Annual Report and Accounts 2009 (pdf-file)

Transcription

Unibet Group plc
Annual Report and Accounts 2009
Unibet Group plc
Fawwara Buildings
Msida Road, Gzira GZR1402, Malta.
Tel: +356 2133 3532
ANNUAL REPORT 2009 Unibet Group plc
www.unibetgroupplc.com
playing to win
by players for players
PROFIT BEFORE TAX
+161%
Company No: C39017.
Registered in Malta.
PBT GBP 28.9M
Registered office:
c/o Camilleri Preziosi,
Level 2, Valletta Buildings
South Street, Valletta VLT11, Malta.
Active customers
+25%
365,865 Active customers worldwide
Pioneer in the
moneytainment®
industry
AnnuAl generAl meeting
Unibet was founded in 1997. With over 4.1 million registered customers
in more than 100 countries, the Group is one of Europe’s largest
online gaming operators.
Gaming products include pre-game sports betting, live betting, casino, poker,
bingo and soft games. Customers can bet via websites in 27 languages,
and increasingly via mobile phones and other mobile devices.
The Annual General Meeting (AGM) of Unibet Group plc will be held at 15.00
CET on Thursday 6 May 2010, at the Grand Hotel, Södra Blasieholmshamnen
8, Stockholm in Sweden.
Right to participate
Holders of Swedish Depositary Receipts (SDRs) who wish to attend the AGM
must be registered at Euroclear Sweden AB/VPC on Monday 26 April 2010
and notify Skandinaviska Enskilda Banken AB (publ) of their intention to attend
the AGM no later than 11.00 CET on Friday 30 April 2010, by filling in the
enrolment form provided at www.unibetgroupplc.com/AGM, Notification to
holders of Swedish Depository Receipts in Unibet Group plc. The form must be
completed in full and delivered electronically.
Unibet creates products and services intended for the global market,
and customises them to suit local needs. This “glocal” approach – global
reach and mindset combined with local understanding – helps Unibet
make all customers feel at home.
Please note that conversions to and from SDRs and ordinary shares will not
be permitted between 26 April and 6 May 2010.
mission
To provide reliable online gaming and build
value by delivering entertaining products
and excellent service.
vision
The thrill of putting money at stake for
the chance to win more is at the heart
of Unibet’s vision – it’s moneytainment®.
Key objectives
Satisfied and excited customers
Dividend
The Board of Directors proposes a dividend of GBP 0.71 per share/SDR,
which is approximately SEK 7.68 per share/SDR.
Financial information
Unibet Group plc’s financial information is available in Swedish and English.
Reports can be obtained from Unibet’s website, www.unibetgroupplc.com or
ordered by email at [email protected]. Distribution will be via email.
unibet’s strengths
One of Europe’s largest gaming
companies in a fast-growing and exciting
consumer category
Motivated employees
Strong financials
Annual Reports can be ordered through the website, www.unibetgroupplc.com
or ordered by email at [email protected].
Unibet will publish financial reports for the financial year 2010 on
the following dates:
• Interim Report January – March 2010, on 5 May 2010
• Interim Report January – June 2010, on 11 August 2010
• Interim Report January – September 2010, on 3 November 2010.
Diversified product and geographic
portfolio
Main focus on organic growth combined
with selected acquisitions
Regarded as one of Europe’s strongest
sportsbooks
overview
Key highlights
Unibet at a glance
Gaming responsibly
Q&A with the CEO
Sports betting
Non-sports betting
Designed and produced by SampsonMay
Telephone: 020 7403 4099 www.sampsonmay.com
business review
1
2
4
6
8
10
Delivering against our strategy
Emerging markets new opportunities
Innovation leading the way
Market overview
Unibet’s markets
Financial objectives
Sportsbook B2B network
Business performance review
Unibet going forward
Dedicated people
General legal environment
Principal risks
governAnce
12
14
16
18
20
22
23
24
26
27
28
30
Shares and share capital
Directors’ report
Remuneration Committee report
Corporate governance statement
Accounts
Consolidated income statement
Statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes
in equity
Consolidated cash flow statement
Notes to the consolidated financial
statements
Printed by Park Communications on FSC certified paper.
AdditionAl informAtion
32
34
36
38
41
41
42
43
44
45
Independent auditors’ report to the
members of Unibet Group plc
Board of Directors and CEO
Definitions
Annual General Meeting
62
63
64
65
When you have finished with
this report please recycle it
whAt’s inside
50%
Park is an EMAS certified CarbonNeutral® Company and its Environmental
Management System is certified to ISO14001.
100% of the inks used are vegetable oil based 95% of press chemicals are
recycled for further use and on average 99% of any waste associated with
this production will be recycled.
This document is printed on Revive 50:50; a paper containing 50% virgin fibre
and 50% recycled fibre. The pulp used in this product is bleached using an
Elemental Chlorine Free (ECF) process and contains fibre from well managed,
sustainable, FSC certified forests.
The unavoidable carbon emissions generated during the manufacture and
delivery of this document have been reduced to net zero through a verified,
carbon offsetting project.
Unibet is not affiliated or connected with sports teams, event organisers or players
displayed in this report.
Unibet Group plc Annual Report and Accounts 2009
65
overview
key hiGhliGhTs
ifrs (GBp)
non-GAAp*
Gross winninGs revenue 2009
+12% (2008: 123.4m)
EBITDA per share GBP
eBiTDA 2009
(2008: 46.3m)
2009
2008
41.9
46.3
1.498
1.657
30
37
-0.352
-1.340
2009
2008
EBITDA margin %
Net cash less bond per share GBP
overview
138.3m 41.9m
EBITDA GBPm
operATionAl
Number of employees at year end
465
412
Registered customers at year end
4,149,668
3,142,751
365,865
292,168
28,258,038
28,241,092
Active customers last three
months of the year
Number of shares at year end
2009
2008
32.8
36.5
58
45
Net cash per share GBP
-0.352
0.994
Dividend per share paid
out to SDR-holders GBP
0.23
0.50
Profit from operations GBPm
Equity: assets ratio %
All time high in active customers
All time high in sports betting gross
winnings revenue
For the third time in four years Unibet was awarded
“European Sports betting operator of the Year”
Due to the popularity and success the Live Casino
has achieved Unibet was also awarded the
“European Live Gaming Operator of the Year”
*Certain measures used in the reporting are not defined under
IFRS. The Company believes that these measures are important
to understand the performance of the business. (Also refer to
definitions on page 64).
The Company’s registered office is at Camilleri Preziosi, Level 2
Valletta Buildings, South Street, Valletta, Malta. The Company’s
registered number is C39017.
furTher non-GAAp*
AnAlysis
More information to be found
in the business performance
review on page 24.
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.
for furTher informATion
see pAGe 11
live BeTTinG
AccelerATinG
furTher operATionAl
AnAlysis
More information to be found
in the financial objectives
section on page 22.
see pAGe 17
LIVE
live cAsino
Unibet has a dominant position in
the Nordics and Western Europe
in the live gaming segment and a
strong position in Southern Europe.
LIVE
Strong barrier to market entry
Over 21,000 events offered
Over 4,500 events streamed
moBile chAnnel GrowinG
Mobile betting took some major
steps forward in 2009 as the mobile
platform asserted its place in the
betting industry’s future plans.
see pAGes 8-9
1
overview
uniBeT
AT A GlAnce
who we Are
key fAcTs
2009 AwArDs
Awarded two prizes at the prestigious
eGaming Annual Awards ceremony organised
by the international gaming magazine
eGaming Review, Unibet is a clear leader
in the moneytainment® industry.
For the third time in four years Unibet was
awarded “European Sports Betting Operator
of the Year”. The second award was the
“European Live Gaming Operator” which
Unibet was awarded due to the popularity
and success the Live Casino has achieved.
whAT we Do
465
pAssionATe, frienDly eXperTs
40
nATionAliTies
27
lAnGuAGes
see pAGes 8-9
sporTs BeTTinG
Sports betting is the heartbeat of Unibet’s business.
To illustrate the sheer power of major sporting events,
the number of active customers using Unibet hit a
peak of 365,865 in the fourth quarter of 2009.
over
Unibet is one of the largest online gaming
operators in the European market with over
4.1 million customers worldwide.
100
counTries wiTh cusTomer presence
Unibet offers a comprehensive range of online
gaming products, such as pre-match sports
betting, live betting, casino, poker, bingo and
soft games, through the Group’s websites.
Unibet now also offers Sportsbook and risk
management services to external B2B customers.
The customer base spans more than
100 countries.
Unibet is audited and certified by eCOGRA
and by G4, Global Gambling Guidance Group,
in relation to responsible and fair gaming.
2
see pAGes 10-11
non-sporTs BeTTinG
Online poker is a phenomenon. Bingo brings people
together. The online casino gives players a little of
the glamour of the real thing. Non-sports betting
is an important part of Unibet’s business, and
opens up a broad range of target markets – young
and old, male and female – to the possibilities
of moneytainment®.
overview
Unibet has customers in more than
100 countries worldwide. The Group’s
key markets are divided into three
territories: Nordic and Western Europe,
along with the combined region of
Central, Eastern and Southern Europe.
Nordic is the Group’s biggest market,
while Central, Eastern and Southern
Europe is the fastest growing.
28.9m
profiT Before TAX (GBp)
4.1m
reGisTereD cusTomers worlDwiDe
online Gross GAminG 2007 – 2012e
(eur Bn)
uniBeT rollinG 12-monTh ADjusTeD cAsh flow versus profiT
from operATions AnD Before TAX (GBp million)
11.1m
esTimATeD online sporTs BeTTinG
AccounTs in europe 2012
Source: H2 Gambling Capital, January 2010
Profit from operations (trailing 12-mth)
Profit before tax (trailing 12-mth)
Operating cash flow before movements in working capital
after tax and capital expenditure (see Note 28 on page 61)
(trailing 12-mth)
3
overview
GAminG
responsiBly
The imporTAnce of
responsiBle GAminG
“By players, for players” does not stop
at providing fair gaming and betting
products tailored to customer’s
entertainment needs. It also entails
a shared responsibility to educate
customers on responsible online
behaviour and ensure that gaming
is and remains fun and entertaining.
In contrast to what conventional
wisdom may suggest, Unibet has
vested interests in providing for a safe
and responsible moneytainment®
environment. The key objective
as a customer-centric company
is to provide value added service
to customers over a longer period
of time, build trust and increase
customer retention and satisfaction.
In this regard, responsible gaming is
an integrated part of the overriding
company objectives.
Being a founding member of EGBA
and ESSA, Unibet has always
advocated a constructive dialogue
based upon facts, instead of myths
and misunderstandings. Whilst
acknowledging that consumer
protection and problem gambling,
like any other problem behaviour,
must be addressed in the most
adequate manner, one may not forget
that studies in the field of responsible
gaming reveal that more than 98 per
cent of the population enjoy gaming
and betting in a responsible manner.
An analysis of Unibet’s database
shows that the average player is
32 years old, places 188 stakes per
year with an average value per stake
of GBP 6.2.
For the vast majority of people,
gambling is fun and entertaining,
a hobby or a social activity among
others, this both online and land-based.
To a very small percentage of people,
gambling – like any other human
behaviour – can become problematic
and develop into problem behaviour,
even addiction. The questions also
needing to be answered are; what
do 98 per cent of the gamblers get
4
out of their gaming? What do they do
right, which the minority does wrong?
What good does it do them? What
are the moral benefits for society as
a whole? Everyone will benefit from
this: Unibet, the gaming industry, as
well as the specialised service centres,
customers, and potential customers.
As the dominant research paradigm
for gambling behaviour relates to
understanding, mitigating or treating
gambling-related risk or harm, Unibet
initiated cooperation with a leading
scientific research centre to study
the possible benefits of gambling for
society at large. Acknowledging that
problem behaviour remains a priority,
by supporting this scientific initiative,
Unibet aims to contribute in a positive
manner to a broader responsible
gaming debate.
When consumer protection at large
is based upon an informed choice
and self-responsibility, why should
98 per cent of European consumers
be denied and restricted in their
choice to purchase services across
borders? When one does too much
of something, whether it is food,
shopping, gambling, alcohol or other
chemical substances, one will start
to get negative consequences of that
particular behaviour. Balance is the key
in enjoying life and having a good time.
This is no different in the gaming or
moneytainment® industry.
What has changed over the last
decade, and driven by innovation
and the further development of
e-commerce, is that more people are
discovering the internet and internet
gaming. As such this is not more
dangerous or problematic. However
addressing new challenges and risks
associated with e-commerce such
as the protection of minors on the
internet, is a shared responsibility
of us all, including service providers,
politicians, adults and regulators.
New technologies also provide new
opportunities to increase protection
and security. The mere fact that
As A leADer in The europeAn moneyTAinmenT® inDusTry,
responsiBiliTy AnD cusTomer sATisfAcTion Are key
oBjecTives AnD pArT of uniBeT’s corporATe DnA.
for uniBeT, responsiBiliTy TAkes A numBer of forms,
of which primAry prevenTion is The mosT imporTAnT.
+10
over 10 yeArs eXperience of responsiBle
GAminG, conTrols, securiTy AnD
frAuD prevenTion
overview
+98%
over 98% of plAyers enjoy GAminG
AnD BeTTinG in A responsiBle mAnner
responsible gaming is high up the
agenda of all stakeholders, including
monopolies and politicians, finds its
root cause in the arrival of technology
driven operators such as Unibet.
Together with other EGBA members,
Unibet is raising the bar and standards
on an ongoing basis.
The yearly Responsible Gaming
Day (RGD), organised in the
European Parliament by EGBA, is
a good illustration of how Unibet
wishes to come via open dialogue
to more efficient and sustainable
solutions for all. The work done by
the EGBA in relation to consumer
protection and its standards was
taken into consideration by the
Swedish EU presidency. As history
has demonstrated, prohibition
is counterproductive as it drives
both provision and consumption
underground without any safeguards
for consumers. If consumer
protection is the true driver of the
debate then Unibet and alike are
part of the solution.
In line with the six points on page 7,
Unibet advocates a passport
mechanism based on cooperation
between Member States, nonduplication of requirements and the
definition of equivalent or minimum
consumer protection standards in
the European Union.
responsiBle GAminG DAy-To-DAy
For Unibet, responsibility takes a
number of forms, of which primary
prevention is the most important.
All of the Company’s operations are
designed to prevent problems as
much as possible, including gambling
addiction, under-age gambling and
safeguarding the integrity and security
of the operations.
In general, the Company’s responsible
gaming policy is designed i) to apply
to all the customers, not just problem
gamblers, and ii) to increase customer
satisfaction and retention as part of
house-hold entertainment.
responsiBle GAminG
DAy-To-DAy
To implement its Responsible
Gaming vision, Unibet, amongst
other things, undertakes to:
Educate and provide information
to all staff in Responsible Gaming
strategies and procedures.
Have Responsible Gaming as an
integrated part of the daily operations
in everything the company does, from
customer service to marketing and
technical solutions.
Be committed in being up to date
with research and public awareness
regarding Responsible Gaming and
contribute to further research in
this area.
Evaluate, and improve where needed,
its policies and procedures from
an holistic point by a qualified
behavioural psychologist, appointed
Responsible Gaming Manager.
Monitor vigilantly all transactions and
have a zero-tolerance policy against
fraud, including under-age gambling.
Advertise responsibly.
Use the opportunities offered by new
technologies to optimise consumer
protection, e.g. by implementing third
party ID verification tools or relying
on objective recorded data instead
of self-reported data.
Have tools available on the Group’s
websites to enable customers to set
their own gaming limits in function of
time, budget and/or products.
Provide responsible gaming information,
including self-assessment tools and
links where to turn for further specialised
assistance on the websites.
Engage with external specialists and
have processes audited and improved
in cooperation with suppliers as G4,
the Global Gambling Guidance Group
(G4), Adictel, eCOGRA (eCommerce
and Online Gaming Regulation and
Assurance) or Gambling Therapy.
5
overview
Q&A
wiTh The ceo
peTTer nylAnDer
whAT hAs hAppeneD in 2009?
If we summarise 2009 we can see
that despite the economic downturn
the gaming industry has continued
to grow. Compared to other consumer
industries we have been resilient but
not totally immune.
Re-regulation has gained momentum
with Italy reducing betting duties, and
adding more products, and France
and Denmark moving from monopoly
positions opening up for private
industry in different forms.
Consolidation has continued to be a
theme with Bwin, Mangas and others
being active in the market place.
We could also see that the online industry
keeps on delivering more innovation
with streaming, WebTV and the mobile
channel producing real numbers and
real contribution for the industry and
for ourselves.
whAT cAn we eXpecT
from 2010?
If we look at where independent
analysts predict this industry is
going, the underlying growth and the
consumer demand is expected to
continue and support industry growth.
2010 will also be a big year for
European sportbooks with the winter
Olympics just passed and the World
Cup in football to come later this spring.
We also expect the consolidation
to continue and the underlying trend
towards re-regulation to carry on
paralleled with a persisting legal tension
field. An interesting phenomenon is
that re-regulation triggers potential
new entrants such as telecom, media,
land-based casino groups and venture
capitalists, creating a new wave of
industry entrants.
6
A new EU Commission with the
important task of being guardians of
the treaty and supporting the single
market principle has just been installed
in Brussels. However it seems to take
time before the vision of one digital
European market place becomes
a reality.
whAT will Drive uniBeT
in The cominG yeAr?
Besides the strong sports
calendar, streaming and broadcasting
of sport events will be an important
factor. Live betting is still in a fantastic
growth phase and we will continue
to develop the product and broaden
our offerings in order to always be
on the forefront.
Our emerging markets in Europe are
developing well, stimulated by our
investments in a number of activities
such as sponsorships, poker TV, and
active online marketing.
We have also added a new business
area where we offer our B2B in-house
developed proprietary system for fixed
and live odds betting, including odds
compiling and risk management.
The first operator to sign up was the
Ålandic gaming company Paf. They will
also be able to offer our fast growing
sports betting pool products, SuperToto
and SuperScore to their punters.
In connection with this we have
initiated investigations on how to
structure our B2B business in order
to protect the integrity of the B2B
customers and to maximise the
shareholder value for the Unibet
shareholders.
So all in all, our shareholders can look
forward to a very exciting year whereby
“By players, for players” will show that
we really work for our players…
peTTer nylAnDer
uniBeT ToDAy
uniBeT’s 6 poinTs
of A moDern europeAn
GAminG mArkeT
1. free movemenT AnD choice
Article 56 in the Treaty of the
Functioning of the European Union
(Treaty of Lisbon), is one of the
fundamental principles of the
EU constellation and prosperity.
2. compeTiTion increAses
reGulATion AnD conTrol
A competitive market has a regulatory
and controlling effect between
market operations.
Trust and security are key differentiators
in e-commerce.
As in telecoms, we wish for a highly
regulated EU market with appropriate
consumer protection mechanisms.
3. fiGhT proBlem GAminG BAseD
on science
The vast majority use gaming services
in a responsible manner.
Responsible gaming is a top priority.
4. sTATe reGulATe, noT operATe
Regulation and enforcement
by independent authorities and
cooperation between Member States.
5. AppropriATe eu frAmework
Recognises cross-border
technology-driven industry.
High-end consumer protection.
Guarantees consumer choice.
Fair and equal market access.
Cooperation between Member States.
6. we Are pArT of The soluTion
Unibet is a public company, listed
on NASDAQ OMX Nordic Exchange
since 2004.
We are EU-regulated and push for
higher standards.
Self-regulation and co-regulation
are key.
Cooperation, not repression.
Trust and security are key
differentiators in e-commerce.
7
overview
The online GAminG
inDusTry is 100% in
The new fronTier
DrivinG chAnGe wiTh
no AnAloGue leGAcy
overview
sporTs BeTTinG
inTroDucTion
vArieTy AnD innovATion
pre-mATch BeTTinG
The BiGGesT pAyouT for 14 correcT
preDicTions on superToTo DurinG
2009 (eur)
pre-mATch BeT offers DurinG 2009
The Unibet Sportsbook product
portfolio consists of fixed odds
betting as well as the Football/Ice
Hockey pool betting products
Supertoto and SuperScore. Unibet
also offers betting on French Horses
and on Swedish Trotting through
the Travnet Live Racing platform.
The continued expansion of the Unibet
sporting range has proved the strength
behind the success of 2009.
Unibet offered odds on over 50
different sports during 2009, ranging
from Champions League football to
Mixed Martial Arts. The most popular
Sportsbook bets were on English
football with over 17 million bets placed.
Football is the sport that provided
over 55 per cent of Unibet’s pre-match
betting turnover. The most popular
Football Leagues to bet on in 2009
were the English leagues closely
followed by the Champions League
and the leagues in Spain, France
and Italy.
232,247.6 875,000
Sports betting is the heart of the Unibet business –
providing high-octane, high-thrills entertainment
on local and international events 24 hours a day,
7 days a week.
There are a vast range of sporting opportunities
to bet on around the globe, from the biggest
international events to more localised competitions,
whilst also providing coverage of popular nonsporting events; everything from the Eurovision
Song Contest and the Oscars, to whether or not
Susan Boyle will win a Grammy.
Unibet is always looking to the future and raising
the bar with innovative new products and an
expansion of the existing Sportsbook portfolio.
During 2009, mobile channel developments, live
betting and a significant increase in streamed live
sport, were key elements in the Group’s drive
to be an industry leader and innovator.
51.2m
Furthermore, Unibet continued its
market-leading approach to nonsports offering. Once again, the
Eurovision Song Contest was the
most popular entertainment event.
There was huge interest across
Europe with 40,000 bets placed.
Mobile betting really took off in
2009 and with new platforms coming
next year the potential for 2010
looks enormous. Thanks in part to
the launch of an iPhone client, Unibet
had a 400 per cent increase in mobile
actives at the end of 2009 compared
to the end of 2008. The mobile
channel provides even more
opportunities to bet wherever you
are and whenever you want; at the
stadium, on the bus or at home
with friends.
By offering a forever growing range of
product offers, the product pushed all
barriers with over 68 million bets
placed in 2009.
Tennis, ice hockey, basketball and
trotting were the other highest
turnover sports after football.
Unibet has proved this year that
the product is not reliant on major
showpieces such as the World Cup
and the Olympics. By having a variety
of events and bet types, the fixed
odds can generate interest even in
quieter months.
2010 is definitely a year to keep an
eye on – the recent Winter Olympics
and the World Cup will fuel betting
interest and push the fixed odds offering
up to a new level. The World Cup
dream scenario would see an early exit
from the tournament for Brazil and a
final between Australia vs Denmark.
overAll Gross winninGs revenue By sporTs
BeTTinG proDucT 2009 (GBp)
uniBeT Gross winninGs revenue 2009
26%
63%
11%
Pre-match betting
Live betting
Total Sports betting GBP 51.2m
Non-sports betting GBP 87.2m
30 Jan 2010: Birmingham City v Tottenham
Hotspur, Premier League.
8
24 Feb 2010: Cross-Country Skiing Men’s
4 x 10km Relay.
live BeTTinG
sTreAminG/uniBeT Tv
live BeTTinG AcTiviTies GrowTh
live sTreAmeD evenTs offereD
DurinG 2009
Live betting continued to thrive and
flourish throughout 2009.
The Sportsbook streaming has
revolutionised the brand in 2009 and
looks set to push the product for 2010.
The range of bets Unibet offers on
a live match is continually increasing,
giving a greater range of variety of
bet types.
The product grew so much in 2009
that it accounted for over 50 per cent
of the Sportsbook total turnover. 2009
saw Unibet offer over 21,000 live
events in total of which 12,000 were
football matches. In 2010 live betting
will offer over 30,000 matches in total.
Tennis was the next most popular live
betting sport with over 3,400 events
offered. It proves to be a successful
live betting sport due to the vast range
of bet offers that Unibet is able to
provide. As well as all the prices on
match odds and next set, there are
prices on such things as next point,
next game and next game score.
These offerings encourage turnover
and stimulate activity as they are very
fast and settled quickly, enabling the
customer to then bet again and again
throughout the match.
4,500
overview
31.67%
The impressive growth in the live
betting product has also been achieved
by the substantial strengthening of the
live streaming offer.
Streaming has become a vital part of
the business, providing entertainment
on a whole new level and combined
with the live offer this creates an
ultimate service to watch and bet at
the same time. With the acquisition of
many new leagues and events, Unibet
now streams about 450 live events
per month – that’s almost 15 matches
per day! In 2010 these figures will
continue to increase significantly.
The offer is a strategic mix of high
profile events and smaller events
ranging in size and stature from
Spanish Primera and Grand Slam
tennis down to well-timed events
like Darts World Championships
and Philippine basketball.
Del Potro vs Federer – a thrilling match.
684,399
hiGhesT live BeTTinG Turnover (GBp)
AchievemenTs
For the third time in four years, Unibet was awarded the
prestigious European Sports betting operator of the Year
at the annual EGR Awards.
It was also a record-breaking year – in October the Sportsbook
posted an all time high in gross winning revenue, just short of
the GBP 10 million mark.
DiD you know?
Live betting gives the ability to bet
on practically anything, any time from
the top football and tennis matches to
squash and beach soccer, and watch
the match in the live betting console
thanks to Unibet TV with the unique
design of the client. There is also the
“Ca$h In” function, an innovative
feature which enables the customer
to take a profit on both sides as a
match is in progress. This sophisticated
tool really makes Unibet’s product
stand out from its competitors.
...That the football match that created the biggest live betting
turnover for Unibet during 2009 was the Champions League
Final between Barcelona and Manchester United at the Stadio
Olimpico in Rome. The odds on Barcelona to win the treble
were 30.00 at the start of the season.
...That the SuperScore odds record is 139,986 (10 March 2009).
21,000
evenTs in live BeTTinG DurinG 2009
26 Jan 2010 Rafael Nadal of Spain eyes a return.
14 May 2009 Eurovision Song Contest – Moscow.
9
overview
non-sporTs BeTTinG
inTroDucTion
poker
cAsino
ToTAl plAyers in uniBeT open 2009
ToTAl jAckpoTs offereD (eur)
1,889
Poker continues to be a strong force
within the Unibet product portfolio,
registering an increase in new
depositors of 24 per cent in 2009,
compared with 2008.
The quality of graphics, the range of games, the
reliability of the technical platform and, of course,
the quantity of prizes available all helped Unibet
to extend its leadership of non-sports online
betting in 2009.
87.2m
uniBeT Gross winninGs revenue By non-sporTs
BeTTinG proDucT 2009 (GBp)
uniBeT Gross winninGs revenue 2009
37%
63%
10
Sports betting GBP 51.2m
Non-sports betting GBP 87.2m
This growth can be attributed to a
range of factors including successful
local marketing initiatives such as the
Swedish and Finnish Online poker
championships which gained over
76,000 entries, local poker tours
in Poland and the Czech Republic
combined with the continued success
of the Unibet Open. These activities
and others have ensured substantial
presence in both online and offline
spaces across Europe.
The poker software saw upgrades
too with the aim of refining and
improving the user experience:
A new “XL” lobby was launched,
new tournament types including
the popular “Survivor” tournaments,
and a new Single Table Tournament
offering, were all implemented during
2009. The network also proved itself
to be one of the most stable around
with 99.994 per cent up time.
The Unibet Open has gone from
strength to strength as one of
Europe’s leading poker events,
attracting strong media coverage
and positive feedback for building
the Unibet brand as well as acquiring
new players.
12m
In 2009 Unibet’s existing casino
portfolio, a flash casino on unibet.com
and a download casino on
unibetcasino.com, saw an exciting
new addition with the launch of a
Live Dealer Casino. Streaming from
a studio in Riga, the Live Casino offers
dedicated Blackjack tables, Roulette
and Baccarat, and is the closest
you can get to a bricks-and-mortar
casino online.
Every November the egaming industry
gets together at the prestigious
EGR Awards, the industry’s very own
“Oscars”. In 2009 Unibet was handed
the European Live Gaming Operator
trophy for its new Live Casino.
The award is a celebration and
acknowledgement by the industry,
underlining what was the most
successful launch for Evolution
Gaming’s Live product by any of
their partners.
