Good morning. Welcome, everybody, to the presentation of Evolution's interim report for the Q2 2021. My name is Martin Karlesund, and I'm the CEO of Evolution. With me, I also have CFO, Jacob Chaplin. 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 that, I will round off our presentation, with an outlook for the rest of the year. Then we are happy to take questions. Next slide please. I'm happy to present the fantastic development of Evolution in the 2nd quarter.
As usual, it has been a quarter with extremely high operational activity and the great result is an outcome of the hard work performed by all employees. The combination of global demand for our products, a constant pursuit of cost efficiency, together with the energy, hard work and high ambitions of all employees, all sums up to the fantastic numbers. Altogether, we reached EBITDA of €174,700,000 and an EBITDA margin in the quarter of 68%. Our live business continues its exceptional growth from the Q1. For the Q2 in a row, we grow close to 60% compared to previous year.
We're also continuing to reshaping the roadmap for RNG. And RNG revenues increased slightly from Q1, but are 2% lower than Q2 of 2020. The reshape of the road map has, among other things, created Starburst Extreme, which was released after the Q2 ended, but it's the strongest phase ever made in the history of Netland. The opportunities in the U. S.
Markets are also promising, with states becoming more and more positive towards regulation of online casino. Next in line for our U. S. Expansion is Michigan. The studio is fully ready and was approved for launch during Tuesday this week.
We are now in this practical start up start up for go live, which will happen tomorrow. A new studio will always get attention, but let me assure you that we are expanding in all our studios at the moment as demand of our products is increasing worldwide. Expanding our studio capacity means that we need to recruit a lot of new employees. The recruitment pace is high in the quarter and we hired over 1,000 new fantastic talent, the highest recruitment number ever in a quarter. At the end of the quarter, we're close to acquisition of Big Time Gaming.
Acquisition was announced early in the quarter, actually in April and BTG are one of the most innovative sludge craters in the world and we are very much look forward to start working on what we can do together. In the quarter, we also announced that we start a U. S. Rollout of lightning roulette in the land based casinos together with Scientific Games. I'm also very happy for our 5 wins at this year's EGR B2B Awards.
We took home awards for both our Evolution, NetAnt and the Tiger brands, including live casino flyer of the year, and this is actually the 12th consecutive time we win that award. Now let's look move to the coming slides and see the effect of numbers and products on all our efforts. Operator, next slide, please. After the phenomenal Q1, I'm very pleased to see the continuing strong development in the Q2 with the growth in live casino almost reaching 60% again. Let's look at the financials.
Revenue in the quarter is almost €257,000,000 increase of 100% compared to Q2 of 2020. With live revenue growth of 59%, RNG increased slightly from the Q1, but declined 2% comparing to the net and reported figures of 2020. This reshaping of the slots roadmap is going well and I look forward to the second half of
the year.
EBITDA increases from €81,000,000 to €175,000,000 in the quarter, a good increase of 115% year on year. I'm also satisfied with the EBITDA margin of 68% in the quarter. With the margin in Q1 of 67.9% followed by a margin of 68% in the Q2, we can conclude that the guidance we gave for the year of 65% will be exceeded. I expect we can maintain the current level also during the second half of twenty twenty one. 2nd quarter is a strong follow-up for the Q1, we will now act as one company after acquisition of NetEnt and we are definitely well placed to further strengthen our market share and continue to widen the gap to competitors in the second half of twenty twenty one.
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, Brat's boss is to be seen as an indicator for 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 of best spots continued in the second quarter.
The number of best spots from end users amounted to SEK 17,500,000,000 compared to SEK 11,900,000,000 the same period last year, which is the growth by 47%. Also compared to Q1, there is an increase of 2%. The effect of lockdowns, canceled sport and closed land based casinos on the demand for our products will level off as pandemic circumstances improve. At the same time, we would be able to operate with full capacity and get back to efficiency and catch up the pent up demand in life. Many of the new players that have been introduced to Life Casino during the recent year will continue to accelerate the growth in the long term.
