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  • Q&A: Pontus Lindwall on currency risks and Betsson’s M&A success
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NEXT.io spoke with Betsson AB CEO Pontus Lindwall to delve deeper into the group’s performance in Q1 2024, which led to a significant increase of over 13% in Betsson’s share price.

Last week, Betsson reported double-digit year-on-year revenue and EBITDA growth for the first three months of 2024, while operating income increased 35% to a new record level of €57.9m.

NEXT: Betsson’s Q1 2024 results were robust, but you noted being affected by foreign exchange headwinds. What measures are you implementing to shield against the volatility of foreign exchange rates, and do you believe this risk is getting greater as you continue to diversify the business?

PL: Actually, we don’t employ hedging strategies to protect against currency risks. Our revenue is primarily in euros, which means there’s no real currency risk.

The recent currency devaluation in Argentina was a first-time experience for us, but we don’t see it as a significant problem going forward.

Of course, it’s an unpleasant experience, and we will always be exposed to some currency risks. However, we are active in 23 markets and have a diverse revenue stream, which helps mitigate these risks effectively.

NEXT: During the recent earnings call, you mentioned that the M&A landscape appears intriguing. Could you elaborate on why you find it so compelling right now?

PL: M&A remains a pivotal aspect of our growth strategy. Judging by our robust balance sheet and healthy cash reserves, it’s evident that we are in a good position to pursue M&A opportunities.

We are essentially debt-free and actively exploring various avenues for growth. While I can’t delve into specifics, our focus primarily lies on B2C acquisitions. However, we’re open to considering B2B assets if they align with our strategic objectives.

NEXT: How would you describe Betsson’s M&A success rate?

PL: If I look at the number of M&A proposals that come in my mailbox, I have to say that only a fraction materialise into successful deals. This is a natural part of the process, given the need for due diligence and alignment with our goals.

However, once we engage in discussion and decide to really go for it, we have quite a good success rate because we are experienced. We don’t need to ask the bank for money, we have processes in place and we have a high hit rate.

NEXT: Several companies have scaled back their M&A strategies recently, with some admitting they may have grown overly large and complex. Is this a concern you’re mindful of currently?

PL: This is something we do discuss, but I don’t perceive the size of our company as a significant issue. Obviously some companies in this industry are much larger than we are.

However, rapid acquisitions without proper integration or consideration of the acquired assets can indeed lead to challenges. You cannot just buy and buy. Fortunately, we have processes in place to handle these aspects effectively, mitigating such risks.

NEXT: Earlier this month, the Dutch house of representatives voted in favour of a prohibition of “high-risk” games such as online slots. Do you believe there’s a genuine possibility of this measure becoming law?

PL: No, I don’t think so. The decision to regulate online gambling in the Netherlands was made after careful analysis of various factors, and those circumstances haven’t changed.

The country still aims to safeguard players, generate tax revenue, and maintain control over the gaming market.

It’s unlikely that the government would reverse course and open the market to unlicensed operators from around the world, thereby jeopardising player protection and forfeiting control.

We haven’t seen that happen in any country before, and I have a very hard time to see that it will happen in the Netherlands.

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