Over 200 casino games are currently
offered combined on Unibet’s three
casinos, including more than 110 video
slots and over 30 progressive jackpot
games. Regular casino tournaments
are held on a daily and monthly basis
with prize pools of up to EUR 20,000.
sofT GAmes
BinGo
GAmes AvAilABle
BinGo rooms
2009 has seen the portfolio of games
more than double to 50, including over
20 new slots. The portfolio still aims
to satisfy all tastes with Keno, Sports
Dice and other games.
Frequency of play is high, with players
looking for the entertainment factor
with a quick and frequent bet rather
than the higher rolling casinos.
Therefore games provide an important
element of our overall casino and
games offering, giving players more
reasons to come to Unibet.
The year also saw the launch of a new
games lobby with 15 games targeting
the female-dominated Maria site.
skill GAmes
20
DifferenT skill GAmes
Skill covers single and multiplayer
games with a wide range of regular
tournaments and jackpots including
favourites such as Head to Head
Solitaire games and Yatzy.
This year saw the launch of a new
comprehensive Backgammon.
Approved by the World Series of
Backgammon, it is as close to the
real thing as you can get in the online
world and is already proving a hit with
Backgammon aficionados.
50
overview
50
Bingo remains a key part of the Unibet
offering and continues to dominate
activity on the Maria brand. The Bingo
product offers players a unique
opportunity to join players from across
our markets in pan-European bingo
games featuring multiple currencies
and nationalities – with the prizes paid
in the local currency. Players can
also enjoy a localised experience
with each market having dedicated
Bingo rooms and Chat Hosts.
Bingo development continued in 2009
with further strengthening of the
online community, including innovative
features such as online profiles for
players with direct appeal to the key
bingo audience.
Anthon-Pieter from the Netherlands was the winner of Unibet Open
in Budapest 2010.
690,000
prize pool in uniBeT open (eur)
AchievemenTs
Unibet has growing presence in
the European market and offers
Live Casino in all markets in 18
languages. Unibet believes in a
localised approach with the products
and services offered in the customer’s
language as this builds trust and loyalty.
The Live Casino was launched in
early June 2009 and started out
with one private Unibet branded
Blackjack table, exclusively
for Unibet players. After just two
months a second private Unibet table
was enabled to meet demand, and
both tables are usually full throughout
most parts of the day.
Unibet now has a dominant
position in the Nordics and the
Western Europe in the live
gaming segment, and a strong
position in Southern Europe.
Unibet is dedicated to make the
user experience the best to be
online. Through surveys and
customer focus groups Unibet
understands what is important for
the players, and the future roadmap
is largely based on that input. With
this information and feedback the
live gaming offering at Unibet will
continue to grow to be Europe’s
biggest and best.
11
Business review
DeliverinG AGAinsT our sTrATeGy
uniBeT’s Business concepT is To Be A reliABle
proviDer operATinG in The online GAminG mArkeT,
BuilDinG vAlue By DeliverinG enTerTAininG GAminG
proDucTs wiTh An eXcellenT service.
Aims
Unibet’s business aim is to strengthen
its position as one of the major players
in the European market for online
gaming. The financial aim is for gaming
profits to increase by at least the same
rate as market growth for online
gaming and for at least 50 per cent
of this increase to directly improve the
operating result.
our sTrATeGy eXplAineD
1
2
3
4.1m
80
140
Though the Company has customers
in more than 100 countries, historically
Unibet’s operations have been
specifically targeted at Sweden,
Denmark, Norway and Finland.
Unibet now offers between 6,000
and 10,000 odds and almost 80
live events every day. Almost every
sport event broadcast in Europe or
streamed on the site is offered live,
plus much, much more... Focus is
to always have any relevant market
available at the best price, and
markets are offered on anything
right down to next point or next
corner. Unibet also provides
coverage of popular non-sporting
events, everything from Eurovision
to Big Brother.
Unibet has continued to broaden the
range of gaming products with exciting
new offers designed to capture
customers’ imaginations and grow
quickly. The Unibet browser casino
consists of more than 80 games such
as Roulette, Blackjack, Caribbean
Stud, Video Slots and Video Poker,
and the downloadable casino offers
over 140 games to give players the
perfect casino experience.
Enter into more markets within
Europe, historically characterised
by monopolies and a strong
gaming culture, where there
is also high internet penetration.
sTrATeGies
how we Deliver
Unibet has a leading position in the
European market for online gambling.
Unibet’s strategies to expand activities
and achieve the business and financial
aims are:
reGisTereD cusTomers in more ThAn
100 counTries
AchievemenTs
Even Spain, Italy and Poland have
their dedicated marketing teams.
With the acquisition of MrBookmaker
in 2005, the Netherlands, Belgium
and France became important
markets. Since then the expansion
has encompassed several new
countries in Central, Southern and
Eastern Europe – each with its
dedicated website.
see pAGes 20-21
Strenghthen the position in the
market for sports betting by offering
better odds on major events,
particularly within domestic sports.
live evenTs every DAy
The important differentiator, live
betting, is also the fastest growing
product. It is an important entry
barrier to market and during 2009
Unibet offered over 21,000 live
events in total, of which 12,000
were football matches.
see pAGes 8-9
In 2009, Unibet was awarded two
prizes at the prestigious eGaming
Annual Awards ceremony organised
by the international gaming magazine
eGaming Review. For the third time
in four years Unibet was awarded
“European Sports betting operator
of the Year”. The second award was
the “European Live Gaming Operator
of the Year” which Unibet was
awarded due to the popularity and
success it has achieved.
12
Offer a wide range of new
gaming products, for example
Casino and Poker, to existing
and new customers, reducing
dependence on sports betting.
DownloADABle cAsino GAmes
Unibet’s Live Casino offers two
Unibet-branded Blackjack tables,
Roulette and Baccarat. The Live
Casino is the closest you can get to
a real bricks-and-mortar casino online,
with real dealers spinning the roulette
wheel and dealing the cards. Due to
its popularity and incredible success
with the players, it was handed the
“European Live Gaming Operator of
the Year” trophy at the prestigious
eGaming Awards in November 2009
– the industry’s very own annual Oscars.
Unibet Games includes a wide range
of entertainment games with many
themes and there are now almost 50
games in this lobby. The games are a
softer version of the casino and are
derived from the popularity of lottery
and keno-based games, virtual sports
and hi/lo games.
see pAGes 10-11
uniBeT GoinG forwArD
Develop new distribution methods,
for example, mobile applications.
5
Prioritise organic growth.
400%
Top 3
As a company that relies so heavily
on technology, Unibet has to effectively
use developments in digital distribution
channels, with particular focus on
interactive services via PC and mobile
devices. This means ever more
opportunities to bet wherever you are
and whenever you want. At a stadium,
in a bar or just at home with friends –
the growth of the mobile market looks
to have forever expanding possibilities
as smartphones become more and
more prevalent.
In earlier phases of development,
Unibet focused on products and on
regions. That work has now paid off,
with the customer base reaching
critical mass, and an exceptionally
strong combination of products,
infrastructure and personnel in place.
increAse in moBile AcTiviTy
Mobile betting really took off in 2009
and with new platforms the potential
for 2010 looks enormous. Thanks
in part to the launch of an iPhone
client, Unibet had over 400 per cent
increase in mobile activities at the end
of 2009 compared to the end of 2008.
see pAGes 16-17
Business review
4
online GAminG proviDers By 2010
While the focus is on online marketing,
a broad range of channels are used
tactically to develop recognition and
respect for the Unibet brand and core
values and to treat customers like
friends by delivering offers tailored
exactly to them.
In building the Unibet Open Poker
tournament into one of Europe’s
biggest events, with opportunities for
online players to win a seat at the
table, Unibet has even crossed the
boundary between the virtual and
real worlds.
By 2010 Unibet aims to be among
the top three online gaming providers
in all of its prioritised markets. That
vision is ambitious. It is also achievable.
Unibet’s product breadth, commitment
to marketing innovation and strategic
focus on the customer, will help make
it happen.
uniBeT’s moDel hAs proveD successful
Given The sTronG TrAck-recorD in
DeliverinG profiTABle GrowTh since iTs
founDinG. The pillArs of The moDel will
conTinue To Be The key for uniBeT’s
fuTure success AnD Are encApsulATeD
in “The uniBeT wAy”:
Leadership – Unibet aims for a top 3 position
in every geographic market entered.
Brand – Unibet has a strong pan-European
brand supported by high-value niche brands
for all markets and products.
Horizontal approach – Unibet has a horizontal
business model, working with the best available
suppliers for non-sports products, to enhance
time to market, customer satisfaction and return
on capital while managing the Sportsbook
internally using proprietary software, odds
compilation and risk management.
Digital – Unibet is mainly focusing on
digital distribution.
Responsible – Unibet works proactively
to secure responsible gaming.
Talent – Unibet employs talented people, focuses
on accountability and rewards high performers.
see pAGes 14-15
13
Business review
emerGinG mArkeTs
new opporTuniTies
sTrATeGy in AcTion
poker Tv
sponsorship
In the Czech Republic Unibet has
produced the first celebrity-style
poker show called “VIP Poker Show”.
The show was broadcast on the
biggest commercial TV channel
Nova. Eight episodes were shown
for almost three months on Nova
and Nova Sport, and reached a
majority of their late-night audience.
Unibet is the official sponsor of Nõmme
Kalju in Estonia, Ferencvaros in Hungary,
Žalgiris Vilnius in Lithuania and Rapid
Bucureşti in Romania.
It opened a door to media publicity and
through 12 celebrities, Unibet received
significant media attention on different
channels. This investment had a huge
influence on securing Unibet’s position
in the market and gave high credibility
for future investments.
In the spring of 2009 Unibet
launched the Unibet “Pókermilliomos”
Championship in Hungary. During six
weeks of qualification over 15,000
players entered the competition and
the 12 best players had the chance to
play against top national celebrities,
fight for fame and the HUF 10 million
prize money. The highlights of the
series were an instant hit on Hungarian
TV channel Viasat3, and had over
100,000 viewers on average in front
of the screens.
cooperATion wiTh sporT porTAls
Another important channel to the
customers in Eastern Europe is
cooperation with sport portals. Special
Unibet-branded poker sections have
been introduced on the top two sport
portals in each country. These poker
sections included the Unibet Poker
School and general tips and explanations
of the online poker game. Special
tournaments will introduce Sportsbook
punters to the online poker world.
Poker has grown steadily in the
Eastern region.
These sponsorships include the Unibet
logo on the players’ shirts, billboards
and scoreboards.
JK Nõmme Kalju is one of Estonia’s
most popular football clubs based
in Tallinn and currently plays in the
Meistriliiga, the highest level of
Estonian football.
The green and white club colours
of the well-supported Ferencvárosi
Torna Club in Budapest make a
perfect match with the Unibet logo.
The Romanian football club FC Rapid
Bucureşti is one of the top three teams
in Romania and has won the Romanian
championship four times and the
Romanian Cup on 13 occasions.
In green and white the FK Žalgiris in
Vilnius have won the Lithuanian
Championship three times.
online mArkeTinG
Online marketing is important to
attract visitors and convert them to real
money players that can drive revenues
from the emerging markets. Unibet
focuses on optimising search engine
positioning, social media and
cooperation with affiliates/partners.
During 2009 a brand-new design
of unibetaffiliates.com was launched
in 18 languages promoting all the
three brands: Unibet, Maria and Carlos.
The affiliate team also uses a scientific
approach for banner tracking and
reward plans for affiliates signing up.
invesTinG in “emerGinG mArkeTs”
Valencia CF – official sponsor
Main sponsor of football clubs:
Nõmme Kalju (EE)
Ferencvaros (HU)
FC Rapid Bucureşti (RO)
FK Žalgiris Vilnius (LI)
Unibet Open poker in Budapest, Prague and Warsaw
Poker TV shows in Hungary and the Czech Republic
Maria brand expansion with online campaign, affiliates,
media cooperations and poker events
14
invesTinG in emerGinG mArkeTs is An imporTAnT pArT
of uniBeT’s AmBiTion To Grow in eAsTern europe.
ThrouGh sponsorships, poker Tv proGrAmmes AnD
cooperATion wiTh lArGe sporTs porTAls, uniBeT is
BuilDinG The BrAnD in These imporTAnT counTries.
15,000
plAyers TryinG To QuAlify for The
pokermilliomos
18
lAnGuAGe versions of
uniBeTAffiliATes.com
Business review
451
plAyers compeTeD in The uniBeT open
in prAGue 2009
15
Business review
innovATion
leADinG The wAy
sTrATeGy in AcTion
140,000
loG-ins since lAunch in june 2009
16
converGence is DrAmATic, chAnGinG consumers’
BehAviour. innovATion is supporTinG The inDusTry
AnD uniBeT To Grow. The sTronGesT consumer
TrenD in online GAminG riGhT now is To enjoy
A live eXperience. iT’s All ABouT live.
Unibet now offers live betting, live
streaming and Live Casino and the
customers really appreciate the live
element in these products. In less
than a year Unibet has transformed
by being much more active in using
Web TV to strengthen products, brand
and user experience. During 2009
Unibet offered over 21,000 live events
integrated into the live betting offer.
Several markets have also started
to produce excellent Web TV shows
(5-10 min) and/or video blogs
dedicated for different markets.
Unibet Open is also a fantastic platform
for developing and use of Web TV.
Smartphones and particularly
iPhones have dramatically changed
mobile usage and behaviour over the
past few years. User experience has
increased significantly and with
these new devices the possibilities
for development are endless.
Unibet’s Sportsbook and Casino have
been well received by both existing
and new customers when using the
mobile betting platform.
In order to serve our customers with
the best and the latest solutions for
moneytainment®, Unibet continues
to stay focused on the mobile betting
industry and the transition period it
is going through with fast-moving
internet and betting into mobile.
This is just the beginning of how
television and the PC are becoming
one, and Unibet is in a pole position
making it a vital part of the DNA.
moBile chAnnels GrowinG
Mobile betting took some major
steps forward in 2009 as the mobile
platform asserted its place in the
betting industry’s future plans. The
mobile channel is without doubt
one of the most important areas of
potential growth.
H2 Gambling Capital predicts that
the global market for mobile gaming
will grow to EUR 2.9 billion by 2012 in
terms of gross gaming yield. Given the
rapid growth rate so far, this appears
to be a conservative estimate.
The underlying market trend is that
internet is moving into the mobile
arena and so is Unibet.
Unibet has continued to be at the
forefront of mobile development by
extending the mobile betting offer
to meet with new handset technology
requirements and opportunities
that they bring. This leadership by
innovation philosophy has established
Unibet as a leading mobile betting
operator. The outlook is very positive
with expectations that mobile betting
will get its real breakthrough in 2010.
live BeTTinG
Unibet live betting is now more or less
a 24/7 product with matches offered
through the night. This, in addition
to the launch of combination bets,
offers the customer more options and
flexibility than ever before. The aim for
2010 is to continue customer-driven
innovation, with the goal being for
the customer to consider Unibet live
betting to be not just a betting site,
but a sporting hub.
21,000
Business review
TechnoloGy converGence
live BeTTinG evenTs offereD
4,500
live BeTTinG evenTs sTreAmeD
any European television station. Unibet
aims to keep the continued integration
of sports and media as a focus area
for 2010.
live cAsino
Unibet’s Live Casino was launched
in June 2009 and currently offers
three classic casino games: Roulette,
Blackjack and Baccarat. The big
difference between the Live Casino
and other online casinos is that you
have real live dealers spinning the
roulette wheel and dealing your cards
while you play and watch the action
via live streaming.
The fact that the gaming experience
in Live Casino is as close as you
can get to a real land-based casino,
including real-time chat with the
dealers and other players, made it an
instant hit with the players. It became
so popular during the year that
dedicated Unibet Blackjack tables
were added to accommodate demand
and its success earned Unibet the Live
Gaming European Operator of 2009
Award from eGaming Review.
During 2009 live betting continued
to accelerate, with a doubling of both
turnover and the number of events
offered. A huge investment has been
made in the live streaming product,
with full coverage offered on two
of the top four European Football
leagues, as well as over 500 Grand
Slam Tennis matches from Wimbledon
and the Australian Open, more than
17
Business review
mArkeT overview
jusT Three yeArs AGo, The GBGc
reporTeD ThAT There were 9.3
million online sporTs BeTTinG
AccounTs in ToTAl ThrouGhouT
europe. in DecemBer 2009, uniBeT’s
cusTomer BAse wiThin sporTs &
non-sporTs proDucTs sTooD AT
4.1 million AccounT holDers.
percenTAGe of householDs wiTh BroADBAnD Access
Source: Eurostat, February 2010
norDic reGion
The Nordic Region, which includes
Sweden, Denmark, Norway and Finland,
is the Company’s biggest and most
established market. Unibet is one of the
largest private online gambling operators
in the region.
The popularity of live televised events is indicative
of a worldwide determination to be part of the action.
Online gaming helps quench this thirst and advanced
technology assists delivery of the product.
30%
70%
Sports betting
GBP 19.4m
Non-sports betting
GBP 44.9m
wesTern europe
Within Western Europe, Unibet has
three established markets in France,
Belgium and Netherlands, and four
new markets in Germany, the UK,
Austria and Switzerland.
The European market has one of the world’s highest
– and fastest growing – rates of internet and
broadband penetration. The number of worldwide
consumer broadband connections will reach over
half a billion in 2010, according to the European
Travel Commission, with a 56 per cent broadband
penetration of all European Union households in
2009 says Eurostat. Online payment systems and
state regulation have improved across Europe as
a whole.
The bank of knowledge, experience and success
across the Unibet organisation enables the Group
to enter new markets quickly and efficiently. Tried
and tested systems are used alongside common
principles of customer relationship management
(CRM). These are amalgamated with marketing
campaigns and products that are tailor-made to the
local interests and characteristics.
65%
BroADBAnD TAke-up
wesTern europe Gross
winninGs revenue
conTriBuTion By reGion
56%
44%
Sports betting
GBP 23.9m
Non-sports betting
GBP 30.0m
Market outlook for world egaming gross gaming
yield is estimated to be EUR 25.3 billion by 2012
according to H2 Gambling Capital.
The Group made giant strides in 2009, despite a
worldwide economic downturn, maintaining strong
growth in established markets, building on the
foundation of success in established markets, and
introducing the Unibet brand to several new markets.
BroADBAnD TAke-up
norDic Gross winninGs
revenue conTriBuTion
By reGion
Those two figures underline not just the rapid growth
in online gaming, but that Unibet is now established
as one of the major online bookmakers in the world.
The homogenising influence of the European Union
notwithstanding, the continent’s online gaming
market remains complex, with individual nations
retaining unique characteristics and varying degrees
of growth. State gambling monopolies, local laws
and interpretations of European law vary from one
country to another. It means that the way in which
Unibet markets itself varies greatly.
77%
cenTrAl, eAsTern AnD souThern europe
Central, Eastern and Southern
Europe is the fastest growing of Unibet’s
three regional markets – albeit from
a relatively small base.
40%
BroADBAnD TAke-up
cenTrAl, eAsTern AnD
souThern europe Gross
winninGs revenue
conTriBuTion By reGion
39%
61%
The year ahead is a bright one, with a strong sports
calendar expected to drive online betting levels to
new heights, and a live offering and live streaming of
thousands of events is expected to be a cornerstone
of that success.
Sports betting
GBP 7.2m
Non-sports betting
GBP 11.5m
Other regions – comprised of Sports betting GBP 0.7m and Non-sports betting GBP 0.8m
18
online GGy By proDucT 2012e
11%
4%
8%
36%
Sports betting
Poker
Casino
Bingo
Skill-based and
other gaming
Lotteries
22%
19%
Business review
19
Business review
uniBeT’s mArkeTs
ADvAnceD TechnoloGy, comBineD wiTh The eXpAnDinG
suiTe of sophisTicATeD BeTTinG AnD GAminG proDucTs,
AnD eXTensive knowleDGe of eAch locAl TerriTory
AnD iTs cusTomer BAse, hAve meAnT susTAineD
GrowTh in 2009.
+32%
This has placed Unibet at the forefront
of a modern market and the Group is
now widely acknowledged as one
of the world’s leading betting and
gaming companies.
4.1m
While Unibet has a historical strength
in the Nordic Region, there has been
continued expansion in the last 12
months. Unibet now has over 4.1 million
clients in over 100 different countries.
reGisTereD cusTomer GrowTh 2009
reGisTereD cusTomers
For operational purposes, the market
is divided into three territories: Nordic
Region, Western Europe and the
combined area of Central, Eastern
and Southern Europe. Each market
is divided into three phases:
Established markets, Emerging
markets and New markets.
uniBeT’s Gross winninGs revenue
By reGion 2009
1%
14%
46%
Each stage and market is unique,
requiring specific initiatives.
Managing the cost base to ensure
efficient use of resources is
fundamental, though significant
progress on key technology
programmes is expected to ensure
further growth in the year ahead.
Live streaming of a large number of
high-profile events in 2009 via the
Unibet website proved an unreserved
success and acted as a catalyst for
increased site traffic.
Betting in running is, by its nature,
a high-risk transaction in a fastmoving environment, where speed
of bet acceptance and time validation
is critical.
It is not a coincidence that Unibet is sponsoring
Valencia CF in Spain. The Valencia Football team is
as passionate, friendly and ambitious as Unibet.
Increasingly, the clients demand a live
offering and Unibet has demonstrated
in the past year its willingness and
ability to react to the new demands.
39%
norDic reGion
The Nordic Region, which includes
Sweden, Denmark, Finland and
Norway, is where the Group is
most established.
Nordic Region
Western Europe
Central, Eastern and Southern Europe
Other
Unibet is the largest private online
gaming operator in the region, with
a well-established and widely
recognised brand, including a strong
reputation for quality.
mArkeT ouTlook europeAn eGAminG GGy
(eur Bn)
15
11.81
10
12.83
10.47
8.72
7.16
5
5.38
4.04
0.97 1.67
20
03
20
04
20
05
20
06
20
07
20
0
20 8
09
20 E
10
20 E
11
20 E
12
E
0
2.71
20
By investing in the technology for live
betting and mobile betting, Unibet has
left many competitors in the shade.
The aim going forward is to maintain
the high levels of customer satisfaction
and build upon a broad and solid
foundation to consolidate Unibet’s
position as a market leader in
Northern Europe.
wesTern europe
The threat of a prolonged economic
recession and other geo-political
events resulting in a reduction of
betting activity across Europe was
very real in 2009.
Within Western Europe there are three
well-established markets in France,
Belgium and the Netherlands, and four
developing markets in Germany, UK,
Austria and Switzerland.
Yet against this backdrop, Unibet’s
track record of innovation and profitably
exploiting regulatory, fiscal and
technological change shone through,
as the Group saw sustained growth
overall, especially in the Nordic Region.
Huge variations in regulatory
environments within the region require
an imaginative approach to develop
the Unibet brand.
There was again an increase in
competitive activity, although the cost
of gaining a foothold in this region
remains significant.
Unibet strives to build an increasingly
profitable business by exploiting its
resources and relationships and, at the
same time, carefully managing the
risks to the operation.
The popularity of the live poker tournament The
Unibet Open, underlines Unibet’s commitment to
be a customer focused, multi-channel business.
The Western Region reported very
solid and strong growth in 2009,
thanks in part to the fantastic
development of live betting, particularly
in France and the Netherlands,
supported by live streaming of
approximately 4,500 events across
all regions.
The Maria brand was launched in the
Western Region as a female gaming
brand in 2009 and it proved a success.
In June, Unibet had high exposure
throughout Europe when a Dutch
woman landed a staggering EUR
4,345,183 jackpot on the Mega
Fortune casino game for a bet
of just EUR 1.25. It is one of the
largest jackpots in the history of
online gaming.
emerGinG mArkeTs
The Unibet Open is a great-value poker
tournament with a special atmosphere and has
become one of the most sought-after live events
in Europe. The tournament structure has proved
extremely popular with all types of players from
high rollers to novices, giving everyone who plays
the chance to experience live poker with some
of the best players in the world.
The promotion of the Sportsbook
was enhanced through innovative
value-added content: Web TV and
Video Tipsters have proved to be a
great success within the region.
Unibet also has a commercial deal
as a betting partner with FC Brugge.
The Live Dealer Casino has proved
really popular and the Unibet Open
became a permanent fixture on the
calendar, gaining fantastic momentum,
and attracting more players than
ever before.
The Unibet Open events in Budapest,
the Algarve, London, Prague and
Warsaw gained increased coverage
and attention from the poker
communities – both online and offline
– supported by the broadcasting of
two editions in London and the
Algarve on Belgian, French and
Flemish TV channels.
Unibet is rightly proud of the Unibet
Open, which is a great opportunity for
the poker community to see the
human face of the Group, and to
promote Unibet’s values through the
friendly, passionate and expert people.
Allied to this great opportunity to
market the Unibet brand and bond
with poker players is the creation
of a professional Unibet poker team,
with celebrities and professional
poker players who are ambassadors
for the Group.
cenTrAl, eAsTern AnD
souThern europe
“Know your market”. It sounds a simple
and logical statement, but in such a
competitive industry, it is fundamental
to identify the needs of your customers
and cater for their needs.
with full-time employees dedicated
to Spain, Italy, Greece, Estonia, Russia,
Portugal, Poland, Romania, Hungary,
Croatia, Latvia, Lithuania, Bulgaria and
the Czech Republic.
The fastest growing market, albeit
from a relatively small base, is
Eastern Europe.
Broadband internet access, online
payment systems and state regulation
have all improved across Europe as a
whole and a continuation of these
trends has helped support Unibet’s
potential in the emerging markets.
The basis for rapid growth mirrored,
to a large extent, the Western
European model, with live betting and
live streaming providing the main
thrust and significant returns were
a result.
Key investment in mobile betting
solutions in 2009 has also maintained
the brand-leader status in many
of these developing markets and
Unibet strives to build significant and
valuable brand awareness through
affiliate deals.
Unibet is proud to maintain the
sponsorship deal with Spanish Primera
division giant Valencia FC. Unibet is
equally thrilled to be the official partner
of Nõmme Kalju in Estonia, Žalgiris
Vilnius in Lithuania, Ferencvaros
in Hungary and Rapid Bucureşti in
Romania. The Unibet brand name is
emblazoned on the shirts of each of
these great soccer teams.
Unibet will continue to explore
opportunities which will create value
for the shareholders.
Business review
Germany and the ultra-competitive UK
market both showed continued growth.
mAriA – you GoT To see her...!
The year 2009 was the year where the Maria brand
shifted into high gear. The Maria Bingo and Maria
Casino products were improved by a new flexible
platform making it possible to increase conversion
rates, the ability to play and the attractiveness of
the products. A community was added, servicing all
Maria products, making it possible to upload your
own material, blog, read articles and connect with
other customers.
Later on, the bingo and casino products were
joined by soft games early in the year, broadening
the appeal of Maria as an online meeting-place
for women. Finally, the much-awaited Maria Poker
was launched in June, the most exciting online
poker site for women. With this addition, the Maria
Universe became a 100 per cent experience
covering a broad spectre of online gaming services.
All this was done with the single focus of providing
women with everyday moneytainment® and a sense
of belonging, escapism and excitement online.
Market-wise, renewed focus was put on the
emerging markets so that Maria is now offered in
25 languages in 23 countries. This sits well with
the fact that Maria is the most common female
name in the world.
Unibet’s strength is its diverse talent
pool, a well-educated European
workforce who identify with an
increasingly youthful customer-base,
21
Business review
finAnciAl oBjecTives
uniBeT Gross winninGs revenue By
proDucT 2009
8%
26%
resilienT BuT noT immune. DurinG 2009 The re-reGulATion in
europe GAineD momenTum wiTh iTAly, frAnce AnD DenmArk
in Discussions To open up Their mArkeTs. Also, consoliDATion
conTinueD wiTh severAl merGers AnD joinT venTures. The
TechnoloGy converGence increAseD AnD supporTeD GrowTh
AnD miGrATion from The mArkeT To The online mArkeT wiTh
moBile Devices AnD weB Tv BeinG more AnD more ATTrAcTive.
