Key performance indicators of the Group
| 9M 2013 | 9M 2012 | 9M 2011 | ||
| Revenues | m€ | 105.9 | 98.0 | 93.2 |
| Gaming tax | m€ | 21.4 | 20.1 | 19.2 |
| EBITDA | m€ | 28.6 | 27.7 | 24.0 |
| EBIT | m€ | 22.7 | 19.7 | 11.5 |
| Net profit | m€ | 18.3 | 17.7 | 10.0 |
| EBITDA margin | % | 27.1 | 28.3 | 25.7 |
| Operating margin | % | 21.4 | 20.1 | 12.3 |
| Net margin | % | 17.3 | 18.1 | 10.8 |
| Assets | m€ | 108.9 | 118.1 | 105.3 |
| Equity | m€ | 94.1 | 86.2 | 77.6 |
| ROE | % | 21.4 | 23.0 | 13.0 |
| ROA | % | 16.1 | 15.8 | 9.4 |
| Current ratio | times | 3.1 | 2.1 | 2.2 |
| Casinos at end of period | # | 83 | 62 | 63 |
| Casino floor area at end of period | m2 | 27,230 | 23,354 | 23,149 |
| Employees | # | 2,534 | 2,310 | 2,004 |
| Slot machines at end of period | # | 2,970 | 2,479 | 2,447 |
| Gaming tables at end of period | # | 185 | 182 | 173 |
Key developments of the Group during the 9 months of 2013:
- The Group’s consolidated sales revenues for 9 months 2013 amounted to EUR 105.6 million, up 8.4% or EUR 8.1 million y‑o‑y.
- Gaming revenues accounted for 93.4% (98.6 m€) and other revenues for 6.6% (7.0 m€) of the Group’s consolidated sales revenues for 9 months 2013. A year before the revenue split was 93.0% (90.6 m€) and 7.0% (6.8 m€), respectively.
- The Group’s consolidated EBITDA for 9 months 2013 amounted to EUR 28.6 million, up 3.4% from EUR 27.7 million a year before. The Group’s consolidated operating profit increased EUR 2.9 million (+14.8%) to EUR 22.7 million.
- The Group’s consolidated net profit attributable to equity holders of the parent company for 9 months 2013 totalled EUR 18.3 million compared to EUR 17.7 million a year ago.
- On 11 March Olympic Casino Eesti AS, the subsidiary of Olympic Entertainment Group AS, acquired a 100% shareholding in Siquia Holding B.V. registered in the Netherlands.
- On 11 March 2013 Olympic Entertainment Group AS established and registered the companies Gametech Services Ltd and Brandhouse Ltd in Jersey to create a legal platform for the expansion of the Group’s activities in markets related to online gaming.
- The annual general meeting of the shareholders held on 18 April 2013 decided to pay dividends in the amount of 15,132,950.50 euros.
- As part of the restructuring, Olympic Entertainment Group AS acquired 100% of the shares of the Dutch entity Jessy Investments B.V. and transferred the 100% shareholding in OÜ Fortuna Travel to the acquired entity. In addition, Olympic Entertainment Group AS acquired 100% shareholding in Kesklinna Hotelli OÜ, the share of which was used to increase the share capital of Jessy Investments B.V through non-monetary contribution. The restructuring was completed in June 2013.
- On 28 June 2013 Siquia Holding B.V, the subsidiary of Olympic Casino Eesti AS, signed a sales-purchase agreement to acquire 100% shareholding in Latvian casino operator Altea SIA.
- On 18 July 2013 Group entity Kesklinna Hotelli OÜ and AS Merko Ehitus Eesti signed an agreement for the construction of new upscale hotel instead of Reval Park Hotel & Casino. The new hotel will be operated by Hilton Worldwide under its Hilton Hotels & Resorts brand. The estimated cost of the new hotel and casino complex expected to open in December 2015 is EUR 36 million.
- Group entity Olympic Casino Latvia SIA started providing online gaming services in Latvia from 1 August 2013. In addition, the Group launched sports betting and sports bar network under Olybet name, a new brand for online services.
