Enlabs AB (publ) (OM:NLAB)

Earnings Call Transcript

Thursday, August 20, 2020 10:00 AM

Executives

Adam Jonsson - Chief Financial Officer

George Ustinov - CEO & President

Analysts

Jonas Amnesten - Redeye AB, Research Division

Presentation

Jonas Amnesten

Good morning and a warm welcome to Enlabs' quarter report presentation and Q&A. My name is Jonas Amnesten, and I'm an equity research analyst at Redeye with focus on the online gambling industry. I will also be the moderator during the Q&A session that will follow after the presentation in about 20 minutes. For those of you viewing the live stream, you're welcome to send any questions already at this point, and that's easiest done through the form on the live streaming website, just below the live stream.

And due to the extraordinary situation with the COVID-19 outbreak, we're going to have Enlabs' CEO, George Ustinov; and CFO, Adam Jonsson, with us over video link. Welcome, gents. The stage is yours.

George Ustinov

Thank you, Jonas. Welcome, dear listeners. My name is George. I'm the CEO of Enlabs. And with me today, I have Adam, our CFO. We have captioned the second quarter as steadily navigating through the storm. But let's start first with a quick recap of what Enlabs stands for.

Enlabs is the largest iGaming company in the Baltics with more than 25% market share in the region. We are the largest licensed operator in Latvia, second largest in Estonia and fourth largest in Lithuania. We focus on regulated markets, and more than 90% of our revenues are coming from locally -- from local licenses. We pay local taxes, local gaming taxes, and we refer to these revenues as being sustainable.

We are executing a multi-brand sales strategy focusing on various customer segments, and we own our own future and have very good control of our margins because we own our own technology, the gaming platform and also the Sportsbook product.

Now towards the second quarter, while we called it a storm, mainly we referred to the regulatory events which happened in Latvia during the quarter. Just to remind everyone that Latvian Parliament voted to suspend all gambling licenses in Latvia from April 8 until June 10. This was a rushed and noninformed decision. And logically, it was recalled, and we have restarted our operations with full capacity starting from June 10. And exactly from the moment when we restarted, our expectations were completely positively shattered at the manner that customer activity broke several all-time records, and we felt as if the business never really stopped. And to us, definitely, this is the big testament that a locally licensed operator can cater much better the needs of local customers than any unlicensed operator who started in the market.

And really, as a cherry on the cake, in our retail operations, several customers brought flowers to our cashiers saying how happy they are that we restart the operations and how welcome we are back. So that's definitely a positive development for us. And we initially saw that maybe it will take longer to recover in Latvia, but basically, the recovery took place on the first day after we reopened.

When it comes to Lithuania, retail gambling operations were suspended from March 18 until May 18. Online was not affected, but we stopped completely our online marketing communication during the quarter and restarted it on the 1st of July.

In Estonia, online operations have not been affected, but all online operators agreed to tone down their marketing messages. And we have no retail operations in Estonia, so we are not affected by the closure of retail. And as of now, in Q3 2020, there are no regulatory restrictions affecting Enlabs operations in the Baltics. So we could say that the regulatory landscape has completely stabilized.

Onto the high-level overview of our financials. During the quarter, our revenues totaled EUR 6.1 million, all this despite being in lockdown in Latvia for 2 months, having retail operations in lockdown and having the lack of sports activities. And please note, this is not a normal financial performance of Enlabs Group. This is an exceptional quarter in which we faced several lockdowns and operations now are completely back to normal, even better than that.

During the quarter, total active customer count decreased only 2%. This is to highlight that at the moment, when we restarted operations in Latvia, customer activity peaked at all-time highs, and for the full quarter, only a 2% decrease. Gaming margin was 3.8%, considerably lower than our usual 4.6%, 4.8%. That's because of reducing the proportion of Sportsbook revenues and the total product mix. And with the sports activity coming back more and more with every month, also our sports book revenues are growing. And both EBITDA and net profit during the quarter amounted [indiscernible], and this, in essence, is a testament that we have a flexible business model and we managed to adapt quickly our cost structure and deliver positive bottom line, also with positive operating cash flow during the quarter.

