Annual Report & Accounts 2012 - REPORT OF THE GROUP FINANCE DIRECTOR
ANNUAL REPORT 2012 GVC H o l d i n g s
This review is in four sections:
1. Income statement;
3. Balance sheet; and
4. Key financial issues for 2013.
1. Income statement
The income statement reflects Betaland as a discontinued activity and therefore the comparatives for
2011 are restated.
The complex deal with EPC and Superbahis results in a combination of revenues and costs normally
being associated with gaming activities being compressed into a composite revenue figure, not easily
expressed into the Group's preferred KPI measure of "revenue per day". For this reason, the Group
describes the underlying activities in more conventional terms such as "sports wagers" and "sports
margin" and "revenue per day" although the latter for B2B is referred to here as "pro-forma revenue per
day" (PFR). This is in advance of the accounting treatment required following the acquisition of
Sportingbet plc and the elimination of the revenue-share arrangements.
1.1 Proforma revenues
Total revenues rose 116% to €104.2 million (2011: €48.3 million). The dominant reason for the increase
was the full-year's activity of the Superbahis customers, of EPC, to whom the Group provides B2B
Betboo's revenues increased by 17% to €10.3 million from €8.8 million, whilst CasinoClub decreased
by 4% to €28.1 million from €29.4 million.
1.2 Net Gaming Revenue
NGR is Gross Gaming Revenue less customer bonuses, bad debts and chargebacks, and in the case
of the agreement with EPC, is net of the certain allowable costs (such as payment processing, and
software royalties and affiliate commissions associated with the Superbahis product), along with the
revenue-share payable to Sportingbet.
Total NGR increased by €15.3 million (34%) to €59.6 million (2011: €44.3 million). €15 million of this
increase was attributable to B2B; €1.5 million was attributable to Betboo, whilst CasinoClub revenue
fell by €1.2 million.
1.3 Variable costs
These consist of payment processing fees, software royalties, and affiliate and other marketing
Contribution is NGR less variable costs and it increased by €14.5 million to €35.1 million. This increase
is attributable between:
2012 2011 Increase
€million €million €million
B2B 15.2 2.8 12.4
CasinoClub 16.3 15.5 0.8
Betboo 3.6 2.3 1.3
35.1 20.6 14.5
The rise in B2B contribution reflected a full year's activity, whilst for CasinoClub the increase was a
result of tight cost control. Betboo's increase was attributable to higher revenues. The relative
contribution ratios were:
REPORT OF THE GROUP FINANCE DIRECTOR