Next slide, please. We continue to increase headcount And at the end of the period, we exceeded 11,000 in staff. We have high demand on expansion right now. There's still demand lagging from 2020 as operators have increased their traffic, but we were limited in our supply of tables. In the Q2, we added over 1,000 people and expanded in basically all of our locations.
We will continue to expand both in existing studios as well as new studios. As stated, Michigan will go live tomorrow and we will add 2 new studios in Europe by the end of this year and also expand and also add 1 new delivery studio in Canada during beginning of next year. While stating these ambitions, it's worth reminding ourselves The pandemic continues to impact our expansion plans. We continue to follow guidelines set by the countries that we act in. The overall situation is improving, but it's still very hard and I must stress the fact that the pandemic is not over.
Next slide, please. Our RNG business amounted to 21% of our total revenue in Q2 and Live represented 79%. We continue to widen gap to competitors, no one else has the product portfolio to match ours and no one adds as many high quality games. In addition to new titles, an important part of our product development is to constantly improve the gaming experience in our existing games. Securing the long term quality through continuous improvement is essential in our ambition to increase the gap to competition.
Recently, we have done enhancements for Baccarat, DreamCatcher, Monopoly and Blackjack, always with a focus to create a richer gaming experience. Blackjack is a good example where we have fine tune our interface and implemented a zooming feature on all our blackjack tables. It enables the player to clearly see the real cards dealt when playing in portrait mode on their phone. It's a neat feature that we provide as a service to our players and operators. About a week ago, we launched Starburst Extreme, a new slot title based on the iconic Starburst slot game.
We've been working hard to keep the classic features of the original Starburst that made the game so popular and then we incorporate them into an extreme version. It has been well received by players and it's so far the strongest release in NetEnt's history. Both our Red Tiger and NetEnt brands have strong lineups for the operators and players during the second half of this year. It's important to point out that we continue to innovate. An example of that is our agreement with Scientific Games to make our multi award winning live online lightning roulette game available in land based casinos worldwide.
As mentioned earlier, the combination with NetEnt will create opportunities for game development in RNG as well as live and in combination of the 2. I'm very excited about the new games that we will launch during the second half of the year as well as the roadmap for 2022, both in RNG as well as in Life. Next slide, please. On the slide, you will see some of the live games that we are launching during the second half of this year. Like previous year, we'll do some new traditional table games titles as well as more game show style games.
At Evolution, we're working hard to evolve the casino industry that has been in our DNA since the beginning. In the game show category, an overaching theme this year is to add more decision making to the player. In the early game shows, players placed the bat and then waited for the result. This year, we're adding player control to the games, games where the player can make choices during the game. Already in Crazy Time, we introduced some player choices in the bonus rounds, but this year we give the player more choices control providing a more active player experience.
I've already seen this is Gonsos Treasure Hunt that we released in June and it will also be large part of our next game show, Cash or Crash, that will be launched later this year. With these games, we are further developing the game show category and I think it will also expand to audiences for these expand audience for these games. There would be 4 new live games with an Asian flavor to them this year. Baccarat Red Envelope is already launched, a variation of traditional games that adds multipliers on Per and Thai Bats. And later this year, there is another variation of Bakker called Golden Wealth Baccarat.
Furthermore, in Q3, we will launch Backbow, a dice game in the spirit of Baccarat. And In the Q4, we'll release Fantan, a simple, very beautiful ancient game. It has been around for 100 of years and is now coming to Evolution Live. Also in the traditional table game space, later this year, we'll release Lightning Blackjack And this is the 3rd game type on the Lightning brand, a brand place I've gotten to love through Lightning Baccarat. I won't give you the details of the game away here, but it's an enhanced Blackjack experience and it's our late and it's out later this year.
These are some of the gains that will come during the coming months. Operator, let's move to the next slide, please. This slide shows the breakdown of our revenues by geographic region and it's evident that demand is truly global. We see very good growth year on year in all regions and markets. This is naturally partly by acquisition with the addition of Netland, but also our live business growth rate.
