Betsson AB (publ) year-end report 1 January – 31 December 2022

"Strong finish to the best year ever for Betsson, driven by high activity and new customers"

Group revenue was EUR 220.6 (157.5) million, an increase of 40%. Organic increase of 48%.
Casino revenue increased by 27%. Sportsbook revenue increased by 76% and the sportsbook margin was 7.3% (6.0%).
EBITDA was EUR 51.1 (30.4) million, an increase of 68%. The EBITDA margin was 23.2% (19.3%).
Operating income (EBIT) was EUR 40.0 (20.8) million, an increase of 92%. The EBIT margin was 18.1% (13.2%).
Net income was EUR 32.7 (18.7) million, corresponding to EUR 0.26 (0.14) per share.
Operating cash flow was EUR 75.5 (13.4) million.
Net debt was EUR -65.7 (2.5) million.
Active customers increased by 23% to 1,424,794 (1,161,683).

QUARTER OCTOBER - DECEMBER 2022 THE PERIOD JANUARY – DECEMBER 2022

Group revenue was EUR 777.2 (657.7) million, an increase of 18%. Organic increase of 27%.
EBITDA was EUR 172.4 (153.7) million, an increase of 12%. The EBITDA margin was 22.2% (23.4%).
Koncernens intäkter uppgick till 170,2 (157,4) miljoner euro, en ökning med 8%. Den organiska ökningen var 14%. • Operating income (EBIT) was EUR 131.2 (117.6) million, an increase of 11%. The EBIT margin was 16.9% (17.9%).
Kasinointäkterna minskade med 5%. Sportboksintäkterna ökade med 45% och sportboksmarginalen var 8,3% (7,2%). • Net income was EUR 114.7 (103.9) million, corresponding to EUR 0.87 (0.78) per share.

• Det operativa kassaflödet var 26,9 (32,3) miljoner euro.

EBITDA uppgick till 33,4 (35,8) miljoner euro, en minskning med 7%. EBITDA-marginalen var 19,6% (22,7%). • Operating cash flow was EUR 178.7 (143.6) million.
Rörelseresultatet (EBIT) uppgick till 23,6 (27,3) miljoner euro, en minskning med 13%. Rörelsemarginalen var 13,9% (17,3%). • Resultatet efter skatt uppgick till 20,9 (23,7) miljoner euro, vilket motsvarar 0,16 (0,17) euro per aktie. • The Board of Directors proposes to the AGM that EUR 59.7 (50.3) million, corresponding EUR 0.436 (0.367) per share, to be distributed to shareholders through an automatic share redemption program.

KEY DATA

MEUR	Q4 2022	Q4 2021	∆	Jan-Dec 2022	Jan-Dec 2021	∆
Revenue	220.6	157.5	40%	777.2	657.7	18%
Gross profit	144.8	97.7	48%	504.4	425.6	18%
EBITDA	51.1	30.4	68%	172.4	153.7	12%
EBITDA margin %	23.2	19.3	-	22.2	23.4	-
Operating income (EBIT)	40.0	20.8	92%	131.2	117.6	11%
EBIT margin %	18.1	13.2	-	16.9	17.9	-
Net income	32.7	18.7	75%	114.7	103.9	10%
Earnings per share (EUR)	0.26	0.14	86%	0.87	0.78	12%
Operating cash flow	75.5	13.4	463%	178.7	143.6	24%
Casino revenue	146.1	115.1	27%	514.7	477.1	8%
Sportsbook gross turnover	1,416.2	1,024.5	38%	4,413.1	3,532.0	25%
Sportsbook revenue	70.7	40.2	76%	250.6	172.1	46%
Sportsbook margin after free bets %	7.3	6.0	-	8.0	7.3	-
Deposits	1,096.0	784.6	40%	3,667.2	2,991.2	23%
Active customers (number of)	1,424,794	1,161,683	23%

CEO COMMENT

Pontus Lindwall President and CEO Betsson AB

Strong finish to the best year ever for Betsson, driven by high activity and new customers

We can look back at the best year ever for Betsson with strong growth and profitability, driven by disciplined capital allocation, geographical diversification and investments in new markets, as well as continuous strengthening of the tech platform and product offering. For the full year, revenue increased by 18 percent and EBIT increased by 11 percent. Organically, revenue increased by 27 percent for the year.