When it comes to the key events during the period, once again need to highlight the Latvian Parliament's suspension of all gambling licenses, but that is gladly behind us. We have acquired 29.9% of Global Gaming shares, and Global Gaming is the holding standing behind the successful Ninja Casino brand. We have launched our second brand in Latvia called Laimz. We have introduced several important product updates, both in terms of content and adding new gaming verticals. And we extended our financial targets for 2021, leaving them unchanged.

Events after the period, we very happily welcomed the adoption of gambling law in Ukraine, which, in essence, opens the door for us in that market. We have launched Optibet in Latin America, and we continue with the further on product improvements. And very importantly, in July, we are happy to share that our gaming revenues are up 11% year-over-year. And this 11% increase came even despite that our gaming margin is still 20% lower than it was a year ago. And again, with sports activity coming back and with the customer activity we've seen in Casino segment, we're quite confident that this trend will continue and be an increase.

Now towards the more detailed operational update, what have we been up to during the second quarter. And I would like to start by talking about our brands and, more specifically, our new fully in-house developed brand, Laimz. The objective with Laimz was to make it as different from Optibet as possible. And Laimz offers a gender-neutral mobile-first casino and bingo product, something which is completely new to the Latvian market. With Laimz, we went the hyper-local way, starting from the brand name, which derives from the Latvian word laime and what laime meant, meaning happiness and to win, and just focusing only with local languages and only locally relevant content.

To give you an impression of how Laimz started out, I have a few KPIs to share. And we are comparing here full operational months of Laimz compared, let's say, with our previous full month's launch of Optibet in Lithuania. Then we see that Laimz is producing 10x higher at the customer acquisition numbers, 6x higher deposit amount, 75% of revenues are coming from mobile devices. We achieved the perfect balance with this gender neutrality with 50-50 percent male-female customer split. And very importantly, Laimz is growing profitably from day 1. And by growing profitably, I mean not only profitable on marketing investment level, but the net profit level, in essence. So we see Laimz as definitely one of key growth drivers for the coming year and perhaps even 2 years, and Laimz has an equally relevant market to be, the Lithuanian market.

Optibet is our flagship brand and will remain so. With Optibet, we're executing a one-stop shop approach where any customer can find anything for him. And we are constantly improving the content, constantly adding new one, adding gaming verticals and making sure that Optibet can really cater the needs of any customer.

BestPoker is our global poker-focused brand, which has global aspirations. And over time, we'll also develop live casino and casino verticals in it.

Onto the new market development, this is always on top of our agenda. And I have 4 blocks to share with you. Maybe before going into any one of these, we don't have Finland listed in here because we are already live and we are already profitable in Finland. So I'm not going to focus on that market. In terms of Latin America, we have softly and prudently launched our operations in Peru and in Chile. We have established a local office with a local presence. And our strategy in the region is to get every market to profitability and only then expand. So now we are focusing on getting Peru and Chile into the black numbers, and then we'll further expand in the region, which has huge potential, just to name, Mexico and Brazil.

In terms of Sweden, if you open now optibet.se, we are live on the market, but this is definitely not the product which we are intending to sell. This is an absolute NBP. And during the second half of the year, we'll invest resources to get our Swedish operations up to the Enlabs standards. We'll significantly improve the product. We'll add local knowledge to the team, and we'll always keep a focus on compliance in this market.

In Belarus, we have decided to postpone the launch until 2021. The main driver behind that decision is the current political environment. Our local media in the Baltics cover quite a lot the events after the presidential elections. There are massive but peaceful riots in the country, and there's certain lack of stability currently, and we feel that we should better invest our current resources into the Swedish market. But we are definitely committed to entering Belarus. We are sure that in the short term, the political turmoil will settle down. As for now, there are 3 licenses -- 3 online licenses granted on that market. And we see that all 3 licensees are heavily Sportsbook focused. So for us, that's an indication that we need to go with the casino-first approach to be different from day 1, and we'll certainly do that.

