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Betsson AB
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Good morning, and welcome to this presentation with Betsson. With us today, we have CEO, Pontus Lindwall; and CFO, Martin Öhman.My name is [ Christopher Bergen ], and I will handle the Q&A session after the presentations. If you have any questions, you can write them directly on the page, and you can dial in and follow the instructions.And with that said, Pontus, please take us through Q3.
Hello, and welcome to the Presentation of Betsson Third Quarter 2021. Here's the agenda for today, including highlights, strategic initiatives, financials -- going to be presented by Martin -- trading updates, regulatory update, summary and Q&A.The third quarter highlights our revenues of SEK 1.7 billion, EBIT of SEK 324 million with a margin of 19%; active customers close to 1 million; casino revenue down 2%; and Sportsbook revenue up 24%.The Dutch market was closed during the quarter. The international sites closed as of 30th of September to position ourselves for the licensing process. The financial impact of that is minus SEK 25 million per month EBIT from October.This is the Betsson strategy that support growth, and we will look into a few activities in relation to this. To mention a few new markets, we launched Croatia a year ago, and it's growing well. In the second quarter this year, we also finally launched Greece, which is developing in a solid way, too.On the existing markets, LatAm is performing very strong with an all-time high in the third quarter, where both Casino and Sportsbook did really good. In the quarter, Betsson acquired Inkabet to further support our commitment in LatAm. We also invested in Slapshot Media in Canada to position ourselves for the upcoming regulation there.In the U.S., we are moving ahead on the time line according to plan, and the Strive platform was certified during the quarter, with Betsson Sportsbook coming up for next certification.On the product side, there is continuing developments such as enhanced game lobbies, upgraded BetBuilder, new casino native apps, lots of new casino games. ColBet has been migrated to a new platform, horseracing offered on Betsson Chile, just to mention a few.Sustainability is a very important part of Betsson's business strategy and a foundation for generating shareholder value, and at the same time, thinking long-term responsibility. The new governance model, including top management of the company has been introduced to make sure these questions are addressed properly.Responsible gaming is a central part of the sustainability framework. Betsson deployed several tools within this area, and we measure certain KPIs to monitor our progress here. We also work towards set goals on climate impact and with an ambition to reach certain goals by 2030.During the quarter, Betsson was awarded a Safer Gambling Operator of the Year and Mobile Operator of the Year at the International Gaming Awards 2021, and at the Women in Gaming. Diversity Awards 2021, Betsson was awarded the Diversity and Inclusion award.Now over to financials.
Okay. Thank you, Pontus. Now it's time for Martin Öhman to present the financials in more details.
Thank you, [ Christopher ]. Q3 is yet another good quarter with growth in active customer, growth in deposits, growth in Sportsbook turnover and revenue and also overall revenue growth year-over-year.Revenue for the third quarter was SEK 1.733 billion, an increase of 3% year-over-year and 8% organic increase. Casino revenue was SEK 1.276 billion, a decrease of 2% year-over-year, impacted by loss of revenue from Germany and U.K., which are casino-heavy markets. The decrease should also be seen in the light of casino revenue in Q3 last year being very strong and showing an increase of 30% year-over-year.The gross turnover in Sportsbook was SEK 8.4 billion, which is an increase by 7% compared to the third quarter last year. Sportsbook margin was 7.9%, which is higher than the 7.0% last year and higher than the 2-year rolling average margin of 7.5%. Sportsbook revenue increased by 24% and amounts to SEK 436 million and represent 25% of the group's total revenue.License revenue from B2B customer grew from SEK 261 million in Q3 2020 to SEK 291 million in Q3 2021 and corresponds to 16% of the group's total revenue. The increase in revenue by some SEK 57 million comes from Sportsbook in all regions, except Western Europe and from casino in the CEECA region and the rest of the world region.When focusing on the Nordic region, we see a decrease of 2.5% year-over-year, explained by decreased casino revenue, which is somewhat mitigated by Sportsbook growth. Sweden continues to develop well, and Betsson's market share has increased, mainly driven by development of the Sportsbook and Gala Casino.In Finland, revenue increased both compared with last year and compared with previous quarter. The year-over-year growth is explained by higher Sportsbook activity, while higher casino activity has driven the increase compared to last quarter.Revenue from Norway decreased compared with previous year due to continued challenges with payments. Revenue from Western Europe decreased by 28% or by SEK 134 million, driven by decreased casino revenue and