Evolution AB (publ) (EVO) Earnings Call Transcript

Good morning, and welcome to the Evolution Q4 2022 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Mr. Martin Carlesund, CEO. Please go ahead.

Good morning. Welcome everyone to the presentation of Evolution's year-end report of 2022. My name is Martin Carlesund, and I'm the CEO of Evolution. With me, I have our CFO, Jacob Kaplan. I will start with some comments on our performance in the quarter, whereafter I will hand over to Jacob for a closer look at our financials. After that, I will round off our presentation with an outlook for the rest of the year. And at the end, we will open up for your questions. Next slide, please. I'm very satisfied to be able to present yet another strong quarter, which concludes a successful 2022 for Evolution. As always, operationally, it has been a very hectic year for us, and in the fourth quarter, we continued at the high pace from the previous quarters. We continue to see strong worldwide demand for our products in live casino. Both existing, as well as new games launched during the year, continue to attract new players, but also new playgroups. We can also now notice how different parts of the world have initially slightly different preference when they begin their journey within Evolution. At the beginning of the year, I spoke of 2022 as a year of the product. I think 2022 has lived up to that billing. In the quarter, we have further expanded our North American footprint with the launch of a third studio in New Jersey to support the growing demand there and the build-out of the new studio will continue in 2023. We're also gradually starting to expand our games portfolio in North America, after the launch of Craps in Pennsylvania last quarter. And we finally also launched the fantastic new game in New Jersey in Q4. In addition, the new studio was launched with our newest game called Football Studio. Furthermore, we will shortly also launch Mega Ball with the British Columbia Lottery Corporation, with the other Canadian lotteries to follow. This will be the first real lottery game launched with a lottery in Canada. In January, we also went live with the Canadian province in Saskatchewan. Things are also moving within slots. Red Tiger, the first game supplier to introduce timed jackpots in North America. Timed jackpot is a mechanic for slot games that allows operators to set up the progressive jackpot that are guaranteed to hit before a certain time. In the fourth quarter, Red Tiger launched these unique timed jackpots games in Connecticut, Ontario and Quebec. And a week ago, they were launched in Michigan, and has been an instant success. At the end of the quarter, we had over 1,300 tables live, resulting from an increase of over 300 tables during the year. The high demand for our products means that we must expand in existing studios and the new ones to keep up the pace. We will continue to increase our studio capacity also during 2023. During the second quarter last year, we launched new fantastic lobby and since then we have rolled it out. And now in January, the transition to the new Smart Lobby was completed for all customers. The lobby's recommendation engine powered by artificial intelligence assured that the players will always get the content best suited to them. The recommendation engine gets smarter every time the player enters the lobby. And our goal with the new lobby is simple, to help players quickly find a game that they will enjoy. The new lobby is smart, powerful and personalized and it does definitely enhance the playing experience for the end users. During the year, we have faced difficult macroeconomic environment with war in Europe, increasing cost levels and pressure on supply chains, which has put pressure on our margins. But even throughout the year, we have continued to invest in growth. This year, as always, our main priority has been to continue to serve an ever better experience with the all-fantastic new games as well as enhanced existing games. With that backdrop, we delivered an EBITDA margin within the guided range for 2022, despite the cost increases we have faced this year. In 2023, cost efficiency will remain as important as in 2022, and our efforts to increase efficiency and throughput will continue. We round off 2022 with a strong financial result and continue the new year with fantastic line of new games and a strong momentum, which makes us well placed to further strengthen our market share and continue to widen the gap to our competitors. Now let's move to the coming slides and see the effect on numbers, on products, on all our efforts. Operator, next slide, please. Our financial results for both the quarter as well as for the full-year 2022 are strong. Revenues increased by 36%, both in the quarter as well for the full year. EBITDA increased by 35% to EUR 279.5 million in Q4, corresponding to a margin of 68.6%. For the full year, the EBITDA growth amounted to 37% and reached a margin of 69.2%, in line with our guidance of 69% to 71% for the year and an increase compared to full-year 2021 -- 2022. Hard with the years now, when we are in the beginning of '23. Live casino delivered very satisfactory growth of over 41% in the quarter and for the full year. RNG revenue amounted to EUR 72.5 million, a growth of 15.3% in reported numbers. The growth in the quarter compared to the combined revenue of Evolution and Nolimit City for Q4 2021, the pro forma growth of RNG amounted to 5.1%. As earlier communicated, we have a target of double-digit organic growth in RNG. Moving forward into 2023, the path to our goal within RNG will not be linear, but we look forward to 2023. We will double the releases of our national brands, add new bonusing tools for slots and increase distribution for slots through OSS. Our EBITDA margin guidance for 2023 is 68% to 71%, and we have widened the range to 1% as a result of the uncertainty of the macroeconomic situation in the world. It is, as always, important to state that the investments will continue to be high and our main priority is to continue to grow. And as always, in a trade-off between growth and margin, we will always opt for growth. Important also to note that the Board proposed the dividend of EUR 2 per share for 2022. This is in line with our policy and slightly above 50% of net profit. All in all, fantastic numbers, and I'm very pleased with our financial performance in the fourth quarter and we are definitely well placed to deliver a strong 2023. Operator, next slide, please. Expanding our studio capacity means we need high recruitment pace. And in the quarter, we increased the number of Evolutioners with 1,100. The increase in staff in 2022 amounted to 3,600, adding to over 17,000 Evolutioners at the end of the period. Evolution is a truly global company. Our products can be played in most corners of the world, and our employees are a good mirror of that global reach. And at the end of the period, we had over 100 nationalities employed all over Evolution. We will continue to