Key performance indicators of the Group
| Q1 2014 | Q1 2013 | Q1 2012 | ||
| Revenues | m€ | 34.9 | 33.3 | 32.2 |
| Gaming tax | m€ | 7.0 | 6.8 | 6.7 |
| EBITDA | m€ | 8.0 | 8.2 | 8.7 |
| EBIT | m€ | 6.1 | 6.1 | 5.8 |
| Net profit | m€ | 4.9 | 4.6 | 5.1 |
| EBITDA margin | % | 23.0% | 24.8% | 27.1% |
| Operating margin | % | 17.4% | 18.4% | 18.0% |
| Net margin | % | 14.0% | 13.8% | 15.9% |
| Assets | m€ | 122.3 | 113.2 | 107.0 |
| Equity | m€ | 107.1 | 97.3 | 87.9 |
| ROE | % | 5.0% | 5.1% | 6.4% |
| ROA | % | 4.2% | 4.1% | 4.9% |
| Current ratio | times | 3.5 | 3.6 | 2.2 |
| Casinos at end of period | # | 82 | 66 | 61 |
| Casino floor area at end of period | m 2 | 27,181 | 25,232 | 23,418 |
| Employees | # | 2,505 | 2,381 | 2,296 |
| Slot machines at end of period | # | 3,011 | 2,693 | 2,446 |
| Gaming tables at end of period | # | 191 | 184 | 183 |
Key developments of the Group during the first quarter of 2014:
- The Group’s consolidated sales revenues for Q1 2014 amounted to EUR 34.8 million, up 5.3% or EUR 1.7 million y‑o‑y.
- Gaming revenues accounted for 94.0% (32.7 m€) and other revenues for 6.0% (2.1 m€) of the Group’s consolidated sales revenues for Q1 2014. A year before the revenue split was 93.4% (30.9 m€) and 6.6% (2.2 m€), respectively.
- The Group’s consolidated EBITDA for Q1 2014 amounted to EUR 8.0 million, down 0.2% from EUR 8.2 million a year before. The Group’s consolidated operating profit decreased EUR 0.1 million (-1.0%) to EUR 6.1 million.
- The Group’s consolidated net profit attributable to equity holders of the parent company for Q1 2014 totalled EUR 4.9 million compared to EUR 4.6 million a year ago.
- On 23 January 2014 Olympic Entertainment Group AS acquired a 100% shareholding in Slovak VLT slot casino operator company WINWIN Slovakia S.r.o. (renamed to OlyBet Slovakia S.r.o.) and plans to open its first VLT slot casino in Slovakia within the first half of 2014.
- The annual general meeting of the shareholders held on 25 April 2014 decided to pay dividends in the amount of 15,132,950.50 Euros. Dividends will be paid out to shareholders on 13 May 2014.
The Group’s consolidated sales revenue by segments:
| ‘000€ | Q1 2014 | Q1 2013 | Change |
| Estonia | 7,788 | 8,108 | -3.9% |
| Latvia | 10,415 | 8,030 | 29.7% |
| Lithuania | 5,499 | 5,130 | 7.2% |
| Poland | 6,218 | 6,282 | -1.0% |
| Slovakia | 3,625 | 3,919 | -7.5% |
| Belarus | 472 | 691 | -31.7% |
| Italy | 790 | 899 | -12.1% |
| Total | 34,807 | 33,059 | 5.3% |
At the end of March 2014, the Group had 82 casinos with total floor area of 27,181 m² (+1,949 m²).
Number of casinos by segment:
| 31 March 2014 | 31 March 2013 | |
| Estonia | 18 | 18 |
| Latvia | 38 | 21 |
| Lithuania | 12 | 12 |
| Poland | 3 | 3 |
| Slovakia | 5 | 5 |
| Belarus | 4 | 5 |
| Italy | 2 | 2 |
| Total | 82 | 66 |
The Group’s consolidated operating expenses for Q1 2014 amounted to EUR 28.8 million, up 6.2% or EUR 1.7 million y-o-y. The growth was highest in personnel expenses (+1.2 m€, +14.3%), rent expenses (+0.2 m€, +5.0%) and gaming tax (+0.2 m€, +3.7%). Amortisation and depreciation cost declined the most (-0.2 m€, -7.0%). Personnel expenses (9.5 m€) and gaming tax (7.1 m€) represented the largest cost items accounting for 57.4% of total operating expenses.
Overview by markets
Estonia
The sales revenues of Estonian segment for Q1 2014 amounted to EUR 7.8 million (-0.3 m€, -3.5%), EBITDA to EUR 1.8 million (+0.0 m€, +0.2%) and operating profit to EUR 1.3 million (-0.1 m€, -5.7%). Gaming revenue increased 0.1% y-o-y amounting to EUR 7.5 million.
