Key performance indicators of the Group
| 6M 2017 | 6M 2016 | 6M 2015 | ||
| Revenue before gaming taxes | m€ | 104.4 | 99.2 | 86.5 |
| Gaming tax | m€ | -21.6 | -22.9 | -20.4 |
| Net revenue | m€ | 82.8 | 76.3 | 66.0 |
| Total net revenue and income | m€ | 82.8 | 76.8 | 66.3 |
| EBITDA | m€ | 20.9 | 17.1 | 18.4 |
| EBIT | m€ | 14.7 | 12.0 | 14.5 |
| Net profit | m€ | 12.6 | 10.1 | 12.4 |
| EBITDA margin | % | 25.3 | 22.5 | 27.9 |
| Operating margin | % | 17.8 | 15.8 | 21.9 |
| Net margin | % | 15.2 | 13.3 | 18.7 |
| Assets | m€ | 150.1 | 188.9 | 125.0 |
| Equity | m€ | 127.2 | 108.8 | 106.8 |
| ROE | % | 10.4 | 8.9 | 11.5 |
| ROA | % | 8.3 | 5.8 | 9.8 |
| Current ratio | times | 2.0 | 0.8 | 2.2 |
| Casinos at end of period | # | 117 | 125 | 96 |
| Casino floor area at end of period | m2 | 38,784 | 39,223 | 30,263 |
| Betting points at the end of period | # | 30 | 33 | 0 |
| Betting points floor area at end of period | m2 | 846 | 899 | 0 |
| Employees | # | 3,059 | 3,260 | 2,653 |
| Slot machines at end of period | # | 4,098 | 4,159 | 3,351 |
| Electronic roulette terminals at the end of period | # | 116 | 148 | 104 |
| Gaming tables at end of period | # | 165 | 198 | 182 |
| Tournament poker gaming tables at the end of period | # | 66 | 63 | 44 |
Key developments of the Group during 6 months of 2017:
- The financial results in the management report section of this report have been presented together with discontinued operations Poland and Belarus, whereas in the statement of comprehensive income the results of discontinued operations have been separated and presented in a single line. Please see page 13 for the income statements of continued and discontinued operations.
- The Group’s consolidated total revenue before gaming taxes for 6 months of 2017 amounted to EUR 104.4 million, up 5.2% or EUR 5.2 million y‑o‑y.
- Total gaming revenue before gaming taxes accounted for 90.4% (94,3 m€) and other revenues for 9.6% (10.0 m€) of the Group’s consolidated total sales revenues for 6 months of 2017. A year before the revenue split was 94.0% (93.3 m€) and 6.0% (5.9 m€), respectively.
- The Group’s consolidated EBITDA for 6 months of 2017 amounted to EUR 20.9 million, a growth of 22.1% from EUR 17.1 million a year before. The Group’s consolidated operating profit increased EUR 2.7 million (22.3%) to EUR 14.7 million.
- The Group’s consolidated net profit attributable to equity holders of the parent company for 6 months of 2017 totalled EUR 12.8 million compared to EUR 9.8 million a year ago.
- In the current financial statements, Polish and Belarus segments have been classified as discontinued operations, for which the net profit for 6 months of 2017 amounted to EUR 0 million (in 6 months of 2016 net profit of EUR 0.3 m€).
- Group Polish subsidiary Casino Polonia-Wrocław sp. z o.o. that operated the flagship casino of OEG in Warsaw until September 2016 submitted to the court its bankruptcy petition on 2 January 2017.
- On 11 January 2017 Group established and registered the company Olybet Malta Limited in Malta. with share capital of EUR 5,000. Group owns through a subsidiary 100% of the shares of Olybet Malta Limited. The aim of establishing the subsidiary is to develop the legal platform for the expansion of OEG group's activities in the business of remote gambling.
