Good morning, and welcome to the Evolution Q4 2022 Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Martin Carlesund, CEO. Please go ahead.
Good morning. Welcome everyone to the presentation of Evolution's year-end report of 2022. My name is Martin Carlesund, and I'm the CEO of Evolution. With me, I have our CFO, Jacob Kaplan. I'll start with some comments on our performance in the quarter, where after I will hand over to Jacob for a closer look at our financials. After that, I will run off our presentation with an outlook for the rest of the year, and at the end, we will open up for your questions. Next slide, please. I'm very satisfied to be able to present yet another strong quarter, which concludes a successful 2022 for Evolution. As always, operationally, it has been a very hectic year for us, and in the 4th quarter, we continued at the high pace from the previous quarters.
We continue to see strong worldwide demand for our products in live casino, both existing as well as new games launched during the year, continue to attract new players, but also new player groups. We can also now notice how different parts of the world have initial slightly different preference when they begin their journey within Evolution. At the beginning of the year, I spoke of 2022 as a year of the product. I think 2022 has lived up to that billing. In the quarter, we have further expanded our North American footprint with the launch of a third studio in New Jersey to support the growing demand there, and the build-out of the new studio will continue in 2023. We're also gradually starting to expand our games portfolio in North America.
After the launch of Craps in Pennsylvania last quarter, we finally also launched the fantastic new game in New Jersey in Q4. In addition, the new studio was launched with our newest game called Football Studio. Furthermore, we will shortly also launch Mega Ball with the British Columbia Lottery Corporation, with the other Canadian lotteries to follow. This will be the first real lottery game launched with a lottery in Canada. In January, we also went live with the Canadian province in Saskatchewan. Things are also moving within slots. Red Tiger, the third game supplier to introduce timed jackpots in North America. Timed jackpot is a mechanic for slots games that allows operators to set up a progressive jackpot that are guaranteed to hit before a certain time.
In the 4th quarter, Red Tiger launched these unique timed jackpots games in Connecticut, Ontario, and Quebec. A week ago, they were launched in Michigan. They have been an instant success. At the end of the quarter, we had over 1,300 tables live, resulting from an increase of over 300 tables during the year. The high demand for our products means that we must expand in existing studios and build new ones to keep up the pace. We will continue to increase our studio capacity also during 2023. During the 2nd quarter last year, we launched a new fantastic lobby, and since then we have rolled it out, and now in January, the transition to the new smart lobby was completed for all customers.
The lobby's recommendation engine, powered by artificial intelligence, assured that the players will always get the content best suited to them. Recommendation engine gets smarter every time the player enters the lobby, and our goal with the new lobby is simple: to help players quickly find a game that they will enjoy. The new lobby is smart, powerful, and personalized, and it does definitely enhance the playing experience for the end users. During the year, we have faced difficult macroeconomic environment. With war in Europe, increasing cost levels, and pressure on supply chains, which has put pressure on our margins, but even throughout the year, we have continued to invest in growth. This year, as always, our main priority has been to continue to serve an ever-better experience with all fantastic new games, as well as enhanced existing games.
With that backdrop, we deliver an EBITDA margin within the guided range for 2022, despite the cost increases we have faced this year. In 2023, cost efficiency will remain as important as in 2022, and our efforts to increase efficiency and throughput will continue. We round off 2022 with a strong financial result and continue to the new year with fantastic pipeline of new games and a strong momentum which make us well-placed to further strengthen our market share and continue to widen the gap to our competitors. Let's move to the coming slides and see the effect on numbers on products on all our efforts. Operator, next slide please. Our financial results for both the quarter as well as for the full year 2022 are strong. Revenues increased by 36%, both in the quarter as well as for the full year.
EBITDA increased by 35% to EUR 279.5 million in Q4, corresponding to a margin of 68.6%. For the full year, the EBITDA growth amount to 37% and reach a margin of 69.2% in line with our guidance of 69%-71% for the year and an increase compared to full year 2021. hard with the years now when we are in the beginning of 2023.
Live Casino delivered a very satisfactory growth of over 41% in the quarter, and for the full year, RNG revenue amounted to EUR 72.5 million, a growth of 15.3% in reported numbers. The growth in the quarter compared to the combined revenue Evolution and Nolimit City for Q4 2021, the pro forma growth of RNG amounted to 5.1%. As earlier communicated, we have a target of double-digit organic growth in RNG. Moving forward into 2023, the path to our goal within RNG will not be linear, but we look forward to 2023, where we will double the releases of our network brand, add new bonusing tools for slots, and increase distribution for slots through OSS.