The fourth quarter was dominated by the largest sports event of the year, the Football World Cup. In sports terms, it was perhaps one of the best tournaments of all times, with both real surprises and favourites playing some incredibly exciting games in the knock-out stage. As expected, for Betsson the World Cup turned out to be the largest sports event ever and contributed to new records for all possible key performance indicators in the quarter, such as revenues (despite a significantly lower sportsbook margin than in the previous quarter), EBIT, sportsbook turnover, casino turnover, active customers and customer deposits.

In the fourth quarter, organic revenue growth for the Group was 48 (27) percent year over year, with an EBIT margin of 18.1 (13.2) percent. Geographically, once again growth was driven by the regions Latin America and CEECA (Central and Eastern Europe and Central Asia). Above all, Latin America recorded new highs on most key parameters. Our strategic investments in the region continue at full speed – in Peru, the naming rights sponsorship for the highest football league, Liga 1 Betsson, was extended another four years, and in Chile, a new naming rights deal was agreed with the highest football league, which will be named Campeonato Betsson. Both leagues kicked off at the end of January, and it is gratifying to see the continued engagement in football together with clubs, fans and customers.

Further development of Betsson's tech platform is constantly taking place and the investments of the past years have paid off. Within product and tech, the focus was also on the World Cup during the quarter. All targets were met regarding scalability, quality and stability, at times in exceptional circumstances with very high player activity. As an example, during the final customers placed three times as many bets as during the Champions League final, which is otherwise often the busiest event for the sportsbook during the entire year. Some new functionality was also added, such as boosted odds for live betting, which was frequently used during the tournament. Additionally, a native app was launched for the Greek market.

Finally, I would also like to take the opportunity to thank our employees for all the hard work put in during the past year. Together we will continue to deliver the best customer experience in the gaming industry and create long-term value for our shareholders. Even if the macroeconomic and geopolitical situation in the world remains uncertain, we remain optimistic about 2023 thanks to our geographical diversification, focus on profitable growth, strong balance sheet and our sustainable gaming solutions.

Pontus Lindwall President and CEO Betsson AB

SIGNIFICANT EVENTS AND OUTLOOK

SIGNIFICANT EVENTS DURING THE QUARTER

Dividend

The second part of the automatic share redemption program was completed by Betsson AB in October. A total of SEK 269.5 million, or SEK 1.97 per share, was paid out. This was the second half of the ordinary cash distribution to shareholders for 2021.

Acquisition

In October, Betsson acquired 80% of the shares in KickerTech Malta Limited from TG Holdings Limited. KickerTech has a business-to-business (B2B) sportsbook operation.

Regulatory matters

In Italy, the budget law 2023, approved by the parliament at the end of December 2022, extended all existing online licenses until December 2024. This means that the license held by Betsson's subsidiary BML Group Ltd was also extended.

In Germany, Zecure Gaming Limited's license application for virtual slots and online poker was approved by the regulator in December.

In the pending complaint regarding the cease-and-desist order of the gambling authority in Norway against BML Group Ltd, BML Group Ltd was granted deferred implementation of the cease-and-desist order until the Ministry of Culture and the Lottery Committee decided on the complaint and whether to uphold the order. The Ministry of Culture and the Lottery Committee issued their decisions to uphold the cease-and-desist order, in November and December, respectively. Subsequently, BML Group Ltd and the Norwegian gambling authority started a dialogue with regards to the changes made and planned to be made to the company's websites.

SIGNIFICANT EVENTS AFTER THE END OF THE QUARTER

At the beginning of February, Betsson through subsidiaries was granted an online gaming license in the province of Cordoba in Argentina, which is the third license for the Group in Argentina.

TRADING UPDATE

This trading update is an indication of how the first quarter has started, however it is not a revenue forecast for the quarter.

The average daily revenue in the first quarter 2023 up until and including 8 February was 33.9 percent higher than the average daily revenue of the full first quarter 2022. Adjusted for currency effects and acquisitions, the average daily revenue until 8 February was 41.0 percent higher than the average daily revenue of the full first quarter 2022. During this period, the sportsbook margin has been higher than the average margin over time.

THE GROUP'S OPERATING ACTIVITIES

Betsson's operational subsidiaries offer online casino, sports betting and other types of gaming. In the following sections, we comment on the development of the operational business as well as the financial developments of the Group.

