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$EVO 48% YoY GROWTH 
Leading developer of live casino studios for gaming operators
Sales grew 48% YoY to € 140m in Q3 ’20 with EBITDA Margins of 65%
Live casino’s market grew by 45% EACH yearAn EASY thread
$EVO Evolution Gaming Group is a Swedish 
company that develops, produces, markets and licenses live casino solutions for gaming operators
Founded in 2006 and has become a pillar in the online gambling industry
Serving over 300 operators and employing over 8,000 people
company that develops, produces, markets and licenses live casino solutions for gaming operatorsFounded in 2006 and has become a pillar in the online gambling industry
Serving over 300 operators and employing over 8,000 people
Before we take the dive, what are LIVE CASINO’s?
Think of a normal casino with REAL game operators and REAL players - But everything is LIVE-STREAMED:
A real game operator (dealer) who handles real playing material (cards, roulette)
Think of a normal casino with REAL game operators and REAL players - But everything is LIVE-STREAMED: A real game operator (dealer) who handles real playing material (cards, roulette)
A set of high-definition cameras sit in front of the game operator and stream the live action to gamers
Gamers interact (make bets, chat, speak) through their computer or mobile phone
In more details:
The game operator (dealer) works from a purpose-built gaming studio where the streaming equipment is installed
The decor is a mix of computer generated images and physical pieces
The studio has to adhere to the laws of the jurisdiction it operates in
The game operator (dealer) works from a purpose-built gaming studio where the streaming equipment is installed The decor is a mix of computer generated images and physical pieces The studio has to adhere to the laws of the jurisdiction it operates in
Here is the full take explanation https://www.bbntimes.com/companies/how-do-live-casino-games-work
https://www.bbntimes.com/companies/how-do-live-casino-games-work
What is $EVO doing in this?
$EVO owns live gaming studios. It also recruits and trains the gaming operators
It also provides parts of the live-gaming software, offers decor and game customisation features
From its control rooms, it monitors games to prevent fraud
$EVO owns live gaming studios. It also recruits and trains the gaming operators It also provides parts of the live-gaming software, offers decor and game customisation features From its control rooms, it monitors games to prevent fraud
It then licenses these facilities to gaming operators such as Betfair, Draft Kings, William Hill and MANY more It also enables mobile live casino (play from mobile device) and land-based live casino (where it operates from a real casino)
Great! But what does competition looks like?
$EVO is the leader in the live casino studio market as it operates 9 studios worldwide and serves over 300 operators
$EVO is the leader in the live casino studio market as it operates 9 studios worldwide and serves over 300 operators
“Due to the high quality of their live dealer casino games, you will find the products of this casino vendor in many gambling websites throughout the industry.”
From https://everymatrix.com/popular-casino-vendors-everymatrix/
From https://everymatrix.com/popular-casino-vendors-everymatrix/
“The company is the leading supplier of live casino games […] Online live casino is the fastest growing segment of the online gambling market in Europe”
“Evolution Gaming’s market share amounts to 40% in Europe with half of the 20 biggest operators as their clients”
“Evolution Gaming’s market share amounts to 40% in Europe with half of the 20 biggest operators as their clients”
Here is the full report
http://webapp.sebgroup.com/mb/mblib.nsf/a-w/43c1b7397ec7e88bc1258030004020b2/$file/sebc1609spelfaktabladeng160916.pdf
http://webapp.sebgroup.com/mb/mblib.nsf/a-w/43c1b7397ec7e88bc1258030004020b2/$file/sebc1609spelfaktabladeng160916.pdf
The industry is consolidating and $EVO is taking the lead as well:
It acquired NetEnt for $ 2.1B in September 2020
NetEnt itself acquired Red Tiger for £ 220m in September 2020
It acquired NetEnt for $ 2.1B in September 2020 NetEnt itself acquired Red Tiger for £ 220m in September 2020
What about the market?
According to Research And Markets, the global online gambling market is expected to reach $ 124B by 2027
Generating a CAGR of 11.5% over the 2020 - 2027 period
According to Research And Markets, the global online gambling market is expected to reach $ 124B by 2027 Generating a CAGR of 11.5% over the 2020 - 2027 period
Driven by the increasing adoption of smartphones, technical advances that enable a better online experience“Moreover, increasing digitalization coupled with secure digital payment options are also some factors contributing to online gambling market growth.”
What about Live Casino’s in more details?
SEB (the bank) reports that the segment grew by 45% a year over the 2008 / 2016 period
Google Search Interest for live casino’s has been on a steady growth over the last 15 years
SEB (the bank) reports that the segment grew by 45% a year over the 2008 / 2016 period Google Search Interest for live casino’s has been on a steady growth over the last 15 years
Financial Check Sales reached € 140m in Q3 ’20 up from € 95m a year earlier (48% YoY growth)
EBIT increased by 99% to € 84m up from € 42m a year earlier
EBITDA reached € 91m from € 49m a year earlier (87% YoY growth)
EBITDA margins of 64.8% up from 51.2% a year earlier
Company has € 486m in current assets and € 183m in current liabilities
Notable mentions
Further expansion in the US with opening of the studio in Pennsylvania
Live Casino Supplier of the Year Award for the 11th year running at the EGR B2B Awards
Acquired NetEnt for $ 2.1 B and got approval from authorities in Malta and Curacao
Further expansion in the US with opening of the studio in Pennsylvania Live Casino Supplier of the Year Award for the 11th year running at the EGR B2B Awards Acquired NetEnt for $ 2.1 B and got approval from authorities in Malta and Curacao
THE BOTTOM LINE Online gaming market is growing fast, driven by mobile adoption, faster internet and new gaming possibilities (mini-games, live casinos) The live casinos space grew by 45% over the 2008-2016 period and $EVO is the absolute market leader in this space
It is consolidating its position and diversifying its product portfolio by acquiring competitors $EVO ’s financial track record is outstanding, growing at 48%, expanding its margins & being profitable
Legal needs to be watched (anti-trust & gaming regulation)
Disclaimer - This is not investment advice in any form and investors are responsible for conducting their own research before investing.
Sources
✑ Investor presentation
✑ Company website
✑ BBN Times
✑ Reuters
✑ Every Matrix
✑ Skandinaviska Enskilda Banken
Sources
✑ Investor presentation
✑ Company website
✑ BBN Times
✑ Reuters
✑ Every Matrix
✑ Skandinaviska Enskilda Banken
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