Q4 2021 Evolution AB (publ) Earnings Call

Speaker 1: Welcome to the Evolution audio cast with Teleconference Q4 2021. Today I am pleased to present CEO Martin Carlsen and CFO Jacob Kaplan. For the first part of this call all participants will be in listen only mode and afterwards there will be a question and answer session. Speakers over to you.

Okay.

Welcome to the evolution what are your costs with teleconference, Q4, 2021 today.

Today I'm pleased to see Matson Carlson I'm CFO Yaacov Kaplan. So the first conference call all participants will be in listen only mode. Afterwards, there'll be a question and answer session because it's cheap.

Yeah.

Speaker 2: Good morning. Welcome everyone to the presentation of Evolution's Year End Report 2021.

Good morning, welcome everyone to the presentation of evolutions year end report 2021.

My name is Martin called <unk>, the CEO of evolution with me as always I have our CFO Jacob capital.

Speaker 2: My name is Martin Carlsen and I'm the CEO of Evolution. With me, as always, I have our CFO , Jacob Capon.

Okay.

Speaker 2: I will start with some comments on our performers in the quarter where after I will hand over to Jacob, we'll closer look at our financials. After that, I will round off the presentation with an outlook for the rest of the year. And then we are happy to take your questions.

I will start with some comments on our performance in the quarter were after I will hand over to Jacob for a closer look at our financials after that I will now.

And off the presentation with an outlook for the rest of the year and then we are happy to take your questions.

However, before going to the next slide I want to comment the picture and I'll say.

It's a real photo of one of our latest astonishing studios is supposed to do for the comment for the Goldberg, who left and this is just awesome game play experience and the new logic and this game is something we had extra just want to point that out.

Thank you now next type thing.

Yeah.

Yeah.

I'm very satisfied to babies sounds yet another strong quarter for evolution driven by the entertainment of end users and the increasing preference of those.

The products, we launched during the year in combination with the continued strong market development and global demand have contributed a very high growth rate. Furthermore, we also experienced strong sales from the investments in increased due to capacity.

Speaker 2: The products we launched during the year, in combination with the continued strong market development and global demand, have contributed to a very high growth rate. Furthermore, we also experienced strong results from the investments in increased studio capacity.

Speaker 2: In the end of the quarter we had over 1000 tables live resulting from an increase of 300 tables during the year.

And the end of the quarter, we had over a thousand table like resulting from an increase of 300 tables during the year.

Speaker 2: These factors, in combination with a constant pursue of cost efficiency, has positive effect on our model.

These factors in combination with a constant pursuit of cost efficiency has positive.

Positive effect on our margin.

Speaker 2: While we had operational challenges due to the pandemic, the truth is we also learned a lot.

While we had an operational challenges due to spend on it and then make the truth is we also learned a lot.

Speaker 2: We proved that our business model is resilient and that our customer base gets stronger every day. We also had to learn how to adapt to new situations as a result of the pandemic and we proved that we are in the forefront of innovation and creativity.

It proved that our business model is resilient and that our customer base gets stronger everyday.

Walk us to learn how to adapt to new situations as a result of the pandemic and we proved that we are in the forefront of innovation and creativity.

Speaker 2: Our other aspects of the pandemic are also that it made people more comfortable with video streaming and that most people improve their connectivity from remote locations such as your home or even when you're on vacation.

Our aspects of the other aspects of the pandemic are also that it made people more comfortable with video streaming and that most people improve the connectivity from a remote location. So thats your home or even on your own vacation.

Speaker 2: The pandemic has simply increased the worldwide connectivity and push bandwidth and latency to new levels which in turn creates a very good fundamentals for the future of our games.

Pandemic, just simply increase the worldwide connectivity and pushed bandwidth and latency to new levels, which is in turn creates a very good fundamentals for the future of our games.

Speaker 2: During this last period, we have also, with our cutting edge technology and innovation, been able to appeal to entirely new player demographics and engage new player types.

This loss, but we have also without cutting edge technology, and innovation and been able to pizza entirely new player demographics and engage new play types.

Speaker 2: Regulation of online gaming continues to gain ground all over the world. On the first day of the quarter, the newly regulated Dash market opened up and we are already powering an absolute majority of the licensed operators.

Regulation of online gaming continued to gain ground.

The ground all over the world.

On the first day of the quarter the newly regulated markets opened up and we are already powering an absolute majority of the licensed operators.

We expect that the Dutch market to expand further as the number of licenses increased during 2022. It is important to note that already in December the regulator Dutch market pass the pre deregulated levels.

Our growth in North America is a great opportunity in October we launched the LNG games in Connecticut, While live games will be launched in the near future also in the quarter. We went live with the in the regulated province of Montana with OLED to provincial lottery and gaming and did you see the market for commercial operators San Jose is planned to open in.

Speaker 2: Our growth in North America is a great opportunity. In October , we launched the RNG games in Connecticut, while live games will be launched in the near future. Also in the quarter, we went live in the regulated province of Ontario with OLG, the Provincial Lottery and Gaming Agency. The market for commercial operators in Ontario is planned to open in April .

April .

Speaker 2: In the quarter we also announced that we were first to market with live casino in Argentina's newly regulated Buenos Aires province. With Colombia already regulated and live with evolution and more provinces and countries working on regulation, Latin America is a promising market.

In the quarter, we also announced that we were first to market with live casino in Argentina newly regulated business at blended Iris for this.

Columbia will have the regulated alive with evolution and more provinces and countries working on regulation Latin America is a promising market.

Speaker 2: After the end of the purge we renewed our existing agreement with Fanjul Group To become Fanjul, select the provider of live casinos across the entire US

After the end of the party, we renewed our existing agreement with San Julin Group.

<unk> selected provider won't live casino across the entire U S.

Speaker 2: have invested significantly in the US market and will continue to do so in the years to come.

We have invested significantly in the U S market and we'll continue to do so in the years to come.

Speaker 2: As I stated before, the demand of our products is truly global, and we are expanding our studio capacity in all locations. Coming out of Q4, I still see that we are under supplying to the demand, even if we double the number of employees during the last 18 months. Again, I reiterate, we will continue to expand, and we're with high speed throughout 2022.

As I stated before the demand of our products is truly global and we are expanding our student capacity in all locations coming out of Q4, I still see that we are under supply into the demand.

Even if we double the number of employees during the last 18 months again I reiterate we will continue to expand.

With high speed throughout time, just wanted to.

Speaker 2: Now let's move to the coming slides and see the effect of numbers and products of all our efforts. Operator, next slide, please.

Now, let's move to the company's licensee to affect the numbers and products all our efforts operator next slide please.

Yes.

Speaker 2: I'm pleased to present our strong results for both the quarter as well as the full year 2021. Operationally it's been a very hectic year for us and in the fourth quarter we continued the momentum from the previous quarter.

I'm pleased to present, our strong results for both the quarter as well as the full year consequent to them operationally, it's been a very hectic year for us and in the fourth quarter. We continued the momentum from the previous quarters.

Speaker 2: Revenues increased by 69% to over 300 million euro. EBITDA increased by 115% to 207 million euro, corresponding to a margin of 68.9%. The margin for the full year ended on 68.7%, slightly above our guidance for the year.

Revenues increased by 69% to over 300 million Euro EBITDA increased by 150% to 207 million corresponding to a margin of 68, 9%.

Margin for the full year ended on six to eight 7% slightly above our guidance for the year.

In a year with such strong Spansion I consider increase in more than 2021 US an achievement in 'twenty to 'twenty. Two we'll continue to invest in all expansion both in studios in games, but even so I expect to be able to strengthen the EBITDA margin for 'twenty, two I'm being somewhere in the range between 69 and 71%.

Speaker 2: In a year with such strong expansion, I consider increasing the margin in 2021 as an achievement. In 2022, we continue to invest in our expansion, both in studios and in games, but even so, I expect that we will be able to strengthen the EBITDA margin for 2022, ending somewhere in the range between 69 and 71%.

Speaker 2: In this context, it's important to state that investments will continue to be high, margins might vary quarter on quarter, and if there is a trade-off between growth and margin, we will always prioritize growth.

In this context, it's important to state that investments will continue to be high margin might vary quarter on quarter and if there's a trade off between growth and margin, we would always try to prioritize growth.

Speaker 2: Live casino delivered a very satisfactory growth of 40...

Like just say not delivered a very satisfactory growth of 40.

9% compared to Q4 last last year R&D revenue amounted to $62 9 million euro with a growth of nine 4% compared to the combined revenue of <unk> during Q4 'twenty.

Speaker 2: 9% compared to Q4 last year. RNG revenue amounted to 62.9 million euro with a growth of 9.4% compared to the combined revenue of NASDAQ and D2D during Q4 2020.

Moving forward into 'twenty two.

Speaker 2: The path to growth within RNG will not be linear, and I expect the growth rate to vary through the next couple of quarters. With the fantastic pipeline of slots in 2022, together with a new technical platform, I have high expectations for growth in the little bit longer time perspective.

The path to growth within R&D will not be linear and I expect the growth rate to vary through the next couple of quarters with a fantastic pipeline of slots in 2022 together with the new technical platform I have high expectations will go through the little bit longer time perspective.

All in all fantastic numbers and I'm very pleased with our financial performance in the fourth quarter, and we are definitely well placed to deliver strong consistent too.

Speaker 2: All in all, fantastic numbers and I'm very pleased with our financial performance in the fourth quarter and we are definitely well placed to deliver strong trends from still.

