Gaming Innovation Group reports Q1 2020
Gaming Innovation Group Inc. (GiG) reports Q1 2020 revenues of €31.1 million and an EBITDA of €2.5 million.
“GiG returns to topline growth as a group for the first time in five quarters, and many of the actions we have taken in Q4 & Q1 will enable further cost savings, optimization of the organisation and performance that will be a leaver to improved earnings in the second part of the year”, says Richard Brown, CEO of GiG.
- Return to quarterly growth after four consecutive quarters with decline
- Revenues in Q1 2020 of €31.1m (32.4)
- EBITDA in Q1 2020 was €2.5m (4.1) with an EBITDA margin of 8.1% (12.7%)
- Revenues for the B2B segment in Q1 2020 were €12.7m (14.2), EBITDA was €1.3m (3.0)
- Revenues in Media Services were €8.2m (9.1) in Q1 2020, EBITDA was €4.5m (5.2)
- Other operating expenses were €12.9m (13.3), the number of employees decreased from 695 to 594 year-on-year
- Cash flow from operations in Q1 2020 was €8.1m (4.4) and cash used in investing activities was €3.0m (4.2)
- Revenues for the B2C segment in Q1 2020 were €20.0m (20.2), EBITDA was €1.2m (1.1) with an EBITDA margin of 6% (5%)
- Media Services return to quarterly growth in both revenue and FTDs after three quarters of decline
- Strategic review initiated in November 2019, leading to an evolved strategic direction to reduce complexity and improve efficiency in the Company – resulted in agreement in February to divest B2C to Betsson
- Launched MegaLotto onto the platform expanding GiG footprint across iGaming product verticals to include lottery - one of the largest markets in the industry
- Extended the contract with a current platform customer with the addition of two new brands on the new fixed fee model.
- The sales pipeline is developing positively, however has slowed some of the final contract negotiations as land based operators come to terms with actions around COVID-19
- Other cost savings initiatives are progressing according to plan, which is expected to reduce operating expenses and the headcount to approximately 430 by year end 2020
Events after Q1
- The B2C vertical was divested to Betsson effective on 16 April 2020, and the SEK300 million bond was repaid on 22 April 2020
- Revenues from Platform Services in April were 35% higher than Q1-20 average and 40% higher than April 2019
- Sportsbook restructuring initiated, which will lead to around €400k in monthly savings in Sports Betting Services when completed, and place it in a sustainable position for growth and strategic partnerships
Outlook and guidance
- GiG will become one of few fully independent B2B providers after the divestment of the B2C segment – will give the Company dedicated focus on building the B2B business
- Platform Services revenues and profitability will benefit from the increased traction several brands on the platform are experiencing from Q2 and onwards
- GiG will continue its focus on cost control, execution and global expansion and multitude of actions taken in Q4 and Q1 will positively impact bottom line in the latter part of 2020, especially for Sports Betting Services
- Guiding for full year 2020 remains, revenues are expected in the range of €70 - 75 million, with an EBITDA expected in the range of €14 - 17 million (including, for comparison, B2C as continued operations until completion of the transaction)
CEO Richard Brown will present the Q1 2020 results via livestream at 11:00 CET. The presentation will be followed by a Q&A-session, and investors, analysts and journalists are welcome to participate. The presentation will be given in English.
Link to the livestream: https://www.redeye.se/live/gig-live-q-5-maj
For further information, contact:
About Gaming Innovation Group (GiG)
Gaming Innovation Group Inc. is a technology company providing products and services throughout the entire value chain in the iGaming industry. Founded in 2012, Gaming Innovation Group’s vision is ‘To open up iGaming and make it fair and fun for all’. Through its ecosystem of products and services, it is connecting operators, suppliers and users, to create the best iGaming experiences in the world. GiG operates out of Malta and is dual-listed on the Oslo Stock Exchange under the ticker symbol GIG and on Nasdaq Stockholm under the ticker symbol GIGSEK. www.gig.com
Gaming Innovation Group Inc. gives forecasts. Certain statements in this report are forward-looking and the actual outcomes may be materially different. In addition to the factors discussed, other factors could have an impact on actual outcomes. Such factors include developments for customers, competitors, the impact of economic and market conditions, national and international legislation and regulations, fiscal regulations, the effectiveness of copyright for computer systems, technological developments, fluctuation in exchange rates, interest rates and political risks.