Good morning, everybody, and welcome to the presentation of Evolution's interim report for the Q1 of 2021. My name is Matti Kallesund, and I'm the CEO of Evolution. With me, I also have our CFO, Jacob Kaplan. As usual, I will start with some comments on our performance in the quarter. I will then hand over to Jacob for a closer look at our financials, and after I'll round off our presentation with an outlook of 2021.
And then, of course, we're happy to take questions. Next slide, please. This year started with a bang, and I want to begin to talk about what we are really doing in evolution at the moment. That is more important than the actual figures as we are building our future. And quarter 1 and the end of 2020 has been an intense with an exceptional high pace of delivery for Evolution.
I can assure you that everyone in the company will agree with me on that. It's important for me to explain that to create the figures you are about to see, a lot has to happen. The closed net and integration faster than planned, major reorganization, we are about to launch in Michigan. We have started 2 New studio constructions, we are revisiting the roadmap of both slots as well as live. We are currently expanding in each existing studio.
We're acquiring BTG, handling COVID in a total of 42 locations over the world and have one of the fastest recruitment phases of new employees ever. When I say we work hard, we do. When I say we have high ambitions, we do. When I say that we need to be better every day, we do. Evolution has a great speed forward and is built of 10,000 plus crew of fantastic talent.
I want to thank everyone for the hard work in the end of 2020 and this Q1. Now let's move to the coming slides and see the effect on numbers and products on all our efforts. Operator, next slide please. We continue the momentum from 2020 and seen a very strong start of 2021. As you've seen from the last slide, there has been a normal extreme activity level from December 2020 and through the Q1.
I'm especially excited about the focus on products and future play experiences, but needless to say, I'm also very happy to be able to state to you that the integration and restructure of NetEnt is done and delivering over expectations. I will soon get back with some figures on that. Let's look at the financials. Revenue in the quarter is €235,000,000 an increase of 105% compared to Q1 2020. That includes the acquired NetCent business for a full quarter.
Our Live business shows fantastic organic growth of 60% compared to Q1 2020. It's the highest growth rate that we have had in a single quarter since 2015 or even earlier. Slots revenue grew 6% year on year if comparing to net sales reported figures of 2020, which is in line with our expectations. EBITDA increase is 150 percent to EUR 160,000,000 in the quarter. Our EBITDA margin is 67.9% for the same period.
Other highlights in the quarter include the integration of Neta. Just 4 months after closing the deal, we have established our new organizational structure and completed our cost synergies target and closed Q1 with a run rate saving of approximate €44,000,000 This is €40,000,000 higher than the original target, and we are also about 9 months ahead of our earlier communicated timetable. With this, we'll now close the reporting of synergies. Moving forward, we will, of course, continue to work with our cost efficiency. The rapid completion of cost synergies supports a strong margin in the quarter.
It has been exceptional hard work put in by all parts of our organization to achieve this and we delivered 92% on our 100 day plan, which I'm satisfied with. But also just 1 week after the end of the quarter reported about acquisition of Big Time Gaming. This will be a great addition to Evolution and our aim to become the number 1 in online casino. In my opinion, it's the most innovative slot company in the world. It's a great fit with our culture at Evolution, always driving new gaming experience and play satisfaction.
We very much look forward to welcoming the big time gaming crew to Evolution. I'll come back to the acquisition on a later slide. All in all, I'm very pleased to be able to present yet another very strong quarter for evolution. We are definitely well placed for further strengthening our market share and continue to widen the graph to competitors. But as always, we need to work hard and become better every single day.
Next slide, please. As I think most of you know by now, that spot is to be seen as the indicator of the activity in our live network. So this has not changed and only shows the live part of the total EVO network. The positive trend with a strong increase of bed spots that we have seen through 2020 continued and accelerated in the Q1. The number of best spots from the end user accounted to SEK 17,200,000,000 compared to SEK 8,700,000,000 the same period last year, which is the growth by 97%.
In the quarter, we have invested in additional student capacity, both in North America and in other regions. However, due to the pandemic, several studios continue to operate with somewhat limited capacity. Despite that we experienced a continued strong increase in volume quarter after quarter, which is which have the simple explanation the attraction of our products. I believe that some of the toughest competition we face to our online casino products or other forms of online entertainment. Increases in our volume is partly because we have been able to develop total new games that have attracted weekly new groups of players.
