Q3 2023 Evolution AB (publ) Earnings Call
Speaker 1: transcript
Okay.
Speaker 2: transcript
Welcome to the evolution Q3, 'twenty twenty-three report.
Speaker 2: transcript
For the first part of the conference call the participants will be in listen only mode.
Speaker 2: transcript
During the questions and answer session participants are able to ask questions by Dialling start five on the telephone keypad now I will hand, the conference over to the speakers CEO Martin call Sunday and CFO Jacob Calpine.
Please go ahead.
Speaker 3: transcript
Okay.
Good morning, welcome everyone to the presentation of Evolutions report for the third quarter of 2023 My name is multi cortisone.
With me I have our CFO.
Speaker 3: transcript
I will start with some comments on our performance in the quarter as usual.
After I will hand over to Jacob but just look at the our financials after that I will round off our presentation with an outlook for the rest of the year and that we all have to take all of your questions.
So lets begin our move to the next slide.
Okay.
Okay.
Speaker 3: transcript
The underlying growth drivers of our business remains solid theres, a global audience with excitement and entertainment that online casino brings and we continued to see strong global demand for our games.
Speaker 3: transcript
The third quarter, we have released more games in the earlier quarter and we are on track to exceed our target of 100, new games in 2023.
Speaker 3: transcript
There is more to come in the fourth quarter with games like face the pachinko and vendor overlap shown here on the slide.
Come back to that in upcoming game without coming games Nathan's presentation.
Speaker 3: transcript
During Q2 and that was in Q3, we see higher demand for I'd like to see more than we currently can deliver which is very close Davis our gains have phenomenal traction of the MAU Eva So we need to expand our suite of space as well as increased their speed of recruitment. We are addressing this would put borst.
At the moment in parallel building use it is in Europe, Latam and also planning to add new students in North America as well as expanding existing studios, we're faced some delays and built out but even more importantly, it need to decrease the recruitment base as the new students are more tables get ready to be added to that mix in networks.
Speaker 3: transcript
Speaker 3: transcript
We are in an investment phase and we will continue to invest as fast as we can during amdocs and three as well as during transplants for multiple projects. This quarter include a new small city in Colombia, which was just after the end of the third quarter. The largest students was initiated in Colombia as a next step during transplants for at Wassa.
Aim to open one new student in Europe later, this year of $3 four New studios our plan both in Europe, North America, and Latin America for 12 months before.
Speaker 3: transcript
Now, let's move to the coming slide to see the effect on numbers and products on our all our efforts.
Speaker 3: transcript
Let's look at financials revenue in the quarter increased by 96% to $452 6 million Euro for the year to date bird growth amounted to 26, 1%.
Speaker 3: transcript
EBITDA in the quarter increased by two 1% to $318 6 million corresponding to a margin of 17, 4%.
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<unk> January to September we reached a margin of 73%, which is the bulk of our 68% to 71% guidance for the full year from fund III.
Speaker 3: transcript
I am pleased with the margin level, considering the cost levels in the world have increased significantly during the year, our focus on continuously increasing efficiency in our ratios as well as good cost control through our organization has helped us achieve this.
Speaker 3: transcript
For like Casino, we grew revenue with plans for 3% compared to Q3 last year, some rising to total revenue of $385 8 million Europe.
Speaker 3: transcript
In the third quarter R&D revenues amount to $66 8 million correspond to negative growth of one 9% and our R&D business amongst a 14, 8% of total revenue.
Speaker 3: transcript
For the first nine months, though.
We grew R&D with four 9%.
Overall financial results in the quarter as solid.
Speaker 3: transcript
We prefer to concentrate on factors that we have control in explaining our results and then download will continue with this approach. However, this quarter the impact from external factors are on a higher level than ever before so I think we'll be wrong not to mention it at all.
Speaker 3: transcript
The strengthening of the euro against most currencies compared to Q3 last year effects, our top line growth during this year.
Speaker 3: transcript
Quantifying those effects in the third quarter, we calculate at 6% to 8% points negative headwind on growth from currency effects on revenues when compared to the same quarter last year without this headwind figures would have been very strong.
Now, let's move to next slide.
Speaker 3: transcript
With the fast growth of the company, we need to have an equal high pace in our recruitment and recruitment we continues to be one of our priorities and one of our key processes.
Speaker 3: transcript
At the end of the period, we were close to 18000 evolutionary working hard to delight players everyday increases stock year on year month to 1900, <unk> corresponding to an increase of 12%.
As said on the beginning of extension of not added headcounts truly asked which would have liked to.
Together with stood a build out we are known for.
Focusing on expansion.
Speaker 3: transcript
Hiring and retaining the best people is top.
Ever been and we're working with this continuously identifying inefficiencies improving our recruitment process.
Speaker 3: transcript
<unk> good recruitment are not new to us. It's just the reality in the business that is dependent on continuous high employing people equally. This is the reason why that why it's very important to have the right incentive programs in place.
Now to the next slides.
Speaker 3: transcript
The game round index shows the development of the whole evolution network and includes all games can be seen as a general indicate the productivity in our network.
Speaker 3: transcript
Over time more game rounds means more activity leads to increased revenue this quarter game rounds increased 6% year on year, So a higher growth rate than our total revenue gain round is growing faster than revenues is the development. We have seen in the past few quarters.
It's not termed as the volume of new phase from new regions coming in with a lower bed sizes.
Speaker 3: transcript
Looking at the absolute level.
Of the index in Q2, and Q3, you can see some flattening which to some extent it reflects that.
What we discussed in the previous slides.
Gardening that we see a higher demand of our products that we currently can deliver.
Next slide.
Move to products.
Speaker 3: transcript
The width of our product portfolio is already today and unmatched in online casino and there are many more games to come this year, we launched a record number of exciting games to inspire countless relative to players.
Speaker 3: transcript
Let me mention a few of the games recent announcements to be launched.
Speaker 3: transcript
Two of the strongest brands in our portfolio of licenses the likely franchise on the <unk> pilot.
Both will expand in the coming months and even a combination will be added to the product portfolio.
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This fall it's time for the additions to the <unk> compound in both of them will continue to combine the world of live casino and RMG.
Speaker 3: transcript
<unk> lapped combines the award winning nicely, we're left with accelerating experience of trades tons. Most popular bones game Crazy time game is going to be crazy pachinko.
Based on the creative and bonus armed with the same name.
Speaker 3: transcript
This new addition to the <unk> family really shows the outstanding pay experiences that we can create a mixing light and R&D together.
Speaker 3: transcript
Likely Lotto is not just and again, it's a live game.
Unknown Attendee: Welcome to the Evolution Q3 2023 Report. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing Star 5 on their telephone keypad.
Bouncing ball game.
It takes the traditional Lotto game players that know and love this game to a new level.
Speaker 3: transcript
We change it up with an electrifying twist and the two more growing machine completed with a live game hope it is a fast paced and Mercedes high energy game, that's sure to keep the players with the thing.
Unknown Attendee: Now I will hand the conference over to the speaker CEO Martin Carlesund and CFO Jacob Kaplan. Please go ahead. Good morning.
Speaker 3: transcript
With evolution players can always find what the what suits their taste on a constant game Easter and the breadth of offering is a major distinguishing factor effective revolution.
Martin Carlesund: Welcome I want to the presentation of Evolution Report for the third quarter of 2023. My name is Martin Carlesund and the CEO of Evolution. With me, as usual, I have our CFO Jacob Kaplan. I will start with our comments on our performance in the quarter as usual as well and we are after I will handle with the Jacob who close look at our financials. After that, I will round off our presentation with an outlook for the rest of the year and then we are happy to take all of your questions.
Okay.
Speaker 3: transcript
Remember that and operate then all my casino today is not just competing against other suppliers. The Beaumont casino, it's competing against the rest of the entertainment industry.
Speaker 3: transcript
Evolution.
AD products that we go up against streaming services and social media platform, where players time and use entertainment is the only true long term measurement that matters that need to be able to assure that you constantly increased entertainment spectrum bandwidth to be relevant for the players our games on the App.
Martin Carlesund: Okay, so let's begin and move to next slide. Now the line growth drives of our business remain solid. There is a global audience for the excitement and entertainment that online casino brings and we are continuing to see strong global demand for our games. During the third quarter we have released more games than in any earlier quarter and we are on track to exceed our target of 100 new games in 2023. There is more to come in the fourth quarter with games like Crazy Pachinko and Rendo Ruler shown here in the slide and I'll come back to that in the upcoming game to put out coming games later in the presentation.
<unk> immersive entertainment constantly develop and move forward on the players' attention.
Speaker 3: transcript
Innovation and the best game will always drive evolution, we continue to innovate substantially enhance refine that they experienced their continent full preparation for the roadmap that's four and yes, it will be the best roadmap.
12% before is yet another year of the product.
The next slide.
Speaker 3: transcript
This slide shows the breakdown of our revenue by geographic region.
Martin Carlesund: During Q2 and I was a Q3 we see higher demand for our light casino than we currently can deliver, which is very positive as our games have phenomenal attraction and demand. Even so we need to expand our studio space as well as increase the speed of recruitment. We are addressing this with food force at the moment in parallel building new cities in Europe, Latin and also planning to add new studios in North America as well as expanding existing studios.
Speaker 3: transcript
We have a true global on strong demand for our product, which is also reflected in the spread of revenues over a geographic regions.
Speaker 3: transcript
Europe continues to have a healthy growth, it's amongst the 10% in the third quarter compared to last year for the first nine months to go from month to 30%, which is a good sign that we're still develop and grow and more in our most.
Mature market.
Speaker 3: transcript
In Asia, we saw continued good growth, which amounts to close to 35% year on year, we still see rapid growth in Asia, but the growth rate in percentage terms continues to come down south side seems to get bigger.
Martin Carlesund: We have faced some delays in build-out but even more importantly it needs to increase the recruitment pace as the new studios are more tables get ready to be added to the evolution network. We are in an investment phase and we will continue to invest the fastest we can during end of 2023 as well as during 2024. Multiple projects this quarter include the new small studio in Colombia which was largest of the end of the third quarter.