Our EBITDA margin guidance for 2023 is 68%-71%. We have widened the range with 1% as a result of the uncertainty of the macroeconomic situation in the world. It is, as always, important to state that the investment will continue to be high and our main priority is to continue to grow and as always in the trade-off between growth and margin, we will always opt for growth. Important also to note that the board proposed a dividend of EUR 2 per share for 2022. This is in line with our policy and slightly above 50% of net profit. All in all, fantastic numbers. I'm very pleased with our financial performance in the 4th quarter, and we are definitely well-placed to deliver a strong 2023. Operator, next slide, please.
Expanding our studio capacity means we need high recruitment pace, and in the quarter we increased the number of Evolutioners with 1,100. Increase in staff 2022 amounts to 3,600, adding to over 17,000 Evolutioners at the end of the period. Evolution is a truly global company. Our products can be played in most corners of the world, and our employees are a good mirror of that global reach. At the end of the period, we have over 100 nationalities employed all over Evolution. We will continue to increase headcount during 2023 as we expand in our studios, we will continue to consider diversity as strategic advantage and a key asset in. It is a condition for Evolution's operational excellence. I'm very proud of all our employees and the work ethos they show in their daily work.
They make up a fantastic company. Next slide, please. Last quarter, we replaced bet spots as a measure of player activity on our network and replaced it with game rounds. The bet spots slide was only related to live games, and by that did not cover the whole network and simply had played out its role as a performance indicator. The game rounds index instead shows the development of the whole Evolution network and includes all games. A game round is what it sounds like, one round of a game. One round of roulette, one hand of baccarat, or one spin of a slot all count as one game round.
There are still differences between games and for example since a hand of blackjack takes longer time than a spin of a slot, each game round of blackjack typically carries a higher bet, so all game rounds are not equal in value. In the chart, the index values for game rounds from Live and RNG and Other are weighted according to revenue contribution. This gives us a joint index that includes all games based on equal revenue contribution. Game round index will over time give a better view of the activity in our network. This index will not correlate exactly with revenue each quarter. As you can see in the chart activity, has remained high in the quarter, over 7% year-on-year growth for the 2nd quarter in a row.
One reason for the high growth in game rounds compared to the revenue is that we are adding many game rounds from new markets, that typically have a smaller bet size, so activity increases more than revenue. Increased activity in the network is a very positive sign and will contribute to growth in the future. Operator, next slide, please. This slide shows the breakdown of our net revenue by geographic region. It's a very good growth year-on-year in all geographical markets. It's evident that the demand is truly global. Year-on-year growth in North America amounted to 66% with the highest growth rate of all regions for the 4th quarter. For the full year, the growth amount to 65% compared to last year.
In Asia, we saw continued strong growth of 50% year-on-year and the growth of 67% the full year. There's a good potential in both these markets and expect a continued high growth rate going forward. Europe as a whole, including U.K. and Nordic, showed a good growth of 7% in the quarter. Quarter-on-quarter, European markets in general have a slower growth than North America and American Asian markets due to both regulatory changes as well as that they are more mature. It's worth noting that this table does not include pro forma figures of the growth year-on-year. Some, to some extent, it can be attributed to the acquisitions. Other, including Latin America, Africa, and remaining part of the world, shows a very good growth of 61% year-on-year.
In this market segment, it is LatAm that is the main driver for growth. Share of revenues from regulated markets amount to 40% in Q4. Next slide, please. Products. Most important thing, products. In 2022, we grew the Evolution live offering significantly, further widening the gap between Evolution and our competitors. One year ago, I said 2022 would be the year of the product. I set a goal for ourselves to deliver 88 new games in 2022. It would mean a record number of releases from Evolution in one year. We did it. I'm very proud of all the people within Evolution Group that made it happen. In 2023, we've launched over 100 new games. I think it's fair to say it will be yet another year of the product. Among the new games in 2022, XXXtreme Lightning Roulette was an out of the gate success.
Monopoly Big Baller is another mega hit. I'm happy to report that the original Monopoly Live continued to see good increase in player numbers even after the launch of Big Baller. A third exceptional game to point out is this live slot Crazy Coin Flip, a truly unique game that combines slots and live show entertainment. The game found a very large audience. I'm excited to do more in 2023 combining the worlds of live and slots. In the 4th quarter, we launched two new and exciting football team games, Football Studio Dice and Football Studio Roulette. Another game in Q4 was the Free Bet Blackjack, a variation of our classical blackjack. What makes the version different are the exciting free bets.