STRATEGIC DIRECTION FOR GROWTH

Betsson's long-term ambition is to outgrow the market, which should be done in a profitable and sustainable manner with local adaptations. Based on its strengths and thorough market analysis, Betsson has identified the following growth areas: growth in existing markets, expansion into new markets and development of the B2B offering with focus on the proprietary sportsbook.

Betsson sees opportunities to grow in these areas, both organically through in-house development and through acquisitions when the right opportunities are identified. Betsson's

financial position allows room for manoeuvre to take advantage of good opportunities that supplement the existing offering with new geographical markets, products, and brands.

Betsson shall strengthen its position in existing markets and evaluate new markets by prioritising countries where the Group has the best conditions to offer competitive products profitably. Betsson's broad brand portfolio, as well as its own technology and proprietary platforms, create opportunities to quickly and flexibly establish a presence in new markets. The proprietary sportsbook entails substantial opportunities to create new offerings with economies of scale.

Operations in existing markets have continued to primarily focus on adapting and developing Betsson's offerings to changing player behaviour, regulatory requirements and the competitive landscape.

During the quarter, Betsson continued to allocate resources on growth initiatives in Latin America and parts of CEECA, as well as the B2B sportsbook offering.

Betsson owns 40 percent of the shares in Strive Gaming, which has a proprietary Player Account Management system (PAM) which is specially adapted for the North American gaming market. So far, Strive Gaming has signed contracts with six customers, three of which they are live with; these are Golden Nugget and Desert Diamond in Arizona, as well as Betsafe in Colorado.

PRODUCT AND TECHNOLOGY DEVELOPMENT

Betsson's gaming sites are largely run on the proprietary platform Techsson, a so-called Player Account Management System (PAM), which makes up the core of the offering and user experience. Techsson manages payments, customer information and account management and games. The proprietary platform provides flexibility and enables rapid adaptation to new market conditions or as part of preparing for launches in new jurisdictions and of new brands. Betsson also works continuously to meet authorities' rising demands for data and background information and has developed a tool to automate a large share of these deliverables.

Adaptations and further development of Betsson's tech platform and sportsbook are also being made to support a B2B offering.

Work to migrate Betsson's brands to the cloud to optimize the proprietary platform continued during the quarter. The cloud migration provides both improved system capacity and an overall improved customer experience in the form of faster and more responsive websites and mobile apps.

During the quarter, development and launch of native apps (apps specifically built to perform on iOS or Android) have continued in several markets. Among other things, a native app was launched for the Greek market.

Within product and tech, the focus was also mainly on the World Cup during the quarter. The organization reached all goals regarding scalability, quality and stability, at times in exceptional circumstances with very high player activity. Some new functionality was also added, such as boosted odds for live betting, which was frequently used during the World Cup.

SUSTAINABILITY

Sustainability is an integrated part of Betsson's business strategy and a prerequisite for generating shareholder value and at the same time taking long-term responsibility for customers, employees, and the communities in which the Group operates. Betsson's sustainability framework establishes five focus areas: Responsible Gaming, Business Compliance, Employee Impact, Social Impact and Climate Impact. For a more detailed description of these areas, see the Annual and Sustainability Report for 2021.

Responsible gaming

Betsson has a responsibility to support customers in controlling their gaming and to identify and help customers at risk of problem gaming. Betsson's ambition is to be a role model in the industry and to create conditions for players to always have a healthy relationship to gaming. Betsson offers its customers a wide range of tools for responsible gaming, for example deposit limits, self-exclusion, personal time limit for gaming, self-evaluation tests and access to well-trained and professional customer service staff 24 hours a day, 7 days a week.

During the fourth quarter, the CEO of Betsson AB and the Head of Responsible Gaming participated in several seminars during the European Safer Gambling Week. Betsson also organised a webinar titled When Safer Gambling Becomes Personal presenting an account by a former compulsive gambler followed by a discussion with Betsson's Head of Responsible Gaming and questions from the participants.

At the SiGMA Europe 2022 Awards Betsson won the Responsible Gaming of the Year Award for the second consecutive year. This category recognises the operator that is leading the industry in terms of safer gaming.

During the fourth quarter, 9.15 percent (12.25%) of customers used non-mandatory tools to control their gaming and 32.83 percent (37.83%) of all new depositing customers during the quarter set a deposit limit. The change in these numbers is related to the customer mix during the quarter since customers in some markets are more prone to using control tools than others.

