Interim / Quarterly Report • Jul 21, 2021
Interim / Quarterly Report
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| Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jul 2020- | Jan-Dec | ||||
|---|---|---|---|---|---|---|---|---|---|
| Group, EUR thousands | 2021 | 2020 | % | 2021 | 2020 | % | Jun 2021 | 2020 | % |
| Operating revenues | 256,687 | 128,307 | 100% | 492,528 | 243,456 | 102% | 810,206 | 561,134 | 44% |
| EBITDA | 174,668 | 81,143 | 115% | 334,793 | 145,266 | 130% | 521,740 | 332,213 | 57% |
| EBITDA margin EBITDA excluding items affecting |
68.0% | 63.2% | - | 68.0% | 59.7% | - | 64.4% | 59.2% | - |
| comparability | 174,668 | 81,143 | 115% | 334,793 | 145,266 | 130% | 541,126 | 351,599 | 54% |
| Adjusted EBITDA-margin | 68.0% | 63.2% | - | 68.0% | 59.7% | - | 66.8% | 62.7% | - |
| Operating profit | 155,852 | 74,166 | 110% | 297,500 | 131,291 | 127% | 465,909 | 299,700 | 55% |
| Operating margin | 60.7% | 57.8% | - | 60.4% | 53.9% | - | 57.5% | 53.4% | - |
| Profit for the period | 144,406 | 70,445 | 105% | 276,444 | 124,641 | 122% | 436,425 | 284,622 | 53% |
| Profit margin | 56.3% | 54.9% | - | 56.1% | 51.2% | - | 53.9% | 50.7% | - |
| Earnings per share before dilution, EUR | 0.68 | 0.39 | 75% | 1.30 | 0.69 | 89% | 2.19 | 1.55 | 41% |
| Equity per share, EUR | 14.07 | 1.78 | 690% | 14.07 | 1.78 | 690% | 14.07 | 12.84 | 10% |
| OCF per share before dilution, EUR | 0.59 | 0.52 | 14% | 1.79 | 0.73 | 146% | 1.90 | 1.72 | 11% |
| Average number of FTEs | 7,653 | 4,211 | 82% | 7,379 | 4,848 | 52% | 6,216 | 4,894 | 27% |
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| www.evolution.com |
| www.twitter.com/EvolutionIR |
Evolution develops, produces, markets and licenses fully integrated B2B Online Casino solutions to gaming operators. Since its inception in 2006, Evolution has developed into a leading B2B provider with 500+ operators among its customers. The group currently employs 11,000+ people in studios across Europe and in North America. The parent company is based in Sweden and listed on Nasdaq Stockholm with the ticker EVO. Visit www.evolution.com for more information. Evolution is licensed and regulated by the Malta Gaming Authority under license MGA/B2B/187/2010. Evolution is also licensed and regulated in many other jurisdictions such as the United Kingdom, Belgium, Canada, Romania, South Africa, and others.
Our strong development continued during the second quarter, we see very strong top-line growth and good momentum for Evolution. Revenues in the second quarter increased by 100 percent compared to the second quarter of 2020 to EUR 256.7 million. EBITDA increased to EUR 174.7 million, an increase of 115 percent and corresponding to a margin of 68 percent. We are in the middle of reshaping our RNG road map and revenues in the RNG business increased slightly from the first quarter this year but declined by 2 percent compared to Q220. I expect the year-on-year RNG-growth to improve in the coming quarters this year. The Live Casino business continues to see exceptional world-wide demand and grew with 59 percent compared to Q220. It is good to see Live Casino continue to deliver such a high growth rate yet another quarter. I am happy with the performance in the second quarter but as always we can do better and should always strive to do more.
Our EBITDA margin reached a new high level during the first quarter this year, a level that we maintained this quarter and I expect to maintain also during the rest of the year. Strong demand contributed to the margin development in the quarter, but as we have stated several times, in a trade-off situation between margins and growth, we will always go for long-term growth.
As always, we continue to put great focus on products and innovation in both our verticals with the ambition to continuously recharge our product offering. The flawless end-user experience together with entertaining, innovative games is the core of Evolution. Evolution's ambition is not only to continuously develop new unique games, but also to launch incremental improvements to our existing titles to enhance the player experience to perfection in every detail. In Live Casino securing long-term quality through continuous improvements is essential in our ambition to increase the gap to competition. In the quarter we have for example made a revolutionizing new version of our Baccarat game which we hope will be the new way of playing Baccarat all over the world. Also the Game Show category will see new titles during the second half of this year. We are developing the category with games that engage the players with more entertainment and more control for the player. We believe this is a way to broaden the category even further to yet new types of players.
As I write this one of our biggest slot-launches this year - Starburst XXXtreme - has just reached players. The slot is a sequel to NetEnt's flagship title, the iconic Starburst launched back in 2013. We believe this boosted sequel will really take the player experience to a completely new level. The joint product team combining the creative talents from NetEnt with Evolution alike, is now also coming up to speed and I look forward to seeing what the joint team will deliver in terms of continued revenue synergies.
At the end of the second quarter, Evolution also completed the acquisition of Big Time Gaming, announced in April. The acquired business, with its portfolio of slot brands and game mechanics, will be fully consolidated from the third quarter 2021. We all very much look forward to start working on what we can do together with BTG.
