Super Group Reports Third Quarter 2022 Financial Results

• Third Quarter 2022 Revenue of €307.8 million
• Profit after tax of €34.9 million for the third quarter of 2022
• Third Quarter 2022 Adjusted EBITDA of €56.1 million
• Cash and cash equivalents was €266.0 million at September 30, 2022
• Management to host conference call today at 8:30 a.m. ET

Super Group (SGHC) Limited (NYSE: SGHC) (“SGHC” or “Super Group”), the parent company of Betway, a leading online sports betting and gaming business, and Spin, the multi-brand online casino, today announced third quarter 2022 financial results for its operating subsidiary, SGHC Limited.

Neal Menashe, CEO of Super Group, commented: “Super Group’s online-only business model and ongoing focus on improved customer experience through enhanced global technology platforms continues to ensure optimal customer engagement and value. Together with effective investment in our brands and efficient allocation of our capital, this provides us with a sound path for long-term growth.”

Alinda van Wyk, CFO of Super Group stated, “Super Group remains financially strong and we continue to optimize our global footprint and operate more efficiently to leverage our scale. We remain focused on investing into technology and marketing, as well as other opportunities that will provide us with long-term growth and profitability.”

Financial Highlights

• Revenue decreased by 2% to €307.8 million for third quarter of 2022 from €312.6 million over the same period in the prior year primarily as a result of a decline in online casino net revenue and brand license fee income, partially offset by an increase in sports betting net revenue.

• Profit after tax for the third quarter of 2022 was €34.9 million compared to a profit of €50.5 million in the same period of the prior year.

• EBITDA, a non-GAAP measure, was €60.9 million in the third quarter of 2022 compared to €75.9 million in the same period for the prior year.

• Adjusted EBITDA, which excludes transaction fees, share listing expense, changes in valuations of warrants and earnout liabilities and associated foreign exchange movements, gains on derivative contracts, recognition of fair value option, bargain purchases and RSU expenses, decreased 26% to €56.1 million compared to €75.9 million in the same period from the prior year.

• Monthly Average Customers for the quarter increased 7% to 2.7 million during the third quarter of 2022 from 2.5 million in the third quarter of 2021, excluding customers of Jumpman Gaming which was acquired on September 1, 2022.

• Cash and cash equivalents was €266.0 million as of September 30, 2022 and €293.8 million as of December 31, 2021. This net reduction in cash for the 9 months to September 30, 2022 is comprised as follows:
  • Inflows from operations amounting to €135.0 million;
  • Offset by outflows from investing activities of €70.5 million mainly attributable to an increase in restricted cash of €69.5 expenditure on tangible and intangible assets of €23.8 million offset by loan settlements of €18.9 million;
  • Cash used in financing activities of €96.2 million primarily due a cash outflows for share repurchases of €222.3 million offset by an inflow or shares issued of €172.1 million; and
  • A gain of €3.9 million as a result of foreign currency fluctuations on foreign cash balances held over this period.

¹Sports betting and online casino revenues are not within the scope of IFRS 15 'Revenue from Contracts with Customers' and are treated as derivatives under IFRS 9 'Financial Instruments'.

² Brand licensing revenues are within the scope of IFRS 15 'Revenue from Contracts with Customers'.

³ Other relates to rebates received from external processors.

Reorganization Timeline

Over the last three years, the business conducted a restructuring by combining existing, stand-alone companies into the newly formed Super Group.

SGHC Limited was formed on July 6, 2020.

The following transactions took place during 2021 and 2022 as part of the reorganization:

• January 11, 2021 - Raging River Trading was deemed to have been acquired.
• April 9, 2021 - Webhost, Partner Media and Buffalo Partners were acquired.
• April 14, 2021 - DigiProc Consolidated was acquired.
• April 16, 2021 – Digiprocessing (Mauritius) was acquired.
• April 19, 2021 - Raichu Investments was acquired.
• September 2, 2021 - SGHC purchased 100% of the outstanding shares of Smart Business Solutions S.A.
• December 1, 2021 - SGHC purchased 100% of the outstanding shares in Haber Investments, and Red Interactive.
• January 27, 2022 - Business combination with SEAC.

Since the reorganization, the following transaction has taken place:

• September 1, 2022 – acquired a majority ownership interest in Jumpman Gaming. 

Non-GAAP Financial Information

This press release includes non-GAAP financial information not presented in accordance with the International Financial Reporting Standards (“IFRS”).

EBITDA and Adjusted EBITDA are non-GAAP company-specific performance measures that Super Group uses to supplement the Company’s results presented in accordance with IFRS. EBITDA is defined as profit before depreciation, amortization, financial income, financial expense and income tax expense/credit. Adjusted EBITDA is defined as EBITDA less gain on derivative contracts and gain on bargain purchase plus transaction costs, share listing expense, fair value adjustments on warrant liabilities and earnout liabilities and associated foreign exchange movements, recognition of fair value of option and the expense for the award of restricted stock units.

Super Group believes that these non-GAAP measures are useful in evaluating the Company’s operating performance as they are similar to measures reported by the Company’s public competitors and are regularly used by securities analysts, institutional investors and other interested parties in analyzing operating performance and prospects.

Management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with IFRS. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by IFRS to be recorded in Super Group’s financial statements. In order to compensate for these limitations, management presents non-GAAP financial measures together with IFRS results. Non-GAAP measures should be considered in addition to results and guidance prepared in accordance with IFRS, but should not be considered a substitute for, or superior to, IFRS results.

