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INTRALOT Announces First Quarter 2021 Financial Results
INTRALOT SA (RIC: INLr.AT, Bloomberg: INLOT GA), an international gaming solutions and operations leader, announces its financial results for the three-month period ended March 31st, 2021, prepared in accordance with IFRS.
Group Revenue at €102.0m in 1Q21 (+9.3% y-o-y).
EBITDA in 1Q21 at €24.4m (+55.4% y-o-y), while Adjusted EBITDA at €20.8m (+56.4% y-o-y).
NIATMI (Net Income After Tax and Minority Interest) from continuing operations at €-7.3m, improved by 57.8% compared to a year ago.
North America operations, under Intralot Inc., achieved significant y-o-y growth (Revenue +21.8%, EBITDA +81.8%).
Group OPEX in 1Q21 is better by 8.3% y-o-y, with Greek entities OPEX lower by 25.7% y-o-y, without taking into consideration the capital structure optimization expenses.
Operating Cash Flow at €21.6m in 1Q21 (+127.4% y-o-y).
Group Net CAPEX in 1Q21 was €2.9m, lower by 48.2% compared to a year ago.
Group Cash at the end of 1Q21 at €90.6m.
Net Debt at €643.7m at the end of 1Q21.
The COVID-19 pandemic impact for 1Q21 has been restrained in the vicinity of €1.5m at Group’s EBITDA level.
In May 2021, INTRALOT announced the sale of its 80% stake in “Intralot do Brasil”, to SAGA, the only other shareholder of Intralot do Brasil, holding 20% of the company, for a total cash consideration of €0.7m. INTRALOT will continue to provide its gaming technology to Intralot do Brasil following closing of the transaction.
Also in May 2021, INTRALOT announced that its subsidiary in The Netherlands INTRALOT BENELUX BV, in co-operation with the Nederlandse Loterij, completed the transition of the operator’s full gaming portfolio enabled by the innovative LotosX platform, and rolled out 4,300 Photon terminals along with its robust signage solution empowering further the retail channel of Nederlandse Loterij’s Lottery games and Sports Betting offering.
Group Headline Figures
| (in € million) | 1Q21 | 1Q20 | % | LTM | ||
| Change | ||||||
| Revenue (Turnover) | 102.0 | 93.3 | 9.3% | 373.5 | ||
| GGR | 80.5 | 74.3 | 8.3% | 299.1 | ||
| OPEX1 | -23.2 | -25.3 | -8.3% | -93.1 | ||
| EBITDA2 | 24.4 | 15.7 | 55.4% | 74.9 | ||
| EBITDA Margin (% on | 23.9% | 16.8% | +7.1pps | 20.1% | ||
| Revenue) | ||||||
| EBITDA Margin (% on GGR) | 30.3% | 21.1% | +9.2pps | 25.0% | ||
| Adjusted EBITDA3 | 20.8 | 13.3 | 56.4% | 63.3 | ||
| Capital Structure | -5.0 | -0.3 | – | -11.5 | ||
| Optimization expenses | ||||||
| D&A | -16.0 | -18.2 | -12.1% | -66.3 | ||
| EBT | -3.4 | -14.9 | 77.2% | -82.6 | ||
| EBT Margin (%) | -3.3% | -16.0% | +12.7pps | -22.1% | ||
| NIATMI from continuing | -7.3 | -17.3 | 57.8% | -94.1 | ||
| operations | ||||||
| Total Assets | 612.1 | 755.3 | – | – | ||
| Gross Debt | 734.3 | 753.1 | – | – | ||
| Net Debt | 643.7 | 611.1 | – | – | ||
| Operating Cash Flow from | 21.6 | 9.5 | 127.4% | 49.8 | ||
| total operations | ||||||
| Net CAPEX | -2.9 | -5.6 | -48.2% | -33.3 | ||
INTRALOT Chairman & CEO Sokratis P. Kokkalis noted:
“First quarter results show strong Revenue and EBITDA growth, driven by robust operational performance and successful implementation of cost containment measures, while maintaining a strong cash position. At the same time, we continue to sharpen our focus on strategic markets with higher margins, launch new operations, such as Croatia, and roll out our new product portfolio, overall pointing to a very healthy operational performance for 2021.”
- OPEX presented exclude the capital structure optimization expenses.
- The Group defines “EBITDA” as “Operating Profit/(Loss) before tax” adjusted for the figures “Profit/(loss) from equity method consolidations”, “Profit/(loss) to net monetary position”, “Exchange Differences”, “Interest and related income”, “Interest and similar expenses”, “Income/(expenses) from participations and investments”, “Write-off and impairment loss of assets”, “Gain/(loss) from assets disposal”, “Reorganization costs” and “Assets’ depreciation and amortization”.
- Calculated as Proportionate EBITDA of fully consolidated entities including EBITDA from equity investment in Taiwan.
OVERVIEW OF RESULTS
REVENUE
Reported consolidated revenue posted an increase compared to 1Q20, leading to total revenue for the three-month period ended March 31st, 2021, of €102.0m (+9.3%).
