Fourth quarter of 2023 (Q4 2022)
- Operating revenues increased by 16.6% to EUR 475.3 million (407.5)
- EBITDA increased by 20.5% to EUR 337.0 million (279.5), corresponding to a margin of 70.9% (68.6)
- Profit for the period amounted to EUR 282.9 million (223.5)
- Earnings per share amounted to EUR 1.32 (1.05)
Full-year 2023 (2022)
- Operating revenues increased by 23.5% to EUR 1,798.6 million (1,456.7)
- EBITDA increased by 25.7% to EUR 1,267.4 million (1,008.4), corresponding to a margin of 70.5% (69.2)
- Profit for the year amounted to EUR 1,070.9 million (843.4)
- Earnings per share amounted to EUR 5.01 (3.95)
- The Board proposes a dividend of EUR 2.65 per share (2.00)
Comments from CEO Martin Carlesund:
In the fourth quarter 2023, Evolution reported revenue of EUR 475.3 million and EBITDA of EUR 337.0 million, corresponding to year-on-year revenue growth of 16.6 percent and an EBITDA margin of 70.9 percent. In addition to the strong financial results, we finished the year operationally very well. During 2023 we added 110 new exciting games to our portfolio, exceeding our target of 100 new games set at the beginning of the year. We also made significant progress towards a better supply balance of tables and simply accelerated expansion during the fourth quarter. Currency headwinds remain in the year-on-year comparison, revenue growth at constant currency is estimated to have been 25 percent in the fourth quarter.
EBITDA margin for the full year amounts to 70.5 percent, in the upper end of the communicated full year guidance of 68-71 percent. For 2024 we are raising the guided range to 69-71 percent - we will continue our strong focus on expansion and with expectation that the margin will be stronger in the second half of 2024. As we have stated many times before our top priority is growth and during 2024 we will increase the pace of our investment for future growth in line with that strategy.
Revenues in Live Casino increased to EUR 405.6 million in the fourth quarter. We are now clearly in a better balance between supply and demand than a quarter ago. The hard work to improve capacity and focus on expansion the past few quarters has paid off. During the quarter we also increased our studio network in Europe, as communicated in the third quarter, as we opened a new studio in Bulgaria also helping to end the year with over 1,600 live tables in total.
Revenues in RNG increased sequentially from the third quarter to EUR 69.8 million in Q4 but declined compared to the corresponding quarter in 2022. Our efforts to systematically improve operations, have continued in the second half of the year with positive effects. Every day we move one step forward and I am happy with the development in Q4. We aim for continued step-by-step improvements during 2024.
We see encouraging development in all the regions going into 2024. North America showed strong momentum in Q4 coming back to sequential growth. The quarter also included landmark game launches such as the launch of Crazy Time, a title which has been incredibly successful in other regions. We look forward to bringing US players the fun and entertaining experience this title can offer. Europe continued its good development from the previous quarter with close to 10 percent year-on-year growth rate for the second quarter in a row. There is still untapped potential in Europe and it remains a region with good potential for Evolution. Asia and LatAm are the fastest growing regions year-on-year at the moment. Brazil's announcement of an upcoming regulation of online casino came at the end of the period and is a sign of the rapid development of the market in this region. We will continue to invest in the LatAm region in the years to come.
We have increased the pace of our studio expansions in the fourth quarter and expect to continue into 2024. We launched a new studio in Bulgaria and have initiated the project to build a second studio in Colombia. Investments in 2023 amounted to EUR 94 million which was below our guidance of EUR 120 million from the beginning of 2023, as we did not manage to expand quite as fast as we had planned. For 2024 we will repeat the capex guidance of EUR 120 million. We see strong demand and aim to accelerate investments during 2024 for our Live Casino product across the globe and will invest in new game development as well as expand table capacity both in our existing network of studios and in new studios. We plan to add at least four new studios during 2024 in addition to expansion in existing locations.
Our pace of game releases increased during the past year and with the launches in the fourth quarter we managed to exceed our target of more than 100 new games across both RNG and Live, ending with 110 new fabulous games released. In Live casino we continued to develop our homegrown franchises built around Crazy Time and the Lightning-series with games like Red Door Roulette and Crazy Pachinko. We create exiting new player experiences in a style that players have grown to recognize and really enjoy. RNG has increased its release tempo in the second half of the year and kept the pace of the third quarter into the fourth.
We closed 2023 and delivered on a great product roadmap. Many games were released during the second half or even towards the end of the year which means that we are just starting to see their contribution. I am proud of what we have brought to market, and I am proud of all team members working for Evolution constantly pushing boundaries delivering player experiences often beyond what many can dream of. But even with a successful 2023 we come into 2024-2025 with higher ambitions than ever. We want to do more - we want to create games that take the entertainment to the next level. We want to invent, we want to develop, we want to break new boundaries. 2024 -2025 we will do more for our product, more for our end-users, than ever. We are going to deliver more exciting games, we will explore new types of games that we do not have today and we will invest in unique games for specific markets. We will yet again increase the gap to the competition. I very much look forward to what I call "the Product Leap" years 2024-2025. What an exciting time in front of us!
During the quarter, the Board of Director's introduced a share repurchase programme of EUR 400 million to further improve the capital structure of the company, a proof of our strong financial position and capital structure. The Board of directors proposes a dividend of EUR 2.65 (2.00) per share for 2023, in line with the dividend policy to distribute a dividend of 50 percent of net profit annually.
As a company, Evolution remains profitable, strong, and all-equity financed. As we look into 2024 and beyond, we do so with excitement, hunger and ambition. We will continue to invest, recruit and expand our operations in the whole world. 2023 was an intense year and I want to thank the amazing team at Evolution for all the great achievements and I am looking forward to an equally fantastic and hectic 2024 where we will relentlessly continue to strive to make Evolution a bit better every day!
Presentation for investors, analysts and the media
CEO Martin Carlesund and CFO Jacob Kaplan will present the report and answer questions on Thursday, 1 February 2024 at 09:00 am CET via a telephone conference. The presentation will be in English and can also be followed online.
Number for participation by phone: https://conference.financialhearings.com/teleconference/?id=5004328
Follow the presentation at: https://ir.financialhearings.com/evolution-q4-report-2023
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 1 February 2024, at 07:30 am CET.
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 19,200+ 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.
