Unibet GroUp plc AnnUAl report 2006 Unibet GroUp plc AnnUAl report 2006

64 Pages·2007·2.12 MB·English

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www.unibetgroupplc.com
By players, for players
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The Annual General Meeting of Unibet Group plc will be held at 14.00 C.E.T.
on Wednesday 25 April 2007, at the Grand Hotel, Södra Blasieholmshamnen
FFiinnAAnncciiAAll 8, Stockholm.
Right to participate
Holders of Swedish Depositary Receipts (“SDRs”) who wish to attend the
2006 2005 AGM must be registered at VPC AB on Friday 13 April 2007 and notify
Gross winnings revenue – sports book GBPm 25.9 17.4 Skandinaviska Enskilda Banken AB (publ) their intention to attend the
AGM no later than 17.00 C.E.T. on Friday 20 April 2007, by filling in the
Gross winnings revenue – other gaming products GBPm 48.9 26.1 enrolment form provided at www.unibetgroupplc.com/AGM, “Notification
to holders of Swedish Depository Receipts in Unibet Group plc”. The form
Gross winnings revenue GBPm 74.8 43.5
must be completed in full and delivered electronically.
Adjusted EBITDA1 GBPm 32.1 21.6
Please note that conversions to and from SDRs and ordinary shares will
EBIT GBPm 28.4 19.9
not be permitted between 11 April and 25 April 2007.
EBIT margin % 37.9 45.7
Dividend
Return on total capital % 31.0 18.9
The Board of Directors proposes a dividend of SEK 5.50 per share/SDR.
Profit after tax GBP 37.9 13.7
Financial information
Profit margin % 50.7 31.5 Unibet Group plc’s financial information is available in Swedish and English.
Reports can be obtained from Unibet’s website, www.unibetgroupplc.com
Earnings per share GBP 1.344 0.523
or ordered by email at [email protected]. Distribution will be via email.
Equity/assets ratio % 70.8 53.6
Annual Reports can be ordered through the website,
Cash flow per share GBP 0.50 –0.07
www.unibetgroupplc.com or ordered by email at [email protected].
Number of employees at year end 270 175
Unibet will publish financial reports for the financial year 2007
Registered customers at year end 1,580,000 919,000
on the following dates:
Number of shares at year end 28,241,092 28,125,092
• Interim Report January – March 2007, on 9 May 2007.
• Interim Report January – June 2007, on 15 August 2007.
2006 includes a full year of results from Mr Bookmaker.com. • Interim Report January – September 2007, on 7 November 2007.
ooppeerrAAttiioonnAAll
• Gross winnings revenue continued to increase at a rapid pace,
to GBP 74.8 (2005: 43.5) million.
• EBIT (Profit from operations) increased by 43 per cent, to GBP 28.4
(2005: 19.9) million.
• Gross winnings revenue from Unibet’s sports business increased
significantly by 49 per cent, to GBP 25.9 (2005: 17.4) million.
• Gross winnings revenue from Unibet’s non-sports business increased
significantly by 87 per cent, to GBP 48.9 (2005: 26.1) million.
• Unibet’s business was not affected by the new legislation passed by the
US Congress in September 2006, as Unibet has never accepted business
from residents of the USA.
• The number of active customers increased to 218,770 (2005: 171,918)
by the year end.2
• Eight new language versions were launched and also several new
products including casino video slots and bingo.
• The Board of Directors proposes a dividend of SEK 5.50 (2005: 2.25)
per share/SDR.
1 A djusted EBITDA is profit from operations excluding depreciation and amortisation and in 2006 excluding
GBP 0.6 (2005: nil) million in reorganisation costs.
2 An active customer is defined as a customer who has placed a bet in the last three months.
Unibet Group plc Annual Report and Accounts 2006 61
“ Unibet’s business objective is to become one of the leading players
in the European ‘moneytainment’ market for online gaming.”
28.4
28.4
EBIT GBP
Contents
2006 Highlights 
mm Vision and strategy 2
Group at a glance 4
CEO’s statement 8
Market overview 0
37.9
37.9 Technological change
Profit after tax GBP
Unibet’s markets
Moneytainment 4
Financial objectives 6
mm Shares and share capital 8
Employees 20

Risk management 22
General legal environment 24
Directors’ report 26
Remuneration committee report 28
Corporate governance statement 30
1.344
1.344 Business performance review 33
Earnings per share GBP

Consolidated income statement 35
Consolidated balance sheet 36
Consolidated statement of
changes in equity 37
Consolidated cashflow statement 38
Notes to the consolidated financial
statements 39
5.50
5.50 Definitions 56
Proposed dividend SEK
Independent auditors’ report 57
Options 58
Board of Directors and CEO 60
Annual general meeting 6
The Company’s registered office is at
Camilleri Preziosi, Level 2 Valletta Buildings, South Street, Valletta, Malta
The Company’s registered number is C39017.
This document is the English original. In the event of any discrepancy between the original
English document and the Swedish translation, the English original shall prevail.
