Super Group (SGHC) Limited (SGHC) Q1 2022 Earnings Call Transcript

Super Group (SGHC) Limited (SGHC -1.64%)
Q1 2022 Earnings Call
Apr 13, 2022, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the Super Group full year 2021 earnings call. [Operator instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Lisa Kampf, head of investor relations for Super Group. Thank you.

You may begin.

Lisa Kampf -- Vice President, Investor Relations

Good morning, everyone. I'm Lisa Kampf, and I'm delighted to have recently joined Super Group as the head of investor relations. I'm based in New York, and I look forward to engaging with many of you virtually and in person in the coming date. Joining me today to discuss Super Group's results are Neal Menashe, chief executive officer; Richard Hasson, president and chief operating officer; and Alinda Van Wyk, chief financial officer.

Also with us today during the Q&A session is Spencer McNally, group head of data and analytics. By now, everyone should have access to the company's full year earnings press release issued earlier this morning. The press release is available on the investor relations page of Super Group's website at investors.sghc.com. During this call and in our earnings press release, we will be making or have made comments of a forward-looking nature.

These forward-looking statements include statements related to Super Group's anticipated financial performance and operating results, market opportunity, and business strategy and plans. These statements are neither promises or guarantees and are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. The company assumes no obligation to update these statements after today's call, except as required by law. Please refer to today's press release and the company's filings with the SEC, including the Risk Factors section in the company's report on Form 20-F filed on February 2nd, 2022, and in the annual report on Form 20-F for the year ended December 31st, 2021, to be filed with the SEC later this month for the detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today.

Additionally, on today's call, we may refer to certain non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for measures of financial performance prepared in accordance with GAAP. The reconciliation of historical non-GAAP financial measures to the most comparable GAAP figures are included in the press release issued earlier today and available on the investor relations page of Super Group's website. As a result of uncertainty regarding and the potential variability of reconciling items, we have not reconciled our expectations as to adjusted EBITDA.

Accordingly, reconciliation is not available without unreasonable effort. Although it is important to note that these factors could be material to our results computed in accordance with GAAP. Also note that we have posted a supplemental presentation to the investor relations section of our company website, along with the earnings release, the link to this webcast, and filings with the SEC. And now I would like to turn the call over to Neal.

Neal Menashe -- Chief Executive Officer

Thanks, Lisa. It's great to have you on board. Good morning, everyone, and thank you for joining us today on our first earnings call as a public company. I am Neal Menashe and I've been with the business in various leadership positions for over two decades and have been the chief executive officer of Super Group since it was incorporated as our group holding company in 2020.

As you know, Super Group stock began trading under the ticker SGHC on the New York Stock Exchange in January 2022. We are excited and humbled to have this amazing opportunity and look forward to this new chapter. I would like to thank our existing investors and our new shareholders as we embark on this very exciting journey. Most importantly, I want to thank our team at Super Group for their relentless dedication and commitment through such a challenging environment over the last two years.

And also for the fantastic efforts that have contributed to Super Group becoming a publicly traded company. Our team truly understands the core mission of delivering first-class, safe, and responsible gaming entertainment to our customers. We are excited to communicate with you on a quarterly basis as we continue to discuss our current business initiatives and development toward our long-term goal. In our press release issued earlier today, Super Group announced tremendous results across all of our key financial metrics, exceeding our outlook on both net gaming revenue and adjusted EBITDA.

Net gaming revenue, or NGR, at a constant currency, was $1.53 billion for 2021, exceeding our forecast of $1.5 billion. Adjusted EBITDA at constant currency was $368 million, better than our forecast of $350 million. Using actual exchange rates during 2021, this translates to $1.48 billion of NGR and $358 million of adjusted EBITDA. Given that this is our first earnings call as a public company, I will spend a few minutes providing some background on who we are, our mission, and what we believe makes us different.

I will then hand over to Richard, our president, and COO, to explain the progress we have made as we continue to grow in existing markets, into new markets, and how we plan to continue gaining traction in the large and growing worldwide market of online gaming and sports better. After that, Alinda, our CFO, will discuss our financial performance over the past year. Super Group is the parent company for two leading global online sports betting and gaming businesses. Firstly, Betway, which is our premier global online sports betting brand and Spin, which is our multi-brand casino offering.

Our sports betting and online gaming offerings are underpinned by scalable technology, enabling fast and effective entry into new markets. While proprietary marketing and data analytics engines empower us to provide a unique, customized, safe, and responsible gaming experience. We believe that we have a number of advantages and differentiators over our competitors, and I'm briefly going to highlight some of the more significant ones. Firstly, Betway is the only Sportsbook brand that we promote and we do so in a consistent manner worldwide.