As stated at the top we continue to see increased demand for online casino globally. Our products are global, and our long-term ambition is to be the global market leader. We want to re-shape the Online Casino market in the world. It is that simple. The expansion potential lies in both existing geographies and in new markets. This quarter we have expanded in the UK through an agreement with the gaming operator Entain for online games on the Ladbrokes, Coral and Gala platforms. In the US new markets open up state by state. Our Michigan studio is approved and ready for launch, it will be the 3rd studio we operate in the US.
We have high demand on expansion and we will continue to invest both in existing studios as well as new studios both in North America as well as in Europe. During 2021 we will add two new delivery hubs in Europe. Coming into 2022 we see expansion and investment in studios continuing in current locations but also in new markets like Latin America. Still, the pandemic continues to impact our expansion plans and we continue to follow guidelines set by the countries where we are active. The overall situation is improving but it is still very hard and the pandemic is not over.
This quarter we announced a partnership with Scientific Games to bring our Lightning Roulette game to landbased casinos. This will be the first Evolution game to be launched in land-based casinos. We're happy to be able to offer the game, which is very popular with online players, also in a land-based environment. In the near-term I see it mainly as a way to continue to build trust and strengthen our relationship with casino players across the globe.
It is a very active time within the company right now. I very much look forward to the second half of the year, and to continue to widen the gap to competitors. We remain ever as paranoid, only by working hard to improve our offering step-by-step, day by day - every day can we reach our goals.
Martin Carlesund CEO
Quarterly results trend
*Q4/20 adjusted for non-recurring items
Revenues amounted to EUR 256.7 million (128.3) in the second quarter, equivalent to an increase of 100 percent compared with the corresponding period in 2020. EUR 53.0 million (-) of the revenue was derived from RNG-games. The positive revenue development mainly derives 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 our continuous launch of new games and variations on traditional games. The number of bet spots from end users amounted to 17.5 billion (11.9).
Revenue by game type
| Group, EUR million | Jan-Mar | Apr-Jun | Jul-Sep | Oct-Dec | Jan-Mar | Apr-Jun |
|---|---|---|---|---|---|---|
| 2020 | 2020 | 2020 | 2020 | 2021 | 2021 | |
| Live | 115.1 | 128.3 | 140.0 | 159.7 | 183.7 | 203.7 |
| RNG | 49.0 | 54.2 | 49.3 | 49.6 | 52.2 | 53.0 |
The acquisition of NetEnt was completed on 1 December 2020 and is included in the consolidated financial statements from that date. Thus, in the above table, the RNG revenue is the equivalent to the reported revenue for NetEnt for the second and third quarters during 2020. Reported amounts in SEK are converted with SEK/EUR 10.56. The reported revenues October-December 2020 for Evolution Group amounted to EUR 177.7 million, including EUR 17.8 million from NetEnt.
Operating expenses amounted to EUR 100.8 million (54.1). Expenses were mainly driven by higher costs for personnel, connected to the launch of new tables in the company's studios and the expansion in general compared to the second quarter of 2020. The expansion has also increased other operating expenses compared with Q2 2020.
Operating profit amounted to EUR 155.9 million (74.2), corresponding to an increase of 110 percent. The operating margin was 60.7 percent (57.8). The EBITDA margin was 68.0 percent (63.2).
Net financial items only had small impact on profits and related mostly to leasing interest expense and currency exchange differences. The Group's effective tax rate for the quarter amounted to 5.7 percent (4.9). The tax rate is influenced by the countries in which earnings are generated, which may vary between reported periods. Profit for the period amounted to EUR 144.4 million (70.4). Earnings per share before dilution were EUR 0.68 (0.39).
Investments in intangible assets amounted to EUR 7.1 million (3.4) during the quarter and were mainly attributable to development of new games and technical improvements of the platform, such as new functionality.
Investments in property, plant and equipment amounted to EUR 5.2 million (4.9) and comprised new studio space, new gaming tables, servers and other computer equipment to meet new technical requirements and maintain capacity and performance in connection with new platform launches.
Cash flow from operating activities amounted to EUR 125.3 million (93.6) during the quarter. Cash flow from investing activities was negative in the amount of EUR 107.5 million (negative 8.7) and included investment in subsidiaries of EUR 94.2 million. Cash flow from financing activities was negative in the amount of EUR 142.8 million (negative 77.4) and included dividend to shareholders of EUR 144.4 million (76.1). Cash and cash equivalents amounted to EUR 200.4 million (212.0) at the end of the quarter.
For the January-June 2021 period, revenues amounted to EUR 492.5 million (243.5), corresponding to an increase of 102 percent compared with the same period in 2020. EUR 105.2 million (-) of the revenue was derived from RNG-games. The positive revenue development within live casino mainly derives from increased commission income from both new and existing customers.
Operating expenses amounted to EUR 195.0 million (112.2). Expenses were mainly driven by higher costs for personnel, connected to the launch of new tables and studios. The strong expansion has also increased other operating expenses compared with the previous year.
Operating profit amounted to EUR 297.5 million (131.3) with an operating margin of 60.4 percent (53.9). The EBITDA margin was 68.0 percent (59.7).
Investments in intangible assets amounted to EUR 13.4 million (6.1) for the period. Investments in property, plant and equipment amounted to EUR 12.1 million (9.6). Investments in other financial assets amounted to EUR 0.9 (0.5).