Important to remember. Thank you. Next Slide 6. Due to the pandemic and the related restrictions, we operated fewer tables than planned during 2020. The pandemic still limits us in many ways, but we are even so expanding in all location as fast as we can.
As the graph shows, we passed 10,000 employees at end of the quarter. We operate for more than 20 countries worldwide and it continues to expand in our current location as well as open up in new. Just a few years ago, it was a big step for us to open a new studio and we will strive to make every new studio the best one ever, but studio expansion is today an integrated part of our operation and not a one off project. We continue to see very high demand for tables, we will continue to grow with our customers. Therefore, I expect the number of employees to continue to grow also in the years to come.
Much of our success at Evolution is due to the fact that we have managed to recruit the best talent in each market. Also with the acquisition of NetEnt, we have added great talent evolution and we truly want to create a special place to work, a place that is demanding, yes, but also a place where you can make a global impact, where you can grow. The people at Evolution today create playing experience that millions of players all over the world enjoy, the hub of cutting edge technology where you want to work if you aim to be the best. Next slide, please. With the acquired R and G business, we now have 2 legs to stand on.
Our R and G business stands for about 20 percent of our total revenues in Q1 and live down for 78%. As I already said, our live the Sino business had the highest growth rate we have ever seen or recorded in the quarter at this 60%. The growth for RNG, as also mentioned, amounted to 6%. The RNG growth is in line with our current expectations. I'm very excited about the new games that we have in line up for 2021 and also the work with the roadmap for 2022, both in RNG as well as in Life.
We have revisited everything that was on the roadmap and we will have very interesting releases coming. As a result of the releases and changes, we will have more releases in Q3 and Q4 than in Q2, and we also face a tougher comparable figures in Q2 for RNG as the Netland business saw a significant bump up in growth, specifically in Q2 2020 as the pandemic hit. We will also enhance our offering on already existing markets where we are focusing on reaching out with our full product portfolio. We will also during 2021 release new games to the live game show segment as well as new takes on traditional live games. On top of that, we are very much default in adding big time gaming games to the total roadmap.
All in all, this will be a product wise very exciting year for Evolution. Next slide, please. We announced a big time gaming deal earlier this month, as you know. As I stated then, our long term ambition is to become the world leading provider of online casino. And with BTG, we have an important piece to achieve that ambition.
BTG is one of the most innovative slots creators. BTG brings with them a very strong catalog of great games that players love. Play titles like Bonanza, Extra Chile, Monopoly, Megaways have an audience all over the world, simply a great team with great products. In addition, Big Time Gaming are the creators of Megawave game mechanic, which is featured in many of their own games, but also is licensed to over 200 games from many other providers, including our NetEnt and Red Tiger brands. We have followed big time gaming development for a long time and are impressed with what they have achieved and are very excited to join forces and to continue our journey to create a global market leader in online casino.
The deal is planned to close during the Q2. Operator, please let's go to the next slide. This slide shows the breakdown of our revenue by geographic region, and it's evident that the demand growth is truly global. We see very good growth in all our geography. This quarter, we had acquired business for full quarter, so the year on year increase is not comparable to previous quarters.
As the year goes on the comparison, quarter over quarter will be more relevant. So we will move towards a quarter by quarter comparison instead. The Nordics make up for about 7% of the total revenue. NetEnt Games are strong in this region and has been an important contributor to the increase compared to 2020. We more than doubled our revenues from the region compared to Q1 2020.
UK is about 9% of the total revenues in Q1. Also here, net of the Tiger games contributed significantly to the increase compared to Q4, but also live games have had a good development in UK in the quarter. The rest of Europe is about 44% on total. So together with UK and Nordics, about 50% of the revenues come from Europe. As we have seen during the past year, Asia and North America are growing very fast with the year on year growth amounting to 156% and 204%, respectively.
We see good potential in both these markets and expect a continued high growth rate going forward, particularly as we are a small actor in Asia and with the recent regulatory movement in U. S. And the coming machine studio. Other included South America, Africa and remaining part of the world showed good growth of 67%. Revenues from regulated markets constitutes 40% of revenues.
