Greetings and welcome to the Super Group Full Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Lisa Kampf, Head of Investor Relations for Super Group. Thank you. You may begin.

Good morning, everyone. I am Lisa Kampf and I am delighted to have recently joined Super Group as the Head of Investor Relations. I am based in New York and I look forward to engaging with many of you virtually and in person in the coming days. Joining me today to discuss Super Group’s results are Neal Menashe, Chief Executive Officer; Richard Hasson, President and Chief Operating Officer and Alinda Van Wyk, Chief Financial Officer. Also with us today during the Q&A session is Spencer McNally, Group Head of Data and Analytics. By now, everyone should have access to the company’s full year earnings press release issued earlier this morning. The press release is available on the Investor Relations page of Super Group’s website at investors.sghc.com. During this call and in our earnings press release, we will be making or have made comments of a forward-looking nature. These forward-looking statements includes statements related to Super Group’s anticipated financial performance and operating results, market opportunity and business strategy and plans. These statements are neither promises nor guarantees and are based on management’s current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. The company assumes no obligation to update these statements after today’s call except as required by law. Please refer to today’s press release and the company’s filings with the SEC including the Risk Factors section in the company’s report on Form 20-F filed on February 2, 2022 and in the annual report on Form 20-F for the year ended December 31, 2021 to be filed with the SEC later this month for the detailed discussion of the risk that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Additionally, on today’s call, we may refer to certain non-GAAP financial measures. These financial measures are in addition to and not a substitute for measures of financial performance prepared in accordance with GAAP. The reconciliation of historical non-GAAP financial measures to the most comparable GAAP figures are included in the press release issued earlier today and available on the Investor Relations page of Super Group’s website. As a result of uncertainty regarding and the potential variability of reconciling items, we have not reconciled our expectations as to adjusted EBITDA. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these factors could be material to our results computed in accordance to GAAP. Also note that we have posted a supplemental presentation to the Investor Relations section of our company website along with the earnings release, the link to this webcast and filings with the SEC. And now I would like to turn the call over to Neal.

Thanks, Lisa. It’s great to have you on board. Good morning, everyone and thank you for joining us today on our first earnings call as a public company. I am Neal Menashe and I’ve been with the business in various leadership positions for over two decades and have been the Chief Executive Officer of Super Group since it was incorporated as our Group Holding Company in 2020. As you know, Super Group’s stock began trading under the ticker SGHC on the New York Stock Exchange in January 2022. We are excited and humbled to have this amazing opportunity and look forward to this new chapter. I would like to thank our existing investors and our new shareholders as we embark on this very exciting journey. Most importantly, I want to thank our team at Super Group for their relentless dedication and commitment through such a challenging environment over the last two years and also for their fantastic effort that have contributed to Super Group becoming a publicly traded company. Our team truly understands the core mission of delivering, first-class safe and responsible gaming entertainments to our customers. We are excited to communicate with you on a quarterly basis as we continue to discuss our current business initiatives and developments towards our long-term goal. In our press release issued earlier today, Super Group announced tremendous results across all of our key financial metrics exceeding our outlook on both net gaming revenue and adjusted EBITDA. Net gaming revenue or NGR at a constant currency was $1.53 billion for 2021, exceeding our forecast of $1.5 billion. Adjusted EBITDA at constant currency was $368 million, better than our forecast of $350 million. Using actual exchange rates during 2021, this translates to $1.48 billion of NGR and $358 million of adjusted EBITDA. Given that this…