AcTive cusTomers AnD Gross
winninGs revenue on All
Time hiGh
For 2009 the gross winnings revenue
increased to GBP 138.3 (2008: GBP
123.4) million. A big driver was the
live betting which accounted for over
11 per cent of the total gross winnings
revenue for 2009.
The gross margin for total sports
betting in 2009 before Free Bets was
6.5 (2008: 6.9) per cent. The gross
margin for total sports betting in 2009
after Free Bets was 5.8 (2008: 6.2)
per cent.
Earnings before interest, tax and
depreciation and amortisation
(EBITDA) was GBP 41.9 (2008: 46.3)
million for the full year 2009.
DiviDenD policy unchAnGeD
The dividend policy remains
unchanged with an intended payout
of up to 75 per cent of the Group’s net
income after tax for a financial year
provided other financial objectives
are met and an appropriate capital
structure is maintained.
maximum number of shares/SDRs
that may be so acquired was
2,824,109, i.e. may not exceed 10 per
cent of the total number of shares
issued by the Group as at 31 December
2008. Under this approval, 297,900
shares/SDRs were acquired by the
Group during 2007. No share buy
backs were made during 2008 or 2009.
The objective of the buy back
programme is to achieve added value
for the Group’s shareholders and
to give the Board increased flexibility
with the Group’s capital structure.
The intention of the Board is to
either cancel the shares (requires
further shareholder approval), use
as consideration for an acquisition,
or issue to employees under a Share
Option programme.
18%
Sports betting
Live betting
Poker
Casino
Other products
In the exercise window ending on
15 November 2009, under the rules
of Unibet’s option schemes no. 14
and 15 for senior executives, 98,176
share options were exercised. Of these
options 16,946 options were exercised
by issuing 16,946 new ordinary shares
with a par value of GBP 0.005, and in
connection with this exercise, Unibet
has received GBP 0.2 million which
has, in full, been taken to equity.
The remaining 81,230 options were
exercised using SDRs from Unibet’s
share buy back programme initiated in
2007. In connection with this exercise,
Unibet has received GBP 1.0 million,
which has, in full, been taken to equity.
finAncinG
Following this exercise, the total
amount of shares outstanding in
Unibet Group plc is 28,258,038
ordinary shares with a par value of
GBP 0.005. Of the total outstanding
shares, 216,670 from the share buy
back programme initiated in 2007
continue to be held by Unibet as a
deduction to equity.
Through this early redemption of the
bond, Unibet expects to save GBP 3.5
– 4.5 million in finance costs compared
to holding the bonds to its original
maturity in December 2010. This
saving includes early redemption costs
incurred of GBP 1.2 million in the fourth
quarter of 2009.
In November 2009 Unibet signed a
revolving credit facility with a maximum
value of EUR 24.0 million with a leading
international bank. In December 2009,
the full EUR 24.0 million facility was
utilised in connection with the early
redemption of the bond. The bond had
a nominal value of EUR 100 million,
was denominated in EUR and bore
interest at a fixed rate of 9.7 per cent
per annum, which was payable
annually in arrears. The bond’s original
maturity was on 21 December 2010.
On 22 December 2009 Unibet
redeemed the outstanding balance of
the bond of EUR 65.8 million in full.
All
time
high
Euro
2008
effect
World Cup
2006
effect
172
309
223
214
219
Q2
Q3
Q4
191
240
366
317
288
292
315
309
Q1
Q2
330
264
257
221
139
63
72
68
Q1
Q2
Q3
80
90
91
Q4
Q1
Q2
2004
Q3
Q4
Q1
2005
2006
Q1
Q2
Q3
2007
Q4
Q1
Q2
Q3
2008
Q4
Q3
Q4
2009
performAnce inDicATors
No dividend will be paid on the shares/
SDRs held by the Group as a result of
the share buy back programme.
GBP million
shAre Buy BAck proGrAmme
22
11%
uniBeT AcTive cusTomers (ThousAnDs)
The Board of Directors proposes a
dividend of GBP 0.71 (2008: 0.23) per
share/SDR, which is approximately
SEK 7.68 (2008: 2.75) with the
exchange rate 10.819 GBP/SEK at
19 March 2010 per ordinary share, to
be paid to holders of ordinary shares
and SDRs. If approved by the AGM, the
dividend is expected to be distributed
on 17 May 2010 and amounts to a
total of GBP 20.0 (2008: 6.4) million
which is approximately 75 per cent of
net profit after tax.
At the 2007, 2008 and 2009 AGMs,
shareholders approved a share buy
back programme whereby the Board
was authorised, until the next AGM in
2010, to acquire GBP 0.005 ordinary
shares/SDRs in the Group. The
37%
Gross winning
Actual
2009
123
138
Maturing markets
66
64
Growth markets2
57
74
EBITDA (margin)
46 (37%)
42 (30%)
37%
29%
1
ROAE
3
1
Actual
2008
Sweden, Denmark, Norway and Finland
2
Rest of countries
3
Return (EBIT) on average equity (ROAE)
sporTsBook B2B neTwork
in 2010 uniBeT enTereD The B2B mArkeT AnD The firsT
cusTomer To siGn A conTrAcT wAs The ÅlAnDic GAminG
compAny pAf in eArly 2010.
Land-based and online gaming companies
around the world are facing new challenges,
and Unibet can offer them a fully serviced
sports betting solution, including odds-compiling
and risk management.
why offer uniBeT’s core
proDucT To oThers?
The cost to maintain and develop the
Sportsbook requires more investment
in terms of money and people from
year to year. This has been accelerated
by the rapid growth and commitment
to being market leader in live betting.
By entering into the B2B market,
Unibet will ensure that betting customers
will continue to have a world-class
sport betting product in the future.
Unibet will reduce the business risk
and create shareholder value by
adding another business leg that will
capitalise on an already existing asset.
mArkeT Drivers ToDAy
Both land-based gaming and online
gaming companies around the world
are facing new challenges all the time.
The challenges that are driving the
business for Unibet’s Sportsbook B2B
Network are mainly:
• Live betting, which is the fastest
growing product within the online
gaming sector. The demand from
the punters to have a full range of
events and variety of bet offers in
live betting has increased for the
• Re-regulation, which has started
in Italy, and both France and
Denmark have declared that they
will open up their markets. Several
other countries in Europe are
looking into re-regulation and in
most cases it will put new demands
on the IT platform to comply with
licence requirements.
• New players, such as state-owned
gaming companies and other
companies in the leisure industry,
entering the online gaming sector.
The product a customer can get today
will include:
• Full scale Sportsbook offer
• The skills from over 100 employees
with up to 10 years experience
• Software developed together with
odds compilers and risk managers
• More than 2,200 live events/month
• Full risk management
• Second line support
• Pool betting products
new sTrucTure To Be
invesTiGATeD
Unibet has initiated investigations
on how to structure the Unibet
Sportsbook B2B Network business
in order to protect the integrity of
the B2B customers and to maximise
the shareholder value for Unibet
shareholders.
why ouTsourcinG?
A new player in the market has to build
up an excellent Sportsbook which
requires investments that will take a
long time to build up, when time to
market is essential. Unibet can offer
a customer:
•
•
•
•
•
•
Higher quality
Risk reduction
Flexibility
Lower costs
Scalability
Competence
why shoulD A B2B clienT
choose uniBeT?
GloBAl sporTs BeTTinG Gross GAminG yielD (us$ Bn)
45
43.40
43
42.10
41
40.90
40.90
39.60
39
38.10
38.90
38.50 38.60 38.30
39.10
42.60
39.30
39.90
37
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
E
20
10
E
20
11
E
20
12
E
35
Unibet’s legacy since it was founded
in 1997 has been the Sportsbook and
a lot of resources have been invested
to build up the unique infrastructure
and experience. The tagline is
“By players, for players” to visualise
the passion behind the work to build,
operate and be innovative in delivering
a world-class Sportsbook. Unibet has
received appreciation not only from its
customers but also from the online
gaming industry by receiving the
“European Sports Betting Operator
of the Year” award in 2006, 2008
and 2009.
23
Business review
Expansion into the global gaming
B2B market is an important step for
Unibet. Paf will be fully serviced with a
sports betting solution. The scope of
the services includes odds-compiling
and risk management on an in-house
developed proprietary system for fixed
and live odds betting. Paf will also
become a customer in the fast growing
sports betting pool products SuperToto
and SuperScore offered by Unibet.
Business review
Business performAnce review
commenTs on The finAnciAl DevelopmenT. The oriGinAl sporTs
BeTTinG Business of uniBeT hAs Grown conTinuAlly over The pAsT
finAnciAl yeArs. The GrowTh hAs Been eXperienceD Across All of
uniBeT’s GeoGrAphicAl mArkeTs. The inTroDucTion of non-sporTs
BeTTinG proDucTs hAs sTronGly conTriBuTeD To uniBeT’s resulTs
in The lAsT five yeArs AnD hAs Also helpeD To smooTh ouT The
seAsonAl effecTs AnD volATiliTy of sporTs BeTTinG.
9.1 (2008: GBP 9.8) million were
in respect of depreciation and
Sports Betting after free bet
amortisation charges. Included within
Sports
amortisation charges was
GBPBetting before free b
4.0 million charged in respect of
capitalised development expenditure
(2008: GBP 4.8 million), and GBP 3.4
(2008: GBP 3.1) million attributable
to other intangibles.
uniBeT’s sporTs BeTTinG Gross win mArGin % (Before AnD AfTer free BeTs)
10
8
6
4
Sports Betting before Free Bets for the quarter
Sports Betting before Free Bets for the full year
Gross mArGin on sporTs
BeTTinG
These financial statements have
been prepared in accordance with
International Financial Reporting
Standards (IFRS) and IFRIC
interpretations as adopted by the
EU and with the Maltese Companies
Act 1995.
The gross margin for sports betting
excluding live betting and before
Free Bets in 2009 was 9.0 (2008: 9.2)
per cent.
Where relevant, certain additional
information has been presented in
compliance with the NASDAQ OMX
Nordic Exchange in Stockholm
requirements.
Gross winninGs revenue
Gross winnings revenue on sports
betting represents the net receipt of
bets and payouts within the Group
for the financial period as reduced
for Free Bets. Free Bets are bonuses
granted or earned in connection with
customer acquisition. Total gross
winnings revenue in 2009 increased
to GBP 138.3 (2008: GBP 123.4)
million. Gross winnings revenue from
sports betting amounted to GBP 51.2
(2008: GBP 41.2) million for the full
year 2009. Non-sports betting saw
gross winnings revenue amounting to
GBP 87.2 (2008: GBP 82.3) million
for the full year 2009.
24
9
20
0
20
0
9
Q
Q
YR
4
3
2
9
9
20
0
20
0
20
0
Q
Q
1
9
8
YR
4
20
0
Sports Betting after Free Bets for the quarter
Sports Betting after Free Bets for the full year
finAnciAl sTATemenT
presenTATion
The accounting policies as adopted
in the published results for the year
ended 31 December 2009 have
been consistently applied.
20
0
8
Q
Q
3
2
8
Q
8
20
0
8
Q
1
20
0
4
20
0
07
20
Q
20
07
3
Q
2
Q
20
07
Q
1
20
07
YR
20
07
4
6
Q
20
0
6
20
0
Q
3
2
Q
6
6
20
0
20
0
20
0
6
Q
1
0
YR
2
The gross margin for total sports
betting in 2009 before Free Bets was
6.5 (2008: 6.9) per cent. The gross
margin for total sports betting in 2009
after Free Bets was 5.8 (2008: 6.2)
per cent.
Live betting accounted for 29.2
(2008: 19.4) per cent of gross
winnings revenue on sports betting,
excluding Free Bets, in 2009.
Sports betting gross margins can
vary from one quarter to the next,
depending on the outcome of sporting
events. However, over time these
margins will even out. This can be
seen in the graph above.
are levied at varying rates of betting
turnover, averaging about 4% of
stakes. There are no betting duties
in Antigua.
Gross profiT
Gross profit for the full year 2009
amounted to GBP 120.7 (2008: GBP
112.4) million.
mArkeTinG cosTs
During the full year 2009, marketing
costs were GBP 36.6 (2008: GBP
24.2) million. Active customers at 31
December 2009 had increased to
365,865 from 292,168 at the end of
the previous year.
ADminisTrATive eXpenses
During the full year 2009,
administrative expenses were GBP
51.3 (2008: GBP 51.8) million. Of
the administrative expenses GBP
Excluding depreciation and
amortisation, therefore, administrative
expenses were GBP 42.2 (2008:
GBP 42.0) million, of which GBP 21.0
(2008: GBP 18.9) million were salaries
and associated costs.
profiT from operATions
Profit from operations for the full year
2009 was GBP 32.8 (2008: GBP
36.5) million. Earnings before interest,
tax and depreciation and amortisation
(EBITDA) for the full year 2009 was
GBP 41.9 (2008: GBP 46.3) million.
cApiTAliseD DevelopmenT
eXpenDiTure
IAS 38 requires the capitalisation of
certain development costs. These are
costs incurred in developing the existing
IT platform and the integration and
further development of new products.
These are identifiable assets from
which a future economic benefit is
expected to be derived. In the full year
2009, expenditure of GBP 2.1 (2008:
GBP 4.2) million, had been capitalised.
Expenditure of 0.5 million was
capitalised with regard to other
intangible assets (2008: GBP 0.6 million).
eArninGs per shAre DevelopmenT
0.957
cosT of sAles
Cost of sales covers betting duties,
revenue share and affiliate
programmes. Betting duties are
payable in the licensed jurisdictions
UK, Malta and Italy. The betting duty
in the UK is currently 15 per cent
of gross winnings. Betting duties in
Malta are levied at varying rates on
different gaming products, subject
to a maximum capped amount per
year per licence. Betting duties in Italy
0.301
*0.71
0.659
0.08
0.229
0.108
0.192
0.50
0.314
0.057
0.293
0.357
0.141
0.23
0.127
0.078
-0.030
07
Q1
08
Q2
Q3
Q4
Dividend paid out
09
* Proposed dividend
profiT AnD operATinG cAsh flow Before movemenTs in workinG cApiTAl (GBp million)
16
14
12
10
8
6
4
2
Finance costs for the full year 2009
were GBP 4.3 (2008: GBP 27.0)
million, including GBP 1.4 (2008:
GBP 1.3) million of charges arising on
repurchase and the early redemption
of EUR 65.8 million of the remaining
nominal value of the bond during
2009. The balance of finance costs
of GBP 3.0 (2008: GBP 25.7) million
comprised foreign exchange gains of
GBP 3.5 (2008: losses of GBP 17.9)
million and interest costs of GBP 6.5
(2008: GBP 7.8) million. The foreign
exchange gain of GBP 3.5 million
was in relation to realised exchange
gains arising on retranslation of the
bond during the 2009 financial year
(2008: GBP 15.1 million of unrealised
exchange losses on the bond).
profiT AfTer TAX
Profit after tax for the full year 2009
was GBP 26.8 (2008: GBP 8.8) million.
BAlAnce sheeT
Unibet’s balance sheet reflects both
the Group’s growth and its ability to
manage working capital.
As is common in the bookmaking
industry, the Group employs a
requirement of ensuring customer
deposits are received before bets can
be placed and therefore customer
balances have increased with the
growth in gross winnings revenue.
The gross cash position held at year
end has decreased primarily as a result
of the early repayment of the bond.
9
Q
4
20
0
9
9
20
0
3
Q
20
0
9
Q
2
20
0
Q
1
20
0
4
Q
Q
Q
8
8
8
20
0
3
20
0
8
2
20
0
Q
1
20
07
4
20
07
Q
3
Q
20
07
2
20
07
Operating cash flow before movements in working capital
Invest and Monnet Enterprises Limited
was denominated in currencies other
than GBP and has therefore been
retranslated at the closing exchange
rate as required by IAS 21. This
translation adjustment decreased the
carrying value of goodwill by GBP 0.8
million in 2009 (2008: increased by
GBP 6.8 million). The carrying value
of other intangible assets decreased
by GBP 0.3 million (2008: increased
by GBP 2.7 million). These translation
adjustments were debited to the
translation reserve.
Certain non-current assets of the
Group relate to IT development
costs, which have been capitalised in
accordance with the policy described
earlier. Other non-current assets
include computer hardware and
fixtures and fittings.
The non-cash current assets on
the balance sheet therefore relate
only to other receivables, prepayments
and taxation. The movements in the
tax balances in the consolidated
balance sheet are influenced by the
timing of dividend payments within
the Group.
Significant liabilities on the balance
sheet include trade and other payables,
customer balances, and the bank loan
(see Note 17).
finAncinG AnD cAsh flow
The cash in hand position at the end
of 2009 stood at GBP 39.8 (2008:
GBP 53.4) million. This is before
deducting GBP 21.4 (2008: GBP
65.9) million for borrowings.
The cash outflow for the year 2009
was GBP 12.3 (2008: GBP 11.7)
million, which included cash generated
of GBP 44.4 (2008: GBP 53.3) million
from operating activities.
Significant non-operating cash
flows for 2009 included GBP 6.4
(2008: GBP 14.0) million which
was distributed as a dividend to the
shareholders, GBP 64.3 (2008: GBP
24.3) million which was used for buy
back and repayment of the bond, and
GBP 21.6 (2008: GBP Nil) million
which was received from borrowings.
In November 2009 Unibet signed
a revolving credit facility with a
maximum value of EUR 24.0 million
with a leading international bank.
In December 2009, the full EUR
24.0 million facility was utilised in
connection with the early redemption
of the bond. The bond had a nominal
value of EUR 100 million, was
denominated in EUR, and bore interest
at a fixed rate of 9.7 per cent per
annum, which was payable annually
in arrears. The bond’s original maturity
was on 21 December 2010. On 22
December 2009 Unibet redeemed
the outstanding balance of the bond
of EUR 65.8 million in full. Unibet was
in full compliance with the terms of the
outstanding bank facility between the
date of signature of the facility and
the date of this report.
Through this early redemption of
the bond, Unibet expects to save
GBP 3.5-4.5 million in finance costs
compared to holding the bond to its
original maturity in December 2010.
This saving includes early redemption
costs of GBP 1.2 million incurred in
the fourth quarter of 2009.
The operating cash flow before
movements in working capital
amounted to GBP 42.7 (2008: GBP
46.8) million for the full year 2009.
uniBeT hAs orGAniseD iTs Business inTo Three DifferenT GeoGrAphicAl AreAs, norDic reGion, wesTern europe, AnD ces
(cenTrAl, eAsTern AnD souThern europe)
Gross winninGs revenue By mArkeT AnD proDucT seGmenT
2009
In addition to these two line items,
along with reserves, the other
significant asset on the balance sheet
is goodwill. The goodwill balance
arose on the acquisitions of the
MrBookmaker Group of companies in
2005, Maria Holdings in December
2007, Guildhall Media Invest in 2008,
and Monnet Enterprises Limited in
2009. The balance of goodwill and of
certain intangible assets recognised
in connection with the acquisitions
of Maria Holdings, Guildhall Media
2008
GBP 000
Sports
betting
Non-sports
betting
Total
Sports
betting
Non-sports
betting
Total
Nordic Region
21,425
44,893
66,318
21,114
46,332
67,446
Western Europe
26,448
29,976
56,424
19,177
26,565
45,742
8,469
11,474
19,943
6,262
8,030
14,292
Central, Eastern and Southern Europe
676
809
1,485
-639
1,366
727
Total before Free Bets
Other
57,018
87,152
144,170
45,914
82,293
128,207
Free Bets
-5,852
–
-5,852
-4,762
–
-4,762
Total after Free Bets
51,166
87,152
138,318
41,152
82,293
123,445
25
Business review
finAnce cosTs
Q
6
Profit from operations
Q
1
20
0
6
4
Q
Q
3
20
0
20
0
2
Q
Q
1
20
0
6
6
0
Business review
uniBeT GoinG forwArD
“fesTinA lenTe”. To sAy ThAT This pAsT yeAr hAs Been
A momenTous perioD for The GAminG inDusTry woulD
Be A consiDerABle unDersTATemenT. in 2009 The GAminG
inDusTry wiTnesseD AnD emBrAceD mAny chAnGes ThAT
will impAcT in BoTh The lonG AnD shorT Term.
Against this backdrop, Unibet has
quietly and efficiently continued to
modernise its structure and has
boosted year-on-year gross winnings
growth, while expenses continue to be
kept under tight control.
It boasts a strong management team
and workforce of trained employees.
“Make Haste Slowly” is a mantra that
only comes with knowing your product
and the opportunities that are
presented to you.
Above all, it is a vibrant company
with well-balanced geographical and
product portfolio. A strong cash flow
means that it remains well placed
to weather a prolonged economic
recession, and 2009 saw growth
across the board.
It is not a phrase frequently used in
coffee shop conversation, let alone
regular online betting discourse.
Rather, it is an English translation of
the Latin proverb “Festina lente”, a
command allegedly used by Julius
Caesar and one which, according to
the philosopher Desiderius Erasmus,
means to approach a task with “the
right timing and the right degree,
governed alike by vigilance and
patience, so that nothing regrettable
is done through haste and nothing
left undone through sloth”.
In other, less complex words, proceed
quickly, but with caution.
Be under no illusion: Unibet is well
placed to make haste slowly.
It has a long-established and widely
recognised brand, with a strong
reputation for quality.
And it is focused on sustainable
and profitable growth and tight
management of costs.
Unibet’s trusted brand meant the
customer base hit the 4.1 million
mark in 2009 and the regular
surveys concluded that levels of
customer satisfaction were higher
than ever before.
Yet although the customer base has
risen by over 1.8 million in the past two
years, this is not a time for complacency.
The online gaming market continues
to evolve and expand. Consumers are
aware that the choice is bountiful and
Unibet is committed to working harder
to maintain their loyalty and interest in
2010 and beyond.
lAyinG founDATions
Pressure continues to be exerted by
the EU on Member States that seek
to restrict access for private operators
to their sports betting markets.
The exceptionally strong combination
of products, infrastructure and
experienced personnel, combined
with the Unibet reputation for fairness
and integrity, means the Group is well
positioned to secure a solid foothold
as the major online gaming platform in
all the European markets.
if you BuilD iT...
In 2007, the goal was to be among the
top three online gaming providers in all
of the prioritised markets. It was an
ambitious vision, but one the Group
felt was achievable. Suffice to say,
Unibet has all but achieved that goal
with 12 months remaining.
The goal for 2010 is obviously to
sustain this continued growth, while
focusing more on enhancing the
customer’s enjoyment through
innovation and attention to detail.
Unibet is an online business. The
majority of customer communication
is online – via email, and live chat,
although the Company does also
contact some customers by phone.
Customer Relationship Management
(CRM) is about taking care of
customers, meeting their needs and
fostering a close customer
relationship. Unibet uses three main
channels to build this relationship: the
Unibet website, SMS and email.
Online marketing is cost-efficient and
measurable, helping Unibet put its
products in front of the ideal target
market precisely when they are
looking for entertainment.
sTrATeGic evoluTion
proDucTcenTric
2005-2007
26
reGioncenTric
2007-2008
cusTomercenTric
2009
Unibet’s systems are set up to monitor
and measure every view, click and
conversation, leading to a very high
return on the Group’s investment
in online marketing.
Unibet is at the forefront of innovation
and cutting-edge technology. Web
TV, Video Tipsters, live streaming of
over 4,500 events and growing each
year with value-added content have
helped drive the Sportsbook, where
Unibet offers more live, in-running
betting opportunities than most of
the main competitors.
Unibet’s business is to deliver casino
games that are as exciting and
rewarding as the real thing. That is
why the Group continues to invest in
the technology to provide stunning
graphics and functionality across all
its websites.
movinG forwArD
The key to long-term loyalty is
increasing the personalisation of
communication with customers.
The first five months are crucial in
determining whether a new customer
becomes a loyal player.
The customers expect nothing less
than a secure, trusted and user-friendly
website, which offers attractive odds,
and interesting and innovative betting
opportunities.
Above all else, Unibet prides itself on
exceptional customer service. While
the technology may advance, the focus
on the customer will not change in
2010. If anything, it will intensify.
DeDicATeD people
By plAyers, for plAyers
iT is noT eAsy To GeT A joB AT uniBeT – BuT The oDDs
Are ThAT if you Do, you will finD iT chAllenGinG,
rewArDinG – AnD eXciTinG!
“people mATTer”
“GooD leADers lisTen”
Unibet is always looking to employ
outstanding achievers who want
to grow with the company. To that
end, Unibet has put in place specific
recruitment requirements which
include academic degree, fluency in
at least two languages, international
experience and – as an extra
dimension – an interesting talent
or passion. Unibet people must
also share their customers’ passion
for gaming.
Unibet focuses on linking the strategic
and operational needs of the business
with the skills and talent of all the
employees, helping them to meet the
specific characteristics of each market.
Unibet has always recognised the
importance of good leadership and
its critical role in stimulating the high
level of performance and engagement
that is essential to the continued
success in a changing and increasingly
challenging environment. Simply
setting high-level performance targets
is not enough. Opportunities must be
identified and responsibility assigned
at the right levels to ensure action
is implemented. Unibet continues to
encourage an open and participative
management style at every level, and
is committed to promoting from within
the Group.
In order to attract the right candidates,
Unibet makes a real effort to position
itself as an employer of choice by
becoming recognised for the positive
working environment, diverse workforce,
equal opportunities and great growth
opportunities. In 2009, Unibet was
nominated “Employer Branding
Company of the Year” by the global
leader in employer branding, “Universum”.
“livinG The GAme”
The Group’s motto is “By players, for
players”, and this is something which
every employee lives and breathes.
The core values and promise of the
Unibet brand are passion, friendliness
and expertise. Unibet people share the
enthusiasm of the sports aficionado
and the poker player. They understand
the thrill of the casino just as much as
the players, and enjoy the opportunity
to interact with customers via live chat.
But they also have a level of expertise
that sets them apart.
A shared vision, people who genuinely
care about what they do and who
have the ability to adapt the product
and marketing mix to meet the
specific characteristics of each
market, enable Unibet to develop the
most exciting new products in the
market – anticipating the demands
of customers and staying one step
ahead of the competition.
This means giving the employees the
responsibility and support they need
to develop their full potential, and
providing a working environment in
which they thrive and are clear about
their individual objectives and how
these align to the Group strategy.
PAGE (Performance And Growth
Enrichment) is an internally developed
programme that was launched in
2007. The system enables the Group
to identify high-growth potential,
target development efforts and
develop succession planning that
crosses geographical and
departmental boundaries.
Through PAGE, Unibet has improved
the managers’ ability to identify and
reward outstanding performance.
Equally important is the way which
PAGE enables the Group to find out
what best motivates each individual in
line for reward and encouragement.
PAGE also ensures the
implementation of equal opportunities
and provides fair and consistent
procedures to deal quickly with any
issues of underperformance.
There are two career paths – the
Expert and the Leader – both seeking
new challenges, being able to look
beyond existing boundaries and
thrive under pressure. Those with a
passion to succeed in a competitive
environment have the opportunity
to thrive. As the Group grows,
increased opportunities for
internal promotion and relocation
between offices and countries are
providing additional motivation for
Unibet people.
Unibet regularly performs 360-degree
evaluations of managers which help
identify and develop the potential of
today’s leaders – and, maybe even
more importantly, tomorrow’s.
“we celeBrATe success
(yeT we Are never sATisfieD)”
Unibet strives to create an
environment which is challenging,
enjoyable and rewarding. Every year,
the company asks the employees
for feedback – enhanced through an
annual survey from every member
of the Unibet team – and thereafter
makes an action plan based on it.
With a global presence, the Group also
offers a variety of career experiences
and international career paths which is
hard to find anywhere else. Everyone
at Unibet welcomes and values the
diversity of skills and abilities that a
global workforce brings to the business
because ultimately, it gives the Group
an advantage over competition.
While it is a lively environment for a
fulfilling career, the vibrant Group is
reflected in the active social scene.
Poker nights, 10-pin bowling, trips to
the Epsom Derby or the All England
Club, drinks at the local or eating out
in style, Unibet knows how to let its
hair down. There is always something
fun going on within the Unibet family!
