Better Collective’s revenue for 2023 was 21% higher than the year before, on top the growth of 52% the year prior. The company’s 2022 forecast of EUR315m to EUR325m was exceeded. The recurring revenue was EUR189m. This is a 47% increase.
Better Collective’s EBITDA (before special items) also increased by 31%, to EUR111m. This is again at the upper end of their EUR105m-EUR115m target. EBITDA was at 34%. This is in line with the 30%-40% target set by Better Collective for its report of 2022.
Jesper Sogaard is the founder and CEO of Better Collective. He said, “In 2023 a team effort from across the Better Collective group ensured a successful year, marked by profitable expansion, while we continued our strategic investments in order to lay the groundwork for the future.”
The year 2023 is a standout as the one where we have made major progress in our quest to become the world’s leading digital sports media company.
Q4 of 2023 For Better Collective
Better Collective achieved its revenue goal of 2023 by accumulating EUR85m during the Q4 period. In Q4, the group’s revenue recurring was up 15% at EUR47m. The company said this meant “higher-quality revenue”.
The group revenue in Q4 2018 was EUR1m lower than the revenue generated by Q4 2022. Organic revenue growth for Q4 2019 is -7.7%.
EBITDA before Special Items was EUR30m in Q4, down by 16% from 2022. However, EBITDA Margin stood at 35% and finished at the upper end of the range for 2023. Better Collective attributed the drop in EBITDA to the transition from revenue sharing to cost-sharing in the US.
In January, the group saw its revenue drop 27% to EUR27m. Better Collective attributed this to the comparisons made with its launch of sports wagering in Ohio in Ohio in January 2018. This was Better Collective’s best-ever month.
Better Collective has announced that it won’t report trading data for the first quarter of the next quarter due to the large fluctuations within certain quarters, such as the Q4 of 2023.
Better Collective reported a 17% drop in new customers for the fourth quarter, with 483,000. The group blamed the 300.000 NDCs during the Fifa World Cup 2022 for this decline. From the 483,000 sent, 115,000 went to the US. Better Collective has sent an unprecedented 1.9 millions NDC in 2023. This is a 14% increase.
Cash flow before special items in Q4 of 2022 was EUR38m. This is an increase of EUR17m over the previous figure, EUR21m. Better Collective had EUR122m of capital reserves at the end of 2023. This was made up of EUR43m of cash, EUR7m of other current assets, and EUR72m of unused credit lines.
Better Collective acquisitions for FY2023
Better Collective has acquired Playmaker Capital in a deal worth EUR176m, the second-largest ever for the company. This deal is expected to strengthen the company’s position in North America and give them “market leadership” throughout South America.
After the Playmaker Capital transaction, Better Collective raised its targets for 2023-2027, increasing its EBITDA before special items from 30%-40% to 35%-40%.
The revenue compound annual growth (CAGR), and the net debt-to-EBITDA target remained unchanged at +20%, and respectively below 3x.
BLS Capital Fundsmaeglerselskab a/s was also announced as the new majority shareholder following the end of Q4. They hold 6.7% of voting rights. Also, the group has been listed on Nasdaq Stockholm as well as Nasdaq Copenhagen.
2024 Targets
Better Collective has increased its financial goals for 2024, targeting EUR390m to EUR420m. This would represent a growth rate of between 19% and 29%.
Better Collective also hopes to reduce the net debt ratio to EBITDA to 3x. It also aims to grow its EBITDA by 13%-22% and generate EUR125m to EUR135m.
Better Collective has accounted for an impact of 11 months from the Playmaker Capital deal, but it expects flat revenues and earnings in 2024. It believes that the deal will increase in value over time.