Looking at the fully organic development for Q1, we see that European regions are stable and slightly lower in UK. As we have seen during the past year, Asia and North America are growing fast. Year on year growth amounts to 133% and 220%, respectively. Also compared to Q1, both regions grow with over 20% growth quarter on quarter. It's a good potential in both these markets and expect to continue high growth rate going forward.
Other, including South America, Africa and remaining part of Roche shows a good growth of 23% compared to Q1. Revenues from regulated markets shows a growth of over 100% compared to last year and is stable from previous quarter at 40% of group revenues. I will now pass on to Jacob, who will speak more about financial details. Next slide, please.
Thank you, Martin, and good morning to everyone. We'll now move on to a couple of slides with a closer look at our financial development during the period. I'm on Slide 9. Revenue amounts to €256,700,000 in the second quarter. That's made up of 203 SEK700,000 related to our live casino product and SEK 53,000,000 from our R and G games.
As Sandrine mentioned earlier, the live casino growth has been very strong The first half of this year, we're close to 60% growth. It's a high growth rate for us. As a comparison, our full year 2020 growth in light casino was just under 50%. So the pace has picked up during this year. There's no one factor to explain the increased growth rate this year.
Mainly it shows the strong underlying growth in Live Casino with players. Then of course, we try to do our part by continuously broadening our product offering and making the games as entertaining as we can. Also, many players found our games during last year, many new players found our games. And this, in combination with our ability to add More tables this year also supports growth. So all in all, many factors contribute.
Our RNG revenue is $53,000,000 in the quarter. This is slightly up from Q1 of this year, but down 2% compared to the NetEnt reported numbers in the same quarter of 2020. NetEnt did have a pronounced spike in volumes when the pandemic kicked in during the Q2 last year. So comparable figures were high for RNG in this quarter. Our reworking of the product road map is ongoing.
And as Martin mentioned, we're clearly moving in the right direction with both the NetEnt and Red Tiger brands, So good outlook. EBITDA for the quarter amounts to €174,700,000 and an EBITDA margin of 68 Percent in the quarter. Margin level is in line with what we reached in the Q1. Our guidance for full year 2021 at the start This year was that we would reach 65 percent EBITDA margin for the full year. Of the 2 quarters with margins around 68%, we see that we can maintain That level also during the rest of the year.
So we are adjusting that original guidance from February. As you can see in the chart, we have a good scalability in our operations. We've been able to, over time, improve margins as top line has increased. Right now, we're seeing a very high demand for tables and we'll expand our operations as Fast as we can during the rest of the year, naturally considering how the what the development of the pandemic will allow. But this expansion will drive cost in the near term, but also contribute to future growth.
All this is in line with what we've often stated that our first priority is growth. Should we see an opportunity to take on cost now to capture revenue in the future, we will prioritize that even if it means some pressure on margin in the short term. To sum up, revised margin guidance for 2021 around the current level of 68%. Operator, let's go to the next slide, please. This slide shows our P and L in a bit more detail.
Walking through the table from the top, We see live revenue, again, EUR 203,000,000. This is comparable to the EUR 128,000,000 in the Q2 of 2020. RNG amounts to NOK 53,000,000 in this quarter. And like you saw on the previous slide, when we compare year on year growth for RNG, it will be We have reported net debt figures this year sorry, the reported net debt figures from 2020. So this slide is not the pro form a for 2020, just to be clear on that.
Total revenue, SEK 256,700,000 an increase of 100% compared to reported revenue same period last year. And looking at the half year figures, revenue amounts to almost €493,000,000 an increase of €250,000,000 also up just over 100%. Where over 105% is through the acquisition of NetEnt. So organic growth is 59% for the first half of this year. Moving down to expenses, also here the comparison figures 2020 do not include the acquired NetEnt business.