Also new in the quarter is the gripping experience with Dead or Alive: Saloon, a card game set in a fantastic wild west saloon style environment. Actually, the studio I showed you on the cover of the Q3 report presentation, if you remember. While we want to see more in RNG, we have released many very good games also 2022. During the 4th quarter, one of my favorite is Dead Canary from Nolimit City. Other releases in the quarter, as you can see in the slide here, are In the Rabbit Hole from Red Tiger and Cupcakes from NetEnt, but there were more. We will have a very high focus on RNG vertical 2023, and we will do everything in our power to deliver the best and most innovative slots in the world this year.
Let's say just a few words about the roadmap for 2023. Operator, let's move to the next slide. Products 2023. Exciting 2023. Here on this picture is a sneak peek at one of our launches at ICE next week. It's one of our headline games in 2023 and the most technically complex game we have ever built. It's the largest and most spectacular game show we have ever made. It's a strikingly beautiful studio and a bonus and multiplayer extravaganza. End user will see something they have never seen before. I won't get into details as we release on ICE, but I'm very, I would say even extremely excited to bring this experience to players across the world. 2023, we have a great variety and innovation amongst existing releases, both Live and RNG from all seven of our brands.
We will show some, but not all of what we are having in store for players next week at ICE. Looking forward to see you all there. At Evolution, we always try to be a little bit better every day. Of course, 2023 is going to be our strongest product year ever. End user entertainment and satisfaction is what will be the future, not only 2023 or 2024 or 2029. It's the ultimate goal for all of us trying to make a difference every day. We need to stay on our toes, breaking boundaries, create what others dream of and think is impossible. We can never stop. We need to relentlessly continue to create Evolution's future. That's what all of us Evolutioners do every day, trying to create what others dream of, that is called ambition, hunger, and energy.
That is why all of the soon 18,000 employee of Evolution should be proud. With that, I will pass on to Jacob, who will speak more about financial details. Operator, next slide, please.
Thank you, Martin. Good morning to all of you listening. We now have a couple of slides with comments on our financial development during the period. I'm on slide 9. Revenue amounts to EUR 407.5 million in the quarter. That is made up of EUR 334.9 million related to Live Casino and EUR 72.5 million from our RNG games. Live Casino has had a very strong performance throughout this year, or 2022, I should say. Shows a strong development also in the 4th quarter. Year-on-year growth is 41% in the final quarter of the year and 42% for the full year. As Martin mentioned, we see year-on-year growth in all regions. Have also been successful with several strong game releases this year.
We feel good about the roadmap for 2023 as Martin just pointed out. There are still large growth opportunities for us in many markets. All that said, I expect the growth in percentage terms to continue to come down as our revenue base gets larger. RNG revenue amounts to EUR 72.5 million in the quarter. Growth rate for RNG, just looking at the reported figures, is 15% in the quarter, but that does include Nolimit City that was acquired in the 3rd quarter of this year, so not included in the comparison period. Growth compared to pro forma figures is about 5%. This is a slight improvement in growth from Q3, but still lower than the goal of double-digit growth we communicated at the beginning of 2022.
We stated also then that the development will not be straight line towards that goal, and I see that comment as still valid looking into 2023. We remain committed to the goal, as Martin pointed out, and are continuously working to improve productivity in our RNG operations, but we will not set a firm deadline for when the goal of double-digit growth can be achieved at this time. EBITDA for the quarter amounts to EUR 279.5 million, given an EBITDA margin of 68.6% in the quarter and 69.2% for the full year. We are in line or based at the low end with our margin guidance of 69%-71% set at the beginning of this year. For 2023, we expect to achieve a margin in the 68%-71% range.
I guess you can say that's a notch lower than the guidance for 2022, but given the uncertainty in the world, the pressure we see on cost right now, and the fact that we exit this year just over 68%, we think the larger interval does make sense. As we have said many times before, and I will repeat now, we do prioritize growth over margins, so this guidance is a way to share our expectation today, rather than that it's a hard goal in and of itself. Operator, let's move to the next slide, please. We are at the end of the calendar year, so I have added this slide to the presentation, a little bit to zoom out and also take a look at the multi-year performance of Evolution.
As you see here, we closed this year, or 2022 with almost EUR 1.5 billion in revenue and just over EUR 1 billion in EBITDA. When you look at numbers all day, sometimes they can be more than just numbers, and for me, it was very nice to see us break the EUR 1 billion level for EBITDA. Of course, EUR 999 million wouldn't have been a huge difference, but still a milestone, and I'm, or I should say we all are happy for that. Looking at the multi-year development, we also see that we have been able to increase margin with the growing top line. We do increase margin also 2022 versus 2021, but not with the same jump as we saw during pandemic years in 2020 and 2021.