Speaker 2: And as always, we will relentlessly further strengthen our market share and continue to widen the gap to competitors.

And as always we will relentlessly for the strength of our market share and continued to widen the gap to competitors.

Slide please.

That sports is to be seen as an indicator of activity in our evolution live network.

Speaker 2: Best spots is to be seen as an indicator of activity in our Evolution Live network.

Speaker 2: The number of best spots from an end user amounted to 20.9 billion, which is a phenomenal increase of 15% from Q3 and a compared to Q4 last year goes to 37%.

The number of basketball from Madame do amounted to $20 9 billion.

Which is a phenomenal increase of 15% from Q3 compared to Q4 last year growth of 37%.

Speaker 2: The general player activity has continued to increase and the player activity in the beginning of Q1 has accelerated further. Crazy Time continues to conquer the world and is one of the biggest success stories in online gaming of all time. In Q4 the game saw exceptional player activity growth in the game and the player activity has continued to grow.

The general activity has continued to increase in the.

The player activity at the beginning of Q1 has actually accelerated further.

<unk> continued to conquer the world and it's one of the biggest success stores and online gaming of all time in Q4, the game saw exceptional play a tizzy.

<unk>.

Speaker 2: combined with a very high user preference with millions of unique players enjoying the game.

Combined with a very high use of restaurants with millions of unique players enjoying the game.

Speaker 2: It can also reveal that the game generated some huge wins for players during Q4 with multiple mega payouts. The top 5 wins alone paid out 50 million euro in a quarter, the biggest one being over 20 million euro, making it the largest non-progressive payout ever in the online gaming world, benefiting thousands of players.

You can also revealed that the gain generated some huge wins for players during Q4 with multiple mega pay out the top five wins the loan paid off $50 million you in the quarter, the biggest one being over $20 million, making it the largest non progressive payout ever in the online gaming world benefiting thousands of players.

Next slide please.

Yeah.

Speaker 2: Expanding our studio capacity means that we need a high recruiting pace and in the quarter we hired about 1200 new employees.

Expanding our suite of capacity means that we need high recruiting recruiting pace and in the quarter, we hired about 1200 new employees.

Speaker 2: Increasing stock 2021 amounted to 3,900, corresponding to an increase of 41%. But if we extend the perspective to end of Q2 2020, an 18-month period, evolution doubled in size.

Increase in staff trying to 'twenty, one amounted to 3900 corresponding to an increase of 41%, but if we found the perspective to end of Q2, 2012 and 18 months.

Evolution doubled in size.

Expansion of this rate is very costly, but even more important to double a company that assesses evolution in 18 months takes energy ambition and pure will.

Speaker 2: Dispensation at this rate is very costly but even more important to double the company of excessive evolution in 18 months takes energy, ambition and pure will.

Most would even say it's impossible, but when you see these don't forget that its the way everyone. An evolution in the evolution team pushed forward doing and create this create what others Dreamer.

Speaker 2: Most would even say it's impossible, but when you see this, don't forget that it's the way everyone in evolution, in the evolution team push forward. Doing and create this, create what others dream of. At the end of the purge, we were more than 13,000 evolutioners and we will continue to increase headcount. Recruitment is therefore one of our key processes and the well-being and development of our employees is key for evolution.

And of the person we were more than 13000 evolutionary and we will continue to increase headcount recruitment is therefore, one of our key processes and the wellbeing and development of our employees is key for evolution.

Speaker 2: We are a company where everybody should feel welcome. We constantly and every day work to be better and see education and development of everyone as a core process. We are demanding and fair and want to create a unique work environment guided by true and really sound core values.

We are a company, where everybody should feel about it constantly and everyday work to be better see education and development of everyone is a core process.

Mounting in fact, I want to create a unique work environment guided by true and really sound core values.

Speaker 2: I'm humbly and very proud of all employees that make up this fantastic company.

Humbly and very humbled I'm very proud of all employees that make up this fantastic company.

Operator next slide please.

Plans to 'twenty, two the year of product and innovation.

Speaker 2: 2022, the year of product and innovation.

Speaker 2: We kickstarted it yesterday with an online event where we introduced 25 new fantastic games. Before the end of this year we will launch 88 new games in total. It is a record number of releases from Evolution in one year and it showcases the breadth of our exceptional portfolio.

We kick started it yesterday with an online event, where we introduced 25, new fantastic games before the end of this year, we will launch eight to eight new games until it's over.

Record number of releases from evolution in one year and showcase the breadth of our exceptional portfolio.

Speaker 2: We need to innovate, we need to entertain, we need to deserve the end user's time, we need to develop games for the future. No one can believe that continuing doing the same thing for the coming five years will make the future and end users happy.

We need to innovate we need to and the team we need to serve the end users' time, we need to develop games for the future no. One can believe that continuing to doing the same thing for the coming five years would make the future end users happy.

Speaker 2: Don't copy, develop, don't take for granted, move with desire.

<unk> coffee develop don't take for granted move with desire.

Speaker 2: The end users of tomorrow will be picky and have loads of options. Evolution DNA is to continue to create the games of the future entertaining these end users. One thing we should think of, as we all know it, the future will be different from the present and standing still will not make your success.

And users of tomorrow will be picky and have loads of auctions evolutions DNA is to continue to create the gains of the future and obtaining these end users. One thing we should think of as we all know the future will be different from the press Sundance standing still will not make your success.

Speaker 2: Evolution has completed a series of acquisitions that have further strengthened and diversified our comprehensive content and technology portfolio. All fitting our strategy where all parts have a role to play. Together with one-stop shop, the seamless and flawless single point integration, the new lobby will help our customers to thrill their users. With one integration through our fantastic new lobby, all Evolution content will be delivered seamlessly to operators all over the world.

Evolution has completed a series of acquisitions that further strengthen and diversify.

Our comprehensive content and technology portfolio.

Fitting our strategy with all parts have a role to play to gate together with one stop shop to seamless and flawless single point integration the new law will help our customers to thrill their users with one integration through our fantastic New logos all evolution contract will be delivered seamlessly to operators all over the world.

Speaker 2: When you see our products for 2022, don't forget that we have put desire, sweat and tears into it. Sort of each part, making it worth something, pushing the boundaries. That's who we are, relentlessly pushing forward.

Let me see how products with transplants too don't forget that we have put desire sweat empties into it sort of each part, making it worse something pushing the boundaries, that's who we are relentlessly pushing forward.

Yes.

Next slide please operator.

Speaker 2: First games launched this year are Peak, Bakara and Bakpo. Peak Bakara is a unique and revolutionary version of classic face down Bakara. Revolutionary because it's the only Bakara in the world that lets the player take a peek and increase their bets after the normal betting time is over and some of the cards have been dealt.

First games launched this year, our peak baccarat and backbone peak back right. So unique and revolutionary version of classic Facedown backer.

Evolutionary because it's the only back out in the world that less the play it take at peak and increase their best after the normal but I think time is over and some of the courts have been doubts.

Michael it's sort of a simpler version of Buckeye, but with a unique twist. It's played with dice not cards St quick fire dies, more excitement and pay us up to 88 to one and backfill the team and everyone in ball hospital.

Speaker 2: Backboard is sort of a simpler version of Backer but with a unique twist. It's played with dice, not cards. Think quick-fire dice, more excitement and payouts up to 88 to 1. In Backboard the team and everyone involved has brought out the best in Backer and SICPO and we are seeing one of the most successful launches in the region in recent times.

All the best in <unk>, we're seeing one of the most successful launches in the region recent times.

Speaker 2: In our RNG vertical, with our world class slots offering an IP, I'm confident that we will reach higher growth for RNG. However, the road to increased growth will not be a straight one and I expect growth rate to fluctuate in the year to come. Some of the slots we launched in 2021 were successful and well received by players. However, in 2022 we need to continue to play equally successful games as in 2021 but at a higher pace.

In our R&D vertical with our world class slots offering.

I am confident that we will retire growth for LNG. However, the road to increase growth will not be a straight line.

I expect growth rates to fluctuate in the year to come some of the slots. We launched in 2021 were successful and well received by players. However in 2002, we need to continue to believe equally successful games as in 2021 but at the higher pace.

Speaker 2: with 88 new games this year have high expectations for the full year. Yesterday Nick Robinson CEO of BTG said that 2022 is possibly the most exciting year.

With 88, new games to D. C. I have high expectations for the full year yesterday, the chromosomes CEO <unk> said the 'twenty to 'twenty two is possibly the most exciting year.

Speaker 2: in a 10-year history and with action-packed online slot games based on TV show Night Rider from Netflix and Narcos Mexico from Red Tiger we would deliver the best and most innovative slots in the world this year.

In the 10 year history, and with action packed on last 12 games based on television show Nightrider from that sounds in northwest Mexico from Red Tiger, We will deliver the best and most innovative slots in the world This year.

I'm very glad that Digirad has recently become part of evolution families did you released the worlds first rotating HD digital gaming and one of the most innovative products ever created in the casino the device's unique and all casino operators offline and online channel enjoyed the most successful game ever created.

Speaker 2: I'm very glad that DigiWheel has recently become part of Evolution's family. DigiWheel is the world's first rotating HD digital gaming wheel and one of the most innovative products ever created in the casino world. The device is unique and all casino operators, offline and online, can enjoy the most successful wheel game ever created.

Good.

