The company’s FY23 results comprised reported revenue of £1.71bn (€1.99bn/$2.16bn), an increase of 31.1% year-on-year. However, on a pro forma basis, revenue fell 7.5%.
Wilkins said the revenue had been affected by “regulatory headwinds”, with the UK online revenue reflecting “the player mix shift to lower-spending customers”. The report noted that this shift came as a result of additional safer gambling measures in the UK. Nonetheless, 888 saw 44.6% growth in UK & Ireland online revenue in 2023 to £658.5m.
In terms of its international performance, Wilkins said 888 had “ended the year with a smaller, but high-quality business”. Revenue in this segment ticked up 1.8% yearly, hitting £517.4m.
Wilkins also noted that corporate costs rose exponentially, coming out at £42.3m for the year – a sizeable increase of £37.4m year-on-year. But he outlined that this “is not a real increase in costs as such and more harmonisation in accounting”.
Despite the context behind 888’s financial performance, Wilkins accepted that it had fallen below expectations for FY23. “We are under no illusions that this financial performance has been disappointing.”
Evoke rebrand “a new direction”
The proposed rebranding of 888 Holdings to Evoke represents a new dawn for the business according to Widerström. He said that, although 888 has “great customer facing brands”, Evoke would create a definitive direction for the company.
“We need a corporate brand,” Widerström explained. “We need a new company name that is memorable and translatable… A new direction. A new sense of purpose.”
He emphasised that this would not happen overnight but stressed that the executive team had blazed a clear path to success.
“Today marks a new start, our new one company, Evoke,” Widerström continued. “We have a lot of work to do. It is a reset of the business. But we know exactly what success looks like and we have a clear strategy to get there.
“This will be delivered with a laser-focus on execution.”
This took Widerström into 888’s value creation plan. Announced alongside the FY23 results, he explained that this began last year with his appointment as CEO and followed on with a strengthened executive team.
“[888] are also crystal clear on where we are focused, to deliver the best returns,” Widerström explained in reference to the initiatives. “We know this is a very competitive industry.
“We want every customer to recommend our brands to their friends… [888 is] moving towards a world of infinite personalisation.”
Executing 888’s strategy
Part of the value creation plan consists of six strategic initiatives, one of the most prominent being Operations 2.0 – a data and AI strategic point, representing a step-change value creation.
Widerström assured that Operations 2.0 would focus on implementing AI in a way that improves 888’s day-to-day operations. If done correctly, this would benefit cost efficiency, training and customer-facing operations.
“I am a huge fan of AI, used in the right way,” he said. “As outlined today, Operations 2.0 is all about the right way [to implement AI].”
Executing 888’s strategy would also involve meeting certain set targets, Widerström continued. Improving profitability and efficiency through operating leverage was presented as one of the key targets. To achieve this, Widerström said 888 would “drive and improve profit margins”.
“I am, along with the executive team members, absolutely committed to this plan,” he said. “You can have the best strategy in the world, but it’s meaningless if you cannot execute it effectively.”
Choosing where and when to compete
Despite 888’s fair results in its UK & Ireland and International segments, it continued to take a close look at its geographical operations in 2023. Earlier this month, 888 announced a strategic review of its US B2C business. 888 ended its partnership with Authentic Brands as part of the review.
Widerström said that while 888 has the resources to grow globally, it must be finicky about where it chooses to invest. “Our capabilities allow us to invest almost anywhere in the world. But we know we must be selective with our time and shareholder’s money.”
He added that a “laser focus” will be placed on 888’s core markets going forward – UK, Spain, Italy and Denmark, which reflect 85% of its revenue – with more markets expected in the future.
Looking ahead, from a marketing perspective, Wilkins said 888 is “really clear about where we will compete and how we will compete… Speaking to the right customers, in the right market, at the right time.”
Key areas for finance growth going forward are a “cultural shift” and optimal resource allocation at 888. Wilkins assured that 888 is “driving and embedding a cultural shift in the business”, as well as committing to “only spend money where we see sustainable, profitable returns”.
Original article: https://igamingbusiness.com/finance/the-earnings-call-888-fy23-performance-disappointing-as-rebrand-looms/