The market share of Olympic Casino Eesti AS in the Estonian land-based gaming market was 55% in Q1 2014 remaining on the same level as a year ago. All in all, total Estonian land-based gaming market decreased in Q1 2014 by 2% as compared to the same period a year ago.
At the end of March 2014, there were 18 Olympic casinos with 737 slot machines and 19 gaming tables operating in Estonia. As at 31 March 2014, the Estonian operations employed 473 people.
Latvia
The sales revenues of Latvian segment for Q1 2014 amounted to EUR 10.4 million (+2.4 m€, +29.7%), EBITDA to EUR 3.8 million (+0.4 m€, +11.6%) and operating profit to EUR 3.1 million (+0.3 m€, +11.3%). Gaming revenue increased 30.6% y-o-y amounting to EUR 9.6 million.
The market share of Latvian operations in the Latvian gaming market was approximately 23% in Q1 2014, up from 20% a year ago. Total Latvian gaming market increased by 2% as compared to the Q1 of 2013.
At the end of March 2014, there were 38 Olympic casinos with 1,040 slot machines and 18 gaming tables operating in Latvia. As at 31 March 2014, there were 660 employees in Latvia.
Lithuania
The sales revenues of Lithuanian segment for Q1 2014 amounted to EUR 5.5 million (+0.4 m€, +7.2%), EBITDA to EUR 1.1 million (-0.1 m€, -5.4%) and operating profit to EUR 0.9 million (+0.0 m€, +3.2%). Gaming revenue increased 7.0% y-o-y amounting to EUR 5.2 million.
At the end of March 2014, there were 12 Olympic casinos with 427 slot machines and 61 gaming tables operating in Lithuania. As at 31 March 2014, the Lithuanian operations employed 671 people.
Poland
The sales revenues of Polish segment for Q1 2014 amounted to EUR 6.2 million (-0.1 m€, -1.0%), EBITDA to EUR 1.0 million (-0.1 m€, -10.3%) and operating profit to EUR 0.8 million (+0.1 m€, +6.4%). Gaming revenue decreased 1.2% y-o-y amounting to EUR 6.1 million.
At the end of March 2014, there were 3 Olympic casinos with 284 slot machines and 40 gaming tables operating in Poland. As at 31 March 2014, the Polish operations employed 336 people.
Slovakia
The sales revenues of Slovak segment for Q1 2014 amounted to EUR 3.6 million (-0.3 m€, -7.5%), EBITDA to EUR 0.2 million (-0.3 m€, -58.9%) and operating loss to EUR 0.1 million (-0.3 m€, -118.4%). Gaming revenue decreased 10.3% y-o-y amounting to EUR 3.2 million.
At the end of March 2014, there were 5 Olympic casinos with 224 slot machines and 53 gaming tables operating in Slovakia. As at 31 March 2014, The Slovak operations employed 272 people.
Belarus
The sales revenues of Belarusian segment for Q1 2014 amounted to EUR 0.5 million (-0.2 m€, -31.7%), EBITDA to EUR -0.1 million (-0.2 m€, -148.5%) and operating loss to EUR 0.1 million (-0.2 m€). Gaming revenue decreased 31.2% y-o-y amounting to EUR 0.4 million.
At the end of March 2014, there were 4 Olympic casinos with 187 slot machines operating in Belarus. As at 31 March 2014, the Belarusian operations employed 86 people.
Italy
The sales revenues of Italian segment before deducting the gaming tax of Italy for Q1 2014 amounted to EUR 1.6 million (‑0.2 m€, -12.7%), EBITDA to EUR 0.1 million (+0.1 m€, +160.5%) and operating profit to EUR 0.1 million.
At the end of March 2014, there were 2 VLT slot casinos with 112 slot machines operating in Italy under Slottery trademark. As at 31 March 2014, there were 7 employees in Italy.
Financial position
As at 31 March 2014, the total assets of the Group amounted to EUR 122.3 million, up 3.4% or EUR 4.0 million during Q1 2014.
Current assets totalled EUR 51.2 million or 41.9% of total assets, and non-current assets EUR 71.0 million or 58.1% of total assets. The liabilities amounted to EUR 15.2 million and equity to EUR 107.1 million. The largest liabilities included tax liabilities (4.5 m€), suppliers payable and customer prepayments (4.2 m€) and payables to employees (4.1 m€).