Speaker 2: The evolution roadmap of 2022 is simply the best one ever.

The evolution of the old months of 'twenty constitute is simply the best one ever.

Next slide please.

Speaker 2: This slide shows the breakdown of our revenue by your graphic region. We continue to see an increased demand for online casinos across the globe. We expanded the number of tables with over 300 during the year. However, the demand is so strong we are still underserving in several months.

This slide shows the breakdown of revenue by geographic region. We continue to see an increased demand for online casino across the globe.

<unk> the number of tape outs with over 300 during the year how long the demand is so strong we are still under serving in several markets in Asia. We saw continued growth with amounted to 128% for the full year, we have been successful as a tailored content for this region and its players the new product launches of gains variation of Becker and <unk>.

Speaker 2: In Asia we saw continued growth with amount to 128% for the full year. We have been successful with tailored content for this region and its players. The new product launches of games variation of Baka as well as other games with an Asian flavor to them have worked very well.

Against with an Asian flavor to them have worked very hard.

Speaker 2: North America is also growing fast with a year-on-year growth of around 205%. We see good potential in the North American market and expect continued high growth rate going forward. We don't focus on guessing on which state will regulate next. For us, it is still fantastic opportunities in the states that already regulated and we see growth rates on high levels going forward.

North America is also growing fast with a year on year growth amounted to 205%. So good potash in North America, and the North American market and expect continued high growth rate going forward, we don't focus on guessing on which states will regulate next for US is still some tactical opportunities in the states that all are regulated and we see growth based on.

High level going forward.

Speaker 2: European markets in general have a slower growth than the North American and Asian markets due to both regulatory changes as well as that they are more mature.

European market is it in general.

The slower growth in the North American and Asian market due to both regulatory changes as well that they are more mature.

Speaker 2: However, we still see good opportunities in Europe . Rest of Europe had a year-on-year growth of 55%. The Nordics and UK are about the same size, with the year-on-year growth in the UK amounting to 85%, and in the Nordic, the amounting to 146%. The growth year-on-year can, on these two markets, to a large extent, be attributed to acquisition on net land, which has a strong position in the Nordics and the UK.

However, we still see good opportunities in Europe rest of you had a year on year growth of 55%.

In order to kind of Nordics and U K are about the same size with a year on year growth in the UK amounting to 85% and then the nor does the amount of 146% the growth year on year on these two markets to large extent be attribute to acquisition of <unk>, which has a strong position in the nordics and the UK.

Speaker 2: Others, including South America, Africa, and the remaining parts of the world, show good growth of almost 73% in a year.

Other including South Africa, South America Africa, and remaining part of the all showed good growth of almost 73% year on year.

Speaker 2: Revenues from regulated markets increased to 40 W in Q4.

Revenues from regulated markets increased to 41% in Q4.

Speaker 2: Now I will pass on to Jacob for a closer look at our financials. Next slide please. Thank you Martin and good morning to all of you on the call. We'll now move on to a couple of slides with a closer look at financial development during the period. I'm on slide number 9.

Now I will pass on to Jacob for a closer look at our financials unexpected.

Thank you Martin and good morning to all of you on the call.

Now move on to a couple of slides with a closer look at the financial developments during the period I'm on slide number nine.

Speaker 3: Revenue amounts to 300 million euro in the fourth quarter. That's made up of 237.4 million euro related to our live casino product and 62.9 million euro from our RNG game.

Revenue amounts to 300 million euro in the fourth quarter, that's made up of $237 4 million Euro related to our live casino product at $62 9 million from our R&D game.

Speaker 3: We're happy with the development of both product lines in the fourth quarter, compared to the same quarter 2020, like casino increases over 48%. This compares well to the pre-pandemic growth rates from 2019. And R&D revenues increased just over 9% compared to the performer figures for the fourth quarter 2020, meaning including big time gaming in that time for the full quarter performer.

We're happy with the development of both product lines in the fourth quarter compared to the same quarter of 2020 led casino increases over 48%. This compares well to the pre pandemic growth rates from 2019, and R&D revenues increased just over 9% compared to the pro forma figures for the fourth quarter 2020.

Meaning, including Big time gaming and <unk> for the fourth quarter pro forma.

Speaker 3: Total revenue compared to the reported revenue Q4, that is 177 million euro, that's shown in the chart here. That growth is 69%.

Our total revenue compared to the reported revenue to 477 million Euro Thats shown in the chart here.

It's a 69%.

Speaker 3: I would say RNG development is in line with our expectations from earlier in the year. Our ambition, as Morgan pointed out earlier, was to increase growth and reach double digit growth during next year. But I see that realistically reaching that more towards the end of the year.

I would say LNG development was in line with our expectations from earlier in the year, our ambition as Martin pointed out earlier wholesale is to increase growth and reached double digit growth during next year, but I would say that.

Realistically I think thats, reaching up more towards the end of the year do you look at the numbers, 10% growth compared to Q1, 2021 would mean a bit over $67 million Euro R&D revenue in the first quarter of this year and as you see all seem to table here R&D revenue has been relatively flat over the quarters. This year at 61, two in Q1 60.

Speaker 3: If you look at the numbers, 10% growth compared to Q1 2021 would mean a bit over 67 million euro RNG revenue in the first quarter of this year. And as you see also in the table here, RNG revenue has been relatively flat over the quarters this year, 61.2 in Q1, up to 62.9 in this quarter. So.

Up to $62 9 million this quarter so.

Speaker 3: It will take a few quarters to get growth up and achieve sustainable double-digit growth. I don't see us hitting 67 million euro in Q1.

It will take a few quarters to get growth up and achieve sustainable double digit growth and I don't see a 15 six to 7 million Euro in Q1.

Speaker 3: However, as Martin mentioned, we feel good about the roadmap and any increased growth will start there, with great games that players enjoy and come back to. So we'll take it step by step, but don't expect a linear increase of the growth percentage from Q4 into 2022.

As Martin mentioned, we feel good about the roadmap and any.

Increased growth, we'll start there with great games that failure is enjoying come back to so we'll take it step by step, but don't expect a linear increase of the growth percentage from Q4 into 2022.

EBITDA for the quarter amounted to $206 9 million Euro and an EBITDA margin of 68, 9% in the quarter.

Speaker 3: EBITDA for the quarter amounts to 206.9 million euro and an EBITDA margin of 68.9% in the quarter. This is in line with our latest margin guidance from Q3, a margin exceeding 68% for the year.

This is in line with our latest margin guidance from Q3, a margin exceeding 68% for the year.

Speaker 3: Also mentioned last time we spoke and Martin pointed it out earlier on the call, we are in a period of very heavy expansion. We end the year with over a thousand tables in operations, we're investing in all studios, adding more staff and more capacity than we've ever done before.

<unk> mentioned last time, we spoke and Martin pointed out earlier on the call.

We are in a period of very heavy expansion, we ended the year with over a thousand payables in operation.

First thing in all studios, adding more staff in more capacity than we've ever done before North America is one area, where we've continued to expand all functions of the company. We are moving towards 2000 staff, we see fantastic long term potential in the market.

Speaker 3: North America is one area where we continue to expand all functions of the company. We are moving towards 2000 staff. We see fantastic long term potential in the market and we're really building for the future there. The expansion however does drive costs them and will affect Borgenslam during 2022.

Building for the future there the expansion out of industrial cost and will affect projects during 2022.

For the full year 2021 reached an EBITDA margin of 68, 7% margin.

Speaker 3: For the full year 2021, we reached an EBITDA margin of 68.7%. Margins have been relatively stable this year, around 68-69% each quarter. Q3 was a notch higher at 69.9%.

Just have been relatively stable this year around 68, 6% to 9%. This quarter Q3 was wasn't much higher at six to $9 nine.

Speaker 3: Margin full year 2021 is up significantly from 2020. For full year 2020 we have 62.7% EBITDA margin, so almost 6 percentage points up.

For the full year 2021, it's up significantly from 2020.

Full year 2020, we had 62, 7% EBITDA margin, so almost six percentage points up.

Speaker 3: For full year 2022, we don't expect the same step up in margin. And as pointed out earlier, we see that we can reach a margin full year 2022 in the range of 69 to 71%. So that's our guidance for 2022.

For full year 2022, we don't expect the same step up in margin.

I pointed out earlier, we see that we can reach a margin full year 2022 in the range of 69% to 71%. So that's our guidance for 2022.

Speaker 3: And I'll repeat that as we've done so many times that we'll prioritize growth over margins if we're faced with that trade-off. All right operator, let's...

I'll repeat dose as we've talked about many times.

We'll prioritize growth over margins.

Space without the tradeoffs.

Alright, operator, let's move to the next slide please.

This slide shows our P&L in a bit more detail.

Speaker 3: This slide shows our PNL in a bit more detail. From the top slide revenue of 237 million euro in the period of October to December 2021, and RNG just under 63 million. We covered the developments in this period compared to same period prior year on the previous slide. So I won't repeat that here. This slide, I should point out, also shows the reported figures for 2020. So no performance adjustments in the 2020 columns on this slide.

From the top line revenue over 237 million Euro in the period October to December 2021.

Orange is just under $63 million, we cover the developments in this period compared to same period prior year on the previous slides I won't appear.

This slide I should point out also shows the reported figures for 2020, so no pro forma adjustments in the 2020 call them on this slide.

Speaker 3: Full year 2021, live revenue is 839 million euro, and that's an organic growth compared to 2020, all over 64% for the full year.