The increase in their share of revenue from regulated markets, partly due to NetEnt is having a greater percent of revenue come from regulated markets, but also to the growth in the U. S. For Life. I will now pass to Jacob, who will speak more about financial details. So next slide, please.
Thank you, Martin, and good morning to everyone listening in. We'll now move on to a couple of slides with a closer look at our financial development during the period. I'm on the slide titled the financial development. As you see in the slide, revenue amounts to €235,800,000 in the first quarter. That's made up of EUR 183,700,000 related to our live casino product and EUR 52,200,000 from our RNG games.
The acquisition of Net Net was completed in December of last year. So Net Net, of course, included for the full quarter for the first time in this quarter. As Martin mentioned earlier, it has been a great start to the year. Our Life Casino business has organic growth of 60% year on year in the quarter. We achieved almost 50% growth for the full year 2020.
So we did have a very good momentum coming into 2021. The growth on this having said that, the growth in this quarter, I would say, is on the high side compared to my own expectations from a few months ago, and it's a combination of many factors. Many of our operators have a good momentum in general with the live product attracting increasing number of players. We continuously building our product portfolio with new games And also the pandemic has given a boost to all forms of online entertainment. So many, many factors contributed to the high growth in the quarter.
Our R and D business is developing according to our expectations and plans. Comparing to net and reported numbers Q1 2020 growth is about 6% in The quarter. In the near term, we do come up a bit against tougher comparable figures as Net Hand had a clear spike in volumes in the Q2 of 2020. But as Martin mentioned, we believe that we have a very strong lineup of new titles, especially during the second half of twenty twenty but I have low expectations on RNG growth in percentage terms in the Q2. EBITDA for the quarter amounts to EUR 160,100,000 and an EBITDA margin of EUR 67,900,000 in the quarter.
The good revenue development also affects the margin positively, of course. Also, we have been able to complete our planned cost synergies ahead of plan. I'll come back to cost synergies on the next slide. So our guidance for full year 2021 was that we would reach the 4th Quarter of 2020 level for EBITDA margin for the full year 2021, which as you can see in the slide would mean 65% for full year 2021. We're only a few months into the year now, so we will not revise that statement.
And as I'm always thinking of, I mean, many things can still go wrong. But with the good start of the year to the year and the complete Cost unit is fair to say, but there is some upside to that guidance from a few months ago. So it's for sure a good start to the year when it comes to margin. Also worth reminding in the context of margins is that our first priority is the top line growth. Should we get a chance to expand more To capture more revenue, we will prioritize that even if it means a hit on the margin in the short term.
So that's that statement is still valid. Okay, operator, let's go to the next slide, please. So a few more words about cost synergies. Our original statement when announcing the Odfjell Furniture and Fortis, we would achieve EUR 30,000,000 in annual cost synergies compared to the Q1 'twenty cost base, which was the latest reported figures at the time of announcement. That's what's shown to the left in the slide, total of euros 28,400,000 for the combined group, whereof euros 27,400,000 was reported by NetEnt and the remainder was the evolution cost base at the time.
The synergies included about EUR 50,000,000 of previously announced savings by NetVen in connection with the acquisition of Red Tiger earlier in 2019. So when reporting the Q4 figures in February, we increased the target to an annual run rate of EUR 40,000,000 And that level has now been achieved even a bit above that as the €10,900,000 reduction in the quarter is a run rate close to EUR 44,000,000 annual run rate. During the year, we have, of course, also had increases not related to the acquisition as Our live business has expanded. We've added tables, new studios and so on. And the €8,200,000 increase in that part of business Can be compared to the organic increase between the Q1 'nineteen and the Q1 'twenty for Evolution, which was about EUR 7,600,000, so relatively normal increase if we look historically.
Altogether, that brings us to the reported operating expenses, excluding depreciation, this quarter of 75.7 €1,000,000 So as Martin mentioned, we will definitely not stop our efforts for cost efficiency when it comes to the integrated business, but we will not track Synergies separately, it will be part of our normal operations. All right, operator, let's go to the next slide please. So this shows our P and L in a bit more detail. And just walking through the table from the top, we see live revenue almost €184,000,000 was mentioned, and that's comparable to the €150,000,000 we reported in the Q1 of 2020, so 60% increase. RNG revenue amounts to EUR 52,000,000 and when we compare our year on year growth in RNG during 2021, It will be against the reported net Net and for 2020, just to be clear on that, but you see that in the slide.
