Kambi Group plc

This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps within the transcript are designed to help you navigate the audio should the corresponding text be unclear.

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00:05 Good morning, everyone. My name is Mia Nordlander, I'm the Senior Vice President, Investor Relations.

And today, I'm here with our CEO, Kristian Nylen; and our CFO, David Kenyon. And they will present our Q4 2021 result.

After the presentation, you will be able to either call in your questions through the telephone conference or write your question in the Web chat here. 00:31 But first, over to you, Kristian.

00:35 Thank you, Mia. So yeah, please get the agenda.

So yeah, we will go through first the highlights as usual and then, I will hand over to David for a short while to go through the financial highlights, and then I will come back and talk a little bit more about Kambi. 00:57 So you can take the next slide.

I'm extremely pleased with the performance we have shown in Q4. Talking about headwinds, I think this has been probably the toughest comparable we have ever had.

[Technical Difficulty] comparing quarter where we lost in Q4 2020, we had the top three operators according to our Annual Report that was about 64% of our revenues that were DraftKings not with us anymore [Technical Difficulty] where we lost a majority of revenue [Technical Difficulty] But for us, their most important market Netherlands, we have not got annual revenues in this quarter. 01:56 And on top of that, we also have still quite a good margin in 7.8%, but compared to a year ago, it's roughly 18% worse.

And still we come in with quite a good result and still showing great operating margin, 20%. Of course, the big event for us at the moment it what we announced on Tuesday [Technical Difficulty] sorry, some sound coming in.

So in -- yeah, sorry for that. Yeah, so the big news coming out Tuesday night, where we had two news at the same -- in the same press release.

02:59 First of all, we extended our partnership with Kindred until the end of 2026. And of course, for us, that is really important.

It shows that we will have financial strength for another three years up until the end 2026. And of course, it also gives some more transparency about our relationship with our largest customer for the long-term.

On top of that, we also announced that we now have met the financial targets to be able to repay the convertible bond at our own discretion. If and when that will happen, we don't know at this point.

But now, we have a full control with that situation. 03:56 Together, these two events, I think, creates a very strong foundation for Kambi and gives us full control how to plan our strategic direction going forward.

Other news during the quarter, we have signed five new partners in Q4 and in the beginning of 2022, which illustrates our market-leading position in North America. And finally, we have gained the license in New York State, and in early-2022, we also launched in a west state on Europe.

So, that's obviously one of the largest states in U.S., so a great achievement for us. 04:47 With that, I handing over to David, and I will come back later.

04:54 Thank you, Kristian. I'm really pleased to present some strong financial results for Q4, albeit up against some tough comparatives, which I'll give you some more detail of shortly.

But firstly, the Q4 numbers, so EUR34.9 million in revenue with OpEx of EUR27.8 million this quarter, giving an operating profit of EUR7.1 million, a very healthy margin at over 20%. 05:18 If we take the next slide, we'll give you the full-year figures.

So revenue for the full-year was EUR162.4 million, up from EUR117.7 million last year. I think, we can be really proud of that 38% increase in the face of losing the business of DraftKings at the end of Q3.

I think 38% is a very healthy growth number there. 05:41 In terms of operating profit, we saw the scalability of our business model really shining through again this year, with operating profit up from EUR32 million to EUR57 million, a 77% increase.

And this year, it's an operating margin of over 35% versus 27% last year. 06:01 On the next slide we have the Turnover Index, which is an analysis of the underlying operator performance, which really makes -- builds up our revenue model.

The blue columns you see here is the aggregated operator turnover on an index basis. We set that index at 100 when we first listed back in 2014.

And the line is the aggregated operated trading margin, which you can see fluctuates quarter-by-quarter depending on the sporting results. 06:34 It's a very typical seasonal pattern for us that Q4 is a strong sporting calendar.

It's a pattern we've seen throughout as we've looked back through the years and the quarters, and obviously we have a full quarter of the European soccer leagues and also in the U.S., the American football and basketball seasons in full swing. And this contributed to a 32% sequential growth from Q3.

06:57 If you look at versus Q4 last year, we are down 23%. But I think, there's some key factors that Kristian touched on, which we should flesh out a bit more to actually see the underlying growth of the business.

So, firstly, there's DraftKings, major customer of ours, which transitioned away in full by the end of Q3. And 888, which transitioned a large part of that business away in the early part of this year.