Full year 2021, <unk> revenue is 839 million euro and that is in organic growth compared to 2020, although over 64% for the full year.

Speaker 3: Total revenue is 300 million euro. That's an increase of 69% compared to the reported revenue 2, 4, 2020 and looking at the full year revenue amounts to 1 billion, 68 million euro, an increase of 90% year on year. And then that of course includes both organic and acquired roles. Moving down.

Total revenue is 300 million Euro that's an increase of 69% compared to the reported revenue.

Q4, 2020, and looking at the full year revenue amounts to $1 billion $68 million, an increase of 90, 890% year on year.

That of course includes both organic.

Gross.

Moving down to expenses.

There is no there is no pro forma.

Speaker 3: There's no, since there's no performance in here, the addition of our required businesses during 2021, it's of course a part of the explanation of each of the lines, but then also our life-thusening operations have increased in expenses, so both of them.

The addition of our acquired businesses during 2021.

Of course, a part of the explanation of each of the lines, but also our 9% operations have have increased expenses.

Both effects here.

Speaker 3: Here, moving through the lines, you could support personal expenses amount to $65.2 million, that's an increase of $16.6 million, at $16.6 million, compared to the same period.

Moving through the lines you could support personnel expenses amounted to $65 2 million. That's an increase of 16.66 billion $1 6 million compared to the same period last year.

Speaker 3: appreciation amounts to 22.4 million euros. That includes about 10.5 million euro in a participation of incandibles related to that position so net-ent and the big time gaming.

<unk> amounts to $22 4 million euros that includes about $10 5 million and amortization of intangibles related to the acquisition of <unk>.

And the big time gaming.

Other operating expenses that includes the number of iphones consumable equipment communication costs consultants royalties.

Speaker 3: other operating expenses that includes a number of items, consumable equipment, communication costs, consumption, royal diseases, a big part of that. The line amounts to 38 million euro in the quarter. The corresponding period 2020 here includes 19.4 million euro in one-house restructuring costs. So adjusted for that one-house item last year, the increase is 14.6 million euro.

Part of that.

Your line amounts to 38 million in the quarter. The corresponding period of 2020 includes $19 4 million Euro and one off restructuring costs. So adjusted for one off item last year. The increase is $14 6 million euro.

Speaker 3: in this quarter compared to the same quarter.

In the in this quarter compared to the same quarter quite the contrary.

Speaker 3: And that's instead of the reported number that, as you see here in the table, it's actually higher in the same period.

Instead of the reported numbers.

As you see here at the table it is actually higher than the same period.

Summing up total operating expenses totaled just over 115 million Euro for the period October to December 2021, and for the full year, almost 415 million an increase of 71% compared to the reported figures over the same period last year.

Speaker 3: Summing up, total operating expenses, total just over 115 million euro for the period of October to December 2021 and for the full year almost 415 million euro, an increase of 71% compared to the reported figures of the same period loss.

Operating profit.

Speaker 3: Operating profit sums up to 184.5 million euro in the quarter. Our tax is at 12.7 million euro in the quarter. That's a tax rate of 6.9 percent. The full-year tax rate is 6.5 percent. That's up from just under 5 percent in 2020. So, it's a slight increase.

Up to 108.

$84 5 million euro in the quarter.

Our taxes up $12 7 million euro in the quarter adjusted tax rate of six 9% for the full year tax rate is six 5% and thats up from just under 5% in 2020.

So I think for us there.

And all of this sums up to a profit for the three months period.

Speaker 3: And all this sums up to a profit for the three-month period of 171.6 million euro, which equals an earnings per share of 77 euros and per share for the quarter, an increase of 89% compared to the fourth quarter 2020. And full year earnings per share is 2 euro 73 cents per share, an increase of 81% from the previous year.

$171 6 million.

Which equals earnings per share of $77 per share for the quarter, an increase of 89% compared to the fourth quarter 2020.

Full year earnings per share is <unk> 73 per share an increase of 81% from the previous year.

All right, let's move on to the next slide please.

Speaker 3: Before I hand back to Martin, we look at Casulo and financial position.

Before I hand back to Martin, we look at cash flow.

<unk> position.

Speaker 3: Starting with a chart to the left in the slide, this shows developmental capital expenditure. The great part of the bars represents investment in tangible assets that is mainly our studio construction. It's a step up this quarter from previous quarters to almost 14 million euro. Main driver of the increase is our investment in our North American studios. We're expanding in all studios and as pandemic restrictions have...

Starting two charts to the left in the slide this shows developmental capital expenditure the great part of the bars represent investments in tangible assets, but it's mainly our studio construction.

<unk> up this quarter from previous quarters to almost 14 million euro.

Main driver of the increase it's our investments in our North American Studios, we're expanding in all studios.

And then make restrictions.

Speaker 3: Like the scale back, we've been able to increase the pace there during the period.

The scaled back we have been able to increase the pace during the period.

Speaker 3: As we mentioned earlier, we continue to invest heavily, not just in the US, but in all studios and other ongoing projects include the new studios in Madrid and also in Armenia. As well as our fourth US studio in Connecticut.

As we mentioned earlier, we continue to invest heavily.

Not just in the U S but.

And all of that all studios and other ongoing projects include the New studios in Madrid.

Also in the in Armenia.

As well as our fourth U S studio in Connecticut.

Speaker 3: So, that's going on in plus martial world location.

Lots going on.

And pretty much all locations.

Speaker 3: The blue part of the bar is investment in intangible assets and is related to development of new games and features to the platform. It's 8.4 million euro in the quarter. That's up a bit compared to the same quarter 2020. But now also includes development of net net, red tiger and big time gaming games.

The blue part of the bar is investments in intangible assets related to development of new games and features to the platform. It's $8 4 million during the quarter, that's up a bit compared to the same quarter of 2020, but now also includes development of Red.

Tiger.

Time gaming games.

And yesterday.

Speaker 3: And yesterday, as we presented our 2022, I should say, roadmap, and I'm sure many of you thought or will see it. And you see that we launched close to 90 games this year. So investment in tangible assets are also supposed to continue at a high pace.

We present the dollar plenty plenty.

192, I should say roadmap I'm sure. Many of you saw it or we'll see it.

We launched close to 90 games. This year so investment the intangible assets are also set to continue at a high pace.

Speaker 3: Caffex for the full year 2021 amount to 60 million euro, which means that the pickup in Pacing Q4 meant that we actually reached our full year guidance of 60 million euro this year. And looking ahead to 2022, estimates that we will have a caffix of about 90 million euro. So more or less maintaining the current level that we see in the fourth course.

Capex for the full year.

The amount to 60 million euro, which means that the pick up in pace in Q4.

We actually reached our full year guidance of 60 million. This year and looking ahead to 2020 to estimate that we will have a capex of about $90 million, so more or less maintaining the current level.

In the fourth quarter.

Speaker 3: All right, moving on in the middle of the slide, we show operating cash flow. Cash flow was good in the quarter, over 166 million euro, slightly lower from Q3, due to, among other things, the higher investment. Cash conversion percentage on the rolling 12 mile basis is 75%. So still at a good level.

Alright, moving on in the middle of the Slide we show operating cash flow cash flow was good in the quarter over 156 million Euro slightly lower from Q3 due to among other things to higher investments.

Cash conversion percentage on the rolling 12 month basis, it's 75% so lots of good level and then finally to the fall right into slide a quick look at the balance sheet 421 million in cash at the end of December .

Speaker 3: And then finally to the far right in the slide, quick look at the balance sheet. 421 million euro in cash at the end of December . Out of that, 303, it's the proposed, 3.3 million euro is the proposed dividend for 2021.

Out of that 303 is the 300.

$3 million is the proposed dividend for 2021.

Speaker 3: We also have roughly 66 million euro that will be used for the compulsory buyout of the remaining net-end chairs that did not come with the share offer last year. That will take place now also during the first quarter. And we also have about 80 million euro remaining in the share buyback program that was initiated in December . And so that will also continue now. All these payouts considered, we will reduce our cash position during the first half of this year, but we maintain a good cash show and then overall strong financial position.

We also have roughly 66 million that will be used for the compulsory buyout of the remaining net them chess that did not come with a share offer last year.

Now also during the first quarter.

We also have about $80 million euro remaining in the share buyback program that was initiated in December so that could also continue now.

All of these payoffs considered we will reduce our cash position during the first half of this year, but we maintain a good cash flow and an overall strong financial position.

Speaker 3: That was the end of my prepared comments. I'll stop here, hand back to you Martin and we'll take questions off the earth. What?

What's the end of my prepared comments, so I'll stop here back to Martin and we will take questions.

Yeah.

Speaker 2: Thank you. Well, I'm on slide 12, last slide before questions. Thank you, Jacob. A few words to conclude this report presentation.

While I'm on slide 12 last slide before questions. Thank you Jacob.

Few words to conclude this report presentation.

I want to point to would be the year of product and innovation. Great started we will release, a record number of new and exciting and fantastic products exciting game since obtaining the end user. This is all possible because of the great person, it's an evolution and the teamwork between all of you.

Speaker 2: 2022 would be the year of product and innovation. A great year has started. We will release a record number of new innovative, exciting and fantastic products, exciting games and entertaining the end user. This is all possible because of the great persons in evolution and the teamwork between all of you.

Speaker 2: In the last quarter, several of new markets regulated and we were first to market in all of them.