Speaker 3: transcript
Even though the potential nature remains huge with separate <unk> book publisher.
Speaker 3: transcript
Worth mentioning is that earlier this year, the Philippines became the first country in the region to have the regulation for online gaming in place.
Martin Carlesund: The largest studio is also initiated in Colombia as the next step during 2024. We also aim to open one new studio in Europe later this year and three four new studios are planned both in Europe North America and Latin America for 2024. Now let's move to the common slides and see the effect of numbers and products on our all our reports. Let's look at financials. Revenue in the quarter increased by 19.6 to 452.6 million euro for the year-to-date period growth amounts to 26.1%.
Speaker 3: transcript
Most of the market is growing year on year by about 9% for the period of nine months the growth amounts to close to 6% decline in revenue from Q2 is due to staff back in R&D revenue, while our liable for it has steady growth in the quarter, we're working hard to launch new games in the U S and we have a fantastic.
Speaker 3: transcript
Im lineup of games, including Facetime soon to be launched and I have high expectations that they will perform well is a good potential that theres a long growth runway in the existing states and over time, we will also see more states to regulate.
Martin Carlesund: If a DA in the quarter increased by 22.1% to 318.6 million euro corresponding to margin of 70.4. Professor. We're January to September, we reach the morning of 70.3%, which is in the upper port of our 68-71% guidance for the fully-eared country. I'm pleased with the modern level, considering the cost levels in the world have increased significantly during the year, our focus on continuously increasing efficiency in our operations as well as good cost control throughout the organization as health does the sheet in this.
Speaker 4: transcript
North America region is still in its early stage of development.
Speaker 3: transcript
<unk> currently makes up about 8% of our total revenue in the quarter with a growth in the quarter up to close to 39%. We believe it's the region with a great potential and good momentum.
Speaker 3: transcript
In addition to already launched studios studio in Argentina, We initiated construction of a state of the Australia, Colombia to cover the demand we're seeing market.
Speaker 4: transcript
The regulatory and laptop continue earlier this year passed legislation for online gaming gambling and also Brazil has taken some steps forward towards to regulate online gaming.
Martin Carlesund: For life as you know, we grew revenue with 24.3% compared to Q3 loss years, summarizing to total revenue of 385.8 million euros. In the third quarter, R&G revenues amount to 66.8 million euros correspond to negative growth of 1.9% and our R&G business amounts to 14.8% of total revenue. For the first nine months though, we grew R&G with 4.9%. Overall, financial results in quarter is solid. We prefer to concentrate on factors that we have controlled in explaining our result and in general, we continue with this approach.
Speaker 4: transcript
Remains the other region, which mainly consist of Africa, South America is up three 5% of the group revenue and its future growth opportunity for us.
Speaker 4: transcript
Shadow revenues from regulated market continues to be stable.
We see growth on all markets amongst the quarters, some Q3 plus three.
Speaker 4: transcript
With that I'll hand over to Jake office and most of the lifestyle.
Speaker 5: transcript
Thank you Martin.
And good morning to all of you listening I will now cover a couple of sites with comments on off National development series.
Martin Carlesund: However, this quarter, the impact from external factors are on a higher level than ever before, so I think it would be wrong not to mention it at all. The strength thing of the euro against most currencies compared to Q3 loss year affects our top line growth during this year. From to find those effects in third quarter, we calculate the 6 to 8% points negative headwind on growth from current effects on revenues when comparing to the same quarter last year.
Revenues amount to 462 6 million euro in the quarter, it's made up of almost $386 million record license to note of six to $6 8 million from our R&D teams.
Speaker 5: transcript
Like I said now it's about 85% of our group revenue in the quarter.
As year on year growth of 24, 3% with an increase of 75 million euros on same quarter last year, a $14 million increase on the previous quarter. This year.
Martin Carlesund: Without this headwind figures would have been very strong. Now let's move to next slide. With the fast growth of the company, we need to have an equal high pay in our recruitment and recruitment. We continue to be one of our priorities and one of our key processes. At the end of the period, we were close to 18,000 evolutioners working hard to delight players every day. The increase in stock year and year amounts to 1,900 MVs corresponding to an increase of 12%.
Speaker 5: transcript
I'll come back to this slide in a minute, but added a slide to show our live casino development site.
The other perspective overtime. This slide shows the increase quarter on quarter.
Speaker 5: transcript
For our licensees.
The best line is the average increase per quarter through the past five years, Bob Copeland and in Europe, a quarter. It appeared that of course includes the pandemic years, but also a few years, which I would see us more normal English.
Speaker 5: transcript
In the slide you can see that our increased the two most recent quarters is much lower than the average for this period.
Martin Carlesund: As said, on the beginning of the presentation, we have not added headcounts, fully as we would have liked. Together with Stu to build out, we are now in a full force focusing on expansion. Hiring and retaining the best people has ever been and we are working with this continuously, identifying inefficiencies in improving our recruitment process. Challenges with recruitment are not new to us, it's just a reality in the business that is dependent on continuous high-income people.
Speaker 5: transcript
Walter mentioned, we focus our energy.
The factors that we control and expanding our financial development.
Speaker 5: transcript
Right now Mark.
<unk> mentioned.
We're not expanding our table capacity as we would like to and that's affecting our revenue growth is not possible to expect to quantify the financial effects of this on the supply for quarter, but help us break out what the right question, but clearly it's up about ending up at the moment.
Speaker 5: transcript
So that's what we can control and what we work on all of.
Martin Carlesund: Equally, this is a reason why it's very important to have the right incentive programs in place. Now, move to the next slide. The game round index shows the development of the whole evolution network and includes all games. It can be seen as a general indicator for activity in our network. Over time, more game round means more activity leads to increased revenue. This quarter, game rounds increased 6% per year on year, so a higher growth rate than our total revenue.
Hum.
Would be able to fix but understand the financial results in the quarter or will some factors outside of our solutions address.
Speaker 5: transcript
Ill now spend two minutes talking about currency rates I think both mark and Mike will have full understanding if you'd rather have listened to with them if you're onto something else for a couple of minutes. Please go ahead.
While you're doing this year, we have seen large movements in currency rates, it's understandable a shift in interest rates on the general economy I've also been on levels not implemented yet possibly decades.
Speaker 5: transcript
As a result of this.
Martin Carlesund: Game rounds growing faster than revenues is a development that we have seen in the past few quarters and it's natural as the volume of new phase from new regions coming in with the lower bed cycles. Looking at the absolute leveling of the indexing Q2 and Q3, you can see some flattening which to some extent reflects what we discussed in previous slides regarding that we see a higher demand of our product done can't we can do this.
The euro has strengthened significantly versus most currencies compared to.
The third quarter.
Perfect all revenues negatively Australia's wager and generate gross gaming revenues.
In many different currencies with our operators that did you always convert with euro and is the basis for our commission revenue stronger Euro may substitute yard generated in local currency equals fewer doors.
Martin Carlesund: Next slide, movie products. The width of our product of folio is already today unmatched in online casino and there are many more games to come. This year we want to record a number of exciting games to inspire our talents as well as huge players. Let me mention a few of the games we simply assumed to be launched. Two of the strongest brands in our portfolio are the lightning franchise and the grace time.
Speaker 5: transcript
We estimate the changes in euro rate affect our total growth negatively by six to eight percentage points in this quarter compared to Q3 last year.
Speaker 5: transcript
Indirect effects that I. Just described is not captured in the currency effect, but there's more direct in our accounting, meaning if we convert our non euro invoicing, our non euro expenses with another rate for adoption.
Thats reported separately.
Speaker 5: transcript
This is Barry.
Of course, it's also not a new thing.
Martin Carlesund: Both will experiment in the coming months and even a combination will be added to the product of folio. This fall, it's time for the additions to the grace time family in both of them will continue to combine the world of light casino and RG. Red door left combines the world winning lightning or left with accelerating experience of grace times, most popular bones game. The grace time game is going to be crazy patching code based on the grace time bonus on with the same name.
This year the movement has been larger than what we have seen previously so that's why I mentioned it today.
Speaker 5: transcript
However, it doesn't change anything I can adjust the adjustment.
I guess last on everything actually looks good except for the fact that.
Maybe it's not so.
Despite all of this telecom of courses.
The increase in the quarter still 14 million Euro.
We need to recruit faster, which is add more tables.
We're in a very good position to do so and that's what we're focused on.
Speaker 5: transcript
Alright, I'll now go back to the previous slide.
Martin Carlesund: This new addition to the grace time family really shows the outstanding experiences that we can create from mixing light and RG together. Lightning Lockdown is not just any game. It's a live game that takes the traditional Lockdown game players that know and love this game to new lover. We change it up with an electrifying twist and a two-board drawing machine completed with a live game house. It's a fast-paced immersive high-energy game that's sure to keep the players on the thing.
Speaker 5: transcript
Move on to <unk>.
<unk> comments on our R&D business.
Speaker 5: transcript
R&D revenue amounts to $66 8 million in the quarter.
One 9% decline from the same quarter last year.
$2 5 million you were lower than the previous quarter. This year, that's really not happy with our financial delivery in this area. However, as I stated earlier, we're making step by step improvements.
With the new games is now satisfactory level, all on new game charges on our Elisa.
Speaker 5: transcript
On Oss and.
Martin Carlesund: With evolution players can always find what suits their taste when it comes to gaming experience. The breath of altering is a major distinguishing factor of factored revolution. Remember that to operate in all my casinos today is not just competing against other suppliers of all my casinos. It's competing against the rest of the entertainment industry. We as evolution need to add products that will go up against streaming services and social media platforms for players time.
And the roadmap ahead with strong gains.
Speaker 5: transcript
Our earlier communicated those for growth still remains.
We've already moved into what I would call show territories, rather than Perl. So.
For the next quarters and first of all looking for incremental improvement on where we are today.
Speaker 5: transcript
Also as I said already.
Q2.
Comments.
Last quarter, while its not growing up we want that orange business, it's very profitable.
Very good cash generation and we definitely see lots of potential in this area going forward.