In terms of Ukraine, as I already said, the President has signed a law of regulating both online and retail gambling in the country. The only thing which remains currently unclear, what will be the gaming taxes and when exactly the licenses can be granted. But Enlabs will certainly obtain the license whenever the legal landscape allows us to do it. And for us, Ukraine is quite a close market, which we understand. We have common languages. We have Ukranians working in the organization. We understand the people's mentality, and we have many Ukranians playing with us currently in Optibet.com.

As for the data on the market, we know that it's at least EUR 300 million worth online market. And definitely, it will be a market where retail will be converting online and unlicensed online will be converting to licensed online. So these are the trends we see all over the Baltics, and surely, we'll see the same in the Eastern markets.

In terms of product upgrades, we haven't been in a standstill during the quarter. We have been very busy improving what we have. And when I talk about product, I mean the combination package which we offer to our customers. And this package consists of the gaming platform, of the content which we display on that platform and of the service which we provide to our customers.

On the platform front, we have finished our second brand migration during the period. That was BestPoker. So that is currently running on the new gaming platform. The largest migration in our history migration of Latvian business is due to happen in September. Here, we take it really step-by-step, and we choose to measure 7 times and not only once. So we have been steadily preparing for this feat and will accomplish it in September. And migration -- the final migration of Estonian business will take place straight after we complete Latvia, and we will finish the year 2020 as a single-gaming platform company. And with that, it will bring up the speed in processes, speed of new content, new market rollout, new brand rollout, a leaner organization and general efficiency within Enlabs.

On the content front, we have switched open network to a more stable one from Playtech. We have launched new product vertical daily fantasy sports from Scout Gaming, new eSports product vertical from Everymatrix, new virtual sports product vertical in cooperation with Leap Gaming and brought exclusive casino content in Latvia.

On the service front, we have launched our automated withdrawal flow. What it means in essence is that customer can press the button, withdraw money and get it within 3 seconds, yes. So we are not talking 3 minutes even here. It's immediate automated withdrawals. There are sophisticated algorithms behind that, that's fully in compliance with AML. And that's just a brilliant service that we are able now to provide to our customers.

We have also started outbound calling to increase the conversion from registrations to active customers and also collecting feedback on our product. And obviously, we have added local payment solutions in Latin America and to be locally relevant.

Onto the M&A update. We haven't been lazy on this front either. And we have made a strategic acquisition of 29.9% share in Global Gaming. This, for Enlabs, is a strategic move towards becoming a powerhouse in the Baltic Sea region. Global Gaming has strong operations in Finland and Estonia. Enlabs is very new to Finland, but Enlabs has strong operations in Estonia, where Global Gaming has traction. So we definitely share those 2 markets. We see very big potential synergies between the 2 companies on the technology front, on the product front, on the new market front, on the cost front. And we totally like the Ninja Casino brand, the strong team behind it. And we are currently in a strategic discussion with Global Gaming senior management team, and we are evaluating our next steps.

And to finish off my lengthy monologue, I want to recap our financial targets. In 2021, Enlabs shall deliver at least EUR 20 million EBITDA and an earnings per share growth of at least 40% annually through a combination of organic growth and acquisitions. And organic growth will be at least 25% annually.

Thank you for listening, and Adam, over to you.

Adam Jonsson

Thank you, George. I'll now guide you through a financial update from the second quarter of 2020.

So as George mentioned, it's been a challenging quarter in many ways, which is true from a financial aspect as well. But with the revenues being suspended basically overnight, we have the cost base to manage. But with a very agile team and loyal employees, we managed to navigate through the quarter without any layoffs.

We recorded EUR 6.1 million in revenue, which is down 42% quarter-over-quarter and 35% year-over-year. With our flexible business model, we managed to stay profitable during the quarter and recorded an EBITDA of EUR 0.5 million. That is down 84% quarter-over-quarter and 82% year-over-year and results in an EBITDA margin of 8% in the quarter.

The revenue split, we can see that casino is our major revenue driver here, and it's increasing its share from 59% in the first quarter to 63% in the second quarter, very logical taking revenue shares from betting who suffered from the lack of sporting events. Betting is only 14% of our revenues in the second quarter coming from 28% in the first quarter. So betting really took a substantial hit during the quarter in terms of revenue with the lack of sporting events, which impacted both online and retail, of course.