- Group Polish subsidiaries Baina Investments sp. z o.o. and Silber Investments sp. z o.o. submitted to the court their bankruptcy petitions on 20 January 2017. These holding companies own shares in the OEG subsidiary Casino Polonia-Wrocław sp. z o.o.
- On 27 February 2017 Group announced that the Lithuanian subsidiary of OEG, UAB Orakulas will be demerged into two entities within the first half of this year. The aim of the demerger was to adjust the group structure by separating the technology platform of online operations and trading and risk management for sports betting services from the operational activities of the subsidiary. OEG would own 100% of the shares in both entities after the demerger. Demerger was completed on 16 May 2017.
- On 28 March 2017 Group initiated proceedings for delisting its shares from the main market of the Warsaw Stock Exchange.
- The general meeting of shareholders held on 20 April 2017 decided to pay out dividends in amount of EUR 15,179,120.60 (EUR 0.1 per share), that were paid out to shareholders on 9 May 2017.
- On 9 May 2017 Group announced that Italian subsidiaries of OEG, casino operating companies Slottery S.r.l. and Jackpot Game S.r.l., have concluded a merger agreement. The merger was finalised on 28 June 2017 and during the course of the merger Jackpot Game S.r.l. was merged with Slottery S.r.l. The aim of the merger is the adjustment of the group’s structure.
- On 29 May 2017 OEG announced of the liquidation of its Belarus subsidiary Olympic Casino Bel IP. The aim of the liquidation was the adjustment of the group’s structure.
- On 9 June 2017 the Group announced that its Lithuanian subsidiaries, Olympic Casino Group Baltija UAB and Orakulas UAB have concluded a merger agreement on 7.06.2017. The merger will be finalised within the current year and during the course of the merger Orakulas UAB will merge with Olympic Casino Group Baltija UAB. After the merger has been completed the group will carry on operating the casinos and betting shops in Lithuania only through Olympic Casino Group Baltija UAB. The aim of the merger is the adjustment of the group’s structure.
The Group’s consolidated total revenue before gaming taxes by segments:
| ‘000€ | Q2 2017 | Q2 2016 | Change | 6M 2017 | 6M 2016 | Change |
| Estonia | 14,329 | 10,592 | 35.3% | 26,729 | 20,123 | 32.8% |
| Latvia | 16,662 | 15,205 | 9.6% | 33,203 | 31,229 | 6.3% |
| Lithuania | 6,673 | 6,003 | 11.2% | 13,705 | 12,291 | 11.5% |
| Slovakia | 4,288 | 4,790 | -10.5% | 8,790 | 8,713 | 0.9% |
| Italy | 7,750 | 6,392 | 21.2% | 15,665 | 12,679 | 23.6% |
| Malta | 3,143 | 2,552 | 23.2% | 6,259 | 4,738 | 32.1% |
| Poland | 0 | 4,657 | -100.0% | 0 | 9,229 | -100.0% |
| Belarus | 0 | 64 | -100.0% | 0 | 186 | -100.0% |
| Total | 52,845 | 50,255 | 5.2% | 104,351 | 99,188 | 5.2% |
Number of casinos by segment:
| 30 June 2017 | 30 June 2016 | |
| Estonia | 24 | 24 |
| Latvia | 52 | 57 |
| Lithuania | 18 | 19 |
| Slovakia | 7 | 8 |
| Italy | 15 | 14 |
| Malta | 1 | 1 |
| Poland | 0 | 1 |
| Belarus | 0 | 1 |
| Total | 117 | 125 |
The Group’s consolidated operating expenses for 6 months of 2017 amounted to EUR 68.1 million, up 5.2% or EUR 3.4 million y‑o‑y. The growth was highest in personnel expenses (+1.1 m€, +4.3%), amortisation, depreciation and impairment costs (+1.1 m€, +21.7%), rent expenses (+0.9 m€, +11.4%) and utilities and maintenance costs (+0.3 m€, +7.2%). Personnel expenses (27.5 m€) and rent costs (8.3 m€) represented the largest cost items accounting for 52.6% of total operating expenses.
