Super Group (SGHC) Ltd. Q3 FY2024 earnings call

• Total revenues ex the U.S. for Q3 2024 were €395 million, up 13% y-o-y. Adjusted EBITDA ex the U.S. was €95 million, a third quarter record, up 52% y-o-y.
• Casino represents 83% of net revenue, with continued growth expected via multi-brand strategy like rolling out Spin brands.
• Africa has been the largest revenue contributor for two quarters, with Super Group operating in seven markets and podium positions in five, and a healthy pipeline of new markets.
• Canada is seeing strong growth in sports and casino, with Jackpot City a leading brand.
• U.S. sportsbook operation shut down, with costs less than previous estimate; assessing iGaming in New Jersey and Pennsylvania.
• Balance sheet is robust with unrestricted cash of €297 million and no debt; exploring ways to return cash to shareholders, including initiating regular dividend of €0.025 per quarter from Q1 2025 and considering special dividend before end of 2024.
• Revising ex-US adjusted EBITDA guidance to exceed €345 million with 22% margin, above long-term target of over 20%.

Total revenues ex the U.S. were an all-time high for a third quarter, growing 13% year-over-year to €395 million. Adjusted EBITDA ex the U.S. grew 52% year-over-year to €95 million. Casino represents 83% of overall net revenue for the quarter. Africa provides the largest portion of revenue for the second quarter running, with Super Group operating in seven locally regulated markets and holding podium positions in five. Canada is experiencing strong year-over-year growth across sports and casino. The U.S. sportsbook operation has been shut down, with associated costs coming in around €9 million less than estimated.

• Revising ex-US adjusted EBITDA guidance to exceed €345 million for Q4 2024, representing a margin of 22%.
• Planning to initiate a regular dividend of €0.025 per quarter starting in Q1 2025.
• Considering a further special dividend before the end of 2024, to be discussed with the Board in early December.

• Regulatory risks in various markets, including the U.S. where new regulations or changes in existing regulations could impact operations. For example, concerns about over-taxation leading to black markets as seen in some other countries.
• Uncertainties in the iGaming business in the U.S. if targets for profitability are not met.

Q: Talk about sports results globally into 4Q and view on Latin America A: October was strong with good volumes, customer numbers, etc. Sports results in September were not as good, but casino (83% of revenue) is counteracting. In Latin America, currently focused on optimizing existing footprint and building on current revenues, not proceeding in some markets until profitability path is identified Q: View on capital returns policy, another dividend or strategic M&A A: Considering special dividend into Q4 2024. Maintaining strategy to invest in technology, marketing spend. On M&A, constantly assessing potential opportunities but nothing firm for Q4 Q: Detail on cost efficiency and customer engagement/retention despite sports outcome A: October was spectacular with good customer numbers, volumes, revenue. Focus on marketing efficiencies and operating efficiencies across companies, focusing on best markets and becoming the best in those markets Q: Year-to-date growth excluding India and long-term margins A: Excluding India, up 24% y-o-y. Long-term margins have been over 24% for two quarters, focusing on marketing efficiencies, expecting to lift long-term target to 22%-24% in 2025 Q: US shutdown costs in Q4 and other market closures A: No more US shutdown costs in Q4. Other market closures were a spillover from India, related to processor investment impairment Q: Difference between top five and other two markets in Africa, durability of position A: Been in Africa for 10 years, dedicated team of over 1000, Betway brand resonates well, especially with football. Podium positions in five markets, working on the other two. Rolling out Jackpot City in more markets, confident in growth opportunities Q: Long-term view on iGaming in the US A: Good revenue increase in New Jersey and Pennsylvania, focusing on achieving profitability, casino business is easier, will change stance if profitability path not seen Q: Success in Canada, market share, and Alberta regulation A: Canada has good year-on-year growth, learned lessons from Ontario, ready for Alberta regulation, brands resonate, working on fixing marketing in under-indexed areas Q: TAM in Africa, market growth rate A: TAM in Africa is about $5 billion, population growing, access to internet via mobile devices. Growth expected as markets open up and regulation improves Q: Regulatory comfort in Africa for US investors, and when global players might enter Africa A: Work with regulators, pay taxes, engage in CSR, helping local communities. None of the major global online players are really in Africa yet, focusing on own battle