Thank you, Neal. It is great to be on our first earnings call as a public company and I first want to thank all our partners, shareholders, employees and investors for joining us on this journey. 2021 was a great year for Super Group during which we continued to execute on our global strategy, both in existing and new markets. In 2021, Betway and Spin launched sub-licenses in nine new markets around the world. Betway launched in France, Tanzania and Germany. Spin, in Mexico and the Betway brand was launched by our soon to be acquired partner DGC in Colorado, Indiana, Iowa, Pennsylvania, and New Jersey. As we’ve previously discussed in some detail, those US markets are not yet using the Betway global technology and we are of course aiming to change that in the not too distant future. But we are happy to say that in 2022, DGC has recently gone live in Arizona on the Betway global technology platform and that launch is also notable as DGC’s first table gaming deal. We are fortunate at Super Group to be operating in a large and growing market and we still see a lot of headroom. Globally, the OSP and gaming market is expected to exceed $120 billion by 2025. Our gross gaming revenue or GGR for 2021 was around $1.8 billion, which means we have lots of opportunity to grow both in the U.S. and elsewhere. Decisive market launches already mentioned, we are obviously also looking at other commercial opportunities for growth. We’ve already given a lot of detail about the planned DGC acquisition and that’s still on track for closing in the latter part of H2. Canada is currently our biggest market and obviously the regulatory environment there is key. Currently, only Ontario is in the process of…

Thank you, Richard. I'm especially delighted to present you with Super Group's financial results on our first earnings call because 2021 was a good year for us. Continuing our strong growth in previous years with excellent year-on-year increases in all the headline key metrics, including net gross revenue, revenue, adjusted EBITDA, and the others. Despite industry headwinds in certain quarters and some markets with regulatory challenges, we were able to achieve our key financial goals. Before I get into the details, I want to highlight that we are reporting in Europe and not U.S. dollars. We've made a decision to do so because currently, we do not have any meaningful part of our business trading in dollars, at least not until we acquired DGC sometimes in the latter half of this year. So reporting in U.S. dollars really just introduces unnecessary currency fluctuations into our results and in particular it makes prior year comparisons much more difficult. The numbers we are presenting are pro forma consolidated numbers as a sum total of all our Groups irrespective of the timing of the company's reorganization, which occurred during both 2020 and 2021. The numbers presented are adjusted EBITDA, which is the EBITDA numbers adjusted for transaction expenses relating to the listing, impairment of goodwill and deduction of some non-recurring expenses. I will now turn to our financial results. Net gaming revenue for the full year increased by 29% year-on-year to €1.26 billion, which reflects good growth in markets categorized as business as usual and where we are therefore, able to appropriately offer and market our products in 2021 as we did in 2020 and before. For markets where that was not the case, including some which closed during the year, such as Netherlands or in Germany, where regulations cited significantly, we estimate…

Thank you, Alinda. Super Group has had an extraordinary year. Everybody listening to this call knows how much time, bandwidth and resources the process of becoming a public company can be. The listing process onto the New York Stock Exchange took up all of 2021 with most of our senior executives and many members of our operational management. And despite that extraordinary focus our team delivered record levels of new and returning customers, record revenues and record profits with strong growth in all of these metrics. With the listing and 2021 behind us, we're looking forward to this year and beyond as we continue to enter new markets and grow existing ones with our Betway and Spin brands. We're confident that we can drive this business onwards into the online gaming behemoth that we know it will become and we hope that all of you are excited for the future as we are. With that, we open the call to questions. Operator?

Thank you. [Operator instructions] Our first question comes from the line of Stephen Grambling with Goldman Sachs. Please proceed with your question.

Hey. Thanks for taking the question. I guess maybe the first one, just on the regulatory changes in Canada, it seems like folks have started to launch there, curious how that progression has compared to your own expectations and how you're thinking about that market.

Hi, Stephen. Richard here. So we're currently going through the process as we mentioned. All active conversations with the Ontario regulator. Very comfortable with where we are in the process, very comfortable with the timing and confident in completing that application process with the regulator. And for now, as we mentioned, we continue operating in Ontario with the knowledge of the regulator.

And I guess, from a competitive standpoint, has it been surprising as you've seen any kind of changes in advertising, promotions, et cetera, as some of the peers have started to ramp up there?

Yes, I think it's still relatively early days. Obviously, only earlier this month. And there are obviously new operators in the market, but I think it's too early to make a call on that.