Cash flow from operating activities amounted to EUR 227.1 million (131.7) over the period. The increase is primarily due to improved profit. Cash flow from investing activities was negative in the amount of EUR 122.9 million (negative 17.6) and included investment in subsidiaries of EUR 96.5 million. Cash flow
from financing activities was negative in the amount of EUR 127.6 million (negative 84.2) and included dividend to shareholders of EUR 144.4 million (76.1).
The global online casino market (Live & RNG) has grown 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 grow 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 growth driver for many years, and in the second quarter 68.95 percent (67.02) 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 productfor them.
As a B2B supplier, Evolution has customer relationships with gaming operators, who in turn own the relationships with the end users. Generally, the gaming operators are licensed in a limited number of jurisdictions while operating in a global market and allowing play from various geographic areas. 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. The UK includes the Crown Dependencies.
| Group, EUR million | Apr-Jun 2020 |
Jul-Sep 2020 |
Oct-Dec 2020 |
Jan-Mar 2021 |
Apr-Jun 2021 |
|---|---|---|---|---|---|
| Nordics | 6.7 | 5.8 | 11.1 | 16.4 | 16.4 |
| UK | 10.6 | 9.5 | 13.9 | 21.4 | 19.8 |
| Rest of Europe | 62.4 | 65.6 | 81.1 | 104.1 | 104.0 |
| Asia | 28.2 | 34.8 | 41.9 | 53.2 | 65.7 |
| North America | 8.5 | 9.2 | 12.6 | 21.6 | 27.2 |
| Other | 12.1 | 15.1 | 17.1 | 19.1 | 23.5 |
| Total operating revenue | 128.5 | 140.0 | 177.7 | 235.8 | 256.7 |
| Share of regulated markets | 33% | 32% | 36% | 40% | 40% |
| Revenue, regulated markets | 42.8 | 45.2 | 64.3 | 93.9 | 102.9 |
Revenue per geographical region
The Parent Company is a holding company. Net sales for the second quarter of 2021 amounted to EUR 4.9 million (1.8) and expenses to EUR 4.6 million (1.9). Operating profit amounted to EUR 331 thousand (negative 16). Profit for the period amounted of EUR 342 thousand (negative 18). The Parent Company's cash and cash equivalents amounted to EUR 17.2 million (15.1) at the end of the period and equity amounted to EUR 2,692.0 million (262.2). No significant investments were made in intangible or tangible assets.
As of 30 June 2021, Evolution had 11,311 employees (6,764), corresponding to 7,835 (4,060) full-time positions. The average number of full-time equivalents for the quarter was 7,653 (4,211).
Evolution's operations are exposed to certain risks that could have a varying impact on earnings or financial position. These can be divided into industry, operational, and financial risks. When assessing the Group's future development, it is important to take into account the risk factors, alongside any opportunities for profit growth.
The development of laws and regulations relating to the supply of gaming services that Evolution provides is a central risk factor for the Group's future earnings. Since most of Evolution's licensees are active in Europe, the legal situation in the EU is of particular interest and is continuously monitored and managed by the Group. Despite this, there remains a risk that, in the event of legislation being interpreted in an unfavourable or unanticipated way, Evolution's conditions for growth, profitability, and the games that may be supplied could be changed. Likewise, a favourable interpretation could have a positive impact on the Group.
One or more markets may be affected by events that may result in rapid changes in the business environment. Examples of this kind of events which could lead up to production disruption are extreme weather events, social unrest, diseases (e.g. virus outbreaks) or other macroeconomic or geopolitical events affected by external influences.
For further information about Evolution's risk exposure and handling, please see the Group's Annual Report for 2020, which is available on the company's website.
Interim report January-September 2021 28 October 2021 Year-end report 2021 February 2022
This interim report has not been reviewed by the company's auditor.
Stockholm, 21 July 2021
For further information, please contact CFO Jacob Kaplan, +46 708 62 33 94, [email protected].
Evolution AB (publ) e-mail: [email protected] Hamngatan 11 Website: www.evolution.com SE-111 47 Stockholm, Sweden Corporate ID: 556994-5792
CEO Martin Carlesund and CFO Jacob Kaplan will present the report and answer questions on Wednesday, 21 July 2021 at 09:00 a.m. CET via a telephone conference. The presentation will be in English and can also be followed online. Number for participation by telephone: Dial-in number:
SE: +46 8 505 583 69 UK: +44 333 300 90 34 US: +1 646 722 49 02
Follow the presentation at: https://tv.streamfabriken.com/evolution-gaming-group-q2-2021
This information is such that Evolution AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, through the contact person set out above, on 21 July 2021, at 07:30 am CET.
| Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jul 2020- | Jan-Dec | |
|---|---|---|---|---|---|---|
| Group, EUR thousands | 2021 | 2020 | 2021 | 2020 | Jun 2021 | 2020 |
| Revenues - Live | 203,678 | 128,307 | 387,352 | 243,456 | 687,211 | 543,315 |
| Revenues - RNG | 53,009 | - | 105,176 | - | 122,995 | 17,819 |
| Total operating revenues | 256,687 | 128,307 | 492,528 | 243,456 | 810,206 | 561,134 |
| Personnel expenses | -51,564 | -30,316 | -100,364 | -63,626 | -170,490 | -133,752 |
| Depreciation, amortisation and impairments | -18,816 | -6,977 | -37,293 | -13,975 | -55,831 | -32,513 |
| Other operating expenses | -30,455 | -16,848 | -57,371 | -34,564 | -117,976 | -95,169 |
| Total operating expenses | -100,835 | -54,141 | -195,028 | -112,165 | -344,297 | -261,434 |
| Operating profit | 155,852 | 74,166 | 297,500 | 131,291 | 465,909 | 299,700 |
| Financial items | -2,735 | -79 | -3,688 | -159 | -4,547 | -1,018 |
| Profit before tax | 153,117 | 74,087 | 293,812 | 131,132 | 461,362 | 298,682 |
| Tax on profit for the period | -8,711 | -3,642 | -17,368 | -6,491 | -24,937 | -14,060 |
| Profit for the period | 144,406 | 70,445 | 276,444 | 124,641 | 436,425 | 284,622 |
| Of which attributable to: | ||||||
| Shareholders of the Parent Company | 144,406 | 70,445 | 276,444 | 124,641 | 436,425 | 284,622 |
| Average number of shares before dilution | 212,695,352 | 181,284,725 | 212,511,180 | 181,397,392 | 199,484,809 | 183,927,915 |
| Earnings per share before dilution, EUR | 0.68 | 0.39 | 1.30 | 0.69 | 2.19 | 1.55 |
| Average number of shares after dilution | 223,350,840 | 187,046,005 | 220,865,210 | 185,825,338 | 206,541,214 | 189,021,346 |
| Earnings per share after dilution, EUR | 0.65 | 0.38 | 1.25 | 0.67 | 2.11 | 1.51 |
| Operating margin | 60.7% | 57.8% | 60.4% | 53.9% | 57.5% | 53.4% |
| Effective tax rate | 5.7% | 4.9% | 5.9% | 4.9% | 5.4% | 4.7% |
| Group, EUR thousands | Apr-Jun 2021 |
Apr-Jun 2020 |
Jan-Jun 2021 |
Jan-Jun 2020 |
Jul 2020- Jun 2021 |
Jan-Dec 2020 |
|---|---|---|---|---|---|---|
| Profit for the period | 144,406 | 70,445 | 276,444 | 124,641 | 436,425 | 284,622 |
| Other comprehensive income | ||||||
| Items that may be reclassified to profit | ||||||
| Exchange differences arising from the | ||||||
| translation of foreign operations | 24,645 | -1,679 | -25,146 | -1,635 | -48,657 | 37,449 |
| Other comprehensive income | 24,645 | -1,679 | -25,146 | -1,635 | -48,657 | 37,449 |
| Total comprehensive income for the period | 169,051 | 68,766 | 251,298 | 123,006 | 387,768 | 322,071 |
| Group, EUR thousands | 30/06/2021 | 30/06/2020 | 31/12/2020 |
|---|---|---|---|
| Assets | |||
| Customer relationships | 180,832 | 2,106 | 191,257 |
| Game software | 229,886 | 14,934 | 172,466 |
| Brands | 334,526 | 251 | 335,534 |
| Goodwill | 1,999,578 | 12,477 | 1,834,333 |
| Other intangible assets | 20,035 | 6,488 | 23,930 |
| Buildings | 11,519 | 11,834 | 11,629 |
| Right of use assets | 62,089 | 22,040 | 44,104 |
| Property, plant and equipment | 55,518 | 39,314 | 50,632 |
| Other non-current receivables | 12,394 | 1,479 | 3,302 |
| Deferred tax assets | 1,900 | 344 | 2,696 |
| Total non-current assets | 2,908,277 | 111,267 | 2,669,883 |
| Accounts receivable | 170,000 | 72,011 | 120,481 |
| Other receivables | 177,134 | 92,611 | 146,490 |
| Prepaid expenses and accrued income | 30,277 | 4,016 | 10,583 |
| Cash and cash equivalents | 200,392 | 212,049 | 221,675 |
| Total current assets | 577,803 | 380,687 | 499,229 |
| TOTAL ASSETS | 3,486,081 | 491,954 | 3,169,112 |
| Equity and liabilities | |||
| Share capital | 641 | 545 | 638 |
| Other capital contributed | 2,395,591 | 22,009 | 2,225,817 |
| Reserves | 12,402 | -1,536 | 37,548 |
| Retained earnings including profit for the period | 595,403 | 301,774 | 462,168 |
| Total equity | 3,004,037 | 322,792 | 2,726,171 |
| Deferred tax liabilities | 55,253 | 74 | 36,666 |
| Non-current lease liabilities | 63,809 | 17,830 | 38,078 |
| Total non-current liabilities | 119,062 | 17,904 | 74,744 |
| Accounts payable | 7,076 | 4,389 | 15,335 |
| Current liabilities to credit institutions | - | 5,145 | - |
| Provisions | 3,108 | - | 11,377 |
| Currrent tax liabilities | 180,503 | 96,799 | 164,082 |
| Other current liabilities | 113,431 | 16,823 | 128,502 |
| Current lease liabilities | 12,422 | 4,209 | 11,891 |
| Accrued expenses and prepaid income | 46,442 | 23,893 | 37,010 |
| Total current liabilities | 362,982 | 151,258 | 368,197 |
| TOTAL EQUITY AND LIABILITIES | 3,486,081 | 491,954 | 3,169,112 |
