Espelkamp. After an exceptionally good Fiscal Year (FY) 2006 in the context of the new gaming regulations, the family-managed Gauselmann Group exceeded revenues of one billion again in FY 2007. The earnings were maintained at the level of the prior year. Despite difficult market and competitive conditions the aggregate consolidated revenues of the different corporate divisions increased to € 1.056b (2006: € 1.007b) with a total business volume of € 1.28b (2006: € 1.33b). Domestic and foreign business contributed roughly 50 percent each to the total revenue.
Leading position in Germany asserted
As a result of the new gaming regulations in Germany many new international manufacturers started operating in the German marketplace and have been able to win a certain market share. Despite the fiercer competition the family-managed Gauselmann Group asserted its position as the leading company in the field of electronic amusement with and without prize in Germany. On a national level the discussion and the approval of the German federal states of the interstate treaty on gaming led to tangible revenue losses in the sports betting sector.
Worldwide casino markets are changing rapidlye
The process of rapid changes in the worldwide casino markets and in the casino machine industry continued also in FY 2007. The most important market for Atronic, Russia, came temporarily quasi to a standstill due to the political activities of the Russian government and the corresponding legislation. Simultaneously, the competitive pressure in the important US-market increased. Because of these changes the companies that were affected – Atronic, GTECH, and Lottomatica – became convinced that it would be best to pool the entire responsibilities in a single company and to depart from the target of a 50:50 partnership. On January 31, 2008 the first 50 percent were transferred from Atronic to GTECH and the remaining 50 percent will be transferred some months later as scheduled, as soon as the required licenses are obtained.
Entertainment concept successfully expanded
The expansion strategy in the arcade business developed extremely positively. In addition to some 200 own arcade locations in Germany (Merkur-Spielothek) there are almost 100 entertainment centers under the brand-name MERKUR CASINO in neighboring European countries. This business segment develops particularly well in Hungary and in the Czech Republic.
Capex increases to € 137 million
In the last FY gross capital expenditure (capex) amounted to € 137m (2006: € 110m). The focus of capital expenditure was again on the machine leasing business as well as on measures to optimize national and international activities. This is in particular true for the expansion of modern arcades in Germany and abroad in neighboring European countries. In the context of the new regulations in the sports betting segment in Italy the capital expenditure is to be used for 76 betting offices and 157 sales points that are being established speedily.
New occupations create additional capacities for vocational training
The headcount in the last FY increased to 5,781 (2006: 5,493). 4,270 of the jobs were located in Germany. Expressed in FTE the headcount increased from 4,512 in FY 2006 to 4,865 in FY 2007. At the end of FY 2007, 90 young people participated in vocational training at the Gauselmann Group. Against the background of newly created occupations for the coin-operated industry requiring vocational training the family-managed company will be the first to accept an additional 30 apprentices in FY 2008.
Emphasis on European markets for amusement gaming and liberalized sports betting
The Gauselmann Group will continue to concentrate on its strengths and its core competencies also in FY 2008 and will use its entrepreneurial power effectively to advance the different market segments both on a national and on an international level. The Gauselmann Group places even greater emphasis on European amusement gaming with prize, which will result in new growth potentials. The East-Westphalia based company will use its entrepreneurial leeway to expand and consolidate its market share in Europe as machine and services provider under the label „MERKUR GAMING.“ The successful expansion of the entertainment concept “MERKUR CASINO“ is to be expanded to targeted European markets.
International liberalized sports betting and the gaming offer on the internet also form part of the growth segments.