Personnel expenses amount to €51,600,000 an increase of €21,000,000 compared to the same period last year, includes increase in staff in operations where there's high pressure on adding tables at the moment and also in engineering and business support functions where also staff from Netland is added this year compared to last year. Depreciation amounts to EUR 18,800,000 includes about SEK 9,000,000 in amortization of intangibles related to the NetEnt acquisition. Other operating expenses include items such as consumable equipment, communication costs, consultant royalties and the line amounts to EUR 30,400,000 in the quarter. So summing up, total operating expenses totaled €100,800,000 an increase of 80 6% compared to the reported figures of the same period last year. Moving down, operating profit sums up to 100 and €5,800,000 or €900,000 I guess it's around 2.
Tax is at €8,700,000 in the quarter for tax rate of 6%. This sums up to a profit for the 3 month period of EUR 144,000,000 equals earnings per share of EUR 0.65 per share for the quarter and for the rolling 12 month period, EUR 2.11 per share. Operator, we'll move on to the next slide. Thank you. Before I hand back to Martin, a quick Look at cash flow and financial position.
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 mainly our studio construction. It's just over €5,500,000 in the quarter. Martin commented earlier on our plans for new studios and also continued investment in current studios.
We are about to launch in Michigan, but we'll Also continue to expand there in the coming quarters. Other ongoing projects include 2 delivery hubs for the whole network in Europe and also a new studio in Canada. In addition, we're expanding in almost all current locations at the moment. The blue part of the bar is investment in intangible assets and is related to development of new games and features to the platform. It's €7,100,000 in the quarter, up a bit compared to the same quarter 2020, but now also includes development Of NetDent and Red Tiger Games, of course.
Year to date, total CapEx is €26,000,000, so slightly lower run rate than our estimated CapEx for the full year of Approximately EUR 60,000,000 so we expect a slightly higher CapEx for the second half of twenty twenty one. In the middle of the slide, we show operating cash flow. Cash flow was good in the quarter, over EUR 100,000,000. The cash conversion percentage on the rolling 12 month basis is down from Q1, but still on a good level at just over 70%. To the far right in the slide, a quick look at the balance sheet.
We do add Big Time Gaming the end of the period. So and also have paid dividend EUR 145,000,000 during the quarter as well as the payment for the cash part of the payment for BTG. So the remaining cash balance at the end of the quarter is €200,000,000 at the end of the period. I'll stop there. I'll hand back to Martin for some closing words and we'll take questions after Okay.
Okay.
Thank you, Jakob. Fantastic. A few words to conclude this report presentation. Gonsa's Treasure Hunt and Starburst Extreme are the first examples of what can be created if putting great minds in the same room. Simply put fantastic innovative games and you know that innovation and products are the core of what we do.
We're always about focus on the best game experience and we have a relentless approach to always improve as a company. Looking ahead, I have high expectation on the games already released this year and I feel very excited about the lineup for the rest of 2021. I get even more excited when I look at the roadmap for 2022 and that is very positive. To go live in Michigan tomorrow is yet another important step for our continued North American expansion. However, the demand for our products is global and we need to invest in studio capacity in all our locations as well as build new ones.
In addition to our investments for the future in the form of new studios, we constantly need to stay ahead and further strengthen our market leadership. And as always, we will do our utmost to continue to increase the gap to competitors and improve our offering to operators a little bit every single working day. Thank you all for listening. Enjoy the rest of the summer and we'll speak in a couple of months again. Now it's time for questions.
So let's move
Our first question comes from the line of Ed Young from Morgan Stanley. Please go ahead.
Good morning. Thank you for taking my questions. I've got 3, if that's okay. The first one is on margins. Obviously, you've given very clear guidance around it, so I won't press the point there.
But if I look at the Cost development during the quarter, it looks like personnel costs were very well contained yet again. So up 6% quarter on quarter That's a 9% quarter on quarter revenue growth for the group. So if I think about the moving parts for why margin should stay Flattish. Obviously, the biggest growth area was other operating expenses, which I appreciate is a bit more of a lumpy cost line. What is it in that that's higher?
Is it build costs? Is it game production? Is there other areas there? And is that going to continue to sort of be a little bit outsized compared to normal in order to keep margins That is sort of flattish level in H2 versus H1. That's my first question.