Reconciliation tables of the most comparable IFRS financial measure to the non-GAAP financial measures used in this press release are included below. Super Group urges investors to review the reconciliation and not to rely on any single financial measure to evaluate its business. In addition, other companies, including companies in our industry, may calculate similarly named non-GAAP measures differently than we do, which limits their usefulness in comparing our financial results with theirs.

¹ The recognition of the fair value of the option relates to the exercising of the option to acquire Verno Holdings, the ultimate holding company of Jumpman Gaming, on September 1, 2022. The valuation of the business as required in terms of IFRS3 is provisional at the time of this press release and is subject to change once finalized.

Webcast Details

The Company will host a webcast at 8:30 a.m. ET today to discuss the third quarter 2022 financial results. For ease of year-over-year comparison and analysis the Company may discuss pro-forma consolidated results, including Adjusted EBITDA, which pro-forma results are included in the 3Q 2022 Earnings Review presentation posted on Investor Relations section of www.sghc.com.

Participants may access the live webcast and supplemental earnings presentation on the events & presentations page of the Super Group Investor Relations website at: https://investors.sghc.com/events-and-presentations/default.aspx.

About Super Group (SGHC) Limited

Super Group (SGHC) Limited is the holding company for leading global online sports betting and gaming businesses: Betway, a premier online sports betting brand, and Spin, a multi-brand online casino offering. The group is licensed in multiple jurisdictions, with leading positions in key markets throughout Europe, the Americas and Africa. The group’s sports betting and online gaming offerings are underpinned by its scale and leading technology, enabling fast and effective entry into new markets. Its proprietary marketing and data analytics engine empowers it to responsibly provide a unique and personalized customer experience. For more information, visit www.sghc.com.

Forward-Looking Statements

Certain statements made in this press release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995.

These forward-looking statements include, but are not limited to, expectations and timing related to market entries and expansion, projections of market opportunity, growth and profitability expected growth of Super Group’s customer base, expansion into new markets.

These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “pipeline,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) the ability to implement business plans, forecasts and other expectations, and identify and realize additional opportunities; (ii) the ability to maintain the listing of Super Group’s securities on a national securities exchange; (iii) changes in the competitive and regulated industries in which Super Group operates; (iv) variations in operating performance across competitors; (v) changes in laws and regulations affecting Super Group’s business; (vi) Super Group’s inability to meet or exceed its financial projections; (vii) changes in general economic conditions, including as a result of the COVID-19 pandemic; (viii) changes in domestic and foreign business, market, financial, political and legal conditions; (ix) future global, regional or local economic and market conditions affecting the sports betting and gaming industry; (x) changes in existing laws and regulations, or their interpretation or enforcement, or the regulatory climate with respect to the sports betting and gaming industry; (xi) the ability of Super Group’s customers to deposit funds in order to participate in Super Group’s gaming products; (xii) compliance with regulatory requirements in a particular regulated jurisdiction, or Super Group’s ability to successfully obtain a license or permit applied for in a particular regulated jurisdiction, or maintain, renew or expand existing licenses; (xiii) the technological solutions Super Group has in place to block customers in certain jurisdictions, including jurisdictions where Super Group’s business is illegal, or which are sanctioned by countries in which Super Group operates from accessing its offerings; (xiv) Super Group’s ability to restrict and manage betting limits at the individual customer level based on individual customer profiles and risk level to the enterprise; (xv) the ability by Super Group’s key executives, certain employees or other individuals related to the business, including significant shareholders, to obtain the necessary licenses or comply with individual regulatory obligations in certain jurisdictions; (xvi) protection or enforcement of Super Group’s intellectual property rights, the confidentiality of its trade secrets and confidential information, or the costs involved in protecting or enforcing Super Group’s intellectual property rights and confidential information; (xvii) compliance with applicable data protection and privacy laws in Super Group’s collection, storage and use, including sharing and international transfers, of personal data; (xviii) failures, errors, defects or disruptions in Super Group’s information technology and other systems and platforms; (xix) Super Group’s ability to develop new products, services, and solutions, bring them to market in a timely manner, and make enhancements to its platform; (xx) Super Group’s ability to maintain and grow its market share, including its ability to enter new markets and acquire and retain paying customers; (xxi) the success, including win or hold rates, of existing and future online betting and gaming products; (xxii) competition within the broader entertainment industry; (xxiii) Super Group’s reliance on strategic relationships with land based casinos, sports teams, event planners, local licensing partners and advertisers; (xxiv) events or media coverage relating to, or the popularity of, online betting and gaming industry; (xxv) trading, liability management and pricing risk related to Super Group’s participation in the sports betting and gaming industry; (xxvi) accessibility to the services of banks, credit card issuers and payment processing services providers due to the nature of Super Group’s business; (xxvii) the regulatory approvals related to proposed acquisitions and the integration of the acquired businesses; and (xxviii) other risks and uncertainties indicated from time to time for Super Group including those under the heading “Risk Factors” in our Annual Report on Form 20-F filed with the SEC on April 20, 2022, and in Super Group’s other filings with the SEC. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in other documents filed or that may be filed by Super Group from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Super Group assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Super Group does not give any assurance that it will achieve its expectations.

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