And the last quarter several of new markets regulator than we were first to market and all of them.

Speaker 2: We will in the year ahead continue to our expansion in the world and will continue to develop the best and most innovative games. We have always been the one to push boundaries to push the real more what's possible when it comes to online casino. We've earned the 22 with a good momentum and our tight teamwork and speed will keep us moving forward to yet another great year.

We will in the year ahead continue to our expansion in the world and we will continue to develop the best and most innovative games.

We have always been the one to push boundaries to push to re Alamo whats possible when it comes to online casino.

Im just trying to do with a good momentum and our tight teamwork and speed will keep us moving forward to yet another great year.

Speaker 2: You always stay on our toes, as paranoid as ever, and we are never laid back or content. We always look forward to the next opportunity and the next challenge. Thank you all for listening, and we'll speak in a couple of months again.

We always stay on our toes as paranoid as ever and we are never laid back will come down.

Look forward to the next opportunity and the next challenge.

You all for listening and we'll speak in a couple of months again now.

Speaker 2: Now, and that's moving to the next slide, questions please.

Now, let's move to the next slide questions. Please.

Speaker 1: Thank you. If you wish to ask a question, please dial 0-1 on your telephone keypad now to enter the key. Once your name is announced, you can ask your question. If you find it's answered before it's your turn to speak, you can dial 0-2 to cancel. Our first question comes from the line of Martin on LL of B&B markets. Please go ahead, your line is open.

Thank you if you wish to ask a question. Please don't see where one on your telephone keypad now to enter the queue.

Name has announced you can ask your question. If you found enhance it before it should speak you can download CRH seems to counsel.

Our first question comes from the line of Martin <unk> of Dnb markets. Please go ahead. Your line is open.

Hi, good morning.

Speaker 2: Hi, good morning, gentlemen. I hope you can hear me. Good morning, we hear you. You're almost loud. Yeah, great. Well, my first question is, if you could comment a little bit about the tram so far in 2022, I think you mentioned that player activity has been good in the start of the year, but can you see anything more?

I Hope you can hear me.

Good morning, we hear you almost loud [laughter].

Yes, great.

My first question is.

If you could comment a little bit about the trends so far in 2022, I think you mentioned that.

<unk> activity has been good and the start of the year, but can you say anything more.

Speaker 2: I stated we come out of the Q4 with good momentum. We're starting the year with good momentum. Q1 have started well. Good. So there's no change in trends so far, of course.

Yes.

Stated, we come out of the Q4 with good momentum starting the year with good momentum Q1 have started well but.

So there is no change in trends so far in stores.

No shame income I would say.

Speaker 3: We thought of wealth. Yeah, thank you. It is, yeah. Cool. Thank you guys. And...

We still did well.

Yeah.

Okay. Thank you guys.

Thank you. Thank you.

On the U S expansion.

Speaker 2: When do you expect to be read with a Connecticut studio or for the live basement? When do you expect to see an answer?

When do you expect.

Let me read the Windsor, Connecticut.

The nine basis points.

The enhanced high margin may trend.

Speaker 2: We're in the building phase right now and we hope to go live soon.

And then building phase right now and we hope to go live.

Soon.

Okay.

Before summer is the first time.

Speaker 2: the four summaries from the four summary first off the four summer. Yeah, okay, excellent thing.

First half before summer.

Yeah, Okay excellent. Thank you.

Im.

Yeah.

Speaker 2: You're about to broaden your product portfolio in the US. And that was pretty clear yesterday from the presentation as well. How easy can you do that? How easy to get the game shows certified, et cetera.

Youre about to broaden your product portfolio in the U S that was pretty clear yesterday from the presentation as well.

How can you do that how easy is it to get.

Again shows certified et cetera for the U S States.

Good question.

Speaker 2: Good question, I must say. It's always challenged. First of all, the regulatory environment in the US is live and live is new to them. It's something that is new. So it's a process. You need to work with the regulator and see that they are comfortable and knowledgeable when it comes to the new products. And it will take a little while. But of course, naturally, we'd be working on that for quite some time.

I must say, it's all it's always first of all the regulatory environment The U S.

Live live is new to them, it's something that is new.

So it's a process you need to work with the regulator seats that they are comfortable.

Knowledgeable when it comes to the new products I think it will take a little while but of course naturally we've been working on that for quite some time.

Speaker 2: Okay, thank you. And could you just clarify, I think I overheard on the presentation yesterday that you could use your European studios for Canada on Playa, is that correct?

Okay. Thank.

Thank you and could you just clarify I think I overheard presentation yesterday that you could.

Use your European Studios for China that Ontario is that correct.

Speaker 2: That is correct. The commercial part can be the commercial market in Ontario can use our our students from Europe . Yes.

That is correct.

Commercial part can be the commercial market in Ontario can use our our students from Europe , yes.

Speaker 2: Okay, thank you. And just finally also on the secutations.

Okay. Thank you.

Just finally also on the.

These accusations.

That was filed today.

Speaker 2: Last year, are there any sort of comments you want to make on the dialogue that you have with the University of English? Is there anything that has changed from your perspective from these conversations?

Last year are there any sort of comments you wanted to make on the dialogue that you have with them.

The gaming Division is there anything that has changed from your perspective.

The SEC decision.

Speaker 2: If there is nothing new and nothing has changed, we have had a quarter who had essentially been in contact with many of the regulators as part of Yushal and we're working on the processes as you also see in the CEO comments and always client things to enhance and do better in all areas and so forth.

There is nothing new and nothing has changed we have.

I've had a quarter with SNL.

Essentially would have been in contact with many of the regulators.

Part of <unk> and we're working on the processes as you will see in the sea of our mountain.

And always find things to enhance and do better in all areas and so for this one.

Okay, and then I must just wanted to ask you what are you going to do with all that cash on the balance sheet.

Speaker 2: Okay, and then I must just finally ask you on, you know, what are you going to do with all that cash on the balance sheet? How are the discussions going there in the board? Do you think, is it purely dividends or are you having a deal flow when it comes to M&A? Maybe you could add technology for the future product, etc. How should we think about?

The discussion is going there.

And the board do you think is it purely dividends or are you having the inflow when it comes to M&A, maybe you could add technology for the future product et cetera, how should we think about that.

Speaker 3: Yeah, I think the main way to shift capital back to Charles will be dividend. And then we have a dividend policy of 50% of earnings. So I think that will be the main tool. And then as we see right now, you know, with the plan dividend and the...

Yes, I think the main the main.

They may wait to ship.

Capital back to shareholders will be dividend that we have a dividend policy of 50% of earnings so that I think that will be the main tool.

Then as we see right now.

The planned dividend.

Uh huh.

Speaker 3: compulsory buyout and the buyout program that's in progress, you could say, you know, the cash position will reduce during the first half of the year. Then of course, we do have good cash flows and hope to be in a position to have this question again in the future. So it's the same as always. Then of course, on the M&A side.

Compulsory buyout and the buyout program.

Progress you can say the cost per system will reduce in during the first half of the Identive course, yes, we do have good cash flows.

Hope to be in a position.

To have.

Good question again.

So.

It's the same as always and then of course on the M&A side. We are we've said before we will be opportunistic and that we listen and we look but our main growth strategy is organic growth. It's about everything we showed yesterday.

Speaker 3: We are, we've said before, we will be opportunistic in that. We will listen and we look, but our main growth strategy is organic growth. It's about everything we showed yesterday.

Speaker 3: more products, better products, that's the main growth haven.

More products better products.

So that's the main the main growth Avenue.

Speaker 4: All of the new live games, Martin and Jacob, what are you most excited about?

Of the New live games Martin then take up what are you most excited about.

Just to pick one or two.

Oh, that's a little bit like asking which tile of yours are the best ones I mean.

Speaker 2: That's a little bit like a song which child of yours are the best ones. I mean, we love them all. They are many, many great games coming. 21st.

We love them all they are there are many many great games coming.

Yes.

Okay. Thank you guys Thats ultimate thank you thanks a lot.

Speaker 4: Okay, thank you guys, that's all for me. Bye. Thank you. Thanks for today.

Speaker 1: Thank you. Next question comes from the line of Eddie Young at Morgan Stanley . Who's going to head to your line or so?

Thank you next question comes from the line of Andy Yeung at Morgan Stanley . Please go ahead. Your line is open.

Speaker 5: Good morning, I've got just three questions. The first ones on your North America ramp, it was up 6% quarter on quarter. So you said obviously growth there is lumpy as you work up capacity. I wondered if you could perhaps give a bit of color on how you expect that to develop over the course of the year and whether you'd be able to quantify the impact of the Canada switch off within that North America.

Good morning.

Three questions.

The first one's on Youll, North America ramp it was up 6% quarter on quarter. So you've said obviously growth is.

As lumpy as you walk up capacity.

I Wonder if you could perhaps give a bit of color on how you expect that to develop over the course of the.

And whether you'd be able to quantify.

<unk> the kind of just switch off within that North American number. Thanks.

Good morning.

Speaker 2: Good morning. Yes, good question. We don't quantify the growth in different markets, but I will try to give you some say, I will say, of course, we're coming into 2022. We're in a ramp up expansion phase in all states in the US.

Yes, good question.

We don't quantify the growth in different markets.

Tried to give you something I would say of course, we're coming into 2022.

We are in the ramp up expansion phase in all states in U S.