Thanks.
The most important thing is, of course, for us to capture the market shares. And there will be an expansion phase coming into the second half of the year where we build and construction cost and we will recruit people before going live and expansion will cost a little bit of money. So I would say that is the reason for the margin guidance that we did now.
Okay. Thank you. The second 2 are on growth. So I think the product pipeline is a little bit more H2 skewed than normally. The netcent was pushed out a bit with the product roadmap refresh, I guess.
And it feels like the other products are slightly sort of later. So how should we think about the impact of product releases on growth compared to where you were in H1? Obviously, it was a very strong growth rate in H1. But is there going to be a visible impact from that? Or is it just maintaining the strength of the overall offer?
How should we think about the More H2Q product right now.
We made a major acquisition, as you know. It's almost 6, 7 months ago. And we act as one company already now. And we reshaped the road map. We did a lot and we put products together between slots and live and we're very happy with that.
And that means that we've pushed a little bit of the roadmap, but it also means that It takes effort to do those things. Among other things, we also completely redone the tech stack and the back end, which is phenomenal for NetEnt and where we now integrated into Evolution. So I would say that we look forward very much to H2 and we see that we have a little bit skewed, a little bit more coming out in the H2. But As I stated, I even more look forward to 2022. Understood.
And then finally on capacity, I mean, obviously, A lot of additions going in with another European studio this year, plus Canada, plus you flagged LATAM. I wonder if you could just talk a little bit about How much line of sight do you have to demand that you're the demand for the capacity you're putting in there? So in terms of Pre selling tables or is it you can just see in terms of the system that you're underserving the demand you're seeing Is anticipating where things will go. There was obviously a balance between those. But if you could just give a bit of color on sort of what lies behind the The rate of capacity additions that you're committing to?
Thanks.
We don't comment on the orders or how we are in that, but we see good demand and we see that we need to build a lot of studios during both 2021 H2 and the 2022 to actually cover the demand that we see.
I can add to that also that, of course, we're coming off a year Last year, where we really were not able to expand. So we're still many new players, all operators have increased traffic. So there It is almost a bit of pent up demand from last year that we're sort of step by step working through.
So I think
that also supports the increase in tables.
Great. Thanks very much guys.
Thank you.
And the next question comes from the line of Oscar Ericsson from Carnegie. Please go ahead.
Thank you and good morning, guys. A continued impressive performance for Live. Could you talk a little bit about what drove the strong sequential performance and market share gains in North America, especially In terms of U. S. Versus Canada, live versus slots?
Thank you.
Can you please specify what do you want to elaborate? I mean, I'm not sure
I got it. On the North American performance, which was very strong sequentially, if you could elaborate on the mix between U. S. Versus Canada and also live versus slots piece?
I think that the right now the driving for us in North America is of course United States, but Canada is also doing well, but it's still a smaller part of the market. So I would say that U. S. Is the strongest development and contributing the most. I would say that both live as well as RNG develops well.
As we stated, we have not been able to deliver as much we should with live. So there is quite a potential as we come out of the pandemic or hope to come out of the pandemic. I feel quite uncertain of that right now, but if that gives you a little bit more flavor.
Yes. Thank you. That's very helpful. And 2 more questions, if I may. First of all, how has the launch of the red envelope bonus Or Multi Tyre been received in Asia.
I know it was described by your CTO as wonderful launch. And also there, what H2 launch do you think has the largest potential in terms of growth addition? Thank you.
I can the Rettamalop, it's fantastic. We're very happy with it. I don't want to comment on the figures, but we're happy with it. It's a good launch. It's actually reshaping the Bakkara world right now.
When it comes to put one product against the other. I mean, we already stated that the Starburst Extreme is the actually the strongest release ever in that front, which is fantastic. So that is, of course, a runner-up for that. But it's hard to say which of the products that actually the player will find the most interesting.
