Kindred to take “immediate actions to improve profitability”
The Swedish online gambling operator says it will take action after disappointing 2022 results.
Sweden.- Kindred Group says it will take “immediate actions to improve profitability” after 2022 revenue fell by 15 per cent year on year to £1bn. Despite a strong Q4, with revenue up 20 per cent at £305.5m, the operator’s results fell short of expectations, particularly in World Cup betting.
Underlying EBITDA for 2022 was £129.2m, down of 61 per cent. Profit after tax was £120.1m. It now intends to focus on reducing losses in North America, re-prioritising investment projects and optimising group operating expenses to boost scalability.
The operator did see positive news in 2022, most notably Unibet‘s reentry into the Dutch market. Its exit upon the launch of the Netherlands’ regulated online gaming market in October 2021 significantly harmed revenue. The return to the Dutch market saw Kindred’s total number of active customers rise by 25 per cent to 1,827,881 in Q4.
However, Kindred continues to be bogged down in a legal battle in Norway, where it has agreed to stop targeting local players to avoid fines from the country’s regulator.
CEO Henrik Tjärnström said in his statement on the annual results: “Despite growth in our core markets and continued encouraging performance in the Netherlands, following re-entry to the market in July 2022, the fourth quarter fell significantly short of our ambitious expectations.
“Several core markets continued to perform well during the quarter, with solid activity in France, Sweden, the UK and the Netherlands contributing to total revenue of £305.5m, an increase of 25 per cent compared to the same period last year.
“The Netherlands continued to exceed our expectations with daily average gross winnings revenue of £0.5m, and we remain firmly on track to being the number one operator in 2023.”
He added: “While most core markets have performed well, Belgium has been impacted by regulatory changes with increased requirements on customer duty of care and responsible gambling limitations affecting revenue negatively.
“In Norway changes made to our offering also had a negative impact. In both markets, this follows the pattern seen previously as a result of regulatory changes and we are working hard to mitigate the impact, with the expectation that revenues will stabilise in the coming quarters and return to growth over time.
“The non-satisfactory performance during the fourth quarter, attributed to these one-off items as well as the headwinds in Belgium and Norway, have led to actions being taken to further improve profitability.”
Kindred has set a target of £200m in EBITDA and revenue of £1.6bn for 2023.
Kindred renews focus on “Journey to Zero”
Meanwhile, Kindred Group has announced that it is inching towards achieving its sustainability goals of making 0 per cent revenue from harmful gambling. It reported that 3.3 per cent of revenue came from harmful gambling in Q4 2022, down from 3.8% in Q3 and equal to Q1 and Q2.
However, that still leaves some distance for it to meet its target of 0 per cent this year. The operator is working with several advisors on the objective, with EPIC Risk Management joining BetKnowMore and DealMeOut on its Journey to Zero panel. The panel will host focus groups and workshops and assess Kindred’s Player Safety – Early Detection system to identify areas for improvement.