We have marketing and sponsorship arrangement with more than 70 sports teams, events, leagues, and franchises worldwide. And our single brand means that we are able to optimize marketing ROI rather than spread it out less efficiently over multiple brands. Campaigns targeted in one country generate revenue for us worldwide, and the cost of even a single country campaign can be amortized across the entire globe. This compares to some of our competitors who only trade in a few markets and therefore, can't amortize their spend or generate worldwide revenue like we can or others who have multiple brands, which may dilute the effectiveness of their spend in the big traditional media channels were fourth-bing with advertisers.

Secondly, while there are many markets in which large-scale traditional brand market is possible for sports, that's really the case for online casino, where instead a wide range of brand is required for strategy with a greater weight toward online marketing. Spin, well-established and diverse portfolio of online casino brands gives us extra shelf space over single brand competitors and the ability to suitably service different sectors of this market. Thirdly, we own or control under long-term contract or all of the key components of our [Inaudible] with the exception of temporary third-party tech for regulatory purposes in select new markets. Even then, we aim to convert this to one of our existing technology options at the earliest possible time with the ultimate goal of owning or controlling all key aspects of the front end and back end for all of our casino and sports products.

Critically, we do always own or control all of the competitive advantage technology related to data and analytics and all of the key components required for interacting with customers in real time. Amongst many other things, this means that we're able to launch into more markets more quickly, adapt more quickly to the changing needs of existing markets and in particular, that we can move more quickly and effectively adapt our products to the complexities of a world in which regulation and customer needs are changing all the time. Our fourth major competitive advantage relates to data analytics and in particularly, how we use proprietary models and systems, plus massive amounts of granular data to understand our customers in real time to enhance that interaction with them in real time in order to customize and optimize the individual experiences of our products safely, responsibly, and profitably again, all in real time. I want to emphasize that these are well calibrated proven commercial model, not black box or outsourced algorithms that no one understands and which could randomly haywire at any time.

Our models are all proprietary. We show that we can predict individual customer profitability with remarkable accuracy. And together with our proprietary interaction system, we're therefore able to offer our products to customers both profitably and responsibly all in real time. That's a quick summary of what makes us different.

I hope that you found it useful. I'll now pass it over to Richard to provide more detail on the global market opportunity for Super Group as well as current business initiatives and development. Richard?

Richard Hasson -- President and Chief Operating Officer

Thank you, Neil. It's great to be on our first earnings call as a public company. And I first want to thank all our partners, shareholders, employees, and investors for joining us on this journey. 2021 was a great year for Super Group during which we continued to execute on our global strategy, both in existing and new markets.

In 2021, Betway, the Betway brand, and Spin launched licenses in nine new markets around the world. Betway launched in France, Tanzania, and Germany, Spin in Mexico, and the Betway brand was launched by our soon-to-be acquired partner, DGC in Colorado, Indiana, Iowa, Pennsylvania, and New Jersey. As we've previously discussed in some detail, those U.S. markets are not yet using the Betway Global technology, and we are, of course, aiming to change that in the not-too-distant future.

But we're happy to say that in 2022, DGC has recently gone live in Arizona on the Betway Global technology platform, and that launch is also notable at DGC's first tribal gaming deal. We forged a Super Group to be operating in a large and growing market, and we still see a lot of headroom. Globally, the OSB and gaming market is expected to exceed $120 billion by 2025. Our gross gaming revenue or GGR for 2021 was around $1.8 billion, which means we have lots of opportunity to grow both in the U.S.

and elsewhere. Besides the market launches already mentioned, we're obviously also looking at other commercial opportunities for growth. We've already given a lot of detail about the planned DGC acquisition and that's still on track for closing in the latter part of H2. Canada is currently our biggest market.

And obviously, the regulatory environment there is key. Currently, only Ontario is in the process of regulating, and we're busy doing what we need to in order to comply with the requirements for that market. The relevant applications that we lodged with the Ontario regulator within the required time frame, and we'll go through the process. In the meanwhile, we continue operating in Ontario with the knowledge of the regulator.

Ultimately, we're bullish on the effects of the regulation in the Ontario market because we expect that the pie will grow in the medium to long term, and we're coming at it with a significant head start over most of the competition. We also expect this regulation to open up additional marketing opportunities in Ontario and bring with it term cost efficiencies to offset the gaming duties. So net-net, we think that this market still has some solid potential upside for us in terms of both revenues and profits. On the marketing front, our team had a busy 2021, bringing in more than 30 new brand partnerships for Betway.

