Welcome to the presentation of Betsson AB fourth quarter 2017. I will start with some highlights from the fourth quarter. We had quite a strong sportsbook development, up 36%. B2C sportsbook had a gross turnover up. Margin was quite strong at 8.2%. The new mobile web sportsbook was launched on all our core brands. We are quite happy that the sportsbook performed well. That is a good foundation for this year when we will have the World Cup soccer. Casino growth was 5%. The growth mainly came from Western Europe, but we saw a small decline in the Nordics. We have implemented a restructuring program in the first quarter of 2018 with ambition to make the company more efficient. We have also introduced KPIs related to responsible gaming in our reporting. The financial summary for the fourth quarter.
Revenue increased by 12%. Organically it was a 10% growth. EBIT declined 18%, mainly based on increased spending in marketing, SEK 44 million, negative currency impact of SEK 34 million, and negative impact from acquisitions of SEK 16 million. Organically, EBIT increased by 1%. The EBIT margin came in at 17.4%. The board of directors propose a dividend to the AGM of SEK 393 million, which is SEK 2.844 per share to be distributed to the shareholders. On the organic growth, we reported SEK 1,256 million. As you can see on this slide here, we have an impact from acquisitions, and also quite a big currency impact. If we look into these figures, then we see that the organic revenue was SEK 1,231 million, which is a growth of 10%. For the EBIT, we reported SEK 218 million.
If we look at the impact from acquisitions of SEK -15 million and currency of SEK -34 million, that corresponds to an EBIT of SEK 268 million, which is in growth of 1% and which is a margin of 22%. Going into the regions. Nordics, still our strongest region, 48% of the revenues. Nordics, we are very happy about the sportsbook growth with 62%, very encouraging, before the World Cup in soccer. In region Western Europe, we had a growth of 14%, which is quite strong, and we saw some all-time highs from some markets, which is also encouraging. The CEECA region still struggles with currency headwind, and the rest of world continues to grow strongly, even though it is a small part of our revenues. If we look at the growth per region, and see how it builds up from last year.
In Nordics, we have a growth of 9%, in Western Europe, 42%, in CEECA, we have a negative growth of 14%, and rest of world, unfortunately, a small region, but a growth of 75%. This makes up the growth of totally 12% on the revenues. This was a strong quarter for the sportsbook, up 36% year-over-year. Margin came in at 8.2%, which is a little bit higher than our rolling average which tend to be around 6.5%. Same quarter last year was 6.6%. We have done the rollout of the new mobile web sportsbook on our core brands. We do continuous improvements of the offering. We will roll out the OBG front-end framework on the desktop and the apps during this year. Casino growth was not as strong in the fourth quarter, a growth of 5%, organically 3%.
The growth was mainly driven by live casino and mobile web casino. The rollout of OBG front end framework on desktop and apps, during 2018 will have a positive effect on the casino going forward. We expect so, at least. Underlying activity was quite strong. Active customers up to 615,000 customers. Deposits also strong, even though impacted negatively by the currency effect in CEECA region. On the regulatory side, we look forward to the Swedish re-regulation that is bound to happen in the beginning of 2019. There is also re-regulation going on in the Netherlands. The process is a little bit unclear, but the government has expressed its ambition to re-regulate during 2019. We have announced a restructuring program for increased efficiency. This is not a cost saving program, but a program to improve the performance of the company.
We want to make the responsibilities within the organization more clear. We want to have less layers, and we want to scale back our activity in the U.K. a little bit. These changes resulted in a headcount reduction by 160 people. The cost for this program is to be taken in the first quarter, which is this year, around SEK 50 million. As a result of this program, we will save costs going forward of SEK 50 million-SEK 60 million per year. It's important to keep in mind that this program is not a cost saving program. It's an efficiency program to make the company more efficient going forward. What's the focus of Betsson going forward? We want to continue to strengthen the product. We want to further roll out the new casino and the sportsbook.