Unibet celebrates success, yet is
never satisfied.
employee sTrucTure 2008
GenDer
Unibet is committed to a policy of equal
opportunity in matters relating to employment,
training and career development.
30%
70%
Women 30%
Men 70%
eDucATion
An important objective is to ensure that
Unibet has a workplace that can attract
and help retain existing skilled staff.
35%
65%
High school or equivalent 35%
University degree 65%
AGe
Unibet’s relatively low average age reflects
the fact that the Company is operating in
a young industry.
12%
47%
41%
< 30 years 47%
30-40 years 41%
> 40 years 12%
27
Business review
“we hire only The BesT”
Unibet truly believes that the key to the Group’s
success are the employees, who are engaged,
committed and always hungry to find new ways
to grow the business. No matter what their
backgrounds, or which of the 40 countries they
come from, Unibet’s people are uniquely qualified
to understand their customers and contribute
directly to the Group’s continuing success.
bUSineSS review
general legal environment
Unibet groUp’S core bUSineSS, namely SportS
betting and other gaming ServiceS, may be SUbject
to a nUmber of legal reStrictionS in the marketS
where Unibet haS a commercial intereSt and focUS.
The majority of revenues are derived
from markets located within the EU.
Unibet is established and licensed in
a number of Member States of the
EU. Unibet and its EU customers
benefit from the application of
certain fundamental freedoms
applicable to citizens of the EU.
These freedoms include, amongst
others, the principle that there
should be no restrictions within the
EU affecting the free movement of
goods, the free circulation of capital,
the right to establish and the right
to consume, provide and promote
services across borders.
Any law, practice or procedure
applicable under the domestic law
of individual Member States may be
contrary to EU law (and therefore
in theory unlawful) where such law,
practice or procedure amounts to a
restriction or barrier affecting the EU
fundamental freedoms. An exception
to this position is where a Member
State is able to demonstrate that
the non-discriminatory restriction
is necessary and proportionate to
meet general public interests such
as the protection of public health
and public policy.
The application of EU law in the
context of the gaming industry means
that certain restrictions purportedly
applicable to the Unibet Group under
the domestic law of a Member State
may be unlawful. It is even more
likely that restrictive domestic laws
are contrary to EU law where there
is an inconsistent gaming policy in
the particular market or the policy is
mainly directed at sustaining revenues
generated through banning market
competitors such as Unibet.
In this regard, reference can be made
to the ongoing formal infringement
procedures initiated by the European
Commission (EC) against 10 Member
States in relation to the cross-border
provision and promotion of gaming and
betting services. In the course of 2007
and 2008, the EC issued Reasoned
28
Opinions against seven Member
States, including France, Sweden
and the Netherlands. Further, certain
Member States have expressed
intent – or are underway of doing so
– to open up their national market for
competition. As long as the regulatory
process is ongoing, it is difficult
to take a detailed position on the
subject matter. Unibet further holds
that any “controlled opening” may
constitute a continued breach of EU
law. This is confirmed by the Detailed
Opinions and comments issued by the
European Commission on the draft
legislation submitted under the socalled notification mechanism.
In September 2009, the European
Court of Justice (“ECJ”) held in its
Santa Casa judgment that in the
absence of dedicated secondary
EU legislation the mere fact that a
licence was issued in another Member
State did not provide on its own for
sufficient guarantees. In the absence
of any dedicated EU harmonisation in
the field of gaming services, the ECJ
rejected – for the time being –
a mandatory mutual recognition of
gaming regulations between Member
States. Observers, however, indicated
that under established ECJ case
law and primary EU law, Member
States must continue to consider
safeguards already in place in the
country of establishment as part of
the overall proportionality test and,
for instance, keep in mind that money
laundering regulations and/or financial
services are already subject to EU
harmonisation.
As a result of the recent developments,
it is not possible to draw detailed
conclusions in relation to the legality
of specific legislation and practice
applicable to the gaming industry in
the various Member States. Legislation
and practice vary from country to
country and will be tested on an
individual basis. This being the case,
it should also be noted that legislation
or practice in this area can be
challenged or tested in a number
of ways depending upon the applicable
law and court system of a particular
Member State. In addition, legal action
in Member States may be subject to
a number of levels of court hierarchy
and can therefore take many years to
conclude. There may also be further
delays as a result of a particular legal
action or process triggering another
ancillary court proceeding, such as
those dealing with claims for
injunctions or similar interim relief.
Despite an increasing number of
cases pending before the ECJ for a
preliminary ruling, including Swedish,
Dutch and French cases, there is a risk
that courts judging under the national
laws of a particular country may rule
against the activities of Unibet and its
private sector competitors. Subject
to advice on a case-by-case basis,
Unibet expects to appeal any adverse
judgments to higher courts evoking
overriding principles of European law.
For this reason, Unibet does not hold
any provisions in its balance sheet for
potential adverse judgments. Unibet’s
assessment of the current legal
environment it faces in certain material
European markets is set out country
by country below. Given the legal
situation in the USA, Unibet stresses
that its standing policy and practice
remain not to accept any paying
customer resident in the USA.
Sweden
In 2003, Unibet launched legal
proceedings against the Swedish
government claiming that the Swedish
government were in contravention
of EU law in seeking to restrict
cross-border gaming services. This
action was taken by Unibet in order to
safeguard its fundamental freedom to
provide and promote gaming services
to its customers, and to allow Swedish
consumers the possibility of choice.
The hearing was held in January
2010 and a judgment was rendered on
2 March 2010 against Unibet. Unibet
will file an appeal to the Appeal Court.
norway
The Norwegian parliament adopted
payment blocking restrictions in
relation to payment transactions.
Unibet asserts that the measure
is against Norway’s free trade
obligations, disproportionate,
counter-productive and ineffective.
france and belgiUm
In view of the multitude of IPR and
related cases before a number of
courts in France and Belgium, it is
too soon to draw a final conclusion.
On certain questions of law, such as
legitimate use of trademark, courts
have ruled in favour of Unibet, on
other points, such as passing off, not.
The Paris Court of Appeal ordered
Unibet to pay EUR 1.2 million in
damages in relation to its offering of
bets on the French Open organised
by the French Tennis Federation (FFT).
The court further ordered Unibet to
immediately cease its activities on
total sanction of EUR 700,000 per
day or per breach. Unibet is currently
assessing all legal avenues possible,
including an appeal to the French
Supreme Court. Unibet is further
involved in an alleged infringement
of trademarks and passing off case
initiated by PMU, the French horse
racing monopoly.
Unibet is monitoring this regulatory
development. Unibet further believes
that France must meet its continued
obligations under EU law. If the new
French law is in breach of overriding
EU law, this could lead to the opening
up of a second infringement case
against France. The criminal cases
against Unibet and Unibet’s CEO are
still pending and first judgments are
awaited for in 2010.
bUSineSS review
AB Trav och Galopp (ATG) has filed a
lawsuit against a subsidiary of Unibet
claiming infringement in its database
on horse race fixtures. ATG is claiming
damages up to the amount of SEK
325 million. During the spring of 2008
the Supreme Court ruled in favour of
the Unibet subsidiary in the matter of
the interim decision. The main hearing
is expected to take place during the
autumn of 2010 or the beginning
of 2011.
the netherlandS
In October and December 2007,
De Lotto (the local State-approved
monopoly) brought ex parte
procedures against several Unibet
legal entities in relation to a cease
and desist order. In the summary
proceedings, the district court of
Utrecht ordered the legal entities
concerned to stop the provision and
promotion of all gaming services to
Dutch residents, or pay a fine of EUR
100,000 per day up to a maximum
of EUR 3 million. In the second case,
brought on the merits before the same
district court, the latter ordered the
legal entities concerned to stop the
provision and promotion of all gaming
services to Dutch residents, or pay a
fine of EUR 10,000 per day. Unibet
has introduced appeals against both
judgments and awaits a hearing date
before the competent jurisdiction.
The Reasoned Opinion of the EC
and two references to the ECJ for
preliminary rulings seem to support
Unibet’s opinion.
France is in the process of reregulating its online market and will
allow companies such as Unibet
to apply under national law for a
local French licence. In consultation
with a number of key stakeholders,
29
bUSineSS review
principal riSkS
Unibet divideS itS riSkS into the following categorieS:
riSk
mitigation
A detailed discussion of the general legal environment is contained on pages 28 to 29.
Legal risk is the risk that, despite the general
principles of the EU, which creates Unibet’s ability
as an operator properly established, licensed and
regulated within the EU to operate its business
throughout its principal market of Europe, certain
individual countries may seek to place restrictions
on Unibet’s legitimate business.
Market risk is the risk that Unibet will lose money
on its business due to unfavourable outcomes on
the events where the Group offers odds. Market
risk includes risks in relation to match fixing and
suspicious betting behaviour.
The Group has adopted specific risk management policies that control the maximum risk level for each sport or event on which
the Group offers odds. The results of the most popular teams in major football leagues comprise the predominant market risk.
Through diversification, which is a key element of Unibet’s business, the risk is spread across a large number of events and
sports. The heads of Odds compilation and Risk management are responsible for day-to-day monitoring of Unibet’s market
risk. It is also their responsibility to advise the odds compilers and risk managers on appropriate risk levels for certain events.
To achieve the desired risk profile, Unibet conducts trading with a small number of well-known companies.
The Compliance Officer and the Head of Sports Betting jointly assess risk levels for individual events as well as from a
longer-term perspective.
Counter-party risk All bets and stakes are made
through account gaming, i.e. the player deposits
money in an account, from which he/she then
draws to place bets.
No customers are offered credit.
Operational risk is the risk that the Group will
lose money as a result of individual mistakes,
e.g. by an odds compiler.
The Group has internal procedures to monitor and detect mistakes caused by operational error or human factor.
Foreign exchange risk The Group operates
internationally and in addition to GBP sterling,
is exposed to foreign exchange risk arising from
various currency exposures, primarily with respect
to the euro, Swedish kronor, Norwegian kroner,
Danish kroner, Swiss francs and US dollars.
The Group’s operating cash flows provide a natural hedge of operating currency risks, since deposits and payouts to
customers in different territories are matched in the same currency.
The spread of the Group’s operations, including material revenue and expenses denominated in many different currencies,
and taking into account the fact that customers can trade with the Group in currencies other than the currency of their
territory of residence, makes it impractical to give an indication of the impact of single currency movements on the results
from operations. In general, when the reporting currency of GBP sterling weakens against the euro and other major trading
currencies of the Group, as occurred during 2008, that would tend to increase operating profits because of the positive
operating profits and cash flows generated by the Group.
In relation to borrowings of the Group, the bank loan issued in December 2009 is denominated in euros, which is why there is
a currency translation exposure related to that financial liability. Until such time as the loan becomes repayable, such translation
gains and losses are unrealised. The potential translation gains and losses arising on the loan would be offset to the extent
that the Group generates positive future cash flows in other areas of the business in euros.
Customer-specific risk The risk that
the Group will lose money on customers
who are exceptionally successful is
called customer-specific risk.
Unibet has introduced three types of customer limit:
• Each event on which the Group offers odds has a limit for how much an individual customer can win on the event.
These limits vary depending on the event and can be changed over time.
• It is also possible to set a limit for combinations of bets. This limit is normally higher than for an individual bet.
• Each customer has a personal limit, which regulates the maximum amount that can be staked in a single bet.
Technical risks Unibet’s activities are
highly dependent on information systems
and other types of technical risk.
Interruptions on the internet, e.g. viruses, intrusion attempts or access restrictions due to reduced capacity, have an impact
on the business. Unibet works actively and continuously to minimise the risk of such attacks.
Secure transmission of confidential information over the internet and the overall security of Unibet’s system are crucial to the
business. The Group uses licensed encryption and authentication systems to ensure secure transmission of confidential
information such as credit card numbers.
The gaming application is business-critical, and Unibet has gone to considerable lengths to ensure that it is able to handle
various types of interruption. All critical servers are duplicated, i.e. if one server fails, another will immediately take over.
Unibet has also created a back-up site, which in the event of a serious operational interruption will take over from the
primary servers.
System security
The security of Unibet’s systems and applications are tested several times per year by third-party security experts. Furthermore
Unibet has an Intrusion Detection System that monitors all network traffic 24/7 for signs of attacks or intrusions.
Treasury management – customer deposits
All customers wishing to place a bet with Unibet must first register by opening an account and making a deposit. Deposits
can be made by credit or debit card, through a cash deposit or via bank transfer at a local branch or using an online banking
service. Alternatively, Unibet offers a variety of other payment solutions in different countries. Bets can be placed as soon
as the account has been credited.
Withdrawal requests can be satisfied only if certain criteria are met and confirmation that a deposit has been cleared is
obtained. In addition, several other checks are made to minimise the risk of fraud.
Payouts to customers are made via bank transfer from one of Unibet’s network of banks worldwide, in the currency requested
by the customer and directly into their nominated bank account or via a preferred payment solution. The Group has accounts
with many major banks in the EU.
Fraud and money laundering
Unibet requires all customers to provide detailed information upon registration. The Group applies a strict age limit and
accepts no customers under the age of 18. Unibet uses industry-leading providers of identity verification to ensure that details
provided are correct. All clients making major transactions or having a high risk profile will be requested to undergo further
documentation requirements.
Unibet has a dedicated fraud department and advanced systems in place to detect and prevent suspicious activity, to ensure
that Unibet’s website remains a secure playing-field. Any account involved in suspicious activity will be suspended and
investigated to the fullest extent.
All deposits and withdrawals are made through banks or established electronic payments solutions and Unibet has clear
internal procedures for detecting and handling suspect transactions. In order to comply with obligations under money
laundering and gaming legislations, all employees need to annually complete a course and pass an assessment.
30
monthly retUrnS
and tracking errorS
Unibet employs various risk management
tools to assess and manage the risks.
For example, to monitor the relative risk of
the Sportsbook, Unibet has risk tools and
models normally used in the investment
management industry.
benchmarked against a long-term average
return. The tracking errors are measured
by taking the standard deviation on
the difference in return between the
Sportsbook and the average return at
a 95 per cent confidence interval.
The chart below sets out the monthly
return on the Sportsbook from mid-2003
to date (pre-match and live betting). The
two outside lines represent the upside
and downside tracking error of this return
A 95 per cent confidence interval indicates
that on average, for 19 months out of 20,
the actual return should be between the
two tracking error lines.
The chart illustrates that over time the
tracking error band has become narrower,
indicating that the monthly margins have
become more stable. This is because
the relative amount of live betting within
the Sportsbook has increased, and live
betting is more stable, even though it
has a lower margin.
0.20
bUSineSS review
0.15
0.10
0.05
0.00
-0.05
2003
2004
2005
2007
2006
2008
2009
July-Dec
Upside of tracking error
Monthly return
Downside of tracking error
integrity in SportS
For Unibet, a key element of
responsibility means keeping online
sports betting free of corruption, which
ensures that customers are provided
with a fair betting product.
Sports and betting are part of the
same entertainment chain and as a
consequence, both have a common
objective to ensure the integrity of
sport is not compromised.
Far from contributing to betting fraud
and match-fixing, the internet and
new technologies make it possible
to record and analyse each individual
action taken online. For instance,
irregular betting activities, such as an
unusually high amount placed on the
unexpected outcome of an event
(e.g. an outsider wins) can be
immediately identified.
To proactively fight all types of fraud in
sports betting, Unibet co-founded in
2005 the European Sports Security
Association (ESSA). ESSA acts as
an early warning system to alert the
sports federations of any suspicious
betting before and during any of their
sporting events. The Association
has been working hand in hand with
some of the leading sport federations
including FIFA, UEFA, the ATP, and
the IOC, to make sure any such
intelligence is shared as soon
as possible.
SenSitivity analySiS
Unibet’s performance is affected by a number of factors. The sensitivity analysis
below only takes into account direct changes. It is likely that actual changes in a
specific item will also affect other items and that estimates made by Unibet and other
parties on the basis of a change of circumstance would also affect other items.
Sensitivity analysis – detail
Unibet considers movements in the factors below to have the most impact on profit
before tax (PBT).
% change
PBT impact GBP
Gross winnings revenue
Factor
+/- 1
+/- 1.383m
Administrative expenses
+/- 1
+/- 0.513m
Marketing expenses
+/- 1
+/- 0.366m
Exchange rate impact of the
bank loan
+/- 1
+/- 0.213m
In 2009, millions of betting
transactions were registered within
the ESSA security network. Of those
transactions, only 45 incidents of
irregular betting across a range of
sporting disciplines were investigated.
However, only one single event proved
to be suspicious and passed on to the
respective sport’s governing body.
31
governance
ShareS and Share capital
Shareholding information
Trading volumes
In 2009, 49,722 trades in Unibet Group were made, representing a total value
of over SEK 3.9 billion.
Unibet groUp plc’S iSSUed Share capital compriSeS
28,258,038 ordinary ShareS each with a par
valUe of gbp 0.005. all ordinary ShareS carry
eqUal voting rightS and rightS to Share in
the aSSetS and profitS of the groUp.
Listing of Swedish Depositary Receipts
Unibet Group plc’s Swedish Depositary Receipts (SDRs) were listed on the
O-list of the Stockholm Stock Exchange (Stockholmsbörsen) on 8 June 2004.
From 2 October 2006, the SDRs have been listed on the MidCap part of the
Nordic List at the NASDAQ OMX Nordic Exchange in Stockholm.
The trading symbol is UNIB SDB and the ISIN code is SE0001 835588. Unibet
has a liquidity guarantee agreement with HQ Bank AB.
Share price performance
Unibet’s SDRs ended the year at SEK 174 having started the year at SEK 108.
The highest price during the year was SEK 200. The lowest price during the
year was SEK 107. As at 31 December 2009, Unibet Group plc had a market
capitalisation of approximately SEK 4.9 billion.
Analysis of shareholdings
at 26 February 2010
Shareholder
Anders Ström through his
company
Number of
shares/SDRs
Share of share
capital/votes,
%
Dividend policy
It is the intention of the Board of Directors that the Company should pay
a dividend of up to 75 per cent of the Group’s net income after tax to
the shareholders, provided that other financial objectives are met and an
appropriate capital structure is maintained. In addition, all banking and debt
covenants will need to be adhered to. All SDRs entitle the holder to the same
dividend rights as holders of ordinary shares.
Proposed dividend
The Board of Directors proposes a dividend of GBP 0.71 (2008: 0.23) per
share/SDR which is approximately SEK 7.68 (2008: 2.75) with the constant
exchange rate 10.819 GBP/SEK at 19 March 2010, per ordinary share to
be paid to holders of ordinary shares and SDRs. If decided by the AGM,
the dividend is expected to be distributed on 17 May 2010 and amounts
approximately to 75 per cent of net profit after tax.
No dividend will be paid on the shares/SDRs held by the Company as a result
of the share buy back programme. Since the bond issued by Unibet in 2007
was redeemed in full in December 2009, the restrictions on dividend payments
contained in the Bond Terms & Conditions no longer apply.
Unibet Share price development
300
Accumulated %
250
200
2,925,000
10.4
10.4
2,744,179
9.7
20.1
Swedbank Robur Fonder
2,660,868
9.4
29.5
Länsförsäkringar
fondförvaltning
1,009,505
3.6
33.1
Danske Capital Funds
933,069
3.3
36.4
Lannebo Fonder
853,150
3.0
39.4
Skandia Liv
842,479
3.0
42.4
Catella Fondförvaltning
709,712
2.5
44.9
Peter Lindell through his
company
708,570
2.5
47.4
Ram One
690,000
2.4
49.8
The Northern Trust
Company
571,624
2.0
51.8
Fjärde AP-fonden
533,350
1.9
53.7
Verdipaperfond Odin
Sverige
514,796
1.8
55.5
SEB Fonder
511,275
1.8
57.3
Holding
Number
of shareholders
Number of
shares/SDRs
Share capital/
votes, %
1-500
5,364
722,355
2.6
Fidelity International
Unibet Group plc
Others
Total
150
216,670
0.8
58.1
11,833,791
41.9
100.0
28,258,038
100
Source: Euroclear Sweden.
100
10,000
8,000
50
6,000
4,000
2,000
30
2004
2005
©
2008
2009
2010
NASDAQ OMX
Ownership distribution
at 26 February 2010
501-1,000
467
384,118
1.3
1,001-10,000
392
1,259,684
4.5
10,001- 250,000
143
9,318,608
33.0
24
16,573,265
58.6
6,390
28,258,038
100.0
Total
2007
Share price
Total Shareholder Return (TSR) (including delivery)
OMX Stockholm Price Index
SIX Return Index
Monthly trading volume, 1000’s (including after hours trading)
250,001-
32
2006
Share buy back programme
At the 2007, 2008 and 2009 AGMs, shareholders approved a share buy back
programme whereby the Board was authorised, until the next AGM in 2010,
to acquire GBP 0.005 ordinary shares/SDRs in the Company. The maximum
number of shares/SDRs that may be so acquired is 2,824,109, i.e. may not
exceed 10 per cent of the total number of shares issued by the Company.
Under this approval, 297,900 shares/SDRs were acquired by the Company
during 2007. No share buy back was made during 2008 or 2009. 81,230 of
the shares/SDRs held by the Company at 1 January 2009 were sold during the
year in connection with the Company’s share option programmes. The number
of outstanding shares at 31 December 2009 was 28,041,368.
Dialogue with capital markets
Unibet’s Investor Relations policy focuses on conducting a dialogue with
representatives from the capital markets, aimed at increasing interest in
Unibet’s shares/SDRs among existing and potential investors by providing
relevant, up-to-date and timely information.
The intention of the Board is to either cancel the shares (requires further
shareholder approval), use as consideration for an acquisition or issue to
employees under a share option programme. During 2008, 87,883 options
were issued over the same amount of shares in the share buy back programme.
On Unibet’s corporate website, www.unibetgroupplc.com, investors can find
up-to-date information about the Group’s financial performance, stock market
data, a financial calendar, Company information and other important data.
Investors and capital market players should be provided with clear information
about the Group’s activities with the aim of increasing shareholder value. Unibet
strives to ensure good access to such information for capital markets, notably
through presentations in Stockholm and London and through road shows in
other European countries as well as the USA.
Unibet arranges the following capital market activities:
Shareholders ownership data
On 26 February 2010, Unibet Group had 6,390 holders of SDRs.
On 26 February 2010, the Group’s 14 largest owners represented 57.3 per cent
of the capital and votes, as shown on page 32.
• Quarterly meetings and teleconferences for analysts, investors and
financial media
• Financial hearings in Stockholm
• Participation in industry seminars and conferences
• Webcasts are available after each quarterly presentation.
%
Swedish financial institutions
39.0
Other Swedish financial entities
1.5
Other Swedish legal entities
11.2
Non-Swedish owners
44.0
Swedish naturalised persons
4.3
Total
100.0
Share capital development
The only changes in share capital in 2009 or the prior year related to the exercise of share options in November 2009. The development of the Company’s share
capital since the Group’s reorganisation carried out on 1 November 2006 is shown in the following table:
Transaction
Year
Issue
price
Change
in number
ordinary shares
Total number
ordinary shares
Par value
per share
GBP
Increase in
share capital
GBP
Share capital
GBP
Issued in Group reorganisation
2006
–
21,841,092
28,241,092
0.005
109,205.46
141,205.46
Exercise of share options
2009
12.16
16,946
28,258,038
0.005
84.73
141,290.19
2009
2008
2007
2006
2005
Equity per share GBP
Five-year summary
4.343
3.565
3.384
3.290
2.155
Equity per share after full dilution GBP
4.333
3.565
3.376
3.248
2.135
Earnings per share GBP
0.957
0.314
0.665
1.344
0.523
Earnings per share after full dilution GBP
0.956
0.312
0.659
1.342
0.515
Cash flow per share GBP
-0.43
-0.41
0.59
0.50
0.07
7.68
2.75
6.00
5.50
2.25
29.3
37.2
10.9
31.0
18.9
Dividend per share SEK
1
Return on total average equity %
Equity:assets ratio %
58
45
45.1
70.8
53.6
28,258,038
28,241,092
28,241,092
28,241,092
28,125,092
Fully diluted number of shares at year end
28,322,407
28,241,092
28,308,080
28,612,088
28,394,747
Average number of shares
27,955,464
27,946,192
28,096,472
28,197,870
26,223,857
Average number of fully diluted shares
27,989,238
28,091,206
28,355,999
28,236,388
26,640,068
The Board of Directors proposes a dividend of GBP 0.71 which is approximately SEK 7.68 per share/SDR with the exchange rate of 10.819 GBP/SEK.
The above figures have been restated to reflect changes in nominal value of the share.
1
33
governance
Ownership structure at 26 February 2010
governance
directorS’ report
the directorS preSent their annUal report on
the affairS of the groUp, together with the
aUdited financial StatementS and aUditorS’
report, for the year ended 31 december 2009.
Principal activities
Unibet is an online gaming business, with over 4.1 million registered customers
worldwide as at 31 December 2009, and is one of the largest privately-owned,
publicly-quoted online gaming operators in the European market.
The internet is the main distribution channel for Unibet’s products. The Group
offers a comprehensive range of online gaming products, such as pre-match
sports betting, live betting, bingo, soft games, online casino and poker products,
through the Group’s primary websites, www.unibet.com and www.mariabingo.
com. The customer base spans more than 100 countries.
On average, the Unibet Group handles over 600,000 transactions every
day (including bets, deposits and withdrawals) and has between 6,000 and
10,000 offerings on major international and local sporting events every day.
The principal subsidiaries and associated undertakings which affect the
results and net assets of the Group in the year are listed in Note 13 to
the financial statements.
Results and dividends
The consolidated income statement is set out on page 41 and shows the result
for the year. The profit after tax was GBP 26.8 (2008: GBP 8.8) million.
The Board of Directors proposes a dividend of GBP 0.71 per ordinary share/
SDR, which is approximately SEK 7.68 per ordinary share/SDR, to be paid to
holders of ordinary shares and SDRs (2008: dividend of SEK 2.74/GBP 0.23
per ordinary share paid in May 2009) and amounts to a total of GBP 20.0
(2008: 6.4) million which is approximately 75 per cent of net profit after tax.
Business review
Significant events during the year 2009
On 15 March 2009 Unibet signed an agreement to become the main web
partner with the popular French football club Paris Saint-Germain.
On 30 September 2009 Unibet launched a mobile sports betting version
specially adapted to the iPhone. User experience and functionality have
been central elements in the development of the iPhone version and it has
shown that the iPhone technology is well suited for sports betting and
provides customers with a new way to have 24/7 access to Unibet’s
extensive Sportsbook.
On 18 November 2009 Unibet Group plc signed an agreement with a leading
international bank for a 12-month Revolving Credit Facility with a maximum
value of EUR 24 million. The new facility was drawn to cover the early
redemption of the bonds that had an outstanding amount of EUR 65.8 million.
Through this early redemption Unibet expects to save between GBP 3.5 and
4.5 million in Finance Costs during the facility’s duration compared to holding
the bonds to maturity. This saving includes the early redemption costs of
approximately GBP 1.2 million in the fourth quarter of 2009.
On 19 November 2009 Unibet Group plc announced an early redemption of
the EUR 100 million bond in Unibet Group plc in accordance with Condition
9 of the terms and conditions for the bonds. The early redemption occurred
on 22 December 2009.
On 30 November 2009, Unibet was for the third time in four years awarded
“European Sports Betting Operator of the Year 2009” at the prestigious
eGaming Annual Awards ceremony organised by the international gaming
magazine eGaming Review. The award goes to the operator that has made the
biggest impression in Europe and continued to grow and broaden its product
offerings. Unibet was also awarded “European Live Gaming Operator of the
Year 2009” for its simplicity of use and innovative approach to live gaming.
On 11 December 2009, Unibet Group plc bond loan 1 was de-listed from
NASDAQ OMX Nordic Exchange in Stockholm’s Retail Bond List.
On 22 December 2009 Unibet Group plc repaid the outstanding amount of
EUR 65.8 million of the original EUR 100 million 9.70% bonds 2007/2010,
a year ahead of the original maturity, in accordance with Condition 9 of the
terms and conditions for the bond.
