Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Super Group (SGHC, Financial) Ltd (SGHC) reported a record third-quarter revenue of EUR 395 million, excluding the US, marking a 13% year-over-year growth.
- The company's adjusted EBITDA, excluding the US, grew by 52% year-over-year to EUR 95 million, setting a third-quarter record.
- Super Group (SGHC) Ltd (SGHC) achieved a 24% margin for the second consecutive quarter, surpassing its 20% target.
- The casino business, which represents 83% of overall net revenue, is experiencing significant growth.
- The company has a strong financial position with EUR 297 million in unrestricted cash and no debt, allowing for potential dividends and shareholder returns.
Negative Points
- The US market has been challenging, leading to the shutdown of the US sportsbook operation.
- Super Group (SGHC) Ltd (SGHC) is still assessing its iGaming business in New Jersey and Pennsylvania, with potential for further action if profitability goals are not met.
- There are FX headwinds impacting growth, and the company is still recovering from the previous shutdown of its India operations.
- The company faces regulatory challenges in various markets, which could impact future operations and profitability.
- Despite strong performance in Africa, there are still markets within the continent where the company is not performing as well as expected.
Q & A Highlights
Q: Can you talk about sports results globally and how Super Group is viewing Latin America?
A: Neal Menashe, CEO, noted that October had strong sports results, while September was weaker. The company is counteracting sports volatility with its casino business, which now makes up 83% of revenue. Richard Hoson, President, mentioned that in Latin America, Super Group is cautious, especially in Brazil, ensuring a sustainable path to profitability before proceeding.
Q: How should we view your capital returns policy, including dividends and strategic M&A?
A: CFO Linda Benwick stated that they are considering a special dividend in Q4 and are focused on investing in technology and marketing. Richard Hoson added that while they constantly assess M&A opportunities, there is nothing firm for Q4.
Q: Can you provide more detail on the strong performance in October and cost efficiencies?
A: Neal Menashe highlighted that October was spectacular in terms of customer numbers, volumes, and revenue. The company is seeing efficiencies in marketing and operations, focusing on key markets to maximize performance.
Q: What is the long-term view on online casino in the US?
A: Neal Menashe explained that while sports betting didn't work out, they are seeing good revenue growth in igaming in New Jersey and Pennsylvania. The focus is on achieving profitability, and they are prepared to adjust if targets are not met.
Q: Can you discuss your position and strategy in Africa?
A: Neal Menashe emphasized their strong position in Africa, with podium positions in five of seven markets. The company has a dedicated team and is leveraging its brands like Betway and Jackpot City. They see significant growth potential as the population and mobile usage increase.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