During 2021, we also added the main part of the RNG business through acquisitions of NetEnt, Red Tiger, and Big Time Gaming, which as you can see here, gave an extra boost both to revenue and EBITDA. As we talked about on the previous slide and earlier in the presentation, we have more work to do to achieve the future growth we want in RNG, but it's a highly profitable business that we feel has a very good fit in the group. Looking at revenue, we increased top line by almost EUR 400 million or 36%, 2022. That revenue figure does include a mix of organic and acquired growth.
Looking at Live Casino revenue isolated, which is all organic, we add over EUR 300 million in both 2020 and 2021, respectively, with growth rates around 50%. While we actually add even more revenue, 2022, the math works so that the growth rate starts coming down a bit, as I mentioned on the previous slide. That was a quick look at the full year development. Let's go to the next slide and we'll have a more detailed look at the most recent quarter. Moving to the next slide. This shows our P&L in a bit more detail. As usual, we'll walk through the table from the top.
Live revenue just under EUR 335 million for the three-month period, October to December 2022, and EUR 1.188 billion for the full year. This is organic growth of 41% and 42% respectively compared to the same period as last year. RNG year revenue amounts to EUR 72.5 million in the three-month period and EUR 268.4 million for the full year. The total growth, including organic and acquired growth, is 15% and 17% respectively, as mentioned earlier. Majority of that, of course, acquired, as was covered also earlier.
Total revenue sum is up to EUR 407.5 million for the quarter and just over EUR 1,456 million for the full calendar year 2022, a 36% growth in the full year numbers versus reported figures. Pro forma, that works out to about 33% for the quarter and about the same for the full year. Moving down to expenses. Personnel expenses amount to EUR 81.5 million in the quarter, an increase of EUR 26 million compared to the same period last year. This includes increase in staff compared to last year in all our teams, commercial operations, engineering, business support, I'd say across the board. Depreciations amount to EUR 29.5 million.
That does include EUR 11 million in amortization of intangibles related to the acquisitions of NetEnt, Big Time Gaming, and Nolimit City. Other operating expenses include items such as consumable equipment, communication costs, consultants, and royalties. Totals EUR 46.4 million, an increase of 22% compared to the same period last year. Summing up total operating expenses, EUR 158 million, increase of 36% compared to reported figures same period last year. That brings us to operating profit. Sums up to EUR 250 million in the quarter and EUR 908 million for the full year period. Increases of 35% and 39% respectively. Financial items includes, as always, a charge for right of use assets according to IFRS 16.
Also on this line, we have currency-related effects from the revaluation of balances on bank accounts that we hold in non-Euro currency, as well as effects on intra-group loans. It's a little higher cost there than previous quarter, it's not related to interest rates. We carried no external debt, so that's not what it is. Tax is just under EUR 17 million in the quarter. That's a tax rate of 7.1%. For the year-to-date period, it's 7%. It's almost 1% higher than the previous year, our tax rate will continue to gradually increase in 2023 as we increase our global footprint.
Regarding the upcoming project of global minimum tax of 15% or the Pillar Two, as it's referred to in tax speak, I guess, the current timetable is that it will come into effect from 2024. A lot of work still remains, we will probably know more as the year progresses, how and when it will affect us. Expect a higher tax level from 2024, as I know most of you already have in your models. All this sums up to profit for the three-month period of EUR 223.5 million. That equals an earnings per share of EUR 1.03 per share for the quarter. That's an increase of 34% compared to 4th quarter of 2021.
Finally, the rolling 12-month period, let's say the full year earnings per share is EUR 3.88 per share. Operator, let's go to the next slide, please. Before handing back to you Martin, a look at cash flow and financial position. We'll start to the left, where we see the development of capital expenditure. The gray part of the bars that represent investment in tangible assets. That means our investment in studio projects. In the 4th quarter, CapEx in tangible assets is almost EUR 18 million. We have had a high activity in studio projects in the quarter. The blue part of the bar is investment in intangible assets, and that's related to new games and features to the platform.
It's about EUR 10 million in the quarter, and in line with previous quarters this year, as you can see. For the full year 2022, CapEx amounts to EUR 97 million. It's not higher than the EUR 90 million we estimated at the beginning of the year, but fully in line with our plans from later in the year. For 2023, we will maintain a high pace in our investment, and I estimate CapEx will total around EUR 120 million for 2023. In the middle of the slide, we show operating cash flow in the quarter. It amounts to EUR 221 million. Operating cash flow in relation to EBITDA on a rolling 12-month basis is still on a very good level at around 75%.