Speaker 2: And that ramp up is of course been challenged with COVID. And it's been a little bit back and forth for us. And we look forward to coming out of COVID and being able to expand faster, simple at that. And then take a larger part of the market. So we look forward to that. But on top of that, we're also in the licensing and regulation phase of new games and expanding the portfolio. And in my dream scenario, of course, we will have the full product suite.

That ramp up is of course being challenged with Covid. It's.

Been a little bit back and forth for us.

And we look forward to coming out of Covid on being able to expand faster as simple as that.

The largest part of the market. So we look forward to that but on top of that we're also in the.

Licensing unregulated shall face of new games, and expanding the portfolio and in my Dream scenario of course, we will have the full product suite.

Speaker 2: Tomorrow, it won't be tomorrow, but as soon as possible for all American players, and that will also enhance the player experience and also of course the market share. When you can't see the content.

Tomorrow, it won't be tomorrow, but as soon as possible for all American place and that will also enhance the play experience and also of course the market share.

When it comes to the quantification of.

Speaker 2: When it comes to Canada, it's been hard and we haven't stated that. We look forward now to the commercial opening of the market in actually state second of April . And look forward to...

When it comes to counter that we havent its been hard on that we haven't stated that we look forward now to the commercial opening of the market and actually state the second of April .

And look forward to.

Good growth on that market Us April and onwards.

Speaker 2: a good growth on that market as of April and onwards.

Speaker 5: Okay, thanks. My second question, you mentioned yesterday that 10% of your customers have moved on to the one stop shop.

Okay. Thanks, My second question, you mentioned yesterday.

10% of your customers have moved onto the one stop shop with I think 2% of traffic expected by the end of Q1 can you just talk broadly about what you've seen from the first move is obviously if you have access to more of your content.

Speaker 5: 30% of traffic expected by the end of key one. Can you just talk broadly about what you've seen from the first move? Is obviously they have access to more of your content? Are they on average taking more of your content onto OSS? And is that how we should think about improvements in cross-cell and RNG growth through the years? Is it partly related to you think to uptake of OSS?

On average taking more of your content onto Oss and is that how we should think about improvements in cross sell and LNG growth through the year or is it partly related do you think to uptake of Oss.

Speaker 2: I think that you should think of OSS in a long time perspective as we talked about being the leader in online casinos, seamless, flawless integration. All customers to one would drop a product, boom, it's possible, it's compliant, it comes out in regulated markets and others in one strike or one blow. It would make the life of the operator simpler, they would have our lobby, they would connect in one place.

I think that you should think of Oss and a longtime perspective.

As we talked about being the leader in online casino seamless flawless integration all customers to one we dropped our product boom. It's possible. It's compliant it comes out in regulated markets and others.

Strike one blows.

It would make the life of the operator simpler they would have our lobby.

Connecting one place.

Speaker 2: I don't expect immediate or effects of that. Of course, when we roll out the product into new customers and they get more, you will see that effect. But I don't see that as a bump up, it's more gradual effect over the time to come. OK, thanks.

I don't expect immediate.

<unk> of that of course, when we rollout the product into new customers and they get more you will see that effect, but I don't see that.

Is the bump up it's more of a gradual effect over the time to come.

Okay. Thanks.

Im sorry.

Alright.

Speaker 5: My final woman's on cost.

Great.

My final one was on.

On costs.

Speaker 5: It looks like the big move on costs quarter on quarter.

It looks like the big move on costs quarter on quarter.

Speaker 5: was other operating costs, up to 38 million from the low 30s.

Other operating costs up to $38 million from the low thirties.

Speaker 5: I know that's a lumpy line, but could you talk a little bit about what's driven the quarter on quarter rise there? And is that the new normal, but other operating costs that we should expect back to reverse a little bit more towards a more normalized level going forward? Because if I look at your staff cost, for instance, it looks like actually, you know, your like-for-like staff cost have continued to be deflationary. So I'm just trying to think about the margin out.

I know that's a lumpy line, but could you talk a little bit about what's driven the quarter on quarter rise to I mean, it's not the.

The new normal for other operating costs that we should expect that to reverse a little bit more towards a more normalized level going forward because if I look at your staff costs for instance, it looks like actually.

Like for like staff costs have continued to be deflationary. So I'm just trying to think about the margin outlook I guess.

Okay, I will start and I will hand over to Jacob but.

Speaker 2: Okay, I will start and I will hand over to Jacob, but

Speaker 2: What I tried to emphasize on the report and also, I'll just say, I mean, we double the company in 18 months. We employed 6,700 people on top of 6,718 months. And that's right.

What I tried to emphasize.

On the report and also projects.

I mean, we doubled the company in 18 months.

We employ 6700 people on top of 6719 months.

And that's drive.

Yeah.

Speaker 2: cost in a lot of different areas. You have to stop up, you have to see too, you have to make it work, and it's a heavy lifting to do that. And I think that

In a lot of different data, yes, you'll have to staff up you have to see to you have to make it work.

It's heavy.

Heavy lifting to do that and I think thats.

Speaker 2: which I also tried to state is that we maintain and have a fantastic margin of 69% in the quarter and for the year essentially is a great achievement and I'm very happy with that. Now I hand over for the more detailed on other explanations.

Which I also tried to state is that we maintain and have a fantastic margin of 69% in the quarter and for the year essentially is a great achievement and I'm very happy with that now I'll hand over for the more detailed on other expenses.

Speaker 3: Yeah, I mean, I think you, you, you, you said it also, it, it is a bit lumpy the other operating expenses. So it, it tends to move a little bit. In this quarter, I mean, there's one component in there that's royalties. That's, that, that moves very much with revenue when, when we have more volume, that also drives cost there. And then there's all types of things that kind of,

I think you said it also that it is.

Lumpy the other operating expenses.

That tends to move a little bit in this quarter.

There is one component of that that's royalties that moves very much with revenue when we have more volume, but also drives cost there.

Then there is all types of things that kind of.

Speaker 3: which is indirectly related to the building activity. Fraid costs are up, consumable equipment is up. So there's a number of items in there that's moving. As you're going forward, I don't see it go, as the company grows, it hasn't gone down that many quarters. But we probably won't see the same increases at each quarter. So it is a little lumpy, but over time, we'll increase that for growth operation.

Somewhat indirectly related to the building activity freight costs are up.

Consumables equipment is up so there is there's a number of items in there.

But movie.

Going forward I don't see it go as a company growth.

It Hasnt gone down that many quarters, but we won't we will probably won't see the same increases each.

Each quarter, so it isn't it's lumpy, but over time.

Will will increase as we as we grow the operation.

Okay. Thanks very much.

Speaker 6: Thank you.

Thank you.

Speaker 1: Thank you, our next question comes from the line of Oscar-Dankest of ABG. Please go ahead to your line, is it?

Thank you next question comes from the line of Scott.

Please go ahead your line is open.

Speaker 7: Good morning, Martin and Jacob, just a few on the morning. So the first one regarding your margin guidance, which is above your Q4 margin. Do you expect a slow down in OPEX growth from previous levels if we take it in like relative terms? Or is it a draw that like any increase in top line growth according to your forecast? It's an increase in top line. Of course, OPEX will be.

Good morning, Martin and Jacob just a few of the morning.

So the first one regarding your margin guidance, which is above your Q4 margin do you expect a slowdown in opex growth from previous levels.

If we take it in relative terms.

Or is it rather like al any increase in topline growth. According to your forecast.

It's an increase in topline.

Of course Opex will follow.

It's primarily due to an increase in topline.

Speaker 7: Alright, so relative to previous like

Alright.

Relative to previous like.

Speaker 7: year-of-year growth in costs. You expect that the relative percentage term to decrease relative to what it was in the previous...

Year over year growth in costs do you expect that relative percentage term to decrease relative to what it was in the previous years.

If you count it to calculate the incremental margin, it's always been a bit higher so over time, they will assimilate mathematically if you would put it like that.

Speaker 2: If you can't, it's a calculating chromaton margin, it's always been a bit higher. So over time, they will assimilate mathematically if you would put it like that. If that's not a chance.

John .

Yep.

Speaker 7: All right, next one on the recent signing with the Fan Jewel. You sign an exclusive like a thing to deal. Do you expect this trend will continue and do you also expect the play take customers with like equal deals to open up for multiple suppliers?

Alright, and next one on the recent signing with a fan Juul you signed an exclusive like casino deal.

Do you expect this trend will continue.

And do you also expect the fleet to customers with like equal deals to open up for multiple suppliers.

Speaker 2: I think that this...

I think that.

The.

Speaker 2: over time, exclusivity will not be there. And right now it's more like an option where...

Overtime exclusivity will not be there and right now it's more.

Like an option where.

Speaker 2: The operators want to have the best product and they need to get a portion. They need to give something and now we end up in agreements or one or the other. Competition is good. There will be competition in you ask, we need to be best. We need to move forward every day and we need to release the best products every year for their users. So I don't see any change in that.

The operators want to have the best product.

They need to get a push and they need to give something and that wound up in an agreement with one of the other competition is good there will be competition to you.

We need to be best we need to move forward every day and we need to produce the best products every year for the end user so I don't see any change in that.

Alright understood.

Speaker 7: All right, understood. Next one, just looking at the growth opportunities in Asia. Is it rather like a significant grab-of-market shares, or is it like more of a market online trend that will fuel your growth in Asia? And additionally, if you could just...