As of today, the total portfolio now stands at in excess of 70 active partnerships in 17 different countries, spread across all the major international sports, including soccer, basketball, tennis, Esports, and golf. Our reach is far and wide. We've got seven different Esports fields. We have 11 tennis fields in eight different countries.

And in the English Premier League, our Betway brand is visible in every stadium at least once the season in many stadiums for almost every game and overall in around two-thirds of all games. In the NBA. We've got deals with the Bulls, the Warriors, the Mavs, the Cavs, the Clippers, the 76ers, the Heat, the Bucks, and the Timberwolves. Plus, there's also ice hockey, horse racing, cricket, rugby, and motorsports.

That's a long list of partnerships and sponsorships that are continuously reinforcing the Betway brand around the world, helping to support all of our other marketing activity and thereby the growth of the business. And of course, we actively monitor other major sports properties around the world for what we see as attractive and potentially profitable entry points. In terms of customer numbers, we had a very good year. On the back of continued strong customer acquisition and equally good retention, H2 finished with an average monthly active customer count in excess of $2.7 million.

That average is around 45% up on the prior year same period and around 150% higher than the same period in 2019. For the full year, those percentages were around 74% as compared to 2020 and around 160% better than 2019. We're obviously very proud of the strong customer growth, but we're mindful of the possibility that at least some of that growth would have come from the secular shift to online that was brought about by the COVID pandemic. We're certainly aiming for continued strong growth in customer numbers in 2022 and beyond.

But equally, we want to keep expectations realistic in this regard. So our guidance for 2022, which Linda will discuss shortly, assumes growth in our customer base at a lower rate than 2021. In terms of customer value, without going into too much detail, we're satisfied with 2021 developed as expected. In our mature continuing markets, customer values remain broadly consistent with prior years, with the exception of the U.K., whereas expected, regulatory and other changes to the structure of the market resulted in continued reduction in average deposits and NGR per customer.

In some of our faster-growing markets, we are pleased to see customer values holding up nicely despite the continued growth with moderate improvements in some cases. In other cases, we saw moderate reductions in monthly values, which is usually what you would expect from markets that have been growing fast and are not yet mature. Overall, average customer values were down against 2020, continuing a trend that has been in evidence for a couple of years at least. Again, this is to be expected as a result of our market mix shifting over time due to faster growth in developing markets where average customer values are naturally lower than in mature markets.

So in sum, 2021 delivered largely as expected. And overall, we saw a pleasing trend toward a more diversified mass-market business that continues to line up nicely with the aim of providing first-class safe, secure, and responsible gaming to all of our customers around the world. With that, I will turn it over to Alinda to review our financials. Alinda?

Alinda Van Wyk -- Chief Financial Officer

Thank you, Richard. I'm especially delighted to present you with Super Group's financial results on our first earnings call because 2021 was a good year for us. Continuing our strong growth in previous years with excellent year-on-year increases in all the headline key metrics, including net gross revenue, revenue, adjusted EBITDA, and the others. Despite industry headwinds in certain quarters and some markets with regulatory challenges, we were able to achieve our key financial goals.

Before I get into the details, I want to highlight that we are reporting in Europe and not U.S. dollars. We've made a decision to do so because currently, we do not have any meaningful part of our business trading in dollars, at least not until we acquired DGC sometime in the latter half of this year. So reporting in U.S.

dollars really just introduces unnecessary currency fluctuations into our results, and in particular, it makes prior-year comparisons much more difficult. The numbers we are presenting are proforma consolidated numbers as a sum total of all our groups irrespective of the timing of the company's reorganization, which occurred during both 2020 and 2021. The numbers presented are adjusted EBITDA, which is the EBITDA numbers adjusted for transaction expenses relating to the lifting, impairment of goodwill, and deduction of some nonrecurring expenses. I will now turn to our financial results.

Net gaming revenue for the full year increased by 29% year on year to EUR 1.26 billion, which reflects good growth in markets categorized as business as usual and where we are, therefore, able to appropriately offer and market our products in 2021 as we did in 2020 and before. For markets where that was not the case, including some which closed during the year, such as the Netherlands or Germany, where regulations cited significantly, we estimate that net gaming revenue was negatively impacted by around EUR 40 million to EUR 45 million compared with how those markets have performed in 2020. I'm particularly pleased that we were able to offset these negative impacts and still deliver strong net gaming revenue growth for the year. Adjusted EBITDA for the full year grew at 41% to EUR 302 million for 2021.