is solely explained by the decrease in revenue in the U.K. and the German market. The Italian market is performing well and shows growth year-over-year.The CEECA region has increased by 21%. Both Sportsbook and Casino contributed the growth. Basically, all markets reported all-time high revenue in the quarter. Croatia and the new market, Greece, where Betsson launched in June, reported rapid growth and solid performance, which create good foundations for further expansion in the region.The operations in the Baltics are also developing well, primarily by increased casino revenue, driven by cross-sales from the Euro 2020.Revenue from the rest of the world grew by 59% compared to the same period last year, and the growth comes from both Sportsbook and Casino. The region's growth is mainly driven by Peru and Chile, where Peru showed all-time high revenue and where Betsson is the market leader. The acquisition of Inkabet will further strengthen the Betsson position in the region. In Brazil, the highest revenue since the acquisition of Suaposta in 2019 was reported.Revenue from markets where Betsson pay local betting duties constitute 32% of the group's total revenue, which is a slight decrease year-over-year, mainly related to strong Sportsbook growth in LatAm and increased revenue in U.K. and Germany during the quarter.When looking at EBIT development year-over-year, we have seen that revenue has increased and following that, cost of services provider has also increased. This is mainly explained by increased payment provider fees, but partly offset by lower cost of affiliates and partner commission.Gross profit has increased by SEK 35 million compared to the same period last year, but the gross profit margin is more or less in line with the third quarter last year.Marketing spend was in line with last year and constitutes on 16% of total revenue and 22% when including affiliate marketing as well. A lower level than previous quarter is explained by higher marketing activity in relation to the big tournaments in the previous quarter.Personnel expenses has increased in the third quarter compared to the same period last year due to geographical expansion and increased investment in technology, mainly from development and adaptation of the Sportsbook for the U.S. market. Other costs increased by SEK 34 million and amounts to SEK 240 million. The increase is mainly driven by consultancy costs and investments in development of the B2B Sportsbook and increased cost for hosting services.When breaking out costs related to the development of new markets, this sums up to approximately SEK 105 million in the third quarter, of which SEK 15 million is attributable to the U.S. expansion. And a big chunk of the remaining part is related to marketing in those regions. EBIT amounts to SEK 323 million, and EBIT margin is 18.7%. Organically, EBIT increased by 14% to SEK 375 million.Moving on to the cash flow and financial position of Betsson. We see cash flow from operating activities amounting to SEK 424 million, driven by operating income and positively impacted by changes in working capital. Impact on working capital is mainly explained by declined payment provider balances.Cash flow from investing activities mainly relates to own development and acquisition of shares in associated companies, mainly slapshot Media and JDP Tech. Cash flow from financing activities impacted the cash flow by SEK 114 million and relates to usage of RCF.Last year, the share redemption program was paid out during the third quarter to Betsson shareholders and explains the deviation between the years. Betsson as of end of September, a net cash -- cash position of SEK 65 million and an equity ratio of 62%.And by that, I hand over to Pontus again to take us through the trading update, followed by a regulatory update.
Yes. Pontus, please go ahead. And I should just add that after Pontus' final update here, we will start the Q&A session. Take us through, Pontus.
Thank you. For the trading update in the fourth quarter, up to the 17th of October, revenues was down by some 17% compared to the full fourth quarter last year.Adjusted for currency, revenues was down by 13%. Sportsbook margin for the period was 4.2%, which means that our customers has won more than they usually do over time. The low Sportsbook margin is the main reason behind the decrease together with the closing of the Netherlands.On the regulatory side, Norway has been discussing DNS blocking. In Germany, casino regulations were introduced in July, making it very hard to run business. In Brazil, tax has been changed to GGR and licensing process should be coming up. In Italy, there's a discussion on a new framework. And in Canada, it is now open for provinces to introduce gaming regulations, and Ontario is the first mover there.So to summarize the third quarter, we saw a strong revenue growth, mainly driven by the strong Betsson Sportsbook, continued strong profitability, while at the same time, investing in new markets. We stopped accepting customers from the Netherlands to our international site and strengthened our position by acquiring Inkabet and investing in Slapshot Media in Canada. U.S. is on track to be launched in the first quarter 2022.So now I think it's time to leave over to Q&A.