Finally, to the far right in the slide, quick look at the balance sheet. We maintain a very strong financial position, EUR 532 million in cash on balance at the end of December, which, if the board's proposal to the AGM of dividend of EUR 2 per share goes through, EUR 426 million out of that will be paid as a dividend in early April. That was the end of my prepared remarks. I'll hand back to Martin for some closing words, and we'll take questions after that. Martin, over to you.
Thank you, Jacob. Now we're on the next slide, the last slide before Q&A. Thank you. A few words to conclude this report presentation. We have a strong end of 2022 and an overall strong year for Evolution, with many strategic achievements such as building four new studios, launching record number of new games, and most importantly, we have continued to increase the gap to competitors. In 2022, we worked hard to restructure the cost base to reach effectiveness and cost awareness, and that job will continue throughout 2023. Despite the macro challenges we face, inflation and cost increases are a reality for us. We have great momentum, and we will focus on Evolution and the things we can control to innovate and push boundaries and enhance the play experience and increase the gap to competition even further.
We see good opportunities for continued positive development in the U.S. We'll continue to expand capacity in our studios and increase our games portfolio in that market. Last week, we had an official opening of our new studio in Madrid, and with three others newly launched studios, we will during the year, be focusing on scaling up the new studios, but at the same time, we will build a number of new ones in 2023. We expect to see continuation of strong growth in Latin America, and we will expand our presence to capture those markets. With a local organization already in place, we are well prepared to continue our expansion there. Moving into the new year, increased growth within RNG is a high priority, and looking at the roadmap of games, I very much look forward to 2023.
Beyond everything, and most important of all is our focus to innovate and push boundaries to enhance the player experience. In the end of the day, that is what counts. Thank you all for listening, and we'll speak in a couple of months again. Now we move to questions. Next slide, please.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. We will take our first question from Ed Young at Morgan Stanley. Please go ahead.
Thank you. Good morning, both. Thank you for taking my questions. I'm going to ask about products. I recognize the importance. It sounds very exciting, but given you've heavily blurred your slide and it's ICE next week, I guess I'll wait till then to ask questions on that one. My first question, if it's okay, is on margin. You've given the range there, Jacob. I wonder if you could just go into the line items a little bit in terms of how you think about the evolution of that cost. I know that cost per personnel was down a little bit in Q4 on Q3, but you've said there's a step up, I think, probably in the spring.
Could you talk perhaps about, you know, particularly personnel and other, how you think about the growth in those line items or how you'll be able to manage the business to hit within that margin target? I'll ask the questions in turn if that's okay.
I will comment it, Ed. It's. We will continue to expand, and we will build new studios. That cost is positive. We need to be cost aware in all different parts, but we will continue to expand and growth is priority. Exactly how that will fall out over the months and quarters is very hard to say. We add the percentage to widen the gap to 68%-71% due to the macroeconomic situation in the world. It's purely because it's very volatile in the world right now. There's a war in Europe, and to account for that, we add the percentage. That's the whole story of that.
Our ambition is, of course, as high as it's always been when it comes to margin, and we have a scalable business, and we should continue to have that.
Understood. Second one's on returns. You know, Martin, you've spoken over the past few months about your personal view on buybacks versus dividends. We've had the conversation on these calls variously over, you know, M&A versus returns, several times. I appreciate it's a decision for the board ultimately. I just wondered if you could give any update on or color on how you see things, particularly, you know, M&A versus returns and if there is a prospect for the company to put its balance sheet towards, buybacks over the coming year.
I think that the first comment would be that the money we have in the balance sheet now or currently at hand will, to large part go out as dividend in a couple of months. The decision for dividend or buybacks is a board decision. My view is that it would be nice to complement the dividend with a buyback, but that's a decision that would be taken by the board in a later stage.
Okay. Then the final one is on the U.S. There was a legal update last week with the Superior Court of New Jersey's Appellate Division on the defamation lawsuit you brought around the report in late 2021 that you said originated from a competitor. One of the aspects raised by the judge was whether the DGE or the Pennsylvania Gaming Control Board has finished any kind of review of the report they received more than a year ago. I appreciate it's a legal process, so you probably won't be able to say too much, but, could you give any update or color around that at all, please?
We pursue and think that we are entitled to know who was behind the report, and we take legal action to do so. That goes a little bit now. It went up one instance and that instance pushed it down, and I see that as positive.