Investments
In the first 3 months of 2014, the Group’s expenditures on property, plant and equipment totalled EUR 3.6 million (+0.0 m€), of which EUR 1.5 million was invested to new gaming equipment (-0.8m€) and EUR 1.9 million (+0.7 m€) to construction and reconstruction of casinos.
Cash flows
In Q1 of 2014, the Group’s cash flows generated from operating activities amounted to EUR 5.6 million (+1.0 m€) and cash flows used in investing activities to EUR 5.0 million (-11.8 m€). Financing cash flows amounted to EUR ‑0.1 million (‑0.0 m€). Net cash flows totalled EUR 0.5 million (-10.8 m€).
Staff
As at 31 March 2014, the Group employed 2,505 people, up by 117 y-o-y mostly due to expansion in Latvia.
In the first 3 months of 2014, total personnel expenses amounted to EUR 9.5 million (+1.2 m€, +14.3%). 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 225 thousand (222 thousand in Q1 2013) and EUR 39 thousand (EUR 39 thousand in Q1 2013), respectively.
Consolidated statement of financial position
| (EUR thousands) | 31.03.2014 | 31.12.2013 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 45,108 | 44,582 |
| Financial investments | 1,147 | 1,086 |
| Receivables and prepayments | 3,480 | 2,946 |
| Prepaid income tax | 357 | 357 |
| Inventories | 1,116 | 1,001 |
| Total current assets | 51,208 | 49,972 |
| Non-current assets | ||
| Deferred tax assets | 1,089 | 1,077 |
| Financial investments | 4,140 | 3,396 |
| Other long-term receivables | 658 | 670 |
| Investment property | 1,784 | 1,784 |
| Property, plant and equipment | 28,125 | 26,513 |
| Intangible assets | 35,250 | 34,865 |
| Total non-current assets | 71,046 | 68,305 |
| TOTAL ASSETS | 122,254 | 118,277 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Borrowings | 240 | 240 |
| Trade and other payables | 12,870 | 13,494 |
| Income tax payable | 537 | 776 |
| Provisions | 972 | 1,181 |
| Total current liabilities | 14,619 | 15,691 |
| Non-current liabilities | ||
| Deferred tax liability | 241 | 246 |
| Borrowings | 312 | 369 |
| Total non-current liabilities | 553 | 615 |
| TOTAL LIABILITIES | 15,172 | 16,306 |
| EQUITY | ||
| Share capital | 60,532 | 60,532 |
| Statutory reserve capital | 1,210 | 1,210 |
| Other reserves | 247 | 235 |
| Translation reserves | -1,098 | -1,204 |
| Retained earnings | 41,520 | 36,782 |
| Total equity attributable to equity holders of the parent | 102,411 | 97,555 |
| Non-controlling interest | 4,671 | 4,416 |
| TOTAL EQUITY | 107,082 | 101,971 |
| TOTAL LIABILITIES AND EQUITY | 122,254 | 118,277 |
Consolidated statement of comprehensive income
| (EUR thousands) | Q1 2014 | Q1 2013 |
| Income from gaming transactions | 32,719 | 30,884 |
| Revenue | 2,088 | 2,175 |
| Other income | 102 | 225 |
| Total revenue and income | 34,909 | 33,284 |
| Cost of materials, goods and services | -723 | -707 |
| Other operating expenses | -16,527 | -15,968 |
| Staff costs | -9,494 | -8,303 |
| Depreciation, amortisation and impairment | -1,960 | -2,108 |
| Other expenses | -131 | -61 |
| Total operating expenses | -28,835 | -27,147 |
| Operating profit | 6,074 | 6,137 |
| Interest income | 29 | 32 |
| Interest expense | -3 | -4 |
| Foreign exchange gains (losses) | -1 | 5 |
| Other finance income and costs | -1 | -621 |
| Total finance income and costs | 24 | -588 |
| Profit from operating activities | 6,098 | 5,549 |
| Income tax expense | -962 | -797 |
| Net profit for the period | 5,136 | 4,752 |
| Attributable to equity holders of the parent company | 4,881 | 4,580 |
| Attributable to non-controlling interest | 255 | 172 |
| Other comprehensive income: | ||
| Items that may be subsequently reclassified to profit | ||
| Currency translation differences | 106 | -426 |
| Total comprehensive profit for the period | 5,242 | 4,326 |
| Attributable to equity holders of the parent company | 4,987 | 4,154 |
| Attributable to non-controlling interest | 255 | 172 |
| Basic earnings per share* | 3.2 | 3.0 |
| Diluted earnings per share* | 3.2 | 3.0 |
* euro cents
Madis Jääger CEO Olympic Entertainment Group AS Tel + 372 667 1250 E-mail madis.jaager@oc.eu http://www.olympic-casino.com