07:23 And the third factor really is the Netherlands, where we have key operators currently applying for license in the new regulation, which started effective October this year. So I think adjusting -- you need to adjust for those three major factors if you want to see the underlying growth of the business.

And adjusting for those, you get to an underlying growth in operator turnover of 38%. 07:46 Let's go back, Mia, to the last slide.

The operator trading margin this quarter, it recovered really from a weak -- I think, we commented in the Q3 results that it had started in a weak fashion; start of October was a weak margin, but it did recover through the quarter and we ended up at 7.8% for the full quarter, up against a very tough comparative 9.4%, which was unusually high, and we'll see that now in the next slide when we look at our revenue growth. 08:19 So this is the conversion from the operator turnover growth to our revenue growth.

Normally, this may be a waterfall, but obviously, this is now starting from a negative, so that everything looks slightly upside-down to how we normally present, so that the operator turnover was down 23%, as discussed. And the lower trading margin versus that tough comparative meant that operator GGR was down by 37% year-on-year.

08:53 However, this was offset to a quite significant degree by a couple of other factors shown here in the other column, being the lower GGR compared to last year meant that we actually saw slightly higher effective commission rates, which supported, which kind of propped up our revenue growth here. And also, we had income both from Abios and other various fixed revenue streams, which are not directly linked to the level of operator turnover, but that pushed up our revenues to some degree.

The net effect was a 26% decrease in revenue versus Q4 last year. 09:27 Moving finally to the balance sheet.

We remain in a very strong position in terms of the balance sheet with almost EUR80 million in cash in the bank and a cash inflow outside of financing and working capital movements of almost EUR5 million. And we're very pleased to have completed our first share buyback program during the quarter worth EUR12 million.

That said, the balance sheet remains in excellent position to really support both our organic growth and further acquisitions in the future. 10:01 And with that, I'll hand back to Kristian.

10:04 Thank you, David. Yes.

So before I go on in more detail about Q4, I just wanted to give a -- take a look at the highlights of 2021. So yeah, we recorded a 38% rise in full-year revenues.

We acquired the e-sports company Abios. Year-over-year, we signed eight new partners across the globe.

We completed 60 on-property and online launches. We got the Euro, which was an amazing tournament again and set the turnover record for the summer soccer tournaments.

And with Maryland, we completed with 18th U.S. state in which Kambi has launched.

So in total, I would say it's a really, really good year. 11:02 And now I will continue on with Q4.

So, first, I mean, just give you a reminder, we're banging on about our strategic pillars. And today, I will update on the development on a few of them, starting with a technical advanced core platform on the next slide.

Yeah, so I think one thing we have talked about since the Capital Markets Day and throughout a few of the quarters after is what we're doing to try to modernize our platform in a larger degree. 11:50 I think, our current setup with the fully managed service, I mean, it's great for many operators.

And I think it will be a cornerstone in our revenues for years to come. But we also believe that there is an opportunity for us to -- for those who have a fully managed service give them an even better service by opening up our platform for some other services.

And maybe more importantly, we also believe that we can use some of our services to operators who already have a platform to increase that market we have opportunity to target. 12:39 With this, I think, we can also gain even higher operational efficiency.

If we cut out some elements and let other players in the market do things that our operators require, but maybe we feel is not that relevant for us to do, I think it gives us an even greater opportunity to provide an absolute best service to our operators and for years to come, I think, this will give us an absolutely amazing opportunity to expand our market share and make our existing operators much, much more happy. 13:32 Let's go to the next slide and talk a little bit about product -- no, sorry, that's the wrong order.

Also I wanted to talk more about what we have done when it comes to launches. I mean, we are doing so much for our customers and creating more and more opportunities.

So during this quarter, we expanded our U.S. reach into three more states: Connecticut, Louisiana and Maryland.

14:08 We became the first provider to launch in the City of Buenos Aires and the Province of Buenos Aires. We launched with BetCity and JVH in Netherlands after the reregulation.

I think that has been a great success and we obviously hope for more operators to soon be able to rejoin in Netherlands. And in Australia, we have begun our rollout across the massive network of retail agencies for the Western Australian racing and we soon will be up and running in 320 agencies.

15:01 We can go to the next one. When it comes to the product, I think, we have been talking quite a lot about Bet Builder last couple of quarters and we will keep on doing so, because it has become an absolute key product for MA operator when it comes to sports betting.

