Key performance indicators of the Group
| H1 2014 | H1 2013 | H1 2012 | ||
| Revenues | m€ | 72.2 | 67.4 | 64.1 |
| Gaming tax | m€ | 14.3 | 14.0 | 13.5 |
| EBITDA | m€ | 16.7 | 16.7 | 17.3 |
| EBIT | m€ | 12.6 | 12.5 | 11.7 |
| Net profit | m€ | 10.3 | 9.7 | 10.4 |
| EBITDA margin | % | 23.1 | 24.7 | 27.0 |
| Operating margin | % | 17.5 | 18.5 | 18.3 |
| Net margin | % | 14.3 | 14.3 | 16.2 |
| Assets | m€ | 115.4 | 101.0 | 109.9 |
| Equity | m€ | 97.8 | 84.7 | 78.1 |
| ROE | % | 10.8 | 11.5 | 13.8 |
| ROA | % | 8.8 | 9.2 | 9.8 |
| Current ratio | times | 2.3 | 2.4 | 1.9 |
| Casinos at end of period | # | 93 | 83 | 62 |
| Casino floor area (m2) at end of period | m 2 | 31,060 | 26,235 | 23,480 |
| Employees | # | 2,593 | 2,561 | 2,349 |
| Slot machines at end of period | # | 3,337 | 3,056 | 2,487 |
| Gaming tables at end of period | # | 192 | 189 | 183 |
Key developments of the Group during the first half-year of 2014:
- The Group’s consolidated sales revenues for H1 2014 amounted to EUR 72.0 million, up 7.2% or EUR 4.8 million y‑o‑y.
- Gaming revenues accounted for 94.0% (67.7 m€) and other revenues for 6.0% (4.3 m€) of the Group’s consolidated sales revenues for H1 2014. A year before the revenue split was 93.3% (62.6 m€) and 6.7% (4.5 m€), respectively.
- The Group’s consolidated EBITDA for H1 2014 amounted to EUR 16.7 million, a growth of 0.2% from EUR 16.7 million a year before. At the same time, the Group’s consolidated operating profit increased EUR 0.2 million (+1.4%) to EUR 12.6 million.
- In H1 2014, the consolidated net profit attributable to equity holders of the parent company totalled EUR 10.3 million compared to EUR 9.7 million a year ago.
- On 23 January 2014 Olympic Entertainment Group AS has acquired 100% shareholding in Slovak VLT slot casino operator WINWIN Slovakia S.r.o. (renamed later as OlyBet Slovakia S.r.o.) and has opened its first VLT casino on Slovak market during the second quarter of 2014.
- The general meeting of shareholders held on 25 April 2014 has decided to pay out dividends in amount of EUR 15,132,950.50, that were paid out to shareholders on 13 May 2014.
- On 29 April 2014 Olympic Entertainment Group AS has increased to 70% its holding in The Box S.r.l, a company that manages operations in Italy, which in turn has acquired a 100% holding in Slottery S.r.l.
- In May 2014 Olympic Entertainment Group AS has adopted a decision to restructure its Latvian subsidiaries, which leaded to conversion of Olympic Casino Latvia SIA share capital into euros and its increase. It was also decided to merge OEG Latvian subsidiries Olympic Casino Latvia SIA and Altea SIA. The merger process will take 10 months.
- On 21 July 2014 the supervisory board of Olympic Entertainment Group AS has adopted a resolution to increase the share capital of the Company by EUR 184,680.40 by issuing shares without nominal value. The amount of share capital of the Company after the issuing of new shares is EUR 60,716,482.40. The increase of share capital relates to share option agreements concluded by the Company in 2011 and the exercise of options by option holders.
