Novomatic makes around 263 million Euro loss in 2020

A few days ago the global business gambling company Novomatic published its End of Year Financial Report for the past year. As the consolidated financial statements indicate, Novomatic AG generated a negative year-end result of 262,8 million euro. The year before, the Austrian gambling group had reached a yearly profit of 97,3 million euro.

The current profit situation definitely does not satisfy the shareholders of the Austrian Novomatic plc. Compared to the previous year, the turnover of the group was reduced by over 863 million euro to 1,743.6 million euro. The main reason for this negative development might be the Corona pandemic.

Novomatic generated loss in hundreds of millions of euros

In 2019, the boardroom of the global gambling business could be very happy with a profit of 97,3 million Euro. A year later, the year-end result was significantly worse: In 2020 the group had to sustain a loss of 262,8 million euro. This is a percentage decline of around 370 per cent.

Meanwhile the sales declined by more than 33 per cent to 1,743.6 million euro in 2020. For comparison: In 2019 Novomatic plc registered a turnover of 2,607.3 million euro. Parallel to these, the gambling and betting duties decreased as well, from 312,3 million in 2019 to 214,8 million euro in 2020.

Those responsible refer to the current difficult situation even in the preface of the executive board:

The breakout of Coronavirus in the beginning of 2020 and the relating measures to contain the pandemic presented companies all over the world, and thus even the NOVOMATIC plc group with large challenges and a situation, which to date was unprecedented.

European core markets severely affected

As the Novomatic plc writes in its yearly financial statement, there was a dramatic decline in turnover from nearly all markets. As an example, the turnover in Italy declined by 199,3 million, in Germany by 174,4 million and in Eastern Europe by 142,4 million Euro.

Even other countries as Great Britain (- 89,1 million), Spain (- 67,4 million) or the Netherlands (- 39,5 million Euro) had to sustain austere declines in turnovers. Novomatic attributed the worst sales trend primarily to the closure of the casinos for several months in many European countries, because of the worldwide Corona pandemic.

Novomatic plc: Figures on income situation

• Year-end result: -262,8 million Euro
• Profit on sales: -13.2 Per cent
• Return on equity: -26.4 Per cent
• Return on capital: -6.0 Per cent

Source: Annual Financial Report 2020 (Novomatic AG)

The Novomatic plc “made several measures of cost optimisation and efficiency enhancement across the group“ to be able to withstand the decline in sales. Through these measures the group managed to save costs worth hundreds of millions of euros. They could save in personnel: Whereas the costs in 2019 were 772,8 million Euro, in 2020 they were only 606.9 million Euro. Accordingly they are well equipped for the future.

Ray of hope: Online-revenue increases by over 58 million euro

The only pleasant news is coming from the online sector. Here the Novomatic plc made an increase in sales amounting to 58,3 million euro in the past year. On the contrary, the sector of machines suffered the largest decline in proceeds from sales. Here the turnover declined overall by over 41 per cent, that is 524,8 million euro.

For the current financial year 2021, the Austrian casino group is anticipating an increase in turnover once again. Should the casinos in the core markets be allowed to open again, then a swift normalisation of profits is expected. 

Novomatic owns a number of subsidiary companies

Novomatic plc has several subsidiary companies and shares. For example, the casino Berlin GmbH & Co. KG also belongs to Novomatic plc. It was only some time ago that we reported, that a new casino will open in Kurfürstendamm in Berlin.

Even the “Online-Brand“ Greentube belongs to the well-known Novomatic-Group. Last November we reported that Greentube wants to return to the German Online-Market will and wants to offer popular slot machines like Book of Ra™ or Lucky Lady’s Charm™ online once again. Furthermore, the Sports betting brand Admiral Sportwetten Ltd, as well as the gambling machine producer Löwen Entertainment Ltd. belong to the Novomatic-Group.

Novomatic has several subsidiary companies and shares (excerpt):

• Novomatic plc
• Admiral Casinos & Entertainment plc
• Admiral Sportwetten Ltd.
• Greentube Internet Entertainment Solutions Ltd.
• Löwen Entertainment Ltd.
• Spielbank Berlin Ltd. & Co. Limited partnership 

Conclusion

The past year, 2020, provided several challenges for Novomatic plc. As a result, despite cost-saving measures amounting to hundreds of millions of euro, the group had to withstand a negative year-end result of over 260 million euro. The turnover declined by around 33 per cent during this time, from around 2,6 billion to around 1,743 billion euro. We can’t wait to see if the casinos in the core markets will be allowed to reopen soon and then revenue can be generated again accordingly.

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