increase headcount during 2023, as we expand in our studios and we will continue to consider diversity as a strategic advantage and a key asset. It is accreditation for Evolution's operational excellence. I'm very proud of all our employees and the work ethos they show in their daily work. They make up a fantastic company. Next slide, please. Last quarter, we replaced bet spots as a national player activity on our network and replaced it with game rounds. The bet spots slide was only related to live games and by that did not cover the whole network and simply had played out its role as a performance indicator. Game rounds index instead shows the development of the whole Evolution network and includes all games. A game around is what it sounds like, one round of a game, one round of Roulette, one hand of Baccarat or one spin of a slot, all count as one game round. There are still differences between games and, for example, since the hand of Blackjack takes longer time than a spin of a slot, each game round of Blackjack typically carries a higher bet. So, all game rounds are not equal in value. In the short, the index values for game rounds from Live and RNG and others are weighted according to revenue contribution. This gives us a joint index that includes all games based on equal revenue contribution. Game round index will over time give a better view of activity in our network. This index will not correlate exactly with the revenue each quarter. As you can see, in the chart, activity has remained high in the quarter, over 70% year-on-year growth for the second quarter in a row. One reason for the high growth in game rounds compared to the revenue is that we are adding many game rounds from new markets that typically have a smaller bet size. So activity increases more than revenue. Still, increased activity in the network is a very positive sign and will contribute to growth in the future. Operator, next slide, please. This slide shows the breakdown of our revenues by geographic region. It's a very good growth year-on-year in all geographical markets, and it's evident that the demand is truly global. Year-on-year growth in North America amounted to 66%, with the highest growth rate of all regions for the fourth quarter. For the full year, the growth amounted to 65% compared to last year. In Asia, we saw a continued strong growth of 50% year-on-year and a growth of 67% for the full year. We see good potential in both these markets and expect a continued high growth rate going forward. Europe as a whole, including UK and Nordics, showed a good growth of 7% in the quarter -- quarter-on-quarter. European markets in general have a slower growth than North America and Asian -- North American and Asian markets due to both regulatory changes, as well as the -- that they are more mature. It's worth noting that this table does not include pro forma figures of the growth year-on-year. So to some extent, it can be attributed to acquisitions. Other, including Latin America, Africa and remaining part of the world, shows a very good growth of 61% year-on-year. In this market segment, it is LatAm that is the main driver for growth. Share of revenues from regulated markets amount to 40% in Q4. Next slide, please. Products -- most important thing, products. In 2022, we grew the Evolution Live offering significantly, further widening the gap between Evolution and our competitors. One year ago, I said 2022 would be the year of the product and set a goal for ourselves to deliver 88 new games in 2022. It would mean a record number of releases from Evolution in one year. We did it. I'm very proud of all the people within Evolution Group that made it happen. In 2023, we will launch over 100 new games. I think it's fair to say it will be yet another year of the product. Among the new games in 2022, XXXtreme Lightning Roulette was an out of the gate success. MONOPOLY Big Baller is another mega hit. And I'm happy to report that the original MONOPOLY Live continued to see good increase in player numbers, even after the launch of Big Baller. The third exceptional game to point out is this live slot, Crazy Coin Flip, a truly unique game that combines slots and live show, entertainment and the game found a very large audience. I'm excited to do more in 2023, combining the worlds of live and slots. In the fourth quarter, we launched 2 new and exciting football team games, Football Studio Dice and Football Studio Roulette. Another game in Q4 was the Free Bet Blackjack, a variation of our classical Blackjack, but what makes the version different are the exciting Free Bet. Also new in the quarter is the gripping experience with Dead or Alive: Saloon, a card game set in a fantastic Wild West saloon-style environment. Actually, the studio I showed you on the cover of the Q3 report presentation, if you remember. While we want to see more in RNG, we have released many very good games also in 2022. During the fourth quarter, one of my favorite is Dead Canary from Nolimit City. Other releases in the quarter, as you can see in the slide here, are in the Rabbit Hole from Red Tiger and Cupcakes from NetEnt, but there were more. We will have a very high focus on RNG [ vertically ] 2023, and we will do everything in our power to deliver the best and most innovative slots in the world this year. Now, let's say just a few words about the roadmap for 2023. Operator, let's move to the next slide. Yes, products, 2023. Exciting 2023. Here on this picture is a sneak peek at one of our launches at ICE next week. It's one of our headline games in 2023, and the most technically complex game we have ever built. It's the largest and most spectacular game show we've ever made. It's a strikingly beautiful studio and a bonus and multiplier extravaganza. End users will see something they have never seen before. I won't get into details, as it's released on ICE, but I'm very, I would say, even extremely excited to bring this experience to players across the world. 2023, we have a great variety and innovation amongst existing releases, both Live and RNG from all 7 of our brands. We will show some, but not all of what we are having in store for players next week at ICE. Looking forward to see you all there. At Evolution, we always strive to be a little bit better every day. So, of course, 2023 is going to be our strongest product year ever. End-user entertainment and satisfaction is what will be the future, not only 2023 or 2024 or 2029. It's the ultimate goal for all of us trying to make a difference every day. We need to stay on our toes, breaking boundaries, create what others dream of and think it's impossible. We can never stop. We need to relentlessly continue to create Evolution's future. That's what all of us at Evolution is doing every day, trying to create what are the [ 3 moats ] and that is called ambition, hunger and energy. That is why all of the 18,000 employees of Evolution should be proud. With that, I'll pass on to Jacob, who will speak more about financial details. Operator, next slide, please.

