Codere Online Luxembourg, S.A. — FY2021 Form 20-F
Reporting period: Fiscal year ended December 31, 2021. This is an annual report, not a standalone Q4 report; separate Q4 financial results are not provided. Financial statements are audited and prepared under IFRS, and the 2021 statements are consolidated and combined carve-out statements. The company completed its SPAC business combination in November 2021 and began Nasdaq trading in December.
Financial performance and liquidity
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | €80.3 million | €70.5 million |
| Operating loss | €71.0 million | €14.2 million |
| Net loss | €68.0 million | €16.3 million |
| EBITDA (non-IFRS measure) | €66.2 million loss | €13.4 million loss |
| Cash from operating activities | €5.2 million used | €3.9 million provided |
| Cash from investing activities | €0.1 million used | €0.1 million used |
| Cash from financing activities | €89.3 million provided | €0.2 million used |
- Revenue grew 13.8%. Sports betting generated €45.9 million and online casino €34.2 million. Spain contributed €49.8 million, Mexico €24.9 million and Colombia €4.0 million.
- Operating and net losses widened sharply. The operating margin was approximately negative 88.5% of revenue and net margin approximately negative 84.8%.
- Other operating expenses rose 82.4% to €143.5 million. This included €45.5 million of listing and transaction costs, including a €35.8 million non-cash IFRS 2 listing expense. Marketing expenses increased 37.5% to €48.2 million.
- Year-end cash and cash equivalents were €94.9 million, including €3.5 million restricted cash. Total assets were €105.3 million; equity was €68.2 million, versus negative €39.9 million in 2020. Working capital was positive €73.0 million, compared with negative €19.7 million.
- Borrowings were €3.0 million, all current; €50.6 million of related-party borrowings and payables were capitalized during 2021. The balance sheet also included €5.5 million of non-current warrant liabilities, measured at fair value.
Material changes versus prior periods
- Revenue increased from €70.5 million in 2020 and €61.6 million in 2019. The 2021 increase reflected stronger activity in Spain and growth in Latin America, with more sporting events returning after COVID-related cancellations and increased marketing.
- Marketing, streaming and other operating costs increased as sporting events resumed and the company expanded customer acquisition. Revenue growth therefore did not translate into improved operating results.
- The business combination generated approximately $116 million gross proceeds, or about $103 million net of transaction fees and expenses; cash proceeds recorded in the cash flow statement were €89.4 million.
- Codere Online disposed of its non-core Greenplay “.com” business at year-end for approximately €0.2 million.
Outlook, commentary and key risks
- Management intends to invest in customer acquisition, marketing, technology and expansion in Latin America, subject to regulation and licensing. Planned platform investment was described as approximately $8–12 million.
- The filing states the company expected operating losses through 2023; its business plan projected positive cash flow at some point in 2024. Management believed available cash could fund operations through 2024 under that plan, while also stating cash on hand and operating cash flow were expected to cover obligations for the next 12 months. These are projections, not guarantees.
- Management cited substantial uncertainty around profitability, customer growth, competition, marketing returns, foreign exchange and the timing of new regulated markets. The company depends on Codere Group entities for technology, services, brand rights and certain market licenses.
- Licensing remains a material exposure: the Colombia license transfer was pending approval and the license was due to expire in November 2022; Italy’s license expired at year-end 2022 and required a new tender; and Mexico’s license is held by Codere Group subsidiary LIFO, not Codere Online.
- Regulatory and compliance matters include Spain gaming sanctions of approximately €92,000 and €6,000 paid in 2021, and Mexican AML reporting deficiencies that LIFO self-reported to tax authorities. The filing notes potential further penalties and license consequences. A Maltese administrative audit of ONOL was also disclosed.
- Parent reported ineffective disclosure controls at year-end and a material weakness in financial reporting, primarily due to insufficient technical accounting and supervisory expertise for complex transactions. DD3 also restated prior financial statements for warrant and share classification matters. Management said the 2021 financial statements were fairly presented after additional procedures; remediation timing and cost were not established.
- Results include significant non-cash and transaction-related charges, and historical carve-out results may not represent the costs or performance of Codere Online as an independent public company. The warrants’ fair-value changes can also cause non-cash earnings volatility.
Most important facts for investors to verify
- Whether growth and spending plans produce improving EBITDA, operating cash flow and a credible path to the projected 2024 cash-flow inflection.
- Progress on remediating the material weakness, and whether future filings require adjustments, restatements or additional disclosures.
- Renewal or transfer status of Colombia and Italy licenses, and continuing reliance on LIFO and other Codere Group entities for licenses and critical services.
- Exposure and outcomes from the Mexican AML reporting matter, Spanish regulatory proceedings, and other disclosed legal or tax matters.
- Cash availability after restricted balances, ongoing operating cash use, related-party obligations and planned marketing and technology investment.