Full year results 2020

Evolution revenue and profit grow in 2020 following NetEnt integration

| By Robert Fletcher
Evolution has reported a year-on-year increase in revenue and profit for 2020, primarily due to a rise in commission from new and existing customers, and the impact of its acquisition of NetEnt.

Total revenue for the 12 months through to 31 December amounted to €561.1m (£491.4m/$679.8m), up 53.4% from €365.9m in the previous year.

Evolution said while this was mainly due to increased commission from clients, it was also helped by its acquisition of NetEnt, which was finalised on 2 December last year. The combined business now operates under the name Evolution.

As such, Evolution’s financial results also included revenue from NetEnt in the final month of the year.

“Through the acquisition of NetEnt, we add a second vertical to our unrivalled live casino offer and two strong and fantastic new brands to our product portfolio,” Evolution chief executive Martin Carlesund said.

“This makes us well placed for our long-term ambition of taking a leading global position in online casino.”

In terms of spending during 2020, operating expenses amounted to €261.4m, up 25.5% from the previous year, with this increase mainly driven by costs related to the NetEnt acquisition. This led to an operating profit of €299.7m.

Earnings before interest, tax, deprecation and amortisation (EBITDA), adjusted for non-recurring items, was €351.6m, up 92.2% on 2019.

After accounting for €1.0m in financial items, profit before tax was €298.7m, up 89.9% from €157.3m in 2019. Evolution paid €14.1m in income tax, leaving it with €283.6m in total profit, an increase of 90.1% on the previous year.

“The pandemic has continued to be a factor throughout the year,” Carlesund said. “Our organic growth was solid already in the beginning of 2020, and I’m pleased to see continued strong demand with many new players and high activity in the network throughout the year.”

Evolution also set out details of its performance in the fourth quarter, the latter part of which included the NetEnt acquisition. Revenue in Q4 reached €177.7m, up 67.6% year-on-year, with €17.8m of this revenue attributed to NetEnt games.

In terms of geographical performance, €81.1 of revenue was generated from the provider’s rest of Europe operations, with the next highest amount (€41.9) being from Asia. The UK accounted for €13.9m of Q4 revenue, ahead of North America with €12.6m and the Nordics on €11.m. The remaining €17.1m was generated elsewhere.

Operating costs climbed 62.0% to €92.8m, including €19.4m in restructuring and acquisition costs related to the NetEnt deal, while EBITDA for the quarter was 107.2% higher at €115.6m.

Evolution noted €818,000 in financial items, meaning profit before tax reached €84.0m, up 72.8% year-on-year. The provider paid €3.4m in tax, meaning it ended the period with €80.6m in profit, an increase of 72.2% on the previous year.

“There is much to look forward to in 2021,” Carlesund said. “We enter the new year with an intense and successful 2020 behind us, a proven strong, competent and energetic team and tremendous business momentum.

“2021 is off to a strong start and I am excited to soon share more news from the group on how we plan to work with operators to take product innovation and player experience to the next level.”

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