- Lottery Games was the largest contributor to our top line, comprising 63.0% of our revenue, followed by Sports Betting contributing 19.1% to Group turnover. VLTs represented 8.7% and Technology contracts accounted as well for 8.7% of Group turnover, while Racing constituted the 0.5% of total revenue of 1Q21.
- Reported consolidated revenue for the three-month period is higher by €8.7m year over year. The main factors that drove top line performance per Business Activity are:
- €+1.3m (+3.9%) from our Licensed Operations (B2C) activity line, with the increase attributed mainly to higher revenue in:
- Malta (€+2.8m), with the variance attributable mainly to the COVID-19 impact at the end of the first quarter of 2020.
The increase in our Licensed Operations activity line was partially mitigated by the lower performance in:
- other Licensed Operations (referring to Brazil and Argentina), which dropped by €-1.5m, impacted mainly by the FX currency translation.
- €+5.3m (+65.4%) from our Management (B2B/ B2G) contracts activity line with the variance driven by:
- the surplus from our Turkish operations (€+3.1m), driven by Bilyoner’s improved top line performance, favored by the strong growth of the online market. In 1Q21, the local Sports Betting market expanded close to 2.0 times y-o-y, with the online segment representing close to 92% of the market at the end of 1Q21. Performance in Euro terms was partially mitigated by the headwinds in Turkish lira (32.3% Euro appreciation versus a year ago – in YTD average terms),
- the launch of US Sports Betting in Montana and Washington, D.C. in late 2020 (€+1.3m), and
- Morocco’s (€+0.9m or +31.2% y-o-y) improved performance, due to the COVID-19 impact in late 1Q20.
- €+2.1m (+4.0%) from our Technology and Support Services (B2B/ B2G) activity line, with the increase attributed mainly to:
- our US operations’ increased revenue (€+5.5m), mainly driven by the strong growth in our Lottery operations, while further boosted by a significant jackpot in January 2021, despite the effect from the adverse USD movement (9.1% Euro appreciation versus a year ago — in YTD average terms) and the lower merchandise sales in the current period.
The increase in our Technology and Support Services activity line was partially mitigated by the lower performance in:
- The Netherlands (€-1.2m), impacted by the revised commercial terms which affected half of the first quarter of 2020 vs. full quarter effect in 2021,
- Australia (€-1.1m), driven mainly by one-off merchandise sales in 1Q20, as well as the phasing-out of COVID-19 impact, while partially offset by the favorable currency movement, and
- sales from other jurisdictions (€-1.1m), impacted mainly by lower merchandise sales in the current period and the COVID-19 impact.
- Constant currency basis: In 1Q21, revenue — net of the negative FX impact of €13.2m — reached €115.2m (+23.5% y-o-y).
GROSS GAMING REVENUE & Payout
- Gross Gaming Revenue (GGR) from continuing operations concluded at €80.5m in 1Q21, posting an increase of 8.3% (or €+6.2m) year over year, attributable to:
- the increase in the non-payout related GGR (€+7.7m vs. 1Q20), driven mainly by the increased top line contribution of our US operations, as well as the improved performance of Bilyoner in the current period.
The GGR increase was partially counterbalanced by:
– the drop in our payout related GGR (-10.9% y-o-y or €-1.5m), driven mainly by the higher average payout ratio across all licensed operations in 1Q21 and especially in Malta, combined with the adverse FX impact from our licensed operations in Latin America (+2.8% y-o-y on wagers from licensed operations4). 1Q21 Average Payout Ratio5 increased by 5.5pps vs. LY (64.0% vs. 58.5%), affected mainly by the higher weighted contribution from our operations in Malta.
- Constant currency basis: In 1Q21, GGR — net of the negative FX impact of €10.1m — reached €90.6m (+21.9% y-o-y).
OPERATING EXPENSES6 & EBITDA7
- Total Operating Expenses decreased by €2.1m (or 8.3%) in 1Q21 (€23.2m vs. €25.3m in 1Q20). The variance is largely driven by the lower operating expenses across many key regions, such as the US and Morocco, and especially in the HQ, following cost savings and COVID-19 mitigation actions. The decrease was further supported by lower D&A in the current period, while it was only partially offset by the higher advertising costs in Bilyoner.
- Other Operating Income from continuing operations concluded at €5.5m, presenting an increase of 52.8% y-o-y (or €+1.9m), driven by higher equipment lease income in the USA.
- EBITDA, from continuing operations, amounted to €24.4m in 1Q21, posting an increase of 4% (or €+8.7m) compared to the 1Q20 results from continuing operations. 1Q21 Organic performance8 was boosted by the significant growth of our US operations in both Lottery and the new Sports Betting stream, Bilyoner’s improved performance and the operating expenses containments across many jurisdictions. The EBITDA increase was partially counterbalanced by Malta’s higher average payout ratio in 1Q21, a one-off revenue recognition in Australia in 1Q20, the revised commercial terms in Netherlands, as well as the adverse FX impact8 of currencies movement across many key markets (mainly US and Turkey).