The income statement now presents revenue before gaming taxes, then gaming taxes and thereafter net revenue. Therefore, gaming taxes are no longer presented under operating expenses. Gaming taxes for 6 months of 2017 decreased 5.8% (‑1.3 m€) compared to 6 months of 2016.
Overview by markets
Estonia
Total revenue before gaming taxes of Estonian segment for 6 months of 2017 amounted to EUR 26.7 million (+6.6 m€, +32.8%), EBITDA to EUR 4.3 million (+2.2 m€, +103.6%) and operating profit to EUR 2.5 million (+1.6 m€, +183.2%). Gaming revenue before gaming taxes increased 14.7% y-o-y amounting to EUR 21.5 million.
At the end of June 2017, there were 24 Olympic casinos with 988 slot machines, 46 electronic roulette terminals, 24 gaming tables and 24 poker tournament tables operating in Estonia. At 30 June 2017 Estonian operations employed 732 people.
Latvia
Total revenue before gaming taxes of Latvian segment for 6 months of 2017 amounted to EUR 33.2 million (+2.0 m€, +6.3%), EBITDA to EUR 13.5 million (+0.9 m€, +7.4%) and operating profit to EUR 11.5 million (+0.7 m€, +6.3%). Gaming revenue before gaming taxes increased 5.8% y‑o‑y amounting to EUR 30.2 million.
At the end of June 2017, there were 52 Olympic casinos with 1,466 slot machines, 8 electronic roulette terminals, 24 gaming tables and 9 poker tournament tables operating in Latvia. At 30 June 2017 Latvian operations employed 930 people.
Lithuania
Total revenue before gaming taxes of Lithuanian segment for 6 months of 2017 amounted to EUR 13.7 million (+1.4 m€, +11.5%), EBITDA to EUR 1.7 million (+0.8 m€, +90.6%) and operating profit to EUR 0.9 million (+0.7 m€, +525.8%). Gaming revenue before gaming taxes increased 11.6% y-o-y amounting to EUR 13.0 million.
At the end of June 2017, there were 18 Olympic casinos with 544 slot machines, 8 electronic roulette terminals, 53 gaming tables and 2 poker tournament tables and 30 betting shops operating in Lithuania. At 30 June 2017 Lithuanian operations employed 766 people.
Slovakia
Total revenue before gaming taxes of Slovak segment for 6 months of 2017 amounted to EUR 8.8 million (+0.1 m€, +0.9%), EBITDA to EUR 0.9 million (-0.1 m€, -8.7%) and operating profit to EUR 0.2 million (-0.2 m€, -40.7%). Gaming revenue before gaming taxes increased 1.2% y-o-y amounting to EUR 7.9 million.
At the end of June 2017, there were 7 Olympic casinos with 272 slot machines, 36 electronic roulette terminals, 44 gaming tables and 21 poker tournament tables operating in Slovakia. At 30 June 2017 Slovak operations employed 338 people.
Italy
Total revenue before gaming taxes of Italian segment for 6 months of 2017 amounted to EUR 15.7 million (+3.0 m€, +23.6%), EBITDA to EUR 1.0 million (+0.6 m€, +151.9%) and operating profit to EUR 0.6 million (+0.3 m€, +138.5%). Gaming revenue before gaming taxes increased 23.3% y-o-y amounting to EUR 15.5 million.
At the end of June 2017, there were 15 VLT slot casinos with 543 slot machines operating in Italy. At 30 June 2017 Italian operations employed 92 people.
Malta
Total revenue before gaming taxes of Maltese segment for 6 months of 2017 amounted to EUR 6.3 million (+1.5 m€, +32.1%), EBITDA to EUR -0.4 million (-0.1 m€) and operating loss to EUR 1.0 million (-0.1 m€). Gaming revenue before gaming taxes increased 31.9% y-o-y amounting to EUR 6.2 million.