Martin Carlesund: And user entertainment is the only true long-term measurement that matters. You need to be able to ensure that you constantly increase the entertainment factor and close boundaries to be relevant for the players. Our games are on the edge immersive and entertaining and constantly develop and move forward on the player's adventure. Innovation and the best game will always drive evolution. We continue to innovate substantially ahead and refine the player experience. We are currently in full preparation for the roadmap 24 and yes it will be the best roadmap ever.
Speaker 5: transcript
EBITDA for the quarter amounted to $318 6 million, giving us an EBITDA margin of 17, 4% during the quarter, we keep our guidance of 68% to 71% module full year vessels set at the beginning of this year and a sickness in the chart, we have been within that range each quarter this year or the year to date.
Speaker 5: transcript
<unk> margin expanded three we're very pleased with the module level some of the pressures more Jeff was thought at the beginning of year.
Dairy lifestyle has been offset by hard work and a very good cost awareness.
Martin Carlesund: 2024 is yet another year of the product. Move to the next slide. This slide shows the breakdown of our revenue by geographic region. We have a true global and strong demand for our product which is also reflected in the spread of revenues over geographic regions. Europe continues to have a healthy growth which amounts to 10% in the third quarter compared to last year. For the first nine months it goes amongst the third in the stand which is a good sign that we still develop and grow in our most actual mature markets.
Artists.
Speaker 5: transcript
This next slide shows up in a little bit more detail will essentially walk through from the top.
Three month period July September light revenue as we just talked about.
$305 million in R&D.
Almost $67 million. This adds up to total revenue of $462 million up the growth rate of 19, 6%, but it's fully organic us all the most recent acquisition no limit 60, we'll think through the third quarter of last year.
Speaker 5: transcript
First nine months of the year growth in total revenues, 26% compared to the same periods last year.
Martin Carlesund: In Asia we so continue good growth which amounts to close to 35% year and year. We still see rapid growth in Asia but the growth rate in percentage time continues to come down as our sites think we get. Figure. Even so, especially several measures with several billion people population. Also worth mentioning is that earlier this year the Philippines became the first country in the region to have a regulation for online gaming in place.
Speaker 5: transcript
Moving down to expenses personnel expenses amounted to 91 million euro thus the increase of 19% compared to the same period last year, we are having stock in many locations.
But as we have mentioned several times, obviously, but we should be able to increase even more going forward.
Depreciation amounted to $31 4 million Euro that includes $10 9 million euro of amortization of intangibles related to acquisitions.
Speaker 5: transcript
Next line of other operating expenses.
Items, such as consumable equipment communication costs consultants and Ryan. This is the line amounts to 43 million during the quarter is up 4% to same periods. In 2022, it's also up compared to the previous quarter by little over $1 million.
Martin Carlesund: We're working hard to launch new games in the US and we have a fantastic lineup for games, including Crazy Time, soon to be launched and I have high expectations that they will perform well. It's a good potential that there's a long road runway in the existing state and over time we will also see more states to regulate. North American region is still in its early stage of development. Latin currently makes up about 8% of our total revenue in the quarter and with a growth in the quarter to close to 39%.
Summing up total broken expenses totaled.
Just over 165 million in Europe for the period, an increase of 16% compared to the same period last year for the first nine months of the year expenses totaled 400 sprint, which is maintenance of plus 4% versus last year.
Breaking profit sums up to $287 million in the quarter.
Speaker 5: transcript
Financial items amounted to $5 3 million Euro. This includes interest income interest rate income, which is picking up with the higher interest rates promotional items also include.
Martin Carlesund: We believe it's the region with a great potential and good momentum. In addition to all our launch studios, studio in Argentina, we initiated the construction of state of the or studio Colombia to cut the demand we see in the market. We see that the regulatory trend in Latin continue early this year, a repast excretion for online gaming and also Brazil is taking some steps forward towards to regulate online gaming. Remains the other region which mainly consists of Africa, it's not so merely 3.5% of the growth revenue and its huge growth opportunities for us. Shadow revenues from regulated market continues to be stable as we see growth from all markets and amounts of 4% to Q3.
A negative accounting charge for interest on our right of use assets and.
Speaker 5: transcript
Also there are FX differences related to integrate transactions and revaluation of backbone necessity foreign prices.
So there's a bit more than just a short interest rate income tax goes here.
Yes.
That is the major item in the quarter.
Speaker 5: transcript
Taxes up $19 7 million in Europe for the quarter. This was a tax rate of six 7% for the nine month period, I'm, sorry, six 7%.
And for this quarter and for the nine month period.
The six 8%.
Speaker 5: transcript
X rate for this year will be around 7% also in Q4.
Jacob Kaplan: With that, I'll hand over to Jacob and we'll see the next slide.
From 2020 for next year, a subsequent communication during probably the past two years.
Jacob Kaplan: Thank you, Martin.
Jacob Kaplan: Good morning to all of you listening. I've now covered a couple of slides with comments on our financial development in the series. Revenue amounts to 402.6 million euro in the quarter. It's made up of almost 3.86 million. Red is light to 0.66.8 million from our R&G games. Light to 0.85% of our group revenue in the quarter has the only year growth of 24.3%. With an increase of 75 million euro from the same quarter last year and 14 million euro increase from the previous quarter this year.
Rates will increase with about 10 percentage points to 16, 7% as pillar two person comes into effect.
Absolutely no doubt.
Speaker 5: transcript
We'll move to the next slide before I hand back to you Morten.
Speaker 5: transcript
Well it starts to the left in the slide would be a.
Capital expenditure.
Mark on the bars, that's investment in tangible assets.
Art studio projects in the quarter, a capex of tangible assets was 8 million euro.
Jacob Kaplan: I'll come back to this slide in a minute, but I actually add this slide to show our light as in the development in a slightly other perspective over time. This slide shows the increase quarter on quarter or our light as in now. The last slide is the average increase per quarter during the past 5 years, about 7 to 10 million euro per quarter. It's a period that of course includes the pandemic years, but also few years which I would see as more normal.
Lower than earlier this year, we have had a slightly lower pace of studio expansion, but what we play out the beginning of the year, but also capex can vary quarterly depending on how the bundle.
Sure.
Little bit lower than what we have been arguing the blue part of the bar is investment in intangible assets. It's right at the development of new games and features in the platform side to increase throughout the year.
Speaker 5: transcript
9 million euro in the quarter, So total capex year to date.
Jacob Kaplan: In this slide, you can see that our increase in the two most recent quarters is not slower than the average for this period. It's more to mention we focus our energy on factors that we control in expanding our financial development. And right now, as you also have more to mention, we're not expanding our table capacity as we would like to and that's affecting our revenue growth. It's not possible to expect to quantify the financial effects of this under-supplies we call it. I don't have a straight answer to that question, but clearly it's something that's linking us up and on.
63, almost 64 million euro.
Speaker 5: transcript
Jacob Kaplan: So that's what we can control and what we work on and our content that we would be able to fix, but to understand the financial result in the quarter there are also factors outside of evolution to grasp.
It's clear that we have not reached the 120 million euro for the full year that was our.
Guidance at the start of the year, we mentioned that we would be stretched on rich in Q2, but that's obviously here.
And as you heard earlier today, we continue to have ambitious plans for studio expansion going forward I expect some increase in Capex during Q4, but also going into next year. So we should pick up there.
Speaker 5: transcript
In the middle of the slide moving on to the next chart, we show operating cash flow.
Speaker 5: transcript
Very good cash generation in the posterior in the quarter operating cash flow amounts to 165 million Euro.
Jacob Kaplan: I'll now spend two minutes talking about currency rates. I think both Martin and I will have full understanding if you'd rather not listen to it and if you want to do something else for a couple of minutes please go ahead. But anyway, during this year we have seen large movements in currency rates. It's understandable as shifts in interest rates on the general economy. I've also been on level not seen for many years, possibly decades.
Operating cash flow in relation to EBITDA on a rolling 12 month basis has been maintained very good level, just under 8% outside of operating cash flow. We have during the period paid the first tranche of the earn outs.
Speaker 5: transcript
Jacob Kaplan: As a result of this, the euro has been significantly complete versus most currencies compared to the third quarter 2022. This affects our revenues negatively as players wager and generate gross gain revenues GDR in many different currencies with our operators. That GDR is converted to euro and it's the basis for our commission revenue. Strongly euro means that the GDR generated in local currencies is equal to euro. We have to make the changes in euro rates affect our total growth negatively by six to eight percentage points in this quarter compared to two to three losses.
On gaming.
In total about 467 million of which 47 minerals test.
Including that threshold.
About 75% for the Rolling 12 month period.
Speaker 5: transcript
Good.
Finally to the far right.
<unk> quick look at the balance sheet.
Speaker 5: transcript
No big changes to have a very strong financial position.
13 million in cash at the end of September up about current cash balance roughly $400 million according to our dividend policy.
Accumulated dividend so far this year. So that's my view.
Speaker 4: transcript
Sir.
That will stay on for my prepared comments Martin I'll come back to you for some closing words, they can unlock shakeup.
A few words to conclude this report presentation before we open up for question.
Jacob Kaplan: This indirect effect that I just described is not captured in the currency effect that is more direct in our accounting, meaning if we convert our non-Europe invoicing and our non-Europe expenses with another rate from a previous period, that's reported separately. This indirect effect, of course, it's also not a new thing but during this year the movements have been larger than what we have seen previously. So that's why I mentioned it today. However, it doesn't change anything.
Speaker 3: transcript
Evolution offers an unparalleled portfolio of unique gains something that pace for the whole industry with new groundbreaking releases.
Speaker 4: transcript
I'm currently in full preparation overall muscle symptoms for developments going on speed and I can assure you it looks nothing back capacity and transport will take another step towards expanding online casino to new players and increase in payments and excitement even further.
Speaker 4: transcript
Speaker 4: transcript
Jacob Kaplan: I can adjust the adjustments until I get completely lost and everything actually looks good except for the fact that it's not good. So despite all of this token of currencies that the interest in the quarter is 50, 14 million euro, we need to recruit back here which is at more tables. We're in a very good position to do so and that's what we're focused on. All right.
Investments for the future will continue to inform our new studios.
In constant innovation of new products.
Of course in our people in order to sustain the worldwide demand.