- Licensed Operations Revenue also include a small portion of non-Payout related revenue, i.e., value-added services, which totaled €0.8m and €0.4m for 1Q21 and 1Q20, respectively.
- Payout ratio calculation excludes the IFRS 15 impact for payments to customers.
- Operating Expenses analysis excludes expenditures related to capital structure optimization.
- EBITDA analysis excludes Depreciation & Amortization, and expenditures related to capital structure optimization.
- CPI adjusted for Turkey and Argentina (proxy).
- On a yearly basis, EBITDA margin on sales improved to 23.9%, compared to 16.8% in 1Q20 (+7.1pps), as a result of revenue growth (mainly in the US and Turkey), combined with operating expenses containments across many key regions (mainly in HQ, US and Morocco).
- LTM EBITDA rose to €74.9m, up by 13.1% vs. FY20.
- Constant currency basis: In 1Q21, EBITDA, net of the negative FX impact of €3.9m, reached €28.3m (+80.3% y-o-y).
EBT / NIATMI
- EBT in 1Q21 totaled €-3.4m, compared to €-14.9m in 1Q20, with the key drivers of the improvement being:
- the impact of the increased EBITDA (€+8.7m vs. 1Q20), as described above,
- the better FX results (€+4.2m vs. 1Q20), as a result of the USD and other currencies movement against Euro, as well as the positive effect from the reclassification of FX reserves to Income Statement applying IFRS 10, and
- the decreased D&A (€+2.2m), due to increased impairments in the previous periods.
With the increase at EBT level being partially offset by:
– the higher capital structure optimization expenses in 1Q21 (€-4.7m).
- Constant currency basis: In 1Q21 EBΤ, adjusted for the FX impact, reached €+1.0m, from €-14.1m in 1Q20.
- NIATMI from continuing operations in 1Q21 concluded at €-7.3m compared to €-17.3m in NIATMI from total operations in 1Q21 amounted to €-8.2m (improved by €9.4m vs. a year ago), including the performance of the discontinued operations in Bulgaria and Peru.
- Constant currency basis: NIATMI (total operations) in 1Q21, on a constant currency basis, reached €-10.3m from €-17.4m in 1Q20.
CASH-FLOW
- Operating Cash-flow in 1Q21 amounted to €21.6m, increased by €12.1m, compared to 1Q20. Excluding the operating cash-flow contribution of our discontinued operations (mainly Bulgaria) and the capital structure optimization expenses paid, the cash-flow from operating activities is higher by €15.9m vs. a year ago and is largely driven by the positive variance in Income Taxes paid (€+12.2m), attributed to Income Tax returns during the current period vs. payments in 1Q20, and the higher recorded EBITDA y-o-y from continuing operations (€+8.7m), while partially offset by the adverse working capital movement of €-5.5m (€-7.3m in 1Q21, vs. €-1.8m in 1Q20).
- Adjusted Free Cash Flow9 in 1Q21 increased by €24.4m to €4.1m, compared to €-20.3m a year The main contributors to this variance were the positive swing in the Income Taxes Paid (€+12.2m), following an income tax return in 1Q21, the higher recorded EBITDA (€+8.7m y-o-y), and the lower Net Dividends paid (€+2.5m), driven mainly by Inteltek’s dividend paid in 1Q20 as part of settlement procedures after its contract discontinuation. Excluding Parent company tax audit payments and returns, as well as Inteltek’s contract discontinuation impact in the previous period, 1Q21 Adjusted Free Cash Flow stands at €-1.1m, or €+8.3m above 1Q20 levels.
- Calculated as EBITDA – Maintenance CAPEX – Cash Taxes – Net Cash Finance Charges (excluding refinancing charges – Net Dividends Paid; all finance metrics exclude the impact of discontinued operations.
- Net CAPEX in 1Q21 was €2.9m, compared to €5.6m in 1Q20, significantly decreased following the completion of prior years’ investments and projects. Headline CAPEX items in 1Q21 include €0.9m towards R&D and project pipeline delivery, and €0.9m in the US. All other net additions amount to €1.1m for 1Q21. Maintenance CAPEX accounted for €0.8m, or 28.0% of the overall capital expenditure in 1Q21, from €1.6m or 28.1% in 1Q20.
- Net Debt, as of March 31st, 2021, stood at €643.7m, decreased by €7.4m compared to December 31st, 2020. The Net Debt movement was impacted primarily by the Net Investments (€-13.3m, referring mainly to Intralot de Peru sale impact), the bonds IFRS treatment positive effect (€-9.3m), as well as an income tax return in the first quarter of 2021 related to the Parent Company tax audit payments of the previous periods (€-5.2m). The Net Debt decrease was only partially offset by the Restricted Bank Deposits for the period (€+3.2m), the payments towards Capital Structure Optimization (€+3.1m), and the investments towards the growth of our business, mainly for our projects in the US and Croatia (€+1.9m). Normal course of business in the Net Debt movement reflects March coupon payments and the adverse Working Capital, that fully offset the positive Operating Cash Flows.
