ENLABS - Outlining the plan for 2021
Positive trading update, sales +99% y-o-y in Q1 Impressive integration of Global Gaming Revised fair value range of SEK 37-58 (25-47) Aims to gain further market share in the Baltics in 2021… Enlabs’ Q4 numbers were pre-announced, with sales of EUR 20. 3m (EUR 11. 2m) and adj. EBITDA of EUR 6.
6m (EUR 3. 5m). The sales growth was attributable to the acquisition of Global Gaming and organic growth of 20% y-o-y.
The organic growth was driven by the Baltic regions, whereas Optibet. com (Finland) struggled with low betting margins. Enlabs has seen y-o-y sales growth of 99% (34% organic) in Q1 (until mid-February).
Looking at the plan for 2021, Enlabs aims to increase its market share in the Baltic region to 28-30%, up from an estimated 25% in 2020. Furthermore, the company intends to apply for a new Swedish license to re-launch the Ninja brand. Enlabs is also looking to apply for licenses in Ukraine and Belarus, and to launch operations in those countries during 2021.
In Ukraine, it will be a casino-only approach at first, with the Ninja brand, whereas in Belarus it will be a full approach with both casino and sports betting. …and launch operations in three new markets We are impressed with the swift integration of Global Gaming, and the adj. EBITDA margin of 32% in Q4 was above our expectation.
The trading update was also above our assumption, which makes us raise our 2021e sales estimate by 3. 9%. We also raise our EBITDA margin assumption following the report, and in total we raise our EBIT estimate for 2021e by 10.
3%. Entain extended the acceptance period until 18 March On 11 February, Entain prolonged the acceptance period to 18 March (from 18 February) for the cash offer of SEK 40 per share for Enlabs. The share is trading roughly 10% above that and on 18 January a group of investors with more than 10% of the shares confirmed that they had declined the current bid.
Our revised fair value range is SEK 37-58 (SEK 25-47), based on 2022e EV/EBITDA for our peer.