The Group’s consolidated sales revenue by segments:
| ‘000€ | Q3 2013 | Q3 2012 | Change | 9M 2013 | 9M 2012 | Change |
| Estonia | 9,615 | 9,340 | 2,9% | 26,011 | 25,134 | 3,5% |
| Latvia | 11,064 | 8,902 | 24,3% | 27,492 | 24,645 | 11,6% |
| Lithuania | 5,461 | 5,023 | 8,7% | 15,497 | 14,383 | 7,7% |
| Poland | 6,739 | 6,437 | 4,7% | 20,308 | 19,812 | 2,5% |
| Slovakia | 4,253 | 3,243 | 31,1% | 11,959 | 11,002 | 8,7% |
| Belarus | 554 | 906 | -38,9% | 1,808 | 2,481 | -27,1% |
| Italy | 773 | 0 | 100,0% | 2,530 | 0 | 100,0% |
| Total | 38,459 | 33,851 | 13,6% | 105,605 | 97,457 | 8,4% |
Number of casinos by segment:
| 30 September 2013 | 30 September 2012 | |
| Estonia | 18 | 18 |
| Latvia | 38 | 21 |
| Lithuania | 12 | 10 |
| Poland | 3 | 4 |
| Slovakia | 5 | 4 |
| Belarus | 5 | 5 |
| Italy | 2 | - |
| Total | 83 | 62 |
Overview by markets
Estonia
The sales revenues of Estonian segment for 9 months 2013 amounted to EUR 26.0 million (+0.9 m€, +3.5%), EBITDA to EUR 6.8 million (+0.2 m€, +3.1%) and operating profit to EUR 5.6 million (+1.1 m€, +26.3%). Gaming revenue increased 4.1%
y-o-y amounting to EUR 23.7 million.
The market share of Olympic Casino Eesti AS in the Estonian land-based gaming market was 57% in Q3 2013 remaining on the same level as a year ago. All in all, total Estonian land-based gaming market decreased in 9 months 2013 by approximately 4% as compared to the same period a year ago.
At the end of Q3 2013, there were 18 Olympic casinos with 741 slot machines and 19 gaming tables operating in Estonia. As at 30 September 2013, the Estonian operations employed 506 people.
Latvia
The sales revenues of Latvian segment for 9 months 2013 amounted to EUR 27.5 million (+2.8 m€, +11.6%), EBITDA to EUR 12.1 million (+0.9 m€, +7.6%) and operating profit to EUR 10.4 million (+0.9 m€, +9.8%). Gaming revenue increased 11.8% y-o-y amounting to EUR 25.3 million.
The market share of Latvian operations in the Latvian gaming market was approximately 23% in 9 months 2013, up from 20% a year ago. Total Latvian gaming market increased by approximately 3% as compared to the 9 months 2012.
As at the end of September 2013, there were 38 Olympic casinos with 1,001 slot machines and 18 gaming tables operating in Latvia. As at 30 September 2013, there were 662 employees in Latvia.
Lithuania
The sales revenues of Lithuanian segment for 9 months 2013 amounted to EUR 15.5 million (+1.1 m€, +7.7%), EBITDA to EUR 3.5 million (-0.01 m€, -1.5%) and operating profit to EUR 2.5 million (+0.1 m€, +5.4%). Gaming revenue increased 8.4% y-o-y amounting to EUR 14.6 million.
The market share of Olympic Casino Group Baltija UAB in the Lithuanian gaming market was 69% in 9 months 2013, up from 67% a year before. Total Lithuanian gaming market increased by 6% as compared to the nine months 2012.
As at the end of September 2013, there were 12 Olympic casinos with 394 slot machines and 58 gaming tables operating in Lithuania. As at 30 September 2013, the Lithuanian operations employed 670 people.
Poland
The sales revenues of Polish segment for 9 months 2013 amounted to EUR 20.3 million (+0.5 m€, +2.5%), EBITDA to EUR 4.0 million (+0.7 m€, +20.0%) and operating profit to EUR 3.2 million (+1.6 m€, +97.7%). Gaming revenue increased 2.8% y-o-y amounting to EUR 20.0 million.