Speaker 4: transcript
As the leading innovator in unlike the seamless together with a record number of new products released at the year, we continue to relentlessly increase to get to our competitors.
Speaker 4: transcript
Well equipped for a strong last quarter of the year Indeed.
Jacob Kaplan: I'll now go back to the previous slide and move on to comments on our RNG business. RG revenue amounts to 66.8 million euro in the quarter. So 1.9 percent decline from the same quarter last year and 2.5 million euro lower than the previous quarter this year.
Indeed exciting times ahead.
Speaker 3: transcript
That was my final remarks, allowing move to next slide and your questions.
Speaker 2: transcript
If you wish to ask a question please dial.
Five on your telephone keypad to reenter the queue if you.
Jacob Kaplan: That really not happening with our financial delivery in this area. However, as I said earlier, we're making step by step improvements. The output on new games is now satisfactory level. All our new games are released on our OSS and the road map ahead is full of strong games.
Wish to withdraw your question. Please dial star five again on your telephone keypad.
Speaker 2: transcript
The next question comes from Martin <unk> from Dnb markets.
Jacob Kaplan: Our earlier communicative goals for growth still remain, but we've already moved into what I will call show tariffs already rather than tell. So for the next quarters, I'm personally looking for incrementally proven from where we are today. Also, as I said already in the Q2 comments, the last quarter, while it's not growing as we want the RNG business, it's very profitable. We have very good cash generation and we definitely see a lot of potential in this area going forward.
Please go ahead.
Okay.
Good morning, everybody.
Morning.
Speaker 6: transcript
So my first question is on the on the supply situation.
How can you convince us that.
Speaker 6: transcript
Okay.
If it makes sure that you can actually fall during the next year.
Speaker 4: transcript
Let the comments like this it has not changed in a heart failure.
Jacob Kaplan: If you pay for the quarter amounts to 318.6 million euro, giving us an 8.8 margin of 4 percent in the quarter. We keep our guidance of 68 to 71 percent margin for the whole year. That was set at the beginning of this year. And as you can see in the chart, we have been within that range, each quarter this year. For the year-to-date, here you'll be margining 7.3. We're very pleased with the margin level and some of the pressures margin we saw in the beginning of the year.
We were talking about expansion recruitment physical Davidson saw amount and let's start thus far.
Managed to time, that's exactly right.
So.
Speaker 4: transcript
That's what it is and we were focusing on that.
We are really trying to do it as fast as possible.
Got it.
And to do that we convinced that we're going to do it at a certain time.
Speaker 6: transcript
Okay.
These problems is it mainly in Europe.
Jacob Kaplan: Materialized, but have been offset by hard work and a very good cost awareness in all art. [inaudible] Appreciations amount to 31.4 million euro, that includes 10.9 million euro of monetization in intangibles, legal acquisitions. Next line is other operating expanses, this includes items such as consumable equipment, communication costs, consultants, and royalties. The line amounts to 43 million euro in the quarter is up to 4% to the same period as 2022. It's also up compared to the previous quarter by the lower one million.
Can you explain why is this all Mexico.
Or is there anything else behind that.
Okay.
Speaker 3: transcript
The major hubs are in Europe.
Cost of their chances of SaaS, where but brought down 14, mainly about Europe.
The delivery out of the year.
Speaker 4: transcript
So build out hundreds of thousands of square meters with everything that that is what is needed with all the equipment that is set.
Next task, sometimes you'll get the latest just like if you would build your own house or whatever you do so they are physical paramount is deliberate suppliers and everything like that.
It's a hard work.
To recruit on top of that thousands and thousands of people. It's a challenge there's no fundamental things that have changed for us. It's just that okay. We're little bit behind right now, we see high demand for our product.
Speaker 4: transcript
We can sit back and mine is don't forget.
Speaker 4: transcript
That's a very positive situation that you have a higher demand for something that you can deliver them.
So in all fairness, it's a positive.
Speaker 6: transcript
And if you compared to your your control of this problem today compared to the spring do you have a better overview of it now or is it getting worse.
We havent better on the write off.
Jacob Kaplan: Summing up, total of operating expanses total just over 165 million euro for the period, an increase of 16% compared to the same period last year. And for the first nine months of the year, expanses total 4803, which is the main percent time of 4% versus last year. Operating profit sounds up to 287 million in the quarter. Financial icons amounts to 5.3 million euro, this includes interest rate income, interest rate income, which is picking up with the higher interest rates.
Speaker 6: transcript
Okay.
And.
These new studios in Europe, three to four how concrete talk those plans if thats, what youre, hoping for I actually saw.
Are you.
In the contract space.
Yes.
Speaker 4: transcript
We say three to four in the next.
Next Dx in Europe, Latin America, North America, I would say, we will add one more student in Europe. This year.
All students that are mentioned there are complete plants.
Speaker 6: transcript
Yes, okay. Good.
Jacob Kaplan: Financial icons also include a negative accounting charge for interest on our right-of-use assets. And also there are effects differences related to improved transactions and revaluation of bank assets and foreign currencies included there. So there's a bit more than just the short interest rate income that goes here, but that is the major item of the quarter. Tax is at 19.5 million euro for the quarter, this is tax rate of 6.7% for the nine months period. Sorry, 6.7% for this quarter and for the nine months period, the rate is 6.8%. Tax rate for this year will be around 7%, or thank you for.
Final question is on North America, the growth slow down there.
You know you work to improve that.
I noted that your marketing question I'm quite heavily there.
The certification process, how is that going do you expect it to be close npower.
I won't give you a time, but it's going well.
Speaker 4: transcript
Okay. So is it only about certification and getting the new game, saying or what else are you doing in North America to improve.
There is of course, a little bit now.
We're getting some R&D.
Speaker 4: transcript
Yes.
Remember that and everything is that our numbers of course.
Like to get them certified unregulated and compliance in all five states.
Jacob Kaplan: And from 2024 next year, a subsequent community dated during probably the past two years, tax rate will increase with about 10% response to 16.7%. As a pillar, two regime comes into effect. That's also you know that.
Speaker 7: transcript
Is it lack of that.
It's great talking to you more thing, but I think we might one of you.
You can come back later, we need to let a couple of other.
Question, Yes of course.
My final question and just so you know I stayed on.
You clarified the FX that was right.
Jacob Kaplan: I'll move to the next slide before I come back to you, Martin. We'll start to the left in the slide and with the capital expenditure. The great part of the bars, that's investment in hundreds of assets, mainly our studio projects. In the quarter, a capEx in hundreds of classes is 8 million euro. It's lower than earlier this year. We have had a slightly lower pace of studio expansion that what we planned at the beginning of the year.
Yes.
Yeah.
Yes.
Jacob Kaplan: But also capEx can very quarterly depending on how projects they've done that, and a little bit lower than what we've been earlier. The blue part of the bar is investment in intended assets, it's rated to development of new games and features in that form, like increased throughout the year, it's at the 10.9 million euro in the quarter. So total capital gap date is 63, almost 64 million euro.
David the runoff.
Speaker 2: transcript
The next question comes from Oscar rank list from AVG sundial Calia.
Please go ahead.
Speaker 8: transcript
Thank you Ann Good morning morning, Jacob Thanks for taking my question.
Speaker 8: transcript
So just first of all just on market share I think youre mentioning in the public statement that you continue to take market share and the.
Increased GAAP to our competitors.
That's a statement or is that it is like for the upcoming few quarters or years, but just do you have any anything to elaborate on the last couple of months market share. So you do think that you're still expanding the gap to your competitors.
Jacob Kaplan: It's loud clear that we will not reach the 120 million euro for the full year, that was our guidance at the start of the year. We've mentioned that we have this fraction already in Q2, but that's not clear. And as you've heard earlier today, we continue to have ambitious transfer student expansion going forward. I expect some increase in tap extreme Q4, but we're also going into next year, so we can shift the tap here.
Speaker 8: transcript
Let's say pragmatic for in particular, so I mean, they are growing their player numbers at least pretty pretty fast in baccarat and blackjack. So.
And also in the U S. It seems like you are growing slower than the market at the moment. So could you just elaborate on the market Charles please thanks.
Speaker 4: transcript
First of all the market shares.
Jacob Kaplan: In the middle of the slide, moving on to the next chart, we shall operate in test code, something you'll very good at test generation in the past period. In the quarter operating test code amounts to 265 million euro, operating test code in relation to the BTA on the road with 12 month basis is maintained on a very good level just under 80%. Outside of operating test code, we have during the period to take the first tranche of the earnouts to be to do a big time gaming. In total, that was 67 million euro, or which 47 million was cash. So, including that, cash coercion would be around 75% for the road in 12 month period. So, still very good.
I don't have any figures on pragmatic I can't compare that.
Speaker 4: transcript
The competition figures almost gas so they are it's hard to do that.
For example that we're growing.
Speaker 4: transcript
Faster than the market at.
As far as I can see in Europe.
And also in Latin America, and in Tulsa down when it comes to North America last quarter.
Speaker 4: transcript
The CSO.
Year to date at plus 6% overall, we've got doing better while they liked the CMO.
Pushing forward in R&D.
Jacob Kaplan: Finally, to the far right in the slide here, quick look at the balance sheet. No big changes, we have a very strong financial position, 813 million euro in cash at the end of September. After that current test balance, roughly 400 million is supporting to our dividend policy data. They tube-laden dividend, so far this year. So, that's one you will see later.
Speaker 8: transcript
Understood. Thank you.
Just the next one on.
Speaker 8: transcript
On the demand here, so franchise through less switches.
Speaker 8: transcript
More scalable than of course blackjack for instance, so.
Could see that the demand is very very strong overall.
Our supply chain or supply issue.
Some of the markets could we interpret that as I mean, let's say for example would still be very very strong in terms of the actual numbers that you report now or is it more like that you also have some challenge has seen brown the tables.
Martin Carlesund: That was the end of my prepared comments, Mockin.
Martin Carlesund: I'm going back to you for some close of words. Thank you very much, Jacob. A few words to conclude this report presentation before we open up the question. Evolutionals are an unparalleled portfolio of unique gains. So, I think the pace of the whole industry with new groundbreaking releases. I kind of mean full preparation of road market trends for developments going on in food speed, and I can assure you it looks nothing but fantastic.
