Interim Report January-June 2016

[PR] Evolution released today its Interim Report for January-June 2016.

Second quarter of 2016 (Q2 2015)

• Revenues increased by 50% to EUR 27.1 million (18.1)
• Profit for the period amounted to EUR 7.6 million (5.9)
• Earnings per share amounted to EUR 0.21 (0.16)
• EBITDA increased by 38% to EUR 10.6 million (7.7), corresponding to a margin of 39% (42)
• Mobile penetration amounted to 40 percent (24)

Events during the second quarter of 2016

• Exceptional growth in new tables and environments
• Live Casino Supplier of the Year for the seventh consecutive year at the EGR Awards
• Revised timetable for the change of listing to the second quarter of 2017

Events following the balance sheet date

• Agreement with The Ritz Club

Second quarter and the first six months in brief

CEO’s comments

We are continuing to achieve strong growth and revenues increased by 50 percent compared with the same quarter last year. EBITDA amounted to EUR 10.6 million, corresponding to a margin of 39 percent.

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 our studios in Riga and Malta. The project included a complete remodelling of the operator’s studio design, the launch of our 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. We have also signed contracts with new customers such as Danish Spilnu and GVC’s Casino Club brand.

This year’s EGR B2B Awards were held during the quarter and, for the seventh time of possible seven, Evolution was awarded the Live Casino Supplier of the Year. 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 our new game 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. 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, we have entered into a very exciting agreement with The Ritz Club, one of the world’s most exclusive casinos, to whom we will deliver our convergence product Dual Play Roulette. This is a true milestone and something towards which we have worked for many years. 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.

Lastly, I would like to mention that we celebrated Evolution’s tenth anniversary during the quarter. I would like to thank everyone who has been involved and participated in our amazing journey to the position as the market-leading Live Casino provider. I now look forward to another ten successful years and more.

Jens von Bahr, CEO

Read the full interim report at www.evolutiongaming.com/investors