Thank you.
Thank you. Your next question comes from Oscar Rönnkvist from ABG. Please go ahead.
Thank you. Good morning, guys. Thank you for taking my questions. First of all, I just wanna know about the competitive landscape, how you see it developing during the tougher economic environment. Do you see any signs of others slowing down as a result? And also just particularly on the U.S., how do you see competition developing, like Authentic Gaming in Michigan, for example, or Playtech's expansion?
How it relates to the macroeconomic situation is of course that there's less money going around for companies that are in need of money, and that might affect. When it comes to the competition, I would say that it's been a couple of years now, and it's slowed down in my point of view. We have continued as before and even accelerated. My point of view is that we increase the gap to competition and they are now even further behind than they were before. That's of course my view.
Understood. Just on the U.S. expansion, I mean, obviously I think Authentic Gaming just launched in Michigan and then Playtech is the only other Live Casino operator. Do you see any signs of any others coming in there, like Pragmatic? Or should we see or assume that you continue to dominate the U.S. Live Casino space?
I don't think that we should single out any market. We have huge amount of competitors in Asia. We have competitors in Europe. It's healthy to have competition and we work, and we fight every day. There is no specific situation in U.S. I'm very happy with the position we have and the expansion.
Okay, thank you. Next one, just on, I think that the U.K. saw a bit of a sequential increase. Are you seeing any signs of easing there, just looking sequentially, from a bit, I mean, pressured levels, I guess? Also, I mean, if you have, like, any expectations sort of in ahead of the white paper coming, did you see signs of operators actually like, moving up their plans now that, I mean, the comparable should be easier, I guess, soon enough?
It's very hard to say. The, it's been going a bit up and down when it comes to the U.K. regulation. If I would look at the, at the total picture, I would say that I think that we have a bit more stable situation coming our way in 2023 and maybe 2022 in Europe than we have had before, and I hope we're being right in that.
All right. Just wanna follow up on the capital allocation question there. You're not ruling out any potential M&A within the RNG space to maybe expand through M&A there?
I think, yeah, our position has been the same for the past couple of years. You know, the dividend. We have dividend policy of 50% payout, which, you know, this year is very much in line with, and I think you see most of the cash that we hold on balance right now will, you know, is, will be that dividend. Buyback is an opportunity if there is more cash than that. We've also done some M&A, but, you know, that's M&A, that's a bit opportunistic if the opportunity is right, if it fits within the group. It's nothing that we rule out, but it's also not our main growth avenue is organic growth. That's how we've put it in the past.
Okay, thank you. That was all for me. Thank you very much.
Thanks, Oscar.
Thank you.
Thank you. Your next question comes from Joe McNamara at Citi. Please go ahead.
Hi. Morning.
Morning
I want to ask. Morning. I want to ask the first question on game releases, if that's all right. A couple and I'll take them one by one. You did very well, I think, to hit your 88 game targets here. And kind of despite the acceleration in Q4, RNG growth was still somewhat below your aspirations. Could you kind of help me understand why throughput of these games was a bit soft and what needs to be done from a kind of slots quality perspective?
Yeah. I mean, the roadmap for RNG looks much better 2023 than it did 2022. To single something out, we will double the amount of releases on that front, which is highly needed, and we see great potential in that. When it comes to quality, that's a hard one. It's a little bit more of a volume business when it comes to RNG. We have a couple of things that we want to do and innovate when it also comes to slots, and we look forward to those. We are now in the distribution phase of OSS. We also will increase the distribution of our slots with OSS 2023, which is a little bit later than what we expected. Also that we look forward to.
Excellent. Very clear. Thank you. Then also kind of on the same topic, can you disclose how many live games were released as part of the 88, and then kind of, I guess, what the aspiration will be for kind of live game releases in 2023? I guess similar to that, the one of the more popular games or the more popular games in 2022, were kind of your more game show style games such as, you know, MONOPOLY Big Baller and Crazy Coin Flip. If you agree with this, is there gonna be kind of continued increased focus on these kind of game show releases as well? Thank you.
The comment on live releases, we released it's a multitude of brands, and there's also Ezugi, so it's like I would say somewhere between 15 and up to maybe 20 live games for one year. They have some games are aiming for one market, and there is a portion of live games which is sort of regular and a portion that is game shows. We don't really break it out, but 15 to 20 games a year. I think that's a good number. We look forward to be on that, somewhere on that also 2023.