Speaker 4: transcript
We don't.
I won't comment on the table set up in Tulsa and Bob.
Naturally the demand on the non scalable products is much higher.
So that's where we're that's pent up demand is but we also have to remember that the player plays mainly gains. So each section contains coming in should have to satisfy that otherwise we will end up in situation.
Martin Carlesund: In 2004, we take yet another start towards expanding on like a single to new players and increasing payment and excitement even further. Investments for the future will continue in four long news to lose and an inconstant innovation of new products and of course in our people in order to build the worldwide demand. As the leading innovator in online casino, together with a record number of new products released at the year, we continue to relentlessly increase the gap for our investors. We are well equipped for a strong last quarter of the year and indeed exciting times ahead.
During the cold weather at before stays into the wrong gains.
Speaker 8: transcript
Perfect. Thank you I have one more if that's okay just on the.
Weaker macro outlook in general so I mean, I thought that sounds CEO, saying that wouldn't be a headwind in or they haven't seen it at least I assume that it's the same for you in the macro just regarding.
Speaker 8: transcript
Unknown Attendee: That was my final remarks and now we move to the next slide and your questions. If you wish to ask a question, please dial start at five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial start five again on your telephone keypad.
Any potential headwinds and then just on cost of living pressure would that actually be sort of a net positive for you people not going to retail casinos.
Because of the cost of living.
Pressure, and then maybe staying home and being online and start going on the ore types of games.
Speaker 4: transcript
We haven't seen a general slowdown in the economy.
However, the interest rates inflation and the exchange rates are affected by the situation in the world that sort of central banks and finance ministers, we just see that but we don't we don't have on the.
Martin Onnell: The next question comes from Martin Onnell from DnB Market. Please go ahead.
Martin Carlesund: Good morning, everybody. Good morning. So my first question is on this under-supply situation and how can you convince us that this is an issue that you can actually fall during the next year? Let me comment it like this. It's not changed in a heartbeat. We were talking about expansion, recruitment, physical data and so on and it's sometimes hard to manage to time that exactly right. So that's where it is and we're focusing on that and then we are really, really trying to do it as fast as possible but we're not in the view that we convince that we're going to do it at a certain time.
General headwind due to the situation in Florida.
Understood. Thank you very much.
Speaker 2: transcript
The next question comes from Ed Young from Morgan Stanley.
Please go ahead.
Speaker 9: transcript
Good morning.
Good morning.
Good morning, My first question is on <unk>.
On supply.
You've always talked about.
Choosing great alright.
Alright, the margin, but over the past year as you will see exhibited some very good cost control in the face of.
A lot of different cost pressures.
The one thing you haven't mentioned the tool in terms of recruitment is around wages.
Speaker 9: transcript
Do you think there's a possibility of being too restrictive on wages and actually you might need to invest some margin into wages in order to sold recruitment or do you see what do you think it is all just about.
Martin Carlesund: Okay and these problems, if it's mainly in Europe and it's recruitment can you explain why it's so difficult or is it anything else behind it? The major hubs are in Europe. We constantly have chances of elsewhere but right now we're talking maybe about Europe, the delivery of Europe. To build out hundreds of thousands of square meters with everything that that is what is needed with all the equipment, that is a complex task.
You've talked about so far.
Speaker 3: transcript
I don't see that.
But we are paying we are paying a premium salary for the level of work that we do and I think that we are in the right level I don't see that.
It's the salary level.
Yes.
It created a situation where we are.
Not delivering to demand market mall.
Speaker 3: transcript
Okay.
Martin Carlesund: And sometimes you get delays just like if you would build your own house or whatever you do. So there are physical parameters, delivery, suppliers and everything like that. So it's a hard work and then to recruit on top of that thousands and thousands of people, it's a challenge. There's no fundamental things that have changed for us. It's just that, okay, we're a little bit behind right now and we see how you demand for our product and that we can supply.
My second question.
Sorry, sorry, if that would be the case and what we would have that indication.
Speaker 3: transcript
The statements dated staff, we will go for growth and market share.
Speaker 4: transcript
Before margin so if I would have the possibility to solve that with investing more money or pay more we will do that but I wouldn't do that waste the owner of monarch two.
Speaker 4: transcript
Throw money at that.
Martin Carlesund: And the mind don't forget that that's a direct positive situation that you have a higher demand for something that you can deliver than the opposite. So in all fairness, it's a positive problem. And if you compare your control of this problem today compared to the spring, do you have a better overview of it now or is it sort of getting worse? We have a better overview right now. Okay, and these new studios in Europe created for, how concrete are those plans?
But I don't think its a solution so.
The statements and expand some of investments needed.
Speaker 9: transcript
Okay understood.
The second thing on North America, you talked a bit about it already and I don't mean to labor, but I know you spent some time that the stomach could you talk a little bit about more broadly.
<unk>.
Changing that business wasn't working correctly.
<unk> managed to.
Change in that area.
In North America.
Speaker 3: transcript
Yes, we are.
We have a capacity with new management in place I look forward to see if they can deliver so we made some changes with that.
Martin Carlesund: Is that what you're hoping for or is it actually sort of, are you, you know, in the contract phase of these studios? We say three to four in the next year in Europe, Latin American or America. And we say we will add one more studio in Europe this year. All studios that are mentioned are complete plans. Yeah, okay, good.
We need to be much closer to the Mark light commercial and we also need to have the gains back to deliver and mahwah busted gains flowing in Alpha engineering and product, we also need to get them through regulation and compliance embarrass admittedly somewhat lag. So we look forward to.
To the coming quarters.
Speaker 9: transcript
Okay.
Martin Carlesund: And just final question is on North America. The growth slowed down there. You know, you're working to improve that. I noted that you marketed crazy time quite heavily at Vegas at the G3 certification process. How's that going? Do you expect it to be close now? I won't give you time, but it's going well. Okay, so is it only about certification and getting the new game seen, or you know, what else are you doing in North America to improve?
Final question on capital allocation.
Cash bonds only about 100 million I. Appreciate thank you said the dividend to be 400, but you presumably produce.
250 ish of cash in Q4 as well so at what point would be she has now sort of down year to date. Despite the appropriate rates you've achieved do you think it would be appropriate for the company to consider.
Allocating some of that capital in the form of buybacks or something similar.
Speaker 5: transcript
But there is no other.
Martin Carlesund: There is of course a little bit. Now we're getting to the technology delivered and everything is that on the others, of course, a little bit of a light to get the certified and regulated and compliant in all five states. So this is the lack of that.
Answer to that.
Previous to that.
I'd like to point out that the main way of shifting.
<unk> is our dividend policy, which is fixed to supplement profit.
Beyond that.
Have done buybacks in the past Bobby year ago last time, so it's not roadmap in any way, but ultimately it's a decision for our board.
Martin Onnell: It's great talking to you, Martin, but I think we might want to, we need, we can come back later. We need to let a couple of other questionnaires, of course. That was my final question, and just so you know, I stayed on when you clarified the effects, that was very happy.
Okay. Thank you.
Okay.
Speaker 2: transcript
The next question comes from Monique Pollard from Citi.
Please go ahead.
Hi, Good morning, good morning, good morning.
Oscar Ronnkvist: The next question comes from Oscar Ronnkvist from ABG Sundal, Collier. Please go ahead. Thank you, and good morning, Martin, Jacob. Thanks for taking my question. So just first of all, just on market share, I think you're mentioning in the outlook statement that you continue to take market shares and the increased gap to our competitors. I don't know if that's a statement or if that is like for the upcoming few quarters or years, but just do you have anything to elaborate on the last couple of months market share?
Speaker 10: transcript
Okay.
The first question I had was just on the interest income, obviously Jacobs named <unk>, one off than that.
And it wasn't just the service.
Speaker 10: transcript
Straightforward interest income could you just give me an understanding of whether the one offs were largely drags Robyn benefit then.
<unk> interest income even better than what was reported.
Speaker 5: transcript
Today.
Yeah, they're not one offs relenting, you can say that.
<unk> 16 charge, that's recurring so that's kind of a component.
Every quarter done.
Oscar Ronnkvist: So you do think that you're still expanding the gap to your competitors, I would, let's say, pragmatic for in particular. So I mean, they are growing their player numbers, at least, pretty fast in Bakratt and Blackjack, and also I mean in the US it seems like you're growing slower than the market at the moment. So if you could just elaborate on the market share, please. Thanks.
Speaker 5: transcript
Thanks, Tom.
Like what was one of our Euro company holds dollars on tobacco comp opex be that gets us that this little bit up and down.
Speaker 5: transcript
This quarter.
Despite the negative but the main item there is interest income.
The little bit higher than that.
Given this attractive but.
I wouldn't say there'll be a bit it's.
Not big one offs.
Martin Carlesund: The first of all, the market share is very, I mean, I don't have any figures on pragmatic, I can't compare that and the competition figures are very scarce, so they are hard to do that. But I know, for example, that we're growing faster than the market as far as I can see in Europe and also in Latin America in total. So then when it comes to North America, last quarter in Italy and so, but in the year today, it's 36%. Over all, we've got doing very well in life as you know, and we're pushing forward and aren't. Understood. Thank you.
Yes.
Speaker 10: transcript
Does that answer your question, yes, yes.
Okay.
The second question I had was just on the FX headwind so thanks for that detail.
Speaker 10: transcript
Wanted to understand.
Speaker 10: transcript
If there was any sort of transactional FX headwind as well, okay I understand that you're largely invoicing and you raise but then you did mention some non your invoicing and.
Understanding sort of what the cash impact is of cash sitting in other in other currencies.
Speaker 5: transcript
Yes.
Couple of the different.
Different.
Components there.
Speaker 5: transcript
Oscar Ronnkvist: Just the next one on the demand here. So for instance, let's, which is, I mean, more scalable, then of course Blackjack, for instance. So if you could see that the demand is very, very strong overall and that they are supply issues in some of the markets, could we interpret that as, I mean, let's say, for example, would still be very, very strong in terms of the actual numbers that you report now, or is it more like that you also have some challenges in branded tables?
