Better Collective believes that the performance in Q1 was driven by “Latin America and state launches in the US as well as general strong underlying organic growth”.
CEO Jesper Søgaard emphasised that the progression of the business from being “a business to being an integrated collective of businesses” has had an impact on these results and that mergers and acquisitions will remain part of the strategy.
“The past year and onwards, our M&A strategy is to acquire strong local and global sports media with a large and loyal readership, preferably with revenue mainly generated from a single business model in regular advertising.”
Søgaard also explained that Q1 was a period where the company was heavily focusing on its AdTech platform. Announced in its Q4 report, the data analytics tool is something the company believes “will be able to offer targeted marketing ads directly to the millions of sports fans that visit the Group’s broad portfolio of sports brands.
“Several third party platforms already exist, and as Better Collective has been highly acquisitive, we have managed to accumulate several AdTech platforms.”
Better Collective Q1 revenue growth
Better Collective reported revenue growth of 30% with €88m (£77m/$95m) from the €67.4m the company recorded in 2022.
Its net interest-bearing debt to EBITDA ratio sat at 2.30, up from 2.01 in 2022.
Also revealed was that operating profit before depreciation, amortisation and special items also grew with €33.2m in Q1 2023, an increase of 44% from €23.1m last year.
Of this revenue, publishing was responsible for 67% with €59.2m and paid media making up the remaining 33% with €28.7m.
Within this period, Better Collective entered into multiple publishing partnerships including one with football platform Goal, Punch in Nigeria and Polish news portal Wirtualna Polska.
The largest increase for the quarter came within paid media, which saw its specific operating profit before depreciation, amortisation and special items grow by 174% year-on-year from €2.9m to €7.9m.
Better Collective puts this growth in paid media down to a broad-based performance including “a breakthrough in the North American market as well as continued good performance in Latin America.”
Established markets holding strong
The company’s revenue continues to largely come from its more established markets with Europe and the rest of the world (ROW) accounting for 58% of the group’s revenue and the North American market making up the other 42%.
The EBITDA margin before special items for Europe and ROW saw a 37% increase in the same period in 2022, while North America saw a 39% increase for the same metric.
Cost base increase
The company also announced that its cost base has increased from €44m to €55m, a 25% growth in spending.
Better Collective puts this increase largely down to the AdTech platform and LATHAM expansion totalling €4.7m in the period.
The 2023 financial targets, set in 2022 and upgraded after the Skycon acquisition in April 2023 for £45m remain the same.
The company has set a revenue target of €305m to €315m, EBITDA before special items of €95m-€105m and net debt to EBITDA before special items under 2.0.