– Stable revenue of more than € 1 billion
– € 194 million invested in tomorrow
– 390 new jobs in 2008
Despite difficult market and competitive conditions in Germany, the slowed down boom triggered by the new gaming regulations as well as changed business models in the core business of amusement machines with prize and the disposal of business areas such as the casino machine and casino management segment Atronic, the East Westphalia based Gauselmann Group generated revenues of more than one billion € again in FY 2008.
Espelkamp. For the family-owned company, FY 2008 was mainly characterized by the slow down of the boom triggered by the new gaming regulations that came into effect on January 1, 2006 and a change of the business models in the German core market. The sales of AWP machines included a considerably higher percentage of lease machines. On the one hand, this is due to the change of gaming machine technology from the traditional mechanical reel machines to video-based AWP machines, the so-called multigamers with exchangeable gaming packages; and on the other hand it is due to the fact that customers find it more difficult to obtain credit lines from their banks.
When looking at FY 2008, the strategic decision of the Gauselmann Group has to considered that 100 of the Gauselmann subsidiary Atronic were transferred to the US-based lottery systems company GTECH in May 2008, with whom a cooperation had existed since 2005. Nevertheless, on a comparable basis the aggregate revenue increased by 1.6 and the total business volume by about 1 %. In a nutshell: the total business volume – adjusted by the above business areas – rose to € 1.12 billion (2007: € 1.11 billion) and the aggregate consolidated revenue of the different business segments rose to € 886 million (2007: € 872 million).
Leading position in Germany maintained
Despite the continuing competitive pressure because of new international competitors in the German market the Gauselmann Group asserted its position as the leading company in the field of electronic amusement with and without prize (AWP) also in 2008. Especially the new multi-game concept “Merkur Ideal“, introduced in 2008, a unique variable basic unit that serves as the platform for various software packages with up to 60 games, proved successful and was able to reclaim market shares.
Modern entertainment concepts expanded successfully
The enhanced quality found in the modern and unique entertainment centers, about which players are thrilled because of their first class ambiance, a multitude of innovative products, and motivated staff with a genuine service focus emphatically confirmed the role of the Gauselmann Group as a driver of innovation and trendsetter. Both in the Merkur-Spielothek segment (Germany) and in the Merkur Casino segment (abroad) the consistent remodeling of arcades into modern, high quality entertainment centers continued in FY 2008. This strategy with simultaneous adjustment of the current arcade structure was completed successfully in 2008. In the last FY approximately 200 arcades were operated in Germany and 70 arcades in 9 European countries.
In addition, in connection with the new regulation of the sports betting sector in Italy 233 licenses for betting shops and outlets were acquired and opened under the “Merkur-Win” brand by the end of the year 2008. A high two digit million investment was made. Consequently, a positive and increasing business is expected for 2009 and 2010.
Complementary activities
All areas supporting the core business activities also continued to develop positively. Especially in the cash handling segment of the subsidiaries GeWeTe and HESS Cash Systems innovative technologies contributed to generating a strong growth in Germany and abroad, particularly in the banking sector.
Furthermore, the higher share of leases which helps financing the machines as well as the real estate segment contributed to the corporate success.
The systems provider BEIT that is part of the Gauselmann Group was able to acquire three companies as customers apart from its main account Gauselmann, for whom it supplies large-scale IT services.
Investment up to € 194 million
In the last FY investment amounted to remarkable € 194 million (2007: € 141 million). The focus of the investment was again on the strongly growing segment of the lease business as well as measures to optimize national and international activities. This is in particular true for the expansion of modern arcades in Germany and its European neighbors as well as especially in the new field of the sports betting business in Italy.
New occupations create additional jobs
The – adjusted – headcount increased to 5,325 in the last FY (2007: 4,996). 4,179 of these jobs are located in Germany. Expressed in FTEs the headcount increased from 4,105 in FY 2007 to 4,495 in 2008. At the end of FY 2008, 114 young people were in vocational training at the Gauselmann Group. The high number of apprentices and trainees is due to the fact that after many years of discussions, on January 1st 2008 two industry-specific occupations for the coin-op machine industry were established: Qualified commercial clerk in the amusement industry and qualified service technician for coin-operated machines. As of August 1, 2008, the family-owned Gauselmann Group recruited an additional 38 young people for these new occupations and as a result a total of 69 apprentices started at the Gauselmann Group in August/September 2008: For sure one of the milestones in the more than 50 years old history of the company.
Focus on international markets for amusement gaming, liberalized sports betting and online offer
In FY 2009 the Gauselmann Group will continue to concentrate on its strengths and on its core competencies and use its entrepreneurial power effectively in order to promote the different market segments nationally and internationally in currently almost 60 countries and at four manufacturing locations. An important basis for this are the advantages offered by the “Merkur Ideal“ concept. In addition, the expansion of the sports betting business will be the focus in countries, where this offer is legally admissible and the relevant licenses are available.
Apart from the on-site offer of AWP machines in arcades the Gauselmann Group now also focuses on the technological possibilities of the online market. In the long run, this business segment will be an important pillar of the total portfolio of the Gauselmann Group. The first steps towards a comprehensive online offer were taken in FY 2008.
European amusement machine gaming with and without prize will stay the focus of the Gauselmann Group also in 2009 and will open new growth potentials. The East Westphalia based company will use the opportunity to expand and consolidate its market share as a machine and services supplier under the label “Merkur Gaming“ in all of Europe. In the current year, the successful expansion of the entertainment center concept “Merkur Casino“ will also be widened systematically in the European markets.
The development capacities that were increased in 2008 will play an even more important role in the future in order to meet the growing requirements of the markets with additional development resources.