Following Betsson’s announcement 2018 group revenue increased 15% to SEK 5.41bn ($580m), full round-up here, Gambling Insider caught up with CEO Pontus Lindwall for an exclusive chat about the operator’s Q4 and full-year performance.
Looking back, Lindwall admits he is a far happier man than at this point last year…
When you spoke to us during the CEO special, you discussed 2017’s “turbulence.” How pleased are you with Betsson’s 2018 results by comparison?
We are very pleased with what we have achieved during the year. I look back to presenting the Q4 report for 2017 and I was not very satisfied with where we were with the company in a lot of aspects. We have been carrying out our activity programme, which we named “Back on track.” It has gone through all parts of the company and it has really made a difference. We have increased revenues, decreased costs and it has been a very interesting year.
In Q4, sportsbook revenue was down, despite a turnover increase. Would you say this was purely down to the lower margin or were there other factors?
It is purely down to the margin but it’s not that the margin in Q4 2018 was bad; the margin in Q4 2017 was exceptionally high. In my view, that’s not always a good thing. I would rather be where we are today in terms of margin.
As sportsbook turnover continued to grow after the World Cup, are you confident of similar results in 2019 without a major football tournament?
We can’t really give any predictions on that as a company but the changes we have made to our products are sustainable and we are continuing to work on further product enhancements. So, of course, we have great belief we will be successful in the future.
You've talked about Betsson’s determination to improve efficiency within marketing and internal processes. Can you give any specific examples of successful initiatives from 2018?
We have worked out an attribution model for the marketing, which has really helped us segment the marketing we do: the successful parts and less-successful parts. After that, we’ve been able to cut down on the less-successful parts and that really brings the efficiency in the marketing up.
That’s one example. We have also streamlined the organisation quite a lot, so we are more effective. We have a higher output with a smaller headcount so that’s another part we are really happy with.
Can you continue making efficiency gains in 2019 or have you reached an optimal point in these areas?
I think we have taken the bigger steps. But now we’ll go into the small details and I’m sure we’ll find more room for improvements. Normally, when you go into such a project, all the big tasks are the easiest ones to identify and now we are down to smaller details. The important part is we have done this programme and put the company into this peak position.
That shows in the profit (EBIT) margin we have in the company. That is definitely something we are proud of and we see as a very strong competitive advantage, as we face more and more taxes as different markets regulate and increase taxes.
Do you have any specific targets, revenue wise or to do with market share, for the regulated Sweden market?
We have, of course, but these figures are internal. What we can communicate more externally is the ambition we have to be one of the biggest operators in this market. We are one of the older operators in the market and we should be one of the cornerstones of the Swedish gaming market. That’s our ambition.
What are Betsson’s targets for 2019 and what will be the major challenges in achieving them?
What we will try to achieve is having one of the fittest companies in the industry and we are pretty well aligned in that direction. We want to keep on developing our product; we made huge steps forward in 2018 but there is further room for improvement there.
To answer the second part of your question, preparing for other regulated markets and complying with all the regulated markets we are operational in is a big challenge. So far, we have managed that challenge pretty well and I’m sure we’ll manage it in the future. That will also be an important strategic asset for us: that we have the ability to operate in so many markets and comply with so many jurisdictional regulations.