The first half of 2020 is a period that most companies around the world would like to forget. Many will limp battered and bruised into the second half. Some won’t make it that far.
But there are some that have swum against the tide, making lemonade from the many lemons life has thrown us all this year.
Tech companies seem to be well represented in this category. Especially those whose services involve meeting the needs of consumers confined to their homes. Evolution Gaming is no exception.
They released their 2020 first half results this week.
Revenue from January to June 2020 came in at €243 million, 48% up on the same period last year. There was no slowdown during the half, with revenues increasing from Q1 (€115 million) to Q2 (128 million).
Operating profit (€131 million) was almost double the figure for Jan-Jun 2019 (€67 million).
Evolution’s 2020 interim results continue an uninterrupted growth story that has seen the company’s share price rise consistently since listing. This rise has accelerated in the last 12 months; SEK 195 (18 July 2019) to Friday’s close of SEK 684.
As you’d expect, there were plenty of operational highlights behind these numbers. Some of the more noteworthy ones mentioned in the CEO’s comments accompanying the results are quoted below.
Filling the demand from limited sports betting…
“The quarter has been eventful with several product launches and a very high demand, partly due to the lack of sports betting games through a large part of the period…”
But-for restricted table numbers, revenues would have been higher…
“Revenues for the second quarter amounted to EUR 128.3 million (85.7), an increase of 50 percent compared to the corresponding period last year. EBITDA amounted to EUR 81.1 (42.7) with a margin of 63 percent. The margin has been positively affected by high demand and that we have operated fewer tables due to the pandemic. However, the lower number of tables has had a negative effect on revenue both through lower fees from our dedicated environments and through lower capacity than normal. For the January-June period, the margin was 60 percent, meaning we have a good distance to our previous prediction of improving the margin level this year compared to 2019.”
NetEnt acquisition will give the company 2 leading verticals (live casino and slots)…
“Evolution’s vision is to become the leading B2B provider in online casino. An acquisition of NetEnt means that we can accelerate the pace towards this vision. To add NetEnt’s leading slots to Evolution’s strong Live Casino offering will create a very strong market position significantly faster, especially in the USA, and together with clear synergies we believe this to be a strategic and highly attractive acquisition. A future Evolution with two verticals as the foundation will increase cash flow and reduce risk, while the growth potential increases. The bid process continues according to the previously announced time schedule.”
More game launches. Crazy time the most expensive game to date…
“During 2020, Evolution has continued and strengthened its focus on products and innovation. Our ability to develop new unique games while at the same time creating new variants of traditional games is important to further strengthen our leading position in Live Casino. So far, we have launched 8 out of the 12 games that we will launch this year. After the end of the quarter, we launched another one – Crazy Time – which is the most expensive and time-consuming game that we have developed to date. The reactions were instant, and we are overwhelmed by the positive reception among both players and operators.”
More studios on the way. Pennsylvania, Michigan and Lithuania…
“To meet the increasing demand, it is vital that we continue to expand our studio capacity. Our Pennsylvania studio will be our 9th studio. Upcoming additions include a studio in Michigan and an English speaking studio in Lithuania.”
US presence continues to grow…
“During the quarter we signed an agreement with Golden Nugget that will see Evolution’s US Live Casino services to be added to their existing online offering in New Jersey. The agreement consolidates Evolution’s leading position in New Jersey, while also providing a strategic platform to explore additional opportunities together with Golden Nugget in other states as the regulation of online casino in the USA continues.”