| Share | Other capital | Retained | Total | ||
|---|---|---|---|---|---|
| Group 2020, EUR thousands | capital | contributed | Reserves | earnings | equity |
| Opening equity 01/01/2020 | 545 | 17,430 | 99 | 262,823 | 280,897 |
| Dividend | - | - | - | -76,140 | -76,140 |
| Warrants | - | 4,504 | - | 717 | 5,221 |
| Repurchase of own shares | - | - | - | -9,854 | -9,854 |
| New share issue | 93 | 2,203,883 | - | - | 2,203,976 |
| Profit for the period | - | - | - | 284,622 | 284,622 |
| Other comprehensive income | - | - | 37,449 | - | 37,449 |
| Closing equity 31/12/2020 | 638 | 2,225,817 | 37,548 | 462,168 | 2,726,171 |
| Share | Other capital | Retained | Total | ||
|---|---|---|---|---|---|
| Group 2021, EUR thousands | capital | contributed | Reserves | earnings | equity |
| Opening equity 01/01/2021 | 638 | 2,225,817 | 37,548 | 462,168 | 2,726,171 |
| Dividend | - | - | - | -144,382 | -144,382 |
| Warrants | - | 21,973 | - | 1,173 | 23,146 |
| Non cash issue | 3 | 147,801 | - | - | 147,804 |
| Profit for the period | - | - | - | 276,444 | 276,444 |
| Other comprehensive income | - | - | -25,146 | - | -25,146 |
| Closing equity 30/06/2021 | 641 | 2,395,591 | 12,402 | 595,403 | 3,004,037 |
| Group, EUR thousands | Apr-Jun 2021 |
Apr-Jun 2020 |
Jan-Jun 2021 |
Jan-Jun 2020 |
Jul 2020- Jun 2021 |
Jan-Dec 2020 |
|---|---|---|---|---|---|---|
| Operating profit | 155,852 | 74,166 | 297,500 | 131,291 | 465,909 | 299,700 |
| Adjustment for non-cash items: | ||||||
| Depreciation/amortisation/impairment | 18,816 | 6,977 | 37,293 | 13,975 | 55,831 | 32,513 |
| Provisions | -1,769 | - | -6,005 | - | 3,974 | 9,979 |
| Other | 2,222 | -1,004 | -1,824 | 288 | 11,754 | 13,866 |
| Interest received | 15 | 10 | 73 | 22 | 2,519 | 2,468 |
| Interest paid | -1,108 | -94 | -2,118 | -181 | -3,002 | -1,065 |
| Tax paid | -21,731 | -403 | -33,116 | -5,606 | -34,027 | -6,517 |
| Cash flows from operating activities before | 152,297 | 79,652 | 291,803 | 139,789 | 502,958 | 350,944 |
| changes in working capital | ||||||
| Increase/decrease in accounts receivable | -20,755 | 9,003 | -48,457 | -5,725 | -75,077 | -32,345 |
| Increase/decrease in accounts payable | 715 | 1,996 | -8,280 | -868 | -7,665 | -253 |
| Increase/decrease in other working capital | -6,992 | 2,972 | -8,012 | -1,493 | -8,814 | -2,295 |
| Cash flows from operating activities | 125,265 | 93,623 | 227,054 | 131,703 | 411,402 | 316,051 |
| Acquisition of intangible assets | -7,127 | -3,408 | -13,358 | -6,107 | -20,886 | -13,635 |
| Acquisition of tangible assets | -5,150 | -4,876 | -12,124 | -9,585 | -25,790 | -23,251 |
| Acquisition of subsidiary | -94,162 | - | -96,518 | -1,381 | -49,052 | 46,085 |
| Increase/decrease in other financial assets | -1,044 | -458 | -929 | -541 | -2,766 | -2,378 |
| Cash flows from investing activities | -107,483 | -8,742 | -122,929 | -17,614 | -98,494 | 6,821 |
| Repayment of debt to credit institutions | - | -239 | - | -478 | -189,873 | -190,351 |
| Repayment of lease liability | -2,751 | -1,031 | -5,173 | -2,285 | -7,947 | -5,059 |
| Repurchase of own shares | - | - | - | -9,854 | - | -9,854 |
| Warrant premiums | 4,382 | - | 21,973 | 4,579 | 21,898 | 4,504 |
| New share issue | - | - | - | - | -3,010 | -3,010 |
| Dividend | -144,382 | -76,140 | -144,382 | -76,140 | -144,382 | -76,140 |
| Cash flows from financing activities | -142,751 | -77,410 | -127,582 | -84,178 | -323,314 | -279,910 |
| Cash flow for the period | -124,969 | 7,471 | -23,457 | 29,911 | -10,406 | 42,962 |
| Cash and cash equivalents at start of period | 326,041 | 204,949 | 221,675 | 182,520 | 212,049 | 182,520 |
| Exchange rate differences | -680 | -371 | 2,174 | -382 | -1,251 | -3,807 |
| Cash and cash equivalents at end of period | 200,392 | 212,049 | 200,392 | 212,049 | 200,392 | 221,675 |
The company presents certain financial measures in the interim report that are not defined under IFRS. The company believes that these measures provide useful supplemental information to investors and the company's management as they permit the evaluation of the company's financial performance and position. Since not all companies calculate financial measures in the same way, these are not always comparable to the measures used by other companies. Consequently, these financial measures should not be seen as a substitute for measures defined under IFRS. The tables below include measurements that are not defined in accordance with IFRS, unless otherwise stated. For definitions and purposes, see also the last page of the report.
| Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jul 2020- | Jan-Dec | |
|---|---|---|---|---|---|---|
| Group, EUR thousands | 2021 | 2020 | 2021 | 2020 | Jun 2021 | 2020 |
| Operating revenues (IFRS) | 256,687 | 128,307 | 492,528 | 243,456 | 810,206 | 561,134 |
| EBITDA margin | 68.0% | 63.2% | 68.0% | 59.7% | 64.4% | 59.2% |
| Operating margin | 60.7% | 57.8% | 60.4% | 53.9% | 57.5% | 53.4% |
| Profit margin | 56.3% | 54.9% | 56.1% | 51.2% | 53.9% | 50.7% |
| Equity/assets ratio | 86.2% | 65.6% | 86.2% | 65.6% | 86.2% | 86.0% |
| Cash and cash equivalents | 200,392 | 212,049 | 200,392 | 212,049 | 200,392 | 221,675 |
| Average number of full-time employees | 7,653 | 4,211 | 7,379 | 4,848 | 6,216 | 4,894 |
| Full-time employees at end of period | 7,835 | 4,060 | 7,835 | 4,060 | 7,835 | 5,554 |
| Earnings per share before dilution, EUR (IFRS) | 0.68 | 0.39 | 1.30 | 0.69 | 2.19 | 1.55 |
| Equity per share, EUR | 14.07 | 1.78 | 14.07 | 1.78 | 14.07 | 12.84 |
| Op. cash flow per share before dilution, EUR | 0.59 | 0.52 | 1.07 | 0.73 | 2.06 | 1.72 |
| Average number of outstanding shares before dilution |
212,695,352 | 181,284,725 | 212,511,180 | 181,397,392 | 199,484,809 | 183,927,915 |
| Number of outstanding shares | 213,432,040 | 181,284,725 | 213,432,040 | 181,284,725 | 213,432,040 | 212,327,008 |
| Group, EUR thousands | Q2/21 | Q1/21 | Q4/20 | Q3/20 | Q2/20 | Q1/20 | Q4/19 | Q3/19 | Q2/19 |
|---|---|---|---|---|---|---|---|---|---|
| Operating revenues (IFRS) | 256,687 | 235,841 | 177,658 | 140,020 | 128,307 | 115,149 | 105,998 | 94,729 | 85,728 |
| EBITDA | 174,668 | 160,125 | 96,219 | 90,728 | 81,143 | 64,123 | 55,830 | 48,470 | 42,730 |
| EBITDA margin | 68.0% | 67.9% | 54.2% | 64.8% | 63.2% | 55.7% | 52.7% | 51.2% | 49.8% |
| Operating profit | 155,852 | 141,648 | 84,837 | 83,572 | 74,166 | 57,125 | 48,674 | 41,995 | 36,614 |
| Operating margin | 60.7% | 60.1% | 47.8% | 59.7% | 57.8% | 49.6% | 45.9% | 44.3% | 42.7% |
| Revenue growth vs prior year | 100.1% | 104.8% | 67.6% | 47.8% | 49.7% | 45.2% | 50.9% | 47.2% | 44.7% |
| Revenue growth vs prior quarter | 8.8% | 32.8% | 26.9% | 9.1% | 11.4% | 8.6% | 11.9% | 10.5% | 8.1% |
| Cash and cash equivalents | 200,392 | 326,041 | 221,675 | 283,203 | 212,049 | 204,949 | 182,520 | 141,108 | 88,680 |
| Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jul 2020- | Jan-Dec | |
|---|---|---|---|---|---|---|
| Group, EUR thousands | 2021 | 2020 | 2021 | 2020 | Jun 2021 | 2020 |
| Operating margin | ||||||
| Profit before tax | 153,117 | 74,087 | 293,812 | 131,132 | 461,362 | 298,682 |
| Net financial items | 2,735 | 79 | 3,688 | 159 | 4,547 | 1,018 |
| Operating profit (EBIT) | 155,852 | 74,166 | 297,500 | 131,291 | 465,909 | 299,700 |
| Divided by Total operating revenues | 256,687 | 128,307 | 492,528 | 243,456 | 810,206 | 561,134 |
| Operating (EBIT) margin | 60.7% | 57.8% | 60.4% | 53.9% | 57.5% | 53.4% |
| EBITDA and EBITDA margin | ||||||
| Profit before tax | 153,117 | 74,087 | 293,812 | 131,132 | 461,362 | 298,682 |
| Net financial items | 2,735 | 79 | 3,688 | 159 | 4,547 | 1,018 |
| Depreciation/amortisation | 18,816 | 6,977 | 37,293 | 13,975 | 55,831 | 32,513 |
| EBITDA | 174,668 | 81,143 | 334,793 | 145,266 | 521,740 | 332,213 |
| Divided by Total operating revenues | 256,687 | 128,307 | 492,528 | 243,456 | 810,206 | 561,134 |
| EBITDA margin | 68.0% | 63.2% | 68.0% | 59.7% | 64.4% | 59.2% |
| Profit margin | ||||||
| Profit for the period | 144,406 | 70,445 | 276,444 | 124,641 | 436,425 | 284,622 |
| Divided by Total operating revenues | 256,687 | 128,307 | 492,528 | 243,456 | 810,206 | 561,134 |
| Profit margin | 56.3% | 54.9% | 56.1% | 51.2% | 53.9% | 50.7% |
| Equity/Assets ratio | ||||||
| Total equity | 3,004,037 | 322,792 | 3,004,037 | 322,792 | 3,004,037 | 2,726,171 |
| Divided by Total assets | 3,486,081 | 491,954 | 3,486,081 | 491,954 | 3,486,081 | 3,169,112 |
| Equity/Assets ratio | 86.2% | 65.6% | 86.2% | 65.6% | 86.2% | 86.0% |
| Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jul 2020- | Jan-Dec | |
|---|---|---|---|---|---|---|
| Parent company, EUR thousands | 2021 | 2020 | 2021 | 2020 | Jun 2021 | 2020 |
| Net sales | 4,923 | 1,848 | 9,513 | 4,033 | 14,885 | 9,405 |
| Other external expenses | -4,592 | -1,864 | -9,067 | -3,989 | -14,298 | -9,220 |
| Operating profit | 331 | -16 | 446 | 44 | 587 | 185 |
