🎰 $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 year

An 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
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:

1️⃣ A real game operator (dealer) who handles real playing material (cards, roulette)
2️⃣ A set of high-definition cameras sit in front of the game operator and stream the live action to gamers

3️⃣ 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
Here is the full take explanation 👇 https://www.bbntimes.com/companies/how-do-live-casino-games-work
How Do Live Casino Games Work?

In the mid-1990s, several savvy entrepreneurs pinpointed the internet as the next big gambling innovation. As a result, heavy investment went into the development of the first online casinos, which...

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
🎥 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
“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/
Top 10 most popular Casino vendors of EveryMatrix | EveryMatrix

The online gaming industry is as competitive as it gets, with no signs of slowing down, and one of the key growth drivers is the huge amount of content available in the market today. From high-end...

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”
Here is the full report 👇

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:

1️⃣ It acquired NetEnt for $ 2.1B in September 2020

2️⃣ 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
👉 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
💸 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

1️⃣ Further expansion in the US with opening of the studio in Pennsylvania

2️⃣ Live Casino Supplier of the Year Award for the 11th year running at the EGR B2B Awards

3️⃣ 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)
🔥 We take a medium stake in $EVO 🔥

🔮 $DASH is on our watchlist 👉 To Be Reviewed SOON 🔮
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
Hope you liked this thread!

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