EGR Power 50 2020: Kindred Group (4)
Proudly sponsored by
4. Kindred Group (5)
FINANCIALS: Q3 gross winnings revenue reached £280.7m, up 24% year-on-year, while underlying EBITDA jumped 100% to £74.6m
STRATEGY & IMPACT: Bolt-on acquisitions to scale and enter markets has been replaced by organic growth and relying upon its broad product mix
GEOGRAPHIC REACH: Is a leading player in the Nordics, France and Belgium, while the Netherlands, which is regulating, is a key market. Has a limited but growing presence in the US
INFLUENCE & LEADERSHIP: At the forefront of efforts around RG and tackling problem gambling, while Tjärnström’s 10-year reign has been instrumental to sustained growth
By securing fourth spot, Kindred Group has achieved its highest-ever finish in the Power 50 rankings after ricocheting between fifth and sixth spot since 2015. Much of the credit for this consistently strong performance has to go to CEO Henrik Tjärnström, who recently reached the milestone of 10 years in the hot seat. The Swede has steadily guided Kindred to reliable year-on-year growth, to the point where it is on track to breach the £1bn gross winnings revenue barrier for the first time in 2020.
The latest results showed the Stockholm-listed group achieved gross winnings revenue of £765.5m for the first nine months of 2020, eclipsing the revenue achieved for the whole of 2017. Indeed, its high gaming mix helped offset the dip in sports due to the pandemic in Q2 as overall revenue rose 4% and EBITDA rocketed 70%, mostly on reduced marketing costs. In addition, the operator broke its own all-time record in Q3 for active customers, jumping 19% to 1.65 million.
Kindred has historically followed a multi-country, multi-brand strategy (now 12 brands) supported by bolt-on acquisitions, yet the spending spree has slowed of late perhaps due to a shortage of attractive targets. That said, Kindred shelled out £25m for Rank Group’s sole-remaining casino property in Belgium and its online gambling licence. And Tjärnström insists bolt-on deals are still on his radar. “If you hear about a transaction, you can be pretty confident that we have had a look at it,” he told investors in November.
A new brand was introduced in 2020 with Otto Kasino in Finland, marking the company’s debut in the Nordics’ competitive pay and play segment. And when it comes to its home market of Sweden, Kindred, much like its peers, continues to face regulatory pressures, prompting Tjärnström to reveal recently that it will “probably take one more year” before Kindred is back to pre-regulation profitability levels in the country.
Meanwhile, steady progress is being made in the US. Currently in three states (New Jersey, Pennsylvania and Indiana), plans are afoot to increase this to five states by the end of 2021. Kindred now has conditional access to a total of 11 states, or over a third of the US population. As for next year, breaking into the Power 50’s top three seems a stretch, but Kindred could make fourth spot its regular home.