Comments from CEO Martin Carlesund:
The operational delivery in the second quarter of 2022 is nothing but fantastic, and during the quarter, we reached many significant milestones.
These include the new studio in Connecticut, opening of the regulated Ontario market, opening of the new studio in Madrid, opening of the new studio in Yerevan, the launch of Live games in West Virginia and starting construction of an additional studio in New Jersey.
All this, on top of expansion all over the world, adding close to 1,000 employees during the quarter, shows the speed we are moving forward.
I am very proud of all achievements that the employees of Evolution have made during the quarter. Even so, we need to be better tomorrow than we are today and constantly challenge ourselves to perform better.
During the quarter, we also announced the acquisition of one of the leading and most innovative slots creators – Nolimit City.
We are all very happy to welcome Nolimit City to the Evolution family. The acquisition is financed with our existing cash flow. It’s a way to use our financial strength to take yet another step towards becoming the leading provider of casino games in the world.
The transaction, expected to be completed in Q3, includes an upfront consideration of EUR 200 million and earn-outs of up to EUR 140 million, payable in 2023, 2024 and 2025, respectively.
Looking further ahead, we intend to distribute Nolimit City slots through our OSS (One Stop Shop) and add them to our offering to operators.
The earlier communicated goal of double-digit growth for our exiting RNG-business remains and is not affected by this latest acquisition.
Financially, I regard the second quarter as good but not great and not quite reflecting the success we have had operationally. When evaluating our financial performance in the second quarter, I also factor in the exceptional development we had during Q1 and Q2 last year, which affects the year-on-year percentage growth rate in Q2.
In Q2 2022, revenues increased by 34.0 per cent year-on-year to EUR 344.0 million, and the EBITDA increased to EUR 238.2 million, corresponding to an EBITDA margin of 69.3 percent.
In the second quarter of 2022, Live Casino increased by 36.7 percent year-on-year, and RNG revenues grew by 6.1 percent year on year.
As I have stated earlier, when it comes to RNG, our ambition is double-digit growth, and I find the result in Q2 as a good step toward that goal. I’m pleased with the development of our RNG business in Q2 2022.
The EBITDA margin of 69.3 per cent is within our guided range of 69-71 percent for 2022.
Our ambition is always to do more and do better on cost items within our control. As stated many times before, if there is a trade-off between margin and market share, we will always go for market share and what we believe are the right decisions long-term for Evolution.
We all know that the world is a challenging place right now, and it’s hard not to mention the ongoing horrible war and the pandemic’s effects.
Our fast expansion is affected by the current cost inflation, especially in categories like energy, logistics, semiconductor products and wages.
We are happy but not content with the margin of 69.3 percent in the quarter, and we are likely to continue to see margins vary during the year but expect to stay within the guided range for 2022.
Nothing is more important than flawless, seamless player satisfaction through entertaining and exciting world-class games.
The newly released Evolution smart lobby is one example that makes a difference for players every day.
34 of our 88 games planned for this year have been released, so we have more than half of our planned game releases during the second half of this year.
During the quarter, we released one of our headline games this year – XXXtreme Lightning Roulette – it is a great game which attracts both new and existing players. This roulette game with more and bigger multipliers is a good example of how we can leverage our growing portfolio of brands from both the Live- and RNG space.
Another new game combining the Live and RNG playing experience is Crazy Coin Flip. This can be seen as our first ‘Live Slot’ game. It definitely strikes a chord with players and is a style of game that we will continue to explore. New RNG titles in the second quarter include Funkmaster, Dragons Clusterbuster and Space Wars2.
In terms of development by region, we see the larger trends maintained with the demand for online casinos continuing to increase globally. However, both our Asia and Other regions, while growing very nicely, are at a marginally lower pace in this quarter compared to earlier this year.
We continued to expand our studios in North America however, most of the increased capacity was added toward the end of the quarter. European markets showed single-digit growth in the quarter, with a step faster pace in the Nordics.
I very much look forward to the second half of 2022. I feel excited about all things we have in front of us. We want to be better, we want to deliver more, we want to run faster- that is who we are.
Adding Nolimit City and the upcoming games on the 2022 roadmap will be great, and we are again increasing the gap to all competitors. The world is changing, but we stand strong, and we continue forward.
Press Release Ends