Betsson initiated 80,099 (81,738) interactions within responsible gaming with customers manually, automatically and via real-time messages during the quarter. The number of interactions continue to be high as Betsson works actively to interact frequently with customers and raise awareness about responsible gaming.

Betsson uses a number of different ways, some manual and others automated, to pinpoint customers who exhibit risky behaviour according to certain established parameters, among other through the company's proprietary Responsible Gaming Prediction Tool. Yet another way is for customers to be red-flagged after interaction with Betsson's customer service. Customers are then assessed individually, based on the customers' profile and gaming activity. Betsson has a wide spectrum of follow-up actions to deal with risk behaviour. These efforts range from providing the player with more information about safer gaming or asking the customer for feedback to a set of questions, to encouraging the customer to set deposit limits or to take a timeout. Betsson can also exclude customers from continued gaming.

The proportion of red-flagged customers in the quarter amounted to 0.9 percent (1.2 percent) of all customers who contacted customer service during the period. Due to the large number of customers playing during the World Cup, contacts with Customer Service increased. However, the vast majority of these queries were not related to Responsible Gaming, hence the share of red-flags as a percentage of all customer service contacts decreased. Betsson's customer service is continuously evaluated by independent assessors on the quality of management. In this context, Betsson has received a number of awards over the years for its efforts in the field.

In order to increase transparency and raise awareness about risky gambling in Sweden and how proactive contacts can change player behaviour, Betsson has started to report KPIs for problem gambling for the Swedish market.

Business compliance

Betsson holds gaming licenses in 19 jurisdictions with largely different legislations. The sustainability framework states that Betsson must comply with laws, regulations, and ethical standards in the countries where Betsson operates. This is a prerequisite for ensuring long-term sustainable operations and profitability for Betsson.

In Q4, Betsson successfully renewed its required licenses to keep offering B2B and B2C sportsbook services in Colorado (U.S.A.) until December 2024.

In relation to the new gambling regulation in Peru, Betsson submitted its official feedback on the draft legislation during the public consultation period opened by the Peruvian Regulator.

Employee Impact

Betsson's ambition is to be the best workplace in the gaming industry and the Employer of Choice – the first choice for both current and potential employees. Diversity and equal opportunities are natural parts of the business and Betsson aims to offer top-class competence development and career opportunities.

In the fourth quarter, Betsson ran its yearly Employee Survey. Benchmarked against 200,000 responses across multiple companies which also use the same survey tool, Betsson's results are significantly higher in terms of positive answers when it comes to among other the

Proactive interactions for responsible gaming

employees' belief in the company vision and values, satisfaction with working conditions and trust in management.

During the quarter, Betsson also won the Diversity & Inclusion Model of the Year at the EGR Operator Awards. This award recognises the operator that demonstrates its commitment to diversity and inclusion. Some of the key criteria that the jury looked at included the details of the Diversity & Inclusion strategy, the positive impacts on representation and retention, as well as employee engagement, education, and commitment.

Social Impact

Betsson defines Social Impact as taking action to have a positive impact in the locations where we operate. Through direct donations to charity and employees donating their time to volunteer in various projects, Betsson gives back and influences society in a positive direction. Betsson's Social Impact framework has three main focus areas: Sports, Diversity and Environment, but Betsson also adapts to world events and has therefore directed the majority of its support in 2022 to humanitarian aid for Ukraine.

Examples of projects supported in the quarter is a nationwide tree planting initiative in Lithuania and refurbishing therapy rooms for the Hand in Hand Foundation in Hungary, which aims to support people with disabilities. In Peru employees collected food for local families in need.

Every year in December, Malta organises 'L-istrina' - a telethon in aid of The Malta Community Chest Fund Foundation that supports individuals and entities to improve health, quality of life, and the well-being of people in need. Since 2016, Betsson has participated by giving a donation towards this cause. Employees in Malta can volunteer to make a monthly donation through payroll, which the company then tops up.

In the fourth quarter, Betsson also made a monetary donation to the Foodbank Lifeline Foundation in Malta, whereas employees donated food items and volunteered at the foodbank to sort and label donated food.

Climate Impact

Betsson operates in an industry with relatively low CO2 emissions, but nevertheless has a responsibility to help counteract climate change. Betsson has set climate targets according to science-based targets (SBT) of reducing greenhouse gases by at least 55 percent for Scope 1 and 2 and by at least 15 percent for Scope 3 by 2030. Betsson climate compensates for its emissions, including estimated emissions by customers when playing on Betsson brands, by investing in climate positive projects.

