Evolution Gaming: Interim Report January-September 2015

Third quarter of 2015 (Q3 2014)

  · Revenues increased by 57% to EUR 19.5 million (12.4)
  · Profit for the period amounted to EUR 5.8 million (3.3)
  · Earnings per share amounted to EUR 0.16 (0.09)
  · Adjusted EBITDA increased by 60% to EUR 7.8 million (4.9), corresponding to
a margin of 40% (39)
  · The mobile penetration amounted to 28% (12)

Events during the third quarter of 2015

  · Exclusive agreement with Genting Alderney
  · Evolution selected as preferred Live Casino supplier for Microgaming’s
European customers

Events following the balance sheet date

  · Agreements with Gamesys, Casumo and BetConstruct

CEO Jens von Bahr's comments:

The third quarter showed continued favourable growth and profitability. EBITDA
amounted to EUR 7.8 million, corresponding to a margin of 40%. As previously,
growth mainly derives from existing customers, driven by the increasing
strategic importance of the Live product among operators, as well as a strong
increase in mobile gaming. Last year saw a break in the trend regarding seasonal
variations, with reduced activity in the summer – this was confirmed this year
and it is clear that mobile is the main driving force. During the quarter, 28%
of the operators’ gaming revenues were generated via the Evolution platform for
mobile units, and the absolute increase in mobile revenues was more than 260%
compared to the corresponding quarter in 2014. During the quarter, costs rose
somewhat more than previously, partly due to a higher recruitment rate and the
fact that we have employed a number of highly qualified individuals within the
company’s strategic focus areas. When recruiting, we always keep a return
perspective and I have high expectations of these individuals’ future
contribution to the business.

During the quarter, we signed an agreement with the online casino division of
the Genting Group, one of the world’s leading casino operators with, among other
things, a considerable land-based presence in the United Kingdom. Although I
already touched on this agreement in the previous interim report, it is worth
repeating that we perceive exciting opportunities in exploring Genting’s strong
brand, with several high end casinos and valuable online VIP players. Building
strong loyalty between an operator and a VIP player requires a perfect Live
experience, which is precisely what Evolution’s product can deliver. We have
already taken a complete generic offering live and, in the next stage, we will
also be launching a dedicated Genting environment at our studio in Riga.

We also signed a deal with Microgaming, one of the foremost platform providers
in the casino industry. Through the agreement, Evolution becomes the preferred
Live Casino provider to all of Microgaming’s customers in Europe. One of the
biggest, Betway, is already preparing a launch. The agreement confirms two
things: The first is that the European Live Casino market is extremely complex.
We have invested many years of effort in mastering it, and have built a product
that stands out from the crowd. The other is that our strategic focus on
regulated markets is paying off. Through our on-premise studio in Belgium, we
have substantially raised barriers for other suppliers.

In the quarter, we also signed agreements with and launched Live Casino at
Adjarabet and Marathonbet. In addition to these, there are several smaller
operators who all perceive opportunities to benefit from the strong growth in
the segment. After the end of the quarter, we have signed deals with, among
others, Gamesys and Casumo, and also the software provider BetConstruct which
will offer our product to a selection of its customers. Apart from new launches,
we continuously also see existing customers expanding their offering – as an
example, PokerStars launched a dedicated environment for the Italian market in
October. With its human interaction, Live clearly adds a new dimension to the
digitised world of online casino.

To date, 2015 has been a very successful year for Evolution and for the Live
Casino market in general. We continue to work in accordance with our growth
strategy, with a focus on delivering long-term shareholder value and with a
perpetual mission to increase our lead on our competitors.
For further information, please contact:
Adrian Westman, IR Manager
+46 735 090 400, awestman@evolutiongaming.com

The information in this report is such that Evolution Gaming Group AB (publ) is
required to publish pursuant to the Securities Market Act and/or the Financial
Instruments Trading Act. The information was submitted for publication on 23
October 2015 at 8:00 a.m. (CET).
Evolution Gaming Group AB (publ) (”Evolution”) develops, produces, markets and
licenses fully-integrated B2B Live Casino solutions to gaming operators. Since
its inception in 2006, Evolution has developed into a leading B2B provider in
the European market with 70 operators among its customers. The group currently
has about 1,800 employees, most of whom are located in Latvia and Malta. The
parent company is based in Sweden and listed on the Nasdaq First North Premier
exchange under the ticker EVO. Avanza Bank is the company’s certified adviser.
Visit www.evolutiongaming.com for more information.