|
Source: The
Gauselmann Group
Gauselmann Group: First half of 2001 sees 6% in real growth.
In the first six months of the current financial year the Gauselmann Group consistently pursued its adopted policy of concentrating on organic growth and core competences. In spite of continuing unfavorable market conditions in Germany, this family-run group of companies increased sales in the first six months of the current year by DM 36 million (EUR 18 million) to a total of DM 603 million (EUR 308 million), or 6%. (first half of 2000: DM 567 million / EUR 290 million). In the domestic market, sales were stabilized against the background of an overall downward market trend. Sales rose slightly by DM 5 million (EUR 3 million) to a total of DM 381 million (EUR 195 million) or 1%. (first half of 2000: DM 376 million / EUR 192 million). Growth abroad of DM 31 million (EUR 15 million) to DM 222 million (EUR 113 million), or 17%, was also achieved (first half of 2000: DM 191 million / EUR 98 million). In Financial Year 2001 the Gauselmann Group will be investing around DM 120 million (EUR 60 mil-lion) in tangible assets. By 30 June 2001 investment in tangible assets had reached DM 56 million (EUR 29 million). On 30 June 2001 the Gauselmann Group employed 5,143
people worldwide. Compared with the previous year this figure represents
an increase of 103 employees (31 December 2000: 5,040 employees). 4,126
people were employed in Germany and 1,017 abroad. This represents the equivalent
of 4,333 full-time positions (31 December 2000: 4,213 employees). In Germany,
the percentage of female employees is 55%, abroad 36,1%. 101 interns are
currently training for qualification within the Gauselmann Group. Thirty
new trainees were taken on this year alone.
Gauselmann Group a global player This East Westphalian family business has succeeded
since the start of the 1990's in becoming a true global player. The Gauselmann
Group now supplies to 70 countries worldwide. The description of the company's
activities in terms of its different divisions, began in the Director's
report for 2000, gives a much clearer picture in terms of national versus
international activities than that found in previous presentations. In
addition to the Europe-wide amusement with and without prize division
(Merkur), there is the Europe-wide amusement arcade operation (Spielothek)
and the worldwide casino equipment division (Atronic).
Europe-wide AWP and amusement machines This division of the company is chiefly represented by the activities of adp Gauselmann GmbH in Germany, the Europe-wide efforts of Stella International and the activities of the Bell Fruit Games, Mazooma Games and QPS group of companies in Great Britain. In Germany adp Gauselmann GmbH represents one of the main pillars of the national operation. The development, production and marketing of amusement machines with prizes continues to be this company's main activity. In spite of an increase in overall sales, earnings in the AWP sector fell. The reason for this was fiercer and more aggressively priced competition and a significant fall in the sale prices achievable in the current market. adp Gauselmann GmbH is doing everything it can within the limits of the existing statutory framework to exploit opportunities and potential for further product innovation. The main challenge facing it in the remainder of 2001 is the conversion of the equipment already installed to the new Euro currency. All of the machines produced by adp since 1998 have technology (Profi-tech 3000 EU) enabling them to accept, recognize and process both DM and Euro coins. This parallel processing capability is unique in the German gaming and vending machine industry. Preparatory work for a successful conversion to the Euro has been in progress since 1996 and has to date involved the implementation of 350 sub projects. In addition to AWPs, the company's own developments in the field of amusement machines without prize are becoming ever more important. These have in the meantime come to represent the majority of sales in this product segment. In addition to these activities, the Hamburg based subsidiary Nova-Games supplies the European market with products from well-known manufacturers of amusement machines. The significant changes seen in the market during the previous year have continued. Imports from the USA and Japan as well as Europe-wide reexporting activity continued to diminish. More and more entertainment machines continue to be manufactured in Europe by the Group itself. Stella International specializes in the development and Europe-wide marketing of AWPs and fun games for the German market. In the first half of the year the company was able to continue the success achieved Europe-wide in previous years. Stella International produces exclusively at adp Gauselmann GmbH in Germany, making good use of the company's proven and innovative technology platform. The English group of companies consisting of Bell Fruit Games, Mazooma and QPS is still one of the leading English amusement machine manufacturers. In the first half of 2001, the group experienced temporary fluctuations typical of the country's market. Together the three companies succeeded in cutting pro-duction costs by 20 percent over a period of 18 months. The earnings trend was positive. All three companies use the Bell Fruit Games technology plat-form for the production of amusement machines without prize in England. Further activities within the Merkur division are
represented by the subsidiaries GeWeTe, Mechernich near Cologne and HESS
SB-Automaten, Magstadt, (money change systems), Merkur-Freizeit-Leasing
(rentals and leasing) and BEIT-Systemhaus (IT services).
