Austria-based gaming equipment maker Novomatic AG on Friday reported revenue of approximately EUR2.53 billion (US$3.07 billion) for 2017, up 11.1 percent year-on-year compared to EUR2.27 billion achieved in 2016. Novomatic said the 2017 tally was the highest annual revenue the company had recorded in its 37-year history. Annual net profit however declined in 2017, dragged by one-off items, it added.
The revenue growth was “due to a significant increase in the slot arcades operated by Novomatic worldwide,” the firm said in its annual report. The group is active in several gaming segments around the world, including casino, lottery, sports betting, online and mobile.
The company said the number of self-operated locations – including casinos, sports betting outlets and bingo facilities – rose from about 1,900 to just over 2,100 as of end-2017. The firm also reported an increase of nearly 5,000 units in devices it operates worldwide, to about 65,000 in 2017.
Novomatic said revenue from its gaming operations segment grew by 19.7 percent year-on-year, to nearly EUR1.58 billion, representing about 63 percent of the firm’s aggregate revenue in 2017.
Sales in the gaming technology segment, in which Novomatic acts as a manufacturer and technology supplier for the gaming industry, reached EUR937 million last year, down 1.1 percent compared to EUR947 million in 2016.
Group earnings before interest, taxation, depreciation and amortisation (EBITDA) were flat at EUR586.8 million. The company said its EBITDA margin was 23.2 percent in 2017, down from 25.8 percent the previous year.
Profit attributable to shareholders for full-year 2017 was down 61 percent from the previous year, to EUR58.3 million, the firm said. It stated that a number of one-off items had a negative impact on its annual profit.
“In 2017, Novomatic carried out an intensive economic evaluation. As a result, one-off effects were added to the balance sheet as reflected in increased depreciations. This is largely due to the implementation of new regulations, such as in Germany, but also due to depreciations that were necessary for several international group subsidiaries, as well as foreign currency losses,” said the company.
It added: “Provisions were increased in order to compensate for potential future losses from individual associated companies.”
Novomatic completed the acquisition in January of a 52-percent stake in Australian slot machine maker Ainsworth Game Technology Ltd.
Harald Neumann, chief executive of Novomatic, said the company in 2018 would be focusing on efficiency, after several years of expansion.
“After rapid growth over the last few years, in particular through the acquisition of companies, the time has come to optimise internal processes and structures on an international level,” Mr Neumann said in a statement included in Friday’s press release. “It’s the best way to prepare for the future,” he added.
Novomatic said it had 25,536 employees around the world at the end of 2017, and that a total of 223 companies were consolidated on its balance sheet during the reporting period.
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Wilfred Wong Ying Wai
President and chief operating officer of Macau-based casino operator Sands China