Annual Report and Accounts 2006 
VViissiioonn aanndd ssttrraatteeggyy
BBuussiinneessss CCoonnCCeepptt
Moneytainment – the thrill of But how does Unibet determine what is entertaining In Europe, gross winnings are expected by
putting money at stake in order and excellent within the business context? GBGC to rise from nearly EUR 3 billion in 2006
to over EUR 6 billion by 2010. And whereas the
to win more – is at the heart of From the start, Unibet has defined itself as a online share of the total European gambling market
Unibet’s vision. The company is – company ‘By players for players’. That phrase, which was nearly 4 per cent in 2006, by 2010 it is
sums up Unibet’s ethos, merits some explanation. expected to be close to 7 per cent.
and intends to remain – one of the
leading players in the European Unibet’s Chairman, Anders Ström, founded the Unibet’s aim is to have a significant share of
business 10 years ago. As a mathematician by that market.
moneytainment market. training, he was fascinated by the concept of
betting and the challenge of how best to To achieve that, Unibet will continue expanding
manage gambling risks in a highly disciplined – throughout Europe. Targets will be countries
Unibet’s continuing success is and profitable – way. with mature – but not saturated – gambling
based on providing competitive and cultures and a high proportion of households
In Unibet, he combined the rigour and expertise with internet connections.
reliable online gambling and building of his academic background with a passion for
value by delivering compelling harnessing the power of chance. Today, the The company will continue to broaden its range
company retains that balance and many of its of gaming products with exciting new offers
products and excellent service. employees are enthusiastic players themselves. designed to capture customers’ imaginations
and grow quickly.
As players, they fully understand what attracts
and motivates other players. Such empathy has Unibet will aim some new games specifically
enabled them to create a dynamic online at new customer groups.
gambling site that not only reflects – but
regularly anticipates – what users want. That is Existing customers will be retained and
one of Unibet’s greatest advantages. encouraged to increase their levels of activity
by rewarding loyalty through a range of incentive
The company has also been fortunate in its timing. programmes – each one carefully targeted to
During the company’s first decade, it rode the crest of work in local markets.
the IT wave. As internet and broadband penetration
rates have increased, Unibet’s markets have grown Similarly, the company will continue to tailor
accordingly. The company also continues to benefit website style and offers to reflect local culture
from the surge in e-commerce, essential to a and gaming preferences.
business that relies on secure and enhanced means
of payment over the internet. In Europe, the As a company that relies so heavily on technology,
e-commerce market, which totalled EUR 103 billion Unibet will make effective use of developments
in 2005, is expected to grow by 27 per cent year on in digital distribution channels, with particular focus
year in 2007 and 24 per cent in 2008 according on interactive services via PC and mobile devices.
to market analyst Global Betting and Gaming
Consultants (GBGC). And finally, the company will retain and refine
its business development strategy in terms of
Thanks to this enabling technological framework, markets, technology and product range.
the market for online gambling continues to grow.
Key objectives
Unibet aims to be recognised as a The best way to accomplish this To accomplish all of this, Unibet will
European leader in the moneytainment is by having satisfied customers who continue to motivate its employees;
market for online gaming and be one demonstrate their loyalty by coming rewarding them for their passionate
of the top three companies of its kind back and spending more time – and commitment to making their company
in each of the company’s markets. money – on Unibet’s website. an undisputed winner in the online
gambling business.
Growth in gross winnings revenue
should exceed the pace of growth of
the overall market for online gambling.
2 Unibet Group plc
FIFA World Cup 2006 saw records
in both gross turnover and numbers
of bets taken. Italy beat France 5-3
on penalties in the final.
Annual Report and Accounts 2006 3
ggrroouupp aatt aa ggllaannCCee
ssppoorrttss BBeettttiinngg
Sports betting Live betting Supertoto
Unibet offers an impressive range A faster and more exciting form A Supertoto coupon adds even
of bet offers from a wide variety of gambling. more excitement to the weekend
of sports. Bets can be placed 24/7, football action. Predict the
either on Unibet’s homepage or The ability to place bets in real outcome of 14 matches and win
by using a mobile phone. time during the course of a or share the top prize. Supertoto
match increases the excitement payouts depend on the size of
The most popular sport is of of sports betting and gives live the pool and how many winners
course football, followed by tennis, betting a high entertainment have picked the correct outcome
ice-hockey and trotting. However, value. The instant action the on the 14 different matches.
sports like basketball and product offers not only attracts A player could win on 14, 13, 12
handball are growing in interest the regular sports punter but also and 11 correct matches with one
throughout Europe. During 2006 the more casino-oriented gambler. Supertoto coupon. The Unibet
sports events such as golf, pool is combined with the pools
particularly the Ryder Cup and Customers can place any from other online bookmakers.
winter sports, specifically the number of bets during a live
Olympic Games, but also newly event on a variety of offers such If there is only one winner,
emerging sports like beach- as home win/draw/away win, the least that person can win
volleyball and darts, have proved over/under number of goals, next is EUR 100,000!
to be popular betting sports. corner or next ace serve. The
odds will change as the match
During the year, new exciting evolves but the punter retains the
products like statistics and odds which applied at the time of
‘livescore’ were introduced, to placing the bet.
add extra value and excitement
for Unibet’s customers. Unibet has a unique “Cash-in
Function” that allows punters
The Sports betting department to secure part of their potential
prides itself on offering an winnings or cut the potential
extremely competitive pay-out losses before the conclusion
ratio and Unibet are a leading of the event.
player on the European betting
market when it comes to quality
and sports knowledge.
