Börsiteade

Pealkiri

OEG: Consolidated unaudited results for Q3 and 9m 2016

Teade

Key performance indicators of the Group

                                                       9M 2016  9M 2015  9M 2014
                                                      --------------------------
Revenues                                        m€       160.4    121.0    110.4
Gaming tax                                      m€        25.7     22.3     21.2
EBITDA                                          m€        44.2     29.2     27.1
EBIT                                            m€        27.7     23.3     20.8
Net profit                                      m€        23.7     19.6     17.2
EBITDA margin                                   %         27.6     24.1     24.5
Operating margin                                %         17.3     19.2     18.8
Net margin                                      %         14.8     16.2     15.6
                                                                                
Assets                                          m€       153.7    135.3    120.7
Equity                                          m€       123.8    115.0    105.0
ROE                                             %         20.3     18.8     18.2
ROA                                             %         15.0     15.3     15.0
Current ratio                                   times      1.7      2.5      2.9
                                                                                
Casinos at end of period                        #          123       97       97
Casino floor area at end of period              m2      38,435   30,343   32,119
Betting points at the end of period             #           32        0        0
Betting points floor area at end of period      m2         900        0        0
Employees                                       #        3,069    2,636    2,621
                                                                                
Slot machines at end of period                  #        4,137    3,372    3,432
Electronic roulette terminals at the end of     #          112      104       96
 period                                                                         
Gaming tables at end of period                  #          164      185      191
Tournament poker gaming tables at the end of    #           64       46       46
 period                                                                         



Key developments of the Group during the 9 months of 2016:

  -- The Group’s consolidated sales revenues for 9 months of 2016 amounted to
     EUR 142.1 million, up 17.8% or EUR 21.4 million y?o?y.
  -- Gaming revenues accounted for 92.6% (131.5 m€) and other revenues for 7.4%
     (10.6 m€) of the Group’s consolidated sales revenues for 9 months of 2016.
     A year before the revenue split was 93.9% (113.3 m€) and 6.1% (7.3 m€),
     respectively.
  -- The Group’s consolidated EBITDA for 9 months of 2016 amounted to EUR 44.2
     million, a growth of 51.4% from EUR 29.2 million a year before. The Group’s
     consolidated operating profit increased EUR 4.5 million (19.3%) to EUR 27.7
     million.
  -- The Group’s consolidated net profit attributable to equity holders of the
     parent company for 9 months of 2016 totalled EUR 23.7 million compared to
     EUR 19.6 million a year ago.
  -- Group company Baina Investments Sp. z o.o. signed the agreement on 14
     January 2016 to acquire a 20% holding in the Polish subsidiary Casino
     Polonia-Wroc?aw Sp. z o.o., increasing Group holding to 100%.
  -- After receiving an approval from the Estonian Competition Authority, on 16
     February 2016 Group completed the acquisition of 100% shareholding in
     Estonian casino operator AS MC Kasiinod, which is also the 100% owner of
     the subsidiary OÜ Oma & Hea, which is providing casino bar services. As a
     result of the completion of the transaction Group owns 24 casinos in
     Estonia.
  -- The Estonian subsidiaries of Group, Olympic Casino Eesti AS and the casino
     operating company AS MC Kasiinod which was acquired in winter of 2016,
     concluded a merger agreement on 21 March 2016. The merger was finalised in
     May 2016 and during the course of the merger AS MC Kasiinod merged with
     Olympic Casino Eesti AS.
  -- The Slovak subsidiaries of Group, Olympic Casino Slovakia S.r.o. and
     Olympic F&B S.r.o., concluded a merger agreement on 22 March 2016. The
     merger was finalised in April 2016 and during the course of the merger
     Olympic F&B S.r.o. merged with Olympic Casino Slovakia S.r.o.
  -- On 31 March 2016 Group decided to liquidate its Dutch subsidiary Siquia
     Holding B.V., which does not have any business activity. The area of
     activity for the subsidiary was holding activities. The liquidation was
     finalised on 30 June 2016.
  -- The Latvian subsidiaries of Group, Olympic Casino Latvia SIA AS and the
     casino operating company SIA Garkalns which was acquired in autumn 2015,
     concluded a merger agreement on 20 May 2016. The merger will be finalised
     within the current year and during the course of the merger SIA Garkalns
     will be merged with Olympic Casino Latvia SIA.
  -- On 1 June 2016 Group opened a new hotel and entertainment complex in
     Tallinn investing over 45 million euros in the building that accommodates
     the Baltic's first Hilton and the flagship casino of OEG.
  -- The general meeting of shareholders held on 16 June 2016 decided to pay out
     dividends in amount of EUR 22,768,680.90 (EUR 0.15 per share), of which EUR
     0.10 per share was paid out to shareholders on 15 July 2016 and EUR 0.05
     was paid out to shareholders on 14 October 2016.
  -- On 15 July 2016 Group company Jessy Investments B.V. entered into an
     agreement to divest the 100% holding in its Estonian subsidiary Kesklinna
     Hotelli OÜ that owns the hotel and entertainment complex building in
     Tallinn, where the Hilton Tallinn Park hotel and the flagship casino of OEG
     group, Olympic Park Casino, are based in. The buyer was East Capital group
     company ECB3 Tallinn OÜ. The transaction price was 48 million euros and
     profit 17.8 million euros. The aim of the sales transaction was to release
     capital that has been invested into real estate and to focus on the core
     business of the group – operating casino and entertainment complexes. The
     hotel and casino operations that are in the building were not part of the
     sales transaction and will continue to be owned by the Group.
  -- On 23 September 2016 the Group announced that it is forced to freeze active
     operations in Poland from 24 September 2016 due to the lack of valid
     location specific activity license, but remains to be interested in
     continuing its operations in the Polish market and plans to participate in
     the upcoming public tenders for the licenses. The main purpose of freezing
     the active operations is to minimise the everyday costs and expenses.
  -- On 23 September 2016 the Group announced of its decision to exit Belarus
     gaming market due to the inefficient operations caused by the macroeconomic
     situation and poor prospects to increase profitability in Belarus.



