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Gaming Innovation Group

Gaming Innovation Group

Casino and sports betting services

GIG is a young company that sells products to a large part of the online gambling value chain. It sells marketing services to other gambling operators and sells its own software platform and sportsbook to other B2C operators, as well as land-based casinos, enabling them to offer casino and sports betting services. GIG’s footprint is in Western Europe, but it also has US exposure through selling B2B services.

GIG’s opportunity within its B2B platform and affiliate business is to expand the operations by increasing the geographic footprint. Furthermore, there are M&A opportunities present in the affiliate segment.

We see regulatory risks (the firm could face litigation if it fails to comply with local laws and practices in the regions where it operates) and counterparty risk (it faces many counterparties and some customers on the B2B side are smaller firms with low levels of solidity). Although the SEK 450 million bond has been refinanced with more favourable terms and matures in 2024, this still means that there are some financial risks involved.

EURm 2021 2022e 2023e
Sales 67 88 104
Sales growth (%) 28 32,3 18
EBITDA 21 33 45
EBITDA margin (%) 31,1 37,8 43,1
EBIT adj 7 16 27
EBIT adj margin (%) 10,5 18,1 25,5
Pretax profit 0 12 23
EPS rep 0 0,09 0,17
EPS growth (%) 99,7 13979,1 82,3
EPS adj 0 0,09 0,17
DPS 0 0 0
EV/EBITDA (x) 10 6,4 4,4
EV/EBIT adj (x) 29,7 13,3 7,4
P/E (x) -2758 17,1 9,4
P/E adj (x) 424,5 17,1 9,4
EV/sales (x) 3,1 2,4 1,9
FCF yield (%) 2 -22,9 11,8
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 1,8 0,9 0,1
Lease adj. FCF yield (%) 0,7 -24,7 9,9
Lease adj. ND/EBITDA 1,8 1,2 0,3
EURm 2021 2022e 2023e
Leasing payments -2 -3 -4
Sales 67 88 104
COGS -1 0 0
Gross profit 66 88 104
Other operating items -46 -55 -59
EBITDA 21 33 45
Depreciation on tangibles -2 -2 -4
Depreciation on intangibles -14 -12 -9
EBITA 7 16 27
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 7 16 27
Other financial items 0 0 0
Net financial items -7 -4 -4
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 0 12 23
Tax 1 -1 -2
Net profit 0 11 21
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 0 11 21
EPS 0 0,09 0,17
EPS Adj 0 0,09 0,17
Total extraordinary items after tax 0 0 0
Tax rate (%) -447,4 -10 -10
Gross margin (%) 99,3 100 100
EBITDA margin (%) 31,1 37,8 43,1
EBITA margin (%) 10,5 18,1 25,5
EBIT margin (%) 10,5 18,1 25,5
Pretax margin (%) -0,2 13,4 21,8
Net margin (%) 0,6 12 19,7
Growth rates Y/Y 2021 2022 2023
Sales growth (%) 28 32,3 18
EBITDA growth (%) 93 61,2 34,5
EBIT growth (%) 181 128,1 66
Net profit growth (%) 102,5 2542,6 92,6
EPS growth (%) 99,7 13979,1 82,3
Profitability 2021 2022 2023
ROE (%) -0,8 26,3 25,8
ROE Adj (%) 5,2 26,3 25,8
ROCE (%) -2,3 10,9 16,8
ROCE Adj(%) -2,3 10,9 16,8
ROIC (%) -59,3 19,3 24,7
ROIC Adj (%) -59,3 19,3 24,7
Adj earnings numbers 2021 2022 2023
EBITDA Adj 21 33 45
EBITDA Adj margin (%) 31,1 37,8 43,1
EBITA Adj 7 16 27
EBITA Adj margin (%) 10,5 18,1 25,5
EBIT Adj 7 16 27
EBIT Adj margin (%) 10,5 18,1 25,5
Pretax profit Adj 0 12 23
Net profit Adj 0 11 21
Net profit to shareholders Adj 0 11 21
Net Adj margin (%) 0,6 12 19,7
Depreciation and amortisation -14 -17 -18
Of which leasing depreciation -2 -3 -4
EO items 0 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 18 30 41
EBITDA lease Adj margin (%) 27,7 34,2 39,8
EURm 2021 2022e 2023e
EBITDA 21 33 45
Net financial items -7 -4 -4
Paid tax 1 -1 -2
Non-cash items 0 -1 0
Cash flow before change in WC 14 28 39
Change in WC -2 -5 -3
Operating cash flow 13 22 36
CAPEX tangible fixed assets -1 -1 -1
CAPEX intangible fixed assets -9 -12 -12
Acquisitions and disposals 0 -51 0
Free cash flow 3 -42 23
Dividend paid 0 0 0
Share issues and buybacks 0 47 0
Other non cash items 1 -5 7
Decrease in net IB debt 29 8 15
Balance Sheet (EURm) 2021 2022 2023
Goodwill 16 57 57
Indefinite intangible assets 0 0 0
Definite intangible assets 33 35 26
Tangible fixed assets 0 0 0
Other fixed assets 17 17 18
Fixed assets 62 108 103
Inventories 0 0 0
Receivables 18 22 25
Other current assets 0 0 0
Cash and liquid assets 9 21 44
Total assets 88 151 172
Shareholders equity 12 69 90
Minority 0 0 0
Total equity 12 69 90
Long-term debt 39 44 40
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 2 2 2
Other long-term liabilities 21 32 31
Short-term debt 4 4 4
Accounts payable 20 21 25
Other current liabilities 0 0 0
Total liabilities and equity 88 151 171
Net IB debt 37 30 4
Net IB debt excl. pension debt 37 30 4
Capital invested 49 100 94
Working capital -3 1 1
EV breakdown 2021 2022 2023
Market cap. diluted (m) 171 182 193
Net IB debt Adj 37 30 4
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 208 212 196
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 73,9 74 64,7
Capital invested turnover (%) 112,8 138,5 149,6
Capital employed turnover (%) 125,5 185,2 230,4
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 36,1 32,9 28,9
Working capital / sales (%) -10,8 -0,8 1
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) 312,8 43,5 4,1
Net debt / market cap (%) 21,9 16,5 1,9
Equity ratio (%) 13,6 45,8 52,3
Net IB debt adj. / equity (%) 312,8 43,5 4,1
Current ratio (%) 95 156 218,4
EBITDA / net interest (%) 290,7 800,2 1183,9
Net IB debt / EBITDA (%) 179,8 89,9 8,1
Interest cover (%) 110,9 -456,3 -1798,9
Lease liability amortisation -2 -3 -4
Other intangible assets 32 40 38
Right-of-use asset 0 0 0
Total other fixed assets 13 11 8
Leasing liability 3 2 2
Total other long-term liabilities 9 10 10
Net IB debt excl. leasing 34 37 11
Net IB debt / EBITDA lease Adj (%) 184,8 123,4 26,1
EURm 2021 2022e 2023e
Shares outstanding adj. 94 116 123
Fully diluted shares Adj 94 116 123
EPS 0 0,09 0,17
Dividend per share Adj 0 0 0
EPS Adj 0 0,09 0,17
BVPS 0,13 0,6 0,73
BVPS Adj -0,38 -0,24 -0,04
Net IB debt / share 0,4 0,3 0,1
Share price 1,81 1,57 1,57
Market cap. (m) 171 182 193
Valuation 2021 2022 2023
P/E -2758 17,1 9,4
EV/sales 3,12 2,4 1,88
EV/EBITDA 10 6,4 4,4
EV/EBITA 29,7 13,3 7,4
EV/EBIT 29,7 13,3 7,4
Dividend yield (%) 0 0 0
FCF yield (%) 2 -22,9 11,8
P/BVPS 14,35 2,63 2,15
P/BVPS Adj -4,74 -6,48 -34,93
P/E Adj 424,5 17,1 9,4
EV/EBITDA Adj 10 6,4 4,4
EV/EBITA Adj 29,7 13,3 7,4
EV/EBIT Adj 29,7 13,3 7,4
EV/cap. employed 3,6 1,8 1,4
Investment ratios 2021 2022 2023
Capex / sales 13,8 14,3 12,8
Capex / depreciation 80,3 89 89,6
Capex tangibles / tangible fixed assets 0 0 0
Capex intangibles / definite intangibles 27,2 28,8 31,4
Depreciation on intangibles / definite intangibles 13,6 14 15,1
Depreciation on tangibles / tangibles 0 0 0
Lease adj. FCF yield (%) 0,7 -24,7 9,9