Betsson has established a climate roadmap which identifies the main emission sources and how these will be reduced. In the fourth quarter, work according to the climate roadmap continued.

In Q4, Betsson revised its travel policy for its biggest location, Malta, to emphasize that Betsson is committed to reducing its climate footprint and that virtual meetings should take priority over business travel whenever possible.

Betsson continues with internal communication on our climate efforts to further increase knowledge, commitment, and initiative among employees to ensure that the organization takes ownership of targets and activities.

110%

Betsson compensates for all emissions and adds an additional 10% to be climate positive

FOURTH QUARTER DEVELOPMENTS

CUSTOMER ACTIVITY

Customer deposits in all operational subsidiaries' gaming solutions during the quarter were EUR 1,096.0 (784.6) million, an increase of 39.7%.

By the end of the fourth quarter, the number of registered customers was 26.8 (23.3) million, an increase of 15.1%.

Active customers during the quarter amounted to 1,424,794 (1,161,683), an increase of 22.6%.

Customer deposits by quarter

Active customers by quarter

MARKET DEVELOPMENT BY REGIONS

Betsson's long-term ambition is to outgrow the market, both organically and through acquisitions. This should be done in a profitable and sustainable manner with various local adaptations. Betsson operates in locally regulated markets, as well as in POS-regulated markets via the MGA license in Malta. POS, or Point of Supply, regulation refers to markets that are targeted, based on EU and/or international law principles, without being licensed and taxed locally in such markets.

The reported revenue for each region includes both gaming revenue from the B2C business as well as license revenue for system delivery to Betsson's B2B customers.

Increase of customer deposits compared to the same period last year

Nordics

Revenue from the Nordics was EUR 53.1 (51.9) million, an increase of 2.4%.

Finland reported revenue growth both compared to the previous quarter and the corresponding period last year, mainly driven by the sportsbook operations. Denmark reported all-time high revenue in the fourth quarter, where both the casino product and the sportsbook operation reported all-time high turnover. Revenue declined in Sweden compared to the corresponding period last year, mainly driven by the casino product. Norway reported slightly higher revenue compared with the corresponding period last year, mainly driven by the casino product.

Western Europe

Revenue from Western Europe was EUR 25.8 (20.4) million, an increase of 26.4%.

The business in Italy continues to develop well and reported all-time high levels in revenue, deposits and turnover during the fourth quarter. The increase in revenue is mainly driven by the casino product. A new sports betting product was launched in Italy during the third quarter and further improvements of the offering were implemented in the fourth quarter. Focus has been placed on marketing activities in Italian football, where collaborations with several clubs have been signed during 2022.

In Germany, revenue declined both compared to the corresponding period last year and the previous quarter, mainly driven by the market restrictions that have been implemented in the past years.

CEECA

Revenue from Central & Eastern Europe and Central Asia (CEECA) was EUR 85.4 (55.9) million, an increase of 52.8%.

The region reported an all-time high in revenue in the fourth quarter, driven by strong underlying activity in both casino and sports betting. Croatia and Greece showed continued positive trends in activity and revenue levels.

Georgia reported growth both compared to the previous quarter and the corresponding period last year, driven by both the casino product and the sportsbook operations. The Baltics continued to perform well during the fourth quarter, where Latvia and Lithuania reported growth, both compared to the previous quarter and compared with the corresponding period last year. Estonia reported decreased revenue in the quarter, mainly driven by a lower margin in the casino product compared with the corresponding period last year.

Latin America

Revenue from Latin America was EUR 52.3 (26.0) million, an increase of 101.6%.

The region reported an all-time high in revenue in the fourth quarter where all the countries in the region reported revenue growth both compared to the corresponding period last year and compared with the previous quarter. This was mainly driven by strong underlying activity where active players, deposits and turnover in both casino and sportsbook were alltime high in the fourth quarter. The World Cup in football that was held in November and December contributed to the increased activity in the region during the quarter.

ROW, Rest of the world

Revenue from RoW was EUR 4.0 (3.4) million, an increase of 17.3%.

