Annual Report • Mar 28, 2019
Annual Report
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Gross betting and gaming revenue (in mEUR) EBITDA (in mEUR)
| Group and financial key figures | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | |
|---|---|---|---|---|---|---|
| Betting and gaming volume | EUR'000 | 2,136,404 | 2,410,791 | 2,926,165 | 3,174,629 | 3,188,003 |
| Betting volume | EUR'000 | 577,572 | 614,743 | 640,392 | 605,522 | 560,267 |
| Gaming volume | EUR'000 | 1,558,832 | 1,796,047 | 2,285,773 | 2,569,107 | 2,627,736 |
| Gross betting and gaming revenue | EUR'000 | 107,026 | 121,608 | 138,674 | 145,398 | 143,351 |
| thereof online sports betting | EUR'000 | 55,676 | 61,186 | 66,152 | 64,554 | 60,529 |
| thereof online gaming | EUR'000 | 51,351 | 60,421 | 72,522 | 80,844 | 82,822 |
| Net betting and gaming revenue | EUR'000 | 94,744 | 100,312 | 112,888 | 117,763 | 115,125 |
| thereof online sports betting | EUR'000 | 49,199 | 49,851 | 54,008 | 52,645 | 49,529 |
| thereof online gaming | EUR'000 | 45,545 | 50,461 | 58,879 | 65,118 | 65,596 |
| EBITDA | EUR'000 | 26,731 | 31,690 | 33,044 | 35,474 | 36,220 |
| EBIT | EUR'000 | 25,802 | 30,764 | 31,884 | 34,133 | 34,946 |
| Consolidated profit for the period | EUR'000 | 25,643 | 30,672 | 31,004 | 32,847 | 32,612 |
| Balance sheet total as at 31.12. | EUR'000 | 94,474 | 126,775 | 145,375 | 124,648 | 103,339 |
|---|---|---|---|---|---|---|
| Group equity ratio as at 31.12. | % | 71.40 | 74.15 | 75.37 | 71.65 | 67.05 |
| Financial debts and liabilities as at 31.12. | EUR'000 | 0 | 0 | 0 | 0 | 0 |
| Liabilities to customers as at 31.12. | EUR'000 | 10,304 | 10,126 | 10,139 | 8,324 | 7,705 |
| Number of employees as at 31.12. | 264 | 264 | 296 | 311 | 301 | |
| Number of employees (average) | 256 | 266 | 289 | 302 | 304 | |
| Registered customers as at 31.12. | mEUR | 3.98 | 4.27 | 4.60 | 4.83 | 5.05 |
| Stock market indicators | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | |
|---|---|---|---|---|---|---|
| Closing price as at 31.12. | EUR | 28.84 | 48.30 | 79.99 | 104.05 | 45.80 |
| Market capitalisation as at 31.12. | EUR'000 | 202,399 | 338,969 | 561,370 | 730,223 | 321,424 |
| Dividend per share | EUR | 0.60 | 2.25 | 7.50 | 7.50 | 6.50* |
| Dividend | EUR'000 | 4,211 | 15,791 | 52,635 | 52,635 | 45,617* |
| Dividend yield | % | 2.08 | 4.66 | 9.38 | 7.21 | 14.19* |
| Earnings per share | EUR | 3.65 | 4.37 | 4.42 | 4.68 | 4.65 |
* according to the proposed resolution submitted to the Annual General Meeting of Shareholders
| COMPANY PROFILE 3 |
|---|
| REPORT BY THE MANAGEMENT BOARD 9 |
| REPORT BY THE SUPERVISORY BOARD13 |
| BET-AT-HOME.COM SHARE 19 |
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION 25 |
| CONSOLIDATED STATEMENT OF INCOME 29 |
| CONSOLIDATED STATEMENT OF CASH FLOWS 33 |
| STATEMENT OF CHANGES IN GROUP EQUITY 37 |
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 41 |
| SUMMARISED MANAGEMENT REPORT 83 |
| INDEPENDENT AUDITOR'S REPORT 101 |
| IMPRINT 111 |
Consolidated Statement of Income Consolidated Statement of Cash Flows Statement of Changes in Group Equity Notes to the Consolidated Financial Statements Management Report
Independent Auditor's Report
Consolidated Statement of Financial Position
bet-at-home.com Share Report by the
Supervisory Board
Report by the Management Board
Company Profile
1
Company Profile
bet-at-home.com
Board
Board
Consolidated Financial Position
Consolidated
Consolidated Cash Flows
Notes to the Consolidated Financial Statements
Auditor's
Founded in 1999 in Wels/Austria by Jochen Dickinger and Franz Ömer, bet-at-home.com initially offered online sports betting. Thanks to an expansive growth strategy, the development of new markets and the ongoing expansion of the product range, the company developed into a comprehensive entertainment provider with a betting and gaming volume of EUR 3,188.0 million in the 2018 financial year, resulting in a gross betting and gaming revenue of EUR 143.4 million. With more than 5.0 million registered customers, the listed company and its subsidiaries are now among the most successful gaming providers in Europe.
bet-at-home.com has companies in Germany, Austria, Malta and Gibraltar. As of December 31, 2018, 301 employees contributed to the Group's successful development. Through its Maltese companies, the Group holds various online sports betting and gaming licenses. The licenses entitle the company to organize and distribute online sports betting and online casinos.
In the online sports betting segment, customers are offered sports bets in 83 different types of sport. Over the last few years, live betting has become particularly popular, allowing customers to place bets during an event up to the last minute.
The online gaming segment includes offers for casino, poker, games and virtual sports. Customers can choose between classics such as blackjack or roulette, as well as participating in international casino and poker tournaments. With the live casino, a particularly authentic casino atmosphere was created, as with a live broadcast of the tables an interaction with the croupiers is feasible. Since 2015, the launch of the product line virtual sports, a new possibility of betting on virtual events in the sports of football, basketball and tennis was offered.
As at 31 December 2018, bet-at-home.com AG was listed in the regulated market of Frankfurt Stock Exchange in the Prime Standard segment. The core business of the Company's associates is sports betting, casino and poker games, which is exclusively offered online.
The company holds 100% of bet-at-home.com Entertainment GmbH. The company based in Linz, Austria, is mainly responsible for the constant transfer of technology within the Group as well as for further developing its own software. The business in Malta is part of bet-at-home.com Holding Ltd.
Founded in 1999 as a limited liability company, its capital was increased in 2004 and the company was transformed into a stock company. In December of the same year the company was listed on the Frankfurt stock exchange in Gemany. Further capital increases were made in the following years. Since 2009, Betclic Everest Group SAS, a leading French group specialising in online gaming and online sports betting, has been the majority shareholder of bet-at-home.com AG. The following chart illustrates the corporate structure in detail:
The Company is aware of its social responsibility and creates sustainable conditions for using its entertainment-services responsibly. It also intervenes if customers are at risk of developing a gambling addiction so as to protect them from the negative effects as best as possible. In order to meet the high standards and assume the related responsibility, bet-at-home.com undergoes regular and voluntary product tests, which exceed legal requirements, and has been cooperating with organisations such as the Institut Glücksspiel und Abhängigkeit (Gambling and Dependency Institute), which operates in Austria and Germany, for many years. In addition, the continuously developed anti-fraud department investigates the gaming behaviour of customers, in order to prevent gambling addiction. Voluntary memberships in associations such as the European Sports Security Association (ESSA), along with annual voluntary compliance audits by the eCogra industry audit federation, complete the activities in this area.
Further memberships in the German Sports Betting Association (DSWV), the German Online Casino Association (DOCV) and the Austrian Association for Betting and Gambling (OVWG) have been entered in recent years. The latter association advocates the creation of clear framework conditions such as European regulation, uniform tax rates and legal certainty for online sports betting and gambling providers.
Report by the Supervisory Board
Report by the Management Board
| Company | Report by the Supervisory Report by the Management Profile |
|---|---|
| bet-at-home.com | Share |
| Consolidated | Statement of |
| Consolidated | Statement of |
| Consolidated | Statement of |
| Statement of | Changes in |
| Notes to the | Consolidated |
| Manage ment |
|
| Independent Auditor's |
Profile
Report by the Management Board
Board
bet-at-home.com
Consolidated Financial Position
Consolidated
Consolidated Cash Flows
Notes to the Consolidated Financial Statements
Auditor's
the 2018 financial year once again offered us the opportunity to set targeted marketing focuses with the Football World Cup in Russia. International advertising campaigns and customerfriendly bonus programs as well as the expansion in the live betting area and the new sports betting app made it possible to continue our successful path. In addition, we were again able to expand our position as one of the top players in the European market for online sports betting and online gaming. Since October 2018, the customer base on our platform has grown to more than 5.0 million registered customers. Our employees, who work daily to drive innovation and continually expand and optimize the product portfolio, again made a key contribution to this great development.
By successfully acquiring new customers and reactivating existing customers, we were able to further strengthen our presence and brand awareness in our European core markets. As a result, we were able to achieve the highest number of betting and gaming revenue since the founding of bet-at-home.com at EUR 3,188.0 million in the past financial year. The gross betting and gaming revenue amounted to EUR 143.4 million. At EUR 36.2 million, the EBITDA achieved the highest value in the history of bet-at-home.com in the 2018 financial year.
Since the 2011 financial year, we have let our shareholders participate in the company's success in the form of regular dividend payments. Due to the excellent liquidity situation of the bet-at-home.com AG Group, together with the Supervisory Board we will propose the distribution of a total dividend of EUR 6.50 per share to the Annual General Meeting on May 22, 2019.
The permanent further development of our extensive product portfolio paired with trustworthy and reliable customer service in eleven languages offers exciting entertainment at the highest level for our customers, which enables us to constantly strengthen our international competitive position and to sustainably expand our market share. Innovations on our mobile platform as well as the optimization of the offer for smartphones and tablets are clearly focused goals, whereby in the fourth quarter of 2018 already 54% of the gross betting and gaming revenue could be achieved via mobile devices.
In the online sports betting sector, we had over 411,000 events on more than 83 sports in the 2018 financial year. Live betting continues to be a key growth driver in the online sports betting segment. In fiscal year 2018, our customers took the opportunity to virtually sit in the stadium at more than 97,000 live events.
The offer in the online gaming segment was also very well received in the 2018 financial year. Through numerous bonus promotions in the areas of casino, live casino, poker, games and virtual sports the success of the segment was continued analogous to the sports betting offer.
With the Football World Cup in Russia, we placed a further marketing focus especially in the second quarter of 2018 on increasing the brand awareness of bet-at-home.com and the market shares in our core markets through international advertising campaigns. Before and during the Football World Cup in Russia from 14 June to 15 July, we invested in international advertising campaigns in the form of TV spots, print and online media as well as extensive bonus promotions from May 2018 onwards. For us, international football tournaments have always been the ideal time to increase brand awareness and the number of registered customers.
In addition to traditional advertising in TV, online and print media, sponsoring is an essential part of our marketing strategy, as it is a meaningful interaction between the audience in promoting our long-term partnerships with sports clubs and events. As main sponsor of the traditional Berlin club Hertha BSC, we have been jersey sponsor since August 2015 until the end of the Bundesliga season 2017/2018. Since August 2011, we are a premium partner of FC Schalke 04. The football club founded in 1904 has more than 156,100 members and is one of the largest sports clubs in Germany. In international honors FC Schalke 04 came for the first time in 1997 with the triumph in the UEFA Cup, the precursor of today's Europa League.
In addition, we are sponsor of two top clubs in the Austrian Football Bundesliga, Red Bull Salzburg and Austria Wien, and long standing partner of the WTA tennis tournament in Linz.
The global market for online sports betting and online gaming continues to boom and is growing much faster than comparable offers in the offline sector. The sustained growth of the non-cyclical gaming industry – above all in Europe – confirms our strategic orientation. Demographic trends, increasing online affinity of the target group in our core markets, as well as the global penetration of smartphones and tablets favor the long-term growth of our products.
We would like to thank all those who helped bet-at-home.com to achieve such a successful 2018 financial year, especially our employees. Likewise, we would like to express our special thanks to our business partners and shareholders for their confidence in us. We hope that you will continue to accompany us on our journey!
Franz Ömer Michael Quatember CEO CEO
Management Report
Independent Auditor's Report
Cash Flows
bet-at-home.com Share
Report by the Supervisory Board
WTA Tennis Tournament in Linz
bet-at-home.com
Report by the Supervisory Board
Board
Profile
Consolidated Financial Position
Consolidated
Consolidated Cash Flows
Notes to the Consolidated Financial Statements
Auditor's
In 2018, the bet-at-home.com AG Group's business development was again successful. On 22 May 2018, the Annual General Meeting was once again able to approve the payment of dividends. The success and name recognition of the brand is reflected by its more than 5.0 million registered customers.
The Supervisory Board was involved in this welcome development at the bet-at-home.com AG Group. It carried out its responsibilities and duties in accordance with the law and the Sections of association and regularly monitored the work of bet-at-home.com AG's Management Board, as well as offering advice and support.
The Supervisory Board of bet-at-home.com AG met on 14 March 2018 in Düsseldorf, Germany, on 22 May 2018 in Frankfurt, Germany, on 6 July 2018 in Frankfurt, Germany, on 9 October 2018 in Paris, France, and on 3 December 2018 in Frankfurt, Germany. At these meetings, the members primarily discussed the company strategy with the Management Board. At the Supervisory Board meeting on 18 March 2019 in Frankfurt, the members discussed the financial statements, consolidated financial statements, summarised management report, related parties report and the audit procedures and audit reports with PKF FASSELT SCHLAGE Partnerschaft mbB Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft Rechtsanwälte, Duisburg, the auditor appointed by the general meeting of shareholders.
Information and opinions were constantly exchanged among the members of the Supervisory Board. Several decisions were made by written resolution without a meeting. As in the past, there was no need to form committees, as there are only three Supervisory Board members.
During the year under review, the Management Board provided us with regular updates on the Group's strategy, business development and significant business matters, such as license applications and risks. Discussions were held with the Management Board about the strategic development, the current figures, the marketing concept, tax issues, regulatory developments in the gaming and betting sector and ongoing administrative and legal proceedings. Based on the information we have obtained, we believe that business was conducted appropriately.
The Management Board and Supervisory Board have prepared a corporate governance report in accordance with the German Corporate Governance Code to increase transparency and account for the company's increased recognition in the capital market and the current market capitalisation. Please refer to the disclosures in the Annual Report 2018 of the bet-at-home.com AG Group.
As in previous years, PKF FASSELT SCHLAGE Partnerschaft mbB Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft Rechtsanwälte, Duisburg, was appointed as auditor of the financial statements of bet-at-home.com AG and of the consolidated financial statements and summarised management report at the Annual General Meeting. The audits were discussed with the auditor. On completion of the audits, the auditor stated that the audits had not led to any reservations and issued an unqualified audit opinion on the financial statements and consolidated financial statements, including the accounting records and summarised management report.
The audited financial statements and consolidated financial statements as well as the summarised management report and also the Management Board's proposal for the appropriation of profits pursuant to Section 170 of the German Companies Act (AktG) were available to the Supervisory Board together with the audit reports.
The Supervisory Board reviewed the financial statements and consolidated financial statements as well as the summarised management report and discussed them in detail with the auditor on 18 March 2019. The auditor reported in detail on the audit findings.
The auditor also reported on the findings regarding the internal control and risk management system in relation to the accounting process.
All of the Supervisory Board's questions were answered in detail by the Management Board and the auditor.
Following discussion of the financial statements, consolidated financial statements and the summarised management report, the Supervisory Board approved the auditor's reports and audit findings, did not have any reservations upon completion of its own review and approved the financial statements and consolidated financial statements. The financial statements of bet-at-home.com AG are thus adopted.