Europe-wide amusement arcades For a quarter of a century the Merkur Spielothek has been a trendsetter amongst modern entertainment centers and represents another main activity of the Gauselmann Group. In Germany the company has succeeded in maintaining its clear market leadership in the amusement arcade sector. This has been achieved among other things by the launch of new products and concepts which were well received by the market. In the first half of the year alone over 3,000 new amusement machines with and without cash prizes were introduced to customers at the 150 locations served. Together with conversions, modernizations and sales promotion campaigns for AWPs, these measures made it possible to increase sales in the first half of 2001. In a number of European countries significant government interventions regarding gaming regulations and tax rules hampered and damaged the development of the Merkur Spielothek business in approximately 30 locations last year. Nevertheless, in the first six months of this year, sales and earnings have increased. The main problem is still Belgium. The newly announced legal regulations are described by market operators as chaotic and impractical. Two of the five Merkur Spielothek locations there have not received a new amusement arcade license. The future of the other three branches is unclear. Together with efforts to gain new customers and reinforce
the company's market position, the core focus of the second half of 2001
will be the conversion to the Euro. Product-related and organizational
preparatory work has already been done. Conversion equipment in Germany
has, for example, involved the additional investment of more than DM 2.5
million. An estimated additional 3,400 technician working hours will also
be required. In practice this means that it will be necessary to release
about one-third of the company's technical staff from their normal duties
during the conversion period. An investment of almost DM 1 million in data
processing for the conversion to the new currency will also be required.
Total conversion costs in Germany alone total DM 5 million.
Worldwide casino gaming machine business The third main division of the Gauselmann Group is the international casino equipment business run by Atronic, which is based in Lübbecke, Germany, and has development, production and sales centers in Austria, Great Britain, USA, South America, South Africa and Australia. At the end of last year the allocation of markets between Atronic International and Atronic America was adjusted to suit the requirements of those markets. Atronic International is now also taking care of the South American market, with Atronic America concentrating exclusively on the extremely competitive US and Canadian markets. Atronic International has in the meantime succeeded in expanding its activities in all European countries. Its highly professional approach to the imminent conversion to the Euro, closely involving the casino operators affected, has contributed to this. The company has also opened up new markets together with local partners in Russia. Due to the strong demand, an additional production facility is being created in St. Petersburg together with a local partner. As in the US market, casino equipment is now being completed on-site to suit individual customer requirements. A new production unit was opened in the first half of 2001 at the Atronic factory in Gross St. Florian, Austria. Up to 20,000 slot machines for the world market can be manufactured here annually. The necessary investment here totaled DM 1.1 million. Very close to the Gross St. Florian plant, on the edge of the town of Graz and not far from the airport, a new development center will be officially opened next year. Atronic's decentralized development departments will be pooled at this location and further expanded. With its so-called Cashline machines, Atronic America has succeeded in placing an excellent product on the US market. In recent months the 120-strong team led by Michael Gauselmann, has worked very hard to strengthen customer relationships. Joint development projects have been launched together with leading casino operators. The new marketing strategy aimed at establishing a strong brand presence in selected casinos is already paying off. The company's plan to establish a US game design team, oriented towards the specific needs of the country's customers, will shortly be realized. Atronic Australia now has all the manufacturing licenses required for the Australian market. After entering this market, the company discovered that the requirements of Australian players are very different from the rest of the world market. Against this background plans were made for developing games locally. The growth trend established last year accelerated
significantly in the first six months of the current financial year. Atronic
achieved high double digit growth in both sales and earnings.
Amendment to Section 13 German Gaming Rules / 9th Euro Introduction Act (Germany) Since 1999 the Federal Ministry of Economics, the German gaming and vending machine industry and the German PTB have been working to achieve structural changes to the gaming rules in force. The basic form of these regulations dates back to the 1950's and is thus out of date. A look at other European countries reveals, for example, that in Holland, Spain and England the statutory framework is far more liberal and is constantly being adapted in line with developments in other state-run and private forms of gaming. Against this background the German gaming and vending machine industry has tried to ensure that at least within the framework of the 9th Euro Introduction Act, recently discussed by parliamentary committees at the federal level in Germany, some compensation is offered by politicians for the material losses amounting to 21.6 percent suffered since 1993. The increase of the stake per game from DM 0.30 to DM 0.40 in 1993 was the last material improvement made to the framework of regulations. Decisions by the upper and lower houses of the German parliament (Bundestag and Bundesrat) have now sent out a positive signal. To compensate for increased sales tax, inflation and conversion losses on the introduction of the Euro, a reduction of time per game from 15 to 12 seconds from 1 January 2002 has been approved. It is nevertheless necessary to continue working
hard to achieve basic structural changes to the gaming regulations, as
this is the only way to improve the po-sition of the gaming and vending
machine industry in Germany in the long term.
For further information: Robert Hess M. A., Director
of Communications
|