Global sees path to prosperity despite disastrous 2019
Global Gaming has seen revenue slashed and the business incur losses after a tumultuous 2019 that saw the operator lose its Swedish licence, but chief executive Tobias Fagerlund (pictured) believes the business can turn things around in the long term.
Revenue for the year ended 31 December 2019 amounted to SEK412.1m (£32.6m/€38.9m/$42.0m), a 55.0% year-on-year decline. This came predominantly via Global’s core Ninja Casino brand, which accounted for 91.8% of the total.
The Nordic region contributed SEK349.8m of revenue – despite the company’s Swedish shut-down in June 2019 – with a further SEK28.5m coming from the rest of Europe, and SEK33.9m from B2B collaborations. This final figure refers to the Nano Casino brand, launched in partnership with Finnplay’s Viral Interactive in August last year.
While the operator did not provide any figures on player activity for Sweden, it highlighted growth in first time depositors from Estonia and Finland, which rose 69.0% to 25,705. Unique depositor numbers also rose, up 105.2% to 36,932.
As a result of a significant decline in activity resulting from the Swedish shut-down, revenue-related costs fell sharply, down 47.4% to SEK190.8m, leaving a gross profit of SEK221.3m, down 60.0%.
Marketing expenses, cut as part of an efficiency drive, fell 37.9% to SEK182.9m, while personnel expenses rose to SEK95.3m despite the operator significantly reducing its headcount and closing its Swedish technology hub and cutting back its Malta operation.
In total, operating expenses were down 16.0% to SEK340.0m, though as a result of the decline in revenue, this saw Global swing to an operating loss of SEK118.7m, compared to a profit of SEK148.6m in 2018.
After financial income and income tax, Global posted a net loss of SEK122.0m for the year.
This followed a difficult fourth quarter, in which revenue fell 75.9% to SEK57.5m. While revenue-related expenses plummeted to SEK20.5m, and operating expenses to SEK63.6m, the lower revenue base meant that all income was wiped out by cost, resulting in an SEK31.6m net loss for the quarter.
Despite this, chief executive Tobias Fagerlund said that the company’s outlook was much brighter than it had been for a number of months.
“During the period, our efforts to create the conditions to succeed with our short- and long-term goals have continued unabated,” he explained. “We have completed the technical migration to Finnplay’s platform, fine-tuned a partially new and much smaller organisation, regained control of our costs and – not least – internally anchored, launched and started delivering according to the ambitious road-map that followed this autumn’s extensive strategy work.”
Over the year Global failed in a number of appeals against its licence revocation, though in January was offered a glimmer of hope after the Administrative Court of Jönköping granted the operator leave to launch a fresh appeal. This was quickly followed by the Swedish Gaming Authority (Spelinspektionen) rejecting a bid to return Ninja Casino to the market, as a white label site operated by Viral Interactive, however.
Despite this, Fagerlund said the operator’s ultimate aim remained clear: “In the long-term, in a few years’ time, our strategic goal is to take back and pass what we lost in 2019.
“Our vision, which can be repeated, is to be a truly global player that delivers high-quality products and returns by being responsible, taking data- and knowledge-based decisions and by delivering quality on time.”
For the year ahead, however, Global has more modest goals. Key will be to break even, something that Fagerlund believes can be achieved in the first half of 2020, before growing profits going forward.
He said that the performance in January – without providing figures – had “lived up to [the company’s] high hopes”, and saw no reason why this should continue going forward. This was due in part to greater control over costs; Global began 2019 with almost SEK210m in marketing commitments, something that was “now history”, with those commitments “of a completely different size” in 2020.
The technological overhaul, which saw the operator outsource most operations to Viral, means Global is able to be more adaptable and agile in the year ahead, he continued. The operations in Estonia and Finland are profitable, despite a marginal quarter-on-quarter decline in Q4 sales, which was blamed on a platform migration and the restructuring necessitated by the Swedish shut-down.
“Now the organisation is in place and we believe that, despite increased competition, we will consolidate and also strengthen our already large market share in these markets during the year,” Fagerlund said. “Estonia and Finland grew by more than fifty percent in 2019 compared to 2018.”
Growth would be aided further by efforts to expand Global’s range of brands and products. While Ninja Casino – “a very strong brand” – would continue to be leveraged in a number of new markets, these roll-outs would be complemented by the addition of a sportsbook.
However, this will not be powered by Kambi, under an agreement signed in August 2018. As a result of Global being locked out of Sweden for the foreseeable future, Fagerlund explained, and considering the original agreement had been centred around that market, the decision had been taken to end the partnership.
“There is a good bit left for us before we have recovered from the 2019 setbacks and certainly there is much that can go against us,” he said in conclusion. “My most important message now, given the difficult starting position, is that there is a lot that goes well.
“We firmly believe that the processes we control ourselves go according to plan and we firmly believe that when we sum up in 2020 in a year, it is something quite different from the year we have now left behind.
“We believe in what we do!”