The Supervisory Board concurs with the proposal by the Management Board that EUR 45,617,000.00 of the retained earnings of EUR 47,003,241.46 for 2018 to be distributed to the shareholders and the remaining amount of EUR 1,386,241.46 be carried forward to the following financial year.
The auditor also audited the Management Board's report on related party transactions pursuant to Section 312 AktG (related parties report) for the 2018 financial year. The Management Board prepared the related parties report with a view to the controlling interest held by Betclic Everest Group SAS, Paris, France in bet-at-home.com AG, which specifies legal transactions and measures undertaken within the meaning of Section 312 (1) AktG.
Independent Auditor's Report
Notes to the Consolidated Financial Statements
Cash Flows
Supervisory Board
As a result of the audit of the related parties report and the financial statements for the year ended 31 December 2018 and based on the associated audit findings the auditor was satisfied that the related parties report contains the information required under section 312 (1) AktG and that the report fairly presents in all material respects the company's accounts.
As the auditor did not raise any objections to the related parties report for the 2018 financial year following the final results of the audit, the auditor issued an independent auditor's report pursuant to section 313 (3) AktG as follows:
"Based on our statutory audit and assessment, we confirm that
The related parties report and associated auditor's report were submitted in time to all members of the Supervisory Board. The Supervisory Board reviewed these documents and discussed them with the auditor at the meeting on 18 March 2019. The auditor reported on the audit findings. The Supervisory Board's questions were answered by the Management Board and auditor.
The Supervisory Board approved the auditor's findings on the related parties report. Following the final results of its own review, the Supervisory Board did not raise any objections to the concluding statement by the Management Board in the related parties report. The concluding statement by the Management Board in the related parties report is presented under the statement of financial position in the financial statements and in the notes to the consolidated financial statements.
We especially wish to thank the Management Board of bet-at-home.com AG and all the Group's staff members. They have contributed significantly to the Group's positive development through their great commitment and excellent work.
Frankfurt/Main, March 2019
Supervisory Board
| Share Report by the Supervisory |
Consolidated Statement of bet-at-home.com |
Consolidated Statement of |
Consolidated Statement of |
Statement of Changes in |
Consolidated Notes to the |
Manage ment |
|---|---|---|---|---|---|---|
Auditor's
bet-at-home.com Share
Board
Board
Profile
BET-AT-HOME.COM SHARE
With the Football World Cup in Russia in June and July 2018, bet-at-home.com set a further marketing focus in the financial year 2018 through international advertising campaigns to increase the awareness of the bet-at-home.com brand and its market shares in the core markets of Germany and Austria. In addition to exceeding the mark of 5.0 million registered customers in October 2018, the highest EBITDA in the company's history was achieved in the 2018 financial year. Nonetheless, this positive economic development was evidently not refl ected in the company's share price, but appeared to be significantly infl uenced by negative news on regulatory developments. Overall, the bet-at-home.com share price fell by 55.98% in the 2018 financial year. Within the financial year 2018, the share reached its high of EUR 104.50 on January 3, 2018, and the low of EUR 44.30 on December 27, 2018.
bet-at-home.com AG pursues open and active communication with institutional investors, analysts, financial journalists, private investors and other stakeholders in order to present the company as faithfully as possible and thus to meet the capital market's expectations for transparency while boosting the capital market's trust in the share. To achieve this goal, numerous individual and group talks were once again held during roadshows, investor and analyst conferences in the financial centers of Europe, Asia and the USA in financial year 2018. These talks enable the Company to further intensify and maintain personal contacts with investors and stakeholders. At these events, the Management Board and Investor Relations Management mainly presented the quarterly financial statements, the Company's strategic targets and market environment in our dynamic industry.
Management Report
Statement of Changes in Group Equity Notes to the Consolidated Financial Statements
Consolidated Statement of Cash Flows
bet-at-home.com Share
Report by the Supervisory Board
Report by the Management Board
Company Profile
The focus of discussions with analysts and investors was once again on the regulatory and operational performance of the individual markets, as well as strategic questions on the future use of cash and cash equivalents and expectations for the 2018 Football World Cup in Russia and the related investments in comprehensive marketing measures.
In addition to potential gains in share price development, bet-at-home.com AG has pursued a continuous dividend policy since the 2011 financial year to participate in the company's profit through attractive profit distributions.
The Management Board and Supervisory Board will propose a dividend of EUR 6.50 per share (previous year: EUR 7.50) to the Annual General Meeting on May 22, 2019. The dividend payout thus amounts to EUR 45,617,000.00 (previous year: EUR 52,635,000.00). The proposed resolution to the Annual General Meeting will consist of an ordinary dividend of EUR 3.50 (previous year: EUR 3.00) and an extraordinary dividend of EUR 3.00 (previous year: EUR 4.50). Through the distribution of an extraordinary dividend, the shareholders of bet-at-home.com AG should again be adequately involved in the above average overall development of recent years.
| Dividend per share (dividend yield in %) | ||||
|---|---|---|---|---|
| FY 2017 | EUR 7.50 (7.21%) | |||
| FY 2016 | EUR 7.50 (9.38%) | |||
| FY 2015 | EUR 2.25 (4.66%) | |||
| FY 2014 | EUR 0.60 (2.08%) | |||
| FY 2013 | EUR 0.40 (2.36%) | |||
| FY 2012 | EUR 0.30 (2.70%) | |||
| FY 2011 | EUR 0.30 (2.44%) |
The dividend of EUR 6.50 per share proposed by the Management and Supervisory Board for the financial year 2018 corresponds to a dividend yield of 14.19%.
With Betclic Everest Group SAS and its 51.69% stake, the company has a stable core shareholder with its sights set on the long term. Betclic Everest, France, is a European group with shares in online gaming providers based in France that invests in strong brands like bet-at-home.com, Betclic, Everest Poker and Expekt. Société des Bains de Mer (SBM) with head office in Monaco (ISIN: MC0000031187) and a broad portfolio of casinos, hotels and restaurants, as well as the LOV Group founded by Stéphane Courbit with focus on companies with increasing growth and deregulation hold equal shares in the Betclic Everest Group SAS.
The management of bet-at-home.com holds 1.00% of the shares, resulting in a free float of 47.31% as of 31 December 2018. In the course of the financial year 2018, bet-at-home.com AG received notifications of voting rights, according to which BDL Capital Management SAS from Paris had 5.00% and Union Investment Privatfonds GmbH from Frankfurt had stock holdings above the reporting threshold of 3.00% as of 31 December 2018.
Even though it has a strong core shareholder, bet-at-home.com AG regards itself as a public company, and its investor relations have always exceeded the transparency and information requirements of Deutsche Börse and the Prime Standard market segment in the past.
| Full Year Results 2018 | 10.00 am | 03/04/2019 |
|---|---|---|
| Annual Report 2018 | 10.00 am | 03/28/2019 |
| Quarterly Statement Q1 2019 | 10.00 am | 04/29/2019 |
| Annual General Meeting 2019 | 02.30 pm | 05/22/2019 |
| Interim Report January to June 2019 | 10.00 am | 07/29/2019 |
| Interim Financial Report 2019 | 10.00 am | 09/09/2019 |
| Quarterly Statement Q1-Q3 2019 | 10.00 am | 11/04/2019 |
| Full Year Results 2019 | 10.00 am | 03/09/2020 |
| ISIN | DE000A0DNAY5 |
|---|---|
| Securities identification number |
A0DNAY |
| Ticker symbol | ACX |
| Trading segment | Regulated market (Prime Standard) |
| Research coverage | EDISON, FMR Frankfurt Main Research, Hauck & Aufhäuser, Warburg Research |
| Total number of shares | 7,018,000 |
|---|---|
| Market capitalisation | EUR 321.4 million |
| Cash and cash equivalents |
EUR 78.3 million |
| Enterprise value | EUR 243.1 million |
bet-at-home.com
Consolidated Statement of Financial Position
Board
Board
Profile
Consolidated
Consolidated Cash Flows
Notes to the Consolidated Financial Statements
Auditor's
| Note | 31/12/2018 | 31/12/2017 | ||||
|---|---|---|---|---|---|---|
| No. | EUR | EUR | EUR | |||
| A. | Non-current assets | |||||
| 1. | Intangible assets | 589,494.63 | 631,639.01 | |||
| 2. | Goodwill | (9) | 1,369,320.30 | 1,369,320.30 | ||
| 3. | Property and equipment |
(10) | 1,446,891.31 | 2,035,064.80 | ||
| 3,405,706.24 | 4,036,024.11 | |||||
| B. | Current assets | |||||
| 1. | Receivables from taxes |
(11) | 13,139,085.92 | 11,322,469.42 | ||
| 2. | Own advance payments |
(12) | 1,533,190.81 | 1,822,740.82 | ||
| 3. | Other receivables and assets |
(13) | 6,962,739.91 | 5,617,512.10 | ||
| 4. | Short-term fixed deposits |
(14) | 9,524,870.12 | 4,588,000.00 | ||
| 5. | Cash and cash equivalents |
(15) | 68,773,842.34 | 97,261,486.95 | ||
| 99,933,729.10 | 120,612,209.29 | |||||
| Total assets | 103,339,435.34 | 124,648,233.40 |
| Note | 31/12/2018 | 31/12/2017 | ||||
|---|---|---|---|---|---|---|
| No. | EUR | EUR | EUR | |||
| A. | Equity | |||||
| 1. | Share capital | (16) | 7,018,000.00 | 7,018,000.00 | ||
| 2. | Capital reserves | (16) | 7,366,000.00 | 7,366,000.00 | ||
| 3. | Total comprehensive income |
(16) | 54,904,039.24 | 74,926,781.81 | ||
| 69,288,039.24 | 89,310,781.81 | |||||
| B. | Non-current liabilities | |||||
| 1. | Provisions for employee benefits |
(17) | 48,668.36 | 46,684.11 | ||
| 48,668.36 | 46,684.11 | |||||
| C. | Current liabilities | |||||
| 1. | Trade payables | (18) | 3,302,612.54 | 3,531,915.05 | ||
| 2. | Liabilities from taxes | (19) | 16,534,124.03 | 17,342,121.68 | ||
| 3. | Short-term provisions |
(20) | 2,639,356.89 | 1,569,347.92 | ||
| 4. | Customer payables | (21) | 7,704,647.00 | 8,323,726.10 | ||
| 5. | Other liabilities | (22) | 3,821,987.28 | 4,523,656.73 | ||
| 34,002,727.74 | 35,290,767.48 | |||||
Independent Auditor's Report
bet-at-home.com Share
Report by the Supervisory Board
Report by the Management Board
29
bet-at-home.com
Board
Board
Profile
Consolidated Financial Position
Consolidated Cash Flows
Consolidated Statement of Income
Notes to the Consolidated Financial Statements
Auditor's
| Note | 01/01-31/12/2018 | 01/01-31/12/2017 | |
|---|---|---|---|
| No. | EUR | EUR | |
| Gross betting and gaming revenue | (1) | 143,350,883.60 | 145,397,930.98 |
| Betting fees and gambling levies | (1) | -20,952,947.85 | -18,806,926.01 |
| VAT on electronic services | (1) | -7,272,770.25 | -8,828,399.04 |
| Net betting and gaming revenue | 115,125,165.50 | 117,762,605.93 | |
| Other operating income | (2) | 1,073,451.55 | 913,012.78 |
| Total operating income | 116,198,617.05 | 118,675,618.71 | |
| Personnel expenses | (3) | -18,725,359.57 | -18,071,254.54 |
| Advertising expenses | (4) | -38,326,661.55 | -41,958,227.07 |
| Other operating expenses | (4) | -22,926,691.24 | -23,171,964.29 |
| Earnings before interest, taxes, depreciation and amortisation (EBITDA) |
36,219,904.69 | 35,474,172.81 | |
| Depreciation and amortisation | (5) | -1,274,024.52 | -1,340,830.82 |
| Earnings before interest and taxes (EBIT) | 34,945,880.17 | 34,133,341.99 | |
| Finance income | (6) | 49,485.03 | 1,517,386.15 |
| Earnings before taxes (EBT) | 34,995,365.20 | 35,650,728.14 | |
| Taxes on income and earnings | (7) | -2,383,107.77 | -2,803,414.81 |
| Consolidated profit for the period | 32,612,257.43 | 32,847,313.33 |
| Earnings per share | ||
|---|---|---|
| Basic earnings per share | 4.646944632 | 4.680437922 |
| Diluted earnings per share | 4.646944632 | 4.680437922 |
bet-at-home.com AG, Düsseldorf
| 01/01-31/12/2018 | 01/01-31/12/2017 | |||
|---|---|---|---|---|
| EUR | EUR | |||
| Consolidated profit for the period | 32,612,257.43 | 32,847,313.33 | ||
| Items that are potentially reclassifiable to profit or loss |
||||
| Revaluation in accordance with IAS 39 | 0.00 | 0.00 | ||
| Reclassified profits (recycling) | 0.00 | -543,720.09 | ||
| Items that are potentially not reclassifiable to profit or loss |
||||
| Revaluation in accordance with IAS 19 | 0.00 | 5,242.46 | ||
| Income tax and other recognised income and expense |
0.00 | 65,691.79 | ||
| Other comprehensive income | 0.00 | -472,785.84 | ||
| Comprehensive income | 32,612,257.43 | 32,374,527.49 |
Manage-Independent Auditor's Report
Consolidated Statement of Cash Flows
bet-at-home.com Share
Report by the Supervisory Board
Report by the Management Board
FC Schalke 04
bet-at-home.com
Board
Board
Profile
Consolidated Financial Position
Consolidated
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Auditor's
Note 2018 2017 No. EUR'000 EUR'000 Earnings before taxes (EBT) 34,995 35,651 + Depreciation of non-current assets (5) 1,274 1,341 - Interest income related to loans issued to group companies 0 -451 + Increase in provisions 1,072 1,167 - Increase in trade and other receivables not attributable to investing or financing activities -5,973 -896 - Decrease in trade and other liabilities not attributable to investing or financing activities -1,552 -2,078 - Payments for income taxes -5,008 -3,421 - Other comprehensive income 0 -473 = Cash flows from operating activities 24,809 30,840 - Acquisition of assets (excluding investments) -660 -636 + Proceeds from sale of property, plant and equipment 0 140 + Interest income/expense related to loans issued to group companies 0 29,451 = Cash flows from investing activities -660 28,955 - Payments to shareholders (dividends) -52,635 -52,635 = Cash flows from financing activities -52,635 -52,635 = Net cash from operating, investing and financing activities -28,487 7,160 + Cash and cash equivalents at 1 January 97,261 90,101 = Cash and cash equivalents at 31 December (15) 68,774 97,261 Notes to the Consolidated Financial Statements Management Report
Report by the Supervisory Board
Report by the Management Board
bet-at-home.com
Board
Board
Profile
Consolidated Financial Position
Consolidated
Consolidated Cash Flows
Notes to the Consolidated Financial Statements
Statement of Changes in Group Equity
Auditor's
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
bet-at-home.com AG, Düsseldorf
| Share capital | reserves Capital |
comprehensive income (after taxation) Other |
comprehensive income Total |
Total equity | |
|---|---|---|---|---|---|
| EUR | EUR | EUR | EUR | EUR | |
| As at 01/01/2017 | 7,018,000.00 | 7,366,000.00 | 472,785.85 | 94,714,468.48 | 109,571,254.33 |
| Profit for the year | 0.00 | 0.00 | -472,785.85 | 32,847,313.33 | 32,374,527.49 |
| Total recognised gains and losses | 0.00 | 0.00 | -472,785.85 | 32,847,313.33 | 32,374,527.49 |
| Dividend distribution | 0.00 | 0.00 | 0.00 | -52,635,000.00 | -52,635,000.00 |
| As at 31/12/2017 | 7,018,000.00 | 7,366,000.00 | 0.00 | 74,926,781.81 | 89,310,781.81 |
| Share capital | reserves Capital |
comprehensive income (after taxation) Other |
comprehensive income Total |
Total equity | |
|---|---|---|---|---|---|
| EUR | EUR | EUR | EUR | EUR | |
| As at 01/01/2018 | 7,018,000.00 | 7,366,000.00 | 0.00 | 74,926,781.81 | 89,310,781.81 |
| Profit for the year | 0.00 | 0.00 | 0.00 | 32,612,257.43 | 32,612,257.43 |
| Total recognised gains and losses | 0.00 | 0.00 | 0.00 | 32,612,257.43 | 32,612,257.43 |
| Dividend distribution | 0.00 | 0.00 | 0.00 | -52,635,000.00 | -52,635,000.00 |
| As at 31/12/2018 | 7,018,000.00 | 7,366,000.00 | 0.00 | 54,904,039.24 | 69,288,039.24 |
Management Report Independent Auditor's Report
Notes to the Consolidated Financial Statements
Statement of Changes in Group Equity
Consolidated Statement of Cash Flows
Consolidated Statement of Income
Consolidated Statement of Financial Position
bet-at-home.com Share
Report by the Supervisory Board
Report by the Management Board
bet-at-home.com
Board
Board
Profile
Consolidated Financial Position
Consolidated
Consolidated Cash Flows
Notes to the Consolidated Financial Statements
Auditor's
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2018 bet-at-home.com AG, Düsseldorf
bet-at-home.com AG, based at Tersteegenstrasse 30, Düsseldorf, Germany, and registered at Düsseldorf District Court under file number HRB 52673 (as holding company), prepared its consolidated financial statements as at 31 December 2018 in accordance with international accounting standards.
