B2B gaming platform technology provider Bragg Gaming Group
(TSX:BRAG, OTC: BRGGF) ("
Bragg" or the
"
Company") today released its annual financial
results for the three months and year ended Dec 31, 2020.
“We’ve made extraordinary progress in 2020 and
are very pleased with the substantial revenue and EBITDA growth
that we’ve delivered,” said Adam Arviv, Interim Chief Executive
Officer of Bragg. “We continue to expand globally, enhancing our
content portfolio and technology offering, and securing new
customers across key geographies.”
“We’re particularly pleased with the overall
performance of Bragg during 2020 and believe we have built strong
foundations to support future market share gains and new market
entry,” said Richard Carter, Chair of the Board
at Bragg. “Adam and I have taken active leadership
roles within Bragg to ensure the future success of the
Company. We’re aligned in our strategy to grow the
group’s underling operating profit margin and to expand rapidly
into new markets, particularly the burgeoning U.S. market. Our
extensive experience and wide-ranging industry networks
within this constantly expanding market will
add significant value for Bragg shareholders. We are now
extremely well-positioned to capitalize on the strong growth in the
online gaming sector globally.”
FY 2020 financial
highlights
- Revenue1 increased by 74.6% in
2020, up to €46.4M (C$68.7M2), as compared to
€26.6M (C$39.3M) for full year 2019, representing
a yearly 58.4% CAGR since FY 2018
- Wagering revenue generated by
customers increased by 73.5% to €11.8B (C$17.5B)
as compared to €6.8B (C$10.1B) during full year
2019.
- Adjusted EBITDA3 increased by
432.8%, up to €5.5M (C$8.2M) from €1.0M
(C$1.5M) the previous year, with margins
increasing significantly from 3.9% to 11.9%, achieved by reaching
higher scale and practising firm cost control.
- Net loss for the period was €14.6M
(C$21.6M) compared to a net loss of €11.9M
(C$17.7M) in the comparable period, due primarily
to the re-measurement of deferred and contingent consideration and
the accretion of liabilities for the ORYX earn-out.
- Cash and cash equivalents as of
December 31, 2020 amounted to €26.1M (C$38.6M)
compared to €0.7M (C$1.0M) on December 31,
2019.
Q4 2020 financial
highlights
- Revenue increased by 75.7% to
€13.8M (C$20.4M), compared to €7.8M
(C$11.6M) for the fourth quarter of 2019,
representing a quarterly growth of 12.4% CAGR since Q1 2019
- Quarter over quarter revenue
increase of 18%, from €11.7M (C$17.3M) in the
third quarter to €13.8M (C$20.4M) in the fourth
quarter.
- Wagering revenue generated by
customers up by 50.1% to €3.2B (C$4.7B) compared
to €2.1B (C$3.2B) in the fourth quarter of
2019.
- Increase of 70.1% in unique
players4 using Bragg games and content, up to 2.50M from 1.47M
during the comparable quarter in 2019.
- Adjusted EBITDA was €1.3M
(C$1.9M), up 70.8% compared to €0.7M
(C$1.1M), with a decrease in margins from 9.4% to
9.1%, primarily as a result of professional fees and corporate
costs incurred through up-listing from the TSX-Venture Exchange to
the Toronto Stock Exchange.
- Net loss for the period was €5.3M
(C$7.9M), in line with Q4 2019 results of
€5.3M(C$7.9M).
