INSIGHT ICE LONDON REVIEW
Zane Mersich Chief Executive Officer NOVOMATIC UK
What's important about our business in the UK is that we reinvest. The profits that we make in the UK we reinvest in growth, we employ more people, we add more venues - and we are very proud of the fact that we are self-funding our own growth. We remain very bullish about the operational business in the UK and we are going to continue to press very hard.
It's the end of an era at the ICE show, after my first show in 2006. At that time, NOVOMATIC UK had less than 100 employees, but what we saw was a market that had lots of opportunities. Currently, Novomatic UK is in the operational and manufacturing space.
Operationally, the business acquired 15 arcades in 2023, in addition to our own greenfield sites that we opened ourselves, which amounted to 15 new locations. We now operate 275 arcades in the UK, with around 3,800 employees.
An interesting statistic for the UK AGC operations business in the UK, is that we generate around 50 per cent of GGR of the entire UK AGC market. We have a very health marketshare and have reinvented the AGC space in the UK, enjoying tremendous double digit growth.
Energy prices rising significantly has had a negative effect on the business, which is to be expected when you're operating circa 23,000 machines. However, through revenue growth we have neutralised all of these costs, including the added costs of the living wage, which we thoroughly support. Te journey from 2006 has been a great one, especially operationally. Revenues are approaching the £300m mark in the UK, EBITDA is around £80m - heading towards £100m.
What's important about our business in the UK is that we reinvest. Te profits that we make in the UK we reinvest in growth, we employ more people, we add more venues - and we are very proud of the fact that we are self-funding our own growth. We remain very bullish about the operational business in the UK and we are going to continue to press very hard.
In terms of product, most of the casino in the UK feature around 65 per cent NOVOMATIC UK product, which has been a great journey. Back in 2008, the market share for the business was around three per cent. We see positive future growth in machines in the casino and AWP space as the process of amending the current UK Gambling Act is ongoing in the UK.
Te process of consultation is progressing, with no guarantee of any type of outcome until it comes to fruition, but we are positive that there will be changes made that will be favourable for the land-based gaming space in the UK, in particular casinos. We look forward to the outcome of the consultation and ultimately those changes being implemented.
In terms of casino product, the one standout is the live dealer studio in Middlesborough. It is a B2B studio, which we make available to all our customers via our wide area network solution for our electronic table gaming product.
Te studio operates 24/7 and we are finding uptake with all of our major customers who have scaled down some of their own 24/7 live dealer feeds in favour of ours, which is something we are looking to expand to other countries. In terms of games, lots of interesting new games and concepts are being launched at ICE London. We believe that we are leaving on a high and look forward to the next chapter.
We are also the third largest operator in the arcade sector in the Netherlands. We have revenues of just over £100m. It has been a tough market subsequent to Covid, but we are seeing green shoots and we are confident that the market will grow in the Netherlands in the next couple of years.
In terms of casino product, the one standout is the live dealer studio in Middlesborough. It is a B2B studio, which we make available to all our customers via our wide area network solution for our electronic table gaming product. The studio operates 24/7 and we are finding uptake with all of our major customers who have scaled down some of their own 24/7 live dealer feeds in favour of ours, which is something we are looking to expand to other countries.
WIRE / PULSE / INSIGHT / REPORTS P63
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