The Group’s consolidated sales revenues by segments:

‘000€      Q3 2016  Q3 2015   Change  9M 2016  9M 2015  Change
          ----------------------------------------------------
Estonia     12,319    8,804    39.9%   32,441   26,216   23.7%
Latvia      17,034   14,598    16.7%   48,263   40,651   18.7%
Lithuania    6,038    5,190    16.3%   18,330   15,979   14.7%
Poland       4,300    4,745    -9.4%   13,530   18,084  -25.2%
Slovakia     3,966    3,921     1.2%   12,679   11,726    8.1%
Belarus          0      169  -100.0%      186      656  -71.7%
Italy        2,748    2,506     9.7%    8,213    7,331   12.0%
Malta        3,699        0      N/A    8,437        0     N/A
          ----------------------------------------------------
Total       50,104   39,933    25.5%  142,079  120,643   17.8%



Number of casinos by segment:

           30 September 2016  30 September 2015
          -------------------------------------
Estonia                   24                 20
Latvia                    57                 37
Lithuania                 18                 18
Poland                     0                  1
Slovakia                   8                  7
Belarus                    0                  2
Italy                     15                 12
Malta                      1                  0
          -------------------------------------
Total                    123                 97



The Group’s consolidated operating expenses for 9 months of 2016 amounted to
EUR 132.7 million, up 35.7% or EUR 34.9 million y?o?y. The growth was highest
in amortisation and depreciation costs largely due to impairment of goodwill
and assets in Poland (+10.5 m€, +177.0%), personnel expenses (+7.9 m€, +24.6%),
gaming tax (+3.4 m€, +15.1%), marketing expenses (+2.8 m€, +36.2%) and rent
expenses (+2.2 m€, +23.4%). Personnel expenses (40.2 m€) and gaming tax (25.7
m€) represented the largest cost items accounting for 49.6% of total operating
expenses. 



Overview by markets

Estonia

The sales revenues of Estonian segment for 9 months of 2016 amounted to EUR
32.4 million (+6.2 m€, +23.7%), EBITDA to EUR 21.6 million (+17.1 m€, +374.3%)
and operating profit to EUR 19.0 million (+15.9 m€, +507.8%). Gaming revenue
increased 15.5% y-o-y amounting to EUR 28.8 million. Sales revenues increased
partially due to hotel sales revenues. EBITDA and operating profit increased
largely due to the profit from the hotel real estate sales transaction in
amount of EUR 17.8 million. 

At the end of Q3 2016, there were 24 Olympic casinos with 990 slot machines, 36
electronic roulette terminals, 24 gaming tables and 22 poker tournament tables
operating in Estonia. As at 30 September 2016 Estonian operations employed 698
people. 

Latvia

The sales revenues of Latvian segment for 9 months of 2016 amounted to EUR 48.3
million (+7.6 m€, +18.7%), EBITDA to EUR 20.0 million (+0.6 m€, +3.2%) and
operating profit to EUR 17.3 million (+0.1 m€, +0.9%). Gaming revenue increased
18.1% y?o?y amounting to EUR 44.2 million. 

At the end of Q3 2016, there were 57 Olympic casinos with 1,497 slot machines,
8 electronic roulette terminals, 19 gaming tables and 9 poker tournament tables
operating in Latvia. As at 30 September 2016 Latvian operations employed 941
people. 

Lithuania

The sales revenues of Lithuanian segment for 9 months of 2016 amounted to EUR
18.3 million (+2.4 m€, +14.7%), EBITDA to EUR 1.5 million (-1.0 m€, -40.2%) and
operating profit to EUR 0.3 million (-1.3 m€, -81.9%). Gaming revenue increased
15.5% y-o-y amounting to EUR 17.4 million. 