The region reported growth both compared to the corresponding period last year and the previous quarter. In the second quarter Betsson increased its ownership from 25 to 60 percent in the Nigerian gaming operator Betbonanza. The reported revenue increase for the region compared to the corresponding period last year is mainly explained by the revenue from Nigeria.

Nordics (24%) Latin America (24%) Western Europe (12%)

CEECA (38%)

ROW (2%)

MARKET DEVELOPMENT BY PRODUCT

Casino

Betsson's casino product includes a wide range of suppliers and diverse content, customised for a growing global portfolio of markets and brands. The aim is to provide relevant content for each individual region through using off-the-shelf games, as well as the Group's exclusive titles.

During the quarter, Betsson's offering expanded with 230 new casino games, 14 of which came with a period of exclusivity for Betsson's brands.

Betsson has strong, regionally customized offerings in live casino on the market and continuously invests in improvements of the customer experience to strengthen the market position in this segment.

The casino product reported all-time highs in gross turnover and revenue in the fourth quarter. Casino gross turnover in all of Betsson's gaming solutions was EUR 7,090.8 (5,264.9) million, an increase of 34.7% compared to the fourth quarter last year.

Casino revenue amounted to EUR 146.1 (115.1) million, an increase of 27.0%. Casino represented 66% (73%) of Group revenue.

Mobile casino revenue was EUR 118.9 (91.5) million and accounted for 81% (79%) of total casino revenue.

Sportsbook

The fourth quarter of 2022 resulted in all-time high sportsbook revenue driven by all-time high sportsbook turnover. The World Cup in football was played in November and December and contributed to the increased activity in the quarter.

Sportsbook gross turnover across all Betsson's gaming solutions, was EUR 1,416.2 (1,024.5) million, an increase of 38.2% compared to the fourth quarter of last year.

Sportsbook revenue in the fourth quarter was EUR 70.7 (40.2) million, an increase of 75.9%. Sportsbook represented 32% (26%) of Group revenue.

The sportsbook margin was 7.3% (6.0%). The eight-quarter rolling average margin has been 7.7%.

Mobile sportsbook revenue was EUR 57.3 (31.8) million, representing 82% (79%) of total sportsbook revenue.

Other products

Revenue from other products (poker, bingo and other) amounted to EUR 3.8 (2.3) million, an increase of 68.5%, representing 2% (1%) of total revenue.

Revenue by product

Other (2%)

FINANCIAL DEVELOPMENT

Group revenue

Group revenue was EUR 220.6 (157.5) million, an increase of 40.0%. In constant currencies and adjusted for acquisitions (organic), revenue growth was 47.6%.

Revenue by quarter

Revenue from locally regulated markets where Betsson pays local betting duties increased by 31% and was EUR 75.5 (57.4) million, corresponding to 34.2% (36.5%) of total Group revenue.

License revenue for system delivery to B2B-customers amounted to EUR 48.8 (29.6) million and corresponded to 22% (19%) of Group revenue. The increase is mainly due to enhanced performance in the products delivered by Betsson, within both casino and sportsbook. In October, Betsson acquired 80% of the shares in KickerTech Malta Limited. KickerTech is a B2B sportsbook operation and adds new customers, further capabilities in building advanced odds models, trading technology and sportsbook features to the B2B-offering.

Mobile revenue was EUR 178.8 (124.2) million, representing 81% (79%) of total revenue.

Expenses

Cost of services provided was EUR 75.8 (59.8) million in the quarter. In relation to revenue, cost of services decreased, mainly due to a product-mix effect on revenue where the share of sportsbook revenue increased in relation to total revenue.

Gross profit was EUR 144.8 (97.7) million, corresponding to a gross profit margin of 65.6% (62.0%).

Operating expenses were EUR 104.8 (76.9) million.

Marketing expenses (excluding affiliate- and partner commissions) were EUR 37.0 (25.7) million and corresponded to 17% (16%) of total revenue and 22% (20%) of B2C revenue. During the fourth quarter, the focus of marketing initiatives was on the Latin America region and specifically in new markets such as Argentina. The purpose was to increase brand awareness in the market ahead of and during the World Cup in football.

Personnel expenses were EUR 32.4 (24.0) million. The average number of full-time employees in the Group during the fourth quarter was 2,043 (1,958) of which 1,179 (1,174) were based in Malta. The increase in personnel expenses come from yearly salary revisions, performance related compensation, geographic expansion and increased investments in product and technology development. As of October 2022, personnel of the newly acquired company KickerTech Ltd. are included in the figures.

