Novomatic enjoys record revenue in 2017 but profit slumps


novomatic-record-revenue-slumping-profitsAustrian gambling operator Novomatic Group enjoyed record sales in 2017 on the strength of its gaming operations division.

Figures released last week show Novomatic’s overall revenue hit a record €2.53b in 2017, 11% higher than 2016’s result. Earnings were flat at €586.8m but operating income fell by more than one-quarter to €209.8m and after-tax profit slumped nearly 61% to €61.4m.

The operating income decline was attributed to increased gaming taxes in Italy and betting terminal fees in Austria, exchange rate fluctuations and a host of one-offs, including preliminary work for the legally required conversion of all gaming devices in Germany this year, plus the “deterioration in the earnings position” of the Novomatic Lottery Solutions Group.

The gaming machine division reported revenue rising nearly one-fifth to €1.59b, while the gaming technology segment slipped 1% to €937m. Novomatic CEO Harald Neumann credited Spain as “a growth driver,” with sales up 50% year-on-year, while Italy, the UK and Central & Eastern European markets also performed well.

The total number of Novomatic-operated gaming venues – including casinos, sports betting outlets and bingo facilities – rose to over 2,100 from 1,900 in 2016, increasing the total number of gaming machines in operation by 5k to 65k. The aforementioned tightening arcade laws in Germany reduced the number of leased gaming terminals by nearly 10k units to around 191k devices at the end of 2017.

The year was an active one on the acquisitive front, with Novomatic securing a majority stake in four Polish companies, including Novo Poland, which operates four small casinos in the country. Novomatic also acquired 100% of German arcade operator Casino Royal GmbH, as well as several smaller operators of gaming facilities in Italy, Spain and the Netherlands.

Following this acquisition spree, Neumann said management’s focus was now on consolidating growth and increasing synergies “to optimize internal processes and structures on an international level.”

Novomatic’s worldwide staffing ranks swelled to 25,536 employees at the end of 2017, up from 23,849 at the end of 2016. Throw in Novomatic’s two Swiss affiliates – ACE Casino Holding AG and Gryphon Invest AG – and the group’s total staffing tops 30k.