At the end of Q3 2016, there were 18 Olympic casinos with 534 slot machines, 8
electronic roulette terminals, 58 gaming tables and 2 poker tournament tables
and 32 betting shops operating in Lithuania. As at 30 September 2016 Lithuanian
operations employed 780 people. 

Poland

The sales revenues of Polish segment for 9 months of 2016 amounted to EUR 13.5
million (-4.6 m€, -25.2%), EBITDA to EUR ?0.6 million (-2.9 m€, -124.8%) and
operating loss to EUR 8.8 million (-10.7 m€, -577.7%). Gaming revenue decreased
25.3% y-o-y amounting to EUR 13.3 million. Operating loss was caused by the
impairment of goodwill and assets due to freezing active operations. 

Polish flagship casino was closed on 23 September 2016 due to expiration of
location specific activity license. As at 30 September 2016 Polish operations
employed 39 people. 

Slovakia

The sales revenues of Slovak segment for 9 months of 2016 amounted to EUR 12.7
million (+1.0 m€, +8.1%), EBITDA to EUR 1.2 million (+0.8 m€, +188.8%) and
operating profit to EUR 0.3 million (+0.7 m€). Gaming revenue increased 9.4%
y-o-y amounting to EUR 11.3 million. 

At the end of Q3 2016, there were 8 Olympic casinos with 292 slot machines, 42
electronic roulette terminals, 44 gaming tables and 21 poker tournament tables
operating in Slovakia. As at 30 September 2016 Slovak operations employed 312
people. 

Belarus

The sales revenues of Belarus segment for 9 months of 2016 amounted to EUR 0.2
million (-0.5 m€, -71.7%), EBITDA to EUR -0.2 million (+0.1 m€) and operating
loss to EUR 0.2 million (+0.1 m€). As at 30 September 2016 Belarus operations
employed 6 people. 

The Group has announced of its decision to exit Belarus gaming market due to
the inefficient operations caused by the macroeconomic situation and poor
prospects to increase profitability in Belarus. 

Italy

The sales revenues of Italian segment before deducting the gaming tax of Italy
for 9 months of 2016 amounted to EUR 18.8 million (+2.9 m€, +18.4%), EBITDA to
EUR 0.5 million (+0.1 m€, +16.5%) and operating profit to EUR 0.3 million (+0.2
m€, +123.7%). 

At the end of Q3 2016, there were 15 VLT slot casinos with 539 slot machines
operating in Italy. As at 30 September 2016 Italian operations employed 82
people. 

Malta

The sales revenues of Maltese segment for 9 months of 2016 amounted to EUR 8.4
million, EBITDA to EUR 0.3 million and operating loss to EUR 0.5 million. 

At the end of September 2016, there was 1 Olympic casino with 285 slot
machines, 18 electronic roulette terminals, 19 gaming tables and 10 poker
tournament tables operating in Malta. As at 30 September 2016 Maltese
operations employed 211 people. 



Financial position

As at 30 September 2016, the total assets of the Group amounted to EUR 153.7
million, up 13.6% or EUR 18.4 million compared to the same period a year ago. 

Current assets totalled EUR 48.3 million or 31.4% of total assets, and
non-current assets EUR 105.4 million or 68.6% of total assets. The liabilities
amounted to EUR 29.9 million and equity to EUR 123.8 million. The largest
liabilities included dividend liabilities (7.6 m€), suppliers payables and
advances (6.6 m€), tax liabilities (5.5 m€) and payables to employees (5.2 m€). 

Investments

Within 9 months of 2016, the Group’s expenditures on property, plant and
equipment totalled EUR 28.5 million (+9.8 m€, +52.5%), of which EUR 24.4
million was invested into construction of hotel and construction and
reconstruction of casinos (+10.0 m€, +69.2%) and EUR 3.2 million into new
gaming equipment (-0.7 m€, -16.9%). 

Cash flows

Group’s 2016 9 months cash flows generated from operating activities amounted
to EUR 26.0 million (+0.4 m€) and cash flows used in investing activities to
EUR -22.1 million (-6.2 m€). Financing cash flows amounted to EUR 1.6 million
(+15.1 m€). Net cash flows totalled EUR 5.5 million (+9.2 m€). 

Staff

As at 30 September 2016 Group employed 3,069 people, up by 433 y-o-y mostly due
to expansion in Estonia, Latvia and Malta. 

Within the first 9 months of 2016, total personnel expenses amounted to EUR
40.2 million (+7.9 m€, +24.6%). For the first 9 months of 2016, the members of
the Management Board and Supervisory Board of all Group entities were paid
remuneration and benefits including social security taxes in the amount of EUR
1,032 thousand (EUR 620 thousand for 9 months of 2015) and EUR 111 thousand
(EUR 111 thousand for 9 months of 2015), respectively. 