Thank you, Martin, and good morning to all of you listening. We now have a couple of slides with comments on our financial development during the period, and I'm on Slide #9. Revenue amounts to EUR 407.5 million in the quarter, that is made up of EUR 334.9 million related to live casino and EUR 72.5 million from our RNG-games. Live casino has had a very strong performance throughout this year, or 2022, I should say, and shows a strong development also in the fourth quarter. Year-on-year growth is 41% in the final quarter of the year, and 42% for the full year. As Martin mentioned, we see year-on-year growth in all regions and have also been successful with several strong game releases this year and we feel good about the roadmap for 2023, as Martin just pointed out. There are still large growth opportunities for us in many markets. All that said, I expect the growth in percentage terms to continue to come down as our revenue base gets larger. RNG revenue amounts to EUR 72.5 million in the quarter. Growth rate for RNG, just looking at the reported figures is 15% in the quarter, but that does include Nolimit City that was acquired in the third quarter of this year, so not included in the comparison period. Growth compared to pro forma figures is about 5%. This is a slight improvement in growth from Q3, but it's still lower than the goal of double-digit growth we communicated at the beginning of 2022. We stated also then that the development will not be straight line towards that goal, and I see that comment as still valid looking into 2023. We remain committed to the goal, as Martin pointed out, and are continuously working to improve productivity in our RNG operations, but we will not set a firm deadline for when the goal of double-digit growth can be achieved at this time. EBITDA for the quarter amounts to EUR 279.5 million, giving an EBITDA margin of 68.6% in the quarter and 69.2% for the full year. We are in line, albeit, at the low end with our margin guidance of 69% to 71% set at the beginning of this year. For 2023, we expect to achieve a margin in the 68% to 71% range. I guess you can say that's a notch lower than the guidance for 2022, but given the uncertainty in the world, the pressure we see on costs right now, and the fact that we exit this year just over 68%. We think the [ larger interval ] does make sense. As we have said many times before and I will repeat now, we do prioritize growth over margins. So, this guidance is a way to share our expectations today rather than that it's a hard goal in and of itself. Operator, let's move to the next slide, please. We are at the end of the calendar year, so I have added this slide to the presentation, a little bit to zoom out and also take a look at the multi-year performance of Evolution. As you see here, we closed this year, or 2022, with almost EUR 1.5 billion in revenue and just over EUR 1 billion in EBITDA. When you look at numbers all day, sometimes they can be more than just numbers and for me, it was very nice to see us break the EUR 1 billion level for EBITDA. Of course, EUR 999 million wouldn't have been a huge difference, but still a milestone and I'm -- or I should say we all are happy for that. Looking at the multi-year development, we also see that we have been able to increase margin with the growing top line. We do increase margin also 2022 versus 2021, but not with the same jump as we saw during pandemic years in '20 and '21. During 2021, we also added the main part of the RNG business through acquisitions of NetEnt, Red Tiger and Big Time Gaming, which, as you can see here, gave an extra boost, both to revenue and EBITDA. So as we've talked about on the previous slide and earlier in the presentation, we have more work to do to achieve the future growth we want in RNG, but it's a highly profitable business but still has a very good fit in the group. Looking at revenue, we increased top line by almost EUR 400 million or 36%, 2022. That revenue figure does include a mix of organic and acquired growth. But looking at live casino, revenue isolated, which is all organic, we had over EUR 300 million in both '20 and '21, respectively, with growth rates around 50%. So, while we actually had even more revenue in 2022, the math works that the growth rate starts coming down a bit, as I mentioned on the previous slide. That was a quick look at the full-year development. Let's go to the next slide, and we'll have a more detailed look at the most recent quarter. So moving to the next slide. This shows our P&L in a bit more detail. As usual, we'll walk through the tables from the top. Live revenue just under EUR 335 million for the 3-month period October to December 2022, and EUR 1,188 million for the full year. This