CORONAVIRUS PANDEMIC IMPACT UPDATE
The economic fallout from COVID-19 continued to affect business activities in the beginning of 2021, and restrictions in most of the regions across the world were still enforced to cope with the spread of the pandemic. However, as vaccinations are progressing, governments have loosened COVID-19 measures after months of lockdowns, and gradually re-opened economic activities.
Gaming market in most of the regions where we operate has started to improve, while US Lottery market shows high degree of resilience. Based on the current performance of our operations in the first months of 2021 and the actions undertaken by most of our subsidiaries, no significant EBITDA impact is expected post 1Q21 from the pandemic. In any case, the scale and magnitude of COVID-19 impact for 2021 is continuously assessed and all containment measures assumed in 2020 remain intact and have been enhanced in order to absorb the potential impact in the financial results of 2021. The extent to which the COVID-19 pandemic may impact the financial performance in 2021 will depend on future development of the pandemic and the efficiency of the actions taken by the governments. This uncertainty will require us to continually adapt our strategy and initiatives and continuously assess the situation.
The health and safety of our team remains our top priority. With this in mind, we have immediately complied with all measures imposed by local governments and used technology in order to immediately enable a substantive majority of our personnel to work and collaborate remotely, without affecting the performance and quality standards of the Group.
9
RECENT/ SIGNIFICANT COMPANY DEVELOPMENTS
- On January 14th, 2021, the Company announced that OPAP exercised its two-year extension option of the contract with INTRALOT for the continuation of the collaboration of the two companies in the field of numerical lotteries and services from August 2021 to July 2023.
- On February 8th, 2021, INTRALOT announced that it has reached a binding agreement with Nexus Group in Peru to sell its entire stake of 20% in Intralot de Peru SA, an associate of INTRALOT Group, which was consolidated through the Equity method, for a cash consideration of USD 21.0m. In addition, the Company signed a three-year extension of its current contract with Intralot de Peru SA through 2024, to continue to provide its gaming technology and support services. The transaction was completed on February 24th, 2021, with the net cash consideration, after taxes and transaction expenses, amounting to USD 16.2m.
- On March 23rd, 2021, INTRALOT announced the amendment of the contract of INTRALOT Maroc, a subsidiary of the INTRALOT Group acting as games operator in Morocco, with La Marocaine Des Jeux et des Sports (MDJS), a state lottery offering sports betting and other games of chance in Morocco, which was signed in June 2019. According to this amendment, counterparties agree to reduce the duration of the contract, which was initially effective for an 8-year term, ending 31/12/2022.
- On May 14th, 2021, INTRALOT announced that it has reached a binding agreement with “SAGA CONSULTORIA E REPRESENTAÇÕES COMERCIAIS E EMPRESARIAIS” (“SAGA”) in Brazil to sell its entire stake in “Intralot do Brasil Comércio de Equipamentos e Programas de Computador LTDA” (“Intralot do Brasil”), representing 80% of the company’s voting capital. SAGA is the only other shareholder of Intralot do Brasil holding 20% of the company. INTRALOT will continue to provide its gaming technology to Intralot do Brasil following closing of the transaction. The total cash consideration for the stake sale amounts to €0.7m.
- On May 26th, 2021, INTRALOT announced that its subsidiary in The Netherlands INTRALOT BENELUX BV, in co-operation with the Nederlandse Loterij, completed the transition of the operator’s full gaming portfolio enabled by the innovative LotosX platform. Additionally,
INTRALOT has rolled out 4,300 Photon terminals along with its robust signage solution empowering further the retail channel of Nederlandse Loterij’s Lottery games and Sports Betting offering.
10
APPENDIX
Performance per Business Segment10
YTD Performance
Performance per Geography
Revenue Breakdown
| (in € million) | 1Q21 | 1Q20 | % | ||
| Change | |||||
| Europe | 34.4 | 39.0 | -11.8% | ||
| Americas | 55.0 | 49.7 | 10.7% | ||
| Other | 16.8 | 14.0 | 20.0% | ||
| Eliminations | -4.2 | -9.4 | – | ||
| Total Consolidated Sales | 102.0 | 93.3 | 9.3% |
Gross Profit Breakdown
| (in € million) | 1Q21 | 1Q20 | % | ||
| Change | |||||
| Europe | -1.8 | 2.5 | – | ||
| Americas | 14.4 | 9.1 | 58.2% | ||
| Other | 14.2 | 9.8 | 44.9% | ||
| Eliminations | -0.7 | -2.3 | – | ||
| Total Consolidated Gross Profit | 26.1 | 19.1 | 36.6% |
- Part of the US revenue that concerns SB management, has been included under the category “Game Management”. The rest of the US revenue is included under the “Technology” business segment.