We have already had great success with soccer, of course. During this season on American football both when it comes to the NFL and the college football, I think, we have had an absolutely amazing product that has taking quite a large chunk of all the sports betting revenues coming from American football.

15:52 This product, I think is definitely market-leading and I will show you little bit later on next slide. But we are the only one -- not yet Mia.

We are the only one who are able to do combinations between events still. And I think this is something that we will see more and more the usage of when we are able to launch more sports choice.

16:26 And I think with that, we can go to next slide. As you can see here, we are ticking all the boxes, of course, [indiscernible] themself and compared to our competitors.

But this is not the end of it. We just launched the ice hockey both in the Scandinavian leagues and NHL.

And we are quite alone on that. And this will obviously be a very key feature going live in Canada as well.

For the baseball season, we plan to be ready in time for the first match in April, and then we will also release out for the basketball in the start of the next season. And as you can see here, all the NFL wagers, 25% is coming from Bet Builder.

17:37 Next slide, Mia. In Q4, we made three new signings to further strengthen our presence in the U.S.

market. First up, Desert Diamond, which I think is the largest tribal casino operator in Arizona and the one we identified, but we really wanted to signing Arizona outside of our existing partnership.

18:13 Then we also signed Soaring Eagle in Michigan. I think, not such a large opportunity for us, but I think this opportunity has shown very fruitful for us when it comes to relationships in the tribal community in the U.S., so very pleased with that.

And finally, Affinity Interactive, which I think has a very good chance of becoming a strong player in the U.S. market.

They are the owner of iconic U.S.-facing Daily Racing Form brand, which is the number one content and data provider for horse racing players. So very pleased with all of these signings.

And thank you, next slide. 19:12 I touched on it before.

We were awarded one of quite a few licenses in the U.S. states.

So now we have a 10-year Mobile Sports Wagering Platform license in New York. Kambi was the primary applicant of one of two successful bids.

And with that, we have one of the partners in that bid was Rush Street Interactive, which we will operate in the U.S. market.

With a population of more than 20 million, New York is the largest state so far to regulate mobile betting. And so far, it looks like it will be an enormous market.

It's very much driven by bonuses yet, so it will take some time to see how the market will pan out, but obviously very exciting for us. 20:22 Next slide.

In Netherlands, we have seen a re-regulation, which has changed the market somehow from beginning. We managed to go live with a new partner of ours from day one, BetCity, who has been very, very successful so far in the Dutch markets.

And shortly after, JVH gaming also followed. So, we're very pleased with the market share we have in Netherlands at the moment.

But of course, we are definitely hoping and waiting for our existing partners, of which, a few of them had a very, very strong market share in the Netherlands market to also be able to start operate again in Netherlands. 21:27 Next slide please.

After Q4 we have done another two signings in North America. First of all, Carousel Group, which is operating the brand MaximBet.

Maxim is, of course, quite a large media brand in the U.S. I think, they have a circulation of over -- magazine of, yeah, quite a big number, roughly 1 million.

They are currently live with an in-house platform in Colorado and will switch to Kambi technology. And we're also set to launch Kambi in at least five additional U.S.

states and Canada. So this can be a great opportunity for us going forward.

22:26 In Canada, we also have signed NorthStar Gaming. And that is born out of the Torstar Corporation, which is the owner of the largest media in Toronto, the Toronto Star.

Again, I really hope this can be one of the largest firms in Ontario. And we expect to go live when the Ontario market opens up in April.

23:04 Next slide please. Coming back to the announcement from Tuesday evening.

So we did a contract extension with our long-term partner Kindred up to the end of 2026. So it's a three-year extension of the contract, adding to the two years we have left of a contract from before.

We will, of course, remain an integral part of Kindred's sportsbook. And I'm very, very pleased to get this deal done.

I think, it's so important for us to have the ability to show the financial strength of doing the signing with our largest operator. And also, it gives us a great visibility of the future going forward with Kindred.

24:06 In addition to this, we have also achieved the financial goals set out in the convertible bond, which means that we -- when we feel for can repay for the convertible bond. Obviously, the convertible bond is quite an unusual instrument and it has some impact of the option value of Kambi, of course.

So from an investor point of view, I'm very pleased to be able to announce this now. But more importantly, for us, working in Kambi, of course is that it takes away a few operative restrictions.