This was helped in part by some operating leverage and economies of scale in general administrative costs, which are generally fixed and increased by only 16% compared to 2020. This is a very good result given that net gaming revenue grew, as mentioned by 29%. As expected, direct expenses, which are largely variable, and marketing costs, which are mix of variable and fixed grew broadly in line with net gaming revenue. Cash generated from operating activities increased from EUR 156 million in 2020 with EUR 229 million in 2021.

That's a growth rate of 47% and reflects the continued high rate of profitability. Free cash flow grew in line from EUR 183 million in 2020 with EUR 249 million in 2021. Free cash flow as a percentage of adjusted EBITDA was therefore 82% in 2021, a small reduction from 84% in 2020 due to the increases in tax and capital expenditures. Following from that, cash and cash equivalents, more than doubled from EUR 139 million at the start of the year to EUR 294 million at the end of the year, again, reflecting the strong cash-generating abilities of the business and thanks to a debt-free balance sheet.

As for the fourth quarter on a stand-alone basis, net gaming revenue for the quarter came in 15% higher at EUR 320 million in comparison to the same period last year despite a very challenging October in sports for the entire industry and helped by some sports margin recovery in November. Fourth quarter adjusted EBITDA was EUR 69 million, down 2% from the previous year, driven by increase in brand marketing expenditure, which was predominantly USA focused. Regarding our guidance for 2022, we see no reason yet to change while it's previously been provided. Of course, it's still early in the year, and our outlook could change.

But for now, we're comfortable confirming our prior guidance, which is detailed in the presentation posted to our website. If you don't recognize those numbers, it's because we previously provided our forecast in U.S. dollars. And those figures are in the Euro equivalent values using the exchange rate at the time we originally announced the guidance.

In line with what I've mentioned earlier, we're now stating our guidance in Euro to align the reporting of our financials going forward. Finally, I'm very proud of how we've managed to get through our first year-end earnings, both in terms of the results and process. The requirements of public markets are obviously new to many members of our team, I want to thank them for their hard work and congratulate them on getting everything done to such a high standard. Thank you very much.

I will now hand back to Neal for his closing remarks.

Neal Menashe -- Chief Executive Officer

Thank you, Alinda. Super Group has had an extraordinary year. Everybody listening to this call knows how much time, bandwidth, and resources the process of becoming a public company can be. The listing process onto the New York Stock Exchange took up all of 2021 with most of our senior executives and many members of our operational management.

And despite that extraordinary focus, our team delivered record levels of new and returning customers, record revenues, and record profits with strong growth in all of these metrics. With the listing and 2021 behind us, we're looking forward to this year and beyond as we continue to enter new markets and grow existing ones with our Betway and Spin brand. We're confident that we can drive this business onwards into the online gaming behemoth that we know it will become. And we hope that all of you are excited for the future as we are.

With that, we open the call to questions. Operator?

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question comes from the line of Stephen Grambling with Goldman Sachs. Please proceed with your question.

Stephen Grambling -- Goldman Sachs -- Analyst

Hey. Thanks for taking the question. I guess maybe the first one, just on the regulatory changes in Canada. It seems like folks have started to launch there.

Curious how that progression has compared to your own expectations and how you're thinking about that market.

Richard Hasson -- President and Chief Operating Officer

Hi, Stephen. Richard here. So we're currently going through the process, as we mentioned, all active conversations with the Ontario regulator, very comfortable with where we are in the process, very comfortable with the timing, and confident in completing that application process with the regulator. And for now, as we mentioned, we continue operating in Ontario with the knowledge of the regulator.

Stephen Grambling -- Goldman Sachs -- Analyst

And I guess from a competitive standpoint, has it been surprising as you've seen any kind of changes in advertising, promotions, etc., some of the peers have started to ramp up there?

Richard Hasson -- President and Chief Operating Officer

Yeah. I think it's still relatively early days, obviously, only earlier this month. There are obviously new operators in the market, but I think it's too early to make a call on that.

Stephen Grambling -- Goldman Sachs -- Analyst

And then maybe a question on guidance, recognizing that you reiterated the guidance for the year. Curious, I mean, it's been a while, I should say that there's been a number of external events that have happened over the past couple of months. So I'm wondering if you could just walk through any kind of big puts and takes as you see it that are maybe offsetting each other as we think about the guidance? And then any color you can provide on kind of the cadence of the year so that we can make sure that we're not offside in any given period. Thanks.

Alinda Van Wyk -- Chief Financial Officer

Hi. Alinda here. Yes. As previously stated and noted in the call, we still feel very comfortable that our guidance, as I said, in the previous presentations is still relevant and within our reach.