What we call the direct FX effects.
Every quarter this year that base.
We value the invoicing or revenues in non euro currencies.
Same.
For all of our expenses and audio question, it's actually a positive effect in this quarter.
On the EBITDA level, so because they are our dollar expenses are a little bit less.
In.
In euros.
Speaker 5: transcript
In this quarter Dominic they would've been valued.
Exchange rates were one year ago.
Oscar Ronnkvist: We don't, I won't comment on the table set up in total, but naturally the demand on the non scalable product is much higher. So that's where, where the pump up demand is, but we also have to remember that the player played money gains. So each session contains money and you have to satisfy that otherwise you will end up in a situation that we were during the COVID that we forced players into the wrong game. Thank you.
That's been more directly going up and Thats, what we have normally talked about.
Rollout.
With a six 8% that is more indirect.
Try to explain that.
To say that the <unk> that's generated in local currencies.
Speaker 5: transcript
Even if it's invoiced in euros, it's not captured in that first ethics in Mexico.
Indirectly of course.
Speaker 5: transcript
Also FX revenues since the amount of did your various with the with <unk>. So in that case a stronger euro.
Due to lower revenues for us because we get the lower down so.
Oscar Ronnkvist: I have one more if that's okay. Just on the weaker macro outlook in general. So, I mean, so Betzon CEO saying that wouldn't be a headwind or they haven't seen it at least. I assume that it's the same for you in macro just regarding any potential headwinds.
Yes.
Speaker 11: transcript
It's a bit of a mess with ethics you heard before we try we of course follow it but.
It's nothing that we see.
I'm too much time on trying to control.
Sure.
Oscar Ronnkvist: And then just on cost of living pressure, would that actually be sort of a net positive for you? People not going to retail because you know them because of the cost of living pressure and then maybe staying home and being online instead and going on on your types of games. We haven't seen any general slowdown in the economy. However, the interest rate, the inflation and the exchange rates are affected by the situation in the world, the sort of central banks and finance investors. We just see that but we don't we don't have any general headwind just for the situation in the world.
In this quarter.
It's a relatively big headwinds so I think it's right.
Oscar Ronnkvist: Thank you very much.
To understand that.
Yes potatoes.
Hope I answered your question.
Okay, sorry, just a follow up thanks.
Speaker 10: transcript
The FX impact this call today apart from the translational impact there wasn't much of that.
The cash impact was minor.
Speaker 12: transcript
On slide eight.
Absolutely that's fair to say.
In relation to the 68% with Aqua so yes.
Yes.
Okay, and then sorry, just a final question was.
Speaker 10: transcript
Obviously, Martin you've been clear.
On the supply in the market, particularly in Europe, and that things that we can be looking at from the outside that give us help us understand so Dave.
Ed Young: The next question comes from Ed Young from Morgan Stanley. Please go ahead. Good morning.
Speaker 10: transcript
How are you.
Obviously, you understand <unk>, you're on the supply in the market, but I think that we can be tracking how pos to see and the.
Ed Young: My first question is on supply. You've always talked about choosing growth over margin. But over the past years, you've obviously seen some very good cost control in the face of a lot of different cost pressures. The one thing you haven't mentioned at all in terms of recruitment is around wages. Do you think there's a possibility you've been too restrictive on wages and actually you might need to invest some margin into wages in order to solve recruitment?
So mitchell and discipline in the market and get an indication as to when that starts to ease.
Yeah.
I mean.
Speaker 4: transcript
Naturally we have all the <unk> and all the data we see when a table.
It's at the table, along with only side of the table that where it's needed.
So when we say that.
Speaker 4: transcript
We on the supply to the markets, where we have a higher demand I know that we do not app what is needed.
Ed Young: Or do you really think it is all just about processes? Are you talking about so far? I don't see that we are paying a premium salary from the level of work that we do and I think that we are in the right level. I don't see that we that it's the salary level that have created the situation where we are not not delivering to demand market. Okay. Sorry. If that would be the case and we would have that indication the statement still stands, we will go to grow the market share before margin.
Speaker 4: transcript
That's part of based up.
Is that something that you would not see it instead of heart.
Pleased to get that I don't see how you would get that.
Right now were on the site.
Speaker 4: transcript
You can also.
No.
The figure, 6% to 8% and ethics headwinds, it's very large.
And on the supply is mainly.
Let's say.
Speaker 13: transcript
Non scalable products are much much less and much less.
Got it.
Thank you thank.
Thank you.
Ed Young: So, so if I would have a possibility to solve that with investing more money or pay more, we would do that. But I wouldn't do that in ways that owners manage to throw money at the problem that I don't think is the solution. So the statement stands and we would invest this needed. Okay. Understood.
Okay.
The next question comes from Raymond <unk> from Nordea.
Please go ahead.
Speaker 8: transcript
Yes, hi, good morning, two questions from me first one.
You're right in the reported to make progress in R&D. Despite the declining growth could you elaborate on the difference between how you work with LNG game releases before compared to now.
Martin Carlesund: The second thing on North America, you talked a bit about it already. I don't need to labor that but I know you spent some time there this summer. Could you talk a little bit about more broadly what you've looked at changing that business? What wasn't working correctly or what do you hope you've managed to change in that area? in North America. We have a capacity for the new management in place and we're called to see what they can deliver, so we make some changes with that.
Speaker 4: transcript
First of all we released the right amount of gains during Q Q3. So we are on track with the release schedule. That's the first what we are that.
One of course now we need to work with the commercial Vascepa that we that we get to use them handle this higher amount of Av.
Speaker 4: transcript
Speaker 4: transcript
R&D against the other items that we're working on that of course is LIBOR and that amount we have to push those new games over the Atlantic and get them into compliance department regulated and compliance.
Martin Carlesund: We need to be much closer to the market when it comes to commercial, and we also need to have the gains there to deliver. And Martin Arnell, when we've got the gains flow going out of engineering and product, we also need to get into regulation and compliance, and that is a little bit of a lag.
Phosphates are operating right now so that's how we progress with that and I would say that there is.
Speaker 4: transcript
But this quarter is $3 42, we can see that.
Ed Young: So, we look forward to the coming waters. Okay, final question on capital allocation. Cash piles over 800 million. I appreciate that if you said the dividend will be 400, but you'll presumably produce 250 issue of cash in Q4 as well. So, at what point with the shares now sort of down year to date despite the profit growth you've achieved. Do you think it will be appropriate for the company? Do you consider allocating some of that capital in the form of buybacks or something similar?
Step forward and also remember number.
Speaker 4: transcript
FX effect that were talking about also affect this block of business.
Speaker 8: transcript
Alright, Thank you and then regarding the global minimum tax rate of 15% to be implemented in 2024.
Assume you've talk to tax experts do you get the sense that your tax rate is going to end up north of 15% or are there are caveats that make you believe it can be lowered somehow.
Speaker 5: transcript
No I think the basic.
Ed Young: There's no other answer to that than previously. The main way of shifting capital back to almost ESR dividend policy, which is 50% on that profit. And beyond that, we have done buybacks in the past, about a year ago, it was lost time. So, it's not really loud in any way, but ultimately it's a decision for our board.
Thanks, Rob.
The tax rate north of today, it's effectively 5% inbound vessel increased 10% to 16 so.
Monique Pollard: Okay, thank you.
Not all are appropriate toric and multifocal large share of our personal auto so pretty much that comes through on that on the group level.
Then of course as we grow.
A trend upwards on tax.
Over the past years and Thats absolutely.
Speaker 5: transcript
Establish ourselves in more parts of the World. We of course pay tax in all jurisdictions, where we are active so.
Speaker 11: transcript
I wouldn't say I mean, there can be like I say, they can be a caveat some of course.
Monique Pollard: The next question comes from Monique Pollard from City. Please go ahead. Hi, Monique. The first question I had was just on the interest income. Obviously, Jacob, you explained that there are a few one off in there, and it wasn't just the sort of straightforward interest income. Could you just give me an understanding of whether the one-offs were largely drags rather than benefits than, you know, is the underlying interest income even better than what was reported today?
Many countries want to remain as an investor.
Attractive place for investments, so, we'll see how things develop.
That's the base case now I would just like we talked about before it will go up with increased 10 percentage points.
Practiced in multiple direct to consumer.
Okay. Thank you very much.
Yes.
Speaker 13: transcript
Monique Pollard: Yeah, they're not one of three. Let me give you said that the die for a 16 charge that's recurring, so that's kind of component that's there every quarter done. The effects on, like, what is one of our euro companies holds dollars on the back account that gets rid of you, so that is a little bit up and down. In this case, of course, slightly negative, but the main item there is interest income and the little bit higher than the total gives us access.
The next question comes from Karen <unk> from buffet.
Please go ahead.
Hey, good morning, guys.
Good morning.
I just had a couple of questions on the studios.
Speaker 14: transcript
It's great to see that acceleration in the rollout plans.
Been sitting on a pretty large cash pile for a while and we've had from you that demand is running.
Head of.
What you can manage for a while so what's been sort of the delay enrolling two days out have you been trying to get closer to final before flagging them to us.
Monique Pollard: I wouldn't say there are big ones, but it's not big one off. The second question I had was just on the effects headwind to thank this for that detail earlier. I just wanted to understand if there was any sort of transactional effects headwind as well from sort of cat. I understand that you're largely invoicing a new rose, but then you did mention some non-neural invoicing, etc. That's what the cash impact is of cash sitting in other current, and Faith.
Have you tried to get closer to.
Speaker 14: transcript
Signing off on day before flagging the rollout to us or were you just not looking for new students for a while.
Speaker 4: transcript
When it comes to down to supply and I'm not sure I completely get special but it's the same assets.
We've been studios hundreds of thousands of square meters.
Quite lengthy.
18 months minimum prompts us to build a studio. So so we are constantly investing and now we are facing a little bit less than that we're not getting the order overblown and that on top of that we're not recruiting fast enough.