The above developments during 2009 illustrate the following trends that affect
the business of the Unibet Group:
On 21 March 2009 the Unibet poker TV show “Pokermilliomos” started to run
in one of Hungary’s largest TV channels, Viasat 3.
Unibet continues to invest in the expansion of both its product set in its core
markets and its geographical and demographical reach into new markets.
On 12 May 2009 Unibet signed an agreement with the Belgian football club
FC Bruges for the seasons 2009-2012. The deal includes multivision
boarding for all Belgian first league matches and all European qualification
matches together with several other forms of visibility in the stadium and on
the club’s website.
Unibet is committed to the promotion of responsible gaming and remains at
the forefront of industry initiatives in this area.
On 1 June 2009, Unibet signed an agreement with the Spanish football club
Valencia CF to become the main sponsor of the club for the seasons
2009/10 and 2010/11. The deal includes the Unibet logo on the front of the
shirts in all competitions, including Primera Division, Copa del Rey and UEFA
Europa League.
On 8 June 2009 Unibet was certified being compliant with all the 277
requirements of the PCI DSS, Payment Card Industry Data Security Standard.
In August 2009, Unibet became the main sponsor for the biggest Hungarian
football club, Ferencvaros, for the next three seasons up until 2012. The
deal includes the Unibet logo on the front of the shirt in all competitions that
Ferencvaros participates in.
Early in the third quarter 2009, Unibet Mobile Casino was launched.
Initially there were 11 games available covering favourites such as BlackJack,
Roulette, Baccarat and Keno. This provides players with another reason to
choose Unibet whenever they want to play.
34
Unibet continues both to seek further opportunities to cross-sell its
products and also to drive efficiencies in its internal operations through the
standardisation of its technology platform.
Pressure continues to be exerted by the EU on Member States that seek to
restrict access for private operators to their sports betting markets.
Significant events after the year end
On 17 February 2010, Unibet signed a contract with the Ålandic gaming
company, Paf, for the provision of full Sportsbook B2B. The scope of the
services includes fixed odds and live betting including full risk management.
Paf will also become a customer in the fast-growing sports betting pools
products SuperToto and SuperScore offered by Unibet.
A detailed Business Performance Review is set out on pages 24 to 25.
For further information on risk management, refer to Note 2C and 2D
on pages 48 to 49.
Future developments
Although they are conscious of the potential impact of the macroeconomic
situation in Unibet’s core markets, the Directors are confident in the Group’s
trading and financial prospects for the forthcoming financial year.
Directors and their interests
The following Directors served during the year and subsequently, unless
otherwise stated:
Daniel Johannesson
Anders Ström
Kristofer Arwin
Peter Boggs
Peter Lindell
Staffan Persson
Chairman
Deputy Chairman
Non-executive
Non-executive
Non-executive
Non-executive
Daniel Johannesson, Anders Ström, Kristofer Arwin, Peter Boggs and Peter
Lindell will seek re-election at the forthcoming AGM.
The interests of the Directors are shown on page 37.
Employees
The Group is committed to a policy of equal opportunity in matters relating to
employment, training and career development of employees and is opposed to
any form of less favourable treatment afforded on the grounds of disability, sex,
race or religion. The Group recognises the importance of ensuring employees
are kept informed of the Group’s performance, activities and future plans.
The Board of Directors and Chairman declare that the Annual Report has been
prepared in accordance with generally accepted accounting principles, that the
consolidated financial statements have been prepared in accordance with the
international financial reporting standards referred to in European Parliament
and Council of Europe Regulation (EC) No. 1606/2002 of 19 July 2002,
on application of international financial reporting standards, that disclosures
herein give a true and fair view of the Group’s financial position and results of
operations, and that the statutory Annual Report provides a fair review of the
Group’s operations, financial position and results of operations and describes
material risks and uncertainties facing the Parent Company and the companies
included in the Group.
Disclosure of information to the auditors
So far as the Directors are aware, there is no relevant audit information (that
is, information needed by the Group’s auditors in connection with preparing
their report) of which the Group’s auditors are unaware, and the Directors have
taken all the steps that they ought to have taken as Directors in order to make
themselves aware of any relevant audit information and to establish that the
Group’s auditors are aware of that information.
Independent Auditors
The auditors, PricewaterhouseCoopers (Malta) and PricewaterhouseCoopers
LLP (UK), have indicated their willingness to continue in office, and a resolution
that they be re-appointed will be proposed at the AGM.
On behalf of the Board
Malta, 29 March 2010
Daniel Johannesson
Chairman and Director
Peter Lindell
Director
Substantial shareholdings
Shareholdings of 3 per cent or more of the Company’s ordinary share capital
are detailed on page 32.
Statement of Directors’ responsibilities
The Directors are required by the Maltese Companies Act 1995 to prepare
financial statements which give a true and fair view of the state of affairs of the
Group as at the end of each financial period and of the profit or loss for that
period. In preparing the financial statements, the Directors are responsible for:
• Ensuring that the financial statements have been drawn up in accordance
with International Financial Reporting Standards as adopted by the EU.
• Selecting and applying appropriate accounting policies.
• Making accounting estimates that are reasonable in the circumstances.
• Ensuring that the financial statements are prepared on the going concern
basis unless it is inappropriate to presume that the Group will continue in
business as a going concern.
The Directors are also responsible for designing, implementing and maintaining
internal control relevant to the preparation and the fair presentation of the
financial statements that are free from material misstatement, whether due to
fraud or error, and that comply with the Maltese Companies Act 1995. They
are also responsible for safeguarding the assets of the Group and hence for
taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The Directors confirm they have complied with the above.
The Directors are responsible for the maintenance and integrity of the
Group’s website.
35
governance
Research and development
The Group capitalises certain expenditure when it relates to the development
of the core IT platform of the business. During the year the Group capitalised
GBP 2.1 (2008: GBP 4.2) million of development expenditure, and expensed
GBP 6.1 (2008: GBP 6.0) million.
Legislation in Malta and Sweden concerning the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
governance
remUneration committee report
the remUneration committee conSiderS and
recommendS to the board remUneration packageS
for the Senior managerS inclUding the execUtive
management team, acroSS the groUp. the remUneration
committee haS written termS of reference to
determine the groUp’S policy on management
remUneration.
the committee’S propoSed report, which iS UnaUdited,
except where indicated, iS Set oUt below.
The Committee, which had six meetings during the year, comprises Peter Lindell
and Anders Ström who were both elected at the 2008 and 2009 AGM.
Peter Lindell chairs the Committee.
Remuneration policy
The policy of the Board is to attract, retain and motivate the best managers
by rewarding them with competitive salary and benefit packages linked to
achieving the Group’s financial objectives, as defined on page 22.
During the year the Committee considered a variety of independent sources of
information including the comparison of the CEO’s and the Senior Management’s
remuneration with companies of a similar size and diversification. In addition, as
Unibet is an international business, the Committee takes into account relevant
international employment practices, as well as having due regard to the
remuneration packages throughout the Group.
The performance-related elements of executive remuneration comprise annual
bonuses and awards under the Unibet Executive Share Option Scheme. These
incentives are designed to be relevant to the overall objectives of the Group
and to enhance the business. The performance targets referred to below,
recommended by the Committee, are reviewed annually and are intended
to reward superior performance in light of competition and the prevailing
economic climate.
The members of the Committee have no personal interest in the outcome of
their decisions and give due regard to the interests of shareholders and to the
continuing financial and commercial health of the business.
The remuneration packages of Senior Managers comprise:
• Basic salaries, which are reviewed annually, having regard to individual
performance, responsibility and skills, and comparable evidence of other
companies in the sector, together with specific employee benefits.
• Performance-related bonuses, which are based on quantitative and
qualitative goals. The goals are mainly linked to the Group’s financial
objectives such as gross winnings and EBITDA, as well as the delivery of
specific projects and business critical processes. Performance is assessed
on an annual basis. Bonuses are awarded only once specified objectives are
achieved. The amount of potential bonus compared to basic salary varies
depending on position and situation, but is in general less than half the
amount of the basic salary.
• Equity awards through option schemes are granted based on position and
performance under the terms of the Unibet Share Option Scheme, and are
linked to the performance of the Group to further align Senior Management’s
interests with those of the shareholders.
All the 613,493 share options outstanding at 31 December 2009 may generally
be exercised if the holder is employed by the Unibet Group at the date of
exercise. Exceptions are made in special circumstances.
36
Remuneration of the Board of Directors
The remuneration is recommended by the full Board, conditional upon approval
at the AGM.
All Board Directors are elected, as appropriate, at the AGM.
The Group does not operate any form of executive retirement benefits or
pension scheme, and thus no contributions are made in respect of any Director.
All Directors have rolling service contracts without notice periods. The auditors
are required to report on the information contained in the following two sections
of this report on Directors’ Remuneration.
Total emoluments (audited)
All information concerning emoluments and interests of the Directors is
presented on the basis of continuity from the date of their appointment to the
Board of Directors of the Unibet Group plc. Total emoluments of the Board
of Directors and executive managers who served during the year are set
out opposite.
Fees/
salary
Other
2009
Total
2008
Total
Daniel Johannesson, chairman
101.8
–
101.8
85.0
Anders Ström, deputy chairman
117.0
–
117.0
121.3
Kristofer Arwin
40.0
–
40.0
26.7
Peter Boggs
30.0
–
30.0
38.9
Peter Lindell
45.3
–
45.3
44.0
41.8
–
41.8
39.5
–
–
–
8.3
Petter Nylander, CEO
327.9
1.3
329.2
293.3
Executive management
820.2
2.1
822.3
1,164.0
1,524.0
3.4
1,527.4
1,821.0
GBP 000
Directors
Staffan Persson
Henrik Tjärnström
1
Total
1
Henrik Tjärnström resigned on 18 March 2008.
Directors’ interests (audited)
The Directors’ and Executive managers’ beneficial interests in the shares/SDRs of Unibet Group plc as at 31 December 2009 are set out below:
Ordinary
shares/SDRs
at 31 December
2008
Share
options at
31 December
2009
Share
options at
31 December
2008
500
500
–
–
15,600
15,600
–
–
7,000
7,000
–
–
908,570
1,597,304
–
–
137,101
1,762,000
–
–
2,925,000
3,480,000
–
–
3,200
23,200
100,375
147,155
47,464
64,261
188,630
210,706
4,044,435
6,949,865
289,005
357,861
Directors
Kristofer Arwin
Peter Boggs
Daniel Johannesson
Peter Lindell
Staffan Persson
Anders Ström
CEO
Total
The closing price of the Company’s SDRs at 31 December 2009 was SEK 174, and it ranged from SEK 107 to SEK 200 during 2009.
Performance graph
Shown on page 32 is a performance graph that compares the Total Shareholder Return (TSR) of Unibet SDRs with the OMX Stockholm Price Index, this being
the index where Unibet is listed and therefore the most appropriate comparison.
TSR is defined as the return shareholders would receive if they held a notional number of shares and received dividends on those shares over a period of time.
Peter Lindell
Chairman
Remuneration Committee
37
governance
Ordinary
shares/SDRs
at 31 December
2009
governance
corporate governance Statement
Unibet groUp plc iS incorporated and regiStered
in malta and liSted on naSdaq omx nordic exchange
in Stockholm.
Unibet Group plc is required to:
• Explain how it applies the main and supporting principles of the Swedish
Code of Corporate Governance.
• Confirm whether or not it complies with the Code’s provisions and, where
it has not complied, to provide an explanation why not.
On 1 July 2008, the Listing Rules for the NASDAQ OMX Nordic Exchange
in Stockholm incorporated the Swedish Code of Corporate Governance for
all listed companies.
The following statement on pages 38 to 40 has not been audited.
Directors
The Board of Directors of Unibet Group plc is collectively responsible for the
success of the Group and for its Corporate Governance and aims to provide
entrepreneurial leadership of the Group within a framework of prudent and
effective financial controls that enable risk to be assessed and managed.
As outlined on page 35, the Board comprises the Chairman and five Directors,
of which four are independent non-executive Directors. The Swedish Code
identifies the fundamental importance of independent non-executive Directors in
ensuring the objective balance of a Board, and sets out criteria to be considered
in determining the independence of non-executive Directors. In accordance with
Provision 4.4 of the Code, the Board considers Kristofer Arwin, Peter Boggs,
Daniel Johannesson, Peter Lindell and Staffan Persson to be independent nonexecutive Directors. Anders Ström is Deputy Chairman of the Board.
To ensure effectiveness, the Board’s composition brings together a balance
of skills and experience appropriate to the requirements of the business.
The composition of the Board and recommendations for the appointment of
Directors are dealt with by the Nomination Committee and its activities are set
out separately in this report.
The Board is responsible to the shareholders for the Group’s overall strategy
and direction and it usually meets on a quarterly basis throughout the year.
A formal schedule sets out those matters specifically reserved for the Board
and its Committees. Those matters include decisions on Group strategy and
direction, acquisitions, disposals and joint ventures, capital structure, material
contracts, corporate governance and Group policies.
The number of Board and Committee meetings attended by each of the
Directors during the year can be seen in the table on the following page.
The Board has a standard agenda, including receiving and considering reports
from the Chief Executive Officer and the Chief Financial Officer on the Group’s
operational performance, finances, ongoing strategy and risk profile, all of
which are considered at the quarterly meetings. Where appropriate, matters are
delegated to the Audit, Legal, Nomination and Remuneration Committees, and
reports on their activities are included within this corporate governance statement.
Brief résumés of the Board and CEO can be found on page 63.
The Working Procedures of the Board of Directors
The Board of Directors has adopted written instructions for the Chief Executive
Officer. The roles of the Chairman and Chief Executive Officer have been
established in writing to ensure the clear division of responsibilities, and this
has been agreed by the Board. At least once a year the Board of Directors will
review the strategy and visit the Group’s different office locations. Normally
the Board has a short meeting without the management, CEO or CFO in
conjunction with each Board meeting.
The Chairman is responsible for the leadership of the Board; setting its agenda
and taking full account of the issues and concerns of all Board members;
ensuring effective communication with shareholders; taking the lead on
Director induction and development; encouraging active engagement by all
Directors; and ensuring that the performance of individuals and of the Board
as a whole, and its Committees, is evaluated at least once a year.
The Chairman ensures that the Board is supplied with accurate, timely and clear
information. Directors are encouraged to update their knowledge and familiarity
with the Group through meetings with Senior Management. As part of the
induction process, an induction pack is provided to non-executive Directors.
All Directors have access to the company secretary who is responsible for
ensuring good information flows within the Board and its Committees and
between Senior Management and non-executive Directors. The company
secretary is also responsible for advising the Board, through the Chairman,
on all corporate governance matters. Directors are encouraged to seek
independent or specialist advice or training at the Group’s expense where this
will add to their understanding of the Group in the furtherance of their duties.
In accordance with Provision 8.1 of the Code, the Board has a process
to formally evaluate its own performance and that of its Committees. The
performance of the Board and its Committees has been the subject of Board
discussion, led by the Chairman, to consider effectiveness against performance
criteria and potential risks to performance. The performance evaluations of the
Board have been structured in such a way as to ensure a balanced and objective
review of Directors’ performance by using a system of questionnaires intended
to stimulate discussion of factors including performance and commitment.
Following these performance reviews, the Chairman is responsible for ensuring
that the appropriate actions are taken. The evaluations provide a feedback
mechanism to the Nomination Committee and have helped in identifying Board
performance objectives as well as individual actions such as training.
Remuneration and Directors and Officers Liability insurance
The general meeting establishes the principles and the maximum amount of
the Directors’ fees. Employees cannot receive Director’s fees. A Director can,
during a short period of time, supply consultancy services, but only if this is more
cost-effective and better than any external alternative. Any such consultancy
fee will be disclosed in the Annual Report. None of the Directors holds share
options issued by the Company. Unibet has taken out Directors and Officers
Liability insurance covering the risk of personal liability for their services to the
Group. Cover is in place for an indemnity level of GBP 1 million.
Audit Committee Report
The Audit Committee advises and makes recommendations to the Board on
matters including financial reporting, internal controls, risk management, and
the appointment of auditors. The role of the Committee is set out in its written
terms of reference.
The Committee, which met five times during the year to review the interim
reports etc., comprises two independent non-executive Directors, Kristofer Arwin
and Staffan Persson. The Committee is chaired by Staffan Persson, a senior
finance professional who has the relevant accounting and financial management
expertise. Where appropriate, the Committee consulted with the Chairman of the
Board, the Chief Executive Officer and the Chief Financial Officer regarding their
proposals. The external auditors also attended three of the meetings.
Responsibilities include monitoring the integrity of the financial statements
of the Group and any formal announcements relating to the Group’s financial
performance. The Committee has reviewed the Group’s financial statements
and formal announcements relating to the Group’s financial performance before
their presentation to the Board. In doing so, it considered accounting policies,
areas of judgment or estimation, and reporting requirements, as well as matters
brought to their attention by the external auditors.
The Committee is responsible for reviewing the Group’s systems of internal
control and risk management, and determines the scope of work undertaken by
38
the Chief Financial Officer, the Group Compliance and Security Officer
and the Head of Trading. It receives reports from the Chief Financial Officer,
with whom the results are discussed on a regular basis. The Group Compliance
and Security Officer reports quarterly to the Audit Committee.
The Committee remains satisfied that the controls in place, and the review
process overseen by the Chief Financial Officer, the Group Compliance and
Security Officer and the Head of Trading, are effective in monitoring the
established systems.
The Committee is responsible for making recommendations to the Board in
relation to the appointment of external auditors. It is responsible for monitoring
the independence and objectivity of the external auditors, and for agreeing
the level of remuneration and the extent of non-audit services. During the year,
PricewaterhouseCoopers (Malta) and PricewaterhouseCoopers LLP (UK)
(‘PwC’), reported to the Committee on their audit strategy and the scope of
audit work. The Committee has reviewed the performance of PwC and the level
of non-audit fees paid to PwC during the year. These are disclosed in Note 4 on
page 51. The provision of non-audit services, except tax compliance and routine
taxation advice, must be referred to the Committee where it is likely to exceed
a pre-determined threshold of GBP 50,000. Any work that falls below that
threshold must be pre-approved by the Chief Financial Officer. By monitoring
and restricting both the nature and quantum of non-audit services provided
by the external auditors, the Committee seeks to safeguard auditor objectivity
and independence.
Legal Committee Report
The Legal Committee’s task is to reflect, discuss and stimulate interaction
between the Board of Directors and the management. This gives the Board
the opportunity to increase awareness and to better understand the legal and
political environments surrounding the Group, including the associated risks.
The Committee, which met on four occasions during the year, comprises two
independent non-executive Directors, Peter Lindell and Daniel Johannesson
(Committee Chairman).
The Nomination Committee for the 2010 AGM will consist of Anders Ström,
Committee Chairman, and shareholders Peter Lindell, Åsa Nisell from
Swedbank Robur, Johan Ståhl from Lannebo Fonder and Daniel Johannesson,
Chairman of the Board. Daniel Johannesson, Anders Ström and Peter Lindell
are members of the Board.
Remuneration Committee Report
A report on Directors’ remuneration and the activities of the Remuneration
Committee is set out on pages 36 to 37.
Communication with investors
In the interests of developing a mutual understanding of objectives, the Investor
Relations manager has met regularly with institutional investors to discuss the
publicly disclosed performance of the Group and its future strategy. Institutional
investors have also been able to meet the Chief Executive Officer, the Chief
Financial Officer, line managers and other key persons of the Group.
The Board is kept informed of shareholder views and correspondence.
Corporate and financial presentations are regularly made to fund managers,
brokers and the media, particularly at the announcement of interim and year end
results. Links to webcast presentations are published on the Group’s website.
All shareholders are invited to attend the AGM where they have the opportunity
to put questions to the Directors, including the Chairmen of Board Committees.
At the AGM separate resolutions are proposed for each substantially different
issue to enable all of them to receive proper and due consideration. Notice of
the AGM and related papers are posted on the Group’s website between four
and six weeks in advance of the meeting. Further information on the activities of
the Group and other shareholder information is available via the Unibet Group’s
corporate website, www.unibetgroupplc.com.
The Legal Committee does not make any decisions, which remain with the
Board of Directors.
Board and Committee meeting attendance
Full
Board
Audit
Committee
Kristofer Arwin
4
5
–
–
–
Peter Boggs
4
–
–
–
–
Name
Legal
Committee
Nomination
Committee
Remuneration
Committee
Daniel Johannesson, Chairman
4
–
4
–
–
Peter Lindell
4
–
4
–
6
Staffan Persson
4
5
–
3
–
Anders Ström, Deputy Chairman
4
–
–
3
6
39
governance
The Board remains satisfied that the Group’s systems of internal control and
risk management, together with the work of the Chief Financial Officer, the
Group Compliance & Security Officer and the Head of Trading, is effective in
monitoring, controlling and reporting the Group’s risks. An internal audit function
would have only limited additional benefit at this time due to the size of the
Group, although this matter is reviewed annually.
Nomination Committee Report
The Nomination Committee has written Terms of Reference to lead the process
for Board appointments and make recommendations to the AGM thereon.
The Nomination Committee met three times for the 2009 AGM. At the AGM
on 13 May 2009, it was decided that the Nomination Committee shall consist
of the Chairman of the Board and representatives from at least two of the
other largest shareholder’s in the Company at the end of the third quarter.
The Nomination Committee shall appoint as its chairman the representative
of the largest shareholder in terms of voting rights.
governance
corporate governance Statement
The Board of Directors’ Report on Internal Control over Financial
Reporting for the Financial Year 2009
Introduction
According to the Maltese Companies Act and the Swedish Code of Corporate
Governance, the Board is responsible for internal control. This report has been
prepared according to the Swedish Code of Corporate Governance Provisions
10.5 and 10.6 and is accordingly limited to internal control over financial
reporting. This report, which has not been reviewed by the auditors, is not
part of the formal financial statements.
Description
a. Control environment
The Directors have ultimate responsibility for the system of internal controls
and for reviewing its effectiveness. The system of internal control is designed to
manage rather than eliminate the risk of failure to achieve business objectives.
In pursuing these objectives, internal control can only provide reasonable and
not absolute assurance against material misstatement or loss.
b. Risk assessment
The Executive management members are responsible for reviewing risks, and
for identifying, evaluating and managing the significant risks applicable to their
respective areas of business. Risks are reviewed and assessed on a regular
basis by the Group Compliance and Security Officer, the Head of Trading, the
Audit Committee and the Board. The effectiveness of controls is considered
in conjunction with the range of risks and their significance to the operating
circumstances of individual areas of the business.
c. Control activities
The Board is responsible for all aspects of the Group’s control activities.
The Audit Committee assists the Board in its review of the effectiveness
of internal controls and is responsible for setting the strategy for the internal
control review. In doing so, it takes account of the organisational framework and
reporting mechanisms embedded within the Group, and the work of the Group
Compliance & Security Officer and the Head of Trading.
Working throughout the Group, the role of the Group Compliance and Security
Officer and the Head of Trading is to identify, monitor and report to the Board
on the significant financial and operating risks faced by the Group to provide
assurance that Unibet meets the highest standards of corporate governance
expected by its stakeholders.
d. Information and communication
The Board receives regular formal reports from Executive management
concerning the performance of the business, including explanations for material
variations from expected performance and assessments of changes in the
risk profile of the business that have implications for the system of internal
control. In particular the Board receives direct periodic reports from the Group
Compliance & Security Officer.
The Board also takes account of the advice of the Audit Committee, reports
received from the external auditors, and any other related factors which come
to its attention.
e. Monitoring
Further information concerning the activities of the Audit Committee in relation
to the monitoring of Unibet’s internal controls, including the annual evaluation of
the requirement to implement a special internal audit function and review of the
financial reports published quarterly, is contained in the Audit Committee Report
on pages 38 and 39.
On behalf of the Board
Malta, 29 March 2010
Daniel Johannesson
40
Peter Lindell
Director
Statement of Compliance with the Swedish Code of Corporate Governance
Unibet does not comply with Provision 2.4 of the Code since a majority
of members of the Nomination Committee were members of the Board
of Directors, including Anders Ström who is both Deputy Chairman of the
Board of Directors and Chairman of the Nomination Committee. However
this procedure to nominate the Nomination Committee was decided by
shareholders at the 2009 AGM.
Unibet does not comply with Provision 10.1 of the Code, which requires
the Audit Committee to have at least three members. Unibet considers that
the Audit Committee as presently constituted is effective in meeting the
requirements of Provision 10.2 of the Code.
With the exception of the matters noted above, the Directors believe that they
are in compliance with the Swedish Code of Corporate Governance.
accoUntS
conSolidated income Statement
Note
Year ended
31 December
2009
Year ended
31 December
2008
3
138,318
123,445
Cost of sales
4
-17,641
-11,040
120,677
112,405
GBP 000
Gross profit
Marketing costs
4
-36,637
-24,153
4
-51,289
-51,751
3
32,751
36,501
Finance costs arising on bond repurchase
6
-1,353
-1,321
Other finance costs
6
-2,984
-25,725
Total finance costs
6
-4,337
-27,046
Finance income
7
480
1,625
-3,857
-25,421
-12
4
28,882
11,084
-2,116
-2,313
26,766
8,771
Finance cost – net
Share of (loss)/profit from associate
13
Profit before tax
Income tax expense
8
Profit after tax
All the above amounts relate to continuing operations and are attributable to equity shareholders.
Key ratios
Note
Operating margin % (Profit from operations/gross winnings revenue for the year)
2009
2008
23.7
29.6
12.2
4.0
Return on average equity % (EBIT/average of opening and closing equity for the year)
29.3
37.2
Equity: asset ratio %
58
45
EBITDA margin %
30
37
Net debt/EBITDA (rolling 12-month basis)
Employees at year end
0.2
0.8
465
412
10
0.957
0.314
Fully diluted earnings per share GBP
10
0.956
0.312
20
28,258,038 28,241,092
28,322,407 28,241,092
Fully diluted number of shares at year end
Average number of shares
10
27,955,464 27,943,192
Average number of diluted shares
10
27,989,238 28,091,206
More detailed definitions can be found on page 64.
Statement of comprehenSive income
GBP 000
Profit for the year
Year ended
31 December
2009
Year ended
31 December
2008
26,766
8,771
Other comprehensive income
Currency translation adjustments taken to equity
Comprehensive income for the year
-136
9,909
26,630
18,680
Profit and comprehensive income relate to continuing operations and are wholly attributable to equity holders.
The translation adjustment relates primarily to foreign currency retranslation of goodwill and acquired intangibles and the net investment in the subsidiaries, to the
closing exchange rate for each period.
41
accoUntS
Return on total assets % (Profit after tax/average of opening and closing assets for the year)
a
ccoUntS
conSolidated balance Sheet
Note
As at
31 December
2009
As at
31 December
2008
Goodwill
11
122,369
123,165
Other intangible assets
11
26,597
31,570
Investments in associates
13
–
119
Property, plant and equipment
12
2,952
3,993
Deferred tax asset
18
GBP 000
Assets
Non-current assets
169
6,226
152,087
165,073
15
9,538
8,927
11,327
–
26
39,764
53,383
Current assets
Trade and other receivables
Taxation recoverable
Cash and cash equivalents
Total assets
60,629
62,310
212,716
227,383
Equity and liabilities
Capital and reserves
Share capital
20
141
141
Share premium
20
74,044
73,838
9,921
10,057
-42,889
-42,889
81,517
59,531
122,734
100,678
Currency translation reserve
Reorganisation reserve
20
Retained earnings
Total equity
Non-current liabilities
Deferred tax liability
18
2,048
3,677
Borrowings
17
–
65,926
2,048
69,603
Current liabilities
Trade and other payables
16
24,205
24,717
Customer balances
16
28,305
25,309
14,021
7,076
17
21,403
–
Tax liabilities
Borrowings
Total liabilities
Total equity and liabilities
87,934
57,102
89,982
126,705
212,716
227,383
The notes on pages 45 to 61 are an integral part of these financial statements.