is organic growth of 41% and 42%, respectively, compared to the same period last year. RNG revenue amounts to EUR 72.5 million in the 3-month period and EUR 268.4 million for the full year. And the total growth, including organic and acquired, is 15% and 17%, respectively, as mentioned earlier. Majority of that, of course, acquired as was covered also earlier. Total revenues sum is up to EUR 407.5 million for the quarter and just over EUR 1,456 million for the full calendar year 2022, a 36% growth in the full-year numbers versus reported figures. And pro forma, that works out to about 33% for the quarter and about the same for the full year. Moving down to expenses. Personnel expenses amounts to EUR 81.5 million during the quarter, an increase of EUR 26 million compared to the same period last year. This includes increase in staff compared to last year in all our teams, commercial, operations, engineering, business support, I'll say, across the board. Depreciations amounts to EUR 29.5 million. That does include EUR 11 million in amortization of intangibles related to the acquisitions of NetEnt, Big Time Gaming and Nolimit City. Other operating expenses include items such as consumable equipment, communication costs, consultants and royalty fees, totals EUR 46.4 million, an increase of 22% compared to the same period last year. Summing up, total operating expenses, EUR 158 million, increase of 36% compared to reported figures same period last year. That brings us to operating profit, sums up to EUR 250 million in the quarter and EUR 908 million for the full year period, increases of 35% and 39%, respectively. Financial items includes, as always, a charge for right-of-use assets according to IFRS 16. Also on this line, we have currency-related effects from the revaluation of balances on bank accounts that we hold in non-euro currency, as well as effects on intra-group loans. So it's a little higher cost there than the previous quarter, but it's not related to interest rates. We carried no external debt. So, that's not what it is. Tax is just under EUR 17 million in the quarter, that's a tax rate of 7.1%. For the year-to-date period, it's 7%. It's almost 1% higher than the previous year, and our tax rate will continue to gradually increase in 2023 as we increase our global footprint. Regarding the upcoming project of global minimum tax of 15% or the Pillar 2 as it's referred to in tax speak, I guess, the current timetable is that it will come into effect from 2024. A lot of work still remains and we will probably know more as the year progresses, how and when it will affect us. But expect a higher tax level from 2024, as I know most of you already have in your models. All this sums up to profit for the 3-month period of EUR 223.5 million. That equals an earnings per share of EUR 1.03 per share for the quarter and that's an increase of 34% compared to fourth quarter of 2021. And finally, the rolling 12-month period, I would say the full-year earnings per share is EUR 3.88 per share. Operator, let's go to the next slide, please. Before handing back to you, Martin, a look at cash flow and financial position. And we'll start to the left, where we see the development of capital expenditure. The gray part of the bars, that represent investment in tangible assets. That means our investment in studio projects. And in the fourth quarter, CapEx in tangible assets is almost EUR 18 million. We have had high activity in studio projects in the quarter. The blue part of the bar is investment in intangible assets, and that's related to new games and features to the platform. It's about EUR 10 million in the quarter and in line with previous quarters this year, as you can see. For the full-year 2022, CapEx amounts to EUR 97 million. It's a notch higher than the EUR 90 million we estimated at the beginning of the year, but fully in line with our plans from later in the year. For 2023, we will maintain a high pace in our investments and I estimate CapEx will total around EUR 120 million for 2023. In the middle of the slide, we show operating cash flow in the quarter, it amounts to EUR 221 million. Operating cash flow in relation to EBITDA on a rolling 12-month basis is still on a very good level at around 75%. And finally, to the far right in the slide, a quick look at the balance sheet. We maintain a very strong financial position, EUR 532 million in cash on balance at the end of December, which, if the Board's proposal to the AGM of dividend of EUR 2 per share goes through, EUR 426 million out of that will be paid as dividend in early April. So that was the end of my prepared remarks. I'll hand back to Martin for some closing words and we'll take questions after that. Martin, over to you.