The consolidated financial statements as at 31 December 2018 of bet-at-home.com AG were prepared in accordance with the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS), as applicable in the EU, by taking account of the interpretations of the Standing Interpretations Committee (SIC) and the International Financial Reporting Interpretations Committee (IFRIC).
The summarised Group Management Report 2018 was prepared in accordance with the provisions of the German Commercial Code [HGB].
These consolidated financial statements were generally prepared using the same accounting policies as applied to the previous year's financial statements as at 31 December 2017. Any changes resulting from new standards are described below (particularly IFRS 9).
The following standards and interpretations have already been published, but were not yet mandatory for the consolidated financial statements for the period ended 31 December 2018:
| Standard/ Interpre tation |
Title | Issued in | Date of EU endorse ment |
Mandatory for report ing periods beginning on or after |
|---|---|---|---|---|
| STANDARDS | ||||
| IFRS 16 | Leases | Jan 16 | Q4 2017 | 01/01/2019 |
| IFRS 17 | Insurance Contracts | May 17 | t.b.a. | 01/01/2021 |
| IFRIC 23 | Uncertainty regarding the treatment of income taxes |
Jun 17 | Q4 2018 | 01/01/2019 |
| Standard/ Interpre tation |
Title | Issued in | Date of EU endorse ment |
Mandatory for report ing periods beginning on or after |
|---|---|---|---|---|
| AMENDMENTS | ||||
| IFRS 3 | Business Combinations | Oct 18 | t.b.a. | 01/01/2020 |
| IFRS 9 | Financial Instruments | Oct 17 | Q1 2018 | 01/01/2019 |
| Conceptual Framework |
Revision of definitions and new guidance on measurement and derecognition, presentation and disclosure |
Mar 18 | t.b.a. | 01/01/2020 |
| IAS 1/IAS 8 | Definition of materiality | Oct 18 | t.b.a. | 01/01/2020 |
| IAS 19 | Employee Benefits | Feb 18 | t.b.a. | 01/01/2019 |
| IAS 28 | Investment in Associates | Oct 17 | t.b.a. | 01/01/2019 |
| VARIOUS | Annual Improvements 2015-2017 for International Financial Reporting Standards |
Dec 17 | t.b.a. | 01/01/2019 |
As expected, the initial application of IFRS 15 had no effect on the recognition and presentation of the Group's income due to the date-related nature of the business activities.
The initial application of IFRS 16 is going to primarily affect the disclosure of rent liabilities for office space. IFRS 16 must be applied to all leases. A lease within the meaning of the standard exists if the lessor contractually grants the lessee the right to control an identified asset for a specified period of time and the lessee in turn pays the lessor consideration for this permission.
The Group will recognise new assets and liabilities for its office space operating leases. The type of application in connection with these leases will change as the Group now applies amortisation to right-of-use assets and recognises interest expenses arising from the lease liabilities. The Group previously recorded expenses from operating leases in a straight line over the lease term.
It is not anticipated that the initial application of the other standards and interpretations stated above will have any significant effect on the future presentation of bet-at-home.com AG's financial position, financial performance and cash flows. The Company chose not to exercise the option of voluntary early application of these standards and interpretations.
The core business of the Company's associates is sports betting and casino and poker games, which is exclusively offered online.
The consolidated financial statements are denominated in euros.
The consolidated income statement has been prepared in accordance with the nature of expense method.
Report by the Management Board
Company Profile
43
Since 5 September 2009, Betclic Everest Group SAS, Paris, France has held a controlling interest in the bet-at-home.com group parent. Betclic Everest SAS Group (company registration no. 501 420 939) prepares consolidated financial statements for the largest circle of group companies that are included in the consolidated financial statements of bet-at-home.com AG.
Totals in amounts and percentages are subject to rounding differences.
The consolidated financial statements include the accounts of bet-at-home.com's Austrian subgroup Entertainment GmbH, which has its registered office in Linz, Austria. These subgroup accounts of bet-at-home.com Entertainment GmbH include five subsidiaries (second-tier subsidiaries of bet-at-home.com AG, Düsseldorf) in which bet-at-home.com Entertainment GmbH holds all direct and indirect voting rights. bet-at-home.com AG holds all voting rights in bet-at-home.com Entertainment GmbH.
In addition to the group parent, bet-at-home.com AG, the following subsidiaries and/or second-tier subsidiaries were fully consolidated in the reporting period:
bet-at-home.com AG holds 2% each of the shares in the four Maltese companies due to requirements under Maltese company law.
There are no non-controlling interests in group equity. The profit (loss) for the year does not comprise amounts attributable to shareholders of other companies.
There were no changes in group entities in 2018.
All financial statements included in the consolidated financial statements were prepared in accordance with the same accounting policies. The separate financial statements of consolidated domestic and international entities and the Austrian subgroup accounts were all prepared as at the group reporting date, audited and consolidated in accordance with International Financial Reporting Standards on the basis of a fictitious legal entity.
In accordance with IFRS 3.85 (limited retrospective application), from 1 January 2004 IFRS 3 (Business Combinations) and the revised standards IAS 36 (Impairment of Assets) and IAS 38 (Intangible Assets) were applied early with retrospective effect to the Maltese second-tier subsidiaries, which were included in the Austrian subgroup accounts for the first time in 2004. Capital is consolidated by applying the revaluation method. The investment carrying amounts have been offset against the subsidiaries' proportional revalued equity capital (purchase accounting). The initial consolidation of the Maltese second-tier subsidiaries did not result in any excess or deficit.
In the case of Jonsden Properties Ltd., Gibraltar, which was included in the Austrian subgroup accounts for the first time in 2008, the excess of EUR 2,000 identified upon initial consolidation, due to the cost of acquisition exceeding the fair value of the net identifiable assets acquired, was recognised as goodwill and written down in full as an impairment loss in the same year.
Jonsden Properties Ltd. has joint venture agreements with both bet-at-home.com Internet Ltd. and bet-at-home.com Entertainment Ltd. in accordance with IAS 31.3 (agreement for shared conduct of business), according to which each venturer uses its own assets, incurs its own expenses and liabilities and raises its own funding while carrying out all economic activities on a joint venture basis.
The Austrian subgroup was consolidated for the first time as at 31 December 2005. All hidden reserves to be recognised were disclosed in the Austrian IFRS subgroup accounts. The subgroup was therefore consolidated based on the subgroup's equity as determined using the acquisition method. The initial consolidation resulted in a surplus of EUR 1,052 thousand. This surplus was recognised as goodwill in the consolidated financial statements. There was no evidence of impairment of the goodwill.
Trade receivables, loans and other receivables are offset against the corresponding payables and provisions during the elimination of intercompany payables and receivables of entities included in the consolidated financial statements. As part of the consolidation of intercompany revenues and expenses, revenues from intercompany trade receivables were eliminated against expenses from intercompany trade payables. Any significant gains and losses on intercompany transactions during the six-month period were eliminated against each other. Discounts and other entries affecting only profit or loss were eliminated from the consolidated financial statements.
Statement of Cash Flows
Report by the Supervisory Board
Report by the Management Board
The preparation of consolidated financial statements in conformity with IAS/IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, disclosures in the notes and in the consolidated income statement. These estimates and related assumptions are based on historical information and other factors deemed appropriate under the circumstances, and which serve as the basis for assessing the carrying amounts of assets and liabilities that cannot be derived from other sources. Actual outcomes may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
Information about critical judgements in applying accounting policies (IFRS) that have the most significant effect on the amounts recognised in the consolidated financial statements, and estimation uncertainties that may bear the risk of requiring a material adjustment of recognised assets and liabilities in subsequent financial years, are as follows:
Acquired intangible assets and office equipment are measured at cost less any accumulated amortisation/depreciation and write-downs.
No internally produced intangible assets are capitalised. The development costs incurred in 2017 and 2018 do not meet the recognition criteria of IAS 38.
Assets subject to wear and tear are written down over their estimated useful lives using the straight-line method. The following depreciation and amortisation rates were used for estimating the useful lives of assets:
| Years | |
|---|---|
| Operating and office equipment | 3-10 |
| Customer base | 2 |
| Software | 3 |
If an asset acquired during the financial year is used for more than six months, the depreciation or amortisation charge recognised for the asset in the subgroup accounts will be the full annual amount; in the case of a shorter period of use, half the annual amount or the monthly amount is used. In the Austrian subgroup, assets acquired at a cost of EUR 400 or less are fully written down in the year of acquisition and immediately recognised as disposals. In Germany, such items are written down on a pro rata temporis basis. Assets acquired at a cost of EUR 150 or less are expensed in full in the year of acquisition.
Intangible assets with finite useful lives and items of property, plant and equipment are tested for impairment. If there is evidence of impairment, the recoverable amounts for the relevant assets are determined. If the recoverable amount of an asset is lower than its carrying amount, an impairment loss is recognised.
Goodwill has an indefinite useful life and is not amortised, but tested annually for impairment instead ('impairment-only' approach). If the recoverable amount of goodwill, which is the higher of its fair value less costs to sell and its value in use, is lower than its carrying amount, an impairment loss is recognised.
Financial assets and liabilities are recognised as soon as contractual rights or obligations are incurred. These transactions are recognised as at the measurement date. They are derecognised as soon as control over such contractual rights (including the asset) ceases. This is usually the case when the asset is sold or all cash flows relating to the asset are directly transferred to an independent third party.
Independent Auditor's Report
Statement of Cash Flows
Board
Report by the Management Board
Company Profile
47
bet-at-home.com AG treats cash, demand deposits and time deposits with remaining maturities of up to three months as cash and cash equivalents. Long-term deposits with maturities between three to a maximum of 12 months are stated as short term deposits.
Receivables and other assets as well as cash and cash equivalents, which previously all had been allocated to 'loans and receivables' in accordance with IAS 39, are now allocated to 'at amortised cost' in accordance and within the meaning of IFRS 9. However, this change does not affect the Group's profit/loss or equity. There is no credit risk which would generally require a risk provision, which must be determined using the so-called simplified recognition method, to be stated during the initial recognition using the expected credit loss method. The debtors are usually financial and similar institutions with excellent credit ratings. No defaults worth mentioning have occurred in the past and are not expected to occur in the future.
Due to historic legal contractual obligations, bet-at-home.com Entertainment GmbH must render a one-off severance payment to employees if their contract is terminated or upon retirement. The amount depends on the number of years of service and the relevant salary level at the time of severance or retirement.
A provision is made for such obligations. An actuary performed the calculation in accordance with the requirements of IAS 19 'Employee Benefits' for the consolidated financial statements as at 31 December 2018 and the figure specified in the expert report was recorded in income.
As the anticipated actuarial gains and losses pertain to one employee only, they are also expected to be low in the future. The actuarial gains and losses are therefore stated in personnel expenses. The interest cost and employee service cost remain included in the personnel expenses and are not presented in net finance income (costs).
Other provisions are recognised if it appears likely that legal or actual obligations to third parties due to past events may occur, but have not occurred yet. However, it must be probable that these obligations will result in future cash outflow. Provisions are measured at the best estimate of the expenditure required to settle the obligation at the reporting date. When a reasonable estimate is not possible, no provision is recognised and this is disclosed in the notes to the consolidated financial statements.
Trade payables are recognised at cost, which is equal to the settlement amount.
bet-at-home.com AG Group generates its income from the conclusion and processing of sports bets and the provision of various other online games in the Online Gaming division. In line with the practices in the industry, the net income from betting and gaming volume placed by customers and payouts to customers is initially recognised as gross betting and gaming revenue. The net betting and gaming revenue recognised in the consolidated income statement is the amount left after deducting betting fees and gambling levies as well as any VAT on electronic services payable on this income.
All of the bets originally recognised at the Maltese second-tier subsidiary are recognised in relation to dates if the underlying bets have already been decided, subject to the wagers placed until the reporting date. Bets deducted from the customers' clearing accounts before the reporting date where the sport events underlying the bets only take place after the reporting date (pending bets) are recognised as financial liabilities to customers in accordance with IFRS 9.
In financial year 2018, the income tax refund from the Maltese tax entity, in which all Maltese group companies are combined for income tax purposes, was recognised in the financial statements of the same year, as was done in previous years.
Deferred taxes are determined in accordance with IAS 12 (Income Taxes) using the balance sheet liability method. Deferred taxes are computed on the basis of a 25% income tax rate for Austria and about 5% for Malta (taking tax refunds into account). As at the previous reporting date, the stated values did not show any differences as at 31 December 2018.
Net finance income (costs) includes all interest and similar income on financial assets. Interest is recognised on an accrual basis.
Notes to the Consolidated
Cash Flows
Report by the Supervisory Board
Report by the Management Board
The following sections provide additional information on items of the consolidated income statement, consolidated statement of financial position, consolidated statement of cash flows and the consolidated statement of changes in equity. The previous year's comparative figures were taken from the IFRS consolidated financial statements of bet-at-home.com AG, Düsseldorf, as at 31 December 2017.
The consolidated income statement was prepared in accordance with the nature of expense method.
For clarity of presentation of the consolidated financial statements, betting and gaming revenue is shown in the consolidated income statement. The composition of the betting and gaming revenue is presented in these notes to the consolidated financial statements.
The Group operates in the product and operating segments online sports betting and online gaming. The online gaming segment comprises casino, poker, games and virtual sports.