Great. Thank you for the presentation, Pontus and Martin. And before we start the Q&A, just a reminder, you can dial in and follow the instructions or write your questions directly on the web page. And then before I hand over to the operator, I would just like to ask you Pontus and Martin, is there anything particular that you would like to highlight from the last quarters, maybe some key takeaways?
Yes. I think my key takeaway is that as a company, we invest a lot in new markets and in the new business-to-business venture towards the U.S. and at the same time, we managed to show quite a strong profitability. So I think that's a sign of a strong performance of the company.
Martin?
Yes. I think it's a very solid quarter that we have seen. And I'm extra happy to see the development in our Sportsbook. And we see good growth in many, many regions, such as the LatAm region, but also in Sweden, where we gain our market share, thanks to the development of our Sportsbook.
Okay. Great. Thank you. And with that said, let's hand over to the operator. Do we have any questions via phone?
Yes, we do have 5 questions. [Operator Instructions] So the first question is from Mr. Erik Moberg from ABG.
Just in regard to the trading update. When I'm breaking down what it implies, it simply don't add up to what you stated earlier that Netherlands are SEK 25 million in EBIT on a monthly basis. My take is that this appears to be at least up towards SEK 40 million on a monthly basis. If you perhaps could elaborate on how you derive at that SEK 25 million number, which you communicated earlier, because it would be really helpful, because to me, it simply don't add up.
Yes, I can answer that one. To us, that's the calculations we have done, and that is the figure we have communicated. And of course, it's correct. We have all the figures we need to calculate that. So we stick to what we have said in the press release regarding the Dutch market.
Was that based on the last 12 months or on your sort of projections for the coming sort of quarters.
That was based on historical figures.
Okay. And margin-wise, in Netherlands, when you acquired Oranje and Kroon in 2014, the assets had EBIT margins north of 65%. If you perhaps could elaborate anything in regards to what sort of margins you've posted in Netherlands for the past couple of years? It would be really helpful.
We haven't revealed those margins officially, so that's not for us to comment upon.
Okay. But in theory, if you had walk through like the cost base you have, that it's not really that much cost that you have there, correct?
That's not true. It was a big operation, and it comes with certain costs.
Yes. But I mean, you haven't spent anything in marketing or anything like that. I mean I assume the drop-through is pretty high.
Erik, I can say that it is not as high as it was when we acquired it. It's rather lower than it was what you referred to in the press release when we bought it.
You must have expended quite a lot on your personnel then because, I mean, you haven't spent anything in marketing, no betting duties or no -- yes, or no affiliate costs as well. So I mean, where have you sort of expanded your operations there? Where does the cost increases comes from in the Netherlands?
You're correct in saying that we have not been allowed to do any marketing, yes.
So where have the cost increases stemmed from? Where does it come from?
I think as Pontus said, we have released sort of the figures in our press release in regard to this. And for the time being, we cannot give any further details to this.
All right. Just looking at the geographical split there in Q3. The only part of the business that grows year-over-year is the CEECA and the rest of the world region. Nordic was slightly down, while the Western Europe was down considerably year-over-year. Could you just walk through where exactly these headwinds year-over-year are coming from?
Yes. My take is that it's not mainly headwinds. I would say we ride in a nice tailwind. As you can see, we grow strongly in rest of world. We do a very good quarter in CEECA, where we grow in virtually all markets. Western Europe is, of course, down because of what we have mentioned before, we have cut down in the U.K., and there has been impact from the German regulations. And in the Nordics, we've had some headwinds in Norway due to payment issues. But on the highly competitive market of Sweden, we are taking market share. So I would say that we enjoy quite nice tailwinds in total.
Would you say that the situation in Norway is worsening from a regulatory perspective? And do you expect this to continue into 2022?
I have no such expectations.