11
| Gross Margin Breakdown | ||||||
| % | ||||||
| 1Q21 | 1Q20 | |||||
| Change | ||||||
| Europe | -5.2% | 6.4% | -11.6pps | |||
| Americas | 26.2% | 18.3% | +7.9pps | |||
| Other | 84.5% | 70.0% | +14.5pps | |||
| Total Consolidated Gross Margin | 25.6% | 20.5% | +5.1pps | |||
INTRALOT Parent Company results
- Revenue for the period decreased by 55.3%, to €4.6m, with the decrease attributable mainly to one-off equipment sales in 1Q20, as well as lower rendering of services towards the Group’s subsidiaries in the current period.
- EBITDA shaped at €-4.5m from €-2.4m in 1Q20, variance affected mainly by the revenue decrease, while partially offset by the containments in the Company’s operating expenses.
- Earnings after Taxes (EAT) at €-0.1m from €-10.2m in 1Q20.
| (in € million) | 1Q21 | 1Q20 | % | LTM | ||||
| Change | ||||||||
| Revenue | 4.6 | 10.3 | -55.3% | 42.0 | ||||
| Gross Profit | -3.1 | 0.1 | – | 12.3 | ||||
| Other Operating Income | – | – | – | 0.2 | ||||
| OPEX11 | -5.1 | -6.9 | -26.1% | -25.7 | ||||
| EBITDA11 | -4.5 | -2.4 | -87.5% | 0.7 | ||||
| EAT | -0.1 | -10.2 | 99.0% | -30.5 | ||||
| CAPEX (paid) | -0.5 | -1.9 | -73.7% | -6.4 |
- Operating Expenses and EBITDA presented exclude the expenditures related to capital structure optimization.
12
SUMMARY OF FINANCIAL STATEMENTS
Group Statement of Comprehensive Income
| (in € million) | 1Q21 | 1Q20 | % | LTM | |||||||||
| Change | |||||||||||||
| Revenue | 102.0 | 93.3 | 9.3% | 373.5 | |||||||||
| Gross Profit | 26.1 | 19.1 | 36.6% | 82.3 | |||||||||
| Other Operating Income | 5.5 | 3.6 | 52.8% | 19.5 | |||||||||
| OPEX | -23.2 | -25.3 | -8.3% | -93.1 | |||||||||
| EBITDA | 24.4 | 15.7 | 55.4% | 74.9 | |||||||||
| Margin | 23.9% | 16.8% | +7.1pps | 20.1% | |||||||||
| Capital Structure Optimization | -5.0 | -0.3 | – | -11.5 | |||||||||
| expenses | |||||||||||||
| D&A | -16.0 | -18.2 | -12.1% | -66.3 | |||||||||
| EBIT | 3.4 | -2.9 | – | -2.8 | |||||||||
| Interest expense (net) | -11.8 | -12.0 | 1.7% | -48.2 | |||||||||
| Exchange differences | 3.7 | -0.5 | – | -5.4 | |||||||||
| Other | 1.3 | 0.5 | 160.0% | -26.2 | |||||||||
| EBT | -3.4 | -14.9 | 77.2% | -82.6 | |||||||||
| NIATMI | -8.2 | -17.6 | 53.4% | -96.8 | |||||||||
| NIATMI continuing | -7.3 | -17.3 | 57.8% | -94.1 | |||||||||
| NIATMI discontinued | -0.9 | -0.3 | -200.0% | -2.7 | |||||||||
| Group Statement of Financial Position | |||||||||||||
| (in € million) | 1Q21 | FY20 | |||||||||||
| Tangible Assets | 138.9 | 134.3 | |||||||||||
| Intangible Assets | 200.7 | 202.0 | |||||||||||
| Other Non-Current Assets | 19.4 | 19.2 | |||||||||||
| Inventories | 24.2 | 25.7 | |||||||||||
| Trade and Other Short-term Receivables | 138.3 | 151.5 | |||||||||||
| Cash and Cash Equivalents | 90.6 | 100.0 | |||||||||||
| Assets Held for Sale | – | 16.2 | |||||||||||
| Total Assets | 612.1 | 648.9 | |||||||||||
| Share Capital | 47.1 | 47.1 | |||||||||||
| Other Equity Elements | -270.6 | -269.3 | |||||||||||
| Reserves from profit / (loss) recognized directly in other | – | -0.6 | |||||||||||
| comprehensive income and are related to assets held for sale | |||||||||||||
| Non-Controlling Interests | 1.5 | 3.7 | |||||||||||
| Total Shareholders’ Equity | -222.0 | -219.1 | |||||||||||
| Long-term Debt | 480.5 | 476.2 | |||||||||||
| Provisions/ Other Long-term Liabilities | 20.8 | 21.5 | |||||||||||
| Short-term Debt | 253.8 | 274.9 | |||||||||||
| Other Short-term Liabilities | 79.0 | 95.4 | |||||||||||
| Total Liabilities | 834.1 | 868.0 | |||||||||||
| Total Equity and Liabilities | 612.1 | 648.9 | |||||||||||
13
Group Statement of Cash Flows
| (in € million) | 1Q21 | 1Q20 | |
| EBT from continuing operations | -3.4 | -14.9 | |
| EBT from discontinued operations | 0.5 | – | |
| Plus/less Adjustments | 23.3 | 31.1 | |
| Decrease/(increase) of Inventories | -1.3 | 1.0 | |
| Decrease/(increase) of Receivable Accounts | 13.5 | -0.2 | |
| (Decrease)/increase of Payable Accounts | -17.6 | -2.0 | |
| Income Tax Paid | 6.6 | -5.5 | |
| Net Cash from Operating Activities | 21.6 | 9.5 | |
| Net CAPEX | -2.9 | -5.6 | |
| (Purchases) / Sales of subsidiaries & other investments | 13.3 | -0.5 | |
| Restricted bank deposits | -3.2 | -0.7 | |
| Interest received | 0.3 | 0.6 | |
| Dividends received | – | 1.0 | |
| Net Cash from Investing Activities | 7.5 | -5.2 | |
| Cash inflows from loans | – | 27.5 | |
| Repayment of loans | -11.2 | -27.2 | |
| Repayment of Leasing Obligations | -1.4 | -1.8 | |
| Interest and similar charges paid | -21.4 | -22.1 | |
| Dividends paid | -5.1 | -7.9 | |
| Net Cash from Financing Activities | -39.1 | -31.5 | |
| Net increase / (decrease) in cash for the period | -10.0 | -27.2 | |
| Exchange differences | 0.6 | -1.9 | |
| Cash at the beginning of the period | 100.0 | 171.1 | |
| Cash at the end of the period from total operations | 90.6 | 142.0 | |