These operating segments correspond to the Group's internal organisational and managerial structure and the internal accounting system. The gross betting and gaming revenue was defined as segment income.
| Operating segments | ||||
|---|---|---|---|---|
| 31/12/2018 | Online sports betting |
Online gaming (casino, poker, games, virtual sports) |
Non-allocated segments/ consolidation |
Group total |
| EUR'000 | EUR'000 | EUR'000 | EUR'000 | |
| Betting and gaming volume | 560,267 | 2,627,736 | 0 | 3,188,003 |
| Paid out winnings | -499,738 | -2,544,914 | 0 | -3,044,652 |
| Gross betting and gaming revenue | 60,529 | 82,822 | 0 | 143,351 |
| Betting fees and gambling levies | -10,007 | -10,946 | 0 | -20,953 |
| VAT recognised in profit and loss | -992 | -6,281 | 0 | -7,273 |
| Net betting and gaming revenue | 49,529 | 65,596 | 0 | 115,125 |
| Segment assets | 18,757 | 25,289 | 59,294 | 103,339 |
| Operating segments | ||||
|---|---|---|---|---|
| 31/12/2017 | Online sports betting |
Online gaming (casino, poker, games, virtual sports) |
Non-allocated segments/ consolidation |
Group total |
| EUR'000 | EUR'000 | EUR'000 | EUR'000 | |
| Betting and gaming volume | 605,522 | 2,569,107 | 0 | 3,174,629 |
| Paid out winnings | -540,968 | -2,488,263 | 0 | -3,029,231 |
| Gross betting and gaming revenue | 64,554 | 80,844 | 0 | 145,398 |
| Betting fees and gambling levies | -9,176 | -9,631 | 0 | -18,807 |
| VAT recognised in profit and loss | -2,733 | -6,095 | 0 | -8,828 |
| Net betting and gaming revenue | 52,645 | 65,118 | 0 | 117,763 |
| Segment assets | 21,704 | 20,433 | 82,511 | 124,648 |
The segment assets correspond to the respective total assets of the company operating within the segment.
Notes to the Consolidated
Supervisory Board
Report by the Management Board
Betting and gaming volume can be presented by geographic segment based on player country as follows:
| 31/12/2018 | 31/12/2017 | |||
|---|---|---|---|---|
| EUR'000 | in % | EUR'000 | in % | |
| Germany | 1,158,631 | 36% | 1,100,485 | 35% |
| Eastern Europe | 605,930 | 19% | 741,542 | 23% |
| Western Europe (other) | 1,423,442 | 45% | 1,332,603 | 42% |
| 3,188,003 | 100% | 3,174,629 | 100% |
In the 2018 financial year, countries with similar markets were grouped together by region as follows:
Bosnia and Herzegovina, Croatia, Montenegro, Poland, Serbia, Slovakia, Slovenia
Austria, Cyprus, Finland, Ireland, Liechtenstein, Malta, Netherlands, Sweden, Switzerland, United Kingdom
| 2018 | 2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Exchange rate gains | 379 | 459 |
| Income from the release of provisions | 20 | 176 |
| Other | 674 | 278 |
| 1,073 | 913 |
Of the increase in other income, EUR 162 thousand related to the derecognition of incoming bank payments that could not be allocated from previous reporting periods which have expired by limitation by now and EUR 252 thousand to the derecognition of illegitimately acquired customer balances.
Breakdown of personnel expenses:
| 2018 | 2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Salaries | 14,630 | 14,094 |
| Expenses for severance payments and company pension plan contributions |
204 | 205 |
| Expenses for statutory social contributions and pay-based levies and statutory contributions |
3,645 | 3,530 |
| Other social contributions | 247 | 242 |
| 18,725 | 18,071 |
Expenses for severance and contributions to company pension plans include payments totalling EUR 202 thousand (2017: EUR 194 thousand) under the Austrian Act on Benefits (New Severance Pay Scheme) for Employees and Self-Employed Persons [BMSVG 'Abfertigung neu'].
Changes in staffing were as follows:
| Reporting date | Average | |||
|---|---|---|---|---|
| 31/12/2018 | 31/12/2017 | 2018 | 2017 | |
| Employees | 301 | 311 | 304 | 302 |
| Management Board of the parent company and managing directors of bet-at-home.com Entertainment GmbH |
2 | 2 | 2 | 2 |
These expenses include the following items:
| 2018 | 2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Advertising expenses | ||
| Advertising costs | 18,393 | 18,251 |
| Bonuses and vouchers | 13,470 | 14,317 |
| Sponsoring | 5,074 | 7,843 |
| Jackpot expenses | 1,390 | 1,547 |
| 38,327 | 41,958 |
| Consolidated | Statement of | Financial Position |
|---|---|---|
Report by the Supervisory Board
Report by the Management Board
53
| 2018 | 2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Other operating expenses | ||
| Additional transaction costs | 7,444 | 7,410 |
| Software provider expenses | 6,825 | 6,219 |
| Information services and software maintenance | 2,064 | 1,946 |
| Legal, audit and advisory fees | 1,575 | 1,593 |
| Exchange rate differences and similar expenses | 497 | 1,397 |
| Rent and lease expenses | 945 | 891 |
| Additions to provisions for impairment losses on receivables, loan losses and claims |
148 | 440 |
| Costs for the preparation of financial statements, general meeting of shareholders and stock exchange costs |
462 | 343 |
| Supervisory Board remuneration | 60 | 40 |
| Other costs | 2,906 | 2,893 |
| 22,927 | 23,172 |
| 2018 | 2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Amortisation and write-downs of intangible assets | 177 | 183 |
| Depreciation and write-downs of property, plant and equipment | 1,084 | 1,120 |
| Write-downs of low-value assets | 14 | 38 |
| 1,274 | 1,341 |
| 2018 | 2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Finance income | ||
| Interest receivable and similar income | 49 | 494 |
| Income from the disposal of marketable securities | 0 | 1,023 |
| 49 | 1,517 |
In financial year 2018, interest receivable and similar income exclusively pertained to interest income from fixed deposits and other interest receivable and income amounting to EUR 49 thousand (previous year: EUR 43 thousand).
This item can be presented as follows:
| 2018 | 2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Actual taxes | ||
| Current income taxes for the year under review, Austrian subgroup | 2,440 | 2,478 |
| Current income taxes for the year under review, Germany | 221 | 507 |
| Tax income in previous years | -279 | -181 |
| 2,383 | 2,804 |
Difference between the estimated and actual income tax expense:
| 2018 | 2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Earnings before taxes | 34,995 | 35,651 |
| Calculated income tax expense, Austria (25%) | 8,749 | 8,913 |
| Previous years' tax income | -279 | -181 |
| Tax differences for Malta tax group | -7,015 | -7,132 |
| Tax expense, Germany (corporation and trade taxes) | 160 | 507 |
| Other differences and tax rate changes | 768 | 697 |
| Tax expense | 2,383 | 2,804 |
Consolidated net profit for the period in the amount of EUR 54,904 thousand (previous year: EUR 74,927 thousand) exclusively pertains to the shareholders of the parent company.
Management Report
Independent Auditor's Report
Consolidated Statement of
Report by the Supervisory Board
Report by the Management Board
A breakdown of non-current assets and their movements during the financial year 2018 is presented in the Changes in Non-current Assets for the Group (appendix to the notes).
| 31/12/2018 | 31/12/2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Acquisition of Wetten-Schwechat business unit | 155 | 155 |
| Acquisition of the Starbet International Ltd. business unit | 162 | 162 |
| Acquisition of bet-at-home.com Entertainment GmbH, Linz (Austria) |
1,052 | 1,052 |
| 1,369 | 1,369 |
The goodwill remaining after the purchase price allocation in accordance with IFRS 3 amounted to EUR 155 thousand. Pursuant to IFRS 3, this goodwill is not subject to systematic amortisation; it is tested for impairment annually instead. There was no objective evidence of impairment.
In accordance with IFRS 3, this asset deal must be treated in the same way as a share deal. Therefore, initial consolidation was carried out at the date of acquisition pursuant to IFRS 3. Once the disclosed difference had been allocated to identifiable assets, the remainder (EUR 162 thousand) was recognised as goodwill. There was no objective evidence of impairment.
As at 31 December 2005, the subsidiary bet-at-home.com Entertainment GmbH, including its subgroup, was included and consolidated for the first time. All hidden reserves to be recognised were disclosed in the Austrian IFRS subgroup accounts. The subgroup was therefore consolidated based on the subgroup's equity as determined using the acquisition method. The initial consolidation resulted in a surplus of EUR 1,052 thousand. This surplus was recognised as goodwill in the consolidated financial statements. There was no evidence of impairment of the goodwill.
A breakdown of property, plant and equipment and their movements during the financial year 2018 is presented in the Changes in Non-current Assets for the Group (appendix to the notes).
| 31/12/2018 | 31/12/2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Tax receivables | 13,139 | 11,322 |
Own prepayments pertain to prepayments under advertising, sponsoring and maintenance agreements.
All receivables and other assets have residual maturities of up to one year and comprise the following:
| 31/12/2018 | 31/12/2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Receivables from payment service providers | 6,523 | 4,294 |
| Receivables from associated companies | 64 | 824 |
| Other receivables | 375 | 500 |
| 6,963 | 5,618 |
| 31/12/2018 | 31/12/2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Cash at bank (maturities > 3 months) | 9,525 | 4,588 |
Management Report
Independent Auditor's Report
Board
Report by the Management Board
Company Profile
57
| 31/12/2018 | 31/12/2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Cash at bank (maturities < 3 months) and in hand | 68,774 | 97,261 |
Breakdown of the Group's equity:
| 31/12/2018 | 31/12/2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Share capital | 7,018 | 7,018 |
| Capital reserves | 7,366 | 7,366 |
| Consolidated net profit for the period | 54,904 | 74,927 |
| 69,288 | 89,311 |
For more information on group equity, please also refer to the consolidated statement of changes in equity included in the consolidated financial statements.
The Group's share capital is divided into 7,018,000 no par value shares.
The general meeting of shareholders on 18 May 2016 resolved to increase the share capital of the issuer by EUR 3,509,000.00 to EUR 7,018,000.00 through a capital increase from the Company's own funds by issuing 3,509,000 new shares. As announced in the Federal Gazette [Bundesanzeiger] on 15 June 2016, following the capital increase from the Company's own funds, all shareholders were entitled to bonus shares at a ratio of 1:1 to their shareholdings at the close of the stock market on 20 June 2016. These bonus shares were registered on 21 June 2016 (share split). The shareholders' shareholdings did not change as a result of this capital measure.
The reserves are the result of a capital increase in 2005 by 290,000 shares at an issue price of EUR 11.00 per share (totalling EUR 2,900 thousand) and a further capital increase in 2006 by 319,000 shares at an issue price of EUR 26.00 per share (totalling EUR 7,975 thousand). The decrease in 2016 of EUR 3,509 thousand resulted from the conversion for the implementation of the capital increase from the Company's own funds.
Pursuant to the resolution adopted at the general meeting of shareholders on 13 May 2013, the Management Board was entitled, with the Supervisory Board's consent, to increase the company's share capital by 12 May 2018 by issuing new bearer shares (non-par value shares) for cash or non-cash contributions, once or several times, up to a maximum amount of EUR 1,754,500.00. The authorised capital was revoked by shareholder resolution of 18 May 2016.
The general meeting of shareholders on 18 May 2016 resolved to authorise the Management Board, with the Supervisory Board's consent, to increase the Company's share capital by 17 May 2021 by issuing up to 3,509,000 new non-par value bearer shares for cash or non-cash contributions, once or several times, up to an amount of EUR 3,509,000.00.
| 31/12/2018 | 31/12/2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Provisions for employee benefits | 49 | 47 |
In order to calculate the provisions for severance pay in accordance with IAS 19 by applying the projected unit credit method, an actuary's opinion was obtained, which is based on an actuarial interest rate of 1.85% (previous year: 1.69%) and an annual growth rate of 2.5%.
Breakdown of current liabilities and provisions:
| 31/12/2018 | 31/12/2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Trade payables | 3,303 | 3,532 |
| Liabilities from taxes | 16,534 | 17,342 |
| Short-term provisions | 2,639 | 1,569 |
| Customer payables | 7,705 | 8,324 |
| Other current liabilities | 3,822 | 4,524 |
| 34,003 | 35,291 |
Independent Auditor's Report
Cash Flows
Share
Customer payables include pending bets (in accordance with IFRS 9) in the amount of EUR 474 thousand (previous year: EUR 848 thousand) and customer balances (in accordance with IFRS 15) in the amount of EUR 7,231 thousand (previous year: EUR 7,467 thousand).
Liabilities from taxes pertain to corporation tax payable in the amount of EUR 12,940 thousand (previous year: EUR 13,758 thousand), betting fees and gambling levies and VAT on electronic services in the amount of EUR 3,359 thousand (previous year: EUR 3,557 thousand) as well as other taxes in the amount of EUR 235 thousand (previous year: EUR 27 thousand).
Other current liabilities include the following items:
| 31/12/2018 | 31/12/2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Liabilities to employees | 1,857 | 1,941 |
| Social liabilities | 411 | 399 |
| Other liabilities | 1,554 | 2,184 |
| 3,822 | 4,524 |
Liabilities to employees comprise outstanding holiday entitlements and overtime and/or bonuses.
Movements in provisions during financial year 2018 (in EUR'000):
| reclassification Balance at 31/12/2017 before |
Reclassification | reclassification Balance at 31/12/2017 after |
Utilisation | Release | Addition | Balance at 31/12/2018 |
|
|---|---|---|---|---|---|---|---|
| Taxes | 13,758 | 13,758 | 0 | 0 | 0 | 0 | 0 |
| Personnel provisions | 1,659 | 1,659 | 0 | 0 | 0 | 0 | 0 |
| Betting fees and gambling levies |
3,557 | 3,557 | 0 | 0 | 0 | 0 | 0 |
| Audit and advisory | 277 | 0 | 277 | 256 | 20 | 252 | 252 |
| Outstanding invoices | 1,774 | 1,774 | 0 | 0 | 0 | 0 | 0 |
| Provision affiliate program | 1,271 | 0 | 1,271 | 0 | 0 | 177 | 1,447 |
| Other | 304 | 282 | 22 | 22 | 0 | 940 | 940 |
| 22,600 | 21,030 | 1,569 | 278 | 20 | 1,369 | 2,639 | |
Management Report Independent Auditor's Report
Notes to the Consolidated Financial Statements
Statement of Changes in Group Equity
Consolidated Statement of Income Consolidated Statement of Cash Flows
Consolidated Financial Position
Statement of
bet-at-home.com Share
Report by the Supervisory Board
Report by the Management Board
With retrospective effect as at 31 December 2017, income tax provisions, current personnel provisions, provisions for betting fees, gambling levies and VAT on electronic services as well as provisions for outstanding invoices were reclassified to trade payables, liabilities from taxes and/or other liabilities. The customer accounts (previously other liabilities) and pending bets (previously prepayments and accrued income) were likewise moved to customers payables.
The effects of these reclassifications on the comparable period as at 31 December 2017 are as follows:
| 31/12/2017 before reclassification |
Reclassification Short-term provisions |
Reclassification Customers payables |
31/12/2017 after reclassification |
|
|---|---|---|---|---|
| EUR'000 | EUR'000 | EUR'000 | EUR'000 | |
| Income tax provisions | 13,758,390 | -13,758,390 | 0 | 0 |
| Other provisions | 8,841,215 | -7,271,867 | 0 | 1,569,348 |
| Trade payables | 1,758,099 | 1,773,816 | 0 | 3,531,915 |
| Liabilities from taxes | 0 | 17,342,122 | 0 | 17,342,122 |
| Customer payables | 0 | 0 | 8,323,726 | 8,323,726 |
| Other liabilites | 10,084,879 | 1,914,319 | -7,475,540 | 4,523,657 |
| Deffered income | 848,186 | 0 | -848,186 | 0 |
| Total | 0 | 0 |
Due to the high amount of cash and cash equivalents within bet-at-home.com AG Group, customers payables and all other liabilities were sufficiently covered in financial year 2018.