Next one just looking at the growth opportunities in Asia is it rather like a significant to grab a market share or is it like.

More of a market online trend that will fuel our growth in Asia.

And Additionally, if you could just.

Speaker 7: Do you have like a bold park estimate of your current market share in Asia or maybe just discuss sort of your projected market decision there?

Do you have like a ballpark estimate of your current market share in Asia, or maybe just discuss sort of your projected market position there right now.

I would say that we're still small in Asia Asia is a huge market.

Speaker 2: I would tell that we're still small in Asia. Asia is a huge market. That's the first. And then I think that what builds...

And then.

I think that.

Well Bill.

The evolution is preference trustworthiness and the end users and entertainment of the end user. So so that is.

Speaker 2: trust within the end users and entertainment of the end users. So that is what makes our traction. And that's why Asian or North American or European players play. And then there's simply many more players in Asia than in Europe because it's a larger population. So that's why it's driven. In total market, very hard to estimate. As it's hard to estimate also in Europe , since we are the ones that disclose our figures, but it's hard to get the others. Europe , we have a good market share.

What makes our traction and Thats, why Asian, or North American or European players play in them.

There is simply many more players in Asia than in Europe , because it's a larger population. So thats why its driven and told the market very hard to estimate it's hard to estimate in western Europe . Since we are the ones that disclose all the figures, but it's hard to get the others.

We have good market share in the.

Speaker 2: In Asia, I still think we're small.

In Asia I still think we're small.

Speaker 7: All right, got it. Just a final one on the regulatory allegations here. So I know that you have communicated that to you. Yeah, our.

Alright got it.

Just a final one on them.

Our regulatory obligations here.

So I know that you have communicated that to you.

Our.

Speaker 7: talking like daily one of the bases with with the new jersey gaming board but are you worried that the new jersey gaming board or any other regulatory commission could force you to block other markets than the sanction ones or force you to see operations with certain customers such as I don't know stake.com for example

Talking like daily.

With the New Jersey Gaming Board, but are you worried that the New Jersey gaming board or any other regulatory Commission could force you to block other markets, then the sanction ones or foresee to cease operations with certain customers such as I don't know Stakes Dot Com for example.

Okay.

Speaker 2: We're very comfortable with our business model. We only then as you all know, sell our content to licensed operators, licensed by state or government or countries. So we're comfortable with that.

We're very comfortable with our business model, we owned it unless you all know.

So our content to licensed operators licensed by state or government or country. So we are comfortable with us.

Speaker 2: We've been operative in U.S. since 2018, but 1,500 please.

We've been operative use since 2018.

1500 employees.

Speaker 2: And we are not worried about our position in total.

We are not worried about our position in total.

Speaker 2: But of course, you should never be arrogant. Everything that happens, you need to address and we want to be better on everything every day. And now we're of course looking into these and we find things that we can enhance also in this area. And as we stated, as we do that, and we find those things, and we tune those, and we do those things that make it better, we haven't seen any, it's been an insignificant effect on revenue.

Of course, you should never be arrogant everything that happens you need to address and we want to be better on everything every day and now we're of course looking into these and we find things that we can in house also in this area.

As we stated as we do that and we find dosing from two of those and we do those things that make it better we haven't seen any it's been an insignificant effect on revenue.

Okay. Thank you that was all for me.

Thank you very much at Cisco.

Speaker 1: Our next question comes from the line of which is in the birth of Eric Pensabank. Please go ahead, your line is open.

Our next question comes from the line all of which had an impact of airplanes Bank. Please go ahead. Your line is open.

Good morning, guys.

Good morning.

Speaker 2: Can you please elaborate a bit on the best spot development? I know so quite high growth Q and Q. Is that related to higher capacity, or is it related to increased activity in the network?

Can you please elaborate a bit on the development.

Right high growth Q on Q is that related to higher capacity or is it related to increased activity in the Netflix.

Speaker 2: The best part is increased activity and you saw my comments on crazy time and and it's one of the strongest games but in total activity in the network has increased.

The best part is increased activity and you saw my comments on Crazy time.

<unk>.

It's one of the strongest games, but in total activity in the network has increased.

Okay. Good so it's not that there is capacity that has limited dealing the Q to Q Q Q3 during 2021.

Speaker 1: Okay, good. So it's not that it's capacity that is limited during the Q1 to Q3 during 2021.

No I wouldn't say so.

Speaker 2: But we are under supplying, we need more capacity. We could expand, I mean, it's hard to recruit 6,700 people, as I said, so we could expand faster, but we are on it, believe me, we are on it.

But we are on the supply we need more capacity we could expand.

Okay.

It's hard to recruit 6700 people as I said, so we could expand faster.

We are on it believe me we are on it.

<unk>.

Okay. Good.

Speaker 1: Okay, good. And also one question yesterday you talked about in one stop shop and integrated bonus with

Also one question yesterday, you talked about.

The one stop shop integrated business systems.

Speaker 1: is that a key to achieve a higher growth within the orangey second?

A key to achieve a higher growth.

<unk> segment.

Speaker 2: Good questions. I would say that the bonus and free spin situation in RNG is less important now than 10 years ago because of regulatory aspects and limitations in that. And I would assume that development continues. So it's still important, but it isn't as important as it was in the past. Thanks.

Good questions.

I would say that the bonus and free spin situation in R&D is less important now than 10 years ago, because of regulatory aspects and limitations in that and I would assume that developments continue so it's not it's still important but it isn't as important as it was in the past.

Okay. Thanks, that's all for me.

Okay.

Speaker 1: Thank you, and next question comes from the line of Kiran Daggerwal. Oh, so thank you for the America. Please go ahead to your line.

Thank you Chris.

Question comes from the line of Karen <unk> with Bank of America. Please go ahead. Your line is open.

Yeah.

Sure.

Speaker 1: That seems the question is already been answered. I'll move to the next question. The next question comes from the line of Oscar Erickson. On the move, please go ahead to your line, is it?

It seems a question that's already been announced.

I'll move to the next question. The next question comes from the line of Oscar Erickson.

Please go ahead Youre monocytes.

Speaker 7: Thank you and good morning guys. Good morning from me, especially on the pro pipeline here for 2022. Great presentation yesterday. First on the live side, you seem to announce a evolution brand that likes to see new games yesterday. How many do you plan for the full year? What prices are you most excited about in terms of innovation and revenue potential? Martin, I would be interested to hear.

Thank you and good morning, guys.

Good morning from me, especially on the pipeline here for 2022.

Great presentation yesterday.

First on the life side, you seem to announce a evolution Brown Bud light casino games yesterday.

How many do you plan for the full year.

<unk> are you most excited about in terms of innovation and revenue potential Martin.

Interesting. Thank you.

Yeah.

Speaker 2: We will release more games.

Hi.

We will release more games.

Speaker 2: and there's more to come. I'm very excited overall and for different reasons for some of the games that we released. It's very hard for me to pick. I mean, a new big baller monopoli game, fantastic. It's such a beautiful studio. It's such an amazing game. It triggers some part where we are on our way into a new segment, fantastic game.

And there's more to come I am very excited.

Cited over all and for different reasons.

Some of the games that we released it is very hard for me to pick I mean.

A new big boiler monopoly game.

It's such a beautiful studio.

Such an amazing game it figures some parts, where we are on our way into a new segment fantastic game.

Speaker 2: The lightning extreme, extreme lightning, an amazing game. It will sort of continue our rule with the lightning games and make it take it to the next level. It would be...

The lightning lightning extreme extreme and I think an amazing game it will sort of.

Continue our route to the licensing.

Licensing games and make it take it to the next level it would be it would be.

Speaker 2: in my world of blockbuster. Then if you look at...

In my World a blockbuster.

If you look at.

Speaker 2: the gold, the gold, the one that you saw in the first picture. I mean, it's an amazing game, it's a state game, it's gonna be great. There's a lot of things coming in the line line, and I very much look forward to it. And it's more, if we did a little bit more Asian flavored games last year, it's also about with people back, but it's also the hair, but it's more towards the North American and European market.

The the gold.

The one that you saw in the first picture I mean.

It's an amazing game its a state gaming.

It's going to be great. So there is a lot of things coming in the line of alignment.

Very much look forward to it.

It's more if we.

We did a little bit more.

Asia flavored gains last year, it's also but with people back boy. It's also that here, but it's more towards the North American and European market. This year.

Excellent. Thank you.

Speaker 3: excellent. Thank you. And on the slow side, I mean a huge number of announcements yesterday, including perhaps especially Superstars, a little bit hard to put into context, the sort of quantity of releases and the impact. Do you think the pipeline in itself is vastly superior to that in 2021? Would you consider the OSS role out as probably more important to just grow going in the

Flip side, I mean, a huge number of announcements yesterday, including perhaps especially superstars.

Little bit hard to put into context the pump.

The old release us.

Do you think the pipeline itself is vastly superior to that in 2021 would you consider the Oss rollout will be more important to get growth going into the salt segment.

Speaker 2: You put one thing against the other and I would say just the product roadmap as I state the 2022 is the best one ever. That's justice and that goes for each part of the roadmap as well.

So.

You've put one Ross.

Going against that.

I would say, yes, the product roadmap as I state that 'twenty to 'twenty two is the best one ever.

Justice that goes for each part of the world as well.

Speaker 2: But if I'm thrilled about the OSS, it's like a strategic, practical piece. It's the right thing, seamless, flawless reaching out, single integration, making it easy, seeing that everything works smooth, moving us forward is Amazon of gaming, where you can get all the content that one single board.