So, we have more freedom and can easier work with -- yeah, how we want to operate Kambi going forward and take the strategic decisions we feel is right for Kambi. 25:16 So, to summarize the quarter, again, I think we had a very strong performance, which rounds off the record financial year.

We're growing our global presence with our market-leading product. And now we have full control over our strategic direction going forward.

Thank you very much for that.

25:49 Thank you very much, David and Kristian. Now, I think we have time for questions.

First, we will take the telephone questions, but you can also write them in the chat window. But, over to you operator.

26:35 Good morning, Kristian, David and Mia. So I have four questions.

The first one is regarding your cost guidance. Can you give us some details about what is driving a 24% increase in total operating costs looking at your mid-point guidance?

Also, now that the DraftKings are gone and Penn is probably leaving in 2023, do you expect a need to increase headcount in 2023?

27:05 Yeah. I can take that.

Thanks for the question. Yeah.

I mean, I think the first one-off point to make is the acquisition of Abios, which we obviously made towards the end of 2021 and that is standalone is going to drive the cost increase approximately EUR4 million both from the operating expenses, but also the amortization on the goodwill on the acquisition. So that's kind of a one-off difference versus 2021 that will change '22.

But on a more broad basis, we are continuing our cost growth as we have, because we're building out the product. 27:36 So that cost growth really generally entails continued headcount increase, particularly in the tech parts of the business to keep developing a product to make it sellable to be able to really take advantage of our competitive position and to keep selling the product, we need to keep on building it.

We also have a growing amortization number on the back of growth in those development costs over the past few years. We have continued licensing costs, we're going to keep on going for all possible licenses, U.S., Canada, Latin America and wherever else we see commercial opportunities, they do come with costs, but of course a revenue opportunity as well.

28:24 And one other cost factor that's driven by kind of the growing customer base with all these new signings is the data supplier costs, where we have an increase in cost for each new operator, but equally we recharge those costs on, so that's a revenue increase as well. So I think hopefully that's a bit of a picture I think apart from the Abios one-off type step change in cost level.

It's really in line with where we've been going in the past and really that is to keep building this market-leading product.

28:55 All right. Thank you for that.

28:59 And I'd say -- you asked about, does the loss of customers affect fact. I'd say, honestly no, because we want to keep selling and keep winning new customers and we wouldn't do that if we stop spending.

29:10 Yeah. Fair enough.

Next question, you recently announced that the convertible can be repaid, hence Kindred cannot, for example, block a potential bid on Kambi anymore. What has been your feedback from current clients about this?

Are they afraid of you getting acquired by an operator? I mean, let's say, Rush Street, for example, it could be a very tricky situation for them and either they maybe should rushed you for a prolonged contract or else develop their own sportsbook.

Do you have any comments? Could be really helpful here.

29:46 I think it can go both ways, but I think, for most customers, the independence to Kindred is probably more important for them, but then -- but we don't have a convertible bond to protect them. I mean, compared to any other company in the industry, I think we were the only one who had this kind of instrument in place.

And I think, actually, what I heard with a few conversations I had, they definitely not seeing this as a negative.

30:31 All right. Understood.

Next one, can you talk about the modular strategy? Are you in talks with any Tier 1 operators and how could such contract look like?

Is it more of a revenue share model with a lower take rate or is it rather a subscription model?

30:49 So I think, I mean, we're still very early in this. I think, we have some more work to do, but I can see both this being a fixed cost model or a rev share model.

And I think it will probably, best case scenario, will see something late this year, but probably not until next year when we start building these out.

31:22 All right. So just a follow-up there.

Like the modular strategy, has it been your plans all along or is it a result of your top clients maybe leaving you?

31:35 So, I think, we started talking about it on the Capital Markets Day year last summer, well, before we knew anything about Penn, of course. So it has always been a part of our strategy, and I mean, you have to take the steps sequentially, you can't do everything at the same time.

And for many years, it has been way more important for us to build up a business that is suitable for the U.S. market.

And last year, we felt that, okay, we can take the next step in our journey and start figuring out how we can starting making our product more flexible. So it was probably beginning our plans for many, many years, but I think last year was a time when we found we could start looking at it.

32:42 All right. Got it.

Next one, in terms of commission rates from a client such as Kindred, for example, can you give us some ballpark numbers of how much you expect the commission rate will decrease in relative terms from 2024 and onwards, as they are putting some of it in-house?