Thank you, Jacob. Now we are on the next slide, the last slide before Q&A. Thank you. A few words to conclude this report presentation. We have a strong end of 2022, and an overall strong year for Evolution with many strategic achievements, such as building 4 new studios, launching record number of new games and most importantly, we have continued to increase the gap to competitors. In 2022, we worked hard to restructure the cost base to reach effectiveness and cost awareness and that job will continue throughout 2023. Despite the macro challenges we face, inflation and cost increases are reality for us. We have great momentum, and we will focus on Evolution and the things we can control to innovate and push boundaries and enhance the player experience and increase the gap to competition even further. We see good opportunities for continued positive development in the US. We will continue to expand capacity in our studios and increase our games portfolio in that market. Last week, we had an official opening of our new studio in Madrid and with 3 others newly launched studios, we will, during the year, be focusing on scaling up the new studios, but at the same time, we will build a number of new ones in 2023. We expect to see continuation of strong growth in Latin America, and we will expand our presence to capture those markets. With a local organization already in place, we are well prepared to continue our expansion there. Moving into the new year, increased growth within RNG is a high priority. And looking at the roadmap for games, I very much look forward to 2023. Beyond everything and most important of all is our focus to innovate and push boundaries to enhance the player experience. In the end of the day, that is what counts. Thank you all for listening, and we'll speak in a couple of months again. And now we'll move to questions. So next slide, please.