All right. And then just looking at your Sportsbook, you've been talking a lot about your Sportsbook here in the presentation. But I mean, even though you've seen significant growth year-over-year, I mean, all the growth comes from the CEECA and the rest of the world. How come your Sportsbook underperformed in the rest of the market?
It's not that it underperforms. It's that we have a different market -- product mix in different markets. So if you look, as an example of Italy, where we have a Casino brand, then, of course, we don't grow the Sportsbook because there's not much of a sportsbook market for us there. On the other hand, in the rest of world and CEECA, we are very heavy on the Sportsbook. And for that reason, we are doing really well there when the Sportsbook performs.
And to also comment on the Nordics, I mean, Norway is a sport-heavy market. And as we have said, when you have payment challenges there, it is also affecting the Sportsbook, not the sort of underlying Sportsbook as such, but the payments.
All right. And you mentioned CEECA region and your Sportsbook, where it obviously has been performing extremely well. Does any U.S. B2C operator had a problem with your exposure to Turkey? I mean I want to ask you today, is it that issues over illegalization gaming?
There is no illegal gaming being done, and -- as you're well aware of. And so that's quite -- that's not a good question. And no one has -- no company has had any kind of issues with that regard of entering into the U.S. as far as we are informed.
Yes. I guess, whether it's illegal, it's a matter of definition. But I mean it's -- Turkey is in an illegal market. Yes. But given that you currently don't grow within.
That's not true. But I think we'd rather have that debate in another forum.
Yes. But -- all right. So just one follow-up here, and that will be all for me. But given that you currently don't grow within your Sportsbook in the more competitive markets, as it appears to be more tilted towards nonconventional markets such as Turkey. What makes you think that your sports offering actually will be viable in the U.S.?
I don't know if you listened in really to the presentation, because Martin told you that we grow strongly with the Sportsbook in the Swedish market, which is highly competitive, and that proves that the Sportsbook is very competitive.
Yes. But I'm just saying that on -- when you split down like on the actual regions, the only regions it actually shows a meaningful growth on a year-over-year basis, where I can say that it actually grows above the market's underlying growth rate is the CEECA region and the rest of the world.
And that's very natural, because the product offering in, let's say, Western Europe is more tilted towards casinos. So that's the explanation to that. And I believe everybody understands that.
Yes, but you have a Sportsbook product that's ready for the U.S. market as we speak right now?
No. If you looked at the presentation, you should have seen that it will be ready in the first quarter 2022.
Yes. I mean just curious to see what is taking so long, because it's been quite a long time since you're sort of starting to mention U.S. in your presentations.
Yes, U.S. is a different Sportsbook market from Europe, and we started quite some time ago. But in order to release a highly competitive product, we need to put efforts into it and build it for the U.S. market. And when we do things properly -- when we do things, we do it properly, and that goes also for the Sportsbook towards the U.S. market.
Fair enough. And just one last follow-up. You mentioned no issues there in regard to Turkey and the U.S., but what about GBC? If I recall correctly, they had some issues with a Nevada Gaming Board regarding certain regions for them. Do you have any comments on that?
No.
Next question is from Mr. Marlon Varnik from Pareto Securities.
First, just a clarification question. In your trading update here for Q4, you mentioned that the Sportsbook margin was 4.2% up until 17th of October. Are you referring to a Sportsbook margin of the full bets here or with the gross Sportsbook margin after allocated costs?
This is -- I mean we discussed this before, Marlon. You know that our sport, when we're talking about the margin, it's a combination of the sort of B2C margin and the B2B margin. So that you should keep in mind when looking at the margin. It's sort of the entire margin in our Sportsbook.
Yes. All right. So adjusting for -- to a more normalized Sportsbook margin here, the trading update is actually -- activity underlying has been pretty decent. Can you say anything about the really just this driving this trading update? And maybe you have any comments on the Dutch market and your churn expectations here?
I think we can say that the activity where we are active is still very high. It's going very well. And when you see that the Sportsbook revenues are lower than normal for the first part of the quarter, it doesn't mean that activity is lower. It's actually the other way around. So we have a very strong momentum in the Sportsbook, and that is what really counts over time.
Perfect. And can you say anything about the Dutch market, your expectations here in terms of how you churned more medium, longer term, given that you're not operating there now?