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At SiGMA Central Europe in Rome, European Gaming Media sat down with Yevhenii Yankovyi, Vice President of Technology and Deputy CTO at RedCore, for a deep look into what truly powers RedCore’s large-scale engineering operations.
RedCore is known for innovating at enterprise level, yet moving with the agility of a fast-growing tech company. In this conversation, Yevhenii breaks down how the organization manages that balance: how engineering teams maintain both speed and reliability, how automation empowers creativity, and why culture must remain a daily practice rather than a one-time achievement.
Can you introduce yourself and RedCore’s approach to engineering at scale?
Sure. My name is Yevhenii, I’m the Vice President of Technology at RedCore and Deputy CTO. RedCore is a large company with many products and projects, so everything we do operates at a significant scale. And when people hear “enterprise-level engineering,” the usual assumption is that scale automatically means slowness: slow decision-making, slow implementation, slow testing, slow time to market.
That’s the mindset we challenge. We don’t believe speed and stability are opposites. In our experience, at this level of complexity, the two actually reinforce each other. When you build the right processes, the right technical foundations, and the right organizational structure, speed becomes a natural result of stability – not something that contradicts it.
We plan for scaling from day one. For us, that’s a fundamental requirement. We build products with the expectation that they will grow, and growth means scale. So we design with that in mind from the very first line of architecture.
But that doesn’t mean disappearing for six or ten months to design the “perfect” system. That’s the common mistake people make when they hear “design for scale.” Our approach is different: we keep the long-term vision in mind, but we move fast, iterate, and make sure the product can evolve without slowing the team down. Stability and speed working together – that’s the engineering culture we build at RedCore.
How does RedCore balance speed and stability in daily engineering?
I will explain this with a simple metaphor: think about a car. Everyone talks about acceleration and top speed, but none of that matters if you can’t take a corner. Speed alone is not the winning formula – you also need control.
That’s exactly how we look at engineering at RedCore. We want to accelerate, make decisions quickly, and develop fast. But we also need the ability to slow down at the right moment, change direction, and stay agile. Balancing speed with stability is the only way to move at scale.
There are many layers to this – it’s a topic I could talk about for days – but in a nutshell:
at a big scale, you must have strong standards, clear policies, and a high level of automation. We rely heavily on automation: infrastructure as code, CI/CD pipelines, automated testing, and all the tools that remove repetitive, routine work from engineers’ daily lives. When the routine disappears, people can focus on what humans actually do best: creativity, problem-solving, and innovation.
However, automation doesn’t build the software for you. It creates a safety net. It catches mistakes, guards quality, and supports engineers when their creativity pushes boundaries. In other words: tools give freedom, and also protect that freedom.
And of course, this includes AI and many other modern tools. We use whatever helps us keep the balance: give people space to think, create, and experiment, while ensuring the system stays stable, predictable, and high-quality.
How does RedCore’s management keep teams aligned yet fast?
First of all, we provide clear goals. As I mentioned earlier, we always design for scale from day zero – but you can only do that if you know exactly what you’re building, for whom, and why. We have a very strong business team that understands the market and what needs to be delivered. The technology team works side by side with them, reinforcing them.
Once the goals are clear, we begin small. If you try to build a huge system from the beginning and get it wrong, you create a nightmare: something no one can support, change, or grow. Complexity grows exponentially, and humans don’t think exponentially; we think linearly. That’s where companies often get lost.
So we avoid that by validating early and validating often. We start with small steps, keep a close eye on every direction we take, and confirm that what we’re building is truly needed by the market. When we see that the direction is right, then we scale – and by that point, the foundation is already in place. It’s like preparing a launchpad so that when the time comes, the team can accelerate immediately.
