Interactive
Sweden – Evolution sees second quarter surge by 50 per cent
By Phil - 17 August 2016
The continued surge towards live dealer online gaming has pushed Evolution Gaming’s second quarter results to €27.1m (18.1) marking a huge increase of 50 percent compared with the corresponding period in 2015.
The positive revenue development mainly derives from increased commission income from existing customers and, to a certain extent, from new customers. Revenues from dedicated tables and environments also contributed to the increase as a result of additional customers demanding customised live casino environments.
Profitability Operating profit amounted to €8.3m.
Jens von Bahr, CEO, said: “We are continuing to achieve strong growth and revenues increased by 50 per cent compared with the same quarter last year. EBITDA amounted to €10.6m, corresponding to a margin of 39 per cent. This is somewhat lower than in the preceding quarter since the substantial expansion is driving costs, mainly related directly to new tables and environments. During the second quarter we have seen an exceptional growth in new tables and environments, which I believe is strategically very positive. However, it puts pressure on the margin since a new table has a negative margin in the short term.”
As in the first quarter, the expansion is mainly being driven by existing customers. One of the quarter’s most significant activities was the launch of several additional tables for Unibet at Evolution’s studios in Riga and Malta. The project included a complete remodelling of the operator’s studio design, the launch of Evolution’s new Live Lobby and a new user interface, a new dedicated team and new uniforms. Another major project was the relaunch of Grosvenor’s environment, which included moving from Riga to Malta. Customers taking the step of introducing their first dedicated environments during the quarter include LeoVegas. The group has also signed contracts with new customers such as Danish Spilnu and GVC’s Casino Club brand.
Mr. von Bahr added: “For each year that passes, the number of competitors increases, so it feels particularly rewarding to see this evidence that our efforts to continuously remain at the forefront are yielding results.”
On the product side, two major launches took place in the quarter. First out was Double Ball Roulette, which, just as the name suggests, is a variation on traditional roulette but with two balls.
“The game is issued through our partnership with Games Marketing and a number of customers have already launched it to their players,” Mr. von Bahr explained. “The second launch was of the much longed-for mobile version of Live Three Card Poker, which was launched by more than 50 customers in the quarter. Our entire product portfolio is now compatible with smartphones and tablets, which is a basic requirement for being able to provide a complete gaming experience.”
Mobile penetration for the quarter amounted to 40 percent. Following the end of the quarter, Evolution entered into a very exciting agreement with The Ritz Club, who will offer convergence product Dual Play Roulette.
“This is a true milestone and something towards which we have worked for many years,” Mr. von Bahr said. “This also confirms the trend of land-based casinos seeking online solutions to strengthen their relationships with their customers. We expect continued high demand for our services throughout the remainder of the year. To maintain the right focus – to continue delivering growth with a good margin – the Board has therefore revised the schedule for Evolution’s list change, which is now expected to take place in the second quarter of 2017. Despite our size in terms of personnel, we are still an agile and entrepreneurial organisation, in which flexibility is important – at the moment, we believe that management must devote all of its efforts to delivering the best product.”