[Operator Instructions] We will take our first question from Ed Young at Morgan Stanley.

I'm going to ask about products. I recognize the importance, it sounds very exciting. But given you've heavily blurred your slide and it's ICE next week I guess I'll wait till then to ask [Technical Difficulty]. So my first question, if it's okay, is on margin. You've given the range there, Jacob. I wonder if you could just go into the line items a little bit in terms of how you think about the evolution of that cost. I know that cost per personnel was down a little bit in Q4 and Q3, but you said there is a step-up, I think, probably in the spring. So could you talk perhaps about particularly personnel and other, how you think about the growth in those line items, or how you will be able to manage the business to hit within that margin target? I'll ask questions in turn, if that's okay.

I will comment, Ed. We will continue to expand and we will build studios. So that cost is positive. We need to be cost aware in all different parts, but we will continue to expand and growth is priority. Exactly how that will fall out over the month and quarter is very hard to say. We add the percentage to widen the gap to 68%, 71% due to the macroeconomic situation in the world. It's purely because it's very volatile in the world right now. There's a war in Europe. And to account for that, we add the percentage. That's the whole story of that. Our ambition is, of course, as high as it's always been when it comes to margin and we have a scalable business and we should continue to add that.

Understood. And the second one is on returns. Martin, you've spoken over the past few months about your personal view on buybacks versus dividends. And we've had the conversation on these calls variously over M&A versus returns several times. I appreciate it's a decision for the Board ultimately, but I just wondered if you could give any update on or color on how you see things, particularly in M&A versus returns and if there is a prospect for the company to put its balance sheet towards buybacks over the coming year?

I think that the first comment would be that the money we have in the balance sheet now currently at hand will, to a large part, go out as dividend in a couple of months. And the decision for dividend or buybacks is a Board decision. My view is that this would be a nice complement to the dividend with the buyback. But that's a decision that would be taken by the Board in a late stage.

Okay. And then the final one is on the US. There was a legal update last week with the Superior Court of New Jersey's Appellate Division on the defamation lawsuit you brought around the report in late '21 that you said originated from a competitor. One of the aspects raised by the judge is whether the DGE or the Pennsylvania Gaming Control Board has finished any kind of review of the report they received more than a year ago. I appreciate it's a legal process, so you probably won't be able to say too much, but could you give any update or color around that at all, please?

We pursue, and think that we are entitled to know who was behind the report and we take legal action to do so. That goes a little bit. Now it went up one instance, and that instance pushed it down and I see that as positive.

Your next question comes from Oscar Ronnkvist from ABG.

So first of all, I just want to know about the competitive landscape. How you see it developing during the tougher economic environment? So do you see any signs of others slowing down as a result? And also, just particularly on the US, how do you see competition developing like Authentic Gaming in Michigan, for example, or Playtech's expansion?

How it relates to the macroeconomic situation is, of course, there is less money going around to companies that are in need of money -- and that might affect. When it comes to the competition, I would say that it's been a couple of years now, and it's slowed down in my point of view. We have continued as before and even accelerated. So, my point of view is that we increased the gap to competition and they are now even further behind than they were before. But that's, of course, my view.

Understood. And just on the US expansion. I mean it's -- obviously, I think Authentic Gaming just launched in Michigan and Playtech is the only other live casino operator. Do you see any signs of any others coming in there like Promatic? Or should we see, all else equal, that you continue to dominate the US live casino space?

I don't think that we should single out any market. We have huge amount of competitors in Asia. We have competitors in Europe, and it's healthy to have competition and we work and we fight every day. And there is no specific situation in US. I'm very happy with the position we have and the expansion.

Okay. Next one just on -- I think that the UK saw a bit of a sequential increase. So are you seeing any signs of easening there, just looking sequentially from a bit,I mean, pressured levels, I guess? And also, I mean, if you have like any expectation sort of in -- ahead of the white paper coming, did you see signs of operators actually like moving up their plans now that -- I mean, the comparables should be easier, I guess, soon enough?

It's very hard to say. It's been going a bit up and down when it comes to the UK regulation. If I would look at the total picture, I would say that I think that we have a bit more stable situation coming our way in 2023 and maybe 2022 in Europe we have had before, and I hope for being right in that.