The Group’s consolidated sales revenues by segments:
| ‘000€ | Q2 2014 | Q2 2013 | Change | H1 2014 | H1 2013 | Change |
| Estonia | 8,459 | 8,289 | 2.1% | 16,247 | 16,397 | -0.9% |
| Latvia | 11,267 | 8,398 | 34.2% | 21,682 | 16,428 | 32.0% |
| Lithuania | 5,206 | 4,906 | 6.1% | 10,705 | 10,036 | 6.7% |
| Poland | 5,975 | 7,287 | -18.0% | 12,193 | 13,569 | -10.1% |
| Slovakia | 4,111 | 3,787 | 8.6% | 7,736 | 7,706 | 0.4% |
| Belarus | 494 | 563 | -12.3% | 966 | 1,254 | -23.0% |
| Italy | 1,673 | 858 | 95.0% | 2,463 | 1,757 | 40.2% |
| Total | 37,185 | 34,088 | 9.1% | 71,992 | 67,147 | 7.2% |
Number of casinos by segment:
| 30 June 2014 | 30 June 2013 | |
| Estonia | 18 | 18 |
| Latvia | 38 | 38 |
| Lithuania | 12 | 12 |
| Poland | 2 | 3 |
| Slovakia | 6 | 5 |
| Belarus | 6 | 5 |
| Italy | 11 | 2 |
| Total | 93 | 83 |
The Group’s consolidated operating expenses for H1 2014 amounted to EUR 59.6 million, up 8.5% or EUR 4.7 million y-o-y. The growth was highest in personnel expenses (+2.4 m€, +13.9%), rent expenses (+0.7 m€, +13.1%) and other services costs (+0.5 mln eurot, +44.0%). Amortization and depreciation cost declined the most (-0.1 m€, -3.5%). Personnel expenses (19.3 m€) and gaming tax (14.3 m€) represented the largest cost items accounting for 56.3% of total operating expenses.
Overview by markets
Estonia
The sales revenues of Estonian segment for H1 2014 amounted to EUR 16.2 million (-0.1 m€, -1.0%), EBITDA to EUR 3.9 million (+0.3 m€, +7.8%) and operating profit to EUR 3.0 million (+0.1 m€, +4.1%). Gaming revenue increased 3.8% y-o-y amounting to EUR 15.5 million.
The market share of Olympic Casino Eesti AS in the Estonian land-based gaming market was 55% in Q2 2014, compared to 56% a year ago. Total Estonian gaming market increased by 6% as compared to the H1 2013.
At the end of H1 2014, there were 18 Olympic casinos with 737 slot machines and 19 gaming tables operating in Estonia. As at 30 June 2014, the Estonian operations employed 478 people.
Latvia
The sales revenues of Latvian segment for H1 2014 amounted to EUR 21.7 million (+5.3 m€, +32.0%), EBITDA to EUR 8.3 million (+1.2 m€, +16.3%) and operating profit to EUR 6.8 million (+0.9 m€, +14.4%). Gaming revenue increased 32.4% y-o-y amounting to EUR 19.9 million.
The market share of Olympic Casino Latvia SIA in the Latvian gaming market was 23% in Q2 2014, compared to 21% a year ago. Total Latvian gaming market increased by 8% as compared to the H1 2013.
As at the end of H1 2014, there were 38 Olympic casinos with 1,066 slot machines and 18 gaming tables operating in Latvia. As at 30 June 2014, there were 690 employees in Latvia.
Lithuania
The sales revenues of Lithuanian segment for H1 2014 amounted to EUR 10.7 million (+0.7 m€, +6.7%), EBITDA to EUR 2.1 million (+0.1 m€, +5.8%) and operating profit to EUR 1.6 million (+0.4 m€, +30.1%). Gaming revenue increased 6.6% y-o-y amounting to EUR 10.1 million.
As at the end of H1 2014, there were 12 Olympic casinos with 428 slot machines and 63 gaming tables operating in Lithuania. As at 30 June 2014, the Lithuanian operations employed 670 people.
Poland
The sales revenues of Polish segment for H1 2014 amounted to EUR 12.2 million (-1.4 m€, -10.1%), EBITDA to EUR 1.8 million (-0.9 m€, -32.5%) and operating profit to EUR 1.5 million (-0.6 m€, -28.5%). Gaming revenue decreased 10.4% y-o-y amounting to EUR 12.0 million.
As at the end of H1 2014, there were 2 Olympic casinos with 215 slot machines and 39 gaming tables operating in Poland. As at 30 June 2014, the Polish operations employed 327 people.
Slovakia
The sales revenues of Slovak segment for H1 2014 amounted to EUR 7.7 million (+0.0 m€, +0.4%), EBITDA to EUR 0.6 million (-0.4 m€, -41.4%) and operating profit to EUR 0.0 million (-0.4 m€, -90.6%). Gaming revenue decreased 0.9% y-o-y amounting to EUR 6.9 million.
As at the end of H1 2014, there were 6 Olympic casinos with 269 slot machines and 53 gaming tables operating in Slovakia. As at 30 June 2014, The Slovak operations employed 273 people.
Belarus
The sales revenues of Belarusian segment for H1 2014 amounted to EUR 1.0 million (-0.3 m€, -23.0%), EBITDA to EUR -0.2 million (-0.3 m€, -398.0%) and operating profit to EUR -0.2 million (-0.2 m€, -1,936.8%). Gaming revenue decreased 22.2% y‑o‑y amounting to EUR 0.9 million.