Selected fourth quarter and full year
key performance indicators
Euros (Thousands) |
Q4-20 |
Q4-19 |
% |
FY 2020 |
FY 2019 |
% |
Revenue |
13,778 |
7,841 |
75.7% |
46,421 |
26,592 |
74.6% |
Adjusted EBITDA |
1,259 |
737 |
70.8% |
5,546 |
1,041 |
432.8% |
Adjusted EBITDA margin |
9.1% |
9.4% |
-0.3% |
11.9% |
3.9% |
205.2% |
|
|
|
|
|
|
|
Operational |
Q4-20 |
Q4-19 |
% |
FY 2020 |
FY 2019 |
% |
Wagering revenue |
3.2B |
2.1B |
50.1% |
11.8B |
6.8B |
73.5% |
Unique players |
2.50M |
1.47M |
70.1% |
5.87M |
2.75M |
113.6% |
Revenue/ top 10 customers |
66% |
67% |
-1.6% |
58% |
72% |
-18.8% |
Business highlights
- Successful launch of 54 B2B
operators5 during the period, across a number of global
jurisdictions, including 21 operators during the fourth
quarter
- Improved Customers6 revenue
diversification, with 58% of revenue derived from the top 10
customers, as compared to 72% in 2019
- Launched new exclusive content and
completed the integration of key leading studios such as Peter
& Sons, CandleBets and Arcadem
- Expanded its geographic presence,
with entry into a number of new global markets, including
Switzerland, Bulgaria, Portugal, Latvia, Czech Republic and
Spain
- In January 2021, secured a joint
venture Agreement with JVH gaming & entertainment group, the
largest land-based casino in the Netherlands (JVH group) for
iGaming platform (PAM) and turnkey services
- In January 2021, the Company
completed a private placement for €1.9M (C$3.0M), which included
participation from the board of directors and management
- In January 2021, the Company’s
common shares and outstanding warrants began trading on the Toronto
Stock Exchange senior market
- In February 2021, Bragg announced
the acceleration of its investment in the US and Canadian
markets
- The Bragg board of directors was
augmented with the addition of prominent business leader Paul
Godfrey in January 2021 and high-profile gaming industry veteran
Lara Falzon in March 2021
Ongoing strategy
- Bragg recently
announced the appointment of high-profile gaming industry executive
Richard Carter to the role of CEO, effective May 1, 2021
- Bragg is also in
the process of signing on an experienced management team to work
with Mr. Carter, extending the Company’s already sizeable
competitive advantage in the global gaming industry
- Bragg continues
to focus on expanding its global footprint, particularly in the
burgeoning U.S. gaming market, where the total addressable market
(TAM) for iGaming is anticipated to be greater than 40B at 100 per
cent legalization, the TAM for sports betting is expected to grow
to more than $22B once gaming is legalized in all states
- Bragg will also
target Canada, where the TAM for both sports betting and iGaming is
projected to be $5-8B upon full legalization
- Bragg continues
to invest in its technical infrastructure, in increasing
operational efficiencies, and in deepening its data analytics,
gamification and bonuses features
- Bragg continues
to explore strategic M&A opportunities in the U.S. and
globally
Year-end 2020 conference call
information
Bragg Gaming will host its FY 2020 earnings and
business update call on Thursday, March 25, at 8:30am ET.
Adam Arviv, Bragg’s Interim Chief Executive Officer, along with
Ronen Kannor, Bragg’s Chief Financial Officer, and Yaniv Spielberg,
Bragg’s Chief Strategy Officer, will host the call.
To join the call, please use the below dial-in
information:
US/Canada: +1 270 215 9892 US/Canada (toll-free): + 1 866 997
6681UK: 0 2031070289 or 0 8000288438 Passcode: 9537997
A reply of the call will be available for seven days following
the conclusion of the live call. In order to access the replay,
dial +1 404 537 3406 or +1 855 859 2056 (toll-free) and use
the passcode 9537997.
About Bragg Gaming GroupBragg
Gaming Group (TSX:BRAG, OTC: BRGGF) is a global B2B gaming
technology platform provider. With operations across Europe and
North America, Bragg is expanding into an international force
within the burgeoning global online gaming market. Bragg’s main
brand is ORYX Gaming, an innovative business-to-business iGaming
platform, casino content aggregator, managed sportsbook and managed
services provider, offering cutting-edge content from leading
studios.
For Bragg Gaming Group, contact:Yaniv
Spielberg, CSO, Bragg Gaming Groupinfo@bragg.games
For media enquiries or interviews, please
contact:Keera Hart, Kaiser & Partners
Communicationskeera.hart@kaiserpartners.com1.905.580.1257
For investor enquiries, please contact:David
Gentry dgentry@bragg.games1.800.733.24471.407.491.4498
Cautionary Statement Regarding
Forward-Looking Information
This news release may contain forward-looking
statements or "forward-looking information" within the meaning of
applicable Canadian securities laws ("forward-looking statements").
Often, but not always, forward-looking statements can be identified
by the use of words such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or describes a "goal", or variation of such words and
phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be
achieved.
