Financial Targets

Growth target

In the short to medium-term (2018–2020), the Group’s target is to deliver an average annual revenue growth in the range of 30 to 50 percent, including impact from acquisitions. The timing of acquisitions is uncertain by nature, growth may fluctuate between years.The Group’s target is to deliver an annual organic revenue growth in excess of the underlying market growth. Based on the historical and forecasted growth in the European iGaming market the Group expects organic growth to be double-digit in the short to medium-term.

Margin target

The Group’s target is to deliver an EBITA margin in excess of 40 percent before non-recurring costs. The Group will continuously invest in its core assets in order to ensure a long term sustainable business.

Capital structure

Net Debt (defined as interest bearing debt, including earn-outs from acquisitions, minus cash and cash equivalents) in relation to EBITDA before items affecting comparability (on a rolling 12-month basis), excluding temporary deviations, must normally not exceed 2.5 times. The Board of Directors may decide to deviate from this temporarily if it is believed to be justified.

Key assumptions included in the financial targets

The assumptions on which the Group has based its short to long-term financial targets include that:

• the underlying European iGaming market develops in accordance with the estimated market growth. The online sports betting and online casino markets are expected to grow by a CAGR of 8.0 percent and 9.5 percent respectively for the period 2017 to 2020. Mobile sports betting and mobile casino are expected to grow by a CAGR of 14.0 percent and 20.9 percent respectively, for the period 2017 to 2020;
• the Group is able to maintain its current partnerships with iGaming operators, particularly with respect to its largest partnership in terms of revenue and that iGaming operators in existing partnerships with the Group continue to invest in online lead generation marketing;
• the Group is able to improve and develop its product portfolio to attract new iGaming operators and users and remain an attractive partner for its existing iGaming operators and their users; and
• in preparing the short to long-term financial targets, the Group has assumed that no significant change will occur in the following key areas:

 

• the strategies of the Group’s iGaming operators in sourcing and marketing towards potential users, including their use of iGaming affiliates, and renewing contracts covering services for online lead generation currently provided by the Group;
• the competitive landscape in the iGaming affiliate market and the iGaming market, including competitive pricing pressure, general developments in the market or among competitors, and the Group’s ability to adapt and continue to deliver attractive products and services for users; and
• the existing political, fiscal, market or economic conditions, and the administrative, regulatory or tax treatment of the Group.

The Group’s financial targets set forth above constitute forward looking statements that is subject to considerable uncertainty. The financial targets are based upon a number of assumptions relating to, among others, the development of the Group’s industry, business, results of operations and financial position. The Group’s business, results of operations and financial position, and the industry and macroeconomic environment in which the Group operates, may differ materially from, and be more negative than, those assumed by the Group when preparing the financial targets set out above. As a result, the Group’s ability to reach these financial targets is subject to uncertainties and contingencies, some of which are beyond its control, and no assurance can be given that the Group will be able to reach these targets or that the Group’s financial position or results of operations will not be materially different from these financial targets.