And then, maybe a question on guidance. Recognizing that you reiterated the guidance for the year. Curious, I mean, it's been a while, or I should say that there's been a number of external events that have happened over the past couple of months. So I'm wondering if you could just walk through any kind of big puts and takes as you see it that are maybe offsetting each other as we think about the guidance? And then, any color you can provide on kind of the cadence of the year, so that we can make sure that we're not offside in any given period. Thanks.

Hi. Alinda here. Yes. As previously stated and noted in the call, we still feel very comfortable that our guidance, as I said, in the previous presentations is still relevant and within our reach. We have, however, just adjusted for the time being back to Europe as the U.S. dollar conversion obviously creates expectations that we can't control due to the fluctuations. We have, therefore, just looking through the year, we have adjusted our reforecast according to regulatory happenings in for example, Netherlands and Germany to adjust for that and the expectation of Ontario, but we feel comfortable that we're on track of what we've previously provided.

Great. Thank you so much.

Thank you. Our next question comes from the line of Jed Kelly with Oppenheimer and Company. Please proceed with your question.

Hey. Great. Thanks for taking my questions. Just going back to Canada, can you discuss your Canadian iGaming customer? Like, do they have a lot of overlap with the sports betters? Or do you think that the amount of the new sports betting companies coming in are not real? Your – I guess, your iGaming customers, are they mostly just iGaming – or do they bet sports as well? Just trying to get a sense of your iGaming customer profile.

Okay, I'll take that. It's Neal. Jed, so generally, we've seen across the world and we always see and I talk about this a lot, is that the specific iGaming customer casinos compared to the sports is very differently. A person who plays a Betway Sportsbook, who then goes in place in the casino that Betway offers is a fundamentally different customer who plays on our Spin brand, they are not the same. And that's why we have both of them in our offering. So when you basically look at our business, you've got Betway and Spin and together, they make about 50%, 50-50 the revenue or Betway slightly more. But overall, the casino revenue comes in over 70%, but it's different customers in Betway as they are in Spin. And that's why we've got the dual offering wherever we can across the globe and it's very important, they're not the same at all.

Got it. And would you say your Canada iGaming customer or I guess, your Canadian customers, is this – is that spread out relative to the population of each provinces like Ontario certain percentage versus British Columbia?

It doesn't actually fun enough doesn't go according to the population. So, it's an even is less than the population. So that's why with Canada regulating by province is we've got province-by-province. So that -this is obviously the first province of Ontario to regulate.

Got it. And then just, I guess, back on guidance. I guess you had report – you had your 1Q numbers. Could you give us a sense on how we should expect quarterly revenue in the trend? Should it be a similar seasonality to last year?

Yes. I mean, generally, I mean, I'll start and Alinda can then add. But generally, as those seasonality, but remember, casino is very different to sports. Sports you can have a bad hold in one month because of a sports event and different countries will have different holds. So for us, yes, it's quarter-by-quarter, but it's more to look at the half year revenues, et cetera, as you see it because, for example, last year, in October was a terrible month, but in November and December, they’ve obviously started to claw back. It just that happened that was all in the same quarter, where if you had exceptional bad hold in the one quarter, it's an enroll into the next quarter.

And now you've got –

COVID obviously from two years ago where you had sports restrictions, et cetera, then obviously that we've now ramped out of that. So that most all sports events are now open as usual.

And then just one last one from me, when you look at the World Cup this year, how much is that a benefit to your 2022 outlook?

The World Cup towards the latter end of the year and so, from our point of view, yes, it's in there. But remember, it still slow. So we've got some of it in there. But then we've got lots of other competition definitely all the top. So this business is about all sports events, whether it's the EPL, the NBA, the IPL, Esports, et cetera. So from sports, we try in the range across the globe and in cases one brand of Betway. So we open for every sports across the globe with our customers in all the 25 different jurisdictions that we operate in and growing. And that's key. Obviously, with casino, it's more about the random number generating giving customers into the casino, which is obviously open 25 days, seven days a week.