I think it's worth mentioning also that there's also a lot of innovation and new things that go into the existing games. You know, improvements to the interface or sort of new functionalities. Things like that can also be very, very important. In terms of the game releases, you might be right in that, you know, some of these game show games, you know, very spectacular studios and they do get a lot of attention and should get a lot of attention. There's a lot going on also when it comes to the traditional table games.
Excellent. Very clear. The last one is kind of a follow on, I guess, from Ed's comments. Your kind of full-time employee growth was very consistent throughout 2022 of kind of 37% or so. Should we kind of expect this level of growth into the kind of first part of next year? Are there any regions, I guess this is more heavily concentrated or is it again, kind of across the board?
We don't really comment on the growth phase, but they can vary quarter- on- quarter and even maybe sometimes year- on- year as we saw with the pandemic. Overall we continue to expand and grow studios and add studios also during 2023 and 2024, which then of course increases the staff.
All right. Thanks very much for your time.
Thank you very much.
Thank you. Your next question comes from Martin Arnell at DNB Markets. Please go ahead.
Hi, guys. Hope you're well.
Hi.
Hello.
My first question just on the growth drivers in 2023. What drivers are you most excited about if you have to choose one or two things?
I think I'm very happy with the new games released 2022. That I we really see that. That's exciting. They were good. Many of them were mega hits in many ways. I also am very excited about Latin America now coming on and the number of players we see there and the type of games that they play is also very exciting to see. Asia as always, large markets, grows well, also exciting. But now we start to see a little bit pick up in Europe. That's also nice to see again. Africa is bubbling there somewhere around the corner or there are countries in Africa that are really interesting as well.
Interesting. The locations, the studio locations, have you decided them, the one or two new studio locations for this year, and have you started the build?
We are in the decision process right now.
Okay. What would you, I mean, are you preferring to keep it in Eastern Europe or could we look forward to LatAm or what do you expect?
Naturally, we need to get closer to all markets. There's no plan. The first question then would be, are there any plans for a studio in Asia? No, we don't have that. Latin America is of course, Europe is of course something that we need to expand capacity in.
You mentioned product as, I mean, it's obviously your key focus here and also this year, and this new game that you're marketing a little bit today without commenting too much, Staying Alive, is that a completely new version of a game show, or is it an idea built out from existing games? Do you think it could be on par with the success of your biggest game show, or what kind of expectations do you have on the game?
There will be more answers on Tuesday when the game's released.
It's an extremely exciting time now to be able to release that. It's a fabulous game. It will be very exciting. Exactly what will happen with players and how they will be received, of course, we have high expectations on that, and we think that this can be something phenomenal, but you never know.
Yeah.
We will wait with the valuation of it until release.
Okay. Fair enough, guys. One final for you, Jacob. You mentioned that you expect growth rates coming down a bit given the big base, and you've talked about that for quite some time. Is that something you experienced so far in January, in the new year?
It wasn't a comment on January, really. It's more in the year-over-year scenario where I think you see that even Live Casino we're fantastically happy with, you know, 40% growth this year. It was 50%, a little bit higher last year, or 2021. More to highlight that. Not a comment on January.
Okay. Thanks a lot for clarifying. Thanks, guys.
Thank you.
Thank you. Your next question comes from Marlon Värnik from Nordea. Please go ahead, sir.
Yep. Thank you. Good morning, Martin and Jacob. Just a few follow-ups here. Firstly on LATAM, what markets are performing well here? And also, if you open a new studio in the LATAM market, what parameters are important there?
We won't single out markets in Latin America either. We stick to sort of this, but the general comment on markets in Latin America is that they follow, of course, the social economics and the number of people living in the country. That sort of gives you the idea of where the biggest portion of players could be. That's the same for Europe or other parts of the world as the same. Large parts of Latin America is regulated or on its way to regulate. We follow that, and if we would place a studio for that place even to see exactly how and what markets to serve and what. We will look into a lot of parameters when we decide where to build a studio in Latin America.
Yeah. All right. Also just quickly here, the Ukrainian development hub, have you been impacted here for the slots development? Have we seen any delays in game developments here?
We had a large development hub or community there for slots. Of course it was impacted, but more maybe in the beginning of 2022 than in the later part. It's a tough situation in Ukraine. We feel a lot for that and we needed to offset that with our development.
Perfect. Just lastly, given the inflationary environment we see here, how should we understand the royalty rate towards operators going forward? Should we expect some pricing power from your end when renegotiating contracts given the cost inflation we see?
