Despite achieving record sales, Novomatic experienced a decline in profit.
Europe's top gaming company, Novomatic, reported a record revenue of over €2.5 billion for 2017 but experienced a decline in profit due to one-time events. The company's operations in Gumpoldskirchen, Austria, saw a 11% increase in revenue from the prior year (€2.27 billion).
The largest contributor to revenue was the Gaming Operations division, which encompasses casino and electronic casino operations, generating €1.58 billion. The second major division, Gaming Technologies, earned €937 million through renting gaming machines, gaming equipment, and producing gaming systems. Novomatic's subsidiary, Admiral (Austria's leading sports betting service with more than 200 branches), generated over €250 million in revenue for 2017.
Novomatic's CFO, Peter Stein, highlighted the company's success across core markets. When combined with Novomatic's holdings in ACE Casinos Holding AG (Casinos Austria) and Gryphon Invest AG, the group's yearly turnover reached an astounding €4.9 billion.
The group, founded in 1980, boasts an extensive network of 223 subsidiaries and over 400 investments globally.
However, the international presence comes with certain drawbacks. Novomatic's tax and duty payments climbed to a record-high €91 million, with profits suffering due to various single incidents and currency devaluations. Annual net profit for Novomatic AG plummeted by 61% to €61.4 million.
Severe player protection measures in Germany had a huge impact on these disappointing figures. Novomatic had to close 100 of 700 gaming halls in the nation, and replace over 110,000 slot machines. CEO Harald Neumann acknowledged the unexpected costs, adding "we were actually expecting much more."
Novomatic also faced additional tax obligations in Italy due to its partial ownership of Casinos Austria. The Italian authorities refused to accept the offsetting of the software license for the country's joint venture, resulting in €20 million in extra tax payments.
The dollar's fluctuation also impacted profits. As the company hedges a significant portion of its capacities in US currency, the dollar's movements created foreign currency losses of an additional €20 million.
Despite these setbacks, Novomatic maintains its ambitions, targeting to become the global market leader within the next three to five years. The company already considers itself the European leader in the slot machine sector.
The group's workforce expanded by 7% in 2017, bringing the employee count to over 25,500. Novomatic is also increasing its presence in the US market, securing a major contract to equip Foxwoods Resort Casino in Connecticut with multifunctional tables at the G2E trade fair in October 2017.
Following this, Novomatic acquired a majority stake in the Australian machine manufacturer Ainsworth Game Technology (AGT) in early 2018, which has been present on the US market for years, allowing for another international channel. Most recently, a partnership with Novomatic subsidiary Greentube for producing social gaming platforms for the Hard Rock Group from Florida was announced in March 2018.
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Source: www.onlinecasinosdeutschland.com
