Fortuna accepted bets of EUR 251.7 million up 26.3% in the first quarter of 2016
AMSTERDAM/Warsaw/Prague – Fortuna Entertainment Group, the leading Central European fixed-odds betting operator, has announced its unaudited consolidated results for the first quarter of 2016.
· Total Amounts Staked in Q1 2016 increased by 26.3% to EUR 251.7 million
· Total Gross Win in Q1 2016 up by 7.6% to EUR 38.1 million
· On-line Sports Betting Gross Win in Q1 2016 increased by 19.7% to EUR 23.8 million
“In the first quarter of 2016, the Company continued to deliver strong growth in Amounts Staked and we accepted total bets in the amount of EUR 251.7 million, which is 26.3% more than last year. The Amounts Staked grew double digits in all our key markets, primarily driven by the on-line betting growth and in particular mobile sports betting while retail grew low single digit. Our operating profitability measured by EBITDA was impacted by the increase in the betting tax rate in the Czech Republic, unfavourable margin development especially in February and by planned increase of operating costs to support future growth opportunities of the company,” said Per Widerstrom, CEO of Fortuna Entertainment Group.
The Group’s Amounts Staked for the first quarter of 2016 was EUR 251.7 million, a strong 26.3% y-o-y growth. This increase was driven primarily by the double-digit growth in on-line betting in all the countries where Fortuna operates while Retail grew low single digit.
In the first quarter of 2016,the total Gross Win reached EUR 38.1 million, an increase of 7.6% compared to the first quarter of 2015. The Gross Win in the first quarter 2016 compared to the same period last year was impacted by the abolishment of the handling fee on on-line betting in Slovakia at the end of February 2015, which apart from the absence of the fee led to the accelerated migration from Retail to Online which implies further Gross Win margin pressure.
The Gross Win from sports betting was EUR 35.9 million, a 7.8% increase y-o-y. Of this figure, the Gross Win from on-line betting in the first quarter of 2016 increased to EUR 23.8 million, a substantial increase of 19.7% over the same period of 2015.
In the first quarter of 2016, total EBITDA reached EUR 4.6 million, a 37.1% decrease over the same period of last year. The EBITDA decrease resulted mainly from the higher betting tax rate in the Czech Republic which impacted both the sports betting and lottery, the abolishment of the on-line handling fee in Slovakia at the end of February 2015, unfavourable margin development especially in February and by the anticipated increase in operating costs of the Group.
Selected financial indicators – FEG total
|(EUR million)||Q1 2016||% y-o-y|
Guidance for the rest of 2016
The Company confirms its guidance for 2016 and further anticipates:
In 2016, the organic growth will continue to be primarily driven by on-line betting and should be temporarily boosted by the UEFA EURO 2016 hosted by France. The Company anticipates that the total Amounts Staked could grow up to EUR 1,010 million and EBITDA in 2016 could decline in a range between 10% to 15% due to the increase in the betting tax in the Czech Republic, Online Handling Fee abolishment in Slovakia and continuing investments in the operational excellence and building scalability. The investments into new sports betting & gaming platform should further drive the CAPEX spending in 2016 and the capital expenditures in 2016 are expected to reach between EUR 11 - 13 million.
In 2016, Fortuna as a multi-channel regulated multi-channel sports betting company shall continue to provide its customers with extensive range of products and first class service wherever and whenever they want to have a bet. Fortuna will further focus on investments into core competencies and building competitive advantage and scalability for future value creation. The strategic focus will be given to Operational Excellence, Technology Foundation and People capability and capacity build up.
In the Czech Republic, a change of the taxation of sports betting and lottery business came into force on January 1st 2016 which implies an increase of the Gross Win tax on both the sports betting and lottery from 20% to 23%. The Company estimates that the change in taxation will have a negative impact on the full year EBITDA of approximately EUR 2 million.
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