Kindred Group posts 7% YoY rise in Q2 revenue after record-breaking Euro 2024

Kindred Group has announced that revenue climbed 7% year-on-year (YoY) to £327.6m in the second quarter of the year, boosted by strong sportsbook activity from Euro 2024.

B2C revenue produced a similar return, posting a 6% YoY rise at £317.2m, up from £298.3m in the corresponding quarter, which accounted for 97% of Kindred’s overall revenue.

Excluding North America, a region the Swedish operator has now officially departed from an operational perspective, revenue increased by 9% this quarter.

Looking at the bottom line, underlying EBITDA jumped 32% YoY to £73.6m, while post-tax profit for the quarter rose from £27.7m to £44.5m, helped in large part by a 12% uptick in active customers, a metric that sat at 1,749,611 by the close of Q2.

The overall post-tax profit figure takes into account a £1.7m loss from discontinued operations.

According to CEO Nils Andén, the increase in both revenue and underlying EBITDA “highlights the scalability of our business model and accelerated top-line growth while maintaining a stable cost base”.

Breaking it down by vertical, Euro 2024 helped inspire a 21% YoY increase in sports betting actives, while favourable results sparked an 18% YoY rise in gross winnings revenue (GWR).

Euro 2024 marked the highest tournament revenue Kindred has ever seen, including £183.6m in turnover and a sports betting margin, before free bets, of 19.7%. That total was in part fuelled by a significant rise in player prop betting through higher-margin products such as bet builders.

However, average revenue per user decreased 6% when compared to Q2 2023, as a result of more casual bettors placing wagers throughout Euro 2024.

Sports betting margin for the quarter soared to 12.1% after free bets, significantly above the weighted average of 9.9% for the past 11 quarters.

Casino, a vertical that while behind 53% of Kindred’s entire GWR reported a 2% decline in GWR, though excluding the impact of the departure from the North American market, casino increased by 1%.

GWR from Kindred’s locally regulated markets reached an all-time high of £267.1m, while profitability in those markets also continued to improve.

Western Europe contributed the overwhelming majority of the entire GWR, with 65%, or £173m, marking a 16% YoY improvement, with a return to growth in Belgium and France reported alongside another strong display in the Netherlands. In fact, the company said good market share had been taken in France.

While there was an increase in sports betting GWR in Kindred’s Nordic markets, a weaker performance in other product segments ensured that region remained flat for the operator.

Central, Eastern and Southern Europe (CES) posted a 9% YoY decline, with Romania the only market within that region to show any sign of growth.

There was a 49% YoY decrease in GWR in Kindred’s other markets, driven by the winding down of North American operations. The North American region contributed £2.2m this quarter, marking a 73% decrease in constant currency, a decline that was to be expected, though the reported loss of £1.2m was notably less than Q2 2023’s £5.1m, given the reduction in marketing and operational expenditure.

Relax Gaming, Kindred’s B2B segment, continues to post solid growth, with 10% revenue growth to £13.4m alongside B2B revenue of £10.4m, representing a 16% YoY increase.

In Q1, the firm rolled out the Kindred Sportsbook Platform (KSP) in a test market capacity. Q2’s report revealed that the project is meeting its targets and the customers within the aforementioned test markets are already “providing valuable feedback”.

Andén shed further light on the Q2 display as he added: “We continue to demonstrate our resilience and strategic execution, which is reflected in our strong performance across our market portfolio. The vast majority of our top markets have grown year-on-year, which is very encouraging.”

After issuing his assessment on Kindred’s increase in both revenue and underlying EBITDA, Andén continued by analysing the growth shown in locally regulated markets and outlining the impact Euro 2024 had on the group’s performance.

“Our development in locally regulated markets has been particularly strong, with year-on-year gross winnings revenue from locally regulated markets growing 10% (12% excluding North America),” he explained.

“The second quarter contained strong sportsbook activity throughout, with Euro 2024 boosting customer engagement towards the end of the period. 

“Favourable results, in combination with a record share of bet builder activity, delivered a historic high sportsbook margin of 12.1%. This is considerably higher than the long-term average margin of 9.9% and we expect to see some normalisation in the second half of 2024.”

As for the first six months of 2024, total revenue was up 4% to £635.3m, while underlying EBITDA increased 26% to £132.9m.

Release of Kindred’s Q2 performance comes just one day after the firm published its responsible gambling statistics for the first half of 2024.

Between January and July, Kindred revealed that 0.44% of its customer base had been contacted after being flagged as being at risk of gambling-related harm.

The firm’s data also revealed that 76.9% of contacted customers had reduced their gambling activity as a result of proactive messages from Kindred, though that total is down from 78% in H2 of 2023.

Kindred’s ‘Journey to Zero’, which aims to eradicate revenue from high-risk players, revealed that the figure was 3% in Q2, the lowest since the business began reporting this percentage, in Q1 2020.