Excellent. And then my final question from me. European markets, a little bit softer here sequentially in Q2, as also noted among operators this quarter. Apart from the U. K, are there any markets that stand out negatively, positively?
And do you see this as an Opening up effect. And if you could comment on sort of the outlook for the second half of the year in Europe as well. Thank you.
That's also a bit it's sort of a soft question in itself. But we the opening up effect is very hard to put any figure on. We stick to the comment that we did already in Q for the Q1 report 2020. But when it comes to live, it's hampering our delivery capability with COVID and on the other and the activity increases. I'm putting these together, it's neutral or maybe a notch positive.
So coming out of the whenever we do and how well we do it, coming out of the COVID for life, it would be increasing the delivery capabilities and then maybe taking down the activity a little bit and then neutral or a notch negative. That's sort of the comment on that. R and D when it comes to net and you can see it last year that there is a clear up, bump up in Q2 and then it falls back a little bit in Q3, Q4 and that might be the COVID effect. I would say it more smooth. I don't know which is what, if it's seasonality or not.
So that's where we are With that, I think that I will leave it with that.
Great. Thank you very much.
Thank you.
And the next question comes from the line of Richard Ingber from Erik Penson Bank. Please go ahead.
Good morning, guys. Good morning, Yigal. Good morning. I have two questions regarding the bed spots. First of all, if you can describe the well, the growth rate and the decline in growth rates Q on Q.
And second of all, I looked at the revenue for that, so to say, and I've noticed sequential growth quarter on quarter for the last four quarters. This is due to the mix or products or geography?
Yeah, it's like we've said a few times before, I mean, the best spot numbers is more like a rough indicator of the general activity in the network. So it's From one quarter to the next, it's not always so. We've had quarters when bad spots increased a little bit more than revenue and this quarter, it's a little bit the So I don't really have a sort of a it's hard to break it down. Also, yes, remember, bad spots are only for the live business. So it doesn't reflect the R and D activity.
Okay. And the revenue per bed, so to say? Okay. That will answer my question. Thanks.
Thanks, Ekman.
And the next question comes from Martin Arnell from DNB Markets. Please go ahead.
Good morning, guys.
Good morning.
So, Martin, you mentioned the pent up demand from last year, given the studio restrictions. Have you delivered most of that demand Head of the football euros or is it a good chunk left?
Simple question simple answer is no, we haven't.
Okay. Thank you. And then on the I mean, It's still very special times here with the pandemic, etcetera. So I think it would be very helpful if you could comment if you see any change to the top line trends in the 1st 20 days of Q3.
If I stay on the COVID, I mean, I can't see any super clear effects on COVID opening or closing or doing. It's still here. It's hampering our capability to grow. There are restrictions, there are masks, there are temperature controls, there are social distancing. That's actually the effects that I see of COVID.
And then if UK is opening more or less or Germany or this or that, I don't know. I don't see any clear effects of that.
Okay. So there's no change in the top line trend so far in Q3?
I don't see any clear effects of COVID when it comes
to that.
So we haven't we don't comment on the Just the 1st few days of the quarter. So
but We're happy with the start of the quarter. It's fantastic. We see the Starburst Extreme. I look forward to the second half of the year. It's an exciting time, but coming into the quarter in a good way.
There's a lot of positive things. But explicitly to connect that to COVID or not connected to COVID, I don't see any clear effects of COVID. It's almost impossible for even governments to see the effects of it.
Okay. Thanks for elaborating on that. And on the trading in the quarter in Q2. Was the growth evenly spread out or did it increase in the end of the quarter in relation to the football euros or was it stable throughout the
Yes, I mean, we're talking about the quarterly results, so we don't go into the separate months. I guess, we could Elaborate a little bit on the euros, which I would say this year was not that If we look back at previous championships we've had in 2016, it was it's always a driver of table But I would say then you could say that the volumes during the championship weren't really that much affected. It's You know, mainly a sports betting event. And maybe in 2018, when we had the World Cup, we actually did see, you know, not every day, but more of a pickup During the tournament as a whole. And I would say this time, it wasn't that significant.