We have, however, just adjusted for the time being back to Europe as the U.S. dollar conversion obviously creates expectations that we can't control due to the fluctuations. We have, therefore, just looking through the year, we have adjusted our reforecast according to regulatory happenings in for example, Netherlands and Germany to adjust for that. and the expectation of Ontario, but we feel comfortable that we're on track of what we've previously provided.

Stephen Grambling -- Goldman Sachs -- Analyst

Great. Thank you so much.

Operator

Thank you. Our next question comes from the line of Jed Kelly with Oppenheimer and Company. Please proceed with your question.

Jed Kelly -- Oppenheimer and Company -- Analyst

Hey. Great. Thanks for taking my questions. Just going back to Canada.

Can you discuss your Canadian iGaming customer? Like, do they have a lot of overlap with the sports betters, or do you think that the amount of the new sports betting companies coming in are not real. Your -- I guess, your iGaming customers, are they mostly just iGaming -- or do they bet sports as well? Just trying to get a sense of your iGaming customer profile.

Neal Menashe -- Chief Executive Officer

OK. I'll take that. It's Neal. Jed, so generally, we've seen across the world, and we always see and I talk about this a lot, is that the specific iGaming customer casino compared to the sports is very different.

A person who plays a Betway Sportsbook, who then goes in place in the casino that Betway offers is a fundamentally different customer who plays [Inaudible], they are not the same. And that's why we have both of them in our [Inaudible]. So when you basically look at our business, you've got Betway and Spin. And together, they make about 50%, 50-50 the revenue or be slightly more.

But overall, the casino revenue comes in at about 70%, but it's different customers in Betway as they are in Spin. And that's why we've got the dual offering wherever we can across the globe. And it's very important, they're not the same at all.

Jed Kelly -- Oppenheimer and Company -- Analyst

Got it. And would you say your Canada iGaming customer -- or I guess, your Canadian customers? Is that spread out relative to the population of each province is like Ontario certain percentage or British Columbia?

Neal Menashe -- Chief Executive Officer

It doesn't actually fun enough doesn't go according to the population. So it's an even is less than the population. So that's why with Canada regulating our problem is we've got problems by profit. So that -- this is obviously the first province of Ontario to regulate.

Jed Kelly -- Oppenheimer and Company -- Analyst

Got it. And then just, I guess, back on guidance. I guess you had report -- you had your 1Q numbers. Could you give us a sense on how we should expect quarterly revenue in the trend? Should it be a similar seasonality to last year?

Neal Menashe -- Chief Executive Officer

Yep. I mean, generally, I mean, I'll start in Alinda. But generally, as to seasonality, but remember, casinos very different to sports. Sports you can have a bad old in one month because of the sports event and different countries will have different holds.

So for us, yes, it's quarter by quarter, but it's more to look at the half-year revenues, etc., as you see it because, for example, last year, in October was a terrible month. But in November and December, then obviously started to claw back. It just that happened that was all in the same quarter, where if you had exceptional bad hold in the one quarter, it's an enrolled into the next quarter.

Jed Kelly -- Oppenheimer and Company -- Analyst

And now you've got --

Neal Menashe -- Chief Executive Officer

COVID obviously, from two years ago where you had sports restrictions, etc, then obviously that we've now ramped out of that. So that most all sports events are now open as usual for.

Jed Kelly -- Oppenheimer and Company -- Analyst

And then just one last one for me. When you look at the World Cup this year, how much is that a benefit to your '22 outlook?

Neal Menashe -- Chief Executive Officer

The World Cup toward the latter end of the year. And so from our point of view, yes, it's in there. But remember, it still slow. So we've got some of it in there.

But then we've got lots of other competition definitely all the top. So this business is about all sports events, whether it's the EPL, the NBA, the IPL, Esports, etc. So in sports, we try in the range across the globe and in cases one brand of Bestway. So we open for every sports across the globe with our customers in all the 25 different jurisdictions that we operate in and grow.

And that's key. Obviously, with casino, it's more about the random number generating giving customers into the casino, which is which is obviously open 25 days, seven days a week.

Jed Kelly -- Oppenheimer and Company -- Analyst

Thank you.

Operator

Thank you. [Operator instructions] Our next question comes from the line of Bernie McTernan with Needham and Company. Please proceed with your question.

Bernie McTernan -- Needham and Company -- Analyst

Great. Thanks for taking the questions. Just thinking on Canada, I was just wondering if there was anything -- I know there's a lot to talk about competition, but what are you guys doing from a customer retention standpoint to make sure that you can retain your own customers in light of this new competition? Are there any changes in strategy that you're doing now relative to six or 12 months ago?