Total revenue moving down is €235,800,000 increase of EUR 120,000,000 compared to the same period previous year. Moving down to expenses. Also here the comparison to 2020, of course, includes the acquired NetEnt business in this quarter, but not in the January to March 2020 period. As we have stated earlier, our intention was always to integrate the 2 companies. So while we do report revenue by product line, we will not attempt to separate the cost base into live and RNG.
So that will be one where yes, just one segment. Okay. Going through the expense lines there. Personnel Assets amounted to EUR 48,800,000. That's an increase of EUR 10,200,000 compared to the same period last year, Includes increasing staff, both in operations as we're continuously adding tables and also in our engineering and also administrative functions.
Both include additional staff from net debt now included for the full quarter. Depreciation
amounts to
EUR 18,500,000 that includes NOK 8,900,000 in amortization of intangibles related to
the Nesen acquisition.
Next line, other operating expenses include items such as consumable equipment, communication costs, consultant, royalties. The line amounts to SEK 26,900,000 in the Q1. So summing all that up, total operating expenses of SEK 94,200,000 and operating profit sums up to EUR 140,700,000. Tax is at EUR 8,700,000 in the quarter. It's a tax rate of 0.2 percent.
And all this equals a profit for the 3 month period of EUR 132,000,000 And that equals an earnings per share of EUR 60 per share for the Q1 on a fully diluted basis, and that's an increase of 100% compared to Q1 of 2020. And for the rolling 12 month period, EUR 1.83 per share. All right. Let's go to the next slide. Before I hand back to Martin, a look at cash flow and financial position.
So starting to the left in the slide, the chart shows development of capital expenditure. The gray part of the bars represent investment in tangible assets. This is our studio construction mainly. It's just under €7,000,000 at €6,900,000 in the quarter. As we stated earlier, we maintain a very high pace in our expansion of both current studios and also new studios.
For the remainder of '21, I expect at least this level of investment in studios, possibly increasing some during the year. The blue part of the bar is investment in Intangible asset and it's related to development of new games and features to the platform. It totals EUR 6,200,000 in the quarter. This is up from previous quarters looking at 2020, but of course now also includes the net debt development of new games. Total CapEx for the full year 2020 was around €37,000,000 For Q1 'twenty one, the total €13,000,000 as you see in this slide, and we will increase some during the year.
So our estimated CapEx for the full year 2021 in total is approximately €60,000,000 right now. In the middle of the slide, moving on to the next chart, we show operating cash flow, cash conversion at a good level, nearly 80%. And to the far right in the slide, I look at the balance sheet. No major changes since year end. The dividend for 2020 of EUR 145,000,000 Will be paid today actually.
So that should be in progress as we speak. All right. I'll stop there. I'll hand back to you, Martin, for some closing words and we'll Questions after that, Martin?
Okay. So operator, next slide, last slide, outlook for 2021. Thank you, Jacob. I'm very pleased to conclude a very strong quarter. Looking ahead, I feel very excited about the new games that we have in line up for 2021.
At the end of the Q2, we will release the 1st gain coming up out of the cross functional collaboration between Live and RNG provide, and it's the Gonsos treasure hunt. We look forward to that. In addition to product development, we continue to invest for the future in form of new studios. As stated, we will during the Q2 open our new Michigan studio and we as we already see very good development of our RNG games in Michigan, Adding live will be very exciting. We've entered the year with a good momentum and equipped with the extended product portfolio and talent following the completion of the NetLoop acquisition and the coming completion of BTE, I look forward in 2 sessions to the rest of the year.
We'll continue to push boundaries and create the best games with the highest player and payment value for the future. We need to inspire our current as well as future players by new fantastic games, as simple as that. Evolution's core is based on shared desire to win and to collectively constantly push ourselves to the next level. As paranoid as ever, We always want to do better and increase the gap to competition. With that, I want to thank you for taking your time to listen.
And now let's move to questions. So the last Slide please.