Yes, it's very hard to tell. Now of course, we have shut down the Dutch market, we are preparing our applications, and we have a good plan on how to do that. And we will see when time comes, what the Dutch market will look like by then.
All right. And looking to Q4 or more maybe into 2022, I mean, I assume that you will expand into new markets, given the loss of revenue from the Netherlands. What markets could this interest and how many can expect you to enter? I mean if you have any comment here, it would be really appreciated.
We're not going to go into details on certain markets, but I think we have been very clear that we have strong initiatives ongoing in LatAm. We are present in several markets, and we have high expectations for our offering in the LatAm market.
Right. And the last one, I mean, given the expansion plans and so on, and given that the contract with Gaming Innovation Group terminates October 2022, I would assume it will make sense to renew the contract? Or what's the cons here to not renewing this contract given the market expansion plans you have?
I have no comments on that.
Our next question is from Mr. Oscar Erixon from Carnegie.
Happy to stay on Pontus. A few questions from me. First of all, if you could discuss the Sportsbook performance in Q3. What -- have you seen lower activity here in the sort of early part of quarter? And it seems from your comments now that activity and turnover has picked up into Q4 in the face of the lower sports volume.
Yes, I think initially, in the third quarter, the activity was quite strong. Then it, of course, went down a little bit due to pause in certain offerings. And then it picked up again by the end of the quarter as we expected. And we went into fourth quarter with a very strong activity, and we have seen strong activity in the fourth quarter. The players have won more money than usually, which we are actually happy to see. That is a part of the dynamic of our offerings. So over time, the margin will get back to some kind of normal.
Understood. And then on the expansion cost, which you broke down a little bit this quarter. Martin, perhaps you could elaborate a bit on the costs and also a little bit on how you expect them to develop going forward due to your expansion. If you could discuss the sort of different items, how to think about them going forward?
I think this is perfectly in line with what we have communicated earlier that we will continue to develop our B2B Sportsbook and the Sportsbook as such. We will continue expanding into new markets and into new markets, it means that you will add more people in order to be able to support those markets. And you will also do a lot of marketing in order to get those markets up and running. So I think the development we have seen for the past quarter is a pretty good indicator of where we're heading.
Great. And with regards to marketing costs, around SEK 280 million in Q3, 16% of sales. How should we think about marketing investments going forward? And first of all, in Q4, will investments just naturally be a higher share of sales going forward? Or will you adapt it, adapt the investments due to the ceased operations in the 9 months?
If you start by commenting upon the marketing cost in this quarter, it is somewhat lower than in previous quarter, and that's understandable, looking back at Q2 having both the Copa America and the Euro 2020. So naturally, you would spend a bit more in relation to that, which we see, which we could harvest from now in this quarter. But over time, I would say that we are pretty stable, and we are always looking to find the best return on investments. So I think over time, we've been pretty stable in marketing spend, and that might be the pattern to look for going forward as well.
Great. And by that, I suspect you mean in relative terms. So as a percent of sales, so 17%, 18% of sales should come back to that normal level?
That has been the historical numbers, yes.
Great. And then just a final question for me with regards to Norway. Do you expect -- assuming it happens, do you expect any negative impact from the DNS blocking in Norway? And also, have you heard anything at all regarding the market going towards licensing system in the next, let's say, 5 years?
It's hard to tell. We follow those discussions closely. We follow the progression of the regulations in Norway and how they will be implemented. We will just have to wait and see what's going to happen if there will be DNS blocking. And if so, what kind of impact that could have.
Excellent. And then actually, a final, final one for me here on Inkabet. Could you discuss the mix here, primarily between casino and sports, but also in terms of the growth going forward from sort of the H1 levels would be helpful?
Yes. Inkabet started out as a Sportsbook brand and added casino later on. Casino has been catching up recently, but it's not as big as sports still. Sports is a very big product in this region, and we have great prospects for the growth of both sports and casino for Inkabet going forward.
Our next question is from Mr. Martin Arnell from DNB.
First of all, congratulations to the CEO job going forward, Pontus.
Thank you, I'm so happy.