Spencer McNally -- Group Head, Data and Analytics

Hi. It's Spencer, Bernie. Look, I think from a general point of view, our belief in our methodology is strong. We take a customer view on every single individual using a very, very broad range of metrics across a significant range of time frame.

We're evaluating that data in close to real time. We're responding to that in close to real time, and we are offering the customer in a responsible way. What we think is the appropriate products and at the appropriate values and so on and so forth for them. And we don't think that anything changes just because we now may see more competitors or we may see slightly differing regulations.

A lot of the things that are in the regulations the things that we were doing already. And again, that only applies to Ontario, where anything is changing. So I don't know that we see the need to change the game plan. It works around the world in regulated jurisdictions everywhere.

Ontario joining that list doesn't change very much from our point of view.

Bernie McTernan -- Needham and Company -- Analyst

And so I guess the point being that the new competition isn't throwing off your actuarial tables or whatever it may be in terms of what the impact is on your customers.

Spencer McNally -- Group Head, Data and Analytics

Look, I'm tempted to tell a joke about insurance companies and actually is the guy who looks out the back window and tens which way to go. The truth is that it's a little early to tell whether anything is going to change. And I mean my favorite saying is that anything about forecast is they're going to be wrong, it's just a question of how wrong they're going to be. But we're comfortable that we're not seeing anything at this stage that is particularly scary.

We're really not seeing anything at all or scaling alone, particularly. So no, I guess, over there. We don't see the game changes. We've got a strategy that's worked for many years and all the signs that it will continue to work, and we are continuing to refinance and improve it as we go.

Neal Menashe -- Chief Executive Officer

And then I'll -- this is Neal. I'll just to add in, you've seen in the New York with this huge bonus money and then the tax on bonus money. We've always been very careful with our bonus strategy, and we'll continue to do that. And it's not -- you can bring them in the front door, but if your strategies are all wrong, you can't keep changing the odds of the game by giving free bonuses that cost you more than actually the lifetime value of the customers.

So we've had this our whole two decades, and this is no different. We've learned over the last two decades from regulation from one market to another. So Ontario is no different. And remember there's only one profit in Canada.

Bernie McTernan -- Needham and Company -- Analyst

Understood. And then when you finally do gain regulatory approval in Canada, will there be any blackout period from when you get approval to when you launch where you have to kind of cease operations as a -- whether it be a couple of days or whatever it may be, where you wouldn't be operate anymore.

Neal Menashe -- Chief Executive Officer

No. No. No. Businesses do and you roll in from the dot com into the regulated world, which has happened in other countries.

Bernie McTernan -- Needham and Company -- Analyst

Understood. OK. And then maybe just lastly, as a follow-up to Stephen's question. Just any impact on Russia, Ukraine that's implied in the guide or any way to think about the potential impact?

Spencer McNally -- Group Head, Data and Analytics

OK. So firstly -- I'll take that. Firstly, for Ukraine, I hate go out to everyone there. We've got no exposure there.

We've had no developers there in Ukraine, no business in Ukraine, and funny enough when it comes to Russia, Super Group had basically no business in Russia. So we've had no impact from that. But obviously, it's a critical situation that on and is still going on.

Bernie McTernan -- Needham and Company -- Analyst

Great. Well, thanks for taking all the questions. Appreciate it.

Operator

Thank you. Our next question comes from the line of Michael Graham with Canaccord Genuity. Please proceed with your question.

Michael Graham -- Canaccord Genuity -- Analyst

Thank you and thanks for all the new information. Congrats on getting all those numbers out. I just had two questions. The first one is maybe talking about the long-term growth -- relative growth that you expect to see across the business between online casino and sports betting.

Just wondering sort of where you see those growth rates evolving to? And then I also wanted to just ask about how you're feeling about the balance sheet. It looks like you ended up with just under EUR 300 million on the -- of cash on the balance sheet. So just wondering how you're thinking about liquidity and sort of the balance sheet going forward? Thanks.

Alinda Van Wyk -- Chief Financial Officer

Thank you, Michael. Alinda here. So the cash on the balance sheet is well noted, it's morely doubled. There is obviously now being looked at certain opportunities for investment purposes going forward, that's under discussion with management.

But furthermore, we're also looking at a potential dividend policy, but that is very early days. But we remain a strong cash flow generated business. On your question on long-term guidance. There's so much going on in the world at the moment.