As usual, we want to deliver the best products ever existed to any operators, and we want to be a one-stop shop where we supply all possible content that makes a operator successful, and we don't want to use that position as a pricing power. We believe in competition, we believe in running faster, and we believe in a partnership relation with our operators.
Okay. Thank you. For now.
Thank you. Your next question is from Kiran Ganesh from UBS , please go ahead.
Hey, morning, guys.
Morning.
A couple of questions from me. Firstly, the pipeline on new studios in 2023 is lighter than that for 2022. Should we assume relatively fewer cost headwinds in that case because, you know, less of ramp-up cost, I suppose? The second question is, you still have this goal to reach double-digit growth in RNG. What's going to drive the step-up in growth? Related to that, you've done several acquisitions over the last few years on RNG. Have these fully been integrated? Are you leveraging all the sort of USPs from the different acquisitions and combining them now in your new games? Thank you.
Do you wanna start on the second one maybe, and I can take the first one?
Yeah. Yeah. I, we're happy with our acquisitions. We're not happy with the 5.1%. We believe in double-digit growth. Don't lose eyesight from the fact that we have added fundamental value and good margin and cash flow from the RNG business, and it's a great business and an addition to Evolution. I think that coming to the double-digit growth, we will be very satisfied and very happy with the RNG business.
On the first question, Kiran Ganesh, was that related to pipeline of studios, or I didn't catch the first part of what you asked there?
It was on the pipeline of new studios. I think there's fewer new studios for 2023 than 2022, assuming that with each.
I don't know that that's Great. I think, you know, we've had a quite a rapid expansion pace during 2022, as you see in the CapEx where, you know, studios development has been high through the year. I think we see that we maintain that also for next year. It's not... I wouldn't say that the pipeline for new studios is so different. Also remember, now we're soon up to 20 studios or something like that, remember that between 15 and 20. Adding a new studio or expanding an existing one is not that big a difference when it comes to the cost implications of that.
I would say that we have a high pace of expansion in 2022, and we expect to continue that into 2023. No shift there.
Okay, perfect. Thank you.
Thank you. Your next question comes from Simon Davies at Deutsche Bank. Please go ahead.
A couple from me.
Hi, Simon.
300. You added 300 live tables in 2022, and I think 300 in 2021 as well. Is 300 the magic number that we should think of in terms of capacity expansion for you?
Not the magic number, but it's roughly where we've been the last couple of years. It's not a magic number in itself, no.
No.
It could be a bit more. It could be more likely, not less.
The gap with the competition expanding to ever greater levels. Signs of your competitors.
I didn't catch you there. You broke up. Sorry. Can you repeat the question?
That the gap with your competition has ever been the evidence of your competing on price.
You break up a bit, but my. If I little bit guess, you're asking if the gap to competition is the largest ever and if it affects the pricing position for us. I will answer that, and I will say that in my belief, I think that the gap to competition have never been wider. We're adding much more games, we're adding phenomenal games. If you come to us, you will see something spectacular. Competition is more now than a couple of years back, actually only copying what we did, and to some extent, maybe not even trying to do something of their own. The gap is widening. The pricing. I think that we charge far too little for our product.
I always say that, and we should charge much more. I neither see that there should be price pressure. We deliver fundamental value, we add new games, we add new player, we add new player groups to operators. I think that it's fine. Neither I think that we should use our power to increase the price just because we can. But we're in a partnership with our operators and should continue being that.
Last one was just on, obviously it's been the key focus for M&A over the last few years. Their growth rates have been disappointing. Is it fair to assume that the focus will be on consolidating what you've got now as opposed to any further M&A in the RNG space until you can kickstart that business?
I think that the acquisitions over the last year has been truly right. I think that we've bought the right companies. I think that we actually put the cost and we increased the margin and we delivered on that, and that contribute a lot to value. I think that we are a little bit late with the distribution of ourselves. We didn't get the games out that we wanted to have out in 2022, and we're a little bit late. Besides that, we are very good shape, and we look forward to 2023 when it comes to RNG as well. For us, the mergers or the acquisitions or the M&A for us is a, it's a way to enable us to reach the position as a worldwide leader.
If a new company would occur, look at we bought DigiWheel, it's a fantastic acquisition adding value to us. Maybe there are more things like that, small or big, and then we'll consider it.
Great. Thank you.
Thank you. There are no further questions at this time. I would like to hand back to our presenters for closing remarks. Thank you.
Thank you very much for listening. It's been a pleasure to be here today, and it's a fantastic new year started. Thank you, and see you in a couple of months.
Thank you. That concludes our conference for today. Thank you for participating. You may now disconnect your lines.