Sportradar Group AG — FY2021 Form 20-F
Reporting period: Fiscal year ended December 31, 2021, with comparisons to FY2020 and FY2019. This is an annual report, not a standalone Q4 filing; the provided figures are full-year totals. Financial statements are prepared under IFRS and presented in euros.
Business context
Sportradar supplies sports data, audiovisual content and technology to betting operators, sports leagues and media companies. It completed its IPO and Nasdaq listing in September 2021. Revenue comes mainly from subscriptions and revenue-sharing arrangements.
Financial and operating performance
| Metric | FY2021 | FY2020 | Change |
|---|---|---|---|
| Revenue | €561.2 million | €404.9 million | +38.6% |
| Profit before tax | €23.8 million | €22.1 million | +7.7% |
| Profit for the year | €12.8 million | €14.8 million | -13.6% |
| Adjusted EBITDA (non-IFRS) | €102.0 million | €76.9 million | +32.6% |
| Adjusted EBITDA margin | 18.2% | 19.0% | -0.8 percentage points |
| Net cash from operating activities | €132.2 million | €151.3 million | -€19.1 million |
| Adjusted Free Cash Flow (non-IFRS) | €14.5 million | €53.5 million | -€39.0 million |
- Revenue drivers: RoW Betting revenue rose to €309.4 million from €235.0 million; RoW AV rose to €140.2 million from €105.9 million; U.S. revenue more than doubled to €71.7 million from €34.4 million.
- Segment profitability: RoW Betting Adjusted EBITDA increased to €177.0 million and RoW AV to €39.2 million. The U.S. segment remained loss-making, with Adjusted EBITDA of negative €22.6 million versus negative €16.4 million.
- Cash and liquidity: Cash and cash equivalents were €742.8 million at year-end, up from €385.5 million. The company had €420 million drawn under its term loan and €110 million available but undrawn under its revolving credit facility. Management said available cash, borrowing capacity and expected operating cash flow should meet needs for at least 12 months.
- Debt and commitments: Reported loans and borrowings totaled €435.4 million, including lease liabilities. Trade payables were €470.4 million, including substantial sports-rights obligations. Disclosed commitments for ERP and sports rights not yet capitalized totaled €693.8 million.
- Investment and financing: Investing activities used €333.8 million, including acquisition spending. Financing activities provided €539.8 million, principally from share issuance. Capital expenditures were €130.8 million.
Material changes versus FY2020
- Revenue growth reflected increased MTS activity, higher betting-data sales, U.S. market expansion, and recovery in AV from COVID-19 disruption. Management cited favorable year-over-year COVID comparisons in the first half of 2021, with no material COVID-related variance drivers in the second half.
- Operating costs rose: personnel expenses increased 51.6% to €183.8 million, while other operating expenses more than doubled to €87.3 million, including €31.0 million of IPO-related legal and consulting costs. Higher costs, share-based compensation, finance costs and tax expense contributed to lower net profit despite higher revenue and Adjusted EBITDA.
- Operating cash flow fell 12.6%, principally due to a negative €34.4 million working-capital movement. Adjusted Free Cash Flow declined as intangible-asset purchases increased.
- The company acquired Atrium Sports for approximately €183 million in cash plus participation certificates, and also acquired Fresh Eight and Interact Sport. Intangible assets and goodwill increased to €808.5 million from €346.1 million.
- Sportradar entered a 10-year NHL partnership and an expanded NBA partnership. The NBA agreement includes warrants for shares equal to 3% of fully diluted, as-converted shares at a nominal exercise price, subject to an eight-year vesting schedule.
Outlook, risks and unusual items
- Outlook: No quantified revenue or earnings guidance is provided in the supplied filing text. Management expects growth from U.S. legalization, new markets, product expansion and acquisitions, and anticipates improved U.S. profitability as the business scales. These expectations are forward-looking and uncertain.
- Control weakness: Management reported a material weakness in internal control over financial reporting involving control design, IT systems and segregation of duties; disclosure controls were deemed ineffective at year-end. Remediation includes additional finance and controls staff, external advisers, training and ERP implementation. Full remediation by December 31, 2022 was not assured.
- Regulatory and commercial risks: Betting laws and supplier licensing vary and continue to evolve. Growth depends partly on customers’ ability to operate in regulated markets and on continued access to sports-league data, streaming and other rights.
- Technology and operational risks: Cybersecurity incidents, service interruptions, reliance on cloud and other third-party providers, data errors and privacy regulation could disrupt operations or cause liability. The company disclosed a small-scale ransomware incident in 2021 that it said was stopped before spreading, and a cloud-provider interruption.
- Other exposures: COVID-19 and event cancellations, competition, foreign-exchange and floating-rate debt exposure, acquisition integration, customer credit losses, and impairment risk on large sports-rights and goodwill balances may affect results. The company recorded €6.0 million of impairment losses on loans and other financial assets in 2021, but no intangible-asset impairment.
- Ownership and dilution: Founder Carsten Koerl held all Class B shares and approximately 81.7% of voting power at December 31, 2021. The NBA warrants and potential conversion of Class B shares may dilute Class A holders. The company reported no dividends paid and no expectation of dividends in the foreseeable future.
- Audit: KPMG issued an unqualified opinion that the IFRS consolidated financial statements present fairly, in all material respects, the company’s financial position, results and cash flows.
Most important facts for investors to verify
- Whether the remaining internal-control material weakness is remediated, and whether ERP implementation proceeds without reporting or operational disruption.
- Cash conversion and working-capital trends, including the decline in Adjusted Free Cash Flow and the timing and scale of sports-rights payments.
- U.S. segment growth and the path toward profitability, alongside the continued performance of RoW Betting and RoW AV.
- The economics, vesting conditions and potential dilution from NBA and NHL rights-related warrants, and the value generated by the associated partnerships.
- Acquisition integration and returns, particularly given the increase in goodwill and intangible assets and Atrium’s reported post-acquisition loss before tax.
- Renewal and compliance status of required betting supplier licenses, material sports-rights agreements, and any developments in data-protection or player-data claims.