As a business, we have decided that we work we're going to internally look really at the numbers halfway through the year. As you've noted, will that it took a lot of us to get the first 2021 year-end results out in such a short time, which is new to us for a listed entity. With the guidance, we'll rework it through the course of the half-year mark and then maybe put out something during the fall or the later part of the year on what 2023 will look like. I don't think we project three, four years.

We look at some trends, but it's impossible to make that as accurate due to what's happening in the world.

Michael Graham -- Canaccord Genuity -- Analyst

OK. That's very helpful. Thank you.

Operator

Thank you. Our next question comes from the line of Mike Hickey with the Benchmark Company. Please proceed with your question.

Mike Hickey -- The Benchmark Company -- Analyst

Hey, Neal, Richard, Alinda, and Lisa. Good morning, guys. Congratulations on all your success. Just a couple of questions for me.

On Canada, hot topic here. Just curious if you could break out your revenue and profit contribution from Canada? And then specifically, now that at least Ontario is moving to a regulated market, what is the presumed impact net on your guidance from that region thinking about taxes and marketing expense and everything that's going to sort of change now that you're regulated and not operating in the gray market. I have a follow-up.

Richard Hasson -- President and Chief Operating Officer

Hi, Mike. Excuse me. Hi, Mike. Richard here, I'll start with the first question and hand over to you for the second.

In terms of the country breakdown, we don't provide that specifically of those details, but I will refer you to the presentation where you see some similar charts from previous where we have split out the 2021 revenue by geography. And you'll know that the majority of that number made up of the Americas is Canada, of course also in the East Central and South America and that's also is context that's-of the Americas excludes Digital Gaming Corporation because that's not yet part of the Super Group.

Mike Hickey -- The Benchmark Company -- Analyst

OK. The question -- Yes. Go ahead Alinda.

Alinda Van Wyk -- Chief Financial Officer

Yes. Sorry. In your question around the impact on EBITDA, especially around Ontario, two things are happening with our business. I mean we have made notes on operating leverage.

The more we grow we understand our business. We are giving efficiencies, especially in our variable costs, and that rolled over into story as well. But remember, even though you might have a tax paid, you have much more efficiencies in, for example, your cost of processing funds in the country. And actually, on average, our marketing become competitive and less expensive.

So there is some good returns as well for becoming fully regulated in a jurisdiction because it does bring some other efficiencies and reduction in costs.

Neal Menashe -- Chief Executive Officer

And then I'll just add in here. It's Neal. Is that remember, this is only one province in Canada. It's not the whole country regulating as well.

which is quite different to, let's say, Germany and some other markets. So for us, there's lots of opportunity with them in Canada. And again, we've got Betway and Spin, and we've got a lot of opportunity across the globe. So it's the same way we would look at the profit each province in Canada as the new market new existing market, you would look at DGC each state as a market.

And that's how we look at it across the globe, and it's about being localized in each of these markets and having the product localized being the most efficient it can be in each of these countries across the globe. And that's been our business model, and that's over 4,000 people, and we've got teams who teams are unconfident that they run the country and in this case, in DGPs case the state and then Canada obviously for province of Ontario and then the rest of the dotcom. But this has been our business for the last two decades is following it as market becomes regulated.

Richard Hasson -- President and Chief Operating Officer

And maybe that's slightly accurate. In the very short term, it's really hard to call exactly what's going to happen. Our experience in the past is that these markets grow in size once they become regulated and between the operational and cost efficiencies that Alinda referred to and that your overall bottom-line benefits. That's taking a sort of a medium-term onwards.

In the very, very short term, it remains to be seen. It's very, very early what's happening. We're feeling quitely confident but it's too early to tell exactly what it happen in the very short term.

Mike Hickey -- The Benchmark Company -- Analyst

OK. Thanks. Just to confirm, the Canadian piece of your '22 guide that's business as usual. I mean just turn that and do we run the risk here that you when you change that to adapt Sinai's regulated.

So it's not the same scenario that when you originally gave guidance, there's a risk that you have to lower numbers in the near term given taxes and marketing and everything else that's part of being a regulated market.

Alinda Van Wyk -- Chief Financial Officer

Just to reiterate, we did look after the regulation become imminent, we did readjust the guidance, and we still feel comfortable with the adjustment as of effective April 2022, we would reach the target as set out previously.

Neal Menashe -- Chief Executive Officer

That we took into account all the taxes in picture coming into just the province of Ontario.

Richard Hasson -- President and Chief Operating Officer

Yes. The only unknown is exactly how the regulations are going to be interpreted by the regulator, but I think that's going to take a while to play out. And on the face of what you're seeing there, there's nothing particularly unusual. There's not -- we've seen other markets regulate with deposit limits explicitly specified by the regulator or very onerous marketing conditions.

