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Gaming Innovation Group (GiG) has revealed that it intends to divide its two business units into separate companies during the first half of 2024.

The Stockholm-listed company made the announcement alongside the release of its Q2 2023 financial results.

Topline numbers

In Q2 2023, Gaming Innovation Group (GiG) posted a 40% year-on-year revenue increase to €31.1m, driven notably by a 22% organic boost.

GiG’s Media division revenue reached an all-time high of €21.7m, up 47% on Q2 2022. Meanwhile, platform and sportsbook revenue saw a 27% increase, totalling €9.3m.

Adjusted EBITDA grew by 68% year-on-year to €14m, resulting in a record 45% margin, on track towards GiG’s adjusted EBITDA margin target of 50%.

Additionally, EBIT surged by 173% to €6.6m, with a margin of 21.1%.

In H1 2023, revenue reached €59.5m, an increase of 44% increase year-over-year.

Adjusted EBITDA was €25.7m, up 71% on H1 2022, with an adjusted EBITDA margin of 43.1%.

News nugget

GiG CEO Richard Brown provided further updates on the planned spin-off of the company’s business units.

As per plans revealed earlier this year, the company intends to divide its GiG Media and GiG platform and sportsbook businesses into two separate, publicly listed entities.

The planning for this corporate transformation is currently underway, with meticulous attention to the strategic and operational intricacies involved.

An execution of the spin-off is anticipated in the first half of 2024, subject to all requisite corporate actions and approvals from shareholders.

“We still remain with a very strong conviction that the proposed split will enable each of the business units to derive a much better value and enable them to reach their full value potential and growth opportunities over the coming years,” Brown said.

Brown also confirmed that Jonas Warrer will take over as the CEO of GiG Media. Warrer currently serves as CMO and has also been the managing director of GiG Media since October 2019.

He initially joined GiG in September 2017 as the general manager of GiG’s Copenhagen office.

Brown said Warrer has demonstrated an “extremely strong track record for growth”.

“He has not only been able to derive meaningful revenue growth but also significantly improved his team, the operations, the product and the technological capabilities of the unit. So, we’re very proud and we’re very sure that he will be able to continue that success going forward,” he added.

Earlier this week, GiG announced that it has appointed Richard Carter as the new CEO for its platform and sportsbook business.

Latam growth

Moreover, the company also shared that GiG Media’s revenue from the Americas increased by 24% year-on-year, now accounting for 22% of total revenue.

“Latin America remains a very strong region of growth and is becoming what we see as another runway that is really developing quite quickly for us,” Brown said.

Brazil, he added, has historically been a strong market for GiG and continues to thrive.

Additionally, GiG is observing promising growth prospects in other Latin American countries like Argentina and Colombia.

Equally, Brown highlighted a similar growth trend within the platform and sportsbook division, where North and Latin America collectively now contribute almost 30% of GGR.

“We’re also very proud of the fact that 92% of our operator GGR is coming from regulated or soon to be regulated markets,” Brown concluded.

Best quote

During the earnings call, CEO Brown shared some insight on the German market, highlighting that while the market has changed considerably due to its adopted regulatory framework, GiG remains committed to the market.

“I think the German market is an interesting but challenging one. But I think it’s also important to zoom out to see where it is going to be in three to five years. Before regulation, it was one of Europe’s largest markets, and there’s no reason it shouldn’t approach the levels seen in the UK, with billions of euros spent annually.”
GiG CEO Richard Brown

Best question

CEO Brown was asked to provide examples of the measures taken by GiG to substantially improve the performance of the AskGamblers brand following its acquisition from Catena Media.

The first six months of operating AskGamblers have seen a 45% increase in revenue, growth in player intake exceeding 40%, and EBITDA doubling when comparing July to January 2023.

Brown explained that GiG’s teams have shifted their focus towards implementing “what they consider optimal for the product”. This involves enhancing both content creation and usability.

“I don’t exaggerate when I say that the granularity that the teams actually operate on is immense.”

He highlighted the team’s dedication to optimising the performance of each individual page.

“And then, of course, our BI systems are tremendous. They enable us to really make very strong commercial and usability decisions,” he explained.

This combined approach, Brown concluded, led to a noticeable enhancement in revenue structure and the overall performance of the AskGamblers brand.

Current trading & outlook

GiG anticipates full-year revenue to come in between €125m and €130m, accompanied by an adjusted EBITDA margin spanning between 47% and 50%.

Brown was also queried about potential adjustments to its mid-term guidance, considering that it was edging closer to its long-term target.

Bown replied: “I think we’re still very happy with this type that we said we’d be at 50% or above 50% during next year,” reaffirming GiG’s long-term EBITDA margin objective.

He elaborated that due to the planned division of the two segments into separate publicly listed entities, making adjustments at the group level wouldn’t be logical.

Once the two businesses are successfully established, “they will have their own targets and their own financial KPIs”.

Investors reacted positively to GiG’s business update, causing shares to trade around 3% higher following the presentation of the Q2 results.

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