Poker managed to perform on the same level as Q1 in absolute numbers. But with the decrease in total revenues, the share from poker increased to 11%. And we can see the importance here of having a diversified revenue mix.

Our media business stands for 9% of revenues in the quarter and other revenues of 3%.

During 2020, we made 2 strategic investments. In the beginning of the year, we acquired in Scout Gaming and most recently in Global Gaming. During the quarter, Scout Gaming valuation has had a favorable impact on our P&L, a positive effect of EUR 0.7 million. So our smart investments, together with reasonable amortization charge, no interest expense, minimal foreign exchange exposure and favorable corporate taxation income in our main markets, we managed to keep a very low cost base between EBITDA and net profit. So in the second quarter, we had 0 percentage points between the 2 KPIs, and we're profitable on both EBITDA and net profit level with a margin of 8%.

On the right-hand chart, we can see our EPS dynamics over time. Obviously, not the trend we like to see, but highly impacted by the second quarter. On the other hand, we're satisfied to see a positive EPS considering the circumstances during the quarter. 2020 is a year of operational improvements, and now we're setting up progressive EPS growth in 2021.

Our cash flow during the second quarter is -- the conversion rate, as you can see on the figures, is not majestic. On the other hand, we're satisfied to keep an operating cash flow positive. But what happened during Q2 is that in our industry, we have an instant inflow of cash from revenues, but our cost is settling with the time lag. So in Q2, we set them payables from Q1 where we had high activities, but the inflow of cash was very limited due to the suspension in Latvia.

In July, we can see the reverse effect. We have revenues in full speed, and we're settling payables from a low activity period in Q2. And then we have conversion rates well above 100% on both EBITDA and net profit.

If you take a look at the rolling 12 months to get the feeling of our cash conversion, although still highly affected by Q2, of course, we convert 77% of our EBITDA into operating cash flow and 60% of our net profit into free cash flow. We still believe that our goal of 100% EBITDA cash conversion and 80% net profit conversion is achievable with the business volumes up to normal.

On this slide, I'll guide you through our different cost components and explain the dynamic of our business model. We have our cost components expressed as percentages of revenues, with EBITDA as the resulting factor. And all the changes are compared to Q1 2020.

So in cost of goods sales, had an increase of 4.2 percentage points. This is mainly due to the lack of scalability, especially in our betting segment where we have limited revenues but still some fixed costs. But we also continue to invest in our offering. We don't want to compromise the promise to our customer of having the best offering on the market.

On our gaming taxes, that decreased 1.5 percentage points due to the lower share of Latvian revenues. Latvia is one of our higher gaming tax markets. So with the lower share of that market, we decreased our average gaming tax.

In marketing, we experienced a 4.8 percentage point increase. Again, lack of scalability with revenues dropping, but it's down in absolute numbers due to multiple markets being in silent mode or toned down.

On our personnel costs, we did increase 5.4 percentage points. This is probably the hardest cost caption to manage through this temporary downtime we experienced in Latvia. But due to our loyal employees taking a solidary salary cut during the suspension and state subsidies, we managed to keep this as a bare minimum during the quarter.

Our other costs increased 6.1 percentage points due to the lack of scalability again, and that results in an EBITDA margin of 8%.

Looking at the customer KPI, we can see indications of a very strong recovery in Latvia. George mentioned it before, but our active customers decreased only 14% quarter-over-quarter and only 2% year-over-year. So this is a strong indication of how fast the customers came back in Latvia after suspension. A customer only have to be active once in order to be counted as an active customer during the quarter, so that gives you an indication that most of our customers came back during these last days in June and were loyal to the brand. Deposits, on the other hand, is accumulated over the period and will correlate more to revenues, and we can see a decrease of 39% quarter-over-quarter and 28% year-over-year.

On the left-hand chart, we have monthly revenue per customer, which is EUR 48 for the quarter with a decrease of 36% year-over-year. The same logic applies here with revenues being accumulated over the period, but the active customers count if it's only active once during the quarter. So it's tough to make any good comparison in this chart to previous quarters. But when we were looking at other data samples and taking a deeper look into this, we haven't seen any signs of lower play values since the COVID-19 outbreak.