None of that's happening in Ontario. So on the pace of what the regulations are reading like, we're not seeing a huge change in operating conditions.

Mike Hickey -- The Benchmark Company -- Analyst

OK. Great. Thanks, guys. Second question for me on the U.S.

Can you just sort of talk through the playbook there once you finish your acquisition, sort of how you're thinking about the financial impact and the sort of updated thoughts on user acquisition and how you think about bringing in players and sort of overcoming not having a database like some of your peers do?

Spencer McNally -- Group Head, Data and Analytics

Hi, Mik. So as Neil said earlier, when we look at any new market better new U.S. states, or a new country, we look at it on an individual market basis and we'll apply the same toolkit as we have to all of the markets around the world to each of these U.S. [Inaudible].

Where we stand today, DGC is live in six states with a with market up to 12%. And once DGC becomes part of the Super Group those will be treated as every other market within the Super Group is treated. So it will be the power of the Betway brand, the underlying use of data and analytics to understand the customers and of course, having the localized teams in each and every state in this case that are obsessing about the local detail and understanding the customers on an individual basis in each of these markets. So it's taking what we've learned in the last 20-plus years.

It's taking what we've applied to all other markets around the world and in this case, applying it to each of those states as we do to other countries around the world.

Mike Hickey -- The Benchmark Company -- Analyst

Thank you.

Operator

Thank you. Our final question comes from the line of Stephen Grambling with Goldman Sachs. Please proceed with your question.

Stephen Grambling -- Goldman Sachs -- Analyst

Hey. Thanks for sneaking back in. One other one on just the guidance and assumptions there. On the branding fee that you get from -- I guess it's a combination of Thailand, China, and the U.S.

How do we think about the visibility on that, and what will drive that year over year, and how that's trending? Thank you.

Richard Hasson -- President and Chief Operating Officer

Hi, again, Stephen. So on the brand fee, that is a fee that we earn for other businesses making use of our brands. Obviously, the strength of our brand globally is obvious. And the brand for itself is not looked in isolation.

So it forms part of our thinking around the total amount spent and invested into the brand across the world. So when we look at what's today the portfolio of over 70 partnerships for the Betway brand, we will consider in those conversations in those investment decisions, we will consider what we expect to earn as a brand fee from those partners. So any adjustments in that brownfield potential adjustments will be considered in the funding decisions and ultimately, brand, when we look at the brand relative to our revenue the brand, will be a part of the marketing investment, obviously, alongside the other forms of marketing. And in summary, that brand looked at in conjunction with all other marketing decisions is not looked at in isolation.

Neal Menashe -- Chief Executive Officer

I'll just add. It's important to note because we've got this one sports brand, we can have marketing at a brand level that affects this global marketing. But that we don't take all the money on marketing and just spending on brand, brand in one portion of Betway budget, and that's very important. So the brand fee come into that but because we've got the to reach, we've got enough volume in all our marketing to be able to have an effect.

But it's not just the business is not just built on brand. built on brand is one part, and then you've got all the other markets for localized marketing that goes on and that's very important.

Stephen Grambling -- Goldman Sachs -- Analyst

But just to clarify, so that's not a percentage of GGR generated by those operating partners that's kind of like a year-to-year adjustment that's made based on the end that you have?

Neal Menashe -- Chief Executive Officer

Yeah.

Alinda Van Wyk -- Chief Financial Officer

Yep.

Stephen Grambling -- Goldman Sachs -- Analyst

And so you generally think of that as being breakeven then or that's an EBITDA contributing segment?

Neal Menashe -- Chief Executive Officer

Yes. So we did take some income from that will help us then help go toward the brand spend we have a cost to go. Just in accounting terms, you have to kind of separate the two when you disclose it.

Stephen Grambling -- Goldman Sachs -- Analyst

Got it. OK. Thank you.

Operator

[Operator signoff]

Duration: 51 minutes

Call participants:

Lisa Kampf -- Vice President, Investor Relations

Neal Menashe -- Chief Executive Officer

Richard Hasson -- President and Chief Operating Officer

Alinda Van Wyk -- Chief Financial Officer

Stephen Grambling -- Goldman Sachs -- Analyst

Jed Kelly -- Oppenheimer and Company -- Analyst

Bernie McTernan -- Needham and Company -- Analyst

Spencer McNally -- Group Head, Data and Analytics

Michael Graham -- Canaccord Genuity -- Analyst

Mike Hickey -- The Benchmark Company -- Analyst

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