Revenue Grows For Novomatic in 2018 as Operating Profits Decline

Austria-based gambling technology heavy-weights, Novomatic, have posted the final financial figures for the past year and it’s something of a mixed bag, as revenue rise and operating loss are both reported.

Despite the 10.5% annual revenue rise before taxes and fees (amounting to €2.61 billion, compared to 2017’s €2.37 billion)…

…the twelve-month period up to December 31st also had an operating loss of €131.9 million for the behemoth company.

South Europe to Thank

In regards to surging revenue…

…the success in this segment boils down to a fine growth in certain European markets such as Italy and Spain, where sales rose from €311.7 million to €401.1 million and €126.4 million to €152.1 million respectively.

Still, it’s that is still Novomatic’s crucial source of income – this country contributed with a revenue of €724 million (up €2M from the year before) while the homeland of Austria also contributed decently with €373.6 million (up from €335.9M).

In fact, growth was reported across all European markets and the rest of the world, whose revenue marked a massive leap from €77.2m to €219.5m. Online sales were cited as the only losing department, down to €110.2m from €146.5 in 2017.

Costs Offsetting it All

Revenue in gaming technology also made a leap from €840.2M to €968.1M…

…while another remarkable success was the acquisition of 52.2% of stakes in Ainsworth Game Technology, that boosted the company with additional €160.5 million in revenue made.

On the other hand, various business areas also reported much bigger costs than before: materials costs increased by 50.1% to €496.6m, chiefly thanks to the provider’s presence in and Austria. Due to the said Ainsworth purchase and more business activity than before…

…costs of personnel also made quite the jump, by 10.18% to €776.6 million. A major skyrocketing of amortization and impairment of 101.4% to €687.6m also affected Novomatic’s end results.

From a total profit of €220.5 million in 2018, the supplier reported an operating loss of €131.9m, while earnings before taxes fell from positive €198.9m to €159.5m loss. The overall annual result was a total loss of €154.9m, which is a major difference from €61.4 m in 2017.

Executives Praise the Results

Novomatic’s executive board hailed the revenue growth as a key highlight of their year:

“The focus is currently on consolidating the rapid growth of the past few years, which was driven by the purchase of various companies. In parallel, the company is beginning to increase the synergy potential. The focus of these efforts is on the transnational optimisation of internal processes and structures.”

Source:

“Novomatic slips to loss despite 2018 revenue growth”, igamingbusiness.com, April 26, 2019.