Cash and cash equivalents recognised in the statement of cash flows exclusively refers to the 'cash at bank and in hand' item in the statement of financial position.
The interest income for loans issued to group companies was recognised in cash flow from investing activities. The other interest income was classified as cash flows from operating activities.
Changes in group equity are presented in the consolidated statement of changes in equity.
For further details on non-derivative financial instruments, see the consolidated statement of financial position. In accordance with IFRS 9, pending bets are recognised as financial liabilities (derivatives). Apart from that, the Group does not deal in any derivative instruments and exclusively holds bank balances, cash and short-term time deposits. The Group also has receivables from payment providers.
The financial instruments at fair value are classified according to the levels in the fair value hierarchy, which are defined as follows:
As at the reporting date, 31 December 2018, pending bets were recognised as financial liabilities in accordance with IFRS 9 (fair value measurement according to level 3) and stated in customer payables. Taking into consideration the fact that these are bets that were placed shortly before the reporting date, the Management Board assumes that the fair value as at the reporting date corresponds to the acquisition costs (market value on the date the bet was placed).
There are no other financial instruments that are measured at fair value.
The risks arising from potential financial instruments (IFRS 7.31, 33(b)) are disclosed in the risk report below.
Notes to the Consolidated
Independent Auditor's Report
Consolidated Statement of Cash Flows
Share
The risk report discloses material internal and external risks which may have an effect on the financial position, financial performance and cash flows of bet-at-home.com AG Group. Within the scope of the Group's risk management system, potential risks are identified on the basis of qualitative criteria, their probability of occurrence is determined and their potential effects are explained.
The group parent's Management Board is responsible for establishing risk management policies. Compliance with these policies is monitored by the managing directors and department heads of the subsidiaries. Among the basic components of risk management are general principles for risk prevention, such as the segregation of duties and applying the four eyes principle for important internal controls.
The Management Board is also responsible for identifying negative developments in good time by employing cross-departmental monitoring systems. For example, IT risks are monitored and reported through the voluntary appointment of external certification bodies (such as eCogra), operational risks through automated plausibility checks during the preparation of offers and financial risks through the ongoing analysis of key financial performance indicators.
Also part of this risk management system are provisions on the use of financial instruments. The Group does not hold any derivative financial instruments. Nor does the Management Board intend to use such financial instruments in the future.
In some European countries, betting and gaming providers remain targeted by legislative interventions aiming to terminate the offering and operation of their activities, based in particular on regulations enforcing state monopolies on gambling. Based on various rulings by the European Court of Justice, the Management Board assumes that the online sport betting and gaming market in the EU will continue to be deregulated in the long term. However, a number of national laws or draft laws contain discriminatory regulations with respect to foreign providers intended to continue sealing off the market for national providers/monopolists.
The Management Board will continue to closely monitor future developments and strive to obtain online sport betting and gaming licenses in countries facilitating fair market access, in an effort to enhance legal certainty. However, there is the risk that individual countries could exclude customers from private foreign gaming offerings by imposing provider blocks and payment provider blocking measures, even though there are no legal grounds for such measures. This risk has only increased now that a number of new statutory provisions explicitly provide for such measures, in violation of EU law.
Apart from in individual countries whose governments issue their own licenses, bet-at-home.com AG Group bases its activities on online gaming and sports betting licenses issued in Malta. In the legal opinion of bet-at-home.com AG Group, these are effective in all EU member countries due to the freedom of movement within the EU, as long as the regulations regarding online gaming and sports betting continue to violate EU law in the respective member country. bet-at-home.com AG Group also aims to obtain additional national licenses in the individual EU member countries in which it operates.
Individual member countries' decisions to implement discriminatory regulatory measures which have a worse impact on private online betting and gaming providers than government providers and are therefore prohibited in accordance with EU law may prevent bet-at-home.com AG Group from obtaining comprehensive legal protection against such measures within the time required. A temporary exclusion from individual markets may result in bet-at-home.com AG Group incurring unsustainable losses due to the collapse of income, even should the measures subsequently be proven to be illegal.
Individual countries have further implemented provider blocks and/or payment provider blocking measures so as to stamp down on betting and gaming products, in other words potential customers can no longer access the websites of bet-at-home.com AG Group in these countries and/or cash flows are impaired. Such measures have the potential to damage the Group, even in the very short term, and possible quicker than it takes to defend the Group against such measures through the legal channels.
In the past reporting period, regulatory developments remained marked by further efforts to regulate the online sports betting and gaming sector and establish a licensing system for private providers. The developments in the past reporting period were as follows.
• In Germany, bet-at-home.com Internet Ltd. successfully applied for one of the 20 sports betting licenses issued after the effective date of the Revised Interstate Gambling Treaty on 1 July 2012. The authorities informed the company as early as September 2014 that it will be issued with a license. In the meantime, the tendering procedure was stopped by the supreme court in response to an appeal filed by the losing bidders, meaning that is has been impossible until now to issue a license. The deregulation of the sports betting market in the form of an 'experimental clause' intended for this purpose in the existing treaty ends as soon as 1 July 2019 without any licenses having been issued. It appears probable that the Minister-Presidents will resolve to extend the experimental clause until the expiry of the Revised Interstate Gambling Treaty in mid-2021. Failure to do so would result in the risk of the sector reverting back to the sports betting online monopoly, which has been ruled to be illegal by the courts.
Independent Auditor's Report
Statement of Cash Flows
Report by the Supervisory Board
Report by the Management Board
In the past financial year 2018, individual federal states were yet again unable to agree on a subsequent regulation of the existing Revised Interstate Gambling Treaty. Whilst an increasing number of federal states, led by Schleswig-Holstein, Hesse and North Rhine-Westphalia, are insisting on the deregulation of the online casino market, other federal states, led by Berlin and Hamburg, continue to insist on the continuation of the online casino ban.
The Federal State of Schleswig-Holstein went down a different route and issued licenses for sports betting and casino as early as 2012, including to bet-at-home.com Internet Ltd. These licenses expired in the summer and/or at the end of 2018 and could not be extended due to Schleswig-Holstein becoming a party to the Revised Interstate Gambling Treaty. The Group therefore resolved to discontinue the casino products in this federal state. It is possible to obtain a transitory license for sports bets until the effective date of a new government regulation. In the first quarter of 2019, bet-at-home.com Internet Ltd. will submit a corresponding application to retain a gambling license in Germany.
The Group is reviewing the option of a cooperation with the location-based casinos to be able to maintain its offers beyond this period. As Switzerland is not a member of the European union nor part of the EFTA community of states, foreign companies
As far back as June 2016, the Swiss financial authorities requested for the Maltese company to register with the national VAT register. Following a comprehensive legal review and repeated correspondence with the authorities, bet-at-home.com Entertainment Ltd. was registered in September 2018. The company plans to pay VAT for its casino income with retrospective effect as at 1 January 2017 and has recognised corresponding provisions. At the end of the reporting period, different legal opinions prevailed regarding the exact date on which the tax obligation was created as well as a potential obligation of bet-at-home.com Internet Ltd. regarding sports betting activities. The Group aims to find a mutually agreeable solution with the Swiss financial authorities in the first half of 2019.
cannot call on their national licenses.
In spite of continuing regulatory efforts, betting and gaming providers continue to be targeted by legislative interventions aiming to terminate the offering and advertising of their activities, based in particular on regulations enforcing bans in the gambling sector. The companies of the bet-at-home.com AG Group were involved in the following proceedings in financial year 2018:
Independent Auditor's Report
Statement of Cash Flows
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Report by the Supervisory Board
Report by the Management Board
Company Profile
67
In October 2017, the Federal Administrative Court in Leipzig decided that the ban on operating or brokering casino and poker games online complies with the Germany constitution and EU law, even after the partial deregulation of the 'online' sales channel. This decision was made during proceedings against another competitor. The Federal Administrative Court further emphasised the legality of an online sports betting ban if the provider does not hold the required license and also has not applied for one because the licensing requirement complies with the German constitution and EU law. Overall, the case law regarding the standardisation of German gambling law remains inconsistent. Final clarification by the Federal Constitutional Court and/or the European Court of Justice is still pending.
The Group strengthened the following activities at a national level in the past reporting period: In addition to its long-term membership with the European Gaming and Betting Association (EGBA) and its new membership with Deutscher Sportwettenverband (DSWV) [German Sports Betting Association] in 2015, bet-at-home.com became a founding member of Deutscher Online Casinoverband (DOCV) [German Online Casino Association] and Oesterreichische Vereinigung für Wetten und Glücksspiel (OVWG) [Austrian Association for Betting and Gaming]. All associations campaign for fair and legally sound regulations in the corresponding countries.
The risks of negative effects resulting from the regulatory environment and existing legal risks remain medium in a year-on-year comparison. Should such risk occur, the impact on the financial position, financial performance and cash flows would be high.
At the political level, the European Parliament already adopted a legislative initiative in support of a proposal by the EU Commission in 2011 targeted at harmonising national sports betting and gambling laws. The first step will be to largely harmonise gambler and data protection regulations as well as control mechanisms. Due to diverging interests among member states and national tax authorities, substantial further harmonisation of relevant national sports betting and gambling regulations is not anticipated in the foreseeable future. However, the member countries primarily aim to regulate the online sports betting and gaming sector and to establish a licensing system at national level, even if this does not always comply with the provisions of EU law.
The risk of negative developments within the scope of the continuing deregulation remains medium when compared with the previous year. Should such risk occur, the impact on the financial position, financial performance and cash flows would be high.
The opening of the Dutch market to foreign providers was delayed further. It appears uncertain if the gambling law will be resolved during the course of 2019 as the senate continues to disagree on the specific contents of the law. From today's perspective, it appears unlikely that it will be possible to apply for a license in 2019. The draft bill generally conforms with EU law and the Group therefore aims to apply for national licenses.
In May 2018, the US Supreme Court resolved that the federal states will be able to freely regulate sports betting, both in shops and online. Following this decision, New Jersey, Delaware, Pennsylvania and Rhode Island opened the sports betting market to private providers as well. The Group continuously monitors regulatory developments and options for cooperations with national providers and, in particular, is interested in participating in the markets of the large federal states, such as New York and California.
Based on the rulings of the European Court of Justice, the Management Board assumes that the deregulation of the online sports betting and gaming market will progress in numerous EU member countries. However, a number of draft laws contain discriminatory regulations for foreign providers with a view to keeping the market sealed off to the benefit of national providers. The Management Board will closely monitor future developments and strive to obtain online sport betting and gaming licenses in countries facilitating fair market access, in an effort to enhance legal certainty.
The countries in which bet-at-home.com AG Group operates raise higher taxes on sports betting and gaming products based on varying measurement bases as well as VAT on electronic services. It cannot be ruled out that the taxes and levies in individual countries will increase to levels that would render the business of bet-at-home.com AG Group wholly or largely unprofitable, either due to the tax rate or selection of measurement base.
Since the introduction of the respective taxes and levies, the tax and levy rates have neither been increased nor decreased. As a result, the risk is to be classed as unchanged year-on-year from today's perspective. Should such risk occur, the impact on the financial position, financial performance and cash flows would be high.
bet-at-home.com has implemented numerous measures to encourage its customers to gamble responsibly and for many years has been cooperating with organisations such as the Institute for Gambling and Dependence [Institut für Glücksspiel und Abhängigkeit] in Salzburg, Austria. These measures are complemented by voluntary annual compliance checks by eCogra, the industry testing organisation.
Individual risks nevertheless exist, such as the possibility of customers who have incurred betting and/or gambling losses attempting, or continuing to attempt, to claim compensation for such losses from bet-at-home.com AG Group on the grounds of having been offered betting or gaming products that are banned under regulatory law. It is also conceivable that customers claim compensation for losses from the Group on the grounds of a gambling addiction, meaning that they were in an unfit condition to enter into a business transaction when concluding the bet and/or playing the game, or that gamer protection mechanisms (particularly blocks) were implemented not at all or too late to protect them.
Cash Flows
Profile
Since October 2018, proceedings against an Austrian customer have been pending. He is claiming back EUR 627,000 in gaming losses before the court. The first hearing is scheduled for May 2019. The Group expects to have a good chance of success before the court, particularly as new studies can be provided that prove that the national gambling laws violate EU law.
The risk of customer compensation claims and/or claims for the reimbursement of gaming losses remains medium compared to the previous year. Should such risk occur, the impact on the financial position, financial performance and cash flows would be medium.
bet-at-home.com AG Group bases its products on Maltese licenses which entitle the bearer to non-discriminatory access to the markets in the EU member countries as well as licenses issued by individual member countries. If a member country were to revoke its national license, bet-at-home.com AG Group would possibly be able to continue providing its services under the Maltese license. However, if the Maltese license were to be revoked, the Group would either have to use an alternative license or lose access to markets in which it does not hold a license.
The respective Maltese licenses are issued by the Malta Gaming Authority (MGA) subject to a compulsory ongoing system audit during which the MGA audits the technical equipment of the licensee, particularly in terms of its functionality and IT security.
The Malta Gaming Authority can issue covenants or revoke a license if deficiencies are found during the audit if
The bet-at-home.com AG Group companies have always met the terms and conditions of the license and successfully concluded all system audits, which is why the risk of a revocation of licenses remains low. Should such risk occur, the impact on the financial position, financial performance and cash flows would be high.
Inaccurately estimated odds or manual errors made by bookmakers may result in higher customer payouts and therefore a decrease in income. This risk is minimised by a multitude of backup systems and by continuous monitoring of betting odds through market comparison. The IT project team continues to develop all the software required to provide a competitive product in the betting market. All required measures, such as automated algorithms for the prevention of manually estimated inaccurate odds for the minimisation of risks, were implemented so that the respective risks and impact on the financial position, financial performance and cash flows would be low.
As bet-at-home.com AG Group does not broker sports bets, but acts as a counterparty of its customers, the Group incurs a contractual risk for every bet. This risk is reduced by the highest possible number of customers participating in a bet with different expectations regarding the outcome so that the customers' betting positions balance each other out as much as possible.
bet-at-home.com AG Group also determines betting odds, based on customers' expectations regarding the outcome of bets, and continuously adjusts them until the bet has been closed. To be able to provide customers with products in line with the market, the odds of competitors, and therefore the entire market, are also taken into consideration in addition to the betting odds that can be offered on the basis of the positioning of the Group's own customers.
The products and services offered by the Group depend on the reliable functioning of numerous technical systems. Any serious disruption of the IT systems, particularly through adverse external influences such as hacker attacks, DDos attacks, etc., could negatively affect the Group's financial position, financial performance and cash flows. Another steep rise in business volume will place increasing demands on the accounting and controlling systems of group companies.
To minimise the IT risks, personnel structures in the form of an IT Security Officer (CISO) and related IT Security Engineers were created in 2013. These employees implement individual security measures to ensure IT security during ongoing operations, investigate potential security-related incidents, are responsible for establishing the information security policy by providing awareness training, and focus their activities on measures such as the ones stated below within bet-at-home.com AG Group:
Cash Flows
Share
Report by the Management Board
Report by the Supervisory Board
Company Profile
71
The Management Board assumes that these are extensive measures for minimising IT risks, meaning that these risks are medium. Should such risk occur, the impact on the financial position, financial performance and cash flows would be high.
The economic success of bet-at-home.com AG Group will continue to primarily rely on the performance of all employees and executives. The growing competition in the gaming and betting products market brings with it an increased risk of qualified employees being enticed away by competing companies and of not being able to hire a sufficient number of suitable new employees. The personnel and employee risk is to be successively reduced by implementing attractive general conditions and sufficient prospects for committed employees as well as ongoing employee training.