Okay. Thank Our first question comes from Ed Young from Morgan Stanley. Please go ahead. Your line is open.
Good morning. Thank you for taking my questions. Obviously, a very strong quarter. So I sort of think that speaks for itself in some regards. I'd like to ask 3 slightly longer term questions, if that's okay.
So on the first one, the net end road map, can you talk a little bit more about the changes there? It seems like a relatively recent decision. So what have you discovered in the last 4 to 5 months remaining in the business that required a sort of change in direction? And would it be fair to describe that change as quality over quantity?
We aim to do the best slots in the market. We have that aim, that ambition. And looking at the slots, I think that there are a number of things that we can do better with NetCent. There's been some limitations and maybe a little bit more look into the volume rather than the quality. And now we're changing that a little bit and adding the right things to make the best slots.
We often talk about like, okay, we want to make when we release So it should look like, okay, this can be top 5 in the world 2021. And that's sort of where we're aiming. Are we going to do? Are we going to succeed with that? Of course, not every time, but we have that ambition.
So the changes are in line with that.
Okay. And then second of all, I'll start with I'll start the question by acknowledging it's very clear from your comments The acquisition of BTG appears to be about innovation above everything else. But having said that, do you believe there is any kind of tension between Your ambition to become the biggest and best online casino supplier and operators wish not to be beholden '21 supply, I. E, would you consider requiring more slots companies? Or would at some point there be dis synergies from doing that?
And if they would, how should we think about M and A targets if you continue to grow your cash
That's actually more than one question, I would say. The first and this is like sensitive to say, but I want us to be the best company in the world. And that is not an arrogant statement. It's done with great I want to be humble saying that, but I cannot understand why we can't be that. And it's ambition, it's ambition.
That's where we're going. Included in that is that we want to work with our operators. We want to expand the market and do good things. So I want our operators to see us a partner doing good things and having a good relation with them. So we don't that is important.
That's a little bit common to the size and the power that we have and so on. So that's the answer to that. The Buy BTG is about the innovative power and the team and the great people that work there and what they have created. And we were picking we looked at BTG for a long time and I would even Also, humbly, so I'll say that we know them a little bit by now and we will pick it when we choose them. So that is the way we look at mergers acquisitions and what we are doing.
We're scanning the market. But right now, the focus is to take care of what we have and treated that, that works out well.
Understood. And my final one, just obviously, you talk regularly about the importance of extending The capital competition, if I look at some of your competitors, they're not just sort of copying themes or concepts. Some of their games look like the studio is in the next room to yours. Some of the interfaces are Copied almost exactly. So in terms of defending IP, what are you doing and what can you do to ensure that the innovation you're doing gets The best return and the gap to competition is maximized.
Thanks.
Stealing is never good. We've stated that before. But the true answer to that is that we want to develop. We want to be innovative. We want to move the boundaries further, and we want to be part of digitalizing the online casino market.
And I think that we need to get the industry to understand that, That is a common goal that we have together and taking and copying from each other is not pushing that boundary. We need to be innovative, everyone in each part. So I would rather look at it in that perspective than in lawsuits and other.
Okay. Thanks.
Thank you. Our next Question comes from Martin Lano from DNB Markets. Please go ahead. Your line is open.
Good morning, guys. Good morning.
I will start up with a question on the organic growth acceleration here. You've been at 50% for a while. And now you're up at 60%. I mean, what's changed here? Just in order to try to understand The higher rate in Q1.
We continue to see the global demand, as we've talked about. And that comes out in Q1 in a very good quarter and we see everything moving in that direction. We grow in all markets. We're expanding in all studios at the moment and it all comes down to that. It's rather A lot of things happening at the same time then to single out one single thing.
Okay. And any are there any regions or market that you want to single out as especially important of the acceleration in the growth?
I wouldn't do that. I would say that Europe is growing 2020, very good. Asia and North America is growing fantastically well. We also don't see like we're now engaging a little bit more focus in South America and Africa, and that's early, early days, but also interesting, yes.
And Martin, when you look into the start of the new quarter, Q2, I mean, Would you say you had a good start and that this level is sustainable? Or are you more expecting coming back to 50% level.
