The UK and Germany, two powerhouses of nations with a lot of gaming history, good economical foundations, but we don't consider them investable as a company, so we'll leave them for someone else to invest in.
Welcome back to iGaming Daily supported by OptiMove, the creator of positionless marketing and the number one player engagement solution for sports betting and iGaming operators. I'm Charlie Horner, and today I'm joined by SBC Media's editor-at-large Ted Menmuir. And we're also joined by Betsson CEO Pontus Lindwall as the international operator reports its Q1 results. Pontus, thanks ever so much for joining us. How are you doing?
Yeah, very well, thank you. Very well. Just before we dive into things, I'll just have a little rundown of some numbers. So, group revenue €285.3 million, a decrease of 3%. Casino revenue decreased 4%, sports book revenue increased 1% at a margin of 8.4% and EBITDA at €50 million. I guess the first question really is how do you reflect on Betsson's overall performance in Q1 against your initial expectations?
Yeah, I think it's good. We saw a drop down during the second half of last year in the B2B business. It stabilized by the end of the fourth quarter last year. And we see strong growth in our B2C operations, especially in our core markets where we put most of our efforts. So, in general, quite good, I would say.
And so, I guess it's a bit of a margin squeeze impacting EBITDA and profit. I guess there's lots of factors that go into that mainly sort of 2026 as a whole just providing a tough backdrop. But also I guess it must be noted that B2C revenue is strong and growing well. How do you factor all that into your reporting this quarter?
Yeah, it's a factor what we indicate that the B2C business is performing strongly, but they come with a totally different cost structure. We pay a lot of gaming taxes. We invest in marketing. So whereas the B2B business we don't have those costs and obviously what we saw last year a little bit of a drop down in the B2B, it has an impact on the profitability of the company. But most important right now is that we have seen the B2B business stabilize and from here on we're going to do our best to make it grow again and B2C already on a good growth path. So yeah, that's where we stand.
Fantastic. And Ted, let me bring you into the conversation. Is there anything you'd like to put to Pontus?
Yeah, just look beyond kind of financial metrics like your bets and stuff especially at the B2C level your KPIs remain strong and stable. Product and cost some of the level and how important is that narrative to tell to market and to tell to the investors like yes, this is a transition, but KPIs are strong.
That's a very good question in the way that sometimes you may be a bit scared as an investor when you see profitability going down, but then again, you need to take temperature of the company and see is this healthy or not. Then when you see all these positive KPIs on the B2C side, then you realize that this would not be able to we wouldn't be able to achieve this if our product was not good, if we were making operational mistakes. So I think it's a very important statement to the investors that we are doing so well on the B2C side.
And in terms of that kind of margin squeeze at the moment, I mean, how are you countering that? Is this just a case of revising marketing or specific units? I mean, what's come to the kind of the forefront of these cost control measures?
Yeah, there is obviously certain things you could do, but we have to remember here that what we see is a little bit of a drop down by one of our B2B customers, and we don't believe that we should try to fix that by taking down marketing for our core markets on the B2C side. That would show short term save us some money and have an impact on the profitability, but we're not here for only for this quarter, which we're in now, the second quarter. We're here for the long term, and we want to continue to build the company. So we believe that the strategy that we have is serving us well, and we're going to continue on that path with the existing strategy, and that means that we will continue to invest in some B2C markets, and we will continue to grow the company. Nothing of that has changed. If the company had a lot of extra costs that we didn't need, then of course this would be a perfect time to address that, but I think we are configured in quite a lean way, so we're going to crank on.
Fantastic. I just wanted to reflect on some specific regions if we may. Latin America is of course a core part of Betsson's strategy now and revenue was 25% up that is and I think now accounts for about a third of group revenue. What are the big opportunities that you see across Latin America and I guess what has underpinned your winning strategy in that region?
Yeah, the Latin American market is a little bit let's say behind Europe on the timeline of develop. That means that it's not as well penetrated yet by online gaming. So we believe that there's a strong structural growth in many of these markets going forward. Obviously we have good positions in a few of these markets. I think we're definitely number one in Argentina. We're well positioned in other markets as well. Good brand recognition. Technology which has been proven there for quite some time. So we are definitely optimistic about the future in that region.
Mhm. And in Western Europe we talked about some of the macroeconomic headwinds that the industry faces and I would think that Western Europe is the poster boy of some of those challenges. But you've managed double-digit growth in Western Europe. I think Italy was a core part of that. Could you tell us about how you've sort of been impacted by some of those evolving regulations in Western Europe and how you've managed to grow in the region regardless of that?
Yeah, again a very good question because Western Europe as a whole is actually a sad story in many ways where we have seen regulatory development which definitely is working against the ambitions of the regulators to create a regulated and taxable gaming industry. And we at Betsson being quite a big company, we are standing more or less outside many of the largest markets in Europe such as UK and Germany, two powerhouses of nations with a lot of gaming history, good economical foundations but we don't consider them investable as a company. So we leave them for someone else to invest in. Whereas in Italy, it's a different situation and some other markets as well. We see a better climate and there we can invest and keep on growing but Europe as a whole is very saturated and it's not a similar situation in most countries there.
As a CEO and looking at the overall kind of industry condition, I mean do you have any kind of timeline or confidence that you can return to having Betsson at all levels of market growth across its geographies or is that too far of a reach in 2026?
Well, that's something that we obviously is hoping for and in many ways working for as well by trying to communicate to regulators and educate but you can see with all the efforts that went into the UK as an example to and still it went in the totally different direction, opposite direction. It's very sad.
Mhm. And just one more region I wanted to ask you about Pontus was Central and Eastern Europe. Because that's perhaps the flip side of the story to LatAm and Western Europe. What headwinds are you seeing in that region?
Actually, we are doing quite well in that region. Most of our if not all our B2C markets in that region are performing well, such as Greece and others. Then we had one B2B partner who has the bulk of their revenues in that territory that kind of has not been as successful and that has an impact. But overall, we are quite optimistic for that region as such as well.
