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 period | # | 112 | 104 | 96 |
Gaming tables at end of period | # | 164 | 185 | 191 |
Tournament poker gaming tables at the end of period | # | 64 | 46 | 46 |
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-Wrocław 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 parent | 117,790 | 115,543 | |
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 parent company | 13,910 | 7,804 | 23,661 | 19,604 | |
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 parent company | 14,528 | 7,775 | 24,114 | 19,822 | |
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 madis.jaager@oc.eu
http://www.olympic-casino.com