At the end of June 2017, there was 1 casino with 285 slot machines, 18 electronic roulette terminals, 20 gaming tables and 10 poker tournament tables operating in Malta. At 30 June 2017 Maltese operations employed 198 people.
Financial position
At 30 June 2017, the total assets of the Group amounted to EUR 150.1 million, down 20.6% or EUR 38.8 million compared to the same period a year ago.
Current assets totalled EUR 43.6 million or 29.0% of total assets, and non-current assets EUR 106.5 million or 71.0% of total assets. The liabilities amounted to EUR 22.9 million and equity to EUR 127.2 million. The largest liabilities included suppliers payables and advances (8.7 m€), tax liabilities (5.4 m€) and payables to employees (5.2 m€).
Investments
Within 6 months of 2017, the Group’s expenditures on property, plant and equipment totalled EUR 4.5 million (‑21.5 m€, ‑82.6%), of which EUR 3.2 million was invested into construction and reconstruction of casinos and EUR 1.1 million into new gaming equipment. First half of 2016 also includes investments into the hotel construction, which is why investments for the 6 months of 2017 were lower.
Cash flows
Group’s cash flows generated within 6 months of 2017 from operating activities amounted to EUR 19.4 million (+5.0 m€) and cash flows used in investing activities to EUR -4.8 million (+26.1 m€). Financing cash flows amounted to EUR ‑15.3 million (-29.1 m€). Net cash flows totalled EUR -0.7 million (+2.0 m€).
Staff
At 30 June 2017 Group employed 3,059 people, down by 201 y-o-y mostly due to casino´s closure in Poland.
Within 6 months of 2017, total personnel expenses amounted to EUR 27.5 million (+1.1 m€, +4.3%). For 6 months of 2017, 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 511 thousand (EUR 741 thousand for 6 months of 2016) and EUR 74 thousand (EUR 74 thousand for 6 months of 2016), respectively.
Consolidated statement of financial position
| (in EUR thousands) | 30.06.2017 | 31.12.2016 | |
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalents | 37,180 | 37,933 | |
| Financial investments | 100 | 99 | |
| Receivables and prepayments | 4,193 | 4,552 | |
| Prepaid income tax | 378 | 913 | |
| Inventories | 1,726 | 1,532 | |
| Total current assets | 43,577 | 45,029 | |
| Non-current assets | |||
| Deferred tax assets | 462 | 426 | |
| Financial investments | 5,033 | 4,988 | |
| Other long-term receivables and prepayments | 1,013 | 776 | |
| Investment property | 295 | 295 | |
| Property, plant and equipment | 49,901 | 51,250 | |
| Intangible assets | 49,813 | 49,932 | |
| Total non-current assets | 106,517 | 107,667 | |
| TOTAL ASSETS | 150,094 | 152,696 | |
| LIABILITIES AND EQUITY | |||
| Current liabilities | |||
| Trade and other payables | 19,826 | 19,806 | |
| Income tax payable | 318 | 292 | |
| Provisions | 1,301 | 1,329 | |
| Total current liabilities | 21,445 | 21,427 | |
| Non-current liabilities | |||
| Deferred tax liability | 680 | 693 | |
| Other long-term payables | 766 | 703 | |
| Total non-current liabilities | 1,446 | 1,396 | |
| TOTAL LIABILITIES | 22,891 | 22,823 | |
| EQUITY | |||
| Share capital | 60,716 | 60,716 | |
| Share premium | 252 | 258 | |
| Treasury shares | -53 | 0 | |