33:03 We don't disclose any commission rates to any of our customers.

33:09 All right. But is it fair to assume that the commission rate will be significantly lower, if they are doing like half of the work in-house?

33:23 As I said, I don't disclose any commission rates. But obviously, if they are not taking our services, they would not pay for it.

33:33 Yeah. Fair enough.

All right. That was all from me.

Thank you very much.

33:36 Thank you.

33:47 Good morning. So, on the OpEx guidance, maybe you could help us with the growth rate here, as mentioned, mid-20s growth on the midpoint in 2022 over 2021.

And on the CMD, I recall that you talked about the 15% to 20% level potentially over time. So it's just to read that the OpEx growth peak in 2022, then the growth rate to come down in '23 and onwards towards what you talked about then or even lower in '23 meeting this comp in '23 from 2022?

OpEx up in absolute numbers, obviously, but could you help us with the long-term growth would be would be great.

34:30 Yeah. I think, again, you must need to factor in that step change from the Abios acquisition, which is now -- we're not talking about EUR4 million increase of that, very small part.

I think, we saw under EUR1 million in 2021. So there is a EUR3 million step change there.

I think, adjusting for that, we're much closer to where we have been historically. And then where we talked about kind of decreasing that growth rate, yeah, I think that you will see that when -- kind of probably '23 onwards, but certainly when we have passed the kind of step change adjustments for acquisition.

35:07 Okay. Fair enough.

So what else to say about the Abios contribution then in terms of revenues? You're saying something about the cost.

What about the profit contribution and their growth? How much did it contribute in Q4?

And how much was the full-year revenue for Abios in '21 and what to expect going forward?

35:29 Currently on revenue around between EUR0.5 million and EUR1 million per quarter.

35:36 Because of the run rate.

35:40 Yeah.

35:43 Okay. And when you acquired it, I think, you mentioned the market implied growth rate for these kind of products some 30% or something.

Is that still reasonable to expect or step change here maybe as well when you introduced it and are able to cross-sell it more or what to expect here in terms of its profit contribution of forward?

36:07 Yeah. I think the profit contribution will hopefully increase when they start selling the odds feeds and not on the esports.

So the ability to actually provide odds on the sports, they are experts and that's kind of almost a step change in their business model where we can expect going forward.

36:25 Have you said anything about timing for that?

36:30 We haven't put anything out yet, but it's a work in progress for sure.

36:37 Okay. So the -- and going back to the Kindred deal here, minimum guaranteed revenues of EUR55 million over 2024, '25 and '26.

Is it fair to assume that the largest part, the majority of it to be seen in 2024, then gradually phasing out with just a small part in 2026, given that by then you're likely to have more of a full product than what we will have in 2024?

37:10 I think it's -- obviously, we can't really comment. We don't know [indiscernible] but you have to take that with Kindred, if that's okay.

37:20 Okay. So and the convertible, I know you haven't said anything.

The only thing you've said now is that you can at your own discretion repay it. Is there any reason for you to stall on that decision now that Kindred has showed [indiscernible] and you as well?

Is there any reason to not do it in the very near-term?

37:47 Yeah, I mean, there are certain advantages for us as well to have a convertible in place. I mean, I think, it's well enough for us, but we know that we can change that whenever we want to and yeah, we are happy in that situation at the moment.

38:10 In a theoretical situation where you were or the Board of Kambi were approached by a potential interest support in acquiring the company [Technical Difficulty] basically then trigger the repayment of the bond. So it's not a prerequisite for it to happen, you could do it in connection with that, just so we know the potential dynamics if that should happen.

38:32 Yeah. That's correct.

38:36 Okay. Thank you very much.

38:38 Thank you.

38:48 Thanks for taking my questions. Two from me.

The first, on cost, I was just wondering if you could provide any additional color on the step up in other operating expenses in Q4. I know you mentioned Abios, but just wondering if there were any other things to call out, because it seems like it was a pretty material step change in Q4.

39:09 Yeah. Hi.

Thanks for the question. Yeah, one big one that we took in Q4 in particular was that we've initiated an application for a license in Nevada, which is the most expensive of the license costs we've had to-date in the U.S., and that's over EUR1 million that we've taken out in Q4, which goes to the other line.