Monique Pollard: Yeah, there's a couple of different components there. I mean, what we call the direct effects effect, and that we recorded every quarter this year, that is, if we re-value the inmost thing, or our revenues in non-euro currencies, and that's the same for our expenses in non-euro currencies. That is actually a positive effect in this quarter, on DBA level. So, because they are, our dollar expenses are a little bit less than in euros in this quarter.
Speaker 4: transcript
Don't get me wrong, we are recruiting, but we're not going to be fast enough. So we need to see desktop.
Those two comps to get there and that's why we're on the supply.
Speaker 14: transcript
Got it I think in the past.
We've spoken about struggled to recruitment you also mentioned.
Recruiting the right languages and your existing studios.
Is that true and if so should we expect another studio to come in a major metropolitan city within Europe, rather than quarter if any.
Monique Pollard: Danic, they would have been valued at, you know, the exchange rate from one year ago. That's the more direct component, and that's what we normally talk about. What we pull out in, in, with a 68 percent, or even that is more indirect, what I've tried to explain to that, you say, that the GGR that's generated in non-euro currencies, even if it's being bought in euros, it's not captured in that first effect you'll actually talk about, but indirectly, of course, also effects revenues since the amount of GGR varies with, with the, with the example, in that case, a stronger euro would need to lower revenues for us because, you know, we get the lower down.
Speaker 4: transcript
I won't comment exactly where but not.
Naturally with good decisions, where we think we.
Can recruit the nationalities.
Persons, we need and the volume is there. So we have mandated on mall Thunder and we're adding.
A couple of them in Europe.
To get a higher pace and delivery.
Speaker 14: transcript
Got it and just the last one on Cdos.
Planning the large footprint studio side like we've gotten Vega or is this going to be.
Monique Pollard: So, the, yeah, it's a bit of a mess with ethics, but GGR before, we, we try, we, of course, follow it, but it's nothing that we've done too much time on time to control. So, but it's, in this quarter, it's a relatively big headwind, so I think it's right to, to understand it, but yeah, that's how it's compared to the question itself. Okay, sorry, just to follow up though, the effects impact this quarter though, apart from the translational impact that I understand, there wasn't much of a, the, the cash impact was minor, and slightly better. Yeah, that's absolutely, that's what I was saying, and that's a little new relation to the, the under 68% of the talk about, so yes, but that's, that's the minor. Yes.
Much more focused smaller studios.
Good language, perhaps that you have.
Speaker 4: transcript
Okay.
I think that.
Let me just medium sized two doses.
We are planning for that.
Speaker 4: transcript
Okay.
Some little bit larger, but a medium sized.
With regard.
Let me give some upper medium studio.
Got it thank you very much.
Speaker 2: transcript
The next question comes from Simon Davies from Deutsche Bank.
Go ahead.
Speaker 15: transcript
Yes. Good morning, just one left for me please.
In the U S has obviously been a cost periods in terms of I gaming states opening up.
Monique Pollard: Okay, and then, sorry, just the final question was, um, obviously Martin, you've been clear that, um, you're under supplying the market particularly in Europe, and there are things that we can be looking at from the outside that give us, that help us understand sort of how, how you, obviously you understand internally that you're under supplying the market, but there are things that we can be tracking that help us to see, um, the ways in which you're under supplying the market, and to get an indication as to when that starts to ease. What, what, what, I mean, naturally, we have what the BLEI and all the data, so we see one of the table opens and one, we need to add a table and one, we don't need to add a table and where it's needed and what, so, so when we say that, that we under supply to the market, or we have a high demand, I know that we do not add what is needed.
Im assuming that must be one of the features behind the state growth rates what are your expectations in terms of when you state openings over the next 12 to 18 months.
I presume you'll have your ears to the ground in terms of the latest speculation.
Speaker 4: transcript
Yes, there is always the more speculation on that.
We have stated that.
Speaker 4: transcript
It could be one two a year, but it could also be three years without 111 could we see one yet right.
Speaker 3: transcript
Right now there is there are the usual suspects.
Before Theres always talks about new work ethic.
More of a dream a reality.
Illinois.
And there are a few others Bob Lang.
And then the political process.
And I think that the oil and gas is almost as good as mine, but that there are these you should suspect mining view.
This is Jason before southern the Pennsylvania came out before going out of business.
Speaker 15: transcript
Monique Pollard: That, that, that part of data is, is something that you would, would not see, it's very hard for you to get that, I don't, I don't see how you will get that. So, so, right now we're understanding, but... You can also just notice that the figure 68 percent in affix had been very large and the other supply is mainly, let's say, non-scalable products and much less or much less.
So it could be the next regulation could be someone that we haven't talked about.
Alright, yeah, not hearing of anything imminent.
No no no.
Alright.
Okay. Thank you.
Okay.
Speaker 2: transcript
The next question comes from Jonas <unk> from Investor.
Please go ahead.
Good morning, everyone.
Hey.
Speaker 16: transcript
I think so in my opinion this quarter was again very good honestly I think evolution is one of the best business models in the world and the whole management team is doing a great job and I think it's quite normal that business figures fluctuate quarter by quarter and therefore.
Raymond Kuh: The next question comes from Raymond Kuh from Nordia, please go ahead. Yeah, good morning. Two questions from me, first one. You're right in the report that you are planning growth.
Almost around him and for the long term success.
Raymond Kuh: Could you elaborate on the difference between how you work with R&G game releases before compared to now? First of all, we released the right amount of games during Q3, so we're on track with the release schedule. That's the first one to be all that. And by now, of course, now we need to work with the commercial to see that we get used and hand on this higher amount of R&G games that are there.
On the next quarter.
Seven two warm wherever the growth is 25 or 30%.
I think the only challenge, which has to be addressed promptly as to deliver our capacity as far the access demands.
Speaker 16: transcript
The managed trend following the right strategy to invest heavily in new studios during the coming quarters.
Speaker 16: transcript
And every customer who cannot be soft right now were probably lead to a loss in market share as you're playing with all of our suppliers.
Raymond Kuh: So that's what we're working on and of course there's a little bit of lag on in that. And then we have to push those new games over the Atlantic and get them into compliance department and get a regulated and compliant in gold five states that we're operating right now. So that's how we progress with that. And I would say that there is a, it's the best quarter three and 42, we can see that it's a little bit stuck forward. And also remember that FX effect that we talked about also affects this part of business. All right. Thank you.
So my question is.
Speaker 16: transcript
How long does it take you to open up a new studio with somewhat from the part of seeing excess demand to build up a studio hiring staff and run at full capacity.
Speaker 4: transcript
The lead time for a new suite of different planning to execution plans to 24 months. So they are always impact.
Working on that.
But fell to 24 months.
Okay I see.
Speaker 16: transcript
And my second question is whether it'd be excess demand in Europe can be soft through with the studios in the U S short term solution.
Raymond Kuh: And then regarding the global minimum tax rate of 15% that to be implemented in 2024, I assume you talk to tax experts. Do you get the sense that your tax rate is going to end up north of 15% or are there caveats that make you believe it can be lowered somehow? No, I think the basic effects for us is that the tax rate in water today is effectively 5% and that will increase tax to 15.
They are needs to be a studio in every state that might be excess capacity, which could be used.
Speaker 17: transcript
Yes.
Currently that is not the case, but that is possible, even though good thoughts.
Alright. Thank you. Thank you thanks.
Raymond Kuh: So none of all our profits are in the water but a large share of our concern of the flow pretty much that comes to on the group level. Then of course as we grow, I mean, we've had a trend upwards on tax over the past years and that's as we start the process in more parts of the world, we of course pay tax in all your restrictions where we are active. So that would be, I mean, there can be, like I said, there can be caveats and of course, many countries want to remain as an attractive place for investment.
Speaker 2: transcript
The next question comes from James Rowland Clark from Barclays.
Please go ahead.
Speaker 15: transcript
Good morning, everyone, just a few percentage points.
Fisher wants to finish up.
I was just curious on your comments about <unk>.
Speaker 15: transcript
No hiring at a fast enough rate could you also just talk about your existing live data staff are you seeing any change in the churn rates.
Speaker 15: transcript
Raymond Kuh: So it will be how things develop. But at the base case, now I would just like to talk about it. It will go up with increased 10% of points, you know, those in particular involved and that can't sit on the group. Okay. Thank you very much. Thank you.
For that sort of your existing idea staff count or the same as it previously was.
I would say that that.
Speaker 3: transcript
It's getting mathematically lower so somewhere.
The circumstances increasing in general.
Speaker 15: transcript
Okay and then.
Could you just elaborate for us on the timing of all LNG delivering double digit increase maybe update us on your thoughts there I know you've added litigations, but perhaps a.
Karanjot Gurawal: The next question comes from Karanjot Gurawal from Bhoffay. Please go ahead. I just had a couple of questions on the studios. It's great to see the acceleration of the rollout fans. You've been sitting on a pretty large cash par for a while and you know we've heard from you that the mom's running ahead of what you can manage for a while.
A bit more color on why do you think that could that could turn thank you.
Speaker 11: transcript
Yeah. So we haven't set a timeline on that.
Earlier, I think definitely the ambitious build there but from where we are this quarter, we actually were.
9% lower than the same point last year. So we'll.
We'll take it from here we show some improvements from this level. So we haven't set timing timeline.
Karanjot Gurawal: So what's been sort of the delay in rolling studios out? Have you been trying to get closer to sign off before flagging them to us? Have you tried to get closer to signing off on those before flagging the rollout to us or were you just not looking for these studios for a while? When it comes to the studios, hundreds and thousands of screen readers and it's quite lengthy. It's an 18-month minimum process to build a studio.
Double digit of course, it does flip to positive <unk>.
Right for that.
Yes.
Speaker 15: transcript
Okay.
My final one is just on the supply of <unk> and <unk>.
Speaker 15: transcript
Staff.
To the market.
You've got the slowing revenue growth and.
It can take you a little bit of time to add sufficient capacity to service the demand how can you convince us.
Speaker 15: transcript
That you are holding on to market share or even indeed, gaining market share.
Given your earlier comments you actually put it in the release that you are taking market share. So you said ahead of the market you've got a timeline now or youre not youre not servicing.