So -- but if anything, I mean, what's your view on this recent covenant situation, which -- I mean, it looked quite dramatic at the first sight from the outside. Can you say anything on your views?
Yes, it was -- of course, it was, as I said, at the time, it was -- came as a surprise to me and to the organization as well. Then there has been discussions and there was changes outside of the company in the meantime, and we've had a few new Board members. And yesterday, the Board decided to -- that I should still remain as CEO for the company. And I'm really happy about that. And I think it was a good decision by the Board, given the situation that the company is in. We are moving ahead in a lot of different areas. We have great opportunities in North America. We are investing and growing in South America. We have the Sportsbook B2B venture. We are in the process of Netherlands application. So I'm up and running in all those questions. So for that reason, I think it was a good decision.
Okay. Makes sense. And when it comes to the Netherlands, I guess you're going to be trying mitigating actions to stop the drop from that significant market. Can you talk a little bit on how you think about those and what you could do?
It's not much we can do right now. We have shut down our offering by the end of September. Right now, the only thing we can do, I believe, is to prepare for the market entry by doing a really good application and preparing our products in line with the regulations for that market, so that we hopefully will be able to open up with a strong product offering once we can enter the market.
And how confident can you be in license application filed early 2022 and then that there will be an outcome from the authorities after the summer.
I'm confident that we work according to our internal plan, and we have a very robust plan on how to put that application into place. And this is what we will do. And then we will have to wait for the outcome.
And we have a lot of experience in regards to this. I mean we are in 19 markets. So this is not the first time we are putting together an application process.
Okay. And when it comes to the expansion phase, I mean, you're in several new markets, but your marketing costs in OpEx was fairly stable year-on-year in the quarter. Can you elaborate on that rationale?
Yes. Yes, we have put money into marketing in some of the new markets where we are growing strongly like Croatia and Greece. And naturally, we have pulled down in certain other markets a little bit. But I think the most important thing is that we have the resources to put money into new markets where we want to grow. And we have the ability to do that and still remain profitable, which I think is a very strong sign.
Yes. And in the Nordic, in Sweden, these current Covid restrictions on the regulated market, do you think that those will be lifted in November?
Yes, we believe so. We see no reason to keep the restrictions when more or less all other restrictions in the society has been removed. So we look forward to have those restrictions removed.
Okay. And finally, on the U.S. outlook, could you just repeat the timetable for the launch in Colorado?
Yes, we plan to launch in the first quarter 2022. And as presented on this time line that we had in the presentation, there has been a lot of activities to reach to where we are today. We have some more activities ahead of us before we can launch. Some of those activities are not only internal activities, but external activities like certifications and stuff, which we are not in control of. But our best guess is that we will be able to launch in the first quarter 2022.
Next question is from Mr. Simon Davies from Deutsche Bank.
A few from me, please. Starting off, can you talk a bit about the level of start-up investment you expect in the U.S.? Obviously, it's a big year for you, 2022. But we've seen very little in the way of guidance in terms of the ramp-up of costs. What do you think start-up losses might be in 2022?
As we start business consumer offering in the State of Colorado, that is the place where we will do marketing investments, mainly. And we will start off from 0 and build upwards. We don't plan a huge launch campaign that will cost -- that will have a big impact on the P&L. We have to remember the purpose of our launch in Colorado is to serve as a showcase for the Sportsbook that we will sell business-to-business to other operators in the U.S.
So you don't expect meaningful losses in the U.S. across the board in 2022?
No, not really. We already, as of now, have quite a high-cost burden from the investments that we do towards the U.S. market. So they will more or less be on the same level. Of course, they will go up a little bit once we start to employ staff, et cetera. But there will be no major impact from that on the P&L.
Okay. Perfect. And just on the Sportsbook margin so far in Q4, obviously, very weak. Can you talk a bit about the factors behind that? Is it related to specific sports specific markets, the ramp-up in free bet activity? What are the drivers there?
Soccer is the biggest sport and the biggest contributor to our Sportsbook. And when favorite teams wins games, then it's normal that customers win more money from us than normal. And we've had a number of days in this period, where a lot of favorites has won. And that means that the players have won a lot of money. We tend to look more at activity in the Sportsbook, and that has been trending really strong. So we look forward to the rest of this quarter and the upcoming quarters to see margin trending back to normal, maybe not during this quarter, but over time.
