Evolution operating revenue up 38.6% for Q1

Evolution has shared its financial results for the first quarter of the year and revealed revenue was up 38.6 per cent to €326.8m.

Press release.- Evolution today presented its interim report. The main data that stand out for each period are the following:

•  Operating revenues increased by 38.6 per cent to €326.8m (235.8)
• EBITDA increased by 43.4 per cent to €229.7m (160.1), corresponding to a margin of 70.3 per cent (67.9)
• Profit for the period amounted to €197.7m (132.0)
• Earnings per share before dilution amounted to €0.93 (0.62)

Events during the first quarter of 2022

• In the quarter 747,000 own shares were acquired. A total of 1,905,865 shares have been acquired and the repurchase program, announced on 3 December 2021, is thereby completed.
• Launch of Lightning Roulette in New Jersey with other states to follow.
• After the end of the period, Evolution went live with an extensive set of online casino services for multiple operators in the new regulated online gaming market in Ontario, Canada.
• After the end of the period, the first tables are live in our new Madrid studio

CEO’s comments

I’m very happy to see the great work of all Evolution employees producing yet another strong quarter. We continued the strong development from 2021 also during the first quarter of this year. Revenues in the quarter increased by 38.6 per cent to €326.8m, supported by continued strong demand for Live Casino, and the EBITDA increased to €229.7m, which corresponds to an EBITDA margin of 70.3 per cent.

Looking back at the start of this year the developments outside of Evolution are very much in my thoughts. Even though we were happy to see the effects of the pandemic slowly subsiding in Europe and North America during the quarter our attention moved to the war and the humanitarian catastrophe in Ukraine created by the unprovoked invasion from Russia. At the start of the war, Evolution had approximately 100 co-workers based in Kyiv. As for now, the war has limited direct financial impact on our business but emotionally it has affected us all. We will naturally continue to follow the development closely.

The first quarter for Live Casino has started very well with good momentum on most metrics resulting in strong growth of 44.0 per cent. We experienced exceptional growth in the first half of 2021 so the comparable figures are demanding. 2022 has started very well and the entertainment and excitement that Live games offer continues to drive new as well as existing customers to our games.

RNG growth of 1.8 per cent year-on-year pro-forma is in line with our expectations. While structural efforts, such as the One Stop Shop and other cross sales activities are important elements, at the end of the day the key to improved growth is developing great games for all players. End-user satisfaction is always key and taking us it is not done overnight. The road to success will not be straight-lined but the focus and ambition are clear and I’m convinced that we will reach our growth ambitions over time.

The EBITDA margin of 70.3 per cent is a step up from the same period last year and within our guidance of 69-71 per cent for 2022. I’m happy with this delivery during Q1, especially considering the situation in the world with general cost increases not only relating to transport and energy. Looking ahead we see that the guidance of 69-71 per cent EBITDA margin remains.

For us at Evolution, launching new games is what we live for. Creating new fantastic end-user experiences and simply put – to innovate! New games build loyalty among our existing players, introduce existing players to new games they have not played before and attract completely new categories of players. In Q1 we launched Bac Bo, a unique dice game which combines elements of the classic games Baccarat and Sic Bo. We also released Peek Baccarat which is another version of the classic Baccarat. In the quarter we also introduced new RNG titles such as Narcos Mexico and Knight Rider, as well as home grown brands like Doggy Riches Megaways and Zillard King. During the remaining part of the year, we have a very strong line up of new games both in RNG as well as in Live – a very exciting time indeed.

There is a continued strong demand for online casinos across the globe. In North America, we continue to expand all our studios, with Connecticut as the next studio to be launched in 2022. In Asia, we also continue to experience good growth, while the more mature European markets are, in general, in a slower growth mode – some due to regulatory changes affecting operators. However, we still see growth opportunities in Europe. LatAm also offers good potential going forward and continues to develop with several markets in discussions regarding the regulation of their market for online gaming.

As I write this we are in the final preparations of Go-Live in our new studio in Madrid and as you read this the first tables are just opening! Also, we are moving closer to opening our Yerevan studio to add even more capacity to the Evolution network. A lesson learned during the pandemic years is to not be too dependent on anyone’s studio. Today we can efficiently allocate our resources within our network of fifteen studios and shift resources from one site to another when needed, without any impact on our delivery capacity. As we add studios to the network this becomes even more of a strength benefiting our operators. As earlier communicated, we expect total investments in new studios to increase also in 2022.

We are well on our way into 2022, leaving the first quarter with good delivery and momentum. We strive to be better every single day, every single one of us, and we fight every day to increase the gap to our competitors. With our 88 new games in 2022 we have shown what thousands and thousands of fantastic Evolution employees can achieve together. Evolution is a workplace where everyone is accepted and respected. Together, we hope for a brighter end of 2022 than the beginning.