Karanjot Gurawal: So we are constantly in that and now we are facing a little bit delay in that. We're not getting it all the way over one. And that also put that we're not protruding fast enough. I mean don't get me wrong, we're protruding, but we're not protruding fast enough, so we need to speed that up. And those two come together and that's why we're on the side. Got it.
I haven't seen the demand so how do you how do.
Do you sort of corroborate what how do you convince us that that is the case that you're holding market share, but not quite meeting the demand.
Speaker 3: transcript
But there are other flat, okay, sorry, first the first one.
You have all our figures.
That's very very hard to actually get figures for marijuana. So so that there we are blind pilot. So the only thing that we can rely to a specific date that we have where.
Karanjot Gurawal: And I think in the past when we've spoken about struggles or recruitment, you've also mentioned recruiting the right languages in your existing studios. Is this true and it's so shall we expect another studio to come in a major metropolitan city within Europe rather than in Europe? I won't comment exactly where but naturally we've put the studios where we think we can recruit the nationalities and the persons we need and the volume is there. So we have Madrid and Molta and we're adding a couple of them in Europe to do get a higher patient delivery. Got it.
Speaker 4: transcript
Institute deliver data on Europe, I will come back to that.
We get sort of some some IV.
On Asia, or we look at states in U S that database all surveys.
Speaker 17: transcript
For you and that's what we have so with that said that that's where our statement breath. However, we are not at the convenience of our market share we own the talent. That's how we look at it if we would have all the data.
Institute.
Speaker 15: transcript
Okay. Thank you one final one Greg is what do you think the impact is on the supply.
Speaker 4: transcript
In terms of your life data right for the foreseeable future.
Karanjot Gurawal: I'm just the last one on studios. Are you planning the large footprint studio sites like we've got in Vega or is this going to be you know much more focused more on studios for the language that you have? I think that medium-sized studios is what we are planning to add. I think that's more than a time to talk about the medium-sized. And that I would regard really as an upper medium studio. Got it. Thank you very much.
Haven't quantified that but I gave you the indication that it is much lower than the.
The headwind in FX rates.
Okay. Thank you.
Okay.
Okay.
So another question or.
Speaker 2: transcript
The next question comes from Ali <unk> from private Investor.
Please go ahead.
Hi, good morning, guys.
Speaker 18: transcript
Hi.
My question is about your long term product vision, specifically about scale of your gameshow R&D. So this year and launched Feinstein, probably the highest budget a gaming project ever.
Simon Davies: The next question comes from Simon Davies from Deutsche Bank. Please go ahead. Yeah, morning.
Now that some time has passed since that launch are you satisfied that the ROI of the project. Both in terms of player interest and financial performance also so do you think the future of evolutions opportunities in the life sector lies in similar Oregon bigger projects bigger budget projects take.
Simon Davies: I'm just one left from me, please. In the US, there's obviously been a quite a period in terms of eye-gaming states opening up and I'm assuming that must be one of the features behind the snow and growth range. What are your expectations in terms of new state openings over the next 12 to 20 months? Do you presume you'll have your ears to the ground in terms of latest speculation? Yeah, there is always a more speculation on that.
Speaker 18: transcript
Simon Davies: And I think we are state that it could be one, two years, but it could also be three years without one, and then it could be three, one year. Right, right now, there are the usual aspects before. There is always talks about the juror, I think that it is more of a dream than reality. There is Illinois, Indiana, and there are a few others, bubbling. And it's a political process, and I think the juror gets as almost as good as mine, but there are these usual suspects.
Speaker 18: transcript
Vantage LPR scale compared to competition or is it rather about releasing many numbers of similar to medium scale gameshows. Thanks.
Speaker 18: transcript
Speaker 17: transcript
Okay.
First asset, yes, we are very happy with Buckingham.
And Thats the game performing very well.
Secondly of course, the size of our network is the biggest online gambling networks in the world has the potential to receive these fantastic games that will do when they are they get this exposure. So that's of course, a competitive advantage and yes, we'll get back to release.
Finally, more entertaining fantastic launch schedules.
Simon Davies: Mind you, and we have this situation before, Southern Pennsylvania came and out, performed all the others, and suddenly it was regulated, so it could be the next regulation could be someone that we haven't talked about. Right, we are not hearing anything imminent.
Okay. Thanks.
Thank you.
Okay.
Speaker 2: transcript
As a reminder, if you wish to ask a question. Please dial star five on your telephone keypad.
James Rowland Clark: [inaudible] no, no, no, no[inaudible] The next question comes from James Rowland Clark from Barclays. The next question comes from James Rowland Clark. Please go ahead.
Speaker 17: transcript
Okay, I think that that was the final question.
Speaker 17: transcript
And it was a plus share.
And I look forward to see you in the quarter. Thank you very much.
[music].
Okay.
[music].
Speaker 19: transcript
James Rowland Clark: I'm morning everyone, just a few minutes. Hopefully a few short ones to finish up. I'm just curious on your comments about you know not hiring at a fast enough rate. Could you also just talk about your existing live data staff? Are you seeing any change in the churn rate or that sort of for your existing live data, you know staff counter the same that it previously was? I would say that it's getting mathematically lower. So we are the service length is increasing in general.
Speaker 19: transcript
Cool recording is off.
[music].
James Rowland Clark: Okay, and then can you just elaborate us on the timing of RNG delivering double digit growth please maybe update us with your thoughts there. I know you've added a lot of games, but perhaps a bit more color on when you think that could turn. Thank you. Yeah, so we haven't set the timeline on that like I come earlier, I think definitely the ambition is still there, but from where we are, you know, this quarter we're actually 1.9% lower than the same quarter last year. So we'll take it from here, show some improvements from this level. So we haven't set the time timeline on double digit, but of course it does look the possibility we still strive for that.
James Rowland Clark: Okay, and so my final one is that I've just on the supply of studios and staff to the market. You've got the slowing revenue growth and you know if it's going to take you a little bit of time to add sufficient capacity to service at the moment, how can you convince us that you are holding on to market share or indeed gaming market share? Given your earlier comments, you've actually put it in the release that you are taking market share still you're still ahead of the market.
Okay.
Sure.
Yes.
Sure.
[music].
James Rowland Clark: You've got a time lag now where you're not you're not servicing the demand. So how do you, you know, how do you sort of corroborate or how do you convince us that that is the case that you're holding market share for not quite meeting the demand. They're all the same. The first one from that is that you have all our figures and it's very, very hard to actually get figures from anyone else.
James Rowland Clark: So that's where we are blindsided. So the only thing that we can rely to is the little data we have where institute delivered data on Europe and we compare to that. Or we get sort of some some idea on on Asia or we look at states in US and that data is also very good for you and that's what we have. So with that data, that's where our statement rests. However, we are not here to convince you of our market share. We only tell that's how we look at it. If we would have all the data would produce it to you.
Speaker 19: transcript
James Rowland Clark: Okay, thank you. One final one. Hopefully it's great is what do you think the impact is on under supply. In terms of your live dealer growth for the foreseeable future. We haven't found to find that but I gave you the indication that it's this much lower than the. How do we have to express. Okay, thank you.
Yes.
[music].
Ali Gundas: The next question comes from Ali Gundas from Private Investor. Please go ahead. Hi, good morning, guys.
Ali Gundas: My question is about your long-term product vision, specifically about scale of your game show R&D. So this year, you launched Fancy Time, probably the highest budget I game project ever. And now that some time has passed since that launch, are you satisfied with the ROI of the project, both in terms of player interest and financial performance also? So do you think the future of evolution opportunities in the live sector lies in similar or even bigger projects, bigger budget projects where you can take advantage of your scale compared to competition or is it rather about releasing many numbers of smaller to medium scale game shows?
Ali Gundas: Thanks. First answer is that yes, we are very happy with Fancy Time. It's a fantastic game performing very well. Secondly, of course, the size of our network is the biggest online gaming network in the world has to put many more entertaining, fantastic large game shows. Okay, thanks. Thank you. As a reminder, if you wish to ask a question, please dial Start 5 on your telephone keypad. Okay, I think that that was the final question.
Okay.
Okay.
[music].
Unknown Attendee: And it was a pleasure to have you all and I look forward to see you in a quarter. Thank you very much. Thank you.
Okay.
[music].
Okay.
[music].
Speaker 19: transcript
Okay.
Okay.
[music].
Unknown Attendee: James Clark, Edward Young, Ed Young, Monique Pollard, Simon Davies, Martin Carlesund Cool recording is off James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, Alistair Johnson James Clark, Edward Young, Monique Pollard, Simon Davies, Martin James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, Alistair Johnson, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, Martin Carlesund James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, James Clark, Edward Young, Monique Pollard, Simon Davies, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, James Clark, Edward Young, Monique Pollard, Simon Davies, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund James Clark, Edward Young, Monique Pollard, Simon Davies, Martin James Clark, Edward Young, Monique Pollard, Simon Davies, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund Conference will automatically end in 10 minutes Conference will automatically end in 10 minutes James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund James Clark, Edward Young, Monique Pollard, Simon Davies, Martin James Clark, Edward Young, Monique Pollard, Simon Davies James Clark, Edward Young, Monique Pollard, Simon Davies, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, Alistair Johnson James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, Alistair Johnson, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, Alistair Johnson, James Clark, Edward Young, Monique Pollard, Simon Davies, Martin Carlesund, Alistair Johnson, James Clark, Simon Davies, Martin Carlesund, Alistair Johnson, James Clark, Conference ending, goodbye.
Speaker 19: transcript
Speaker 19: transcript
[music].
Okay.
Yes.
[music].
Okay.
[music].
Speaker 19: transcript
Okay.
Okay.
[music].
Okay.
Thank you.
[music].
Okay.
[music].
Speaker 19: transcript
Yes.
[music].
Speaker 19: transcript
Speaker 19: transcript
Conference will automatically and in 10 minutes.
[music].
Sure.
Yeah.
Sure.
[music].
Yes.
[music].
Speaker 19: transcript
Thank you.
Okay.
Sure.
[music].
Yes.
[music].
Speaker 19: transcript
Sure.
[music].
Speaker 20: transcript
Conference will automatically and in 30 seconds.
[music].
Conference ending goodbye.