As at the end of September 2013, there were 3 Olympic casinos with 271 slot machines and 38 gaming tables operating in Poland. As at 30 September 2013, the Polish operations employed 340 people.
Slovakia
The sales revenues of Slovak segment for 9 months 2013 amounted to EUR 12.0 million (+1.0 m€, +8.7%), EBITDA to EUR 1.8 million (-0.2 m€, -10.6%) and operating profit to EUR 0.9 million (-0.2 m€, -17.3%). Gaming revenue increased 8.0% y-o-y amounting to EUR 10.8 million.
As at the end of September 2013, there were 5 Olympic casinos with 263 slot machines and 52 gaming tables operating in Slovakia. As at 30 September 2013, The Slovak operations employed 263 people.
Belarus
In this interim financial statements the Belarusian segment is regarded as a hyperinflationary economy that is subject to the accounting policies of IAS 29.
The sales revenues of Belarusian segment for 9 months 2013 amounted to EUR 1.8 million (-0.7 m€, -27.1%), EBITDA to EUR 0.06 million (-0.9 m€, -93.7%) and operating profit to EUR 0.01 million (-0.8 m€). Gaming revenue decreased 26.2% y-o-y amounting to EUR 1.7 million.
As at the end of September 2013, there were 5 Olympic casinos with 188 slot machines operating in Belarus. As at 30 September 2013, the Belarusian operations employed 86 people.
Italy
The sales revenues of Italian segment before deducting the gaming tax of Italy for September 2013 amounted to EUR 5.3 million, EBITDA to EUR 0.4 million and operating profit to EUR 0.1 million.
The Group is operating in Italy since August 2012. As at the end of Q3 2013, there were 2 VLT slot casinos with 112 slot machines operating in Italy under the brand of Slottery. As at 30 September 2013, there were 7 employees in Italy.
Financial position
As at 30 September 2013, the total assets of the Group amounted to EUR 108.9 million, down 7.8% or EUR 9.2 million compared to the same period a year ago. The decline in total assets was mostly driven by dividend payment in Q1 2013.
Current assets totalled EUR 44.5 million or 40.8% of total assets, and non-current assets EUR 64.5 million or 59.2% of total assets. The liabilities amounted to EUR 14.9 million and equity to EUR 94.1 million. The largest liabilities included suppliers payable and customer prepayments (4.6 m€), tax liabilities (4.4 m€) and payables to employees (3.0 m€).
Investments
In 9 months 2013, the Group’s expenditures on property, plant and equipment totalled EUR 9.0 million (+3.3 m€), of which EUR 4.4 million was invested to new gaming equipment (+1.3m€) and EUR 4.3 million (+1.7 m€) to construction and reconstruction of casinos.
Cash flows
In 9 months 2013, the Group’s cash flows generated from operating activities amounted to EUR 22.5 million (-1.7 m€) and cash flows from investing activities to EUR -3.2 million (-3.9 m€). Financing cash flows amounting to EUR -17.8 million (‑15.5 €) were largely impacted by dividend payment in the amount of EUR 17.6 million. Net cash flows totalled EUR 1.5 million (-12.8 m€).
Staff
As at 30 September 2013, the Group employed 2,534 people, up by 224 y-o-y mostly due to opening new casinos in Lithuania and Slovakia as well as expansion in Latvia.
In 9 months 2013, total personnel expenses amounted to EUR 26.0 million (+2.0 m€, +8.5%). 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 615 thousand (626 thousand in 9 months 2012) and EUR 117 thousand (EUR 117 thousand in 9 months 2012), respectively.