The financial statements on pages 41 to 61 were authorised for issue by the Board of Directors on 29 March 2010 and were signed on its behalf by:
Daniel Johannesson
42
Peter Lindell
Director
conSolidated Statement of changeS in eqUity
GBP 000
Notes
Balance as at 1 January 2008
Share
capital
Share
premium
Currency
translation
reserve
Reorganisation
reserve
Retained
earnings
Total
141
73,838
148
-42,889
64,328
95,566
–
–
–
–
8,771
8,771
–
–
449
–
–
449
–
–
9,460
–
–
9,460
Comprehensive income
Profit for the year
Foreign exchange differences on the translation of net equity
investments in foreign enterprises
Translation adjustment on goodwill and acquired intangibles
11
–
–
9,909
–
–
9,909
–
–
9,909
–
8,771
18,680
19
–
–
–
–
404
404
9
–
–
–
–
-13,972
-13,972
–
–
–
–
-13,568
-13,568
20
141
73,838
10,057
-42,889
59,531
100,678
–
–
–
–
26,766
26,766
–
–
956
–
–
956
Total comprehensive income
Transactions with owners
Share options – value of employee services
Dividend paid
Total transactions with owners
At 31 December 2008
Comprehensive income
Profit for the year
Foreign exchange differences on the translation of net equity
investments in foreign enterprises
Translation adjustment on goodwill and acquired intangibles
–
–
-1,092
–
–
-1,092
–
–
-136
–
–
-136
–
–
-136
–
26,766
26,630
19
–
–
–
–
659
659
Proceeds of shares issued
19, 20
–
206
–
–
–
206
Disposal of treasury shares
19, 20
–
–
–
–
988
988
11
Total comprehensive income
accoUntS
Transactions with owners
Share options – value of employee services
Dividend paid
9
Total transactions with owners
At 31 December 2009
20
–
–
–
–
-6,427
-6,427
–
206
–
–
-4,780
-4,574
141
74,044
9,921
-42,889
81,517
122,734
43
a
ccoUntS
conSolidated caSh flow Statement
GBP 000
Notes
Year ended
31 December
2009
Year ended
31 December
2008
32,751
36,501
Operating activities
Adjustments for:
Depreciation of property, plant and equipment
12
1,741
1,868
Amortisation of intangible assets
11
7,400
7,918
99
108
Loss on disposal of property, plant and equipment
Share-based payment
19
Decrease/(increase) in receivables
Increase in payables
Cash flows from operating activities
Income taxes paid
Net cash generated from operating activities
659
404
630
-1,519
3,107
9,253
46,387
54,533
-1,992
-1,197
44,395
53,336
354
-3,518
–
-34
Investing activities
Acquisition of subsidiaries, net of cash acquired and debt assumed
Additional investment in associate
13
Interest received
Interest paid
480
1,526
-6,132
-8,319
-837
-1,957
Purchases of intangible assets
-2,642
-4,816
Net cash used in investing activities
-8,777
-17,118
Purchases of property, plant and equipment
Financial activities
-6,427
-13,972
Proceeds of issue of new shares for share options
19,20
206
–
Disposal of treasury shares
19,20
988
–
Bond buy back
17
-64,266
-24,275
Proceeds from borrowings
17
21,602
–
Dividends paid
Repayment of borrowings
9
–
-9,687
Net cash used in financing activities
-47,897
-47,934
Net decrease in cash and cash equivalents
-12,279
-11,716
Cash and cash equivalents at the beginning of the year
53,383
56,047
Effect of foreign exchange rate changes
-1,340
9,052
Cash and cash equivalents at the end of the year
39,764
53,383
44
noteS to the conSolidated financial StatementS
note 1: baSiS of preparation
These consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) as adopted by the
EU, IFRIC interpretations and the Maltese Companies Act 1995, applicable
to companies reporting under IFRS as adopted by the EU.
The consolidated financial statements have been prepared under the historical
cost convention, subject to modification where appropriate by the revaluation
of financial assets and liabilities at fair value through profit or loss. The
individual parent financial statements have been prepared separately.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management
to exercise its judgment in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgment or complexity, or areas
where assumptions and estimates are significant to the consolidated financial
statements are disclosed in Note 2.
(a) New and amended standards and interpretations effective from 1 January
2009 and adopted by the Group
The following interpretations are mandatory for accounting periods beginning
on or after 1 January 2009:
IAS 1 (revised), ‘Presentation of financial statements’ (effective from 1 January
2009). The revised standard prohibits the presentation of items of income and
expenses (that is ‘non-owner changes in equity’) in the statement of changes
in equity, requiring ‘non-owner changes in equity’ to be presented separately
from owner changes in equity in a statement of comprehensive income. As
a result the Group presents in the consolidated statement of changes in
equity all owner changes in equity, whereas all non-owner changes in equity
are presented in the consolidated statement of comprehensive income. The
Group has applied the revised standard from 1 January 2009 and has restated
comparative information so that it is in conformity with the revised standard.
The change in accounting policy impacts on presentation only.
IFRS 7 (amendment), ‘Financial Instruments – Disclosures’ (effective from 1
January 2009). The amendment requires enhanced disclosures about fair value
measurement and liquidity risk. In particular, the amendment requires disclosure
of fair value measurements by level of fair value hierarchy. Additional disclosures
have been made throughout the financial statements.
IFRS 8, ‘Operating segments’ (effective from 1 January 2009). IFRS 8 replaces
IAS 14, ‘Segment reporting’, and requires a ‘management approach’, under
which segment information is presented on the same basis as that used for
internal reporting purposes. The segments are reported in a manner that is
consistent with the internal reporting provided to the chief operating decisionmaker. IFRS 8 is applicable to all entities whose debt or equity instruments
are traded in a public market. As shown in Note 3, the Group has modified the
classification of operating segments in 2009 as a result of adoption of IFRS 8
and of changes in the internal management of the business.
IAS 23 (Amendment), ‘Borrowing costs’ (effective from 1 January 2009).
The amendment to the standard requires an entity to capitalise borrowing costs
directly attributable to the acquisition, construction or production of a qualifying
asset (one that takes a substantial period of time to get ready for use or sale)
as part of the cost of that asset. The option of immediately expensing those
borrowing costs will be removed. Further, the IASB has amended the definition
of borrowing costs so that interest expense is calculated using the effective
interest rate method defined in IAS 39 ‘Financial Instruments’ recognition
and measurement. The amendment does not have a material impact on the
Group’s financial statements.
IFRIC 13, ‘Customer loyalty programmes’ (effective for accounting periods
starting from 1 July 2008). IFRIC 13 clarifies that where goods or services
are sold together with a customer loyalty incentive (for example, loyalty points
(b) Standards, amendments and interpretations to existing standards that are
not yet effective and have not been early adopted by the Group
IFRS 3 (revised), ‘Business combinations’ (effective for accounting periods
starting from 1 July 2009). The revised standard continues to apply the
acquisition method to business combinations, with some significant changes.
It will require all payments to purchase a business, including contingent
payments, to be recorded at fair value at the acquisition date. All acquisitionrelated costs should be expensed. The Group will apply the revised standard
from 1 January 2010 to future business combinations.
IAS 27 (revised), ‘Consolidated and separate financial statements’ (effective
from 1 July 2009). The revised standard requires the effects of all transactions
with non-controlling interests to be recorded in equity if there is no change
in control and these transactions will no longer result in goodwill or gains and
losses. The standard also specifies the accounting when control is lost.
Any remaining interest in the entity is re-measured to fair value and a gain or loss
is recognised in profit or loss. The Group will apply IAS 27 (revised) prospectively
to transactions with non-controlling interests from 1 January 2010.
IAS 38 (amendment), ‘Intangible assets’ (effective from 1 July 2009). The
amendment clarifies guidance in measuring the fair value of an intangible asset
acquired in a business combination and it permits the grouping of intangible
assets as a single asset if each asset has similar useful lives. The amendment is
not expected to result in a material impact on the Group’s financial statements.
IFRS 5 (amendment), ‘Non-current assets held-for-sale and discontinued
operations’ (effective from 1 July 2009). The amendment provides clarification
that IFRS 5 specifies the disclosures required in respect of non-current assets
(or disposal groups) classified as held-for-sale or discontinued operations.
The amendment is not expected to result in a material impact on the Group’s
financial statements.
IAS 1 (amendment), ‘Presentation of financial statements’. The amendment
provides clarification that the potential settlement of a liability by the issue of
equity is not relevant to its classification as current or non-current. The Group
will apply IAS 1 (amendment) from 1 January 2010 but its adoption is not
expected to result in a material impact on the Group’s financial statements.
accoUntS
IFRS 2 (amendment), ‘Share-based payment’ (effective from 1 January 2009).
This amendment provides clarifications in respect of the treatment of vesting
conditions and cancellations. The Group has applied the revised standard
from 1 January 2009. The amendment does not have a material impact on the
Group’s financial statements.
or free products), the arrangement is a multiple-element arrangement and
the consideration receivable from the customer is allocated between the
components of the arrangement using fair values. The amendment does
not have a material impact on the Group’s financial statements.
IFRS 9 (amendment), ‘Financial instruments’ (effective 1 January 2013). The
Standard covers the classification and measurement of financial assets. The
IASB intends to expand IFRS 9 to add new requirements for the classification
and measurement of financial liabilities, derecognition of financial instruments,
impairment and hedge accounting.
note 2a: SUmmary of Significant accoUnting policieS
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. The policies have been
consistently applied to all years presented, unless otherwise stated.
Basis of consolidation
The consolidated financial statements incorporate the financial statements
of Unibet Group plc (‘the Company’) and enterprises controlled by the
Company (its subsidiaries) made up to 31 December each year. Control is
achieved where the Company has the ability to govern the financial and
operating policies of an investee enterprise so as to obtain benefits from
its activities. Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used in line with
those used by other members of the Group. All intercompany transactions
and balances between Group companies are eliminated on consolidation.
Subsidiaries are consolidated, using the purchase method of accounting,
from the date on which control is transferred to the Group and cease to
be consolidated from the date on which control is transferred from the
Group. On acquisition, the assets and liabilities and contingent liabilities of
a subsidiary are measured at their fair values at the date of acquisition. All
associate entities are accounted for by applying the equity accounting method.
45
a
ccoUntS
Revenue recognition
Gross winnings revenue on sports betting represents the net receipt of bets
placed and payouts made within the consolidated entity for the financial year.
For the non-sports betting segment, gross winnings revenue equates to gross
turnover.
Revenue is recognised when the amount of revenue can be measured reliably,
and it is probable that future economic benefits will flow after specific criteria
have been met. Where revenue can be measured reliably but transactions
have not closed at balance sheet date, the revenue will be presented within the
balance sheet as deferred income.
The Group considers:
i) gross winnings revenue to be financial instruments in which betting
transactions are shown net, i.e. stakes (or gross turnover) less payouts, and
ii) the gains and losses arising as a result of customer bonuses (or free bets)
as revenue, which is measured at the value of the consideration received or
receivable from customers.
Segment reporting
Following adoption of IFRS 8 in 2009, operating segments are reported in a
manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker, who is responsible
for allocating resources and assessing the performance of the operating
segments, has been identified as the Chief Executive Officer who, subject to
authorisation by the Board, makes strategic decisions. Comparative figures
for 2008 have been restated in line with the new presentation of operating
segments.
Leasing
Unibet’s leases are all operating leases (leases in which a significant portion of the
risks and rewards of ownership are retained by the lessor). Rentals payable under
operating leases are charged to the income statement on a straight-line basis over
the term of the relevant lease (net of any incentive received from the lessor).
Foreign currencies
The Group operates in Malta and in a number of international territories. The
presentation currency of the consolidated financial statements is GBP since
that is the currency in which the shares of the Company are denominated.
Transactions in currencies other than the functional currency of the company
in which they are recorded are initially recorded at the rates of exchange
prevailing on the dates of transactions. Monetary assets and liabilities
denominated in such currencies are re-translated at the rates prevailing on
the balance sheet date. Profits and losses arising on exchange are included
in the net profit or loss for the year. Gains and losses related to financing,
including unrealised gains and losses arising on the retranslation of the bond,
are recognised within finance costs. Gains and losses arising on operations
are recognised within administrative expenses.
The Group does not enter into forward contracts nor options to hedge
its exposure to foreign exchange risks. Translation differences related to
retranslation of the bond are recognised in the income statement as part of
finance costs.
On consolidation, the assets and liabilities of the Group’s overseas operations
are translated at exchange rates prevailing on the balance sheet date. Income
and expense items are translated at the average exchange rates for the period.
Exchange differences arising on the translation of subsidiary reserves are
classified as equity and transferred to the Group’s translation reserve.
Goodwill and fair value adjustments arising on acquisition of a foreign entity
are treated as assets and liabilities of the foreign entity and translated
at the closing rate.
Retirement benefit costs and pensions
The Group does not operate any defined benefit pension schemes for
employees or Directors. Certain Group companies do make contributions
to defined contribution pension schemes for employees on a mandatory or
contractual basis. The Group has no further payment obligations once the
46
contributions have been paid. The contributions are recognised as employee
benefit expense when they are due. The Group does not provide any other
post-retirement benefits.
Taxation
The tax expense represents the sum of the tax currently payable, and
movements in the deferred tax provision.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible.
The Group’s liability for current and deferred tax is calculated using tax rates
that have been enacted or substantially enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amount of assets and liabilities in the financial statements
and the corresponding tax basis used in the computation of taxable profit, and
is accounted for using the balance sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises
from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither the tax profit nor the
accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising
on investments in subsidiaries and associates and interests in joint ventures,
except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse
in the foreseeable future.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset realised. Deferred tax is charged
or credited in the income statement, except when it relates to items charged or
credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax is offset where appropriate.
Goodwill
Goodwill arising on an acquisition of a subsidiary undertaking is the difference
between the fair value of the consideration paid and the fair value of the
identifiable assets and liabilities acquired. Goodwill is carried at cost, less
accumulated impairment losses. Goodwill and fair value adjustments arising
on the acquisition of a foreign entity are treated as assets and liabilities of
the acquired entity and translated at the closing rate. Adjustments arising on
translation are taken to the currency translation reserve. Impairment tests on
the carrying value of goodwill are undertaken every year. Impairment losses on
goodwill are not reversed.
Expenditure on research activities is recognised at cost as an expense in the
period in which it is incurred.
An internally-generated development intangible asset is recognised at cost only
if all of the following criteria are met:
• An asset is created that can be identified (such as a database or software)
• It is probable that the asset created will generate future economic benefits
• The development cost of the asset can be measured reliably.
Where no internally-generated intangible asset can be recognised, development
expenditure is recognised as an expense in the period in which it is incurred.
Internally generated intangible assets are amortised on a straight-line basis
over three to five years.
Intangible assets identified as a result of a business combination are dealt with
at fair value in line with IAS 38, and are brought on to the consolidated balance
sheet at the date of acquisition. Where they arise as a result of the acquisition of a
foreign entity they are treated as assets of the acquired entity and are translated
at the closing rate. Acquired intangibles include brands, customer databases
and trade names which are being amortised over a period of three to five years,
as the Directors believe this to be their useful economic life. The ‘Maria’ brand
is considered to have an indefinite economic life and is therefore not subject to
amortisation, but is instead subject to an annual impairment review.
Computer software
Acquired computer software licences are capitalised on the basis of the costs
incurred to acquire and bring to use the specific software. These costs are
amortised over their estimated useful life of three years. Costs associated with
maintaining computer software are expensed as incurred.
Impairment of non-financial assets
Assets that have an indefinite useful life, such as goodwill, are not subject to
amortisation and are tested annually for impairment. Assets that are subject
to amortisation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and its value in use.
Fixtures and equipment are stated at cost less accumulated depreciation and
any recognised impairment loss.
Depreciation is charged so as to write off the cost or valuation, less the
estimated residual value, of the assets over their estimated useful lives, using
the straight-line method, on the following bases:
Plant and office equipment
Fixtures and fittings
3 years
3-5 years
The residual values of assets and their useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date.
If any impairment is identified in the carrying value of an asset, it is written down
to its recoverable amount.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable
to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds. Where any Group company purchases the Company’s
equity share capital, the consideration paid, including any directly attributable
incremental costs (net of income taxes) is deducted from equity attributable to
the Company’s equity holders until the shares are cancelled or reissued. Where
such shares are subsequently re-issued, any consideration received, net of any
directly attributable incremental transaction costs and the related income tax
effects, is included in equity attributable to the Company’s equity holders.
Financial assets
The Group classifies its financial assets in the following categories: at fair value
through profit or loss and loans and receivables. The classification depends
on the purpose for which the financial assets were acquired. Management
determines the classification of its financial assets at initial recognition.
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for
trading. A financial asset is classified in this category if acquired principally for
the purpose of selling in the short term. Assets in this category are classified as
current assets.
Regular purchases and sales of financial assets are recognised on the
trade-date – the date on which the Group commits to purchase or sell the asset.
Investments are initially recognised at fair value plus transaction costs for all
financial assets not carried at fair value through profit or loss. Financial assets
carried at fair value through profit or loss are initially recognised at fair value and
transaction costs are expensed in the income statement. Financial assets are
derecognised when the rights to receive cash flows from the investments have
expired or have been transferred and the Group has transferred substantially all
risks and rewards of ownership. Loans and receivables are carried at amortised
cost using the effective interest method.
Gains or losses arising from changes in the fair value of the ‘financial assets at
fair value through profit or loss’ category are presented in the income statement
within gross winnings revenue.
The translation differences on monetary securities are recognised in the
consolidated income statement, while translation differences on non-monetary
securities are recognised in the statement of changes in equity. The Group
assesses at each balance sheet date whether there is objective evidence that
a financial asset or a group of financial assets is impaired.
Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less any
provision for impairment that is required when there is objective evidence that
the Group will not be able to collect all amounts due according to the original
term of the receivables. Significant financial difficulties of the debtor, probability
that the debtor will enter bankruptcy or financial reorganisation, and default or
delinquency in payments (more than 30 days overdue) are considered indicators
that the receivable is impaired. The amount of the provision is the difference
between the assets’ carrying value and the present value of estimated future
cash flows, discounted at the original effective interest rate.
Financial liabilities
Financial liabilities are classified as financial liabilities at fair value through profit
or loss or as financial liabilities measured at amortised cost, as appropriate. The
Group determines the classification of its financial liabilities at initial recognition.
The measurement of financial liabilities depends on their classification (i)
financial liabilities at fair value through profit or loss are carried on the balance
sheet at fair value with gains or losses recognised in the income statement; and
(ii) financial liabilities measured at amortised cost are initially recognised at fair
value and subsequently measured at amortised cost using the effective interest
method. Amortised cost is calculated by taking into account any issue costs,
and any discount or premium on settlement. Gains and losses arising on the
repurchase, settlement or cancellation of liabilities are recognised respectively
in interest and other revenues and finance costs.
Trade payables
Trade payables, including customer balances, are recognised initially at fair
value and subsequently measured at amortised cost using the effective interest
method.
Borrowings and finance costs
Borrowings are initially recognised at fair value net of transaction costs
incurred. Borrowings are subsequently stated at amortised cost; any
difference between the proceeds (net of transaction costs) and the
redemption value is recognised in the income statement over the period of
the borrowings using the effective interest method. Borrowings are classified
as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the balance sheet date.
47
accoUntS
The gain or loss arising on the disposal or retirement of an asset is determined
as the difference between the sales proceeds and the carrying amount of the
asset and is recognised in the income statement.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
included in current assets, except for maturities greater than 12 months after
the balance sheet date. These are classified as non-current assets. The Group’s
loans and receivables comprise trade and other receivables and cash, and cash
equivalents in the balance sheet.
a
ccoUntS
Share-based employee remuneration
The Group operates a number of equity-settled share-based compensation
plans, under which Group companies receive services from employees
as consideration for equity instruments (options) in Unibet. The fair value
of the employee services received in exchange for the grant of options is
recognised as an expense. The total amount to be expensed is determined
by reference to the fair value of the options granted, excluding the impact of
any service or vesting conditions. The total amount expensed is recognised
over the vesting period of the options, which is usually three years.
At the end of each reporting period, the Group revises the estimates of
the number of options that are expected to vest. It recognises the impact
of the revision to original estimates, if any, in the income statement, with a
corresponding adjustment to equity.
The proceeds received net of any direct costs are credited to share capital and
share premium when options are exercised.
Cash and cash equivalents, and finance income
Cash and cash equivalents includes cash in hand, deposits held at call with
banks, other short-term highly liquid investments with original maturities of three
months or less and bank overdrafts.
Finance income is recognised on bank balances as and when it is receivable.
Dividend distribution
Dividends are recognised as a liability in the period in which the dividends are
approved by the Company’s shareholders. Interim dividends are recognised
when paid.
note 2b: critical accoUnting eStimateS and aSSUmptionS
Estimates and judgments are continually evaluated and are based on historical
experience and other factors, including expectations of future events that
are believed to be reasonable under the circumstances. The Group makes
estimates and assumptions concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related actual results. The
estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next
financial year are discussed below.
Impairment of goodwill and other intangible assets
The Group tests annually whether goodwill and other intangible assets have
suffered any impairment, in accordance with the accounting policy stated above.
The recoverable amount of cash-generating units has been determined based
on value-in-use calculations which require the use of estimates. See Note 11.
Income taxes
The Group is subject to income taxes in numerous jurisdictions. Significant
judgment is required in determining the worldwide provision for income taxes.
There are many transactions for which the ultimate tax determination is
uncertain during the ordinary course of business.
Legal environment
The Group operates in a number of markets in which its operations may be
subject to litigation risks, as highlighted on pages 28 and 29. The Group
routinely makes estimates concerning the potential outcome of such risks.
note 2c: financial riSk management
Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk
(including currency risk and interest rate risk), credit risk and liquidity risk. The
Group’s overall risk management programme focuses on the unpredictability
of the Group’s markets and seeks to minimise potential adverse effects on the
Group’s financial performance.
48
Risk management is managed by the finance team reporting through the Chief
Financial Officer to the Board of Directors. The Board of Directors supervises
strategic decisions, including the management of the Group’s capital structure.
Market risk
Market risk is the risk that Unibet will lose money on its business due to
unfavourable outcomes on the events where the Group offers odds. The Group
has adopted specific risk management policies that control the maximum risk
level for each sport or event where the Group offers odds. The results of the
most popular teams in major football leagues comprise the predominant market
risk. Through diversification, which is a key element of Unibet’s business, the
risk is spread across a large number of events and sports. See the graph on
page 24 for more information on the volatility of the sports betting margin.
The heads of Odds compilation and Risk management are responsible for day-today monitoring of Unibet’s market risk. It is also their responsibility to advise the
odds compilers and risk managers on appropriate risk levels for certain events.
The Compliance officer and the head of sports betting jointly assess risk levels
for individual events as well as from a longer-term perspective. Independent
staff make random risk evaluations for the various regions.
On non-sports betting, Unibet does not usually incur any significant financial risk,
except for the risk of fraudulent transactions considered within credit risk below.
Foreign exchange risk
The Group operates internationally and in addition to GBP sterling, is exposed
to foreign exchange risk arising from various currency exposures, primarily
with respect to the euro, Swedish kronor, Norwegian kroner, Danish kroner,
Swiss franc and US dollar. Foreign exchange risk arises from future commercial
transactions, recognised assets and liabilities and net investments in
foreign operations.
The Group’s operating cash flows provide a natural hedge of operating currency
risks, since deposits and pay-outs to customers in different territories are
matched in the same currency.
The Group has certain investments in foreign operations, whose net assets
are exposed to foreign currency translation risk. In addition, the Group
reports in GBP sterling, which is the currency in which its own share capital is
denominated, although it is incorporated and trading in Malta, which converted
to the euro with effect from 1 January 2008.
The spread of the Group’s operations, including material revenue and expenses
denominated in many different currencies, and taking into account the fact that
customers can trade with the Group in currencies other than the currency of
their territory of residence, makes it impractical to isolate the impact of single
currency movements on the results from operations. During 2009 the rate of
exchange of the euro weakened against GBP by 7.2% (from a rate of EUR 1.05
per GBP to a rate of EUR 1.126 per GBP). The rate of exchange of the Swedish
kronor weakened by 1.2% (from a rate of SEK 11.41 per GBP to a rate of SEK
11.544 per GBP). The main currency movements during 2009 occurred during
the second and third quarters of the year. These movements in some of the
Group’s principal trading currencies contributed to the overall foreign exchange
gain on operations as shown in Note 4 on page 51 and to the foreign exchange
gain on the bond as shown on Note 6 on page 52. Additional foreign exchange
disclosures are contained in Note 16 on page 55.
In relation to borrowings of the Group at the end of the financial year, as the
loan issued in December 2009 is denominated in euros, there is a currency
translation exposure related to that financial liability. Based on the exchange
rate between the euro and GBP at 31 December 2009, a 5% fall in the
value of the GBP against the euro would give rise to an exchange loss of
approximately GBP 1.1 million, while a 5% gain in the value of the GBP
against the euro would give rise to an exchange gain of approximately GBP
1 million. Until such time as the loan becomes repayable, such translation
gains and losses are unrealised. The potential translation gains and losses
arising on the loan would be offset to the extent that the Group generates
positive future cash flows in euros.
There is no longer any currency translation exposure in relation to the bond,
since this was repaid in full on 22 December 2009, as explained further in
Note 17 on page 55.
Interest rate risk
The Group interest rate risk was managed during the year through the
negotiation of a fixed rate on the bond issued in December 2007, and on the
bank loan drawn down in December 2009.
The substantial majority of the Group’s liquid resources are held in shortterm accounts in order to provide the necessary liquidity to fund the Group’s
operations, so there is no significant exposure to interest rate risk in respect of
the Group’s interest-bearing assets.
Credit risk
The Group manages credit risk on a group-wide basis. The Group does not
in normal circumstances offer credit to any customers and therefore the only
exposure to credit risk in respect of its sports betting business arises in respect
of the limited trading activities that it occasionally conducts with other parties in
order to lay off its exposure. In non-sports betting the Group works with a small
number of partners and at any time may have a small degree of credit exposure.
The principal credit risk that the Group faces in its gaming operations comes
from the risk of fraudulent transactions and the resulting charge-backs from
banks and other payment providers. The Group has a Fraud department that is
independent of its Finance function that investigates each case that is reported
and also monitors the overall level of such transactions in connection with
changes in the business of the Group, whether in terms of new markets, new
products or new payment providers. See also Note 2F below.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and
availability of funding for the business. The Group ensures adequate liquidity
through the management of rolling cash flow forecasts, the approval of investment
decisions by the Board and the negotiation of appropriate financing facilities. The
Group also monitors adherence to debt covenants related both to the bank loans
and the bond, in accordance with the conditions of those instruments.
The maturity of the Group’s borrowings is disclosed in Note 17 on page 55. The
Group’s financial liabilities of GBP 73.9 (2008: 57.1) million all mature in less
than one year.
The table below analyses the Group’s financial liabilities based on the remaining period at the balance sheet date. The amounts disclosed in the table are the
contractual undiscounted cash flows.
At 31 December 2009
GBP 000
At 31 December 2008
Less than
1 year
Between
1 and 2 years
Between
2 and 5 years
Less than
1 year
Between
1 and 2 years
Between
2 and 5 years
–
–
–
6,527
73,818
–
Bank and other borrowings
21,403
–
–
–
–
–
Trade and other payables
52,510
–
–
50,026
–
–
Bond and related interest1
The amount reported for the bond and related interest does not take account of repurchases of the bond made after 31 December 2008, which total EUR 4.9 million (2008: GBP 4.667 million at the
closing rate).
1
note 2e: fair valUe eStimation
Unibet’s objectives when managing capital are to safeguard the Group’s ability
to continue as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital structure both
to reduce the cost of capital and to provide appropriate funding for expansion
of the business. Unibet has a consistent record of positive operating cash flows
as well as significant ability to manage the timing and extent of discretionary
expenditure in the business. Although the balance sheet at 31 December 2009
showed net current liabilities, the Group expects to move into a net current
asset position in 2010.
