Q&A: Super Group management team on FY23 performance and US plans

CEO Neal Menashe, COO Richard Hasson and CFO Alinda Van Wyk lift the lid on the strategy for 2024 after revenue breaks €1bn barrier for full-year 2023
The post Q&A: Super Group management team on FY23 performance and US plans first appeared on EGR Intel.  

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Dialling in from Super Group’s London office, the New York-listed firm’s top team are fresh off the back of the company’s Q4 results being released, which included record performance for the final three months of the year. On the table, CEO Neal Menashe, COO Richard Hasson and CFO Alinda Van Wyk are gathered to give their insights over the past 12 months.

Revenue for Q4 leapt to €359.9m, taking full-year 2023 revenue to €1.4bn in doing so. Strong growth in Africa and online casino, with the vertical accounting for 85% of group revenue in Q4, were championed by the business. Monthly active customers also shot up, increasing 38% to 4.7 million.

However, operational EBITDA dipped, with Super Group pointing to €17.8m in EBITDA losses with US operations as a core reason. The losses from the US has led to the business confirming it will assess its approach stateside over the coming months.

Here, the trio sit down with EGR to talk through the recent financial performance, core markets, how the US could shape up and how 2024 should be a bumper year for the Betway and Spin parent company.

EGR: The end result for Q4 in terms of record revenue must be positive given the difficulties the industry faced with sports results in October?

Neal Menashe (NM): October was mad if you think about it. I’m still getting my head around it. I’ve never seen anything like it.

Alinda Van Wyk (AVW): It was also a positive thing because it made us think about how to protect the business. If we have these outlier events, it’s about how we recover. We were in a good position in November and even stronger in December. You need to build a business that can withstand these ebbs and flows.

EGR: Given there was such a strong swing to online casino (85% of group revenue), is that purely as an offset to sports betting downturn, or is there any core growth drivers for that vertical?

NM: I think it was a bit of both. There was some crossover from sports to casino but also across our geographies, the little things add up. One difficulty with casino is the promotion abuse, so you have to tweak these things continuously.

I think the model was right, I think we still under-index in some casino, especially in Africa, where we have just launched JackpotCity. Things take longer than expected but when you get there it has an effect.

EGR: You’ve just mentioned Africa, and with the region taking up 33% of group revenue and seeing growth in the quarter, can you shed some light on operations there?

NM: The volume of customers is good, and they love the product. They love the crash games and sports betting, so it is about tweaking the ecosystem.

There are some countries in Africa we don’t do so well in. They are starting to make money but not at volume. It’s the same across Europe, we could do a bit better in the UK and it is a case of sorting things out one-by-one.

EGR: Q4 also saw Super Group pull out of India due to concerns over the GST tax hike. Has that had any material impact?

NM: It is hard because we were generating good volumes in India but at least it’s no longer a source of stress. The option is there because it is not dead forever.  But we are looking at over 10% revenue growth next year, but if you put India back in that growth could be closer to 20%.

EGR: Another market that is facing headwinds is the UK. What was your reaction to the online slots stake limit announcement? And do you also share concerns on black-market leakage as a result?

NM: We haven’t had big customer values in the UK for some time so we should be fine from an impact perspective. We thought this was coming a while ago so have prepared accordingly.

 [The black market] is massive. It’s the single biggest issue in the industry. The more [regulators] police [licensed operators], the more the people they don’t police can do what they like. There is no tax. We must solve this together, as an industry.

EGR: Looking at the US, this is the first time you’ve officially communicated you are looking at the strategy there. What can we expect?

Richard Hasson (RH): We’ve been thinking it through for a while. We had a $57m EBITDA loss last year. If we were talking about a $5 to $15m loss, then it would be a different conversation. It’s still early days and we haven’t turned on the serious marketing taps across the US yet. It makes sense to step back and ask if this is the best use of funds. There are going to be a range of options for us to look at and we’ll make a call, hopefully, relatively quickly.

This is a re-evaluation. ‘Strategic review’ is a bit too much for where we are right now, but the public want to hear that we’re not going to be spending $70m and not have much to show for it.

EGR: One option that has been mooted could be a focus on igaming-only states. Given slow space of legislation on the vertical, what are your thoughts on that approach?

RH: I think what’s different between sports and casino is that you can build a business in one or two states with igaming.

That is different to what big brands spend nationally on the sports betting side. That is one of the options. We’re in two gaming states in New Jersey and Pennsylvania, plus another seven states where we operate sports [betting]. Maybe it is a combination of those two plus a smaller number than seven or maybe it is just the two. A lot of our current revenue comes from gaming, and we are assessing those separately to the sports betting side of things.

EGR: The other angle could be a M&A push. Would this be with a view of divesting your US arm or perhaps acquiring a business to give a boost?

RH: If we were to go with either one of those it would probably be closer to the latter. Maybe there’s another option of combining footprints and then optimising it depending on who the potential partner is, but there’s nothing firm on that front at the moment.

EGR: You’ve set some healthy 2024 targets, including full-year revenue of €1.55bn and EBITDA above €280m . What is the confidence in hitting those for both revenue and EBITDA?

AVW: Bringing the customer in is priority number one but keeping them and getting them to come back regularly is incredibly important. The marketing budget will remain strong, and we will monitor it through the year. If that works, we feel comfortable with the €1.55bn revenue target. There is stronger growth than the 10% in some of our markets. The only things that are really out of our control are the margin and currency movements.

The post Q&A: Super Group management team on FY23 performance and US plans first appeared on EGR Intel.

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