But I mean, is there any particular geographic bias? I mean U.K. sports results thus far, I don't think have been too consumer friendly, certainly with the collapse of Manchester United. Is this -- say, can you fill out any specific leagues where you've been losing out?
No. It's a mix of local leagues and big tournaments. And I think the only common denominator is that the outcome has been very favorable for our customers.
Okay. Just on the Netherlands. I mean you talked about the impact on a monthly basis while you don't have a license. Can you talk a bit about the impact on profits once you do get a license? Because obviously, you're going to be facing significant tax increases, a ramp-up in marketing spend and other costs. I mean do you expect the business in the Netherlands to be profitable once you get a license?
We don't expect it to be profitable from day 1 when we open up in Netherlands. We will start with an empty database. We will start marketing and build up again. But on the positive side, we have the knowledge of the market. We have products that are attractive for the market. So we will work towards profitability in the Dutch market, but not from day 1.
But do you think there's any reason to think that on a monthly basis, it will be more profitable once you have your license than it was -- the impact will be less than when you had to withdraw from the market?
From the beginning, there will be a negative P&L impact when we start operating. That's pretty obvious because we start with a start from 0 and we build up.
Yes. Perfect. You referred to declines in payment providers balances. Is that just related to the drop-off in activity in Norway and Netherlands? Or are there other factors at play there?
I mean you asked about the Netherlands. And one positive side on that is, of course, that once the regulation is in place, you will get more efficient payment solutions that comes to a cheaper price, of course. So moving on to more regulated markets, more regulated revenue, I guess we will see a shift on that.
Perfect. And lastly, you referred to U.K. declines in casino. Can you talk a bit about that? Do you think this is a market phenomenon or specific to yourselves?
I think that's -- I don't know about the market in general. We, of course, brought down our ambitions for the U.K. market during the last year. And this is not one of our most prioritized markets for the time being, and that's why we see a drop in activity.
We have no other question by phone. Back to you.
All right. Great. Thanks for all the questions via phone, and let's go over to the questions via the web page.So the first question, then. Repurchase of own shares must be likely be value for shareholders at current levels, so to speak. Will the company begin to repurchase own shares? If not, why?
You want to…
No, you start. You can start.
I'll start on that one. This is something that we evaluate all the time, of course. But we always have to weigh that possibility against the possibility to acquire other companies to strength -- to do strategic investments in certain markets where we are active. And this is a balance that we're looking at all the time. But we -- surely, we monitor that possibility.
Okay. Great. Next question. Kindred will apply for license in the Netherlands in November and has guided that it will receive a license in April 2022. Why must Betsson wait until end of Q2 2022 to apply?
We have made the assessment of what has been communicated from the Dutch authorities. And given the time lines we have received, we can apply at the time we have presented, and we can't comment on other companies' applications processes.
But it's important there to state as well, I think the question asked, why we could apply at the earliest in Q2?
Yes, exactly.
I think we have stated in our report that the first date, we think that we can apply it in February 2022. So it's Q1, it's not Q2.
Okay. Thanks for clarifying. Okay. Next question then. Betsson has a history of successful spin offs. Are there any plans to spin-off Techsson and to make it more appealing to onboard additional B2B customers?
There is no such firm plan today. Of course, we are building the Sportsbook organization stronger and stronger day by day. And we will see in the future if that could happen, but it's nothing that we have discussed today.
Next question then. The LatAm region seems to be a solid basis for further growth, while the competition in the U.S. market is strong. Will the focus on the U.S. market draw some focus away from the LatAm market? And how do you see Betsson positions -- how do you see Betsson's positions in the U.S. over the next couple of years?
First, I would like to say that, yes, we are putting a lot of efforts into the U.S. B2B Sportsbook efforts today. But at the same time, we do a lot of activities in the LatAm market as well. So we managed to handle both these tracks.In the U.S., in a couple of years down the line, we hope to be an established B2B player, delivering sportsbook to some of the larger operators in the U.S. market.
The next question is regarding currency effects and especially the Turkish lira. Could you comment on that?