We build block by block and work in iterations. We take a small team – one, two, maybe three people – and let them experiment for a week. We test the idea fast, get quick feedback, and bring it to the business side: “Do you like it?” If the answer is yes, then we continue, still following all the proper engineering practices before anything goes into production.
This constant loop between business and technology keeps everyone aligned. We give feedback, we receive feedback, and we move together. That’s how we stay both fast and coordinated, always ready to scale when the direction is confirmed.
How does automation empower engineers without slowing them down?
When we talk about automation, we’re really talking about optimization at scale. It doesn’t make sense to over-engineer small things, but at the scale we operate, the cost efficiency and speed gains are enormous. And people often assume that big systems and automation automatically slow everything down. For us, it’s the opposite.
The tools we introduce are not meant to tie engineers’ hands with bureaucracy. We don’t force strict guidelines or heavy processes that kill creativity. Our tools exist to help: to prevent mistakes, to collect feedback quickly, and to give teams the shortest possible path from idea to validation.
Here’s a simple example: we start experimenting with a small feature. We build a tiny prototype to see if the idea works. If it’s promising, the next step is testing, pipelines, deployment – all the things that normally take time. In many companies, engineers would try to do all of this manually because “building the tools will take too long.” But with us, the tools are already there. The infrastructure, the CI/CD, the automation – everything is ready to use. Our engineers are essentially customers of this internal platform that supports fast, safe delivery.
We have many different teams that have different great ideas. If one team tries something new and it works better, great – we learn from it. If another team has a different approach because of product specifics or release schedules, that’s fine too. We give freedom to the teams to work, share their experiences, and then scale.
Of course, there are non-negotiables. When it comes to security and data privacy there is zero tolerance. These are areas where strict rules are absolutely necessary. I always tell the security people: everyone should be a little afraid of you, because these things must be perfect. But outside those critical areas, we don’t impose rules that slow teams down. We experiment, gather feedback, adjust, and keep improving.
We’re constantly researching, experimenting, and customizing our automation depending on the product and the market. But when it comes to system design, we don’t reinvent the wheel. We choose globally recognized tools and industry-validated technologies. So yes, we empower engineers with automation and the right tools, built on a solid, modern foundation.
How does culture work for you – is it an achievement, or part of your routine?
Culture is a critical element in balancing speed and stability. Tools and processes matter, but culture is what truly empowers a team and keeps everything together at scale.
For us, culture starts with giving people freedom: the freedom to experiment, the freedom to make mistakes, and the freedom to challenge ideas. We don’t want engineers to be afraid of trying something new. We build a culture where mistakes are acceptable and manageable. If we try something and it doesn’t work, great – now we know better. We learn, adjust, and move on.
We encourage ideas from every level. Some of our most interesting insights come from developers who notice something while working on a small task. They can come directly to me or to the CTO and say, “I see a problem here.” It’s completely okay. A small detail in one corner of the system can become a huge issue at scale, so we listen. That’s how we avoid blind spots.
We also give teams autonomy. Small teams can make their own decisions and experiment in their own ways. If different teams want to do things differently, that’s fine – as long as they validate everything and share their findings. We want people to help each other and to understand that even top engineers have ups and downs. Even senior management makes mistakes. I constantly ask my team: “If I make a wrong decision, tell me.” It’s not about transparency as a buzzword – it’s about behavior. People observe how you respond, and they learn from that.
The biggest mistake any leader can make is demotivating people. We work with intelligent, educated, passionate professionals. They want to contribute. You just need to give them the space to do it. That’s when you see people shine and bring forward brilliant ideas.
As for the question of whether culture is an achievement or a routine – for us, it’s definitely a routine. People often talk about “building a strong engineering culture” as if it’s a success. We treat it as a routine as a process. Culture is the daily interactions between people in an organization. Those interactions change: people come and go, someone has a bad day, someone disagrees with a decision. Culture is shaped every day by how we communicate, how we argue, how we respect each other, and how we resolve differences.
Going to a colleague in the kitchen and asking, “Hey, what do you think about this?” – that’s culture. Anyone can talk to anyone, openly. And when engineers realize they can make a real impact, that they are heard, that they can influence the product — that motivates them. That’s what keeps the culture alive.
How do you balance standards with creative freedom?
The first thing is that we don’t pressure people. We set strict standards only where they are truly critical for the business. Security, data privacy, stability at scale – those areas demand clear rules. But everywhere else, we try not to push people. And when we do introduce a standard or guideline, we listen carefully to feedback. If the team tells us we made the wrong call, that’s okay – we rethink it and look for better approaches.
The second thing is that as the projects grow, the teams scale as well. Even in the design phase, we don’t start with a huge team. I prefer a small group: one key person who leads the design initiative, plus two or three contributors who constantly review, test, question, and give feedback. If three or four people align in one direction, that’s a good signal we’re on the right track. Then we take that proposal to a larger group – people who might use it or need it.. We refine it again based on their input. The idea evolves, but we don’t need to start from the beginning.