The respective risks and effects on the financial position, financial performance and cash flows are low.
bet-at-home.com AG Group depends on cooperations with external service providers with corresponding specialist knowledge and technologies for its operations. This primarily pertains to all software products for the casino, live-casino, poker, games and virtual sports segments, such as data and voice communication, procurement, installation, development, care and maintenance of hardware and software as well as payment processes. There is a possibility that one or several external service providers provide their services not at all, not on time or incorrectly.
bet-at-home.com AG Group may therefore find itself in a position of being unable to fulfil its own obligations as required or on time due to errors or failures to perform of the external service providers engaged. This may also go hand in hand with a limitation of the Group's products, right up to the incorrect invoicing of winnings, which may have a negative impact on the Group's cash flows.
The Management Board assumes that regular system audits, internal reviews and training as well as ongoing monitoring by the Product Management and Controlling department are sufficient to minimise these external risks. These risks are therefore regarded as constant compared with the previous year. Should such risk occur, the impact on the financial position, financial performance and cash flows would be medium.
Sports sponsoring has always been crucial for the advertising strategy of bet-at-home.com AG Group. Sponsoring of national sports clubs increases the popularity of the bet-at-home.com brand. In addition, primarily persons with an interest in sports, who are the key target group for the products of bet-at-home.com AG Group, are made aware of the brand in this environment. Advertising materials can therefore be used particularly efficiently in the sports sponsoring sector, at least on the current cost level. The sponsoring of renowned sports clubs also results in their reputation and credibility having a positive effect on how the bet-at-home.com brand is perceived, also because sports events are highly regarded within society. Reputation and credibility are key success factors for bet-at-home.com AG Group.
Should bet-at-home.com AG Group be forced to reduce or discontinue its sponsoring activities in the future due to price increases in the sponsoring business or a revaluation of online betting and gaming products by the sponsoring partners or changes to the general legal conditions, this would reduce the popularity of the bet-at-home.com brand and could therefore have a negative impact on the revenue and income situation of bet-at-home.com AG Group. This risk remains low, like in the previous year. Should such risk occur, the impact on the financial position, financial performance and cash flows would be low.
Liquidity exposure reflects the risk that the Group will have insufficient resources to meet its financial obligations as they fall due. Based on the cash and cash equivalents currently available to the Group, the liquidity risk remains low, like in the previous year. Should such risk occur, the impact on the financial position, financial performance and cash flows would be low.
Independent Auditor's Report
Cash Flows
The interest rate risk associated with investments is considered insignificant. The interest rates on the bank balances depend on the market interest rates, which depend on the maturities. The effect of a change in the current low interest rate by 0.5 percentage points would amount to EUR 391 thousand (31 December 2017: EUR 509 thousand).
Currency risk relates to exchange rate differences. Despite the Group's international orientation, most cash flows are denominated in the group's functional currency (the euro). The Polish zloty created significant currency risks in the financial year 2018, while transactions denominated in other currencies were of minor importance. The Group does not hedge its currency risk. A 10% appreciation (depreciation) in the Polish zloty would have decreased (increased) the profit for the period (and the balance of equity) by around EUR 367 thousand (31 December 2017: EUR 383 thousand). Changes in these risk variables were assessed in relation to the potential for risks inherent in each financial instrument portfolio as at the reporting date.
The Group's interest rate, currency and exchange rate risks remain low, like in the previous year. Should such risk occur, the impact on the financial position, financial performance and cash flows would be low.
Credit risk is the risk of payment delays or defaults by counterparties. As there are no netting agreements, the amounts stated on the assets side (receivables and other assets) represent the maximum exposure to credit and default risk. Provisions have been made for anticipated reversals due to credit card refunds. Default risk relating to bank balances must be considered minor as the lending institutions concerned are A-rated banks. Should such risk occur, the impact on the financial position, financial performance and cash flows would be low.
Members of the Management Board of bet-at-home.com AG, Düsseldorf, during the financial year 2018:
In 2018, the members of the Management Board of the parent company received fixed compensation in the amount of EUR 795 thousand (previous year: EUR 795 thousand) and variable compensation in the form of a management bonus in the amount of EUR 1,055 thousand (previous year: EUR 996 thousand) from Group shareholders. One Group company also paid for one consulting service in the amount of EUR 280 thousand (previous year: EUR 280 thousand).
| Franz Ömer | Michael Quatember | |||
|---|---|---|---|---|
| Cash inflow (in EUR) | CEO | CEO | ||
| 2018 | 2017 | 2018 | 2017 | |
| Fixed compensation | 470,000.00 | 470,000.00 | 325,000.00 | 325,000.00 |
| Fringe benefits | 280,000.00 | 280,000.00 | 0.00 | 0.00 |
| Total | 750,000.00 | 750,000.00 | 325,000.00 | 325,000.00 |
| One-year variable compensation | 452,231.42 | 425,960.00 | 452,231.42 | 425,960.00 |
| Long-term management bonus | 75,169.41 | 72,000.00 | 75,169.41 | 72,000.00 |
| Variable third-party compensation | 0.00 | 890,953.18 | 811,140.44 | 890,953.18 |
| Multiple-year variable compensation | 75,169.41 | 962,953.18 | 886,309.85 | 962,953.18 |
| Total | 527,400.84 1,388,913.18 1,338,541.28 1,388,913.18 | |||
| Catering expenses | 0.00 | 0.00 | 0.00 | 0.00 |
| Total compensation | 1,277,400.84 | 2,138,913.18 1,663,541.28 1,713,913.18 |
In 2018, the parent company furthermore assumed the costs of an accident insurance policy in the amount of EUR 1 thousand (previous year: EUR 1 thousand) for one of the members of the Management Board and carried the costs of the contributions due in accordance with the Austrian Corporate Employee and Self-Employed Pension Act (Betriebliches Mitarbeiter- und Selbständigenvorsorgegesetz, BMSVG) in the amount of EUR 15 thousand (previous year: EUR 14 thousand).
Report by the Management Board
Report by the Supervisory Board
bet-at-home.com
Consolidated Statement of Financial Position
Consolidated Statement of Income
Consolidated Statement of Cash Flows
Statement of Changes in Group Equity
Notes to the Consolidated Financial Statements
Share
75
| Franz Ömer | Michael Quatember | |||||||
|---|---|---|---|---|---|---|---|---|
| Allocations granted (in EUR) | CEO | CEO | ||||||
| 2017 | 2018 | 2018 (Min) | 2018 (Max) | 2017 | 2018 | 2018 ( Min) | 2018 ( Max) | |
| Fixed compensation | 470,000.00 | 470,000.00 | 470,000.00 | 470,000.00 | 325,000.00 | 325,000.00 | 325,000.00 | 325,000.00 |
| Fringe benefits | 280,000.00 | 280,000.00 | 280,000.00 | 280,000.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total | 750,000.00 | 750,000.00 | 750,000.00 | 750,000.00 | 325,000.00 | 325,000.00 | 325,000.00 | 325,000.00 |
| One-year variable compensation | 452,231.42 | 417,907.73 | 0.00 | 484,500.00 | 452,231.42 | 417,907.73 | 0.00 | 484,500.00 |
| Long-term management bonus | 75,169.41 | 79,796.86 | 0.00 | 85,500.00 | 75,169.41 | 79,796.86 | 0.00 | 85,500.00 |
| Variable third-party compensation | 0.00 | 0.00 | 0.00 | 0.00 | 811,140.44 | 64,413.39 | 0.00 | n. a. |
| Multiple-year variable compensation | 75,169.41 | 79,796.86 | 0.00 | 85,500,00 | 886,309.85 | 144,210.25 | 0.00 | n. a. |
| Total | 527,400.83 | 497,704.59 | 0.00 | 570,000.00 | 1,338,541.27 | 562,117.98 | 0.00 | n. a. |
| Catering expenses | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total compensation | 1,277,400.83 | 1,247,704.59 | 750,000.00 1,320,000.00 | 1,663,541.27 | 887,117.98 | 325,000.00 | n. a. | |
In 2016, Betclic Everest Group SAS, the majority shareholder of bet-at-home.com AG, approved variable compensation for the members of the Management Board for the first time. Betclic Everest Group SAS is the sole payee of this compensation, which therefore does not place any financial burden on bet-at-home.com AG or its subsidiaries. The accrual and amount of this variable compensation is based on the price of the shares of bet-at-home.com AG exceeding a certain level in 2016, 2017 and 2018 (basic allowance). An additional incentive for the members of the Management Board is to pay attention to the development of the share price. It is created by decreasing the percentage of compensation if the basic allowance is exceeded during the reporting period and that an agreed minimum dividend does not reduce the basic allowance. Contracts have been concluded to ensure that bet-at-home.com AG will not assume any liability in this respect, including for any taxes payable.
This form of variable compensation is paid as an additional incentive for an above-average presence in the capital market of the members of the Management Board and is therefore not paid for services provided directly for the company, which is why this compensation does not fall within the scope of application of IFRS 2.
Members of the Supervisory Board of bet-at-home.com AG, Düsseldorf, during the financial year 2018:
In 2018, the Chairman of the Supervisory Board received fixed compensation of EUR 40 thousand (previous year: EUR 40 thousand). In 2018, Ms. Andres received fixed compensation of EUR 20 thousand. Ms. Andres had waived her entitlement to compensation in the previous year. Necessary expenses were also reimbursed. Mr. Nabet waived his entitlement to compensation in 2018 and the previous reporting period.
No material related-party transactions were concluded in financial year 2018.
Pursuant to Section 312 (3) of the German Companies Act [Aktiengesetz; AktG], the Board of Management states that, according to the circumstances known to the Board at the time when legal transactions were concluded with related parties, the parent company received appropriate compensation for each legal transaction. Measures within the meaning of Section 312 (1) AktG were neither implemented nor omitted.
Cash Flows
Report by the Supervisory Board
Report by the Management Board
Future commitments in respect of rental and lease agreements for the next five years total EUR 4,682 thousand (previous year: EUR 4,600 thousand). Of this amount, EUR 936 thousand (previous year: EUR 920 thousand) fall due within one year. These are rent payments for office premises in Linz, Portomaso, Malta, and Düsseldorf. As the existing permanent lease of the premises in Linz, which accounts for the majority of these commitments, can be terminated by giving between three and nine months' notice at the end of a month (the respective notice periods depend on the size of the office space leased), the total commitment from the lease cannot be determined in greater detail due to the uncertainty of the contractual term.
The auditor's fee totalled EUR 93 thousand in 2018 (previous year: EUR 96 thousand), which breaks down as follows:
| 2018 | 2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Audit services | 84 | 83 |
| Tax advisory services | 0 | 13 |
| Other services | 9 | 0 |
| 93 | 96 |
The current corporate governance statement can be accessed on the website of bet-at-home.com AG at https://www.bet-at-home.ag/en/corporategovernance. The corporate governance report is also published there.
There were no other events materially affecting the Group's business development and financial position in the period between the end of the financial year 2018 and preparation of the consolidated financial statements.
Subject to the Supervisory Board's consent, the Management Board of the parent company will propose to the general meeting of shareholders in 2019 to pay a dividend of EUR 6.50 per share, totalling EUR 45,617,000.00, from net profit for the year as at 31 December 2018 and to carry EUR 1,386,241.46 forward to new account.
We assure that to the best of our knowledge, the consolidated financial statements give a true and fair view of the Group's financial position, financial performance and cash flows in accordance with the applicable reporting standards, and that the management report gives a true and fair view of the business development including the business performance and position of the Group and appropriately presents the significant opportunities and risks of the Group's anticipated development.
Düsseldorf, 28 February 2019
Franz Ömer Michael Quatember
Independent Auditor's Report
Statement of Cash Flows
Report by the Supervisory Board
Report by the Management Board
bet-at-home.com AG, Düsseldorf
| At cost | Accumulated depreciation | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at 01/01/2018 |
Additions | Disposals | Reclassifi- cations |
Balance at 31/12/2018 |
Balance at 01/01/2018 |
Additions | Disposals | Balance at 31/12/2018 |
31/12/2018 Carrying amount |
31/12/2017 Carrying amount |
||
| EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | ||
| I. | Intangible assets | 4,422,277.05 | 56,203.70 | 799.00 | 79,030.00 | 4,556,711.75 | 2,421,317.74 | 177,377.97 | 798.89 | 2,597,896.82 | 1,958,814.93 | 2,000,959.31 |
| and similar rights Internet domains and benefits and licenses derived Software, therefrom 1. |
3,052,956.75 | 56,203.70 | 799.00 | 79,030.00 | 3,187,391.45 | 2,421,317.74 | 177,377.97 | 798.89 | 2,597,896.82 | 589,494.63 | 631,639.01 | |
| Goodwill 2. |
1,369,320.30 | 0.00 | 0.00 | 0.00 | 1,369,320.30 | 0.00 | 0.00 | 0.00 | 0.00 | 1,369,320.30 | 1,369,320.30 | |
| II. | Property and equipment |
6,431,397.25 | 603,933.08 | 129,563.46 | -79,030.00 | 6,826,736.87 | 4,396,332.45 | 1,096,646.55 | 113,133.44 | 5,379,845.56 | 1,446,891.31 | 2,035,064.80 |
| office equipment and fixtures, Furniture 1. |
6,306,397.25 | 138,348.08 | 113,133.46 | 495,125.00 | 6,826,736.87 | 4,396,332.45 | 1,096,646.55 | 113,133.44 | 5,379,845.56 | 1,446,891.31 | 1,910,064.80 | |
| Construction in progress 2. |
125,000.00 | 465,585.00 | 16,430.00 | -574,155.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 125,000.00 | |
| 10,853,674.30 | 660,136.78 | 130,362.46 | 0.00 11,383,448.62 | 6,817,650.19 | 1,274,024.52 | 113,932.33 | 7,977,742.38 | 3,405,706.24 | 4,036,024.11 |
| I. | II. | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Intangible assets | and similar rights Internet domains and benefits and licenses derived Software, therefrom 1. |
Goodwill 2. |
Property and equipment |
office equipment and fixtures, Furniture 1. |
Construction in progress 2. |
||||
| Balance at 01/01/2017 |
EUR | 4,419,157.47 | 3,049,837.17 | 1,369,320.30 | 6,397,611.11 | 5,564,277.78 | 833,333.33 | 10,816,768.58 | |
| Additions | EUR | 223,303.78 | 223,303.78 | 0.00 | 415,864.84 | 282,593.13 | 133,271.71 | 639,168.62 | |
| At cost | Disposals | EUR | 339,787.53 | 339,787.53 | 0.00 | 262,475.37 | 262,475.32 | 0.05 | 602,262.90 |
| Reclassifi- cations |
EUR | 119,603.33 | 119,603.33 | 0.00 | -119,603.33 | 722,001.66 | -841,604.99 | ||
| Balance at 31/12/2017 |
4,422,277.05 3,052,956.75 1,369,320.30 6,431,397.25 6,306,397.25 125,000.00 EUR |
0.00 10,853,674.30 | |||||||
| Balance at 01/01/2017 |
EUR | 2,416,697.21 | 2,416,697.21 | 0.00 | 3,518,366.80 | 3,518,366.80 | 0.00 | 5,935,064.01 | |
| Accumulated depreciation | Additions | EUR | 209,408.79 | 209,408.79 | 0.00 | 1,131,422.03 | 1,131,422.03 | 0.00 | 1,340,830.82 |
| Disposals | EUR | 204,788.26 | 204,788.26 | 0.00 | 253,456.38 | 253,456.38 | 0.00 | 458,244.64 | |
| Balance at 31/12/2017 |
EUR | 2,421,317.74 | 2,421,317.74 | 0.00 | 4,396,332.45 | 4,396,332.45 | 0.00 | 6,817,650.19 | |
| 31/12/2017 Carrying amount |
EUR | 2,000,959.31 | 631,639.01 | 1,369,320.30 | 2,035,064.80 | 1,910,064.80 | 125,000.00 | 4,036,024.11 | |
| 31/12/2016 Carrying amount |
EUR | 2,002,460.26 | 633,139.96 | 1,369,320.30 | 2,879,244.31 | 2,045,910.98 | 833,333.33 | 4,881,704.57 |
Consolidated Statement of Income Consolidated Statement of Cash Flows Statement of Changes in Group Equity Management Report Notes to the Consolidated Financial Statements
Independent Auditor's Report
bet-at-home.com Share
Consolidated Statement of Financial Position
Report by the Supervisory Board
Report by the Management Board
WTA Tennis Tournament in Linz
bet-at-home.com
Board
Board
Profile
Consolidated Financial Position
Consolidated
Consolidated Cash Flows
Notes to the Consolidated Financial Statements
Management Report
Auditor's
SUMMARISED 2018 MANAGEMENT REPORT bet-at-home.com AG, Düsseldorf
bet-at-home.com AG group is an online sports betting and gaming company. With more than 5.0 million registered customers, the Group is one of the most successful providers in Europe.