But if I'm if I'm if I'm thrilled about the Oss, it's like a strategic tech piece, it's the right thing seamless flawless leaching out single integration, making EC seeing to that everything works smoothly moving us toward this Amazon gaming, where you can get all the content that one Singapore.

Speaker 2: having that connection with a new lobby, it's like phenomenal. And then on top of that, we release the games and then it's more easy to release games. But we are on our way, don't forget that. It's not usually companies may be talking.

Having that in connection with the new law bids like phenomenon.

And then on top of that we released the games and then it's Moody's released yet, but we are on our way don't forget that it's not you.

Usually companies mainly talk about this for.

Yes. So this should we talk about it and we have already we'd say in a couple of weeks, we started out with us.

Speaker 2: Years as a vision we talk about it and we have already with saying in a couple of weeks we're starting to plant out with us But we're not done so there's a long road but exciting games New lobby fantastic was

Them so there's.

Loan growth.

Exciting games, new lobby fantastic Oss.

Speaker 3: understood other so thank you and then on North America growing by six seven some sequentially I believe

Understood. Thank you.

On North America growing by six 7% sequentially I believe.

Speaker 3: And I have the market growing at maybe 14, 15% sequentially in the US in the eye gaming market. So it's a lower growth. I think you partly perhaps answer this a little bit, but it's lower growth primarily due to the Ontario licensing process.

And I have the market growing up maybe 14, 15% sequentially in the U S in the.

Gaming market.

The lower growth I think you partly answered this a little bit lower growth, primarily due to the licensing process.

Speaker 7: Or are you also seeing sort of a clear impact of not having the full light that you're offering in the US?

Or are you also seeing sort of a clear impact of not having the full casino offering in the U S. Yet.

I mean, both I think Martin you answered it almost looked at early on the call.

Speaker 3: I mean, both. I think Mark and you asked it almost literally on the call. So both of those things affect. I mean, we are expanding as fast as we can in the studios there. But, I think it's fair to say that we're currently a bit under-serving the market when it comes to capacity. And yes, I mean, the Ontario effect is a little bit in the court as well. So, but I guess yes.

But both of those things I mean, we are we are expanding us.

First as we can in the studios there.

I guess I have to say that's currently under serving the market when it comes to capacity and yes that means that the Ontario.

FX, a little bit in the quarter as well so.

I guess, yes on both your suggestions.

Understood and then just a final question for me I guess for you Jay.

Speaker 3: Hello, sir. And then just the final question for me, I guess it's for you Jacob again. Little bit nifty gritty here, but could you share some light on the organic or constant currency growth of live casino here in Q4, given a lot of effects movement. And so thank you.

Again.

Little bit Nitty gritty here.

Could you shed some light on the organic or constant currency growth.

Like if you know here in Q4, given the level of FX movement.

So thank you.

I mean, all the law.

Speaker 3: No, I don't. There's no direct effects, effects and all the live revenue is so organic. Then you could say, of course, you know, different.

No I don't.

There's no there's no direct FX.

All the lives.

All the light revenue here so again.

And you could tell you of course different operators will have players play in different currencies, but we will we will invoice in mainly in euros. So there is no. There is no direct FX effect to us but of course indirectly there might be some but we don't we don't followed up.

Speaker 3: Operators will have players play in different currencies, but we will we will invoice in mainly euros. So there's no direct effects effect class, but of course indirectly there might be some, but we don't we don't follow that.

Got it thank you very much.

Thank you.

Speaker 1: Thank you and we've got Karen Jragglewall of Bank of America back on the line. Please go ahead to your line as well.

And we've got Karen drove all of Bank of America back on the line. Please go ahead your online insightful.

Speaker 8: Morning. Thank you. Just a couple of questions from me. You guys said that you have over 1000 tables that you've ended the year with. Could you maybe speak to how they were phased out where these sort of rolled out more towards the end of the year just trying to see if there's any impact on margins from that. Also, as you roll out some of these non scalable tables such as Blackjack, do you think they could weigh on your margins? Thank you.

Morning, guys, sorry about.

Good morning.

Just a couple of questions from me.

I saw that you had over 1000 tables.

The U S could you maybe speak to how they are phased out whether you sort of rolled out more towards the end of <unk> just trying to see if there's any impact on margins from that.

Also as you rollout some of these non scalable tables, such as Black Jack do you think they could weigh on your margins. Thank you.

We're expanding faster than the end of the year.

Speaker 2: We're expanding faster in the end of the year than in the beginning. The last quarter has been very hectic. So that's one of the constant tables on the bottom. It's a little bit heavy towards the end of the year. Margin, I mean, we guide now on the fixed nights on the one and we're happy with that. And that is including the effects of an expansion in the product suite, both when it comes to arm-scaling but not scalable games.

In the beginning of the last quarter has been very hectic. So that's when it comes to the thousands of <unk> both on the bumps.

So it's a little bit.

Having towards the end of the year.

Margin, we guide now on the six to 971, and we're happy with that.

And that is including the effect of <unk>.

The expansion in the product suite, both when it comes to unscathed, but not scalable games.

If that makes sense.

Alright, thank you.

Thank you.

Thank you.

Yeah.

Speaker 1: Thank you, once again for any further questions, please don't zero one on your telephone key pads down.

Thank you once again.

Further questions. Please don't Cri, one on your telephone keypad now.

Speaker 1: Okay, this is actually barely just one Fakima's cream for a light question. Just need to wear it to that.

Sure.

Okay.

Actually just one second let's confirm question interesting tomorrow.

Yes.

Okay.

Yes.

Well there are no more questions.

Yeah.

Speaker 1: Okay, well they are not. Yeah, this is a question. Yeah, sorry. Apologies, the question literally came in just as I was saying. There's no further questions and it was from a late call so I just need to register them. From the line of Simon Davis's Deutsche Bank, please go ahead, you're on line exactly. Okay.

Okay.

Hi, Dan.

Yes, sorry, sorry, I apologize the question, Okay, and then just as I said, that's nice set of questions and it was from a light colas such things to register them.

From the line of Simon Davies with Deutsche Bank. Please go ahead your mindset.

Speaker 9: Yeah, morning. I just two quick ones from me. Firstly, we're hearing increasing talk of our wage inflation, particularly in the tech space. I was just wondering whether you were seeing any increased pressures in terms of your ability to recruit particularly in North America. And have you seen any signs of a rise in staff churn rate?

Yes. Good morning, just two quick ones from me, especially we are hearing.

We're hearing increasing talk of wage inflation, particularly in the tech space.

Just wondering whether you're seeing any increased pressures in terms of your ability to recruit particularly in North America and have you seen any signs of a rise in staff churn rates.

Speaker 9: My second question just very quickly is there any chance you can give some indication in terms of the thousand tables that you had at the year end How many of those are in North America?

My second question just very quickly is there any chance you could give some indication in terms of the thousands of tables that you had at the year end, how many of those are in North America.

And where do you see that number going to.

Speaker 2: Also two good questions. I mean, there is a lot of talks about inflation worldwide. And of course, depending on the pandemic and the country's print money or stimulating other ways, we see inflation increase. How that will affect, we don't really see it yet. We haven't had any substantial effects. We don't see sort of a shown increasing.

Okay.

Yes.

Also two good questions.

I mean, there is a lot of talks about inflation worldwide.

And of course, depending on the pandemic.

Countries print money or stimulating otherwise, we see inflation increase how that will affect we don't really see it yes, we haven't had them substantial effects, we don't see sort of the churn increasing.

Speaker 2: because of that. However, of course recruiting at the pace we are, it's also costing money when it comes to sharning others. But nothing out of implementation yet. We have to get back to that if that happens, but that's the aim for I guess all of the world, and whichever business you have.

The cost of that.

However of course recruiting at the pace we are.

Thanks.

It's also costing money when it when it comes to.

Churn on others, but nothing nothing else of inflation, yet we have to get back to us if that happens, but that's the same for I guess all of the world.

Have a business you have.

Speaker 2: When you come to the split of the tables to North America, I really understand your question. We don't disclose that. Maybe we'll come for a situation with that later, but we are in a heavy expansion. And we could say that New Jersey have been there for a while, and but it's still expanding. I expect it to almost bubble. And the same goes for Pennsylvania and Michigan. So expansion is heavy, but we don't comment on the exact number of people.

When it comes to the split of the table.

North America, and I really understand.

Question, we don't disclose that.

Yeah.

Maybe we encompass nutrition without later, but we are in to have the expansion and we could say that new doors have been there for a while but it's still expanding.

I expect it to almost double them and the same goes for Pennsylvania, Michigan. So expansion is happening, but we don't comment on the exact number will save us.

Thanks.

Thank you.

Thank you.

Speaker 1: That was the final question on the phone to this time. So I'll have that while I speak as so the closing comment

The final question on the science of this time, so I'll hand back small speakers for closing comments.

Speaker 2: Okay, thank you everyone. It was a pleasure to have you here today and to present a great, another great quarter as I see it from evolution. And above all, we have a fantastic product of line up for 2021. Thank you for listening. And speak to you again in a couple of months.

Okay. Thank you everyone.

Pleasure to have you here today enterprise, great another great quarter as I see it from the evolution and above all we have.

Plastic product lineup for 2002, Thank you for listening and speak to you again in a couple of months.

[music].