So it's a great quarter with strong growth overall and at some level the euros contribute to that. But it's not that the euros themselves were that kind of Clear, clear, clear spike this year.
Okay. And maybe you touched upon this, but I have to ask you, the margin guidance, So 6% to 8%, that includes the BTG consolidation rights. And BTG has an even higher margin than the existing group. So how should we think about that equation?
It includes the BTG, but in relative terms, BTG is a much Smaller contribution to the margin.
Sure. Okay. But you're ramping up the staff and delivery and the studio. So that increases the cost a bit Here and you want some headwind, is that
the way we should interpret it?
Yes. I would say we are ramping up as much as fast everywhere that we can.
Okay,
great. Final question, U. S. Expansion After Michigan, is it fair to assume Connecticut and West Virginia? And finally also, when do you expect the Still doing last time.
Connecticut is a fair assumption, yes. As far as we know, we are already onto it and I don't see any runner-up that could pass Connecticut right now, but it could happen. It's a political process as always, but Connecticut is a fair assumption. We're already present in Latin in America. So there is always studios there, but we could expect to start some studio there.
But I would assume anything like that would be late H2 or maybe even 2022. 2020. Yes. Start, not live start.
You're yeah, you have operators there, but you don't have a studio there today, right, in LatAm?
We have a joint studio with so we have a studio there, yes. Okay.
Or Suzuki brand has a studio there.
Okay. Yeah, yeah, sure. Okay. And just Jacob, final, the negative change from working capital. Was that normal swing or is it anything special in there?
No, nothing special. I would say normal swings. I mean, We've seen in the past that sometimes it's a little bit lumpy development in the working capital. So I would say nothing out of the ordinary.
Okay. Thanks. That's all for me.
Thank you very much.
And the next question comes from the line of Erik Moburg from ABG. Please go ahead.
Good morning, Gents, and thanks for taking my questions. Most of them have already been answered, but just a follow-up here on the cash flow. Operating cash flow up 33% year over year, EBIT up 110%. Could you perhaps elaborate a bit more And the drivers behind this and if there was any specific region that was a cause of this?
No, it's a little bit like we just commented on. I would say, it's there's nothing really that stands out. We've I think in Looking over the year, we've seen these variations in the past. So Nothing really to add there.
So for Q3, should we expect this
to come back to normalized levels?
Yes. I mean, I think so. I mean, It's not we don't make kind of a quarter to quarter assumption, but yes, this is slightly if you look at the accounts receivable versus revenue, I Yes, we're slightly higher this quarter than what we've been on average for the past, let's say, 18 months or so. So sure, reversal to NIM is natural.
Understood. Thank you. That's all for me.
Thank you very much.
And we have one more question from Marlon Varnik from Pareto Securities. Please go ahead.
Hi, good morning, Martin and Jacob, just two questions from my side. First, on the hybrid games, on the live dealer RNG games, How will you book this going forward? How will be the split between in your reporting figures going forward?
It depends a little bit in the games that are that utilize sort of RNG IP will split a little bit in between. Gonsersquest is sort of this a little bit it goes in both categories, but it's sort of been On a kind of a game by game basis.
Okay. And then Another question also on the 2 European delivery hubs or studios you're looking to deliver in 2,001. What are you looking for when picking those locations? Would it make sense, for example, to be more closer to Asian Seakers to deliver today's in market or what's the strategy behind the locations here in Europe?
Good question. 1 of them is an expansion hub for English and one is an expansion hub for international languages. So we're looking to place 1 where we can recruit international workforce and one where we can recruit English speaking workforce.
Perfect. Thank you. Thank you.
And as there are no further questions, I'll hand it back to the speakers.
Okay. Thank you, everyone, for listening and thank you for your questions. It's been a fantastic quarter. We look forward to the second half of twenty twenty one with all activity and everything we need to do. There is a huge it's a pile of things that we need to get done during the second half.
So thank you very much for listening in. See you in the quarter.
Bye bye. Bye bye.