The wide-ranging offerings on www.bet-at-home.com include sports betting, casino, poker, games and virtual sports. In 2018, sports bets were placed on more than 411,000 events in 83 types of sport. bet-at-home.com has companies in Germany, Austria, Malta and Gibraltar. The successful development of the company can be attributed to its 301 employees as at 31 December 2018.
In addition to several countries in Eastern Europe, particularly the German-speaking region and individual countries in Western Europe are key markets.
The Group holds various licenses via its Maltese companies for online sports betting and gaming. These licenses allow the Group to organize and market online sports betting and online casinos in its sales markets in Austria, Western Europe, Eastern Europe and in other countries.
The parent company, bet-at-home.com AG, Düsseldorf, was listed on the regulated market of the Frankfurt Stock Exchange in the Prime Standard section. All operating activities are carried out exclusively by indirect associates.
bet-at-home.com AG holds 100% of bet-at-home.com Entertainment GmbH. This company, which as its registered office in Linz, Austria, is mainly responsible for the continuous transfer of technology within the Group as well as for further developing its internally developed software and provides services for the operating companies in Malta. The company holds its international online sports betting licenses and online gaming licenses for casino, poker, games and virtual sports via bet-at-home.com Holding Ltd., Malta.
Since 2009, bet-at-home.com AG has been a member of the Betclic Everest Group SAS, Paris, a French group specialising in online gambling and online sports betting.
One of the most important assets of the Group is its effective state-of-the-art software. We are continuously enhancing and developing this software. Sports betting and casino products for the mobile platform were continuously enhanced and optimised during the course of 2018. bet-at-home.com reached further international product development milestones with the launch of the new sports betting app in the second quarter of 2018 and a new eSports platform. The main factor in research and development are the IT employees.
Based on the previous experience from key markets of the Group companies, it can be assumed that the online sports betting and gaming business development is largely independent from total economic developments in the respective market.
The Management Board assumes that the overall gaming market will develop positively in the long term, with the online segment gaining further in importance. Particularly the penetration of the target group with mobile devices, mobile gaming as innovative sales channel as well as demographic trends and increasing online affinity will become supporting factors. This development will be supported by the high scalability of the business model and the expected progressive deregulation of the market.
Cash Flows
Report by the Supervisory Board
Report by the Management Board
In 2018, bet-at-home.com AG Group once again showed its strength by generating new record gaming volumes and EBITDA in the history of the company. In financial year 2018, the gross betting and gaming revenue amounted to EUR 143.4 million, thus 1.4% down on the previous year (EUR 145.4 million). Investments in the brand's popularity remained high and as a result the EBITDA in 2018 increased by 2.1% to a record of EUR 36.2 million, thus around EUR 0.7 million up on the comparative figure of EUR 35.5 million in the previous year. Group-wide bundling of the procurement of marketing services at the group company in Gibraltar resulted in significant synergies also during the financial year 2018, which have influenced the Group's development positively.
Primarily in the second half of 2018, bet-at-home.com focussed more of its marketing activities on the Football World Cup in Russia by running international advertising campaigns to increase the popularity of the bet-at-home.com brand as well as its shares in the core markets. With view to the Football World Cup in Russia from 14 June to 15 July 2018, bet-at-home.com increased its investments in international advertising campaigns in the form of TV spots, posters and online media, as well as an extensive bonus offering as from May 2018.
Further permanent expansion in the area of live betting will strengthen the Group's market position further and ensure its continued positive development. Ongoing innovations on the mobile platforms and apps and the optimisation of the mobile device product portfolio are the main focus of operations. As a result, more than 54% of the gross betting and gaming revenue was already generated through mobile devices at the end of financial year 2018.
During the 2018 financial year, the average number of staff (excluding the Board) employed by the Group rose to 304 (previous year: 302). As at the 2018 reporting date, the Group employed 301 staff (previous year: 311). Targeted personnel development combined with the recruitment of highly qualified professionals form the basis for the Group's continued successful development. Another key component to success is intensive further professional training.
ment
The Group further strengthened its position, and in particular that of the bet-at-home.com brand, during financial year 2018. This can be measured, in particular, by the number of registered customers increasing to more than 5.0 million (previous year: 4.8 million) in 2018.
In 2018, the gross betting revenue (betting volume less paid out winnings) amounted to EUR 60.5 million, down on the previous year's figure of EUR 64.6 million.
Primarily due to the significant increase of gaming volume, the gross gaming revenue (gaming volume less paid out winnings) increased year-on-year to EUR 82.8 million (previous year: EUR 80.8 million). Online gaming comprises the products casino, poker, games and virtual sports.
In 2018, the total gross betting and gaming revenue therefore amounted to EUR 143.4 million (previous year: EUR 145.4 million), slightly short of the 2018 forecast and the comparable figures in 2017. The gross betting and gaming revenue is a crucial financial performance indicator for the Group.
Taking into consideration betting taxes and gambling levies and the tax payable due to the VAT regulations for electronic service providers in the European Union, net betting and gaming revenue in 2018 amounted to EUR 115.1 million (previous year: EUR 117.8 million).
During the financial year 2018, the Group's earnings position was as follows:
| 31/12/2018 | 31/12/2017 | |
|---|---|---|
| EUR'000 | EUR'000 | |
| Gross betting and gaming revenue | 143,351 | 145,398 |
| Total operating income | 116,199 | 118,676 |
| EBT (Earnings Before Taxes) *) | 34,995 | 35,651 |
| EBIT (Earnings Before Interest and Taxes) **) | 34,946 | 34,133 |
| EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) ***) |
36,220 | 35,474 |
*) corresponds to profit before income tax as shown in consolidated income statement
**) EBT less finance income (costs) in the consolidated income statement
***) EBIT plus depreciation, amortisation and write-downs as shown in consolidated income statement
bet-at-home.com
Report by the Management Board
Report by the Supervisory Board
Company Profile
Consolidated Statement of Financial Position
Consolidated Statement of Income
Consolidated Statement of Cash Flows
Statement of Changes in Group Equity
Notes to the Consolidated Financial Statements
Share
The previous year's income guidance of EUR 36 million to EUR 40 million was therefore met.
The betting fees or taxes and gambling levies payable in various countries decreased earnings by EUR 20,953 thousand during the financial year 2018 (previous year: EUR 18,807 thousand). In addition, VAT regulations for electronic service providers in the European Union also decreased earnings by EUR 7,273 thousand (previous year: EUR 8,828 thousand).
In 2018, advertising expenses decreased to EUR 38,327 thousand (previous year: EUR 41,958 thousand). With almost identical staff numbers, personnel expenses increased by EUR 654 thousand, from EUR 18.071 thousand in financial year 2017 to EUR 18.725 thousand in financial year 2018, primarily due to salary increases.
As at 31 December 2018, the financial situation was as follows:
| 31/12/2018 | 31/12/2017 | ||
|---|---|---|---|
| EUR'000 | EUR'000 | ||
| Comprehensive income | 34,995 | 35,651 | |
| Cash flows from operating activities | 24,809 | 30,840 | |
| + | Cash flows from investing activities | -660 | 28,955 |
| + | Cash flows from financing activities | -52,635 | -52,635 |
| = | Net increase (decrease) in cash from operating, investing and financing activities |
-28,487 | 7,160 |
| = | Cash and cash equivalents at the end of the period | 68,774 | 97,261 |
The cash flows from financing activities reflect the dividend payment to the shareholders of the parent company.
Cash and cash equivalents of EUR 68,774 thousand boost the Group's excellent financial position as at 31/12/2018 in view of liabilities amounting to EUR 31,363 thousand and provisions to EUR 2,688 thousand. The Group was therefore able to meet its financial liabilities at all times.
As at 31 December 2018, net assets were as follows:
| Assets | 31/12/2018 | 31/12/2017 |
|---|---|---|
| EUR'000 | EUR'000 | |
| Non-current assets | 3,406 | 4,036 |
| Current assets | ||
| Receivables from associated companies | 13,139 | 11,322 |
| Prepayments and accrued income | 1,533 | 1,823 |
| Other receivables and assets | 6,963 | 5,618 |
| Short-term deposits | 9,525 | 4,588 |
| Cash and cash equivalents | 68,774 | 97,261 |
| 103,339 | 124,648 |
The absolute decrease in cash and cash equivalents resulted from the distribution of a dividend in May 2018 in the amount of EUR 52,635 thousand, corresponding to EUR 7.50 per share (previous year: EUR 7.50).
| Equity and liabilities | 31/12/2018 | 31/12/2017 |
|---|---|---|
| EUR'000 | EUR'000 | |
| Group equity | 69,288 | 89,311 |
| Non-current liabilities (provisions) | 49 | 47 |
| Current liabilities (payables and provisions) | 34,003 | 35,290 |
| 103,339 | 124,648 |
As at 31 December 2018, the equity ratio was 67.0% (previous year: 71.7%).
Current liabilities include trade payables in the amount of EUR 1,083 thousand (previous year: EUR 1,758 thousand), liabilities from taxes in the amount of EUR 16,534 thousand (previous year: EUR 17,342 thousand), current provisions in the amount of EUR 2,639 thousand (previous year: EUR 1,569 thousand), customer payables (contractual liabilities in accordance with IFRS 15) in the amount of EUR 7,705 thousand (previous year: EUR 8,324 thousand) and other liabilities in the amount of EUR 6,042 thousand (previous year: EUR 6,297 thousand).
Financing measures were not required during the financial year 2018.
Report by the Management Board
Company Profile
89
The Group's economic position was very positive overall in 2018.
There were no material events after the end of the financial year.
The bet-at-home.com brand is constantly expanded internationally in a cost-effective way through innovative marketing strategies. Depending on regulatory developments in the respective countries, we are working intensively in all submarkets towards increasing our market share.
Based on the assumptions and premises presented in Section B.1 above, the Management Board expects the following development in 2019:
From the current perspective and assuming that the regulatory and tax situation will remain unchanged in financial year 2019, the Management Board expects gross betting and gaming revenue of EUR 130 million to EUR 143 million, with this year-on-year decrease being primarily due to the legal uncertainties in Switzerland.
The Management Board expects EBITDA to amount to EUR 29 million to EUR 33 million in financial year 2019.
The maximum number of employees in the Group should increase to around 320 persons by 31 December 2019.
The management is currently evaluating the effects of the exit of the United Kingdom from the European union (Brexit), which is expected at the end of March 2019. As the Group holds a license in the United Kingdom and operates through this license, no material effects on the financial position, financial performance and cash flows are expected at present.
Statement of Changes in Group Equity Notes to the Consolidated Financial Statements
Consolidated Statement of Cash Flows
Consolidated Statement of Financial Position
bet-at-home.com Share
Report by the Supervisory Board
Report by the Management Board
Company Profile
The bet-at-home.com brand is continuously enhanced in the international market in a cost-effective way through innovative marketing strategies. In accordance with regulatory developments in the respective countries, we are working intensively in all submarkets towards increasing our market.
The development of the global online gaming market shows that the European market (EU 28) has made the largest contribution to growth in the past 10 years worldwide and is expected to continue generating annual growth rates of around 7.1%. This is confirmed by various studies by H2 Gambling Capital, also in 2018. According to recent studies, this trend will continue in the wake of broad-based acceptance of e-commerce and the global penetration of mobile applications and demographic trends and help the gambling sector – which does not depend on the state of the economy – on its way to further sustained growth in the years to come.
The Notes to Consolidated Financial Statements for the Period Ended 31/12/2018 contain detailed disclosures on the development of tax and regulatory risks, the risks from operating activities and financial risks (Section 'VI.2. Risk report') to which explicit reference is made.
The group parent's Management Board is responsible for establishing risk management policies. Compliance with these policies is monitored by the managing directors and department heads of the subsidiaries. Among the basic components of risk management are general principles for risk prevention, such as the segregation of duties and applying the four eyes principle for important internal controls. Various partially automated procedures using software systems are also applied.
Risk management measures include continuously performing credit ratings and auditing the risk control system through credit card checks, payment verifications and analyses of gaming behaviour. In addition, we have further intensified our controlling activities in the marketing, partner programme, payment systems and intercompany clearing subsegments. Reputable external legal advisers are engaged to reduce legal risks and take into account the complex regulatory environment.
The Management Board is also responsible for identifying negative developments in good time by employing cross-departmental monitoring systems. For example, IT risks are monitored and reported through the voluntary appointment of external certification bodies (such as eCogra), operational risks through automated plausibility checks during the preparation of offers and financial risks through the ongoing analysis of key financial performance indicators.
The internal control and risk management system of the bet-at-home.com AG Group comprises all principles, processes and measures aimed to ensure the effectiveness, profitability and orderliness of the accounting system and compliance with the relevant legal requirements. There have been no material changes since the reporting date.
The Management Board of bet-at-home.com AG is responsible for the internal control and risk management system required for protecting against risks and designs and monitors the scope and focus of the systems in place on the basis of specific requirements within the Group. Monitoring measures integrated and not integrated in the processes are the components of the internal monitoring system.
The measures of the internal control system focus on the orderliness and reliability of the Group's accounting system and ensure that business transactions are reported completely, on time and in compliance with the legal and statutory requirements. The Group's consolidation and accounting policies also ensure that assets and liabilities are stated, measured and reported accurately in the consolidated financial statements. The policies also ensure that the accounting documents provide reliable and traceable information.
The financial statements of bet-at-home.com AG have been prepared in accordance with the requirements of the German Commercial Code (Handelsgesetzbuch; HGB) and the additional requirements of the German Stock Corporation Act (Aktiengesetz; AktG). Any deviations from the International Financial Reporting Standards (IFRS) to be applied in the consolidated financial statements are of an immaterial nature.
The management report of bet-at-home.com AG has been consolidated with the Group management report of bet-at-home.com AG Group. bet-at-home.com AG is the management holding company of bet-at-home.com AG Group and as such depends to a significant extent on the development of the bet-at-home.com Group in terms of business trend, position and expected development, including all related material opportunities and risks, which are disclosed in this summarised management report.
| 2018 | 2017 | Change | ||
|---|---|---|---|---|
| EUR'000 | EUR'000 | EUR'000 | % | |
| Revenue | 881 | 780 | 101 | 12.9 |
| Other operating income | 20 | 32 | -12 | -37.3 |
| Ordinary operating income | 901 | 812 | 89 | 11.0 |
| Personnel expenses | 2,031 | 1,982 | 49 | 2.5 |
| Administrative expenses | 1,171 | 1,080 | 91 | 8.5 |
| 3,203 | 3,062 | 141 | 4.6 | |
| Operating income | -2,302 | -2,250 | -52 | 2.3 |
| Income from investments | 46,094 | 55,106 | -9,012 | -16.4 |
| Interest received | 219 | 654 | -436 | -66.6 |
| Interest paid | 9 | 97 | -89 | -90.8 |
| Net finance income | 46,304 | 55,663 | -9,359 | -16.8 |
| Earnings before taxes | 44,002 | 53,413 | -9,411 | -17.6 |
| Income taxes | 160 | 525 | -365 | -69.6 |
| Net income for the year | 43,843 | 52,888 | -9,045 | -17.1 |
The financial performance of bet-at-home.com AG is impacted by the high dividend payments of its subsidiary bet-at-home.com Entertainment GmbH, Linz, Austria. Revenue comprises income from the transfer of management service charges to subsidiaries.
