feedback has been positive so far. How does that work when you test it and sort of who's testing it?
We have user groups in place across U.S., users that play with several different other providers, experienced users, less experienced users, and we let them try what we have developed. We have different versions, and they can prefer this 1 or the other one. And we kind of iterate towards something that we really believe in and that we have kind of signed up -- off by local players to be a good and attractive product.
Great. And just a final question for me on the LatAm expansion. How should we look upon the timing there for the new markets, like Argentina, Mexico, Colombia? And when they will start to contribute? And will you start reporting LatAm separately now?
I'll start with the second part. This is something that we have discussed. If we're going to do that. We'll -- we can't really state that today, but it's up for discussion if we're going to report LatAm separately. We expect to see revenues from new LatAm markets later this year. But unfortunately, we are not in 100% control of when that is going to happen. There are regulators and other things that needs to be taken into account. But surely, we hope and expect some revenues later this year from markets in that area.
Our next question is from Erik Moberg of ABG.
To start off, in regard to Betsafe you launched in Colorado, do you have an exact date for this? And also, how much of EBIT losses do you expect on a quarterly basis?
We don't have an exact date because similar to the situation in LatAm, there's external factors going in there, such as the certification of platform, et cetera. But we believe it's going to be in the latter part of the second half of this year that we can launch in Colorado. Regarding the EBIT contribution from that area, I can't comment on it. But obviously, we're going to start with an empty database, and we will have to build up. So we will invest in that market. I think we will start off not full steam ahead, we will start off slowly and then build up as we get accommodated to the market.
Got you. And in regards to the rollout on B2B, realistically, given that the rollout of B2C will be towards the later stages of the year, what would be a fair time line to assume here?
I -- it's hard to estimate when we will be able to sign a first contract. But definitely, there will be discussions ongoing in parallel with our own ramp up and launch in Colorado. There are already now interest from certain areas in the U.S. So I think we will have discussions ongoing during the second half of this year.
Got it. And regarding your current offering when it comes to Sportsbook, is there anything you feel that you need to adjust ahead of a B2B launch in the U.S.?
Yes. We build a totally new front-end for the U.S., which is totally geared towards the U.S. market, that takes into consideration what the U.S. players really want and what the competitive landscape in the U.S. looks like now. On top of that, we add the knowledge that we have within Betsson from a long operation of Sportsbook, which is quite some nice ideas that we want to implement as well. So it's a totally new product that will face the U.S. market from the user's point of view. Then, of course, the foundation of the product, the trading engine and everything is the same as we have here, which is proven and robust, and which is in operation with heavy load already. So that is already validated, so to say.
Got it. It's in good flavor right there. And just on the cost side, you hinted sort of what you turned your spending on the U.S. side of the business. Is this sort of the run rate we should assume for the rest of the year? Or should we expect any ramp up there?
I mean, I think this is a good estimation. What might come is that, of course, if we scale up the organization going forward and add new people that will bring some more cost. But as for now, I think is a good estimate of where we stand.
And just in regards with your recent partnership with TG Lab in the U.S., you touched on this earlier, but just trying to understand it better because you obviously speak about how scalable your own platforms is. So sort of the rationale behind going with TG Lab versus solely using your own platform.
Yes. TG Lab was already developing this platform for the U.S. market. And we have a lot of initiatives in LatAm and other places where we want to go with our platform. So it's just a matter of prioritizing resources. And when we saw that TG Lab was building this for the U.S. market, it was a good choice for us, which enabled us to be -- to go ahead in other markets at the same time.
Fair enough. And just looking at the underlying business here. When I sort of strip out both acquisitions and Turkey, it appears like underlying revenues were down 10% year-over-year. I'm just trying to understand the dynamics better here. I mean, I understand that you have some headwinds in certain regions, such as Netherlands, Germany and Norway. But still, when I look at your peers, none of your peers have seen the same kind of headwinds. I'm just trying to understand it better.
