{"id":9558,"date":"2025-05-23T13:18:35","date_gmt":"2025-05-23T12:18:35","guid":{"rendered":"https:\/\/sbceurasia.com\/en\/?p=9558"},"modified":"2025-05-23T13:18:40","modified_gmt":"2025-05-23T12:18:40","slug":"better-collective-posts-weak-q1-report-due-to-problems-in-brazil-and-us","status":"publish","type":"post","link":"https:\/\/sbceurasia.com\/en\/2025\/05\/23\/better-collective-posts-weak-q1-report-due-to-problems-in-brazil-and-us\/","title":{"rendered":"Better Collective Posts Weak Q1 Report Due to Problems in Brazil and US"},"content":{"rendered":"\n

Better Collective A\/S<\/strong> experienced a tough opening to 2025 trading due to commercial disruptions in Brazil and the continued media adjustments in North American markets.<\/p>\n\n\n\n

Despite the downturn, the Copenhagen and Stockholm listed media group reaffirmed its full-year 2025 guidance, signalling confidence in the financial recovery of its business, which prioritises cost savings in 2025.<\/p>\n\n\n\n

Corporate Revenue for the three months to 31 March fell to \u20ac83m<\/strong>, down 13%<\/strong> from \u20ac95m<\/strong> in Q1 2024. Group EBITDA before special items dropped 24% to \u20ac22m<\/strong>, as margins narrowed to 27%<\/strong>. <\/p>\n\n\n\n

Headline results saw Better Collective\u2019s Q1 profits halve to \u20ac3.6m (Q12024: \u20ac7.6m) <\/strong>as total new depositing customers (NDCs) referred by Better Collective to customers in Q1 dropped by 30% to 316,000<\/strong>.<\/p>\n\n\n\n

Brazil officially launched its regulated market on 1 January 2025. While the transition delivered \u20ac10m<\/strong> in Q1 revenue, increased activities came at a cost, in which Better Collective attributes a \u20ac7m<\/strong> direct EBITDA hit from Brazil\u2019s adjustments.<\/p>\n\n\n\n

Bets media with legacy revenue share deals replaced by a tax-heavy structure and tighter advertising rules. Brazilian media and sports assets were impacted directly by \u20ac9m<\/strong> in delayed payments from local partners amid the slow onboarding of new administrative frameworks.<\/p>\n\n\n\n

Irrespective of a tough debut Co-CEO Jesper S\u00f8gaard<\/strong> said early signs remain promising for future growth: \u201cWe\u2019re seeing solid migration and sustained wagering from historical users. The structural shift has temporarily affected margins, but Brazil is a high-potential market. We remain confident it will return to growth in 2026.\u201d<\/p>\n\n\n\n

Playmaker and BolaVIP <\/strong>assets continue to modify promotions and marketing as welcome bonuses were banned under the new regime, contributing to a slowdown in new depositing customers (NDCs).<\/p>\n\n\n\n

However, a positive development saw higher retention of the Brazilian layer than expected, a factor Better Collective believes will pay off over the longer term amid a focus on revshare contracts activated from market launch.<\/p>\n\n\n\n

North American revenue dropped 32% year-on-year to \u20ac23m<\/strong>, largely due to the absence of another state launch replicating North Carolina, which had boosted Q1 2024. <\/p>\n\n\n\n

Organic growth contracted 35%<\/strong>, with CPA deals and hybrid bonuses significantly lower than the previous year. North American activities contributed 28%<\/strong> of total group revenue and 19%<\/strong> of operating profit.<\/p>\n\n\n\n

Subscription revenue grew 15%<\/strong>, while revenue share, now the primary vertical, continues its build-up, though earnings continue to be deferred into future quarters.<\/p>\n\n\n\n

US media strategy is overseen by Co-CEO Christian Kirk Rasmussen<\/strong>, who stated:: \u201cWe\u2019re building a healthier, more durable business in North America. While CPA revenue has cooled, our revenue share base is expanding steadily. This will provide better margins and cash flow visibility over time.\u201d<\/p>\n\n\n\n

Revenue across Europe and the rest of the world was broadly flat at \u20ac60m (0%)<\/strong>. Organic growth fell 8% <\/strong>due to the Brazilian drag, though several legacy markets delivered stable contributions. Europe remains the group\u2019s core profit segment, accounting for 72%<\/strong> of revenue and providing an EBITDA contribution of \u20ac18m<\/strong>.<\/p>\n\n\n\n

The Publishing unit, which includes affiliate-led and owned media brands, posted \u20ac58m <\/strong>in revenue (down 13%<\/strong>), while Paid Media fell 14% to \u20ac24.6m<\/strong>. Publishing margins stood at 29%,<\/strong> while Paid Media returned 22%<\/strong>.<\/p>\n\n\n\n

S\u00f8gaard pointed to the company\u2019s strategic pivot: \u201cWe\u2019ve transitioned from a geographically structured business to one aligned by product lines. This is helping us reduce duplication, scale faster, and sharpen operational execution globally.\u201d<\/p>\n\n\n\n

Better Collective is pressing ahead with its October 2024 cost efficiency programme, targeting \u20ac50m<\/strong> in annual savings. Q1 saw group costs fall \u20ac5m (8%)<\/strong>, with adjusted savings of \u20ac9m<\/strong> when accounting for FX and M&A factors. Over \u20ac5m<\/strong> in reductions came from staffing and operational costs.<\/p>\n\n\n\n

CFO Flemming Pedersen<\/strong> said: \u201cWe\u2019re seeing strong early returns from our efficiency drive. These aren\u2019t just short-term savings – this is a structural reset of our cost base to align with a more scalable business model.\u201d<\/p>\n\n\n\n

Cash flow from operations before special items totalled \u20ac21m<\/strong>, with a 93% cash conversion rate. The group ended the quarter with \u20ac90m<\/strong> in capital reserves, including \u20ac25m<\/strong> in cash and \u20ac65m<\/strong> in undrawn bank facilities. Net interest-bearing debt stood at \u20ac248m<\/strong>, with leverage at 2.33x EBITDA.<\/p>\n\n\n\n

In April, the company implemented a new Co-CEO structure. Jesper S\u00f8gaard continues to oversee external strategy and investor engagement, while Christian Kirk Rasmussen leads innovation, operations, and business development.<\/p>\n\n\n\n

Former Bain & Co. partner Sofie Ejlersen<\/strong> also joined as Chief Operating Officer to execute the group\u2019s transformation plan.<\/p>\n\n\n\n

Operationally, the company has restructured around three global business units \u2013 Publishing, Paid Media, and Esports, the latter of which will be reported as a standalone division from Q2 onwards. <\/p>\n\n\n\n

Management also streamlined its \u201cHouse of Brands\u201d portfolio to focus on core assets, including Action Network, BolaVIP, HLTV, FUTBIN, and AceOdds<\/strong>.<\/p>\n\n\n\n

Also in April, a \u20ac10 million share buyback was completed, and a new \u20ac10 million <\/strong>program was launched, scheduled to run until the end of August.<\/p>\n\n\n\n

Management reaffirmed the forecast for 2025:<\/p>\n\n\n\n