Consolidated statement of financial position

(in EUR thousands)                                        30.09.2016  31.12.2015
                                                         -----------------------
ASSETS                                                                          
Current assets                                                                  
Cash and cash equivalents                                     40,202      34,710
Financial investments                                            880       1,835
Receivables and prepayments                                    4,956       5,537
Prepaid income tax                                               631         551
Inventories                                                    1,618       1,366
                                                         -----------------------
Total current assets                                          48,287      43,999
                                                                                
Non-current assets                                                              
Deferred tax assets                                              423         801
Financial investments                                          4,208       3,512
Other long-term receivables and prepayments                      944         914
Investment property                                              288         288
Property, plant and equipment                                 49,482      58,877
Intangible assets                                             50,094      53,942
                                                         -----------------------
Total non-current assets                                     105,439     118,334
                                                                                
                                                         -----------------------
TOTAL ASSETS                                                 153,726     162,333
                                                                                
                                                                                
LIABILITIES AND EQUITY                                                          
Current liabilities                                                             
Borrowings                                                         0         292
Trade and other payables                                      26,457      27,680
Income tax payable                                               201       1,058
Provisions                                                     2,046       1,842
                                                         -----------------------
Total current liabilities                                     28,704      30,872
                                                                                
Non-current liabilities                                                         
Borrowings                                                       722       8,079
Deferred tax liability                                           460         513
                                                         -----------------------
Total non-current liabilities                                  1,182       8,592
                                                                                
                                                         -----------------------
TOTAL LIABILITIES                                             29,886      39,464
                                                                                
EQUITY                                                                          
Share capital                                                 60,716      60,716
Share premium                                                    258         258
Statutory reserve capital                                      4,860       3,574
Other reserves                                                   470         329
Translation reserves                                            -703      -1,156
Retained earnings                                             52,189      51,822
                                                         -----------------------
Total equity attributable to equity holders of the           117,790     115,543
 parent                                                                         
Non-controlling interest                                       6,050       7,326
                                                         -----------------------
TOTAL EQUITY                                                 123,840     122,869
                                                                                
                                                         -----------------------
TOTAL LIABILITIES AND EQUITY                                 153,726     162,333



Consolidated statement of comprehensive income

(in EUR thousands)                           Q3 2016  Q3 2015   9M 2016  9M 2015
                                            ------------------------------------
                                                                                
Income from gaming transactions               45,454   37,431   131,521  113,319
Revenue                                        4,650    2,502    10,558    7,324
Other income                                  17,889      113    18,351      388
                                            ------------------------------------
Total revenue and income                      67,993   40,046   160,430  121,031
                                                                                
Cost of materials, goods and services         -1,485     -913    -3,942   -2,690
Other operating expenses                     -23,959  -18,174   -70,115  -56,595
Staff costs                                  -13,769  -10,032   -40,160  -32,220
Depreciation, amortisation and impairment    -11,390   -2,024   -16,494   -5,955
Other expenses                                -1,679     -122    -1,973     -308
                                            ------------------------------------
Total operating expenses                     -52,282  -31,265  -132,684  -97,768
                                                                                
                                            ------------------------------------
Operating profit                              15,711    8,781    27,746   23,263
                                                                                
Interest income                                   11       10        58       41
Interest expense                                 -25       -7       -41      -21
Foreign exchange income                            5        5        26       20
Other finance income and costs                   -20       -1       -30       -5
                                            ------------------------------------
Total finance income and costs                   -29        7        13       35
                                                                                
                                            ------------------------------------
Profit from operating activities              15,682    8,788    27,759   23,298
                                                                                
Income tax expense                            -1,278     -748    -3,241   -2,896
                                            ------------------------------------
Net profit for the period                     14,404    8,040    24,518   20,402
Attributable to equity holders of the         13,910    7,804    23,661   19,604
 parent company                                                                 
Attributable to non-controlling interest         494      236       857      798
                                                                                
                                                                                
Other comprehensive income                                                      
Items that may be subsequently reclassified                                     
 to profit or loss                                                              
Currency translation differences                 618      -29       453      218
                                            ------------------------------------
Total comprehensive profit for the period     15,022    8,011    24,971   20,620
Attributable to equity holders of the         14,528    7,775    24,114   19,822
 parent company                                                                 
Attributable to non-controlling interest         494      236       857      798
                                                                                
                                                                                
Basic earnings per share*                        9.2      5.1      15.6     12.9
Diluted earnings per share*                      9.2      5.1      15.6     12.9

* euro cents



Madis Jääger
CEO
Olympic Entertainment Group AS
Tel + 372 667 1250
E-mail [email protected]
http://www.olympic-casino.com