Evolution CEO insists growth will return after European ring-fencing measures

Evolution CEO Martin Carlesund has shed light on the impact of ring-fencing measures the supplier has opted to take within its Europe division, stating the arm will soon return to growth.

Over the course of Q1 2025, the company deployed measures that meant its games were no longer available for unregulated operators.

Instead, Evolution said its titles in Europe can now only be found via locally licensed operators for markets where a licence is required. 

Carlesund noted that the process had a “limited” effect on markets that boasted a high rate of channelisation, though it proved more significant to regions where the rate of channelisation is low, sparking a drop in Evolution’s revenue within those areas. 

The comments came during an analysts call following the release of Evolution’s Q1 results, which detailed a marginal decline in European revenue, falling from €191m in the opening quarter of last year to €189.7m this time around. 

Comparing Q1 2025 European revenue to the final three months of 2024 and the region shows a 6% drop – a decrease that has been attributed to the ring-fencing approach. 

However, the Evolution CEO noted that the new policy in Europe has provided the company with “an even stronger foundation” to grow from. 

Carlesund was pressed for comment on when the supplier can expect its European arm to return to growth after being impacted by the ring-fencing approach, suggesting it could come as soon as the second quarter. 

The CEO explained that the new measures were a “proactive” decision following meetings with several European regulatory bodies, before noting: “Essentially, the countries that have very stringent regulation and where they lost a lot of players to unlicensed operators, there was a larger impact. 

“We have taken measures in the UK a little bit earlier, but for the rest [of the Europe], in February. So, coming into Q2, we have this new level and from that, we expect to be able to have a good development.” 

Asked why the ring-fencing measures had any sort of negative impact on Evolution’s profitability this quarter, Carlesund added: “The regulators, in some cases, have moved to repressive measurements and want to restrict the market further.

“So, the players, they need to want to play on the regulated sites. We can’t do much about that, that’s why even though it’s [legal operators] only a click away, it’s a bit slow to get back to the licensed site.” 

Eleswhere, Carlesund issued a brief update on Evolution’s communications with the Gambling Commission (GC), the UK’s regulator. 

Just before Christmas, the GC confirmed it was conducting a review of Evolution’s licence to operate in the UK, after its games were found to be accessible on black market sites. 

When asked if any further clarity on the situation would be provided soon, Carlesund replied: “We have taken all actions that they asked us for. We have provided all the information. 

“It’s a process of board driven like any regulated process, by their [GC] agenda and their timeline. We have had good cooperation and talk a lot to them, we’re moving forward.” 

The Evolution CEO stopped short of placing an end date on the saga, adding: “Exactly when its closing, I can’t state, because it’s not simply up to me.” 

Meanwhile, Carlesund conceded he was “not happy” with Evolution’s Q1 performance, which included 3.9% year-on-year (YoY) uptick in total revenue to reach €520.9m (£444.4m). 

EBITDA, however, suffered a marginal slump of 1.1% compared to the same period last year, amounting to €342m, down from the €345.8m posted in Q1 2024. 

The results sparked a dramatic slide in Evolution’s share price, with stock falling nearly 20% since the start of the day, 30 April, to SEK674.20 (£52.37). 

The post Evolution CEO insists growth will return after European ring-fencing measures first appeared on EGR Intel.

 Martin Carlesund also offers update on the Gambling Commission’s ongoing review into the company’s UK licence following publication of Q1 earnings
The post Evolution CEO insists growth will return after European ring-fencing measures first appeared on EGR Intel.