Thank you.

Thank you. [Operator instructions] Our next question comes from the line of Bernie McTernan with Needham & Company. Please proceed with your question.

Great. Thanks for taking the questions. Just thinking on Canada, I was just wondering if there is anything – I know there's a lot to talk about competition, but what are you guys doing from a customer retention standpoint to make sure that you can retain your own customers in light of this new competition? Are there any changes in strategy that you're doing now relative to six or 12 months ago?

Hi. It's Spencer, Bernie. Look, I think from a general point of view our belief in our methodology is strong. We take a customer-by-customer view on every single individual using a very, very broad range of metrics across a significant range of timeframes. We're evaluating that data in close to real time. We're responding to that in close to real time. And we are offering the customer in a responsible way and what we think is the appropriate products and at the appropriate values and so on and so forth for them. And we don't think that anything changes just because we now may see more competitors or we may see slightly differing regulations. A lot of the things that are in the regulations the things that we were doing already and again, that only applies to Ontario, where anything is changing. So I don't know that we see the need to change the game plan. It works around the world in regulated jurisdictions everywhere. Ontario is joining that list doesn't change very much from our point of view.

And so I guess the point being that the new competition isn't throwing off your actuarial tables or whatever it may be in terms of what the impact is on your customers?

Look, I'm tempted to tell a joke about insurance companies. That I said, actually is the guy who looks out the back window and tells me which way to go. The truth is that it's a little early to tell whether anything is going to change. And I mean that my favorite saying is that anything about forecast is they're going to be wrong, it's just a question of how wrong they are going to be. But we are comfortable that we're not seeing anything at this stage that is particularly scary. We're really not seeing anything at all or scaling alone, particularly. So no, I guess, over there. We don't see the game changes. We've got a strategy that's worked for many years and all the signs that it will continue to work, and we are continuing to refinance and improve it as we go.

And then I'll – this is Neal. I'll just to add in, you've seen in the New York with this huge bonus money and then the tax on bonus money. We've always been very careful with our bonus strategy and we'll continue to do that. And it's not you can bring them in the front door, but if your strategies are all wrong, you can't keep changing the odds of the game by giving free bonuses that the bet costs you more than actually the lifetime value of the customers. So we've had this our whole two decades, and this is no different. We've learned over the last two decades from regulation from one market to another. So Ontario is no different and remember it’s only one province in Canada.

Understood. And then, when you finally do gain regulatory approval in Canada, will there be any blackout period from when you get approval to when you launch where you have to kind of cease operations as a – whether it be a couple of days or whatever it may be, where you would not operate anymore.

No. No. No. Businesses do and you roll in from the dot com into the regulated world, which has happened in other countries.

Understood. Okay and then maybe just lastly, as a follow-up to Stephen's question. Just, any impact on Russia, Ukraine that's implied in the guide or any way to think about the potential impacts?

Okay. So firstly - I'll take that. Firstly, for Ukraine, I hate go out to everyone there. We've got no exposure there. We've had no developers there in Ukraine, no business in Ukraine and funny enough when it comes to Russia, Super Group had basically no business in Russia. So we've had no impacts from that. But obviously, it's a critical situation that on and is still going on.

Great. Well, thanks for taking all the questions. Appreciate it.

Thank you. Our next question comes from the line of Michael Graham with Canaccord Genuity. Please proceed with your question.

Thank you and thanks for all the new information. Congrats on getting all those numbers out. I just had two questions. The first one is maybe talk about the long-term growth – relative growth that you expect to see across the business between online casino and sports betting. Just wondering sort of where you see those growth rates evolving to? And then, I also wanted to just ask about how you're feeling about the balance sheet. It looks like you ended up with just under €300 million on the – of cash on the balance sheet. So just wondering how you're thinking about liquidity and sort of the balance sheet going forward? Thanks.