On our last financial slide and take a look at the balance sheet at the end of June 2020. We have EUR 13.2 million in cash, which is 25% of our total assets. That is down from Q1 due to the investment in Global Gaming. We paid EUR 5 million in cash for that acquisition. That cash payment, together with the share issue and the value of Scout Gaming, amounts to EUR 10.8 million.

The majority of our other assets is intangible assets, consisting of brands and domains, our gaming platforms, gaming licenses, player databases and goodwill. On the other side, we have no interest-bearing liabilities and a full 90% equity ratio.

So to sum up the financial update. We had a very challenging quarter with the suspension of our revenues in Latvia. But with a very agile team and loyal employees, we managed to navigate through this quarter and still be profitable and have positive operating cash flow. With no interest-bearing liabilities and a solid cash position, we were confident to come out stronger of the suspension in Latvia. And now we can see that both revenues and customer KPIs are recovering in a very positive way.

Thank you. Back to George.

George Ustinov

Thank you, Adam. And to summarize our today's presentation, it feels just so much better to be sitting now in August compared to how the organization felt in May. We have proven that we can execute in a very challenging environment, and we see that our customers are so loyal and like the services we provide to them.

As of Q3, the regulatory landscape has completely stabilized. We have demonstrated that we have a flexible business model. We have been very busy during the quarter rolling out our second brand in Latvia and making a lot of product improvements. And we are back to growth in July, back to very profitable growth. And we'd like to finish this on a note that the sun always shines after the storm. Thank you.

Question and Answer

Jonas Amnesten

Perfect. That gives us a very good view of your quarter report. But let us follow up with some questions. And once again, for those of you viewing the live stream, you're welcome to send in your questions through the form on the live streaming website, just below the live stream.

But first up, so Q2 was very turbulent for you, but things are up and running now. But what long-term effects do you expect from the corona crisis?

George Ustinov

I would say that now my opinion is that there will be only positive effects, yes. 3 months ago, I was hesitant with my forecast and I thought that Latvian recovery will be tougher, but now I see that we are breaking records in. Yes, so I would say that on the online business, all this COVID situation will have only a positive effect and on the retail business most likely will have longer-term negative effect. But for us, retail revenues are only 4% of our business, yes. So all in all, we are very happy by the developments which we see now.

Jonas Amnesten

Okay. Yes, it sounds promising. And looking a bit at your new brand here, what potential do you see for the Laimz brand in Latvia?

George Ustinov

It's hard to quantify, but I can say that Laimz brand will, in my opinion, help us maintain this 50% market share in Latvia in the longer term. So it's quite a big potential, yes.

Jonas Amnesten

Yes. So that the KPIs look very promising.

George Ustinov

It's our best ever launch in the market, which we know best. So -- and with -- our hypothesis so far have all been confirmed, so we are very positive on that.

Jonas Amnesten

Okay. Cool. And regarding the new platform, what is the status on having that in Latvia? Because you haven't launched that yet.

George Ustinov

Yes. So we haven't launched it yet. The plan now is to migrate in September. The initial plan was to do it during the second quarter. But as I said, it's better we do it later but properly, yes. So we will measure 7 times and not only once. And we feel now that we are approaching this moment when we are confident that, that will be a successful migration and beneficial migration for customers. We want not only to transfer them to new platform, but we want them to come and see a richer product, new campaigns, more activity from our side. So that's why it's taking a bit longer than we anticipate.

Jonas Amnesten

Okay. Cool. And you acquired close to 30% of the shares in Global Gaming. Could you elaborate a bit more on the long-term plan for that acquisition?

George Ustinov

On this front, I will not elaborate much more than just reiterating that we are now having a discussion with the Global Gaming senior management team and evaluating our next steps.

Jonas Amnesten

Okay. And we have a question here about how confident are you in reaching the financial targets now for 2020 and look 2021?

Adam Jonsson

Very confident.

