Evolution: Interim report January-March 2024

First quarter of 2024 (Q1 2023)

• Operating revenues increased by 16.7% to EUR 501.5 million (429.6)
• EBITDA increased by 15.2% to EUR 345.8 million (300.2), corresponding to a margin of 69.0% (69.9)
• Profit for the period amounted to EUR 269.2 million (251.2)
• Earnings per share before dilution amounted to EUR 1.27 (1.18)

Comments from CEO Martin Carlesund:

For the first quarter of 2024, Evolution continued to render strong results. Revenue amounted to EUR 501.5 million (429.6) corresponding to year-on-year revenue growth of 16.7 percent with an EBITDA margin of 69.0 percent. Revenue growth at constant currency is estimated to 24 percent in the quarter. It is encouraging to see the good momentum from the end of 2023 carrying over into this year.

Revenue from Live Casino increased by 19.8 percent year-on-year and compared to the previous quarter we add EUR 25.7 million in revenue. Although a strong start to the new year, much remains to be done to fully leverage our position in the market and serve the underlying demand.

RNG revenues improved sequentially both in comparison to the previous quarter as well as year-on-year, delivering a revenue of EUR 70.1 million in the quarter. We continue to incrementally improve our RNG business both in the pace of game releases and in tools surrounding the games. We are adding and injecting AI into our system infrastructure and also in our way of operating where we see that it can contribute to efficiency, analysis, or automation. Now we also can see clear benefits of OSS as it is starting to deliver direct results for our operators. With AI-driven functionality and world-wide distribution to the largest Online Casino network in the world OSS is already very powerful. We will continue to add features, more to come already later in the year.

During the period we have continued to increase our table capacity to meet the market demand, and I am pleased to say that the progress made in Q4 has carried over into this year. We have continuously accelerated our recruitment and made good progress in our building expansion projects in several studios – all together we have a much improved balance between supply and demand today compared to last year. Throughout 2024 we will continue to have full focus on increasing our delivery capacity. In this phase with heavy focus on expansion margins will initially be pressured, but the ongoing investments pave the way for increased revenues going forward. For the full year our guidance of EBITDA margin of 69-71 percent remains.

In 2023 we increased the pace of new game introductions, and we aim at maintaining a high pace also 2024.  The first Live game launch of the year is Stock Market, a fantastic game set in the volatile, exciting world of financial markets. Players have quickly taken to the game, and it has been a strong release in the period. In Q2 we will launch our most ambitious game show ever – Lightning Storm – the newest, most thrilling, and extravagant member of our Lightning family. In RNG over 20 new titles were introduced in the first quarter. Our product ambitions are as always high, and we aim to bring players new playing experiences that increase entertainment value and lift excitement to new levels. The addition of the Livespins product is one example of a brand-new playing experience that brings a new dimension to online casino. I very much look forward to the coming year and realizing the ambitions of the “Product Leap years” creating more never-before-seen games and playing experiences.

Our products have a global audience and in the first quarter we see growth both compared to the previous quarter and the first quarter 2023 across all regions. The long-term trends remain, with stable organic growth in Europe and very robust growth in Asia. In North America, we added a new client, Fanatics, and expanded our strategic relationship with Ceasars Digital, which includes an additional studio in New Jersey. We also entered Delaware with our slot game offering. LatAm reported good year-over-year growth in the quarter, however operators are awaiting the transition to regulation in Brazil.

An important part of our growth strategy is to continue to expand our studio network. As already communicated, we launched the Bulgarian studio in the fourth quarter of 2023. As mentioned above, we will now add a studio in New Jersey with Ceasars. Our studio in Colombia is on its way, and we are also adding one new studio in Czech Republic during the year.

Evolution is a growing, strong, profitable, all-equity funded company – in recent years our solid financial position has enabled us to remain focused on growth through periods of geopolitical uncertainty, a pandemic and rapid increases in interest rates. For 2023 a dividend of EUR 2.65 per share is proposed to the AGM, together with the recently completed buy-back program of EUR 400 million over 90% of 2023 profit is returned to shareholders.  We will continue to invest and expand our global operations and come to work hungry, ambitious, and excited for what more we can achieve.

I want to thank the amazing Evolution team - that now exceeds 20,000 exceptionally dedicated persons - for this great start to the new year and their contributions to securing our future growth, and I look forward to seeing how we can continue to make Evolution a little bit better every day in 2024!
 

Presentation for investors, analysts and the media 
CEO Martin Carlesund and CFO Jacob Kaplan will present the report and answer questions on Wednesday, 24 April 2024 at 09:00 am CEST via a telephone conference. The presentation will be in English and can also be followed online.

Webcast: https://ir.financialhearings.com/evolution-q1-report-2024

Teleconference: Dial-in number to the teleconference will be received by registering on the link below. After the registration you will be provided phone numbers and a conference/user ID to access the conference. https://conference.financialhearings.com/teleconference/?id=50048474

For further information, please contact:
Jacob Kaplan, CFO, ir@evolution.com

This information is such that Evolution AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the contact person set out above on 24 April 2024, at 07.30 am CEST.

Evolution AB (publ) (”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 800+ operators among its customers. The group currently employs 20,500+ 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.