Finally, when we have a strong direction, we present it to the entire tech team. And even then – even if top management already supports the decision – it’s completely acceptable for a mid-level developer to raise concerns. Maybe they’ve seen something before, maybe they read an article, maybe they faced a similar issue. We listen, because at scale, one overlooked detail can cost millions.
So once again, balancing standards with creative freedom is about scaling the processes step by step: we start with a small group, validate in small cycles, and then scale the decision up gradually. This approach protects creativity, ensures high quality, and keeps us aligned. And combined with our culture, it makes the process both fast and safe.
The post Scaling With Purpose: RedCore’s Tech Vision Explained appeared first on European Gaming Industry News.
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Super Group (SGHC) Limited, the parent company of Betway, a leading online sports betting and gaming business, and Spin, the multi-brand online casino, notes the United Kingdom Autumn announcement:
In this Autumn Statement, the UK government announced increases to gambling duties: Remote Gaming Duty (iGaming) will rise by +19 percentage points (from 21% to 40%), effective April 2026 and General Betting Duty (Online Sports Betting) will rise by +10 percentage points (from 15% to 25%), effective April 2027.
Neal Menashe, Chief Executive Officer, stated: “Super Group supports the reasonable taxation of online gaming in the UK. We rely on the government to ensure that today’s very substantial increase should be paired with robust and strict enforcement against non-paying offshore operators. This is essential to protect the regulated sector’s investment in jobs, technology, and responsible gaming in the UK.”
Alinda van Wyk, Chief Financial Officer, commented: “Going forward, we estimate that these new tax increases will have an impact of approximately 6% to our 2026 Group Adjusted EBITDA. However, Super Group already has several mitigation levers in motion, which are intended to offset the tax impact. Our strategy remains unchanged: sustainable growth and disciplined capital allocation. We don’t expect today’s news to alter our long-term trajectory nor our capital return priorities.”
The post Super Group Comments on United Kingdom Autumn Statement appeared first on European Gaming Industry News.
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TVC Technology Solutions has completed a comprehensive AV installation for leading Scottish bookmaker ScotBet. Reinforcing how cutting-edge audiovisual technology can dramatically elevate customer engagement, brand impact and operational flexibility in betting shops, ScotBet is another in a list of betting shop makeovers for TVC, including a significant number of independent bookmakers throughout the UK.
The project saw TVC partner with ScotBet to modernise digital infrastructure across a number of stores, delivering high-quality visuals, streamlined content distribution and a unified signage platform. The aim was to create a premium experience that draws in customers, enhances dwell time, unlocks in-shop promotional opportunities and underpins ScotBets’ competitive positioning.
TVC’s campaign started with a deep dive into ScotBet’s existing estate, identifying inconsistent screen sizes, dated display technologies and poor content manageability. Working alongside ScotBet’s retail operations and brand teams, TVC created a future-proof AV design plan encompassing ultra-slim large format displays in key customer zones, dynamic digital signage driven by branded content and a centralised control system for roll-out calability.
In each store, TVC installed industry-leading large-format commercial LCD and LED displays, including high-brightness 75″ panels in customer-facing zones, complemented by multiscreen TV gantries above key counters to deliver live odds, race streams and promotional content. These displays were mounted via low-visual-impact brackets to preserve the sleek interior design while maintaining full service access. The project also included a dedicated network of digital signage screens in foyer spaces, driven by the MySign digital signage platform. This enabled ScotBet to push up-to-the-minute messages and odds, event-based campaigns and third-party partnerships with minimal delay.
What sets the TVC-ScotBet collaboration apart from a typical AV and digital signage installation is the seamless integration of content and infrastructure from a single company.
Beyond hardware, TVC delivered a tailored content-creation service, to produce a range of dynamic content. This included templated campaign animations, in-store clock-in of live odds tickers, game-day social-feed overlays and fast-paced screen-fillers that mirror the fast-moving world of wagering.
Andy Greaves, sales director at TVC, said: “Our employee-owned structure means everyone at TVC is passionately behind every project. We instantly become partners to our betting shop customers, rather than just supply vendors, and the ability to supply and install an end-to-end video, signage and content integration seamlessly makes for a smooth project from start to finish.”
TVC brings nearly three decades of experience to the AV installation in hospitality, leisure, gambling, gaming and retail spaces. The portfolio spans F1 gaming arcades, bars and pubs, hotels, care homes, boardrooms and retail spaces, with specialist knowledge in the complexities of high-traffic public environments and the regulatory demands of leisure and betting retail. From bespoke mounting solutions in confined shop-floor footprints to full networked AV infrastructures across multiple sites with cloud-integrated content, TVC tailors its system design to each customer’s requirements and backs each project with ongoing service and maintenance support.
“With surveys showing increased dwell time, engagement and sales through digital signage advertising, and with many better retailers seeing over 10% of their revenue attributed to virtual and e-sports, now is the time to maximise your AV impact and ROI,” said Greaves.
The post TVC Completes AV Installation at ScotBet appeared first on European Gaming Industry News.
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