Yes. I think the composition of revenues is different between all the operators. I tend to look at the full picture of us. And then it's -- most markets are performing really well. I think we mentioned a few of them in LatAm. Sweden is doing well, building up; Denmark as well; Italy, doing tremendously well. So in total, we grow well. Then, of course, it's hard to compare with other operators as they have a different mix of revenues.
So we should -- so is it fair to assume that this whole decline year-over-year is solely from Netherlands, Norway and Germany, there's no other markets that's sort of lagging on a year-over-year basis?
We are present on many markets. So I can't answer that. But the larger contributors that was having headwinds are the ones that you mentioned. But then there are plenty of markets which are doing really well.
And Erik, if you should also include U.K. in that number of countries because as I said, the strategic decision was to take new way in U.K. So of course, that is impacting the comparables to last year's.
Yes that's right. That's right. And in terms of Netherlands, I mean, some certain domestic operators there will probably launch already in October. How would that sort of affect you guys? Should we assume that revenues from Netherlands continues to decline sequentially throughout the year?
I wouldn't say that, I think we're doing pretty well in Netherlands during -- considering the circumstances right now. And it's -- I see no reason to speculate on what's going to happen when it opens up. We run a good operation there. And hopefully, we will be able to maintain it.
Got it. And just one last question here for me. Just looking at some of your KPIs, active customers declined 4% Q-on-Q, while customer deposits declined 8% Q-on-Q, could you perhaps just elaborate a bit on this sequential decline?
Erik, I think that as I started my presentation, we -- normally, we see lower activity in the first quarter compared to the fourth quarter. So we don't see any -- we are not alarmed by that. It's normal pattern for us. And that you can see also if you go back and look for the years before. So it's nothing alarming for us.
Yes. But I'm just trying to understand it better because it feels like activity throughout Europe has been extremely high throughout the whole quarter. So it's not really like comparable to a regular Q1, yes.
I mean, we -- I think it is like Pontus said, that is depending on what markets you operate. If you compare to other operators, that are really strong in some of the European markets, it is hard to compare with us. As I said in, for instance, in Peru, in the first quarter, the leagues are paused there. So I think you need to take into consideration the sort of geographical presence for the companies when doing that analysis.
Our next question is from Marlon Varnik of Pareto Securities.
First, a question on the German market. You said that you see a slight increase here in Italy from low level. Is the daily average in April over daily Q1 average? Or what exactly you're comparing to when you say slight improve?
We see that the figures right now in April looks a little bit better than they did by the end of the first quarter.
Okay. And you can also dig into the Nordics. It's down, I think, 15% Q-on-Q, despite this market performing decently in the quarter. What's going on in Norway, more specifically? And how is Finland doing here Q-on-Q?
Yes. As we said, in this quarter, we have had some problems with payments in Norway. And we have also seen a little bit weaker Sportsbook margin impacting since Norway is a big sporting market. Finland is more or less the same. We don't it is -- there are no major changes seen there.
Perfect. And shortly, on Denmark. I mean, I know it's a small market, but they now allow sporting be sponsored by gaming companies. What's your say now on the Danish market? Has it increased focus here? Or what is here in Denmark?
Denmark is a small market as such, and it's relatively small market for us. We're happy that we are performing better and better in Denmark, but I can't comment on any operational decisions on how to move forward there.
Understood. And on casino, there was one region growing Q-on-Q, the CEECA region. What's the secret here? Are you converting sports betting players as well? Or what's the drive -- growth drivers here in the CEECA region casino Q-on-Q?
I think we do well in that region in many countries. So it's a mixture.
Okay. But a portion for sports betting players, is it something that -- can you elaborate a bit more, please?
Could you repeat that question, Marlon? Was it a Sportsbook you wanted to hear more about or the casino? Or what was the question?
Casino in the CEECA region.
Casino [ in the ] CEECA region?
Yes.
I mean, what we see there is that, as I mentioned, we have added Croatia. In Croatia, we see good activity. We have also seen good development in many of the other markets, both me and Pontus mentioned, the Baltics and Lithuania. We also see Georgia increase in revenue in Georgia again, and that is, of course, on the casino side as well. So Pontus went through a lot of developments that we are doing both on the casino side and the Sportsbook side, and that is, of course, affecting the product that we're offering towards the customers, and that increases revenue, of course.