Jonas Amnesten

Yes. I guess that's enough. And again, jumping back to acquisitions. How are you looking there? You continue looking for more acquisitions now? Or what's the plan on the M&A side?

George Ustinov

We continue looking for other acquisitions as well. Now we have anchored one with the Global Gaming. That's definitely taking our main focus now. But we are being open-minded, and we feel that during this COVID period, we have never seen so many interesting investment opportunities, yes. So it's a very exciting time, and we feel that the industry is certainly consolidating.

Jonas Amnesten

All right. Perfect. And you mentioned a bit about Belarus. Could you take that again a bit -- what is your view on the -- since it's quite turbulent there right now, will that affect your license process, do you believe? Or...

George Ustinov

So we haven't been able to travel to Belarus last -- basically from the COVID period, yes. And that is definitely impacting our development there. We cannot set up an office. Working remotely with people is okay, but from time to time, we need to have that physical presence. It's tougher to recruit people when on a remote. It's tougher to talk to the regulator on a remote. So we feel that all these barriers are really slowing us down, and we reprioritize now launching Belarus to do that in 2021 and push the Swedish product improvements and become competitive on the market ahead of Belarus.

Jonas Amnesten

Okay. Cool. And we have one question here that says that he noticed that you have 2 new competitors in Latvia. What's your view on the competitive landscape in Latvia?

George Ustinov

That is a very good observation, and Latvia is definitely becoming more and more appealing markets for newcomers. As for us, we are not worried at all. These 2 newcomers, this one company is LV BET, Polish company. And the second is a local retail casino going online. So I can only say good luck to our competitors. In Latvia, we feel by far the strongest. And with the launch of Laimz, it will be very challenging for new players to combat with us.

Jonas Amnesten

Yes. Yes, I guess the entry barriers are unusually quite high in Latvia compared to other countries.

George Ustinov

Yes. And to remind, you can't freely advertise in Latvia. So it's a tough choice of the market when you enter Latvia.

Jonas Amnesten

Yes. Makes sense. Perfect. And looking a bit at, again, market-wise, you're right that the tax increased to 13% in Lithuania. Is there a similar discussion going on in other core markets about increased gaming tax?

George Ustinov

In Lithuania, the game tax increased from 1st of January. So that was a discussion which was ongoing in 2019, was not a surprise for us. So it happened before COVID times. And that's actually hit quite hard the retail operators. So online tax was still okay. Now after the COVID, there are no talks whatsoever about any tax increases. So the governments realize that they need to subsidize the -- it's tough to increase taxes during the crisis, yes. So as for now, we don't expect any tax increases. But going forward, it might happen over time.

Jonas Amnesten

Yes. No, I guess that's natural processes in many markets. And looking a bit in Latin America, what potential do you see there? Because you are starting up now, but it's quite early phase. But what's your view on the potential there?

George Ustinov

It's a very early phase. We don't expect that we will be booming. We expect to grow steadily but profitably. That's Enlabs' mindset in general. Whenever we enter the markets, we want to be prudent. We want to go step-by-step, and we want to do it profitably. So as for the next quarter, I expect that we'll figure out much better the sales channels, the conversion flows and in 2021, already start talking about this profitability in the market.

Jonas Amnesten

All right. Perfect. And looking a bit comparing the Baltics compared to Latin America, is there like any clear difference in the market dynamics there? Or what's your view on that?

George Ustinov

I would say these are totally noncomparable markets, yes. In Latin America, it's just the seed stage, basically, and very popular mobile use and very sports focused. Definitely, casino is still on the first stages of development. Customers are not used to that, so much about football. And then the Baltics are -- they are completely different. Now they are regulated for a long time. Customers are used to how gambling works. They have confidence in online. They have confidence in licensed operators. So yes, these are hardly comparable markets.

Jonas Amnesten

Okay. Perfect. And you gave a bit update how July performed. And you mentioned that the growth increased for us the end of July. Is -- could you give us more insights in how it has continued into August?