During the year Unibet was named
the eGaming Review “European
Sportsbook of the year”.
In August 2006 Unibet started
advertising on perimeter boards
in La Liga and the Premier League.
This attracted a lot of international
media coverage.
4 Unibet Group plc
Annual Report and Accounts 2006 5
ggrroouupp aatt aa ggllaannCCee
nnoonn--ssppoorrttss BBeettttiinngg
Casino Scratch card Poker Games
Unibet Casino has been live since There is an online scratch card Online Poker was launched in Unibet Games were launched
November 2003 and has grown exclusively available at Unibet. September 2004 and has been in December 2005 as a lighter
considerably over the last years, very successful. As at 1 January alternative to casino and have
peaking in 2006 by making the It has been live since 2005 in 2007, more than 200,000 grown consistently over the past
biggest gross win of all Unibet Unibet’s bigger markets; in 2006 customers had visited the poker year. There are between 6,000
products in the fourth quarter. it was launched for every market room and registered to play. and 9,000 customers that visit
With over 40 casino games where Unibet is present. One of the key means of teaching the games monthly. Unibet offers
available, and between 25,000 customers how to play poker is the 14 games including Hi-Lo,
to 30,000 customers visiting the With a win chance that is Poker School. Customers can also Virtual sports and Keno based
casino monthly, it has become substantially higher than those play for free with ‘Fun Money’. flash games.
a key product under the Unibet of state lotteries, it is an
umbrella. attractive online alternative. The Unibet poker product is Unibet offers regular unique
unique and includes other games customised tournaments across
The casino games include all such as Casino and Live Sports the games board. These allow
the best and most popular games Betting. Unibet has one of the players the opportunity to take
that can be found in any land based strongest tournament packages part in exciting games tournaments.
casino. With the frequent addition in the industry giving away more
of new games, and by organising than one million dollars per week
tournaments on all casino games, in guaranteed tournaments.
Unibet casino can offer customers Unibet has several types of poker
a broader experience than any and each type offers a range of
land based casino ever could. stakes to suit all players. In
addition to the usual range of
The games in Unibet casino can poker games, such as Texas
be classified under Table games, Hold’em, Omaha, Omaha High/
Card games, Slot machines, Low, 7 Card Stud, Unibet also
Video Poker and other. offers Five Card Draw.
6 Unibet Group plc
Bingo
Unibet Bingo was launched in
Sweden in August 2006 and
generated more than 20,000
sign-ups in the first four months.
The chat room is an important
aspect of Unibet Bingo where
chat masters guarantee an
interactive feeling to the
customers by organising
chat games in Swedish.
Bingo also includes other
products such as a variety
of Casino games.
The Swedish TV format
‘Pokermiljonen’ attracts
millions of viewers. During
the spring of 2007, the sixth
season will be shown on
Swedish TV4.
Annual Report and Accounts 2006 7
CCeeoo’’ss ssttaatteemmeenntt
At the end of 2006, our client base had increased
by 58 per cent to 1,580,000 and active players
numbered 219,000.
More players naturally had a positive impact on
our total gross turnover, which showed a 50%
increase to GBP 414 million, in 2006, compared
to GBP 276 million a year earlier, where Mr
Bookmaker was included for part of the year.
Gross winnings for 2006 were GBP 74.8 (2005:
43.5) million showing an increase of 72%.
According to archaeologists, the knucklebones found at the sites
of prehistoric human settlements were probably used for some sort EBIT for 2006 was GBP 28.4 (2005: 19.9)
million, showing a 43% increase.
of primitive gambling game.
Consolidation, diversification & expansion
One of our biggest achievements was the full
More recently, one of the biggest hit films of 2006 was Casino Royale, integration of a company we acquired in 2005.
which captured some of the glamour and excitement of poker. At that time, Mr Bookmaker.com was one of the
largest gaming operators in France and the
Benelux countries. It was an acquisition that
It’s a long way from cave to casino, but the human predilection brought us several individuals who have since
been given global responsibility.
for taking pleasure in controlled risk endures. Unibet fulfils that
atavistic desire in ways that entertain our customers while bringing During the course of the year we expanded our
operations to include new countries: Estonia,
profit to our shareholders. Greece, Hungary, the Czech Republic, Portugal,
Romania and Croatia. Today, Unibet does business
in 20 languages in more than 150 countries.
Our performance in the past year bears that out.
Since its launch, Unibet has received a lot of media attention to its
competitive online gambling business model. This article is from the
Swedish newspaper ‘Expressen’ in September 1998. During 2006,
there were over 1,800 articles about Unibet in Sweden alone.
8 Unibet Group plc