The carrying value less impairment provision of trade and other receivables and
trade and other payables are assumed to approximate their fair values. The fair
value of financial liabilities for disclosure purposes is estimated by discounting
the future contractual cash flows at the current market interest rate that is
available to the Group for similar financial instruments.
In order to maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to shareholders, issue
new shares or sell assets.
Unibet monitors capital on the basis of the gearing ratio, which is calculated
as net debt divided by total capital. Net debt is calculated as total borrowings
(including customer balances) less cash and cash equivalents. Total capital is
calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt.
note 2f: credit qUality of financial aSSetS
The credit quality of financial assets that are neither past due nor impaired can
be assessed by reference to external credit ratings (if available) or to historical
information about counterparty default rates.
Since Unibet does not have significant trade receivables other than payment
solution providers, the credit risk associated with its normal operations is
principally in relation to fraudulent transactions as described in Note 2C above.
Unibet uses a large number of banks and payment solution providers both in
order to provide maximum access to markets and convenience for customers
and also to ensure that credit risk in banking relationships is spread.
The gearing ratios at 31 December 2009 and 2008 were as follows:
GBP 000
Total borrowings
Customer balances
Less: cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio
Note
2009
2008
17
21,403
28,305
-39,764
9,944
122,734
132,678
7%
65,926
25,309
-53,383
37,852
100,678
138,530
27%
16
49
accoUntS
note 2d: capital riSk management
a
ccoUntS
The credit ratings of Unibet’s principal banking partners at 31 December 2009,
based on publicly reported Fitch ratings, are as follows:
2009
2008
417
432
AA-
18,238
15,850
A+
10,929
27,719
GBP 000
AA
A
A-
2,456
-
940
879
Not rated
5,645
5,099
Other
1,139
3,404
39,764
53,383
Total cash and cash equivalents
It should be noted that the change in the profile of credit ratings reflects the
overall changes in the banking market and does not indicate that the Group
has changed its attitude to risk. Unibet continually monitors its credit risk
with banking partners and did not incur any losses during 2009 as a result of
bank failures.
Not rated consists of payment solution providers where credit risk is managed
by maintaining Unibet funds in segregated accounts.
Other consists of a large number of banks, none of whom held more than 3% of
the Group’s total cash and cash equivalents at 31 December 2009 and 2008.
None of the financial assets that are fully performing have been renegotiated
during the year.
The maximum exposure to credit risk for cash and cash equivalents, receivables,
and other financial assets is represented by their carrying amount.
note 3: operating SegmentS
Management has determined the operating segments based on the reports
reviewed by the CEO and Executive management team and provided to the
Board, which are used to make strategic decisions.
Management considers the business primarily from a geographic perspective
and during 2009 has reorganised the business to reinforce the primary role of
territory management in driving the business forward. Products are an important
part of Unibet’s operational matrix but the product teams are considered as
suppliers of products and services to the territory managers. This reflects
the fact that products may be sourced both internally and externally from
independent suppliers.
Where products, such as the Sportsbook, are sourced internally, it is Unibet’s
intention that the provision of the products and related services should be
conducted on a professional basis, consistent with Unibet’s strategy of offering
such products on a business-to-business basis to external customers in such
a way that the integrity of the offering is assured.
The reportable operating segments derive their revenues from online sports and
non-sports betting operations.
The primary measure used by the CEO and Executive management to assess
the performance of operating segments is gross profit, which is defined as
gross winnings revenue (net of commissions and bonuses), less cost of sales.
This measurement basis excludes central overheads incurred in support of
the integrated operating model applied by Unibet in order to derive maximum
operational efficiency.
Unibet does not allocate such central operating and administrative expenses by
segment since any allocation would be arbitrary. The measure also excludes the
effects of equity-settled share-based payments, depreciation and amortisation,
and finance costs and income.
Unibet operates an integrated business model and does not allocate either
assets or liabilities of the operating segments in its internal reporting, except for
certain acquired intangibles as shown in the tables below.
The segment information provided to the CEO and Executive management team for the reportable segments during the year ended 31 December 2009 is as follows:
31 December 2009
GBP 000
Revenue
Gross winnings revenue from external customers
Free Bets
Gross winnings revenue as reported
Cost of sales
Gross profit
Marketing costs
Assets by reportable segments
Goodwill
Intangibles acquired through business combinations
Other assets not allocated to reportable segments
Deferred tax assets
Taxation recoverable
Western Europe
Central, Eastern and
Southern Europe
Other
Total
66,318
-2,014
64,304
-3,968
60,336
56,424
-2,538
53,886
-5,551
48,335
19,943
-1,265
18,678
-5,474
13,204
1,485
-35
1,450
-2,648
-1,198
144,170
-5,852
138,318
-17,641
120,677
–
–
–
–
–
–
–
–
–
–
–
–
-36,637
-51,289
32,751
49,628
15,294
61,830
611
10,911
108
–
–
122,369
16,013
–
–
–
–
–
–
64,922
–
–
–
–
–
–
62,441
–
–
–
–
–
–
11,019
10,584
2,952
169
9,538
11,327
39,764
74,334
10,584
2,952
169
9,538
11,327
39,764
212,716
Nordic Region
Liabilities
Liabilities are not allocated by reportable segment in the internal management reporting of Unibet.
50
The segment information provided to the CEO and Executive management team for the reportable segments during the year ended 31 December 2008
is as follows:
31 December 2008
GBP 000
Revenue
Gross winnings revenue from external customers
Free Bets
Gross winnings revenue as reported
Cost of sales
Gross profit
Marketing costs
Assets by reportable segments
Goodwill
Intangibles acquired through business combinations
Other assets not allocated to reportable segments
Investment in associate
Deferred tax assets
Western Europe
Central, Eastern and
Southern Europe
Other
Total
67,446
-1,885
65,561
-1,763
63,798
45,742
-1,660
44,082
-4,738
39,344
14,292
-1,105
13,187
-2,235
10,952
727
-112
615
-2,304
-1,689
128,207
-4,762
123,445
-11,040
112,405
–
–
–
–
–
–
–
–
–
–
–
–
-24,153
-51,751
36,501
50,454
16,910
61,804
1,575
10,907
278
–
–
123,165
18,763
–
–
–
–
–
–
67,364
–
–
–
–
–
–
63,379
–
–
–
–
–
–
11,185
12,807
119
3,993
6,226
8,927
53,383
85,455
12,807
119
3,993
6,226
8,927
53,383
227,383
2009
2008
51,166
87,152
138,318
41,152
82,293
123,445
31 December
2009
31 December
2008
17,641
36,637
11,040
24,153
315
1,261
1,741
7,400
99
21,033
6,084
-1,114
14,470
51,289
105,567
379
1,459
1,868
7,918
108
18,929
5,972
-1,230
16,348
51,751
86,944
Nordic Region
Liabilities
Liabilities are not allocated by reportable segment in the internal management reporting of Unibet.
GBP 000
Sports betting
Non-sports betting
note 4: expenSeS by natUre
GBP 000
Cost of sales
Marketing costs
Annual statutory audit
Operating lease rentals
Amortisation of intangibles
Loss on disposal of property, plant and equipment and intangibles
Staff costs
Research and development expenditure
Foreign exchange differences on operations
Other
Total administrative expenses
Total expenses
Total administrative expenses include fees paid to PwC for non-audit services, comprising of GBP 84,000 for tax advisory and compliance services
(2008: GBP 150,000), and GBP 50,000 for other assurance services (2008: GBP 50,000).
51
accoUntS
Product revenues
Gross winnings revenue by principal product groups:
a
ccoUntS
note 5: Staff coStS
The work of all employees relates principally to marketing of sports betting and
non-sports betting products.
31 December
2009
Average number of employees
31 December
2008
69
59
Marketing and customer service
175
186
Gaming
107
80
67
60
418
385
Finance, administration and management
Research and development
GBP 000
31 December
2009
31 December
2008
17,439
16,069
Wages and salaries
Share option charge – value of employee services
Social security costs
Other pension costs
659
404
2,503
2,358
432
98
21,033
18,929
The remuneration of the Directors and Executive management is disclosed
on page 37.
GBP 000
31 December
2009
31 December
2008
6,190
7,567
305
225
1,353
1,321
-3,511
17,933
4,337
27,046
Interest on bond
Other loan interest payable
Finance costs on bond repurchase
Foreign exchange (gain)/loss on borrowings
Foreign exchange gains or losses on operating activities are included within
operating costs.
note 7: finance income
GBP 000
28,882
11,084
Taxation at the basic income tax rate of 35%
(2008: 35%)
-10,109
-3,879
-571
1,874
Effects of:
Non-utilisation of tax losses
Double-taxation relief
Tax refund
Overseas tax rates
Other
Reversal of prior years’ deferred tax provision
Tax expense
40
136
9,163
10,036
70
-26
-2,377
-10,667
1,793
202
-125
11
-2,116
-2,313
The tax refund of GBP 9,163,000 (2008: GBP 10,036,000) represents Malta
tax recoverable by the Company in accordance with applicable fiscal legislation
on intra-Group dividends distributed during the year.
The main item of income/expenditure not taxable/deductible as shown above,
is in relation to finance costs, including the foreign exchange gain/losses on
borrowings.
Dividend paid GBP 0.23 per share
(2008: GBP 0.50 per share)
31 December
2008
Earnings for the purposes of basic earnings
per share
26,766
8,771
Earnings for the purposes of diluted earnings
per share
26,766
8,771
480
1,625
Income tax credit/(expense)
Total tax expense
Number of shares
Weighted average number of ordinary shares for
the purposes of basic earnings per share
27,955,464 27,943,192
-5,268
2,072
-5,268
-4,188
2,955
Weighted average number of ordinary shares for
the purposes of diluted earnings per share
-4,188
2,955
-2,116
-2,313
Basic earnings per share
0.957
0.314
Fully diluted earnings per share
0.956
0.312
Income tax in Malta is calculated at a basic rate of 35% (2008: 35%) of the
estimated assessable profit for the year. Taxation for other jurisdictions is
calculated at the rates prevailing in the respective jurisdictions. The tax expense
for the year can be reconciled to the profit per the income statement as follows:
GBP 000
2,072
Deferred tax:
18
13,972
31 December
2009
Earnings
Current tax:
6,427
The calculation of the basic and diluted earnings per share is based on the
following data:
1,625
31 December
2008
31 December
2008
note 10: earningS per Share
480
31 December
2009
31 December
2009
In addition the Board of Directors is proposing a final dividend in respect of the
financial year ending 31 December 2009 of GBP 0.71 per ordinary share/SDR,
which will absorb an estimated GBP 20.0 million of shareholders’ funds. It will
be paid on 17 May 2010 to shareholders who are on the Euroclear Sweden
(formerly VPC) register on 11 May 2010.
31 December
2008
note 8: income tax expenSe
Note
GBP 000
31 December
2009
Interest on bank deposits
52
Profit before tax
note 9: dividendS
note 6: finance coStS
Deferred tax (expense)/credit
31 December
2008
Items of income/expenditure not taxable/deductible
Staff costs can be broken down as follows:
GBP 000
31 December
2009
GBP 000
Effect of dilutive potential ordinary shares –
Share options
The nominal value per share is GBP 0.005.
33,774
148,014
27,989,238 28,091,206
note 11: intangible aSSetS
GBP 000
Note
Goodwill
Development
costs
Computer
software
Customer
database
Brands
and other
Total
112,176
15,556
4,453
6,624
13,638
40,271
–
4,235
581
–
–
4,816
Cost
At 1 January 2008
Additions
Adjustment to prior year business combination
Acquisitions – through business combination
726
–
–
–
–
–
3,415
25
–
–
600
625
6,848
335
–
275
2,078
2,688
123,165
20,151
5,034
6,899
16,316
48,400
Additions
–
2,085
557
–
–
2,642
Disposals
–
–
-156
–
–
-156
Currency translation adjustment
At 31 December 2008
Acquisitions – through business combination
21
Reclassifications
At 31 December 2009
12
–
66
–
–
66
–
–
134
–
–
134
-808
–
-101
-24
-224
-349
123,369
22,236
5,534
6,875
16,092
50,737
–
4,824
1,538
2,300
174
8,836
–
4,827
1,026
1,262
803
7,918
–
–
–
19
57
76
–
9,651
2,564
3,581
1,034
16,830
–
3,990
1,043
1,627
740
7,400
–
–
-145
–
–
-145
Accumulated amortisation
At 1 January 2008
Charge for the year
4
At 31 December 2008
Charge for the year
4
Disposals
–
–
111
–
–
111
–
–
-92
13
23
-56
At 31 December 2009
–
13,641
3,481
5,221
1,797
24,140
At 31 December 2009
122,369
8,595
2,053
1,654
14,295
26,597
At 31 December 2008
123,165
10,500
2,470
3,318
15,282
31,570
Net book value
Goodwill arising on business combinations is not subject to amortisation, but is reviewed for impairment as described below. The amortisation period for
development costs is between three and five years depending on the nature of the project. For other intangible assets, the amortisation period is between three and
five years, based on the Directors’ assessment of their useful economic lives.
Impairment Review
Following the acquisition of the MrBookmaker Group in 2005, the Maria Group in 2007, Guildhall Media Invest in 2008 and Monnet Enterprises Limited in 2009,
the activities of the acquired businesses have been integrated into the existing businesses of Unibet and the combined businesses are now managed on a unified
basis. Management considers the combined business to be one cash-generating unit, as the originally purchased businesses are no longer separately identifiable.
Goodwill was subject to foreign currency adjustments in 2009 as shown in the above table and explained within the Group’s accounting policies.
During the year, therefore, the goodwill of GBP 122.4 million, and the Maria Brand of GBP 14.2 million was tested for impairment on a value-in-use basis, based on
the budget approved by the Board and extrapolated projections of the Group. These calculations used post-tax cash flow projections based on the 2009 trading
performance of Unibet, extrapolated forward using growth rates consistent with the forecasts included in industry reports. The projections do not take account of
any growth after the first five years.
The key assumptions which have been approved by the Board used for the value-in-use calculations were as follows:
EBITDA margin
Effective tax rate applicable to operating income
Discount rate
30.0%
5.0%
10%
53
accoUntS
Reclassifications
a
ccoUntS
note 12: property, plant and eqUipment
note 13: SUbSidiarieS and aSSociated companieS
Details of the Company’s principal subsidiaries and associated companies
at 31 December 2009 are as follows:
Fixtures and
fittings
Plant
and office
equipment
Total
1,053
6,115
7,168
Additions
718
1,239
1,957
Disposals
-129
-245
-374
151
–
151
GBP 000
Note
Place of
incorporation
Proportion of
ownership &
voting power
%
Global Leisure Partners Limited
Malta
100%
Unibet (Holding) Limited
Malta
100%
Unibet (International) Limited
Malta
100%
MrBookmaker.com Limited
Malta
100%
Maria Holdings Limited
Malta
100%
Maria Services Limited
Malta
100%
Monnet Enterprises Limited
Malta
100%
UGP Limited
Great Britain
100%
Unibet (London) Limited
Great Britain
100%
Firstclear Limited
Great Britain
100%
Parabol Limited
Great Britain
100%
North Development AB
Sweden
100%
PR Entertainment AB
Sweden
100%
Cost
At 1 January 2008
Acquisitions – through
business combinations
19
Foreign exchange translation
difference
68
87
1,812
7,177
8,989
Additions
108
730
838
Disposals
-65
-371
-436
–
13
13
-24
-52
-76
At 31 December 2008
Acquisitions – through
business combination
21
difference
At 31 December 2009
1,831
7,497
9,328
Accumulated depreciation
At 1 January 2008
Charge for the year
4
Disposals
difference
At 31 December 2008
Charge for the year
Disposals
difference
At 31 December 2009
4
Name of subsidiary
536
2,813
3,349
E-Gaming United Limited
244
1,624
1,868
Global Entertainment (Antigua) Limited
-25
-241
-266
6
39
45
761
4,235
4,996
302
1,439
1,741
-34
-315
-349
-1
-11
-12
1,028
5,348
6,376
Global IP and Support Services LP
Unibet Italia SRL
Mantaray Networks SA
Carrying value at 1 January
803
2,149
2,952
Additions
1,051
2,942
3,993
Share of associate’s (loss)/profit after tax
Converted to subsidiary
Carrying value at 31 December
54
100%
British Virgin Islands
100%
Italy
100%
Costa Rica
100%
In November 2009 the Group increased its interest in Monnet Enterprises Limited
from 50% to 100% and accordingly this company ceased to be an associate and
is now consolidated as a wholly-owned subsidiary. See also Note 21.
GBP 000
At 31 December 2008
100%
The movements in the Group’s interests in associates are shown below:
Net book value
At 31 December 2009
Belize
Antigua
2009
2008
119
81
–
34
-12
4
107
119
-107
–
–
119
note 14: financial inStrUmentS
note 17: borrowingS
The carrying value of the Group’s financial assets and financial liabilities
approximated to their fair values at the year end. At 31 December 2009, other
receivables of GBP 6.4 (2008: GBP 4.8) million were considered to be fully
performing. Because of the nature of the Group’s business, the Group does not
carry any provision for impairment of receivables. The Group does not hold any
collateral as security for its receivables.
The Group’s financial assets consist of loans and receivables, except for assets
at fair value through profit and loss of GBP 0.475 (2008: GBP 0.665) million.
The Group’s financial liabilities consist of other financial liabilities, except for
liabilities at fair value through profit and loss of GBP 1.758 (2008: GBP 2.084)
million.
IFRS7 requires management to identify a three level hierarchy of financial
assets and liabilities at fair value. As noted above, the financial assets at fair
value are immaterial and the financial liabilities at fair value have been
measured using inputs based on unobservable market data. A reasonable
change in assumptions would not give rise to a material change in value.
89
–
21,403
–
–
65,926
Due after more than 1 year:
Bond
–
65,926
21,403
65,926
31 December
2009
31 December
2008
4,789
Prepayments and accrued income
3,130
4,138
9,538
8,927
31 December
2009
31 December
2008
5,342
4,296
Other taxation and social security
119
2,258
Other payables
686
394
note 16: trade and other payableS
Due within 1 year:
18,058
17,769
24,205
24,717
Customer balances of GBP 28.305 (2008: 25.309) million are repayable on
demand, subject to the terms and conditions of the Group’s websites.
The following table shows the split by currency of customer balances:
31 December
2009
31 December
2008
EUR
71%
63%
SEK
11%
12%
DKK
4%
5%
NOK
4%
5%
USD
4%
6%
Other
6%
9%
100%
100%
Due in 1 to 2 years
Due in 2 to 5 years
21,403
–
–
65,926
–
–
21,403
65,926
Bank borrowings:
In November 2009 Unibet signed a revolving credit facility with a maximum
value of EUR 24 million with a leading international bank. In December
2009, the full EUR 24 million facility was utilised in connection with the early
redemption of the bond (see below).
Bank borrowings are denominated in EUR and bear interest at a fixed rate
of 3.5 per cent above EURIBOR at inception, and are unsecured. The bank
borrowings under the revolving credit facility are repayable by 20 December
2010. The fair value of the bank borrowings was EUR 24 (2008: Nil) million
at 31 December 2009.
The revolving credit facility is subject to financial undertakings, principally in
relation to debt service ratio and limitations in respect of permitted business
acquisitions and disposals. At 31 December 2009 Unibet was in compliance
with these undertakings. Unibet anticipates continued full compliance and that
the facility will be repaid in accordance with contracted terms.
Bond:
The bond was issued on 21 December 2007 in order to finance the acquisition
of Maria Holdings Limited and to provide additional funds for future investment.
The bond was listed on the NASDAQ OMX Nordic Exchange in Stockholm in
February 2008.
The bond had a nominal value of EUR 100 million, was denominated in EUR and
bore interest at a fixed rate of 9.7 per cent per annum, which is payable annually
in arrears. The bond’s original maturity was on 21 December 2010. At Unibet’s
option, the bond could be repaid early, from 21 December 2008 onwards.
During 2009, Unibet spent GBP 4.5 million of surplus cash to repurchase
EUR 4.9 million of the nominal value of the bond. On 22 December 2009 Unibet
redeemed the outstanding balance of the bond of EUR 65.755 million in full for
a total consideration of GBP 59.8 million, including a 1 per cent premium on the
outstanding nominal value of the bond as laid down in the bond conditions.
Certain third-party suppliers used by Unibet in its non-sports business use
either EUR or USD as their standard currency and therefore the above analysis
does not represent the spread of customer balances by territory.
During 2008, Unibet spent GBP 24.3 million of surplus cash to repurchase
EUR 29.345 million of the nominal value of the bond on the open market.
The Group’s operating cash flows provide a natural hedge of operating currency
risks, since deposits and pay-outs to customers in different territories are
matched in the same currency.
As a result of the early redemption and market repurchases of the bond,
the outstanding nominal value of the bond at 31 December 2009 was Nil
(2008: EUR 70.655 million).
55
accoUntS
6,408
Accruals and deferred income
–
Other short-term borrowings
Due in 1 year
31 December
2008
Other receivables
Trade payables
21,314
Bank borrowings
Borrowings are repayable with the following maturity:
Due within 1 year:
GBP 000
31 December
2008
Due within 1 year:
GBP 000
31 December
2009
31 December
2009
Total borrowings
note 15: trade and other receivableS
GBP 000
GBP 000
a
ccoUntS
The fair value of the bond at 31 December 2009 was GBP Nil (2008: GBP 66.6)
million, compared to its carrying value of GBP Nil (2008: GBP 65.9) million.
d) Not to provide security as a guarantee or otherwise for a market loan raised
by a Unibet Group Company.
e) To ensure the bond was registered at the NASDAQ OMX Nordic Exchange
in Stockholm.
f) To publish quarterly reports.
The bond was subject to a number of special undertakings by the Company
as follows:
a) Not to make any dividend or buy back or redemption of share capital in excess
of 75 per cent of the Unibet Group’s profit for the previous financial year.
b) To ensure that the Unibet Group’s net debt at each quarterly reporting date
does not exceed three times EBITDA for the previous 12 months.
c) To procure that no substantial change is made in the nature of the Unibet
Group’s business nor that any disposal is made of any material part of
that business.
The Company regularly monitored compliance with these undertakings and
was in full compliance between the issue of the bond on 21 December 2007
and the date of redemption of the Bond on 22 December 2009.
note 18: deferred tax
The following are the deferred tax liabilities and assets recognised by the Group and movements thereon during the current and prior reporting period:
GBP 000
Note
Unremitted
earnings
Tangible
fixed
assets
Unrealised
exchange
differences
Tax
losses
Unused
tax
credits
Intangible
assets
Other
Total
1,050
58
–
–
–
670
–
1,778
At 1 January 2008:
Deferred tax asset
–
–
-482
-423
–
–
-108
-1,013
(Credit)/charge to income for the year
–
35
290
-102
-3,127
-139
88
-2,955
–
16
21
–
-623
74
–
-512
–
–
–
–
–
153
–
153
1,050
149
1,720
–
–
758
–
3,677
Transfer to currency translation reserve
Arising on acquisition
21
At 31 December 2008:
Deferred tax asset
–
-40
-1,891
-525
-3,750
–
-20
-6,226
Charge/(credit) to income for the year
–
-100
468
525
3,506
-147
-64
4,188
Transfer to currency translation reserve
–
-4
-10
–
244
11
–
241
1,050
85
291
–
–
622
–
2,048
–
-80
-5
–
–
–
-84
-169
At 31 December 2009
Deferred tax asset
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
GBP 000
Deferred tax liabilities
Deferred tax assets
Net position
31 December
2009
31 December
2008
2,048
3,677
-169
-6,226
1,879
-2,549
At 31 December 2009 the Group had unused trading tax losses of GBP 128,000 (2008: GBP 849,000) and other unused tax losses of GBP 2,255,000 (2008:
GBP 3,330,000) available for offset against future profit, and had no deferred tax asset in respect of unused tax credits (2008: GBP 3,750,000) as a consequence
of the distribution of the intra-group dividends over which Malta tax is recoverable. No deferred tax asset has been recognised in respect of trading losses (2008:
GBP 616,000) and of the other unused tax losses (2008: GBP 1,310,000) due to insufficient evidence of their reversal in future periods.
The aggregate amount of other deductible temporary timing differences at 31 December 2009 for which deferred tax assets have been recognised are GBP
675,000 (2008: GBP 6,968,000). A deferred tax asset has not been recognised in respect of unexercised share options for GBP 325,000 (2008: GBP 263,000)
and other deductible temporary differences for GBP 2,126,000 (2008: GBP Nil).
56
note 19: Share-baSed paymentS
The Unibet Group plc Executive Share Option Scheme was first introduced in December 2000 and revised in May 2004. Under the scheme, the Board can grant
options over shares in the Company to employees of the Company. Options are normally granted with a fixed exercise price equal to 110 per cent of the average
closing share price in the five days prior to the date of grant. Awards under the scheme are generally made to employees at a senior level. Options granted under the
scheme during 2009 will become exercisable during 2012. Exercise of an option is subject to continued employment. Options were valued using the Black-Scholes
option-pricing model. Certain performance conditions are attached to share options. The fair value per option granted and the assumptions used in the calculation
are as follows:
19
Sept
2006
28
Sept
2007
30
April
2008
03
Sept
2008
Average share price prior to grant GBP
11.04
16.29
13.26
Exercise price GBP
12.16
17.93
14.59
Grant date
29
Sept
2008
29
Sept
2008
5
March
2009
11.98
12.72
12.72
12.78
13.18
13.99
12.72
14.05
9
25
21
13
12
9
38
33,392
53,081
206,669
19,162
48,471
76,303
176,415
3.16
3.13
3.11
3.18
3.10
3.10
3.25
35
35
35
40
39
39
42
Option life (years)
3.16
3.13
3.11
3.18
3.10
3.10
3.25
Expected life (years)
3.16
3.13
3.11
3.18
3.10
3.10
3.25
Risk-free rate %
3.47
4.09
4.00
4.15
3.72
3.72
1.75
Expected dividends expressed as dividend yield %
2.50
5.75
3.64
4.08
4.08
4.08
1.65
Fair value per option GBP
2.28
2.59
3.47
2.92
2.27
2.12
3.27
Number of employees
Shares under option
Vesting period (years)
Expected volatility %
Note: The options granted on 29 September 2008 at an exercise price of GBP 12.72 [SEK 155] were subject to a cap on the potential gain of SEK 200 per share.
The risk-free rates of return applied to the 2009 grants is the approximate implicit risk-free interest rate for the options’ term to maturity, based on the three-year
maturity rate offered by Riksbank at 5 March 2009. A reconciliation of option movements over the year to 31 December 2009 is shown below:
2008
Number
Weighted
average
exercise price
GBP
483,960
14.65
647,214
13.99
Exercised
-98,176
12.16
–
–
Granted
180,237
14.05
461,733
14.09
Lapsed
-115,782
14.29
-298,479
15.26
Outstanding at 31 December
613,493
14.27
647,214
13.99
Dilution effects
Options over 115,782 shares lapsed or were cancelled during 2009 (2008: 298,479). If all option programmes are fully exercised, the share capital of the
Company will increase by a total maximum of GBP 3,067.47 (2008: GBP 3,236.07) by the issue of a total maximum of 613,493 (2008: 647,214) ordinary shares,
corresponding to 2.17 (2008: 2.26) per cent of the capital and votes in the Company.
Performance conditions related to 169,725 of the share options granted in 2009 were only partially achieved (2008: 77,294). Since the year end, the Board has
therefore decided to cancel 84,860 of these options (2008: 57,970).
As a result, of the 613,493 options outstanding at 31 December 2009 (2008: 647,214), 528,633 options with a weighted average exercise price of GBP 14.27
(2008: 589,244 options at GBP 13.99) remained outstanding after this cancellation.
