In a pre-Christmas interview with The World of Gaming, the members of the Management Board of the NOVOMATIC AG Group, Ryszard Presch e Johannes Gratzl (in the photo), summarize the past year, characterized not only by innovation and growth, but also by success in implementing sustainability objectives.
The end of the year is fast approaching and we take a look ahead to 2023. Are you satisfied with the developments of the financial year?
Johannes Gratzl: “We are definitely satisfied with this year's business performance, as we have been able to successfully continue our international growth strategy of recent years into 2023. Furthermore, targeted investments in product development and new technologies have helped us improve our performance and further increase demand for NOVOMATIC products. In particular, we have seen pleasing growth in Italy, Germany, the United Kingdom and the United States. As part of the expansion strategy, the number of consolidated companies of the Group rose to 215 in the first half of 2023, also thanks to the acquisition of several companies in various markets such as Italy, the United Kingdom and Slovenia. NOVOMATIC is also experiencing continuous growth in the US market and has managed to further expand the online segment with Greentube."
What were the biggest challenges for you this year?
Ryszard Presch: “The effects of various geopolitical conflicts, high inflation rates across markets and global supply bottlenecks have had and continue to have a significant impact. In this context, however, we benefit greatly from our high level of internal vertical integration in the manufacturing sector. We can also counteract the global energy crisis to some extent through targeted measures, investing in sustainable energy supplies across the Group, such as the systematic expansion of photovoltaic systems."
Johannes Gratzl: “Furthermore, restrictive monetary policy and rising interest rates in many markets have increased financing costs. In relation to inflation, personnel costs have also increased. We too are affected by all this."
At this point, how do you see the year 2024, in which interest rates and inflation will remain low?
Ryszard Presch: “In addition to large investments in research and development, in the coming year we will continue to evaluate the potential to further secure and expand our leading position in key European markets such as Germany, Italy, Spain, the United Kingdom, the Netherlands and numerous countries in the Eastern and Southern Europe. Our growth strategy also focuses on gaining additional market share in the United States, Australia, Latin America and Africa. Furthermore, the online segment remains a key focus."
Which market currently has particularly high potential?
Johannes Gratzl: “The online, mobile and social gaming segment in particular has continued to experience strong growth in recent years. The market presence of NOVOMATIC's Digital Gaming and Entertainment Division is strengthening in particular thanks to Greentube's expansion strategy. In the current year, the international portfolio was successfully completed by the acquisition of Ineor d.o.o. and the Alteatec Group in the fields of software development and system and platform technology. The growth strategy was also carried forward by the acquisition of the Italian company 187 S.r.l., which manages approximately 630 AWP machines and approximately 690 VLTs in one of the gaming markets with the highest turnover in the world".
Ryszard Presch: “We are also seeing steady growth in the thriving sports betting segment, particularly in the US market, as more states are legalizing sports betting and many casino operators are expanding their offerings accordingly. Fortunately, they are increasingly turning to NOVOMATIC technology. As recently as October, we showcased our innovations for the sports betting industry, such as the new J-Curve sports betting kiosk, as well as exciting iGaming offerings for US markets at the G2E gaming expo in Las Vegas.”
In addition to the traditional ICE and G2E fairs, what other events have you celebrated this year?
Ryszard Presch: “A special moment of the year was the reopening of Spielbank Berlin's headquarters at Potsdamer Platz at the end of April. After a thorough renovation, it is now one of the most modern casinos in Germany and offers a total of 500 gaming machines, including 40 gaming tables with Roulette, Black Jack and Poker, on six floors with a total area of 8.500 square meters . Since not only the extensive catalog of ESG criteria was taken into account during the construction work, but also renewable raw materials such as certified and sustainable wood were used, as well as green electricity, the casino is not only the most modern, but also the greenest in Germany."
You have already mentioned the expansion of photovoltaic capacities within the Group. What are the next investments in green energy?
Johannes Gratzl: “The Group's largest photovoltaic system is currently under construction on an area of 20.000 m² at the headquarters in Gumpoldskirchen. This will allow the company to further reduce its ecological footprint in the future: not only are we investing in a greener future, but we are also making ourselves even more independent than we already are thanks to our high level of vertical integration. By using energy and resources responsibly, we want to make a positive contribution to protecting the environment in production and operations and achieve the sustainability goals we have set ourselves."
NOVOMATIC receives numerous awards every year. Which were particularly important to you in 2023?
Ryszard Presch: “We are pleased to announce that our innovative NOVOVISION™ casino management system has been recognized as a winner in the “Best CMS” category at this year's European Casino Awards in London. The system's biometric-based login solution ensures unique identification of registered customers and sets the global standard in terms of player protection and responsible gaming. The award confirms our Group-wide commitment to responsible entertainment and our belief that success can only be achieved through taking responsibility."
Johannes Gratzl: “The Standard & Poor's (S&P) rating agency's (S&P) upgrade from BB to BB+ was also very gratifying. The outlook for NOVOMATIC AG is also stable. The main reasons for the upgrade are the solid operational performance of fiscal 2022 and debt reduction. Thanks to brand strength, trend development, brand potential and turnover, NOVOMATIC achieved an excellent second place among the ten companies with the most valuable brand in Austria in this year's ranking of the European Brand Institute. It is particularly pleasing that NOVOMATIC was able to record the largest increase in brand value in one year among the 10 most valuable Austrian companies, with a brand value increase of +13,6%.”
Sustainability and ESG are important topics for NOVOMATIC. Will this trend continue next year too?
Johannes Gratzl: “We are convinced of this, because sustainability is not a short-term concept, but a long-term strategy. We take our corporate responsibility and related ESG issues very seriously. It is therefore particularly pleasing that our Group-wide commitment to sustainability has been recognized with first place in the industry-wide PwC ESG Ranking 2023. Furthermore, numerous employer awards, such as the “Leading Employer Austria” or being voted “Best Employers in Lower Austria”, demonstrate our commitment to our more than 24.500 employees worldwide. In the new ESG campaign entitled “My Responsibility”, we invite them to tell us about their personal responsibility, both at work and in their free time. These are impressive stories that we are proud of."
Ryszard Presch: “We would therefore like to express sincere thanks to our employees, whose dedication and commitment contribute significantly to the international success of NOVOMATIC on a daily basis. On behalf of the entire Group Board of Directors, I would like to wish them, as well as our partners and customers, a Merry Christmas, happy and relaxing holidays with their families and a healthy and successful New Year."