Thank you, Michael. Alinda here. So the cash on the balance sheet is well noted. It's more than doubled. There is obviously now being looked at certain opportunities for investment purposes going forward, that's under discussion with management. But furthermore, we're also looking at a potential dividend policy, but that is very early days. But we remain a strong cash flow generated business. On your question on long-term guidance, there is so much going on in the world at the moment. As a business, we have decided that we work we're going to internally look really at the numbers half way through the year. As you've noted, will that it took a lot of us to get the first 2021 year-end results out in such a short time, which is new to us for a listed entity. With the guidance, we'll rework it through the course of the half year mark. And then maybe put out something during the fall or the later part of the year on what 2023 will look like. I don't think we project three, four years. We look at some trends, but it's impossible to make that as accurate due to what's happening in the world.

Okay. That's very helpful. Thank you.

Thank you. Our next question comes from the line of Mike Hickey with the Benchmark Company. Please proceed with your question.

Hey, Neal, Richard, Alinda, Lisa. Good morning, guys. Congratulations on all your success. Just a couple questions for me. On Canada, hot topic here just curious if you could break out your revenue and profit contribution from Canada? And then specifically, now that at least Ontario is moving to a regulated market, what is the presumed impact net on your guidance from that region thinking about taxes and marketing expense, everything that's going to sort of change now that you're regulated and not operating in the gray market and I have a follow-up. Thanks.

Hi, Mike. Excuse me. Hi, Mike. Richard here, I'll start with the first question and hand over to you for the second. In terms of the country breakdown, we don't provide that specifically of those details, but I will refer you to the presentation where you will see some similar charts from previous where we have split out the 2021 revenue by geography. And you'll know that the majority of that number made up of the Americas is Canada, of course also in the East, Central and South America and that's also is context that's of the Americas excludes Digital Gaming Corporation because that's not yet part of the Super Group.

Okay. And the question is – yes. Go ahead Alinda.

Yes. Sorry. In your question around the impact on EBITDA, especially around Ontario, two things are happening with our business. I mean we have made notes on operating leverage. The more we grow we understand our business. We are giving efficiencies, especially in our variable costs and that rolls over into story as well. But remember, even though you might have a tax paid, you have much more efficiencies in for example, your cost of processing funds in the country and actually, on average, our marketing become competitive and less expensive. So there is some good returns as well for becoming fully regulated in a jurisdiction because it does bring some other efficiencies and reduction in costs.

And then I'll just add in here. It's Neal, is that remember, this is only one province in Canada. It's not the whole country regulating as well which is quite different to, let's say, Germany and some other markets. So, for us, there's lots of opportunity with them in Canada. And again, we've got Betway and Spin and we've got a lot of opportunity across the globe. So it's the same way we would look at the profit each province in Canada as the new market new existing market, you would look at DGC each state as a market and that's how we look at it across the globe, and it's about being localized in each of these markets and having the product localized being the most efficient it can be in each of these countries across the globe. And that's been our business model and that's over 4,000 people, and we've got teams around countries who teams around continents that then around the countries and in this case, in DGP’s case the state and then Canada obviously is a province of Ontario and then the rest of the dotcom. But this has been our business for the last two decades is following it as markets become regulated.

And maybe that's slightly accurate. In the very short term, it's really hard to call exactly what's going to happen. Our experience in the past is that these markets grow in size once they become regulated and between the operational and cost efficiencies that Alinda referred to and that your overall bottom-line benefits. That's taking a sort of a medium-term onward skew. In the very, very short term, it’s remained to be seen. It's very, very early what's happening. We're feeling quitely confident but it's too early to tell exactly what it can happen in the very short term.

Okay. Thanks. Just to confirm, the Canadian piece of your 2022 guide that's business as usual. I mean, just turn that and do we run the risk here that you when you change that to adapt so now it’s regulated. So it's not the same scenario that when you originally gave guidance. There's a risk that you have to lower numbers in the near term given taxes and marketing and everything else that's part of being a regulated market.