We will continue to invest in marketing before the World Cup 2018, and we want to focus on efficiencies. That's why we did this reorganization, and we're going back to basics on our operations in the U.K. We have a big program with a lot of activities to address efficiency within the company and within the company's operation. I really believe that will have an impact in the future. It's not a quick fix, and it's not a silver bullet that we're working on. It's a broad program with a lot of activities, and we have an organization which is very committed to this. We look forward to the future and the rest of this year. Thank you. This was efficient as well, nine minutes. We open up for questions.
Yeah. Hi, Martin, with DNB Markets. My first question is on the growth in the sportsbook in the quarter. How much of the year-over-year growth is relating to the sportsbook margin, and how much is really due to your improvement on the product side, would you say?
I can't answer that in firm figures, but of course, revenues are helped by the higher margin. That wouldn't happen if the product wasn't good enough. It's, of course, also depending on the product. That gives us a good foundation for the product before the World Cup.
Did the sportsbook margin trends, did they continue in Q1 when looking at your trading statement?
This is nothing that we have communicated, so I can't go into that.
Okay. You comment on this rollout of OBG on desktop and apps during the year. Would it be possible for you to be a bit more specific when? You expect this to have a positive impact, so it would be good for us to know.
It's a continuous rollout. I can't go into the details today here. It's something that will happen across the year.
It would make sense to have it up before the World Cup, or?
I would be happy if we would do that. I can't go into the details.
Okay, thanks. On your reorganization with this impact of SEK 50 million-SEK 60 million, is that something you expect already for this year, or is it for the coming years?
That's like the annual cost reduction. It starts actually from the day when we announced the program. It will impact this year partly because it happened a bit into the year.
Okay, great. Just overall on your changes to the product side, could you elaborate a little bit more on these changes and where you are today compared to where you want to be so we can get a better feel for how long it will take until you have the possibility to outperform again? I guess that's your ambition.
Yeah. Today we are not where I want us to be fully with the product. Then again, we have a lot of products, a lot of sites, and a lot of different channels. We have quite a massive volume to work with. It's a constant work. It will actually never finish. It has never happened that I'm fully satisfied with a product. At this point of time, we have certain areas that I really want to address. I think that by the end of this year, we will be in a better position than today. Not that the position today is bad in any way, there is room for improvements.
On that note, you say that during the end of the year you will see improvements. You have an ambition to grow revenues and earnings. Then we have the Swedish regulation in 2019 and possibly the Dutch regulation. It's your ambition to grow earnings in that kind of year, 2019?
That I can't comment on today. It's nothing that we have communicated.
Okay. On the U.K. market, you're mentioning that you're scaling back marketing volumes. How should we see that? Is that a lost longer-term opportunity here? Competition is increasing quite a lot in your core markets as well.
Yeah.
Can you elaborate on the U.K. please?
Competition is really high in the U.K. We have gained some market share there. We are going to continue to be on the U.K. market. We're just not going to be as aggressive as we have been so far. We're going to do it a little bit more step by step.
Could we expect more acquisitions in the U.K. or organic from here?
For this year, I'm looking at organic. We work with an efficiency program within the whole company. This is what we're going to focus on this year. That program is very detailed, and there's a lot of work to do. That is what we're going to work with till the end of this year.
When it comes to acquisition possibilities elsewhere, Sweden, for example, ahead of the regulation, is that sort of things you're still looking into, or are you fully occupied with the reorganization and the changes in the company right now?
We are fully occupied by the changes and with the products that we work with. Still, we're an opportunistic company. Should we find something that suits us very well, we could definitely be open to that. It's not a top priority. Acquisitions is not something that we work on actively today.
Okay. Thank you. Let someone else in.
Thank you. Matias, SEB. Well, I wanted to continue a bit on the products and geographies. You mentioned casino in the Nordics. Was that slightly slower growth dependent on a few brands, or was it a broader phenomena?
We didn't succeed as good as we should in the Nordics on casino across the line this quarter. Yeah, it was not any specific brand that stood out, but there's room for improvement in all the brands in the Nordics on the casino side.
Okay. Have you done any changes to your brand portfolio this quarter, or is it the same brands running?
Mainly the same brands running.
Okay. I'm a bit curious about Spain. Have you announced when you are to launch that brand?
I don't know what we have announced, really, in the case of.
