Gauselmann Family Enterprise Successful in 2010 Business Year

More staff and increased business volume at Gauselmann

Espelkamp. The eastern Westphalian Gauselmann Group has successfully completed its 2010 business year. The entire volume of business thereby increased by 22 percent to 1.54 billion euros (2009: 1.27 billion euros). This was accompanied by the expansion of the level of employment within the group of companies. Therefore, the number of staff increased by well over 300 to approx. 6,350 (2009: 6,002) with further increasing tendency. Furthermore, it is very pleasing that besides the volume of business also the Economic Value Added increased by 18 percent compared to the previous year. Paul Gauselmann, Chairman of the Gauselmann Group, stated, “2010 was a good year for us. We were able to convince customers with the right products and services and so were able to grow our business both in Germany and internationally!” This led to an EBIT in the upper single digit area.

Over 200 million euros invested the third year in succession

F.l.t.r.: Michael Gauselmann, Karin Gauselmann, Karsten Gauselmann, Paul Gauselmann und Armin Gauselmann
F.l.t.r.: Michael Gauselmann, Karin Gauselmann, Karsten Gauselmann, Paul Gauselmann und Armin Gauselmann
The basis for this good result is the innovation and investment process that has been ongoing for years. Thus, with an investment sum of 219 million euros in the 2010 business year, this was the third consecutive year that over 200 million euros have been invested. This was mainly financed from operative cash flow and an issued bond whose planned volume of 30 million was almost doubly subscribed.

The focus of the business activities was on the expansion and modification of the arcade network in the Entertainment Centre division, including real estate, alongside the further development in technology and software that, for example, resulted in the introduction of new gaming machines, new cabinet forms and new games throughout the world. Furthermore, major capital flowed into the rent business model for AWP’s.

National and international growth

The business activities of the Gauselmann Group are divided into three divisions. It is extremely pleasing that all business divisions – both in Germany and internationally – grew. In the main German market within the business field Merkur Division (pan-European development, production and sales division for amusement and gaming machines as well as money management systems for banks and municipalities), the Gauselmann Group was able to assert its position as the leading company in the field of electronic entertainment for amusement and gaming machines as well as corresponding service in this field and additionally was able to expand its market share with great success. Furthermore, successful sales were achieved in various European and South American AWP markets. The recently launched gold vending machine that was presented in the press as a novelty stems from the Gauselmann subsidiary HESS from Magstadt where it was developed and is manufactured.

Within the business field Spielothek Division (pan-European Entertainment), the Gauselmann Group was able to expand its leading position in the European arcade market with its brand presence “Casino made by Merkur-Spielothek”. The market leading position in Germany was asserted through the good development as well as the modernisation of existing arcades and successfully establishing new large arcades. Mostly positive developments were achieved in the ten further European countries where arcades are operated thanks to improving working conditions, the financial and economic crisis slowly coming to an end as well as the adaptation of our product range. Approx. 400 arcades were being operated in the past business year, 200 of which in Germany.

With the business division New Business Fields for the future (sports betting, internet-based games, prize games), the focus of the business activities in the 2010 business year lay alongside development of new technologies, in particular on the developments in the international sports betting markets as well as in the field of internet-based games.

Training is the central focus of the company philosophy

Training of qualified young staff in commercial and industrial / technical careers has been a matter of course for decades at Gauselmann and is evidence of the corporate responsibility put into practice by the family-managed enterprise. Furthermore, two brand new industry-specific training occupations were introduced throughout Germany in 2008 under the aegis of the entrepreneur Paul Gauselmann, namely the ‘coin-op service technician’ and the ‘coin-op specialist’. At the Gauselmann Group alone, more than 150 additional training positions have been created since 2008. With a record number of over 200 trainees within the group of companies, the Gauselmann Group has set another major milestone under the responsibility of Personnel Director Armin Gauselmann in the company history than spans more than 50 years.

Cautiously optimistic outlook

The strong investments of previous years have paid dividends in the 2010 business year and resulted in a distinct sales increase as well as stronger market penetration. The Gauselmann Group will face new challenges in 2011 due to the political discussion concerning the German gaming market as well as altered working conditions in the core German market – such as the communal amusement tax (Vergnügungssteuer) or closing times. These developments are partly combined with major risks. However, a potential liberalisation of the gaming market could lead to improved market opportunities. There are similarly advanced developments in some European countries. New private market opportunities under a stringent legal framework could develop here.