All forward-looking statements reflect the
Company's beliefs and assumptions based on information available at
the time the statements were made. Actual results or events may
differ from those predicted in these forward-looking statements.
All of the Company's forward-looking statements are qualified by
the assumptions that are stated or inherent in such forward-looking
statements, including the assumptions listed below. Although the
Company believes that these assumptions are reasonable, this list
is not exhaustive of factors that may affect any of the
forward-looking statements. The key assumptions that have been made
in connection with the forward-looking statements include the
following: the impact of COVID-19 on the business of the Company;
the countercyclical growth of the business of the Company; the
regulatory regime governing the business of the Company; the
operations of the Company; the products and services of the
Company; the Company's customers; acquisition opportunities; the
growth of the Company's business, which may not be achieved or
realized within the time frames stated or at all; and the
anticipated size and/or revenue associated with the gaming market
globally.
Forward-looking statements involve known and
unknown risks, future events, conditions, uncertainties and other
factors that may cause actual results, performance or achievements
to be materially different from any future results, prediction,
projection, forecast, performance or achievements expressed or
implied by the forward-looking statements. Such factors include,
among others, the following: risks associated with general economic
conditions; adverse industry events; future legislative and
regulatory developments; the inability to access sufficient capital
from internal and external sources; the inability to access
sufficient capital on favourable terms; realization of growth
estimates, income tax and regulatory matters; the ability of the
Company to implement its business strategies; competition; economic
and financial conditions, including volatility in interest and
exchange rates, commodity and equity prices; the estimated size of
the gaming market globally; changes in customer demand; disruptions
to our technology network including computer systems and software;
natural events such as severe weather, fires, floods and
earthquakes; and risks related to health pandemics and the outbreak
of communicable diseases, such as the current outbreak of
COVID-19.
Although the Company has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements.
Any forward-looking statement made by the
Company in this news release or the earnings call is based only on
information currently available to the Company and speaks only as
of the date on which it is made. Except as required by applicable
securities laws, the Company nor any of its management or directors
undertake no obligation to publicly update any forward-looking
statement, whether written or oral, that may be made from time to
time, whether as a result of new information, future developments
or otherwise.
Non-IFRS Financial Measures
Statements in this news release make reference
to "Adjusted EBITDA", which is a non-IFRS (as defined herein)
financial measure that the Company believes is appropriate to
provide meaningful comparison with, and to enhance an overall
understanding of, the Company's past financial performance and
prospects for the future. The Company believes that "Adjusted
EBITDA" provides useful information to both management and
investors by excluding specific expenses and items that management
believe are not indicative of the Company's core operating results.
"Adjusted EBITDA" is a financial measure that does not have a
standardized meaning under International Financial Reporting
Standards ("IFRS"). As there is no standardized method of
calculating "Adjusted EBITDA", it may not be directly comparable
with similarly titled measures used by other companies. The Company
considers "Adjusted EBITDA" to be a relevant indicator for
measuring trends in performance and its ability to generate funds
to service its debt and to meet its future working capital and
capital expenditure requirements. "Adjusted EBITDA" is not a
generally accepted earnings measure and should not be considered in
isolation or as an alternative to net income (loss), cash flows or
other measures of performance prepared in accordance with IFRS.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
________________________________
1 Revenue includes the Group's share in games and content, and
platform fees for management and turnkey solutions2 Bragg Gaming’s
reporting currency is Euros. The exchange rate provided for
Canadian dollars is 1.48. Due to fluctuating currency exchange,
this rate is provided for convenience only and may differ from the
rate used to calculate 2019 numbers.3 "Adjusted EBITDA" means
earnings before interest, taxes, depreciation, and amortization
after: adding back share based payments; adding back transaction
and acquisition costs; adding back impairment of intangible assets
and goodwill; deducting lease payments recorded as a depreciation
and interest expense under IFRS standards; and adding back or
deducting gain / loss on re-measurement of contingent and deferred
consideration.4 “Unique players" refers to individuals who made
money at least once during the period5 “operator" is a licensed
entity that contracts directly or indirectly with the group for B2B
gaming services6 “customer" is a licensed entity that contracts
directly with the group for B2B gaming services
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