57
accoUntS
Outstanding at 1 January
2009
Weighted
average
exercise price
Number
GBP
a
ccoUntS
2009
2008
Weighted average remaining life
Exercise
price
GBP
Number of
shares
Expected
12.16
33,392
17.93
14.59
Weighted average remaining life
Contractual
Exercise
price
GBP
Number of
shares
Expected
Contractual
0.1
0.7
13.73
10,000
0.9
0.9
53,081
0.9
0.9
12.16
142,532
0.9
0.9
206,669
1.4
1.4
17.93
56,942
1.9
1.9
13.18
19,162
1.9
1.9
14.59
276,716
2.4
2.4
13.99
48,471
1.9
1.9
13.18
19,162
2.9
2.9
12.72
76,303
1.9
1.9
13.99
53,979
2.9
2.9
14.05
176,415
2.4
2.4
12.72
87,883
2.9
2.9
98,176 (2008: Nil) options were exercised during 2009. The total charge for the year relating to employee share-based payment plans was GBP 659,000 (2008:
GBP 404,000), all of which related to equity-settled share-based payment transactions.
Options
The Company operates two Option Schemes, the Unibet Group plc Unapproved
Executive Share Option Scheme (the ‘Unapproved Scheme’) and the
Unibet Group plc Approved Executive Share Option Scheme (the ‘Approved
Scheme’) under which employees may acquire ordinary shares or SDRs. The
difference between the Schemes is that the Unapproved Scheme does not
comply with the relevant United Kingdom tax legislation while options granted
under the Approved Scheme attract UK tax benefits. The main differences
between the Approved Scheme and Unapproved Scheme are as follows.
A participant may not hold HM Revenue and Customs (HMRC) approved
options over more than GBP 30,000 worth of Ordinary Shares (valued at date
of grant). Alterations to key features of the Approved Scheme are subject to the
prior approval of HMRC. The Directors can make, without shareholder approval,
amendments to the Approved Scheme to obtain or maintain HMRC approval.
The principal terms of the Unapproved Scheme and Approved Scheme are set
out below.
The share option schemes described in this section were established when
the holding company of the Unibet Group was a company incorporated in the
UK. Following the Scheme of Arrangement during 2006 which inserted a new
Maltese company as the holding company for the Unibet Group, all employees
holding share options were offered the opportunity to exchange those options
for equivalent options to acquire shares of Unibet Group plc on substantially the
same terms.
The Unapproved Scheme
Responsibility for operation
The Unapproved Scheme is operated by the Directors or, in respect of Executive
Directors of the Company, by the Remuneration Committee appointed by the
Board, which consists mainly of non-executive Directors of the Company.
Eligibility
Employees and Executive Directors of the Company and any subsidiary
companies are eligible to participate in the Unapproved Scheme. Non-executive
Directors of these companies are not eligible to participate.
Grant of options
Options may be granted at the discretion of the Directors, or the Remuneration
Committee in the case of Executive Directors of the Company, to selected
employees, normally within 42 days of the announcement of the results for the
second quarter. Options are not pensionable or transferable.
58
Option price
The option price must not be less than the market value of the ordinary shares
or SDRs. For this purpose, market value means the weighted average of the
market quotations on the five trading days immediately prior to the date of grant.
Individual limits
The Board of Directors will decide the maximum number of ordinary shares
or SDRs, which may be granted under option to individual participants. At any
given time, the number of ordinary shares or SDRs under subsisting options will
not exceed the following:
• In the case of subsisting options held by the Chief Executive Officer of the
Company, 2.75 per cent of the ordinary share capital of the Company.
• In the case of subsisting options held by the Executive management
(including the Chief Executive Officer) of the Company and other
participating companies, 3.75 per cent of the ordinary share capital of the
Company.
• In the case of subsisting options held by the Executive management
(including the Chief Executive Officer) of the Company and other
participating companies, and all other employees, 5 per cent of the ordinary
share capital of the Company.
Scheme limit
At any time, not more than 5 per cent of the issued ordinary share capital of the
Company may be issued or be issuable under the Unapproved Scheme and
all other employees’ share schemes operated by the Company. This limit does
not include options which have lapsed or been surrendered.
Exercise of options
Options will normally be exercisable in accordance with a vesting schedule set
at the date of grant and will expire not later than the fifth anniversary of the
date of grant. It is intended to grant options on the basis that they will become
exercisable on the third anniversary of grant, for a period of one year, and expire
on the fourth anniversary of grant. Exercise of options may take place only
within prescribed exercise windows during the one-year exercise period. The
rules of the Unapproved Scheme allow the Directors to grant options on the
basis that they will be exercisable only to the extent that certain performance
conditions have been satisfied. Options may, however, be exercised early
in certain circumstances. These include, for example, an employee leaving
because of ill health, retirement, redundancy or death. On cessation of
employment for other reasons, options will normally lapse.
Change of control, merger or other reorganisations
Options may generally be exercised early on a takeover, scheme of
arrangement, merger or other corporate reorganisation. Alternatively,
participants may be allowed or, in certain cases, required to exchange their
options for options over shares in the acquiring company. No options were
exercised under these provisions following the Scheme of Arrangement.
Issue of shares
Any ordinary shares issued on the exercise of options will rank equally with
shares of the same class in issue on the date of allotment except in respect of
rights arising by reference to a prior record date.
Variation in share capital
If there is a consolidation or reduction in the share capital of the Company,
options may be adjusted as the Directors consider appropriate in order to
ensure that the number of ordinary shares or SDRs comprised in an option and
the option price equal the same proportion of the share capital as against the
same option price as was the case before the variation took place.
The Unapproved Scheme
Option
programme
Number of
options
Exercise period
Exercise price
per option GBP
14
33,392
1 Nov 2009 –
15 Sep 2010
12.16
16
47,922
1-15 Nov 2010
17.93
18
63,979
1-15 Jun 2011
14.59
20
130,014
1-15 Jun 2011
14.59
19,162
1-15 Nov 2011
13.18
23
30,777
1-15 Nov 2011
13.99
25
76,303
1-15 Nov 2011
155SEK
26
74,288
1-15 Jun 2012
14.05
28
66,514
1-15 Jun 2012
14.05
29
14,338
1-15 Jun 2012
14.05
Total
556,689
Approved Scheme
The Approved Scheme is substantially the same as the Unapproved Scheme,
except that it has been drafted to comply with the relevant United Kingdom tax
legislation so that options granted under it will attract UK tax benefits. Options
may be granted in respect of ordinary shares only.
The Approved Scheme
Option
programme
17
Number of
options
Exercise period
Exercise price
per option GBP
5,159
1-15 Nov 2010
17.93
19
8,642
1-15 Jun 2011
14.59
21
4,034
1-15 Jun 2011
14.59
24
17,694
1-15 Nov 2011
13.99
27
21,275
1-15 Jun 2012
14.05
Total
56,804
a) Movements in Share capital
2009
2008
200,000,000 ordinary shares of
GBP 0.005 each (2008: 200,000,000
ordinary shares of GBP 0.005 each)
1,000,000
1,000,000
At 31 December
1,000,000
1,000,000
141,206
141,206
84
-
141,290
141,206
GBP
Authorised:
Issued and fully paid up:
At 1 January – 28,241,092 ordinary shares of GBP
0.005 each
Issue of share capital - 16,946 ordinary shares of
GBP 0.005 each
At 31 December – 28,258,038 ordinary
shares of GBP 0.005 each
During 2009, 16,946 shares were issued by the Company at a price of
GBP 12.16 per share, as a result of the exercise of employee share options. The
total proceeds of this issue of new shares was GBP 206,063, of which GBP 84
was an increase in issued share capital and GBP 205,979 was an increase in
share premium.
During 2009 and 2008 no shares were repurchased by the Company. During
2009, 81,230 of the shares repurchased by the Company in 2007 were sold for
net proceeds to the Company of GBP 988,000 in connection with the exercise
of employee share options at the option price of GBP 12.16. See also Note 19.
Of the 297,900 shares that were acquired by the Company in 2007, a balance
of 216,670 of those shares remains held by the Company.
b) Movements in Share premium
Apart from the premium arising on the issue of new shares related to the share
option scheme as described above, there was no movement in share premium
in 2009 or the previous year.
The following reserve was created as a result of the Group reorganisation
in 2006:
Reorganisation reserve: this reserve of GBP -42.9 million (2008: GBP
-42.9 million) arises in the consolidated financial statements, as a result of
the application of the principles of predecessor accounting to the Group
reorganisation in 2006. The reorganisation reserve represents the differences
between the share capital and non-distributable reserves of Unibet Group plc and
the share capital and non-distributable reserves of the former parent company,
UGP Limited. This reserve does not arise in the separate financial statements
of the parent company and therefore has no impact on distributable reserves.
Currency translation reserve: This reserve of GBP 9.9 million (2008: GBP
10.1 million) is a non-distributable reserve.
59
accoUntS
22
note 20: Share capital
a
ccoUntS
note 21: acqUiSitionS
note 22: capital and other commitmentS
(a) Acquisition of Monnet Enterprises (Malta) Limited
On 5 November 2009, Unibet Group plc increased its holding from 50 per
cent to 100 per cent of the voting share capital of Monnet Enterprises (Malta)
Limited (Monnet). Monnet therefore ceased to be an associated company from
that date and became a wholly-owned subsidiary of Unibet Group plc.
The Group has not entered into any contracted fixed asset expenditure as at
31 December 2009. As at 31 December 2009, the Group had an outstanding
guarantee of GBP 266,430 (2008: GBP 286,000) to the UCI.
The cumulative consideration for the acquisition was GBP 84,000, comprising
GBP 39,000 being the existing cost of Unibet’s investment in the 50 per cent
of ordinary shares already owned by Unibet plus a payment of GBP 45,000 for
the additional 50 per cent of ordinary shares. The purchase consideration was
settled in full in December 2009 following the completion of legal formalities.
The Group leases various offices under non-cancellable operating lease
agreements. The leases have varying terms, including provision for rent reviews
and for early termination.
The net assets of Monnet at the date of acquisition were GBP 72,000 and
accordingly Unibet has recognised provisional goodwill of GBP 12,000 on
this acquisition. Unibet has not made any adjustments to the fair values of the
assets and liabilities of Monnet. The acquisition has not had a material effect on
the financial results or position of Unibet.
note 23: operating leaSe commitmentS
The future aggregate minimum lease payments under non-cancellable
operating leases are as follows:
31 December
2009
31 December
2008
No later than 1 year
1,208
1,265
Later than 1 year and no later than 5 years
1,558
2,792
2,766
4,057
GBP 000
The balance sheet of Monnet at the date of acquisition is set out below:
Operating lease payments represent rent payable by the Group on properties in
Malta and other territories.
Carrying
values
pre-acquisition
Provisional
fair value
Intangible assets
66
66
note 24: related party tranSactionS
13
13
5
5
For details of Directors’ and Executive Management Remuneration please refer
to the Remuneration Committee Report on pages 36 and 37.
-411
-411
GBP000
Receivables
Payables
Taxation
Current
–
–
Deferred
–
–
399
399
Net assets acquired
72
Goodwill
12
Consideration
84
Consideration satisfied by:
Existing cost of investment by Unibet
39
Cash (including costs)
45
The intangible assets acquired as part of the acquisition of Monnet consist of
computer software at cost less accumulated amortisation.
(b) Acquisition of Guildhall Media Invest Limited
On 25 April 2008, Unibet Group plc acquired 100 per cent of the voting share
capital of Guildhall Media Invest Limited and its subsidiaries (“Guildhall”) for
a total consideration of GBP 3.623 million, giving rise to provisional goodwill
of GBP 3.415 million.
As the goodwill arising on the acquisition of Guildhall is considered to be
denominated in EUR, it is subject to revaluation in the consolidated financial
statements of Unibet. As a result of this currency translation adjustment,
which is recognised through the translation reserve, the balance of goodwill
related to the acquisition of Guildhall was GBP 3.851 (2008: 4.130) million at
31 December 2009.
Unibet conducted a review during 2009 of the provisional values assigned
to goodwill on this acquisition, but did not record any adjustments to the
original calculation.
60
Executive management have loans outstanding with a Group company at
varying rates of interest based on market rates. The aggregate loans and
interest at 31 December 2009 were GBP 177,620 (2008: GBP 357,356).
note 25: contingent liabilitieS
Currently the Group has not provided for potential or actual claims arising from
the promotion of gaming activities in certain jurisdictions. Based on current
legal advice the Directors do not anticipate that the outcome of proceedings
and potential claims, if any, set out above will have a material adverse effect
upon the Group’s financial position. Further details can be found in the General
Legal Environment section on pages 28 and 29.
note 26: caSh and caSh eqUivalentS
GBP 266,430 (2008: GBP 286,000) of the total cash and cash equivalents
of GBP 39,764,000 at 31 December 2009 (2008: GBP 53,383,000)
represented restricted cash, since this amount was set aside to back the
guarantee given to the UCI in 2007 as part of Unibet’s Pro tour 2007
engagement.
note 27: reconciliation of ebitda to operating profit
GBP 000
2009
2008
EBITDA
41,892
46,287
Depreciation
-1,741
-1,868
Amortisation
-7,400
-7,918
32,751
36,501
The table above shows how EBITDA, which is a non-GAAP measure, is derived
from the profit from operations reported in the consolidated income statement.
note 28: reconciliation of adjUSted operating caSh flow to
profit from operationS
Year ended
31 December
2009
Year ended
31 December
2008
32,751
36,501
1,741
1,868
Amortisation of intangible assets
7,400
7,918
99
108
GBP 000
Adjustments for:
Loss on disposal of property, plant and equipment
404
42,650
46,799
Income taxes paid
-1,992
-1,197
-837
-1,957
Purchases of property, plant and equipment
Purchases of intangible assets
-2,642
-4,816
Operating cash flows before movements
in working capital and after tax and capital
expenditure
37,179
38,829
accoUntS
659
Operating cash flows before movements in
working capital
Share-based payment
The table above shows how Adjusted operating cash flow, which is a nonGAAP measure, is derived from the profit from operations reported in the
consolidated income statement.
61
a
dditional information
independent aUditorS’ report to the memberS
of Unibet groUp plc
We have audited the Group financial statements of Unibet Group plc for
the year ended 31 December 2009 on pages 41 to 61 which comprise the
Consolidated Income Statement, the Statement of Comprehensive Income, the
Consolidated Balance Sheet, the Consolidated Statement of Changes in Equity,
the Consolidated Cash Flow Statement, a summary of significant accounting
policies and the related notes.
Directors’ Responsibility for the Group Financial Statements
As explained more fully in the Statement of Directors’ Responsibilities set
out on page 35, the directors are responsible for the preparation and fair
presentation of the Group financial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union
and the requirements of the Maltese Companies Act 1995. This responsibility
includes designing, implementing and maintaining internal control relevant to
the preparation and fair presentation of financial statements that are free of
material misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on the Group financial statements
based on our audit. We conducted our audit in accordance with International
Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance
whether the Group financial statements are free of material misstatement.
An audit involves performing procedures to obtain evidence about the amounts
and disclosures in the financial statements. The procedures selected depend
on the auditors’ judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In
making those risk assessments, the auditors consider internal control relevant
to the entity’s preparation and fair presentation of the financial statements in
order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion on financial statements
In our opinion the Group financial statements give a true and fair view of the
financial position of the Group as at 31 December 2009 and of its financial
performance and cash flows for the year then ended in accordance with
IFRSs as adopted by the European Union and have been properly prepared in
accordance with the requirements of the Maltese Companies Act 1995.
Report on Other Legal and Regulatory Requirements
We also have responsibilities under the Maltese Companies Act 1995 to report
to you if, in our opinion:
• The information given in the Directors’ Report is not consistent with the
• Adequate accounting records have not been kept, or that returns adequate
for our audit have not been received from branches not visited by us.
• The financial statements are not in agreement with the accounting records
and returns.
• We have not received all the information and explanations we require for
our audit.
• Certain disclosures of directors’ remuneration specified by law are not made
in the financial statements, giving the required particulars in our report.
We have nothing to report to you in respect of these responsibilities.
62
Other Matters
This report, including the opinions, has been prepared for and only for the
company’s members as a body in accordance with Section 179 of the Maltese
Companies Act 1995 and for no other purpose. We do not, in giving these
opinions, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
We have reported separately on the parent company financial statements of
Unibet Group plc for the year ended 31 December 2009.
Lucienne Pace Ross (Partner)
for and on behalf of PricewaterhouseCoopers
Registered Auditors
167 Merchants Street
Valletta
Malta
David Snell (Partner)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
1 Embankment Place
London
WC2N 6RH
United Kingdom
29 March 2010
Note
The maintenance and integrity of the Unibet Group plc website is the responsibility of the
directors; the work carried out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any changes that may have occurred
to the Group financial statements since they were initially presented on the website.
Legislation in Malta and Sweden governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
board of directorS and ceo
Daniel Johannesson
Chairman
Swedish citizen. Born in 1943. Board member since 2005. B.Sc. (Econ.)
from Göteborg School of Economics, Sweden. ISMP, Harvard Business School.
His other positions include Chairman of Millicom International Cellular SA,
Luxembourg.
Staffan Persson
Board member
Swedish citizen. Born 1956. Board member since 2007. B.Sc. (Econ.) Senior
Partner at ITP. Other significant board assignments: Non-executive Chairman
in Neonet AB and Neonet Securities AB, Accelerator Nordic AB och Swedia
Capital AB. Board member in Rite Internet Ventures AB, Klar Invest AB,
The Lexington Company AB., Sveab Holding AB and Bidrivals Ltd.
Holding: 7,000 Unibet SDRs.
Holding: 5,000 SDRs (through company).
Anders Ström
Deputy Chairman
Swedish citizen. Born 1970. Board member since incorporation. Mr. Ström was
the original founder of the Company in 1997. He started his career as a teacher
in 1989 and went on to study Mathematics, Statistics and Economics from
1991 to 1993. After a period as a journalist, Mr. Ström then founded Trav- och
Sporttjänst in 1993. By 1997, the Company had revenues of GBP 1 million with
good profitability. Trav- och Sporttjänst was sold in order to found Unibet.
Holding: 2,925,000 Unibet SDRs (through company).
Kristofer Arwin
Board member
Swedish citizen. Born in 1970. Board member since 2008. He is a co-founder
of the consumer buying guide www.TestFreaks.com and its CEO since the start
in 2006. He is also the founder of the price comparison site PriceRunner in
1999 which he then sold to the NASDAQ-listed company ValueClick in 2004.
Mr. Arwin also worked as COO at the eCommerce website Paletten during
1998/99. Mr. Arwin has a B.Sc. in Business Administration and Economics
from the Stockholm University. Mr. Arwin is a Non-executive Director of
TradeDoubler AB and AlertSec AB.
Holding: 500 SDRs.
Peter Boggs
Board member
US citizen. Born 1948. Board member since 2002. B.A. in American Studies
from Washington College, Maryland USA. Previous engagements include:
1975-1981: President and COO of NDMS Inc. a US political lobbying and
fundraising company; 1981-1985: Managing Director of Brown Direct, Division
of Earle Palmer Brown Inc. a US advertising agency; 1985-1991: Director of
Ogilvy & Mather Direct Plc, London; 1991-2002: President and COO of Grey
Direct Worldwide, a division of Grey Worldwide Inc. New York.
Petter Nylander
CEO
Swedish citizen. Born 1964. B.Sc. (Econ.) from Stockholm University, Sweden.
Mr. Nylander joined the Group in 2005. Prior to that date, Mr. Nylander
was CEO and Managing Partner of OMD Sweden AB, which is part of the
international Omnicom Group. From 1994 to 2003 he held various senior
positions within Swedish-listed Modern Times Group MTG AB. These included
CEO TV3 Sweden, CEO TV3 Scandinavia and VP Global Broadcasting.
Member of the Board of Cherryföretagen during 2001-2003 and Ongame
e-solutions during 2004-2005.
Holding: 3,200 SDRs and 85,016 options in accordance with option
programmes 14, 15 and 17 and 12,400 call options expiring 30 June 2010
and 18,284 call options expiring 15 November 2011.
The above-mentioned holdings include personal holdings, family holdings
and holdings through companies in which they have an interest, and are as
at 26 February 2010.
Independent Auditors of the Company PricewaterhouseCoopers, Malta
and PricewaterhouseCoopers LLP, London
With audit partners Ms. Lucienne Pace Ross from the PricewaterhouseCoopers
Malta office and Mr. David Snell, from the PricewaterhouseCoopers LLP
London office.
Holding: 13,100 Unibet SDRs.
additional information
Peter Lindell
Board member
Swedish citizen. Born 1954. Board member since 2003. M.Sc. in Industrial
Engineering and Management from the Institute of Technology, Linköping
University, Sweden. Senior Partner at ITP. Other significant board assignments:
Accelerator Nordic AB; Svenska Allt för Föräldrar AB, Cidro Invest AB, Rite
Internet Ventures I resp II AB, Syntetich Mr AB, and Lednil AB. Previous
engagements include: Djurgården Fotboll AB; Colorcraft AB; Springtime AB;
Upsize Rental AB; Swedish Private Equity & Venture Capital Association.
Holding: 708,570 Unibet SDRs (through company).
63
a
dditional information
definitionS
Average number of employees
Average number of employees based on headcounts at each month end.
Dividend per share
Dividends paid divided by the fully diluted weighted average number of ordinary
shares for the period.
Earnings per share, fully diluted
Profit after tax adjusted for any effects of dilutive potential ordinary shares
divided by the fully diluted weighted average number of ordinary shares for
the period.
EBIT
Earnings before interest and taxation, equates to profit from operations.
EBIT margin
EBIT as a percentage of gross winnings revenue.
EBITDA
Profit from operations before depreciation and amortisation charges.
Equity:assets ratio
Shareholders’ equity as a percentage of total assets.
Equity per share
Total assets less total liabilities, divided by the number of ordinary shares at the
balance sheet date.
Gross profit
Gross winnings revenue less cost of sales.
Gross turnover
Amounts receivable in respect of bets placed on sporting events, together with
other income from non-sports betting.
For sports betting, represents gross turnover less payouts; for non-sports
betting, equates to gross turnover.
Net cash
Total cash at period end less customer balances and bank loans.
64
Number of active customers
Number of active customers is defined as total registered customers who have
placed a bet with Unibet during the last three months.
Number of registered customers
Number of registered customers means the total number of customers on
Unibet’s customer base.
Operating margin
Profit from operations as a percentage of gross winnings revenue.
Profit margin
Profit after tax as a percentage of gross winnings revenue.
Return on average equity
EBIT as a percentage of average equity.
Return on total assets
Profit after tax as a percentage of average total assets.
Return on total capital
Profit after tax as a percentage of total capital.
Total capital
Total capital is equal to total equity as disclosed on the consolidated balance
sheet, plus net debt (comprising total borrowings and customer balances, less
cash and cash equivalents).
Weighted average number of shares
Calculated as the weighted average number of ordinary shares outstanding
during the year.
Weighted average number of shares, fully diluted
Calculated as the weighted average number of ordinary shares outstanding
and potentially outstanding (i.e. including the effects of exercising all share
options and converting all convertible loan notes) during the year.
AnnuAl generAl meeting
Unibet was founded in 1997. With over 4.1 million registered customers
in more than 100 countries, the Group is one of Europe’s largest
Gaming products include pre-game sports betting, live betting, casino, poker,
bingo and soft games. Customers can bet via websites in 27 languages,
and increasingly via mobile phones and other mobile devices.
The Annual General Meeting (AGM) of Unibet Group plc will be held at 15.00
CET on Thursday 6 May 2010, at the Grand Hotel, Södra Blasieholmshamnen
8, Stockholm in Sweden.
Right to participate
Holders of Swedish Depositary Receipts (SDRs) who wish to attend the AGM
must be registered at Euroclear Sweden AB/VPC on Monday 26 April 2010
and notify Skandinaviska Enskilda Banken AB (publ) of their intention to attend
the AGM no later than 11.00 CET on Friday 30 April 2010, by filling in the
enrolment form provided at www.unibetgroupplc.com/AGM, Notification to
holders of Swedish Depository Receipts in Unibet Group plc. The form must be
completed in full and delivered electronically.
Unibet creates products and services intended for the global market,
and customises them to suit local needs. This “glocal” approach – global
reach and mindset combined with local understanding – helps Unibet
make all customers feel at home.
Please note that conversions to and from SDRs and ordinary shares will not
be permitted between 26 April and 6 May 2010.
mission
To provide reliable online gaming and build
value by delivering entertaining products
and excellent service.
vision
The thrill of putting money at stake for
the chance to win more is at the heart
of Unibet’s vision – it’s moneytainment®.
Key objectives
Satisfied and excited customers
Dividend
The Board of Directors proposes a dividend of GBP 0.71 per share/SDR,
which is approximately SEK 7.68 per share/SDR.
Financial information
Unibet Group plc’s financial information is available in Swedish and English.
Reports can be obtained from Unibet’s website, www.unibetgroupplc.com or
ordered by email at [email protected]. Distribution will be via email.
unibet’s strengths
One of Europe’s largest gaming
companies in a fast-growing and exciting
consumer category
Motivated employees
Strong financials
Annual Reports can be ordered through the website, www.unibetgroupplc.com
or ordered by email at [email protected].
Unibet will publish financial reports for the financial year 2010 on
the following dates:
• Interim Report January – March 2010, on 5 May 2010
• Interim Report January – June 2010, on 11 August 2010
• Interim Report January – September 2010, on 3 November 2010.
Diversified product and geographic
portfolio
Main focus on organic growth combined
with selected acquisitions
Regarded as one of Europe’s strongest
sportsbooks
overview
Key highlights
Unibet at a glance
Gaming responsibly
Q&A with the CEO
Sports betting
Non-sports betting
Designed and produced by SampsonMay
Telephone: 020 7403 4099 www.sampsonmay.com
business review
1
2
4
6
8
10
Delivering against our strategy
Emerging markets new opportunities
Innovation leading the way
Market overview
Unibet’s markets
Financial objectives
Sportsbook B2B network
Business performance review
Unibet going forward
Dedicated people
General legal environment
Principal risks
governAnce
12
14
16
18
20
22
23
24
26
27
28
30
Shares and share capital
Directors’ report
Remuneration Committee report
Corporate governance statement
Accounts
Consolidated income statement
Statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes
in equity
Consolidated cash flow statement
Notes to the consolidated financial
statements
Printed by Park Communications on FSC certified paper.
32
34
36
38
41
41
42
43
44
45
Independent auditors’ report to the
members of Unibet Group plc
Board of Directors and CEO
Definitions
Annual General Meeting
62
63
64
65
When you have finished with
this report please recycle it
whAt’s inside
50%
Park is an EMAS certified CarbonNeutral® Company and its Environmental
Management System is certified to ISO14001.
100% of the inks used are vegetable oil based 95% of press chemicals are
recycled for further use and on average 99% of any waste associated with
this production will be recycled.
This document is printed on Revive 50:50; a paper containing 50% virgin fibre
and 50% recycled fibre. The pulp used in this product is bleached using an
Elemental Chlorine Free (ECF) process and contains fibre from well managed,
sustainable, FSC certified forests.
The unavoidable carbon emissions generated during the manufacture and
delivery of this document have been reduced to net zero through a verified,
carbon offsetting project.
Unibet is not affiliated or connected with sports teams, event organisers or players
displayed in this report.
65
Unibet Group plc
Annual Report and Accounts 2009
Unibet Group plc
Fawwara Buildings
Msida Road, Gzira GZR1402, Malta.
Tel: +356 2133 3532
ANNUAL REPORT 2009 Unibet Group plc
www.unibetgroupplc.com
playing to win
by players for players
PROFIT BEFORE TAX
+161%
Company No: C39017.
Registered in Malta.
PBT GBP 28.9M
Registered office:
c/o Camilleri Preziosi,
Level 2, Valletta Buildings
South Street, Valletta VLT11, Malta.
Active customers
+25%
365,865 Active customers worldwide
Pioneer in the
moneytainment®
industry

Annual Report and Accounts 2009 (pdf-file)

Transcription

Similar documents

norsk Rikstoto

Stunning Debut Year for NSBS

2016 PowerPoint - Finger Lakes Library System

Texas Hold`em Poker - Cash Games

Addictive Games and affect on our children

PlayCentral EX - Scientific Games

2015 Agriculture Federal Credit Union (AgFed) Board of Directors

Illegal betting and organised crime in Asia

The Ultimate 3D Gaming Projector