Some other smaller impacts, but we've got new office premises, which has driven a slightly higher depreciation cost, we've had the returns and travel, which we didn't have this time last year, of course, and some one-off technical consultant cost on a few technical projects. So I think those are the main ones, but Nevada license is one catalysts being the biggest standalone in Q4.

39:56 Okay. Brilliant.

Thanks. Very clear.

And then on my other question, moving into 2022, evidently, the balances, you've got some clients migrated, you've got some new wins, new geographies, new launches. And you also got into these cost lines being in the mid-20s.

I was just wondering how you're thinking about topline growth in 2022. Is there anything you can share with respect to internal targets, forecast, ambitions or where you want that growth rate number to be in full-year '22.

40:28 We don't. So, we don't set out a target, but internally, we're highly confident with the tailwinds we see in terms of regulation, recent signings.

So no, we haven't put a number out there, but we've got reasons to be confident, we can say.

40:43 Okay. Brilliant.

Thanks very much.

41:08 Thank you. Hello, guys.

First question on the Kindred agreement and the convertible bond. So I try to understand here who kind of initiated this contract extension and so on.

And is it correct to read it like you have now reached the certain financial performance criteria, meaning that you're able to repay the bond and that it was it is that in turn has triggered the discussion to extend the partnership with Kindred?

41:43 I don't want to comment. I mean, it's a relationship between us and Kindred.

And I don't really see relevance on who initiated what. It's a deal that is very good for both parties.

And I think we can leave it at that.

42:06 All right. Understood.

And then another follow-up question. I mean, could you comment on whether you have experienced historically that this convertible bond has, I mean, limited your ability to attract new clients given the ties to Kindred.

42:31 I can't comment on that, but I think it's quite obvious with what you have seen in the market.

42:41 All right. Okay.

And at this stage, do you have any -- can you comment anything on the expectations on your relationship with Kindred after 2026?

42:56 No, but it's a very long time to 2027. But I think both Kindred and we are hoping that we can have a much longer relationship [indiscernible] communicate themselves with a platform that should be based on other third-parties.

And as we communicated, we are looking to modernize our service sorry, definitely hope, we -- have a much, much longer relationship then up from 2026.

43:36 Okay. It makes sense.

And then a question on Netherlands. I think in last conference call you guided that the new regulation is expected to negatively impact EBIT by EUR0.4 million to EUR0.5 million per month.

Is this still your best guess going forward or will the impact be less negative given that you have recently launched with BetCity and JVH?

44:06 Yes. Actually I'd say, a really strong start from those customers who are licensed in Netherlands, it probably means that impact is less than we guys thought.

So it's probably around half the impact of what we said last time, somewhere in the kind of 0.2, 0.3 among -- instead of 0.4, 0.5. So yeah, we're very pleased with the way that started and of course [indiscernible] more of our operators getting into that market.

44:30 Yeah. Okay.

And a final question from my side. Could you comment anything about the start of Q1 in terms of player activity or sporting results?

44:45 We usually don't. Obviously, it is a quite a busy period in Q1.

So, obviously, the activity is quite good. Whether the result has been a good to us or not, I choose not to talk about it.

45:10 All right. Thank you very much.

That was all from me.

45:23 Okay. Thank you very much.

We have quite a few questions here on the Web. So, I start with you Kristian.

We have seen some operators in the U.S. go for their own in-house solution.

Can you set that in perspective, when it comes even more complex to offer a sports betting? When multi-betting is possible?

Will they go for a standardized core platform or -- yeah, what is the way forward for operators?

45:52 It's very hard to guess what operators will do in the future. I mean, I think, what an experienced operator like Kindred are doing now, talking about how many years they have spent on their own racing platform, the amount of people they're planning to have to operate the platform, I think it shows how tough it actually is to build a good sports betting platform.

So, if anything, I think, the recent news should probably be something that other operators should look at before they start thinking about doing their own platform.

46:47 Okay. And I think this question is actually connected to that.

So, with both Penn and Kindred migrating at least some of their sportsbook in-house in the future, do you believe that Kambi could remain independent company in a sustainable profitable fashion longer term?

47:05 Yeah, without a doubt. I think the sports betting market is still a very fragmented market, and we are a clear leader in the markets.

So I expect us to be able to pick up a lot of business across the globe. So I have no doubt that we could continue being an independent and refinery operator that’s supplier, sorry.

47:37 Okay. And another one for you, Kristian.

When do you expect to work on the modernization product and make it finished and being fully on offer?

