2014 was yet another strong year for Betsson, both in terms of financial and operational performance. Betsson has continued to deliver upon its strategy where multi-brand is combined with a single technological platform. This has been a contributing factor to Betsson’s development over a number of years, in which the Company has reported growth levels higher than the market average and the highest margin amongst our listed competitors. The long-term investments in our platform and in our brands create, in addition, a solid base to stand on as we face the future. That Betsson has been upgrated to the Nasdaq Stockholm Large Cap list is evidence of our success and I want to thank, first and foremost, Betsson’s fantastic personnel for your strong involvement in making this happen!
BETSSON DELIVERS A STRONG RESULT
Betsson’s growth during the last ten years has been strong and the past year was no exception. During 2014, revenues amounted to MSEK 3,035 an increase of 23 per cent compared with the previous year. Operating income amounted to MSEK 821, which is equivalent to an increase of 37 per cent. The solid improvement in results is partly attributable to strong organic growth and partly to successful acquisitions, where the Oranje and Kroon casino brands, based in the Dutch market, is the most recent acquisition. In line with expectations, we also see that the portion of mobile gaming has increased considerably, and during the fourth quarter 2014 the portion of mobile revenues amounted to 23 per cent of total revenues. During the year, Betsson has invested further in mobile technology with a broader offering of new and improved applications for smartphones and tablets. We anticipate that these investments will result in a further increase in mobile gaming during the coming year, which also will contribute to Betsson’s overall growth.
A clear evidence of Betsson’s long-standing strong operational and financial development is the upgrading to the Nasdaq Stockholm Large Cap list, which took place on 1 January 2015. That Betsson is entering into the Large Cap list shows that the Company has a well-functioning business with highly knowledgeable personnel and a clear strategy. The Company’s multi-brand strategy creates good premises to continue to grow both organically and through acquisitions. The fact that Betsson, in addition, is the first pure Internet company qualified for the Large Cap list shows that the company is at the forefront of technological developments.
Betsson’s vision and goal is to deliver the best customer experience in the industry. We also see a clear pattern that the customers’ expectations are increasing in terms of the user experience. As a result, Betsson is continually making investments to further develop the customer’s experience in all of our brands. Examples of these investments include functions which allow individual customers a greater range of customization options, quicker payments and withdrawals and optimized performance on the various gaming sites as well as optimized flows for registration and deposits. Individual customer adaptations can be achieved through the delivery of individual and relevant communication to the customers in real time and through recommendation functions based on a user’s history. Betsson intends to stay at the cutting edge when it comes to digital marketing and the use of data to facilitate better decisions and to increase customization. By actively investing in and prioritizing these areas, we ensure that we will remain at the very top level of technical competence and product development in the future.
MUTIBRAND STRATEGY AND MIGRATIONS
Another important factor in Betsson’s continued successful growth and result is our multi-brand strategy. By using locally adapted brands, which are integrated into a common platform, a broad and competitive product portfolio is created where the consumers’ range of choice is increasing significantly. Through its wide range of brands, Betsson can also focus on a larger number of segments and target groups, which creates even more growth opportunities.
In recent years, Betsson has acquired a number of companies, Betsafe (2011), NordicBet (2012), the Automaten brands (2013) and Oranje & Kroon (2014). The latter, O&K, has shown a very positive development following the acquisition and has further strengthened its position as one of the two market leading players in the Dutch market.
All of the acquisitions have been very successful in terms of expanding the Betsson Group as a company and have created a better position in the gaming market. This has been possible through our strategy, which implies that we acquire companies and further develop their brands, while the technology is integrated in the common platform. In this manner, the risk of losing customers is minimized while synergies can be achieved and growth possibilities created.
As we have acquired companies during the years, the number of migrations to the common platform has also increased. This has created extensive experience within the organization and thereby increased efficiency. During last year we executed three migrations to the common platform: NordicBet.com, NordicBet.dk and Star Casino. At the same time, we have continued to develop our other brands at a fast pace.
In terms of the regulatory frameworks on our markets, the trend is that more and more markets choose to introduce a licensing system. Concurrently, there are many countries which have retained their monopoly situation and Betsson operates in these countries on the basis of its international license from Malta. Betsson is well-positioned both as regards of locally licensed markets as well as internally regulated markets, and we believe there is significant growth potential in both types of markets. In the locally regulated markets, Betsson will participate and seek licenses where this is commercially defendable.
Acting responsibly is a given for Betsson, and this attitude permeates our entire organization. We offer a number of measures to guarantee safe gaming, such as self-excluding functions, training of all personnel in responsible gaming, self-testing functions, etc. Due to this, Betsson has been nominated as the most socially responsible gaming company for a number of years by both EGR and IGA. That the Company shall also, in the future, be perceived as the most responsible gaming company is something that is very clearly imprinted in Betsson’s culture and organization.
We eagerly anticipate the forthcoming year. Our ambition is to continue to grow at a pace exceeding the market growth rate, and we are prepared to do this both organically and through acquisitions. Our strategy, technical competence and leading market position create positive premises for continued high growth and value creation.
President and Chief Executive Officer, Betsson AB. March 2015