Personnel expenses exclusively pertain to the two members of the Management Board of the Company.
Tax expenses exclusively refer to income taxes.
Report by the Management Board
| 31/12/2018 | 31/12/2017 | Change | ||||
|---|---|---|---|---|---|---|
| EUR'000 | % | EUR'000 | % | EUR'000 | % | |
| Non-current assets | ||||||
| Financial investments | 3,771 | 6.0 | 3,771 | 5.2 | 0 | 0.0 |
| Current assets | ||||||
| Other assets, including accruals and deferred income |
1,220 | 2.0 | 141 | 0.2 | 1,079 | 765.3 |
| Receivables from associated companies |
46,272 | 74.1 | 55,969 | 76.6 | -9,697 | -17.3 |
| Cash and cash equivalents | 11,193 | 17.9 | 13,168 | 18.0 | -1,975 | > 100 |
| 58,685 | 94.0 | 69,278 | 94.8 | -10,593 | -15.3 | |
| 62,456 100.0 | 73,049 100.0 | -10,593 | -14.5 |
Net assets exclusively comprise the investment in bet-at-home.com Entertainment GmbH, Linz, Austria.
Receivables from affiliated companies in the amount of EUR 46,207 thousand contain the dividend of bet-at-home.com Entertainment GmbH, Linz, Austria, for 2018 in the amount of EUR 45,617 thousand.
| 31/12/2018 | 31/12/2017 | Change | ||||
|---|---|---|---|---|---|---|
| EUR'000 | % | EUR'000 | % | EUR'000 | % | |
| Equity | 61,387 | 98.3 | 70,179 | 96.1 | -8,792 | -12.5 |
| Current liabilities and provisions |
||||||
| Suppliers | 0 | 0.0 | 28 | 0.0 | -28 | 0.0 |
| Provisions | 910 | 1.5 | 1,987 | 2.7 | -1,077 | -54.2 |
| Other current liabilities | 159 | 0.3 | 855 | 1.2 | -696 | -81.4 |
| 62,456 100.0 | 73,049 100.0 | -10,593 | -14.5 |
Freely available cash and cash equivalents were invested in fixed-income securities. The Group believes that the risk relating to the use of these financial instruments is very minor.
The structure and amount of the emoluments of the Management Board are determined by the Supervisory Board. The company has refrained from setting up a separate HR committee as its Supervisory Board consists of three members and there is thus no need for such a committee.
The appropriateness of the compensation defined for the Management Board is regularly tested. This is based on the scope of tasks and responsibilities of the individual members of the Management Board and on other factors such as the size of the company, its net assets, financial position and results of operations as well as its development potential and prospects for the future.
Compensation for the members of the Management Board, insofar as it is paid in part by bet-at-home.com AG and in part by one of the subsidiaries, consists of the following:
Consolidated Statement of
Statement of Changes in Group Equity
Notes to the Consolidated Financial Statements
Independent Auditor's Report
Management Report
Report by the Supervisory Board
Report by the Management Board
Profile
Company
95
The granting and the amount of the individual components of compensation, in particular bonuses and other performance-based components, to the respective members of the Management Board are commensurate with the functions and tasks which they perform.
A fixed monthly salary is paid as a non-performance-based component.
The performance relationship of the annual bonuses is based on the key financial ratios taken from the consolidated financial statements. The gross betting and gaming revenue and earnings before interest, depreciation and amortisation (EBITDA) are used as a key performance indicator. Due to these parameters, target achievement is based on the targets set for several years in advance. The income and earnings targets are connected in such a way that both parameters must exceed a minimum target to lead together to entitlement to a bonus.
Instead of annual bonuses becoming payable in full after one financial year, part of the bonus is paid out if the performance targets set at the beginning of the first year are met in the following year as well.
Variable compensation is computed using a base amount and an achievement corridor of from 70% to 150%. The amount is therefore capped at 150%. Subsequent changes to the performance targets are excluded.
For a detailed description of the performance-related and non-performance-related compensation components, we explicitly refer to the disclosure of the management board compensation in the notes to the consolidated financial statements (Section VI.3 Related party transactions).
One Group company also paid for one consulting service in the amount of EUR 280 thousand.
In 2018, the company furthermore assumed the costs of an accident insurance policy in the amount of EUR 1 thousand (previous year: EUR 1 thousand) for one of the members of the Management Board and carried the costs of the contributions due in accordance with the Austrian Corporate Employee and Self-Employed Pension Act (Betriebliches Mitarbeiter- und Selbständigenvorsorgegesetz, BMSVG) in the amount of 1.53% of the gross salary. No other fringe benefits, particularly company cars, were granted.
In 2016, Betclic Everest Group SAS, the majority shareholder of bet-at-home.com AG, approved variable compensation for the members of the Management Board for the first time. Betclic Everest Group SAS is the sole payee of this compensation, which therefore does not place any financial burden on bet-at-home.com AG or its subsidiaries. The accrual and amount of this variable compensation is based on the price of the shares of bet-at-home.com AG exceeding a certain level in 2016, 2017 and 2018 (basic allowance). An additional incentive for the members of the Management Board is to pay attention to the development of the share price. It is created by decreasing the percentage of compensation if the basic allowance is exceeded during the reporting period and that an agreed minimum dividend does not reduce the basic allowance. Contracts have been concluded to ensure that bet-at-home.com AG will not assume any liability in this respect, including for any taxes payable.
Please refer to the disclosures in the notes to the consolidated financial statements.
As resolved by the general meeting of shareholders on 17/05/2017, each member of the Supervisory Board receives, beginning from 01/01/2017, fixed remuneration of EUR 20,000.00 for each full financial year, which is payable one month after the end of the financial year.
The Chairman of the Supervisory Board receives fixed remuneration of EUR 40,000.00 p.a. In addition, reimbursement is given for the necessary out-of-pocket expenses and VAT.
The details of this compensation can be found in the notes to the consolidated financial statements.
The composition of the subscribed capital of the parent company and the investments in capital exceeding 10 out of 100 voting rights are stated in the notes to the consolidated financial statements (Section V.2 (16) and Section I.) as corresponding disclosures have to be included in this document.
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The respective provisions of the German Stock Corporation Act (Section 84 AktG) apply to the appointment and recall of the members of the Management Board of the parent company.
The general meeting of shareholders on 18 May 2016 resolved to authorise the Management Board of the parent company, with the Supervisory Board's consent, to increase the Company's share capital by 17 May 2021 by issuing up to 3,509,000 new non-par value bearer shares for cash or non-cash contributions, once or several times, up to an amount of EUR 3,509,000.00. The shareholders shall be invited to purchase new shares. However, the Management Board is authorised, upon approval by the Supervisory Board, to exclude the shareholders' subscription right in certain cases.
By shareholder resolution of 18 May 2016, the Management Board further may, with the Supervisory Board's consent, purchase treasury shares of up to 10% of share capital, i. e. up to EUR 701,800.00, until 17 May 2021. When pooled with other treasury shares, the shares to be purchased may never exceed 10% of the Company's share capital. The authorisation must not be exploited for the purpose of trading in treasury shares.
The current corporate governance statement can be accessed on the website of bet-at-home.com AG at https://www.bet-at-home.ag/en/corporategovernance. The corporate governance report is also published there.
The business success of bet-at-home.com is reflected in financial and non-financial performance indicators. They pertain to existing and new registered users as well as technological developments. In the opinion of bet-at-home.com, these aspects are key components of a forward-looking positioning in the international competitive environment.
As at 31 December 2018, the Group had a total of 5,046,358 (31 December 2017: 4,828,694) registered users. In financial year 2018, bet-at-home.com received 217,664 (2017: 229,433) new registrations.
The continues increase in staffing numbers in the IT department is the result of the consistent further development of the internally developed software. The high standards of functioning software based on state-of-the-art technology and internally developed innovations are among the key assets within the Group. With regard to software development, the work performed by each employee is individually assessed and recorded by project teams to be able to sustainably plan and evaluate the IT project hours. In financial year 2018, around 220,000 project hours were spent on IT development (previous year: 218,000).
We assure that to the best of our knowledge the Group management report provides a true and fair view of business developments, including the results of operations and situation of the Group, and that it describes the material opportunities and risks of future developments within the Group.
Düsseldorf, 28 February 2019
Franz Ömer Michael Quatember
bet-at-home.com Share
Report by the Supervisory Board
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FC Schalke 04
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INDEPENDENT AUDITOR'S REPORT
INDEPENDENT AUDITOR'S REPORT To bet-at-home.com AG, Düsseldorf
Report on the audit of the Consolidated Financial Statements and of the Combined Management Report
We have audited the consolidated financial statements of bet-at-home.com AG, Düsseldorf, and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at December 31, 2018, and the consolidated statement of profit or loss, consolidated statement of comprehensive income , consolidated statement of changes in equity and consolidated statement of cash flows for the financial year from January 1, 2018 to December 31, 2018, and notes to the consolidated financial statements, including a summary of significant accounting policies. In addition, we have audited the combined management report of bet-at-home.com AG, Düsseldorf for the financial year from January 1, 2018 to December 31, 2018. In accordance with the German legal requirements we have not audited the items listed in the chapter "Other Information" of this report.
In our opinion, on the basis of the knowledge obtained in the audit,
Pursuant to § 322 para. 3 sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the consolidated financial statements and of the combined management report.
We conducted our audit of the consolidated financial statements and of the combined management report in accordance with § 317 HGB and the EU Audit Regulation (No. 537/2014, referred to subsequently as "EU Audit Regulation") and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Our responsibilities under those requirements and principles are further described in the "Auditor's Responsibilities for the Audit of the Consolidated Financial Statements and of the Combined Management Report" section of our auditor's report. We are independent of the group entities in accordance with the requirements of European law and German commercial and professional law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. In addition, in accordance with Article 10 (2) point (f) of the EU Audit Regulation, we declare that we have not provided non-audit services prohibited under Article 5 (1) of the EU Audit Regulation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions on the consolidated financial statements and on the combined management report.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the financial year from January 1, 2018 to December 31, 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our audit opinion thereon; we do not provide a separate audit opinion on these matters.
We have organized our presentation of the key audit matter as follows:
Unchanged to prior periods, the business model of the group is still subjected to risks regarding the regulatory admissibility of the services provided by the group in the areas of online sports betting and online gaming. In specific countries, state-granted monopolies questioning the admissibility of the business of the group in general, contradict jurisdiction of the European Court of Justice, which is generally favorable for providers of such services. The European Court of Justice has – in its ruling dated September 8, 2010 – generally declined any discrimination against private providers of online sports betting and online gaming in favor of stateowned monopolies but at the same time has accepted current legislation for a transitory period.
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As far as legally possible, the group strives to obtain national licenses to mitigate risk with regard to the business of the group. The group currently provides its services on the basis of licenses obtained in Malta (and thus in the EU) and assumes that (based on the European principles of freedom of establishment and services) these are valid in all EU countries. The group has furthermore obtained national licenses in several EU countries.
Specific EU countries still attempt to prevent the group from offering its services by means of regulatory measures supported also by technical obstacles on the level of the internet service providers. As far as such technical interventions are successful, this affects the economic position of the group. As far as important markets are affected to a significant extent, this may potentially impair the financial position of the group. Generally, the group is convinced of the admissibility of its business based on EU law and will take legal action against any such restrictions.
We are constantly monitoring the legal developments and jurisdiction in this area. During our audit, we have requested written evaluations from the external specialized legal consultants of the group. Extensive discussion with management to understand their assessment of the developments as well as consultation with the chairman of the supervisory board of bet-at-home.com AG (himself being a specialized lawyer) are complimented with our own research and evaluations.
We have verified that bet-at-home.com AG management permanently enables itself to competently evaluate the regulatory risks at all times and to be able to initiate necessary action by consulting external experts and maintaining an internal relevant reporting.
We have concluded, that management of bet-at-home.com AG closely monitors the regulatory risk and – as far as possible – strives to influence the developments in favor of the group. In our opinion, there are no current developments that would compromise the business of the group to an extent, where this would have to be further reflected in the group's accounting and reporting.
A detailed description of the regulatory situation in the area of online sports betting and online gaming as well as of the current developments is included in the notes to the consolidated financial statements in section VI.2.1.
ment Report
Management is responsible for the Other Information. The Other Information comprises the following items as included in the combined management report:
Our audit opinions with regard to the consolidated financial statements and the combined management report do not extend to include the Other Information and we thus do not express an opinion or any other form of assurance thereon.
In connection with our audit, our responsibility is to read the Other Information, and, in doing so, consider whether the other information
The executive directors of bet-at-home.com AG are responsible for the preparation of the consolidated financial statements that comply, in all material respects, with IFRS as adopted by the EU and the additional requirements of German commercial law pursuant to § 315e para. 1 HGB and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of the assets, liabilities, financial position, and financial performance of the Group. In addition, the executive directors are responsible for such internal control as they have determined necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the executive directors are responsible for assessing the Group's ability to continue as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In addition, they are responsible for financial reporting based on the going concern basis of accounting unless there is an intention to liquidate the Group or to cease operations, or there is no realistic alternative but to do so.
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Furthermore, the executive directors are responsible for the preparation of the combined management report that, as a whole, provides an appropriate view of the Group's position and is, in all material respects, consistent with the consolidated financial statements, complies with German legal requirements, and appropriately presents the opportunities and risks of future development. In addition, the executive directors are responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a combined management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the assertions in the combined management report.
The supervisory board is responsible for overseeing the Group's financial reporting process for the preparation of the consolidated financial statements and of the combined management report.
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and whether the combined management report as a whole provides an appropriate view of the Group's position and, in all material respects, is consistent with the consolidated financial statements and the knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well as to issue an auditor's report that includes our audit opinions on the consolidated financial statements and on the combined management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with § 317 HGB and the EU Audit Regulation and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements and this combined management report.
We exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• identify and assess the risks of material misstatement of the consolidated financial statements and of the combined management report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our audit opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with the relevant independence requirements, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, the related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter.
We were elected as group auditor by the annual general meeting on May 22, 2018. We were engaged by the supervisory board on December 18, 2018. We have been the group auditor of bet-at-home.com AG without interruption since the financial year 2006.
We declare that the audit opinions expressed in this auditor's report are consistent with the additional report to the supervisory board pursuant to Article 11 of the EU Audit Regulation (long-form audit report).
The auditor responsible for the engagement is Thomas Pannenbäcker.
Duisburg, February 28, 2019
PKF FASSELT SCHLAGE Partnerschaft mbB Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft Rechtsanwälte
Th. Pannenbäcker Dr. Harrison German Qualified Auditor German Qualified Auditor
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40474 Dusseldorf GERMANY
Matthias Hauer/gepa pictures, Luge
bet-at-home.com AG Tersteegenstrasse 30, 40474 Dusseldorf, GERMANY
Phone: +49-211-179 34 770 Fax: +49-211-179 34 757 E-Mail: [email protected]
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