Equity research

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Media

Gaming Innovation Group - Company presentation with Head of IR Hessi Mocca
Gaming Innovation Group - Company presentation with CEO Richard Brown

Main shareholders - Gaming Innovation Group

Main shareholders Share capital % Voting shares % Verified
SkyCity Entertainment Group 11.0 % 11.0 % 1 Apr 2022
Sellers of Sportnco Gaming SAS 10.3 % 10.3 % 1 Apr 2022
Andre Lavold 7.9 % 7.9 % 28 Feb 2022
Kjetil Myrlid Aasen 6.9 % 6.9 % 28 Feb 2022
Jesper Ribacka 4.7 % 4.7 % 31 Jul 2021
Henrik Persson Ekdahl 4.0 % 4.0 % 1 Apr 2022
Hans Michael Hansen 3.9 % 3.9 % 28 Feb 2022
Swedbank Robur Fonder 3.7 % 3.7 % 31 Mar 2022
Symmetry Invest A/S 3.1 % 3.1 % 28 Feb 2022
G.F. Invest AS 2.6 % 2.6 % 28 Feb 2022
Source: Holdings by Modular Finance AB

Insider list - Gaming Innovation Group

Name Quantity Code Date
Nicolas Adlercreutz + 7 500 BUY 18 Aug 2021
Petter Nylander + 21 800 BUY 23 Feb 2021
Henrik Persson Ekdahl -4 869 325 SELL 22 Dec 2020
Petter Nylander + 36 500 BUY 22 Dec 2020
Henrik Persson Ekdahl -4 896 125 SELL 22 Dec 2020
True Value Ltd +4 869 325 BUY 22 Dec 2020
Henrik Persson Ekdahl + 200 000 BUY 20 Feb 2020
Henrik Persson Ekdahl + 55 000 BUY 5 Sep 2019
Henrik Persson Ekdahl + 91 743 BUY 14 Aug 2019

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