888 Holdings Q3 2023 Trading Update
888 Holdings, a global leader in the betting and gaming industry, boasting iconic brands such as William Hill, 888, and Mr. Green, has released its trading update for the third quarter of 2023 (Q3 2023). This comprehensive report sheds light on the company’s performance during this period, encompassing various segments and key developments.
Q3 2023: A Closer Look
Let’s delve into the details of 888 Holdings’ performance during Q3 2023 to gain a deeper understanding of the company’s achievements, challenges, and strategies.
Group Performance: Steady Progress Amidst Challenges
The group’s overall performance during Q3 2023 remained consistent with the trading update provided on September 28, 2023. The reported revenue for the quarter was £405.0 million, representing a 10% decrease compared to the same period last year. This performance aligns with the previously communicated trends and drivers, with notable improvements being made to enhance the sustainability and quality of the business mix, albeit with short-term performance impacts.
UK&I Online Segment: Customer Engagement and Challenges
The UK&I Online segment reported continued robust customer engagement during the quarter, with a remarkable increase in average monthly actives, up by 17%. However, revenue experienced a 10% decline due to the ongoing effects of safer gambling changes and a refined marketing approach. Additionally, a lower-than-expected betting net win margin, attributed to customer-friendly sports results, particularly in UK football, contributed to this decline.
Retail Segment: Balancing Act
The retail segment demonstrated strong underlying performance driven by investments in Self-Service Betting Terminals (SSBTs) and gaming cabinets. However, this growth was partially offset by customer-friendly sports results. Consequently, the revenue in this segment increased by 1% year-over-year.
International Segment: Challenges and Slow Recovery
The international segment faced challenges, with average monthly actives declining by 2% and revenue plummeting by 19%. Compliance changes in dotcom markets, particularly in the Middle East, had a significant ongoing impact. The recovery in revenue and customer activity was slower than initially anticipated, posing challenges for this segment.
Synergy Delivery and Cost Savings
888 Holdings maintained its commitment to synergy delivery, successfully integrating Section8 in-house games into William Hill online. The initial integration of William Hill’s proprietary global trading platform into 888’s in-house platform has also commenced, allowing certain sports to be traded across the group from a unified trading engine. Notably, significant cost savings were achieved, which helped mitigate the impact of regulatory and compliance changes.
Prioritizing Safety Amidst Challenges
The company prioritized the safety and well-being of its more than 500 colleagues in Israel and their families following the outbreak of war post-period end. Business continuity plans were activated and have proven effective, with no significant impact on business operations expected.
Future Expectations and CEO's Vision
888 Holdings maintains its expectations for Q4 revenue to be down in the mid-single digits, with a projected FY23 Adjusted EBITDA Margin of 18-19%. Per Widerström, CEO of 888 Holdings, expressed optimism about the company’s future. Despite regulatory challenges, he acknowledged the team’s hard work and positive momentum as they approach the year’s end. He emphasized the company’s strong foundation for profitable growth and outlined areas for improvement to unlock the company’s full potential and drive value creation.
FAQ: 888 Holdings Q3 2023 Trading Update
What is 888 Holdings?
888 Holdings is a leading betting and gaming company with globally recognized brands.
How did 888 Holdings perform in Q3 2023?
The company reported a 10% decrease in revenue compared to the same period in the previous year, with consistent trends and ongoing improvements.
What were the key challenges in the UK&I Online segment?
Challenges included the impact of safer gambling changes, a refined marketing approach, and a lower-than-expected betting net win margin.
What drove the growth in the Retail segment?
Investments in Self-Service Betting Terminals (SSBTs) and gaming cabinets contributed to strong underlying performance.
Why did the International segment face challenges?
The International segment experienced compliance changes in dotcom markets, particularly in the Middle East, leading to slower revenue and customer activity recovery.
What synergy initiatives were undertaken by 888 Holdings?
The company successfully integrated Section8 in-house games and began integrating William Hill’s global trading platform into its in-house platform, achieving significant cost savings.
How did 888 Holdings prioritize safety during challenging times?
The company activated business continuity plans to ensure the safety and well-being of its colleagues and their families amidst the outbreak of war.
What are the company’s expectations for future revenue?
888 Holdings expects Q4 revenue to be down in the mid-single digits and anticipates an FY23 Adjusted EBITDA Margin of 18-19%.
What is Per Widerström’s vision as CEO?
Per Widerström is optimistic about the company’s potential for profitable growth and plans to work on areas of improvement to maximize value creation.