| Interest income and similar income | -42 | - | -42 | - | 200,094 | 200,136 |
| Interest expenses and similar expenses | 80 | - | 80 | - | 80 | - |
| Profit before tax | 369 | -16 | 484 | 44 | 200,761 | 200,321 |
| Tax on profit for the period | -27 | -2 | -127 | -32 | -183 | -88 |
| Profit for the period* | 342 | -18 | 357 | 12 | 200,578 | 200,233 |
*Profit for the period coincides with comprehensive income for the period.
| Parent company, EUR thousands | 30/06/2021 | 30/06/2020 | 31/12/2020 |
|---|---|---|---|
| Assets | |||
| Intangible assets | 661 | 864 | 763 |
| Property, plant and equipment | 43 | 52 | 50 |
| Participating interest in Group companies | 2,495,726 | 206,000 | 2,495,279 |
| Other non-current receivables | 187 | 40 | 41 |
| Total non-current assets | 2,496,617 | 206,956 | 2,496,133 |
| Receivables from Group companies | 251,232 | 40,735 | 212,914 |
| Other current receivables | 1,549 | 404 | 751 |
| Prepaid expenses and accrued income | 14,262 | 549 | 368 |
| Cash and cash equivalents | 17,150 | 15,123 | 34,388 |
| Total current assets | 284,193 | 56,811 | 248,421 |
| TOTAL ASSETS | 2,780,810 | 263,767 | 2,744,554 |
| Equity and liabilities | |||
| Share capital | 641 | 545 | 638 |
| Retained earnings including profit for the period | 2,691,356 | 261,628 | 2,665,657 |
| Total equity | 2,691,997 | 262,173 | 2,666,295 |
| Accounts payable | 119 | 149 | 2,620 |
| Currrent tax liabilities | 307 | 982 | 1,120 |
| Other current liabilities | 87,563 | 210 | 73,719 |
| Accrued expenses and prepaid income | 824 | 253 | 800 |
| Total current liabilities | 88,813 | 1,594 | 78,259 |
| TOTAL EQUITY AND LIABILITIES | 2,780,810 | 263,767 | 2,744,554 |
Evolution prepares its financial statements in accordance with the International Financial Reporting Standards (IFRS) as approved by the European Union. The Group's interim report has been prepared in accordance with IAS 34, Interim Financial Reporting. The Parent Company uses the same accounting principles as the Group, with the addition of the Swedish Financial Reporting Board's recommendation; RFR 2, Accounting for Legal Entities. The accounting policies are unchanged from the 2020 annual report. There are no amendments to IFRS standards in 2021 that have had material impact on the Group's results of operations and financial position.
Amounts are expressed in thousands of Euro (EUR) unless otherwise indicated. Amounts or figures in parentheses indicate comparative figures for the corresponding period last year.
No major events following the end of the period.
The company has three incentive programmes. Upon full exercise of the warrants within the programme 2018/2021 (adopted by the Annual General Meeting in 2018), the dilution effect will be approximately 0.83 percent. Upon full exercise of the warrants within the programme 2020/2023 (adopted by the Extra General Meeting on 16 January 2020), the dilution effect will be approximately 0.42 percent. Upon full exercise of the warrants within the programme 2021/2024 (adopted by the Extra General Meeting on 28 January 2021), the dilution effect will be approximately 1.86 percent. More information about the programmes is available in the 2020 annual report.
Evolution's operations are, to a certain extent, influenced by seasonal patterns in end-user activity. The Group's customers generally notice increased end-user activity and an increased volume of operations in the fourth quarter of each year, which is consistent with the Group's experience of increased Live Casino traffic and commission income earned in the fourth quarter.
During the first quarter, the remaining additional purchase consideration regarding Ezugi of EUR 2,356 thousand was paid. During the second quarter, the remaining additional purchase consideration regarding Red Tiger of EUR 12,913 thousand was paid.
Evolution has entered into an agreement to acquire 100 percent of the share capital in Big Time Gaming Pty Ltd (BTG). The transaction was closed on 30 June and BTG will be included in the consolidated accounts from 1 July. The up-front consideration was paid in cash and Evolution shares, corresponding to EUR 80 million and EUR 147.8 million respectively. In addition, Evolution will pay earn-outs, based on BTG's EBITDA for the years 2022/23 and 2023/24. Maximum earn-out is EUR 230 million, payable in 2023 and 2024, of which 70 percent in cash and 30 percent in Evolution shares.