We announced sportsbook in Spain.
Yeah. We have announced that we actually have launched Sportsbook in Spain.
You have launched it under a new brand or an old brand?
Under Betsson.
Under betsson.com.
Under Betsson. Okay.
Betsson.es, sorry.
Okay.
It's a local brand.
Yeah. I noticed that affiliate spending did quite a jump between Q3 and Q4. Is this a trend we should expect continued through 2018, that you will try to leverage affiliates more than perhaps during previous year?
It's not a trend that we will really grow on affiliate side, but affiliates will still be an important part of our customer acquisition. That's a part of our marketing mix going forward as well.
Great. Then also another product question. There was a press release, I think it was last quarter, about daily fantasy sports. Have you launched that product?
I-
If you remember.
I can't answer that.
I will have a look, I guess.
Yeah.
Thank you.
Do we have any more questions?
Do you want to say telephone?
Okay, questions from the phone then.
Thank you. Ladies and gentlemen, if you have a question, please press 01 on your telephone keypad and you'll enter a queue. Our first question comes from the line of Rasmus Engberg from Handelsbanken. Please go ahead, your line is now open.
Yes, hi. Good morning. I had a question on if you could give some sort of indication on marketing spend in the first half of the year. How will it develop compared to last year or compared to the fourth quarter as ratio of sales or something? If you could sort of indicate a little bit more on what you mean with investing ahead of the World Cup.
Yeah. As you can see from the figures in the fourth quarter, we invested quite heavily, and we will keep on investing in the first quarter. I can't go into details on the figures, but of course it's important to stay on top in the marketing before the World Cup.
Yeah. Okay. The second question. Scaling back marketing in the U.K., where does that leave the Netplay acquisition? Can that sort of turn around anyway due to lower costs? What is the strategy there with that acquisition?
The strategy with that acquisition was expressed already when we did the acquisition, that it's a long-term acquisition, and there are some agreements that is running. We will see a different story from 2019 for that acquisition. Still, we want to enhance it as much as we can, of course, on the way there. The changes for marketing in the U.K. is not only related to Netplay, it's for other brands as well. Can you remind us what the changes are in 2019 with regards to that acquisition? It's agreements that are related to those brands that run out, and that will put us in a different position. Okay. Thank you. Okay.
Thank you. I remind you that if you do want to ask an audio question, you will have to press 01 on your telephone keypad now.
Nothing.
As there are no more questions registered, I hand back to you speakers in the room.
Okay.
It's a follow-up question from me, Martin, with DNB Markets. On Turkey and the B2B agreement with Realm, can you comment a bit on how that progressed, in Q4 and what you're doing there in order to help them improve in the market?
Realm is doing their own operations. We have seen a stability in the fourth quarter in their operations, I am optimistic for their operations for the upcoming world championship. I think we have seen an uptake in their business and how they operate. They have launched a new brand in the second half of the last year. We're optimistic.
Can you comment on Georgia as well? Because I noticed that the CEECA region was flat organic growth. How are you doing in Georgia with the Europe-Bet operations?
I can't comment on the operations in detail for that. Of course, being quite geared towards sports betting, we're optimistic also before the world championship for that region.
Okay. Thank you.
A question from the web. It's actually two questions from Marius Teikelson from Strawberry Capital. How much of the 3% organic growth in live casino is due to your expanded live casino offering with Evolution Gaming?
Well, that's a very detailed question, which I can't answer, but I can say that there has been a shift over time where live casino has increased, and live casino is performing really strong. Obviously, some part of that growth come from the live casino offering.
Do you believe that you now take your fair share of the live casino growth in your most important markets?
I don't know really what our fair share should be, but it has increased, and I think we're doing quite well on the live casino.
Is it possible to elaborate a bit on the OBG performance in mobile web sportsbook so far?
We launched the OBG framework on the mobile sportsbook during the second half of last year on the main brands, and it's doing well. It's a product which is quite new. It needs some adjustments, and it has got some adjustments, and I think we will continue to improve the product, but it's doing well. It has definitely contributed to the fact that the sportsbook has been doing well in the fourth quarter. Any more questions? Okay. Thank you