Interactive

Sweden – Evolution to add more live dealer studios as revenues increase by 20 per cent

By Phil - 26 October 2023

Following top-line growth of 20 per cent in its third quarter, Evolution has committed to investing in one new live dealer studio in Europe later this year and three to four next year in Europe, North America and LatAm.

The company reported revenue of €452.6m and EBITDA amounting to €318.6m, corresponding to almost 20 percent top-line growth and 70.4 per cent EBITDA margin. The group EBITDA margin was 70.4 per cent during the third quarter.

Martin Carlesund, CEO, said: “Our Live Casino revenue grew to EUR 385.8 million for the quarter and we see a higher demand for our product than what we currently can deliver. That is a measure of the phenomenal traction our games have. However, it also means we are not expanding our studios at the right pace. We have faced delays, and in some cases not executed fully, in several of our planned studio projects for this year but even more importantly we need to increase the pace of recruitment both in existing studios as well as to support new studios. We are working hard to get back on track in our existing locations and we will continue to invest in our network of studios and add new locations. We opened a smaller studio in Colombia just after the end of the third quarter.”

He described the quarter as showing ‘good financial performance’ adding that the ‘underlying growth drivers for the business remains solid.’

“During the third quarter we released more games than during any earlier quarter,” he explained. “A strong development that I am pleased with as entertaining games and a flawless player experience are the absolute most important factors for our long-term success.”

RNG revenues amounted to €66.8m and declined 1.9 per cent compared to the corresponding quarter last year. Despite the step back in year-on-year growth it was a quarter when Evolution made progress in its RNG operations.

Mr. Carlesund said: “Our release pace is now where we want it to be and all new games are from the third quarter on OSS (One Stop Shop). We are methodically and systematically moving our RNG business forward. Our earlier communicated goal for RNG growth remains but at the moment we focus on showing step-bystep improvements. We are focused on factors that are within our control when explaining our financial result. However, this quarter the impact from external factors such as currency effects are more significant than ever. The strengthening of the Euro against most currencies has affected our top line growth negatively during this year. Players deposit and play in many different currencies with our operators, the resulting GGR is converted to Euro which is the base for our invoicing. In the third quarter we estimate 6-8 percentage points negative headwind on revenue growth from currency effects when comparing revenues to the same quarter last year.”

“Our ability to deliver new and exciting player experiences is one of our main competitive advantages and I am pleased to say that we are on track to exceed our plan of more than 100 games released in 2023. In the third quarter we released 28 RNG titles and 8 Live games. We have had a continued strong development of our disco themed Funky Time which launched this spring, adding new dimensions to our popular Game Show portfolio. At the G2E show earlier in October we presented two new releases: Red Door Roulette — an innovative mash-up of Crazy Time and Lightning Roulette — and Video Poker, a Live Casino game offering the ultimate fusion of nostalgia and player-focused modern gaming technology. We also released many new and exciting slots, some of my personal favorites this quarter are The Crypt from Nolimit City and Max Megaways 2 from BTG. As stated, 2023 will be backend loaded in terms of releases both for Live and RNG and I am excited about what the last months of this year will bring from a product perspective.”

North America is a region that Evolution expects to develop over many years as more US states regulate.

“The online casino market is still in an early stage of development. We continue to see growth for our Live product quarter to quarter in the existing states, while we in the past quarter take a step back in our RNG revenue compared to the second quarter,” Mr. Carlesund explained. “Together this results in a 9 percent growth in North America compared to same period last year but a slightly lower revenue in the third quarter compared to the second quarter. Asia and Latin America both grow 35 and 39 per cent respectively from last year and Europe shows a steady 10 per cent increase. The growth compared to third quarter of last year is organic in all regions as the latest acquisitions were included in the group then.”