Yes, I can briefly comment on that. I mean I think we have sent out a press release commenting on the numbers. And the Turkish lira is impacting, of course, the effect on the quarter. And that has been the case for quite some time now. So it's nothing really new. We also have currency exposures to euro for a little bit longer. After this year, we are changing currency to report in euro instead. So then there will be a little bit less sort of effect to that, but the Turkish lira is impacting, yes.
Okay. And we have another question regarding the Netherlands, and they are interested in the competitive landscape in the Netherlands right now, and how many competitors are live?
The market has gone through a big shift from the 1st of October. There has been some 10 companies that has received their licenses. I'm not totally up-to-date on how many has opened yet to the market, but this is a moving target, and we will have time to analyze the competitive landscape in due course until we get our own license.
Okay. Next question then. Are you planning to move out the Sportsbook from Betsson, so it can be run independent? Should it be easier to sell Sportsbook stand-alone instead of Betsson Sportsbook.
That's more or less the same question as we answered. Of course, we have a history of splitting up companies and giving out companies' dividend. And organization-wise, we are quite independent already. There are no such decisions to spin out the sportsbook or that part of the organization yet, and it would be way too premature to do that today. But from an organizational perspective, we are pretty much well-structured already.
Okay. Great. And if we look at the M&A pipeline, do you have any discussions there?
Yes. We -- M&A is part of our growth strategy all the time. So we have a constant work on the M&A side. We assess a lot of companies and opportunities, and there's a steady flow of opportunities for us. So this is something that we work on constantly.
Okay. And the next question is regarding Greece. How important is Greece as a market? And why did you enter so quickly?
Greece is building up strongly. It's a market -- we like the market dynamics. We believe we understand the market. We have solid local knowledge within the company. And it's a market that we like. Today, it's not a material part of our revenues, but it's one of the parts that shows very strong growth and that we are really happy with the outcome so far.
Right. Great. And if we look at Mexico and Argentina, how is the launches in those countries going forward?
Argentina has been a little bit wait and see for one of the licenses. And maybe you can comment on Mexico.
No, Mexico is developing according to plan. So there's no -- really no news in regards to that.
And we have a question regarding Slapshot Media. Please explain Slapshot Media.
Please explain. Slapshot Media is a start-up company in Canada, founded by entrepreneurs from this industry who has great industry knowledge. And we invested in Slapshot because we saw regulation coming up in Canada, and we believe Canada is a very interesting market. So this cooperation, as where we are today, with Slapshot, gives us a very solid position in Canada for future regulations and licensing procedures. And they have the local knowledge of how to operate in that market. So we think it's a very strategic fit with that investment.
And a hot topic these days are cryptocurrencies. And we have a question here that -- I know that there are gambling companies who offer games with Bitcoin. Is there anything Betsson has thought about?
This is something we have, of course, assessed. It's nothing. We are not active in that field yet. And it's not as easy as it may sound, because it's some hurdles in terms of regulations in most markets, but we will certainly monitor any possibilities going further with cryptocurrencies.
Okay. Great. And the last question is here regarding the Dutch market. And it is -- just for clarification, my assumption is that you have a Dutch license in the end of Q3 2022. That would mean a lack of EBIT of SEK 100 million for the next 4 quarters. There are currently 10 licenses in the Dutch market. How many more are expected in the next round until next summer? And how do you consider your chances of receiving such a license?
Yes, it's a long question. It's very hard for us to predict how many licenses that will be given out. We just know that there are several applications which are already handed in to be assessed. So there will be most likely more licenses coming out. And in regards of our license, we have been through '19 different applications processes with success. So we think we have at least the knowledge and the technical level to be successful. And the future will have to prove.
Great. Thank you, and thank you for your presentation and answer to all the questions. That was the final questions from the web and the final questions for the day. Pontus, do you have any closing words for the audience?
Yes, I do. I just want to say that it's been a good quarter. I'm happy to have this kind of profitability. And at the same time, investing a lot in different areas.Thank you to all the staff of Betsson. Thank you to all the support during the turbulence we had in the company for the past 1.5 months. Now we are fully geared up to move ahead, and I look forward to a really exciting 2022.
Great. Thank you.