And last question also on the Kenyan market. What's the latest here? I mean, I see the marketing ban is still in place. The Kenyan premier league is postponed due to COVID. Can you give us an update on the Kenya market and when you expect the marketing ban to be lifted? And maybe also if you can say something about Nigeria [ .
Yes. I can do that. It's very hard to predict what's going to happen in Kenya. It's very unfortunate, the situation as it is, mainly for Kenya, but for us as well. We have the organization in place, the product and everything lined up. But the country is more or less in pause now, waiting for the situation to change. We can't predict when this is going to happen. But obviously, we hope for the sooner, the better. In Nigeria, we have invested a minority stake in the company, which we believe in a lot. It's -- they are like #3 or #4 on that market and in a good position. So it's -- we look forward to see how they will be able to make growth in the Nigerian market.
Our next question is from Oscar Erixon of Carnegie.
A couple of questions from me. And just starting with the Netherlands, maybe I missed something in the earlier presentation, but could you just talk a little bit about if something, in particular, has happened there, did I understand it right, but it's performing weaker now than previously?
No, I think, as you know, we're not able to do any kind of marketing in Netherlands for the time being. But still, we managed to run the operation. The customers are still there with us. We're waiting to be able to apply for a license, and we intend to do that when time comes.
And Oscar, maybe what you meant is that what has happened just recently is that the authorities have eased their ban on using of old customer databases, which is good and positive, of course, for us once launching.
Understood. Thanks for clarifying. And then Norway, just to understand that fully, I mean, it seems to be the main explanation or the sole explanation for the Nordic region, but what has changed sequentially exactly? It seem like customers are having a harder time depositing, but could you just explain that bit?
We have added new payment methods to the Norwegian market, which makes it more easy for the customers to deposit and withdraw money.
You mean assuming late in Q1 then, so it should improve from here, I think.
I don't know which date exactly that happened, but there has been a change.
Okay. Got it. And looking at the cost, you wrote in your report SEK 50 million investments into growth market, and you've discussed that already. But could you just talk a little bit about how -- what that is compared a steady year-on-year figure, obviously, compared to Q4 '20, for example?
Yes. I mean, that is the sort of -- exactly, that's the way you should look upon it. It is sort of the additional focus and the additional people working on the projects related to that. So yes, that's the fair way of describing it Oscar.
Great. And then Peru and Colombia. How does your marketing sponsorship engagement work there? How are they booked over time? Would it continue to generate costs and for how long are the agreements?
Yes. That is the way it works. Cost is taking sort of over the period of time that this agreement is in place. So you will see that cost as part of the marketing for the period of the agreement, so to speak. Yes.
Great. And regarding the trading update. Is it possible to discuss sort of the monthly development in Q2 '20 as well as what you've seen throughout this year so far, including April? I realized it compared to the full quarter last year, of course. It should be relatively reflective of the year-on-year performance. But also maybe discussing a bit what you expect in terms of increased activity during the Euro 2020.
Yes, we expect to see increased activity in relation to the soccer tournaments, both Copa América and the Euros. And that's not only for the Sportsbook. It usually brings up activity also for the casino and the intake of new customers and things like that. The first part of the question regarding the comparison of different parts of the second quarter last year, I don't remember, really, how that quarter played out on a daily basis, it's hard to answer.
Understood. And just a final question from me. I'd see that other corporate services decreased by around 27% sequentially from Q4. Is that mainly due to weaker performance in Western Europe and the Nordics and the strong relative performance for them , which grew by 7%?
I think that is basically what I answered before. I think it is -- there are markets that perform less well. There are also lower activity in some of the markets due to seasonality. So I don't think that there is one single answer to that.
[Operator Instructions]
Do you have another caller?
No more callers at this time. So I'll hand back over.
Thank you. Luckily, I have a few questions from the homepage. So let's start out. First one with regards to the customer activity and deposits. Is it fair to assume that customer activity is on an all-time high if you deduct the effects from U.K., Germany and Norway?