It's too early to state anything about Q2. And I think that we should say that 60% growth on the size we are is a very, very good quarter in Q1.
Okay. And the upcoming Reopenings in many of your markets. How would you expect that to impact your growth? I understand the comments on RNG. It was boosted in Q2 last year, but I'm thinking mainly on the live side.
We're working hard with the expansion right now, to say the least, and to see that we get back. I mean, we lost time with the pandemic. But then the activity level increased and the statement is still valid that we made in 2020 that, okay, activity level increased, we hampered the operative capabilities in evolution, and it came out neutral or a little bit positive. So of course, going back to the other direction, we expect the same.
Yes. And on capacity utilization in the studios for the dedicated Where are you now compared with Q1 last year before the pandemic?
I would say we're as we said already in Q4, we're back with the same number of tables Then as we had pre pandemic, and then we've increased some from that. So I would say compared to pre pandemic, we're it's More or less back, I would say, even a little bit expanded ahead of that. So we were kind of Because they were in that regard, we're not so much comparing to pre pandemic anymore. It's more kind of from how we take it from here.
And at the same time, you've increased your studios' capacity during this period, right?
Yes, for sure. I mean, added studios as well. So yes, absolutely.
And just on the margin discussion for the full year, You mentioned that it's only a few months into the year, so you didn't want to revise that statement. And you said that There are still many things that still can go wrong. What could this be
in your world?
It's hard to paint the picture of what's gone wrong, but anything can happen. As we stated now, we see an upside on
the earlier guidance. That's where we are right now.
Okay. Just to add to that, Portisabeth, I mean, when we have a very good Quarter on revenue, that also comes through on margin. So if that's a little bit exceptional, I would say that also brings margin up. So I wouldn't yes, it of course, it looks compared to where we were a couple of months ago when we sort of had the 65% Idea for the year. I mean, there's an upside to that even though we haven't stated the number.
Okay. Thank you for confirming that. And final question I have is on your U. S. Expansion.
Can you comment a little bit on how is it going in New Jersey and Pennsylvania The upgrade of the product and also Michigan, how is the construction going? When do you expect launch there? And finally, how about your preparations for new states?
Thank you.
It's a bit deep, but We're doing fine in U. S. We're expanding in all studios, and we expect to go live in Michigan during Q2.
Okay. Thank you.
Thank you very much.
Thank you. Our next question comes from Oskar Erikssen from Carnegie. Please go ahead. Your line is open.
Thank you, and good morning, guys. A lot of questions have been asked already, but a few from me. First of all, starting with Net Then could you discuss a little bit Metals market share in Michigan compared to Pennsylvania and New Jersey? Also,
how do
you see slots and live competition developing in the U. S. Ahead? Would also be interesting to hear your take on BTG's U. S.
Expansion? Thank you.
The market share for NetSolent in all of the states is very good. I don't have the figures exactly what market share. They are actually public. So I don't have them in I can't comment on it right now, but it's a very good market share for all. And of course, with strange thing, our position with the BTG acquisition in U.
S, having one of the strong games portfolio there as well. Going forward in U. S, I mean, it's an open market And you need to deliver the best games to attract the players, and we believe we have that. So We have a good market outlook for RNG slots in U. S.
And have a big market share in each state operating right now.
Got it. And regarding the further sort of state 5 stage rollout in the U. S, anything new to share there? Any new markets that you see Potentially and over the next 1 to 2 years, open up.
It's always a big guessing game from everyone because no one really knows. But The states that are sort of in the discussion now would be Indiana, Illinois and Connecticut. And then I would say that They are running a little bit side by side sometimes and these things are happening. And right now, Connecticut is the upfront runner and Someone would expect that that would regulate somewhere 2021 or 2022. But there, my guess in total is as good as anyone else.
Understood. And then a question on the margin side, I suppose. So you went through the synergies from NetEnt, which seems to be already ahead of the SEK 40,000,000 pace. But you see further potential there in coming quarters And were Q1, was that the full run rate? Or have you done stuff in the quarter as well?
I can answer that. I mean, we've as I said, we've completed the planned synergy initiatives are completed. Then of course, as in any business, we continuously look to do things more efficiently and improve and find better. So that We will continue to strive for that and there are things going on. But in terms of synergies, we're kind of closing that project as of now.