47:47 We have been working on it for quite some time now. But yeah, before we start offering it, as I said earlier in a call, not until late this year earliest, probably bit into next year as well.

48:08 Okay. We have another question regarding 2022 outlook.

Approximately when in 2022 will you have added enough operators to make up for the loss of DraftKings business? And yeah, are there any indications that Kambi will be included in another operators in New York, for example, or yeah, more signings, how do you see 2022 outlook?

48:40 I mean, yeah, I think, 2022 looks very promising. We have started the year already with two signings and I think our pipeline looks as good as ever.

We also see that we have more states coming up before regulation in the U.S. So that looks very nice.

We will end the year with a World Cup, which is obviously a very nice event. However, I would like to also dampen the expectations a little bit.

Having a World Cup in the summer is absolutely amazing, because it fills a gap in usually quite a weak schedule. Having a World Cup in November-November doesn't have the revenues as much as it would do, if it were in June-July.

But in general, I think, 2022 looks to be a very, very good year.

49:58 Thank you. A question on M&A.

What kind of acquisitions are you looking at?

50:05 I think -- it was -- we are mainly looking at, as I said before, is in areas of quantum and machine learning to become even sharper in -- and specialized in some of the sports. That is the key area, I think.

If we were to find the right player account management system, that could be something we are looking it for as well. But yeah, I don't think it is as likely to find something there.

50:50 Okay. I get a few questions regarding the opportunities in Asia and Africa.

Can you give some color there as well, Kristian?

50:59 So, I mean, we are focused on regulated markets. So, Asia, there is almost nothing that is regulated.

There may be some opportunities in Philippines actually coming up. But I think the big tickets that we have been talking about and planning for is India and Japan, but we will -- we hope we'll regulate, yeah, somewhere three to five years maybe.

Africa, I mean, it's a lot of things happening there. We have taken quite an opportunistic approach.

It's not a focus market for us. But if there were to come an interesting opportunity inbound, we would definitely look at it.

51:56 David, now here is one for you. Now, that Kambi has the financial strength, will you pay out the dividend?

We used to communicate that, but maybe some color there, David.

52:07 Yeah. I think, actually, for now, the preference has been -- will be to use funds on where we done one buyback program and there could be more, we should see, but also, I think acquisitions rather is a way to really develop the business.

So I think that's probably a more likely use of capital at this stage.

52:27 Okay. Kristian, one regarding Super Bowl that will start now.

Last year, some apps suffered outages before the Super Bowl, and Kambi being blamed. Was this a capacity issue or if so, is this capacity ready for the large amount of betting expected?

52:47 Yeah. I think we were already last year ready for the capacity.

It's actually fair to blame us to some extent at some of our apps for some of the downtime before the match. We were actually fully up and running with our system from [indiscernible] it's before the match and through all of it, throughout the whole match.

So, some of the issues also on us, but it was not actually a capacity issue. It was an operational issue, where we put up a bet of with way too many outcomes that totally clogged up the system verification.

But for this year, I think we have been planning even harder to make sure that nothing can happen and we are very much ready to go.

53:52 Okay. Great.

I get quite a few questions regarding Fanatics after the New York application. Anything you can say there, Kristian?

54:02 Nothing. If I could say something, you would see it in a press release.

54:07 Yeah. And yeah, two more questions.

If you could give some color on Canada. Are you excited about these markets and the potential to win more contracts?

And also give some color around the Brazil opportunity.

54:24 Yeah, I mean, if Canada or Ontario, especially, was a U.S. state, I think it would be the fifth largest state in the U.S.

So it's quite a big market and it's very exciting. I think we have some customers from Europe who are very keen on getting into the Ontario market, and we have some of our U.S.

customers keen on getting into the market. And on top of that, as you saw with Torstar, there are new opportunities as well.

So definitely exciting opportunity for us.

55:12 And last question here, do you see the competitive environment having changed for sports technology suppliers in the U.S. the past year?

55:25 Yes, I think we have less competition, because of some M&A activities with some of the competition we had. So, I mean, I think we are in a better position now than we were a year ago when it comes to prospecting.

55:47 Okay. Great.

So the future looks great for us. Thank you very much, David and Kristian.

And thank you, everyone, for listening into us. We will present our Q1 2022 results the 27th of April.

And I look forward to see you then again. So have a lovely day.

Thank you.

56:08 Thank you.