George Ustinov

I will not comment on August, but I will once again repeat that in July, our gaming revenues were up 11%, with customer activity being much more up than 11%. We had a lower margin by 20%, not because we have been substantially unlucky, but still because Sportsbook revenues, which come with a higher margin, are catching up with time. So by growing Sportsbook revenues to the proportion which we used to have in the past, that will give big positive momentum to the gaming margin. And if you combine 11% growth with the 20% higher margin, it will be a very interesting result.

Jonas Amnesten

Yes. Cool. And about July again here, could you elaborate a bit more also on how the different products has evolved during July? Is it sport betting, does it back on track? Or what has been driving the growth there?

George Ustinov

Yes. So definitely, casino is driving the growth, without any doubt. Sportsbook is recovering with every league opening up. We welcomed so much the start of NBA and NHL games, lots of football now. Still, table tennis remains the first most popular sport, and we are offering lots of bets on that. But in July, still, we saw the Sportsbook revenues -- Sportsbook, let's say, turnover was 20% approximately less than before the COVID months, and casino revenues were way ahead of where they were.

Jonas Amnesten

Okay. Perfect. And on the market side, what was it since you had this turbulent time in Latvia? What markets would be driving the growth year-on-year in July?

George Ustinov

Interesting that in Q2, all our markets stepped up. We saw growth quarter-on-quarter in Estonia. We saw growth quarter-on-quarter in Oceania. We saw growth quarter-on-quarter in Finland. We saw also growth quarter-on-quarter in media. So all kind of operations which were not regulatory affected were showing upside trend. And as for July, we expect all markets to grow. Yes. It's not a single one. But if we talk about what will be the main growth drivers, and I would mention Lithuania and Laimz brand.

Jonas Amnesten

Okay. Perfect. And jumping back to Global Gaming, what is the view on the Ninja Casino brand for Sweden? Is that -- do you see a large potential there? Or is it something that you can comment on?

George Ustinov

I would say that we are conservative when we think about Ninja Casino brand in Sweden, but I cannot comment more at this stage.

Jonas Amnesten

Yes. And regarding how you made the acquisition there of the close to 30%, what's the reason for using the stocks at the time of the acquisition since you had a quite good cash balance?

George Ustinov

It must be noted, at the time when we did the acquisition, it wasn't completely clear how Latvian operations will restart, yes. So we thought potentially, we will need to invest much more money to get to the level where we were, and it turned out that we don't need to invest anything at all to return. So that was a positive development. So I would say that we have been prudent. And at the same time, we wanted to maintain very solid investors, which were part of Global Gaming also to become our investors and share our growth journey together.

Jonas Amnesten

Okay. Cool. And going into the media segment here, I have one question about what your outlook is for the media segment in the U.S. and especially the BestCasino brand.

George Ustinov

Here, I will again remind that now we have restructured our media segment, and its primary objective is to support our gaming business. We have to promote our own brands. And when we talk about U.S. potential with the media, we haven't considered it really, yes. So that's another upside which we have in our assets, which we are not still utilizing.

Jonas Amnesten

Okay. Cool. And well, one question regarding the salaries of the employees. Is that back to 100% again since they were lower during the Q2?

George Ustinov

Yes. With this, I want to say a big thank you to our employees who are being loyal to the company for being supportive, for being understanding. And from the moment when Latvian operations restarted also, we returned the salaries to 100% level of what they were.

Jonas Amnesten

Okay. Perfect. So now looking at 2020, what would be your main focus during 2020?

George Ustinov

Alliance and migrations.

Jonas Amnesten

Okay. Perfect. And looking at the financial goal then for 2021, what will be the most important step there to deliver on this goal? Is it still the same answer to that? Or is generally...

George Ustinov

Exactly. We just need to continue executing our strategy. Yes, we need to continue growing in the Baltics. We need to execute multi-brand growth strategy. We need to optimize our internal processes, and we need to do a productive acquisition.

Jonas Amnesten

All right. Perfect. So that was the last question. And I'd like to wrap this up by thanking Enlabs with George and Adam as well as our viewers. And I hope to see you all next time. Until then, take care, and have a great day. Bye.

George Ustinov

Thank you. Bye-bye.

Adam Jonsson

Thank you. Bye-bye.