The Group had 224 (217) full-time consultants engaged by the end of the quarter, mainly within product development. This cost is recognised under other external expenses.

Other external expenses, which primarily include sportsbook related costs, consultants and software licenses, were EUR 28.8 (23.3) million. The increased costs are driven by sustained increased investments in product development and technology, specifically from increased investments in cloud-based environments, increased legal costs from licensing processes and acquisition related costs, as well as from an extension of the sportsbook offering.

Costs related to new market entries in the fourth quarter amounted to EUR 15.3 million, of which EUR 2.7 million was attributed to the US expansion, divided between personnel costs and other external expenses. The remaining EUR 12.6 million consist of marketing costs

constituting EUR 9.2 million and other costs of EUR 3.4 million, of which the latter mainly consists of external consultants.

Capitalised development costs were EUR 6.1 (6.2) million. Amortisation of capitalised development costs was EUR 6.1 (5.6) million. Total amortisation and depreciation for the quarter was EUR 11.1 (9.6) million.

Other operating income/-expenses was EUR -1.6 (-0.5) million.

Expenses as a percentage of revenue

Operating income and net income

Operating income (EBIT) increased by 92.4% to EUR 40.0 (20.8) million. The EBIT margin was 18.1% (13.2%). Organically, EBIT increased by 166.1% to EUR 55.4 million.

Operating income (EBIT) by quarter

Net financial items were EUR -4.2 (-1.7) million and are primarily related to interest expenses and results of associated companies.

Net income was EUR 32.7 (18.7) million, corresponding to EUR 0.26 (0.14) per share.

The reported corporate tax for the fourth quarter was EUR -3.1 (-0.4) million, corresponding to 8.8% (2.2%) of profit before taxes. The effective tax rate may fluctuate between quarters depending on the tax base in the countries where Betsson has subsidiaries. For example, corporate taxes in certain countries are based on dividend distribution which may result in a difference between the effective and statutory tax rate.

Earnings for the full year 2022

Operating income (EBIT) for the full year of 2022 amounted to EUR 131.2 (117.6) million. Net income amounted to EUR 114.7 (103.9) million, corresponding to EUR 0.87 (0.78) per share.

Financial position

Cash and cash equivalents amounted to EUR 168.3 (95.6) million at the end of the period. Customer liabilities, including reserves for accumulated jackpots, were EUR 56.1 (42.7) million. Gaming regulations require the Group to reserve a certain share of cash to cover player liabilities and accumulated jackpots. Current receivables related to payment providers for unsettled customer deposits were EUR 57.4 (55.2) million. The balance varies as a result of activity and depending on when deposits are made. Net debt amounted to EUR -65.7 (2.5) million at the end of the period.

Cash flow

Cash flow from operating activities during the fourth quarter was EUR 75.5 (13.4) million including a positive impact of EUR 25.8 (-15.1) million related to changes in working capital. The positive effect on working capital is mainly driven by decreased receivables related to payment providers. Cash flow from investing activities was EUR -17.9 (-29.3) million and consists mainly of investments in own development and the acquisition of KickerTech Limited. Cash flow from financing activities was EUR -31.3 (-15.1), mainly driven by paid dividend to shareholders.

External financing

The external financing at the end of the period constituted of bonds amounting to EUR 98.6 million. The bonds have a tenor of three years and a floating interest rate of 3 months EURIBOR plus 650 basis points and final maturity in 2025.

Credit facility	Amount	Utilised	Unutilised	Maturity date
Bond 2022/2025 (MEUR)	98.6	98.6	0.0	June, 2025

Equity

Equity in the Group was EUR 647.8 (568.8) million at the end of the period, corresponding to EUR 4.74 (4.16) per share.

RISKS

The risk areas that Betsson has identified as most significant, and that can significantly affect the Group's operations, earnings, and position, are strategic risks, operational risks, compliance risks and financial risks. These risk areas are described in more detail in the latest annual report.

REGULATORY UPDATE

Betsson has gaming licenses in 19 jurisdictions and operates in additional countries and is thus affected by gaming laws that largely differ between different jurisdictions. For an overall description of the gaming legislation in the jurisdictions in which the Group operates, please refer to the latest annual report. Below is a summary of the latest implemented or planned changes in gaming legislation in markets relevant to the Group.