Consolidated statement of financial position
| (EUR thousands) | 30.09.2013 | 31.12.2012 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 37,451 | 35,973 |
| Financial investments | 1,298 | 13,773 |
| Receivables and prepayments | 3,974 | 2,730 |
| Prepaid income tax | 564 | 280 |
| Inventories | 1,168 | 1,036 |
| Total current assets | 44,455 | 53,792 |
| Non-current assets | ||
| Deferred tax assets | 1,032 | 1,038 |
| Financial investments | 3,402 | 2,035 |
| Other long-term receivables | 685 | 712 |
| Investment property | 1,785 | 1,785 |
| Property, plant and equipment | 22,901 | 19,611 |
| Intangible assets | 34,670 | 30,226 |
| Total non-current assets | 64,475 | 55,407 |
| TOTAL ASSETS | 108,930 | 109,199 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Borrowings | 239 | 241 |
| Trade and other payables | 12,478 | 12,827 |
| Income tax payable | 517 | 827 |
| Provisions | 1,067 | 1,585 |
| Total current liabilities | 14,301 | 15,480 |
| Non-current liabilities | ||
| Deferred tax liability | 152 | 140 |
| Borrowings | 426 | 596 |
| Total non-current liabilities | 578 | 736 |
| TOTAL LIABILITIES | 14,879 | 16,216 |
| EQUITY | ||
| Share capital | 60,532 | 60,532 |
| Statutory reserve capital | 1,210 | 0 |
| Other reserves | 211 | 141 |
| Translation reserves | -1,287 | -700 |
| Retained earnings | 29,275 | 27,327 |
| Total equity attributable to equity holders of the parent | 89,941 | 87,300 |
| Non-controlling interest | 4,110 | 5,683 |
| TOTAL EQUITY | 94,051 | 92,983 |
| TOTAL LIABILITIES AND EQUITY | 108,930 | 109,199 |
Consolidated statement of comprehensive income
| (EUR thousands) | Q3 2013 | Q3 2012 | 9M 2013 | 9M 2012 |
| Income from gaming transactions | 35,986 | 31,409 | 98,636 | 90,629 |
| Revenue | 2,473 | 2,442 | 6,969 | 6,828 |
| Other income | 33 | 35 | 282 | 558 |
| Total revenue and income | 38,492 | 33,886 | 105,887 | 98,015 |
| Cost of materials, goods and services | -778 | -763 | -2,228 | -2,118 |
| Other operating expenses | -16,571 | -14,733 | -48,816 | -44,030 |
| Staff costs | -9,071 | -7,923 | -26,003 | -23,955 |
| Depreciation, amortisation and impairment | -1,783 | -2,392 | -5,983 | -7,959 |
| Other expenses | -97 | -58 | -191 | -216 |
| Total operating expenses | -28,300 | -25,869 | -83,221 | -78,278 |
| Operating profit | 10,192 | 8,017 | 22,666 | 19,737 |
| Interest income | 65 | 63 | 121 | 216 |
| Interest expense | -4 | -42 | -13 | -144 |
| Foreign exchange gains (losses) | -5 | 8 | -58 | -37 |
| Other finance income and costs | -1 | 889 | -622 | 1,412 |
| Total finance income and costs | 55 | 918 | -572 | 1,447 |
| Profit from operating activities | 10,247 | 8,935 | 22,094 | 21,184 |
| Income tax expense | -1,192 | -1,274 | -2,879 | -2,714 |
| Net profit for the period | 9,055 | 7,661 | 19,215 | 18,470 |
| Attributable to equity holders of the parent company | 8,631 | 7,337 | 18,291 | 17,696 |
| Attributable to non-controlling interest | 424 | 324 | 924 | 774 |
| Other comprehensive income | ||||
| Currency translation differences | 265 | 420 | -587 | 1,117 |
| Total comprehensive profit for the period | 9,320 | 8,081 | 18,628 | 19,587 |
| Attributable to equity holders of the parent company | 8,896 | 7,757 | 17,704 | 18,813 |
| Attributable to non-controlling interest | 424 | 324 | 924 | 774 |
| Basic earnings per share* | 5.7 | 4.8 | 12.1 | 11.7 |
| Diluted earnings per share* | 5.7 | 4.8 | 12.1 | 11.7 |
* euro cents
Madis Jääger
CEO
Olympic Entertainment Group AS
Tel + 372 667 1250
E-mail madis.jaager@oc.eu
http://www.olympic-casino.com
