Evolution Gaming: Interim report January-June 2016

Second quarter of 2016 (Q2 2015)

  · Revenues increased by 50% to EUR 27.1 million (18.1)
  · Profit for the period amounted to EUR 7.6 million (5.9)
  · Earnings per share amounted to EUR 0.21 (0.16)
  · EBITDA increased by 38% to EUR 10.6 million (7.7), corresponding to a margin
of 39% (42)
  · Mobile penetration amounted to 40 percent (24)

Events during the second quarter of 2016

  · Exceptional growth in new tables and environments
  · Live Casino Supplier of the Year for the seventh consecutive year at the EGR
Awards
  · Revised timetable for the change of listing to the second quarter of 2017

Events following the balance sheet date

  · Agreement with The Ritz Club

CEO Jens von Bahr's comments

We are continuing to achieve strong growth and revenues increased by 50 percent
compared with the same quarter last year. EBITDA amounted to EUR 10.6 million,
corresponding to a margin of 39 percent. This is somewhat lower than in the
preceding quarter since the substantial expansion is driving costs, mainly
related directly to new tables and environments. During the second quarter we
have seen an exceptional growth in new tables and environments, which I believe
is strategically very positive. However, it puts pressure on the margin since a
new table has a negative margin in the short term.

As in the first quarter, the expansion is mainly being driven by existing
customers. One of the quarter’s most significant activities was the launch of
several additional tables for Unibet at our studios in Riga and Malta. The
project included a complete remodelling of the operator’s studio design, the
launch of our new Live Lobby and a new user interface, a new dedicated team and
new uniforms. Another major project was the relaunch of Grosvenor’s environment,
which included moving from Riga to Malta. Customers taking the step of
introducing their first dedicated environments during the quarter include
LeoVegas. We have also signed contracts with new customers such as Danish Spilnu
and GVC’s Casino Club brand.

This year’s EGR B2B Awards were held during the quarter and, for the seventh
time of possible seven, Evolution was awarded the Live Casino Supplier of the
Year. For each year that passes, the number of competitors increases, so it
feels particularly rewarding to see this evidence that our efforts to
continuously remain at the forefront are yielding results.

On the product side, two major launches took place in the quarter. First out was
our new game Double Ball Roulette, which, just as the name suggests, is a
variation on traditional roulette but with two balls. The game is issued through
our partnership with Games Marketing and a number of customers have already
launched it to their players. The second launch was of the much longed-for
mobile version of Live Three Card Poker, which was launched by more than 50
customers in the quarter. Our entire product portfolio is now compatible with
smartphones and tablets, which is a basic requirement for being able to provide
a complete gaming experience. Mobile penetration for the quarter amounted to 40
percent.

Following the end of the quarter, we have entered into a very exciting agreement
with The Ritz Club, one of the world’s most exclusive casinos, to whom we will
deliver our convergence product Dual Play Roulette. This is a true milestone and
something towards which we have worked for many years. This also confirms the
trend of land-based casinos seeking online solutions to strengthen their
relationships with their customers.

We expect continued high demand for our services throughout the remainder of the
year. To maintain the right focus – to continue delivering growth with a good
margin – the Board has therefore revised the schedule for Evolution’s list
change, which is now expected to take place in the second quarter of 2017.
Despite our size in terms of personnel, we are still an agile and
entrepreneurial organisation, in which flexibility is important – at the moment,
we believe that management must devote all of its efforts to delivering the best
product.

Lastly, I would like to mention that we celebrated Evolution’s tenth anniversary
during the quarter. I would like to thank everyone who has been involved and
participated in our amazing journey to the position as the market-leading Live
Casino provider. I now look forward to another ten successful years and more.
For further information, please contact:
Fredrik Svederman, CFO
ir@evolutiongaming.com

This information is such that Evolution Gaming Group AB (publ) is obliged to
make public pursuant to the EU Market Abuse Regulation and the Securities
Markets Act. The information was submitted for publication, through the agency
of the contact person set out above, on 17 August 2016, at 8.00 am 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
employs 2,500 people, 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.