Just to reiterate, we did look after the regulation become imminent, we did readjust the guidance and we still feel comfortable with the adjustment as of effective April 2022, we would reach the target as set out previously.

That we took into account all the taxes in picture are coming into just the province of Ontario.

Yes. The only unknown is exactly how the regulations are going to be interpreted by the regulator, but I think that's going to take a while to play out. And on the face of what you are seeing there, there's nothing particularly unusual. There's not – we've seen other markets regulate with deposit limits explicitly specified by the regulator or very onerous marketing conditions. None of that's happening in Ontario. So on the pace of what the regulations are reading like, we're not seeing a huge change in operating conditions.

Okay. Great. Thanks, guys. Second question for me on the U.S, can you just sort of talk through the playbook there once you finish your acquisition, sort of how you're thinking about the financial impact and the sort of updated thoughts on user acquisition and how you think about bringing in players and sort of overcoming not having a database like some of your peers do?

Hi, Mike. So as Neal said earlier, when we look at any new market data new U.S. states, or a new country, we look at it on an individual market basis and we'll apply the same toolkit as we have to all of the markets around the world to each of these U.S. business. Where we stand today, DGC is live in six states with market access in up to 12. And once DGC becomes part of the Super Group those will be treated as all - every other market within the Super Group is treated. So it will be the power of the Betway brand, the underlying use of data and analytics to understand the customers. And of course, having the localized teams in each and every state in this case that are obsessing about the local detail and understanding the customers on an individual basis in each of these markets. So it's taking what we've learned in the last 20-plus years. It's taking what we've applied to all other markets around the world and in this case, applying it to each of those states as we do to other countries around the world.

Thank you.

Thank you. Our final question comes from the line of Stephen Grambling with Goldman Sachs. Please proceed with your question.

Hey. Thanks for sneaking me back in. One other one on just the guidance and assumptions there. On the branding fee that you get from – I guess it's a combination of Thailand, China, and the U.S. How do we think about the visibility on that and what will drive that year-over-year, and how that's trending? Thank you.

Hi, again, Stephen. So, on the brand fee, that is a fee that we earn for other businesses making use of our brands. Obviously, the strength of our brand globally is obvious. And the brand for itself is not looked in isolation. So it forms part of our thinking around the total amount spent and invested into the brand across the world. So when we look at what's today the portfolio of over 70 partnerships for the Betway brand, we will consider in those conversations in those investment decisions, we will consider what we expect to earn as a brand fee from those partners. So any adjustments in that brand - potential adjustments will be considered in the branding decisions and ultimately, brand, when we look at the brand relative to our revenue, the brand will be a part of the marketing investments, obviously, alongside the other forms of marketing. And in summary, that brand is looked at in conjunction with all other marketing decisions is not looked at in isolation.

I'll just add. It's important to note because we've got this one sports brand, we can have marketing at a brand level that affects this global marketing. But that we don't take all the money on marketing and just spend it on brand, brand in one portion of Betway budget, and that's very important. So the brand fee comes into that but because we've got the global reach, we've got enough volume in all our marketing to be able to have an effect. But it's not just the business is not just built on brand, built on brand is one part, and then you've got all the other marketing plus the localized marketing that goes on and that's very important.

But just to clarify, so that's not on a percentage of GGR generated by those operating partners that's kind of like a year-to-year adjustment that's made based on the earning that you have?

Yes.

Yes.

And so, you generally think of that as being breakeven then or that's an EBITDA contributing segment?

Yes. So, we just take some income from that will help us then help go towards the brand spend we have a across the globe. Just in accounting terms, you have to kind of separate the two when you disclose it.

Got it. Okay. Thank you.

Thank you. Ladies and gentlemen, this concludes our question and answer session and does concludes our call today. We thank you for your interest and participation. You may now disconnect your lines.