Understood. I'll leave it at that for now, at least. Thank you.
Thanks very much.
Thank you. The next question comes from Marlon Danek from Pareto Securities. Please go ahead. Your line is open.
Good morning. First of all, I mean, well done for the Q1 figures here. First, an upsell performance question. It's kind of 3 questions in 1. If you can just comment briefly.
The German market performance during the quarter, the live craft U. S. Launch and maybe also on the Asian growth drivers In the quarter. So Germany like U. S.
As well as Asia?
Germany is we don't have any further information and of course everything is sort of going down there for the time being. So that's the comment. And we'll get back as soon as we know a little bit more and what will happen with the revenues and other. So we as everyone else took a hit or whatever you call it for that. Asia continuously to grow.
We're still a small player. Market is big, as you know. We continue to see great potential in that market. What was the middle question? Kreps
launched in the U. S.
Working on that, that's a regulatory aspect and we don't have any dates for that yet for the Krebs.
All right. And the question also on big time gaming. I mean, I understand you will continue to provide competitors Megawatts and Megastr Mechanics. Will there be any change in BGG business strategy here? And what's the reason to continue to price and not have it In house as competitive advantage?
No, we won't change the business strategy when it comes to megawaves. It would continuously be provided to other slots as well. So we will be provided to other slots companies on the backbone of that. And we think that is a good business model and it will work.
And what's the B2G growth drivers here as you said for next 1 to 2 years? I mean, for example, how broadly used is the megaclasses compared to megawatts?
I wouldn't go into the potential in MereClusters compared to Megawave, Mere plus is also a good game mechanics, of course, and we hope to do even more like that. Of course, we see potential to take BTG into our network, which is bigger than the current distribution channels that BTG have alone.
Okay. All for me now. Thank you.
Thank you very much. Thanks, Karl.
Thank you. The next question comes from Kiranjut Grewal from Bank of America Merrill Lynch. Please go ahead. Your line is open.
Hey, good morning guys. Just a couple of questions from me. You spoke about the EBITDA margin target And you're likely to see upside from the earlier guidance. Are you also considering BTG when you've mentioned that? Or is that another bolt on to that bigger?
No, no. Sorry, go ahead.
Linda, continue. You can answer.
Yes, definitely. But no, it doesn't consider BTG. I mean, the deal has not closed yet. So we'll wait for that to close until we kind of incorporate that in our Got you. So that's for as we are today.
Okay. Perfect. The other one is around new studios. Could you maybe talk a little bit more about the new studios to come? Are you targeting any specific regions through those studios?
I know in the past you've said Maybe the Asian focused studio, and I know you're building out in other regions as well. So is there any sort of skew for that in terms of what you'll be offering? In terms of the U. S, this is last question. We've often talked about how Blackjack is the most popular game in the U.
S. Are you seeing any sort of successful cost flow into your other games that are more scalable? And what's the sort of trajectory for more Game show games being rolled out in the U. S?
Okay. As I stated, we are building 2 more studios right now. We're standing in actually every studio we have. So we are on our route to increase supply to see that we can fulfill the demand that we see. I stated earlier during the call that We are expanding in 1 building 1 studio in Europe and building 1 studio in North America.
And to be clear on that is that the studio in North America is to supply current demand and it's not the new state, it's applying to demand that we see. It's a constant struggle right now. COVID is still here. It's still difficult to both recruit and manage health for our employees, of course, goes first, there's social distancing and a lot of things. So we need to see to that we can demand.
On top of that, of course, we're also seeing that we'll build a network of studios where we can have redundancy and be more resilient to other situations like the ones that we have right now with COVID, learning from that. So That is also important to see. When it comes to more products in U. S, we're constantly working with the regulators. That's a new area for them.
So it's a bit of a it's always a bit of a not a challenge, it's more like a bit of work to get it done and we're on to that so that we can launch all the products we want to launch in U. S. I hope to be able to tell soon when we're launching what, but a constant work that
we do.
Okay, perfect. Thank you very much.
Thank you very much.
Thank you. There appear to be no further questions. I'll return the conference back to you.
Okay. Thank you very much for listening and taking your time and see you
in the quarter. Bye. Bye bye.