Growth in Western Europe powers Kindred’s Q2 gains

Kindred today hailed strong Q2 results, as group revenue increased 7% year-on-year to £327.6m, or 8% excluding its North American business, which finalised its closure in Q2.

Underlying EBITDA for the quarter was up to £73.6m, representing an increase of 32% on Q2 2023, and profit before tax hit £55.6m, up 68%.

The operator pointed to a “strategic focus on key markets” as it recorded an EBITDA margin of 22%.

Revenue relating to gross winnings grew 6% year-on-year, or 12% excluding North America, to £208.4m thanks to “exceptional growth in locally regulated markets” the firm said.

Impressive growth in revenue across Western Europe powered the group’s overall performance, particularly in the Netherlands (up 17%), Belgium (up 12%) and France (up 41%).

Active customers in France increased 26%, as Kindred CEO Nils Anden told analysts the firm had seized market share in the country during the quarter.

An updated Unibet app launch and improved user experience helped strengthen Kindred’s position in the country.

However, the firm attributed new regulatory measures in the UK to “slowed growth” of 4% in the market during Q2. It expects the trend to continue but believes it has performed “in line with the market”.

A 12% increase in active customers helped drive up revenues across all regulated markets, thanks to the start of the Euros tournament at the end of the quarter.

Sweden’s regulatory landscape remains challenging
In local currency, Sweden’s gross winnings revenue dropped 3% on increased affordability checks introduced in 2023.

Kindred is seeking to regain its market share in the country and said it is starting to see “signs of improvement” in the market.

Sweden has considered various new measures to tighten its gambling regulations, including increasing its gambling tax rate from 18% to 22% of GGR.

Betting margin increases
The start of the Euros positively impacted overall sports betting revenue, as gross revenue was up 18%. A higher than average betting margin in France impacted the wider group’s betting margin, which was reported as 13.3% (before free bets) and 12.1% after free bets.

Overall, higher margin products were favoured during the period, the firm said, including its bet builder offering.

Tightened expenses reap results
Anden also attributed lower marketing costs and improved ROI to the improved quarterly results. Marketing as a share of revenue decreased from 9.9% in Q2 2023 to 8.4% this year. Kindred’s North American exit did contribute to this drop.

“We have directed efforts on improving marketing efficiency and focusing investments in markets and channels that are most likely to deliver top-line growth,” Anden said in the report.