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INTERIM REPORT FOR JANUARY-MARCH 2017
[PR] Evolution released today its Interim Report for January-March 2017.
First quarter of 2017 (Q1 2016)
- Operating revenues increased by 60% to EUR 39.7 million (24.8)
- EBITDA increased by 65% to EUR 17.0 million (10.3), corresponding to a margin of 43% (42)
- Profit for the period amounted to EUR 12.7 million (7.6)
- Earnings per share amounted to EUR 0.35 (0.21)
Events during the first quarter of 2017
- Overall very high demand for Live Casino games among the customers
- Agreement with the Spanish gaming operator Codere for exclusive provision of Live Casino in Mexico
- Additional new agreements with mybet, Matchbook and White Hat Gaming
Events following the balance sheet date
- Entry into the Canadian market through an agreement with British Columbia Lottery Corporation for provision of Live Casino services
Summary of the first quarter
The strong momentum that we experienced towards the end of last year continued into 2017, and January and February were particularly strong, with a very high level of activity among our customers. Compared with the first quarter of 2016, sales increased by 60 percent. EBITDA for the quarter amounted to EUR 17 million, corresponding to a margin of 43 percent, which is roughly in line with the first quarter of 2016.
There tends to be favourable activity early in the year and 2017 has been no exception. We have seen generally high player volumes among all types of customers, both small and large well-established operators, while customers are also increasingly optimising their Live Casino offerings. In line with this, growth has, as in the past, derived primarily from existing customers, while new customers initially focus on adjusting their offer to attract end users to start playing Live Casino.
Many of our existing customers have launched new environments and expanded with additional tables during the quarter. Furthermore, our poker products have been launched with additional customers, with Three Card Poker and our exclusive live version of Ultimate Texas Hold’em, in particular, gaining increased exposure to end users.
We have also secured several new customers in the quarter, including myBet, Matchbook, White Hat Gaming and Codere. For the latter, we will be the exclusive provider of Live Casino in Mexico, one of Codere’s key markets. This will also be Evolution’s first step into the Mexican gaming market.
On the product side, we continue to maintain a high pace. During the quarter, we launched Speed Baccarat and Speed Roulette (faster versions of the originals) and a progressive jackpot for Caribbean Stud Poker. We have also enhanced the user experience in mobile mode by enabling gaming in portrait view for Baccarat and Blackjack. Previously, our mobile products could only be played in landscape view. As mentioned in the previous report, we have also initiated the launch of our new game category Live Lucky Wheel, which could, in time, get a new target audience to discover the thrill of live.
Following the end of the quarter, we have signed an agreement with Canadian operator British Columbia Lottery Corporation, which will mark our first launch in the North American market. As a result of the deal, we will later this year build a new Live Casino studio in the Metro Vancouver area in Canada, our eighth studio in total. It is an agreement of high strategic importance to Evolution and the start of a potential expansion in North America. Canada is a regulated market, where each province has its own gaming and lottery operations under government management. The studio is initially being built for BCLC, but with the intention of serving other provinces over time. The new studio will create over 180 jobs and the gross winnings of BCLC are reinvested in various community initiatives in British Columbia. I am convinced that Live Casino will be a popular product, just as in Europe, and that the new studio will lay the foundation for Evolution’s global leadership in live.
Looking ahead in 2017, we see continued strong demand for our products, even if the second and third quarters tend to have less activity than the winter months. Furthermore, we have no major sporting event driving traffic during the summer this year. However, we view our continued growth confidently, with good opportunities to further widen the gap to our competitors, through our strategy with its clear focus on profitable growth. To support future expansion, we intend to start the establishment of our third major studio in Europe during the year, which like our production studios in Riga and Malta will be able to serve multiple markets and customers.
Martin Carlesund, CEO