All right. And just want to follow up on the capital allocation question there. So, you're not ruling out any potential M&A within the RNG space to maybe expand through to M&A there?

I think our position has been the same for the past couple of years. The main -- the dividend -- we have a dividend policy of 50% payout, which this year is very much in line with. And I think you see most of the cash that we hold on balance right now will be that dividend. And then the buyback is an opportunity if there is more cash than that. And we've also done some M&A, but that M&A is -- that's a bit opportunistic, if the opportunity is right, if it fits within the group. So it's nothing that we rule out, but it's also not -- our main growth avenue is organic growth. That's how we've put it in the past.

Your next question comes from Joe McNamara at Citi.

I want to ask the first question on game releases, if that's all right. A couple, and I'll take them one by one. So, you did very well, I think, to hit your 88 game targets here. And despite acceleration in Q4, RNG growth is still somewhat below your aspirations. So, could you kind of help me understand why throughput of these games was a bit soft and what needs to be done from a kind of slots quality perspective?

Yes. I mean, the roadmap for RNG looks much better 2023 than it did 2022. To single something out, we will double the amount of releases on that front, which is highly needed and we see great potential in that. When it comes to quality, that's a hard one. It's a little bit more of a volume business when it comes to RNG. But we have a couple of things that we want to do anyway when it also comes to slots and we look forward to those. Then we are now in the distribution phase of OSS. So, we also will increase the distribution of our slots with OSS, 2023, which is a little bit later than what we expected. So also that we look forward to.

Excellent. Very clear. And then also kind of on the same topic, can you disclose how many live games were released as part of the 88? And then kind of, I guess, what the aspiration will be for kind of live game releases in 2023? And I guess similar to that, one of the more popular games or the more popular games in 2022 were kind of your more game show-style games such as MONOPOLY Big Baller and Crazy Flip Coin. So if you agree with this, is there going to be kind of continued increased focus on these kind of game show releases as well?

The comment on live releases -- we released -- it's a multitude of brands and there is also Ezugi. So it's like, I would say, somewhere between 15 and up to maybe 20 live games for 1 year. And then they have -- some games are aiming for one market and there is a portion of live games, which are sort of regular and a portion that is game shows. And we don't really break it out, but 15 to 20 games a year. And I think that's a good number. We look forward to be on that --- somewhere on that also in 2023.

I think it's worth mentioning also that there's also lot of innovation and new things that go into the existing games. So improvements to the interface or sort of new functionalities, things like that can also be very, very important. Then in terms of the game releases, you might be right in that, some of these game show, games in very spectacular studios and they do get a lot of attention and should get a lot of attention. But there's a lot going on also when it comes to the traditional table games.

Excellent. Very clear. And then the last one is kind of a follow-on, I guess, from Ed's comments. Your kind of full-time employee growth was very consistent throughout 2022 of kind of 37%-or-so percent. Should we kind of expect this level of growth into the kind of first part of next year? And are there any regions, I guess, this is more heavily concentrated or is it again kind of across the board?

We don't really comment on the growth phase. But they can vary quarter-on-quarter and even maybe sometime year-on-year as we saw with the pandemic. But, overall, we'll continue to expand and grow studios and add studios also during 2023 and 2024, which then, of course, increases the staff.

Your next question comes from Martin Arnell at DNB Markets.

Hope you're well. My first question, just on the growth drivers in 2023. What drivers are you most excited about, if you have to choose 1 or 2 things?

I think -- I'm very happy with the new games released in 2022. We really see that. That's exciting. They were good. Many of them were mega hits in many ways. I, also, I'm very excited about Latin America now coming on and the number of players we see there and the type of games that they play is also very exciting to see. Asia, as always, large market, growth while also exciting. But now we start to see a little bit pickup in Europe. That's also nice to see again. And then Africa is bubbling somewhere around the corner or there are countries in Africa that are really interesting as well.

Interesting. And the locations, the studio locations, have you decided them, the 1 or 2 new studio locations for this year? And have you started to build?

We are in the decision process right now.