According to the preliminary acquisition analysis, a non-tax-deductible goodwill of EUR 392.2 million arose that is primarily attributable to the skills that BTG's employees contribute and strengthened presence in important markets. The useful life for customer relationships and game portfolio is estimated to be ten years.
Preliminary acquisition analysis, based on BTG's May accounts.
| Fair value acquired net assets Big Time Gaming, EUR thousands | ||
|---|---|---|
| Customer relationships | 1,100 | |
| Brand | 2,400 | |
| Game portfolio | 62,700 | |
| Other intangible assets | 92 | |
| Right of use assets | 169 | |
| Property, plant and equipment | 109 | |
| Long-term financial assets | 33 | |
| Accounts receivable | 4,066 | |
| Other short-term assets | 35 | |
| Accrued income and prepaid expenses | 4,904 | |
| Cash and cash equivalents | 6,903 | |
| Deferred tax liability | -19,860 | |
| Long-term liabilities | -519 | |
| Leasing liability | -228 | |
| Short-term liabilities, interest bearing | -3,463 | |
| Accounts payable | -69 | |
| Tax liability | -2,590 | |
| Other short-term liabilities | -237 | |
| Total acquired net assets | 55,545 | |
| Purchase consideration Big Time Gaming, EUR thousands | ||
| Consideration paid, cash | 79,970 | |
| Consideration paid, own shares | 147,804 | |
| Additional purchase consideration, debt | 220,000 | |
| Total purchase consideration | 447,774 | |
| Fair value acquired net assets | -55,545 | |
| Goodwill | 392,229 |
| Investing activities, Group EUR thousands | 2021 |
|---|---|
| Additional purchase consideration Ezugi | -2,356 |
| Additional purchase consideration Red Tiger | -12,913 |
| Redemption warrants NetEnt | -447 |
| Consideration paid Big Time Gaming | -79,970 |
| Expenses directly linked to the acquisition of BTG | -831 |
| Effect on consolidated cash and cash equivalents | -96,518 |
Expenses related to acquisitions are included in Other operating expenses in the income statement.
| Big Time Gaming's contribution, Group EUR thousands | 2021 |
|---|---|
| Operating revenues | - |
| Profit after tax for the year | -831 |
Profit for the year refers to acquisition costs of EUR 831 thousand.
Following table shows revenues and profit for the year as if the acquisition of Big Time Gaming took place on 1 January. Based on actual January to May and June forecast for BTG.
| Group, EUR thousands | BTG | Evolution | Group |
|---|---|---|---|
| Operating revenues | 19,369 | 492,528 | 511,897 |
| Profit after tax for the year | 9,496 | 276,444 | 285,940 |
Big Time Gaming profit for the year include acquisition costs of EUR 831 thousand and amortisation of excess values of EUR 3,190 thousand.
| Key ratios Operating profit (EBIT) |
Definition Profit before tax excluding net financial items. |
Purpose This key ratio is used by management to monitor the earnings trend in the Group. |
|---|---|---|
| Operating margin (EBIT)margin | Operating profit in relation to operating revenues. |
This key ratio is used by management to monitor the earnings trend in the Group. |
| EBITDA | Operating profit less depreciation. | This key ratio is used by management to monitor the earnings trend in the Group. |
| EBITDA margin | Operating profit excluding depreciation and amortisation in relation to operating revenues. |
This key ratio is used by management to monitor the earnings trend in the Group. |
| Profit margin | Profit for the period in relation to operating revenues. |
This key ratio is used by management to monitor the earnings trend in the Group. |
| Equity/assets ratio | Equity at the end of period in relation to total assets at the end of period. |
This key ratio indicated the Group's long term payment capacity. |
| Cash and cash equivalents | Cash and bank assets. | Used by management to monitor the Group's short-term payment capacity. |
| Revenue growth compared with the previous year |
Operating revenues for the period divided by operating revenues in the same period last year. |
This key ratio is used by management to monitor the Group's revenue growth. |
| Revenue growth compared with the preceding quarter |
Operating revenues for the period divided by operating revenues for the preceding quarter. |
This key ratio is used by management to monitor the Group's revenue growth. |
| Average number of full-time employees |
The average number of full-time employees during the period. Full-time equivalents include part-time positions. |
This key ratio is used by management to monitor the Group's number of employees' growth. |
| Per share | ||
| Earnings per share before dilution | Profit for the period in relation to the average number of shares outstanding before dilution during the period. |
This key ratio is used by management to monitor the earnings trend in the Group. |
| Equity per share | Shareholders' equity divided by the number of shares outstanding at the end of the period. |
This key ratio is used by management to monitor the earnings trend in the Group. |
| Operational cash flow per share before dilution |
Cash flow from operating activities in relation to the average number of shares outstanding before dilution during the period. |
This key ratio is used by management to monitor the cash flow trend in the Group. |
| Average number of shares outstanding |
The average number of shares outstanding before dilution during the period. |
Used to calculate key ratios in relation to the number of shares during the period. |
| Number of shares outstanding | Number of shares outstanding at the end of the period. |
Used to calculate key ratios in relation to the number of shares at the end of the period. |
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