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Austria – Italy and Spain drive 10.5 per cent growth for Novomatic

By - 29 April 2019

Novomatic succeeded in increasing sales by 10.5 per cent to €2,613.6m in 2018 with 63 per cent of sales revenue coming from the gaming operations segment, which operates gaming machines for the company across the globe, with the gaming technology division contributing 37 per cent.

The Austrian company said its operational business during the reporting period was ‘extremely satisfactory.’ Whereas gaming revenues worldwide grew by 3.9 per cent in the year 2018 compared with the previous year to US$453bn, Novomatic revenues increased by 10.5 per cent. The company was able to increase revenues in all its core markets. A total of 226 subsidiaries were fully included in the consolidated balance sheet.

The company said there was cause for celebration for the Austrian federal budget too with Novomatic tax and duty payments in Austria rising to a new high of €101m, up from €91m last year. Global taxes amounted to €500m. Novomatic now employs a total of 23,495 employees around the world, up from 23,004 in 2017, with the company providing secure employment for around 3,200 individuals from 70 countries in Austria alone.

Harald Neumann, CEO of Novomatic, said: “Growth was driven by European core markets, with results in Germany and Italy being influenced by regulatory measures.”

Italy, Europe’s largest market in terms of numbers of gaming machines operated, with around 320,000 gaming machines, experienced an increase in gambling taxes. Nevertheless, the group’s market position in Italy was further expanded. Sales in Italy reached a value of €401.1m, up from €371.7m last year. The Spanish market also saw particularly dynamic growth with an increase in sales of 20 per cent to €152.1m, up from €126.4m.

During the 2018 fiscal year, the group also acquired several smaller operators of gaming facilities in Germany, the Netherlands, Spain and Eastern Europe, predominantly gaming halls, bars and betting businesses. These acquisitions enhance the Group’s market position in some of Europe’s core markets.

In 2018, share prices for gaming companies dropped across the world, with this trend reflected in the market price for Ainsworth Game Technology’s stocks. The most significant extraordinary write down of around €264.3m concerned AGT. The first steps towards reversing the trend, such as the appointment of Lawrence Levy as the new CEO of AGT, have already been taken.

The company is also impacted by the introduction of new regulatory provisions, for instance in Germany.

Mr. Neumann sees strong potential in the consolidation begun in 2018, with the aim of achieving the greatest possible synergy between the company’s various holdings: “After rapid growth over the last few years, in particular through the acquisition of other companies, we will continue to optimize internal processes and structures at an international level”.

The group plans to intensify its involvement in the USA, both in sports betting – following on from liberalisation – and in the gaming sector.

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