I haven't done those calculations. So it's very hard to answer. I can't answer that.
Right. And with regards to the cost side, you have touched on it a bit, but here's one investor asking that on your home page, there seems to be a massive recruitment going on in different areas of the world. How will that affect the cost base? And is that included in your projections today?
It is included, yes. And that's true. We are -- I think both me and Pontus mentioned that we are growing the business, and we are looking into expanding into new markets. So that's a natural part of our growth strategy going forward.
Perfect. Also 1 question here about the LatAm countries. Can you elaborate a bit around the launch in Mexico?
I'm not so sure I can. We have a partnership there. And we plan to -- I hope that we will be able to go live in the second half of this year. But as in many other markets, it's not up to us to decide. There are regulators and other external parties that we have to take into consideration. But I hope that we will be able to launch during this year.
Perfect. Now here's a specific question about the strategy on your B2B Sportsbook. How will you compete against the market leader? Is it mainly on price or quality? Or could you elaborate a little bit?
Yes. I think that we will definitely be on par with market leaders in terms of quality, offering and all the hard facts that you can measure. In terms of pricing, I can't comment on it. Of course, we want to be able to compete on the market.
Perfect. And here's maybe a tough one, but can you give some color on the B2B Sportsbook offering and timing? The question is, do you already have potential customers lined up in the U.S. or will you start approaching potential customers? Now could you talk a bit about how the -- how the sales is going?
Yes. The sales is obviously in early stage. There are contracts already being taken. So there are discussions ongoing. And I think we will have those discussions, and I think they will increase during the second half of the year.
Perfect. Let me see here. Here's one question on the financial side. Can you mention something about the SEK 44 million reserved in previous quarters, what happened in those processes, what happens in those processes?
We are still working on that. No news, nothing recovered as of yet, that we will have displayed. But it's still -- yes, we're still working on it.
Here's, again, one question back to the B2B Sportsbook offering in the U.S. market. Out of technology and feature perspective, can you mention any specifics that you will feel will drive the unique proposition in the Sportsbook offers for the U.S. market?
I think we will -- we put a lot of efforts into player props, which is very appreciated by the U.S. players. We have some ideas on some things that could potentially stand out in that market. We will see what we will be able to incorporate for the launch. Obviously, it's not going to be the final product that we launch. But we will have everything that you want to have in place in the U.S. market when we launch. And we will have a list of things that we want to add that will stand out even more from the existing players there.
Perfect. Back to the financial, which is also a strategic question. You got quite the balance sheet nowadays. What's the plan for all this cash? Maybe the dividend could have been a bit higher? What's your thoughts on this?
Yes. We have a strong, strong balance sheet, which we're really happy for. Looking forward to what we are -- our growth strategy and the initiatives that were about to take on. I think it's very good to have that balance sheet to backing us up. We have a dividend policy that we are following. We also have a share buyback mandate to lean on. But the sort of most important part is to support the growth.
Perfect. I have one last financial question here, and it's pretty specific. An invitation to the AGM, there's a proposal to change the reporting currency from SEK to euro. Can you give some background to this in why or what changes these are bringing?
Yes. I mean, the general purpose of that is that starting off as a Swedish company, look a Swedish company, with the majority of the revenue coming from the Swedish market now being global company with where the Swedish revenues are less compared to the total, it makes a lot of sense to convert to a currency that we have the major flows in to try to avoid some of the fluctuations that we have seen in the report -- in the recent reports.
Yes. I only have one more question from the audience now. And I think it will be a recurring one. And it's -- once again, are you planning to divest the Sportsbook to existing shareholders and when?
That's a question that we get, like, once a day, but this is not on the agenda for today. We think it's a perfect environment for the Sportsbook business part of the organization to be in, to have the strength of Betsson behind it with the financial situation that we have and the brand and the strong organization. Then what will happen in the future, we will have to wait and see. So the short answer is no decision made, but it can, of course, happen.
Perfect. I think that's a very good final answer for today. So let me just reach out and say thank you for today, and thank you for these answers on this presentation, and we wish you will come next quarter again. Thank you.
Thank you.