| Statutory reserve capital | 6,325 | 4,860 | |
| Other reserves | 504 | 538 | |
| Translation reserves | 11 | -26 | |
| Retained earnings | 54,016 | 57,825 | |
| Total equity attributable to equity holders of the parent | 121,771 | 124,171 | |
| Non-controlling interest | 5,432 | 5,702 | |
| TOTAL EQUITY | 127,203 | 129,873 | |
| TOTAL LIABILITIES AND EQUITY | 150,094 | 152,696 |
Consolidated statement of comprehensive income
| (in EUR thousands) | Q2 2017 | Q2 2016 | 6M 2017 | 6M 2016 | |||||
| Continuing operations | |||||||||
| Gross gaming revenue | 47,291 | 42,569 | 94,319 | 84,033 | |||||
| Other revenue | 5,554 | 2,965 | 10,032 | 5,740 | |||||
| Total revenue before gaming taxes | 52,845 | 45,534 | 104,351 | 89,773 | |||||
| Gaming taxes | -10,365 | -9,302 | -21,575 | -18,321 | |||||
| Net revenue | 42,480 | 36,232 | 82,776 | 71,452 | |||||
| Other income | 10 | 120 | 20 | 284 | |||||
| Total net revenue and income | 42,490 | 36,352 | 82,796 | 71,736 | |||||
| Cost of materials, goods and services | -1,382 | -1,305 | -2,845 | -2,372 | |||||
| Other operating expenses | -15,860 | -14,396 | -31,373 | -27,706 | |||||
| Staff costs | -14,077 | -12,830 | -27,524 | -24,886 | |||||
| Depreciation, amortisation and impairment | -3,148 | -2,556 | -6,213 | -4,930 | |||||
| Other expenses | -66 | -84 | -129 | -196 | |||||
| Total operating expenses | -34,533 | -31,171 | -68,084 | -60,090 | |||||
| Operating profit | 7,957 | 5,181 | 14,712 | 11,646 | |||||
| Interest income | 0 | 5 | 4 | 20 | |||||
| Interest expense | 0 | -15 | 0 | -15 | |||||
| Foreign exchange gains (losses) | -21 | 24 | -29 | 16 | |||||
| Other finance income and costs | -9 | 0 | -9 | -3 | |||||
| Total finance income and costs | -30 | 14 | -34 | 18 | |||||
| Profit before income tax | 7,927 | 5,195 | 14,678 | 11,664 | |||||
| Income tax expense | -978 | -862 | -2 113 | -1 866 | |||||
| Net profit for the period from continuing operations | 6,949 | 4,333 | 12,565 | 9,798 | |||||
| Net profit for the period from discontinued operations | 0 | 317 | 0 | 315 | |||||
| Net profit for the period | 6,949 | 4,650 | 12,565 | 10,113 | |||||
| Attributable to equity holders of the parent company | 6,825 | 4,652 | 12,835 | 9,750 | |||||
| Attributable to non-controlling interest | 124 | -2 | -270 | 363 | |||||
| Other comprehensive income | |||||||||
| Items that may be subsequently reclassified to profit or loss | |||||||||
| Currency translation differences | 0 | -347 | 37 | -166 | |||||
| Total comprehensive profit for the period | 6,949 | 4,303 | 12,602 | 9,947 | |||||
| Attributable to equity holders of the parent company | 6,825 | 4,305 | 12,872 | 9,584 | |||||
| Attributable to non-controlling interest | 124 | -2 | -270 | 363 | |||||
| Basic earnings per share* | 4.5 | 3.1 | 8.5 | 6.4 | |||||
| From continuing operations | 4.5 | 2.9 | 8.5 | 6.2 | |||||
| From discontinuing operations | 0.0 | 0.2 | 0.0 | 0.2 | |||||
| Diluted earnings per share* | 4.5 | 3.1 | 8.4 | 6.4 | |||||
| From continuing operations | 4.5 | 2.9 | 8.4 | 6.2 | |||||
| From discontinuing operations | 0.0 | 0.2 | 0.0 | 0.2 | |||||
* euro cents
Madis Jääger
CEO
Olympic Entertainment Group AS
Tel + 372 667 1250
E-mail madis.jaager@oc.eu
http://www.olympic-casino.com