Relevant iGaming provider for casino operators Evolution Group announced today its latest Financial Performance, with very positive results. For the January-June 2023 period, revenues amounted to €870.6 million, corresponding to an increase of 29.8% compared with the same period in 2022. From the total, €138.7 million of the revenue was derived from RNG-games. The favorable revenue development within live casino mainly is a consequence of an increased commission income from both new and existing customers.
Moreover, EBITDA increased by 30.8% to €611.9 million, corresponding to a margin of 70.3%. Operating profit amounted to €553.0 million with an operating margin of 63.5%. The EBITDA margin was 70.3%. Earnings per share amounted to €2.41 (compared to €1.87 of H1 2022)
Regarding the second quarter of 2023 (April to June 2023), data also reflected this expansion. Revenues amounted to €441.1 million, equivalent to an increase of 28.2% compared with the corresponding period in 2022. €69.3 million of the revenue was derived from RNG-games. The positive revenue development within live casino mainly comes from increased commission income from existing customers and, to a certain extent, from new customers. Demand for online casino games continues to grow, partly as a result of the continuous launch of new games and variations on traditional games.
About Profitability, operating profit amounted to €281.5 million, corresponding to an increase of 31%. The operating margin was 63.8%. EBITDA increased by 30.8% to €311.7 million. The EBITDA margin was 70.7%. Earnings per share amounted to €1.24 (compared to €0.94 of Q2 2022). Some of the highlights of Q2 2023 were: a) Highest EBITDA-margin ever reported in a quarter; b) Successful launch of Funky Time, and c) Build out of new live casino studios in LatAm.
ONLINE CASINO MARKET DEVELOPMENT
The company also made an analysis of the gaming landscape. The global online casino market (Live & RNG) has risen strongly in recent years and is expected to continue to be among the fastest-growing gaming segments in the coming years. Evolution’s growth target is to expand faster than the total global online casino market. Market growth is influenced by several underlying factors, such as technological advances with, among other things, improved hardware and increased bandwidth, the migration of land-based casinos to online environments and market regulations. Increased use of mobile devices has been a huge driver for many years, and in the quarter 67.0% of the operators’ GGR via Evolution’s platform was generated by mobile devices. RNG is the largest vertical of the online casino market. However, to a large extent, growth is driven by Live Casino, having grown in importance for most gaming operators and has become an integrated and strategically important product for them.
The table below shows the geographic markets from which Evolution’s revenues originate. Revenues based on player activity are allocated according to the end-users’ location, while revenues not based on player activity are allocated to the operator’s location. There has been a progressive and gradual increase in markets such as Europe and LatAm, and a very strong upsurge in Asia, while the USA and other markets remain stable, although with a growth trend for the second half of the year.
As of June 30th, 2023, Evolution had 17,447 employees (+14% v 1H 2022, with 15,297 employees), corresponding to 12,713 full-time positions. The average number of full-time equivalents for the quarter was 12,750.
ANALYSIS OF THE CEO
Martin Carlesund, CEO of the Evolution Group, shared his point of view about the success of the company in the aforementioned period. In this sense, he affirmed: “During the second quarter of 2023, we continued to deliver good results, with top line growth of 28.2% to €441.1 million and our highest ever EBITDA-margin in a quarter, 70.7%. Revenue from our Live Casino business, representing 84% of total, increased by 33.5% to €371.8 million. We have made a lot of progress in our RNG operations during the period. At the end of the quarter, we are up to speed with our game release plan. We have earlier communicated that the development towards our goal of double-digit growth will take more time and while not yet growing in line with our targets for RNG, it is worth pointing out that it is a highly profitable business and accretive to group margins. With our operational improvements in place, I see that we have many opportunities to execute on going forward.”
About the games of the company, he stated: “Funky Time was launched as planned in Q2. It adds to our portfolio of unique game shows, and is the largest and most complex game we’ve ever created, mixing RNG and Live game elements, as well as animated characters and live video. It is a very innovative and entertaining game with a fantastic retro club ambience. We see large numbers of new players continuously taking on to the game and it has good traction. Our release schedule for Live games is tilted toward the second half of the year and we have many exciting releases planned. Also our RNG roadmap is busier during the second half of the year, all according to plan, and in line with the 2023 target of more than 100 games in total (including Live games). This year’s roadmap is our strongest ever and we are planning for an even more exciting roadmap 2024.”
When speaking about regions where the company is working at, he said: “We continue to see long-term growth opportunities in all regions. In North America, we continuously expand our Live game portfolio. In the second quarter, we launched Live Craps in Michigan. We are now present with this iconic dice game in four states in the US. There are still many games to come, and step by step, we add to the game portfolio and will by that increase the Live share of online casino in this market. In LatAm, we continue to see player numbers increase from the region and we have started to expand our studio network there with small studios in Argentina and Columbia. Europe and Asia are today the largest regions for us. Both were early in taking on to Live Casino and players are familiar with the product. There is much potential in both regions. In Europe, demand for new tables exceeds our current delivery capacity, something we will work to address during the quarters to come.”
“New titles and constantly improving the playing experience in our existing games are important cornerstones in our ambition to deliver growth. Securing long-term quality in combination with the fact that we always want to do more and better, this is our mind-set and the reason why we can expand our gap to competition also in challenging times. We will continue to invest for growth, to try new solutions, but always strive to be better, every single day. Together with the soon 18,000 people at Evolution, I look forward to the second half of 2023 with great enthusiasm,” he concluded.