As at the end of H1 2014, there were 6 Olympic casinos with 245 slot machines operating in Belarus. As at 30 June 2014, the Belarusian operations employed 98 people.
Italy
The sales revenues of Italian segment before deducting the gaming tax of Italy for H1 2014 amounted to EUR 5.2 million (+1.5 mln eurot, +40.2%), EBITDA to EUR 0.2 million (+0.02 mln, +10.5%) and operating profit to EUR 0.1 million (+0.0 mln, +23.8%).
In April 2014 Olympic Entertainment Group AS has increased to 70% its holding in The Box S.r.l, a company that manages operations in Italy, which in turn has acquired a 100% holding in VLT operaator Slottery S.r.l. As a result of this transaction at the end of H1 2014, there were 11 VLT slot casinos with 377 slot machines operating in Italy. As at 30 June 2014, the Italian operations employed 57 people.
Financial position
As at 30 June 2014, the total assets of the Group amounted to EUR 115.4 million, up 14.3% or EUR 14.4 million compared to the same period a year ago.
Current assets totalled EUR 37.0 million or 32.0% of total assets, and non-current assets EUR 78.4 million or 68.0% of total assets. The liabilities amounted to EUR 17.6 million and equity to EUR 97.8 million. The largest liabilities included suppliers payables and advances (5.7 m€), tax liabilities (4.2 m€) and payables to employees (3.8 m€).
Investments
In H1 2014, the Group’s expenditures on property, plant and equipment totalled EUR 9.5 million (+3.4 m€, +55.7%), of which EUR 4.2 million was invested into new gaming equipment (+0.5m€, +13.5%) and EUR 4.9 million (+2.5 m€, +104.2%) into construction of hotel and construction and reconstruction of casinos.
Cash flows
In H1 2014, the Group’s cash flows generated from operating activities amounted to EUR 13.2 million (+2.5 m€, +23.9%) and cash flows from investing activities to EUR -13.6 million (-15.8 m€). Financing cash flows amounted to EUR -14.2 million (+3.6 mln eurot, +20.1%). Net cash flows totalled EUR ‑14.6 million (-9.6 m€).
Staff
As at 30 June 2014, the Group employed 2,593 people, up by 32 y-o-y mostly due to expansion in Italy.
In H1 2014, total personnel expenses amounted to EUR 19.3 million (+2.4 m€, +13.9%). In H1 2014, 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 449 thousand (447 thousand in H1 2013) and EUR 77 thousand (EUR 78 thousand in H1 2013), respectively.
Consolidated statement of financial position
(in EUR thousands)
| 30.06.2014 | 31.12.2013 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 30,013 | 44,582 |
| Financial investments | 1,229 | 1,086 |
| Receivables and prepayments | 4,175 | 2,946 |
| Prepaid income tax | 447 | 357 |
| Inventories | 1,089 | 1,001 |
| Total current assets | 36,953 | 49,972 |
| Non-current assets | ||
| Deferred tax assets | 1,099 | 1,077 |
| Financial investments | 4,268 | 3,396 |
| Other long-term receivables | 696 | 670 |
| Investment property | 1,784 | 1,784 |
| Property, plant and equipment | 31,994 | 26,513 |
| Intangible assets | 38,575 | 34,865 |
| Total non-current assets | 78,416 | 68,305 |
| TOTAL ASSETS | 115,369 | 118,277 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Borrowings | 239 | 240 |
| Trade and other payables | 14,176 | 13,494 |
| Income tax payable | 426 | 776 |
| Provisions | 1,183 | 1,181 |
| Total current liabilities | 16,024 | 15,691 |
| Non-current liabilities | ||
| Deferred tax liability | 219 | 246 |
| Borrowings | 1,341 | 369 |
| Total non-current liabilities | 1,560 | 615 |
| TOTAL LIABILITIES | 17,584 | 16,306 |
| EQUITY | ||
| Share capital | 60,532 | 60,532 |
| Statutory reserve capital | 2,495 | 1,210 |
| Other reserves | 258 | 235 |
| Translation reserves | -1,120 | -1,204 |
| Retained earnings | 30,522 | 36,782 |
| Total equity attributable to equity holders of the parent | 92,687 | 97,555 |
| Non-controlling interest | 5,098 | 4,416 |
| TOTAL EQUITY | 97,785 | 101,971 |
| TOTAL LIABILITIES AND EQUITY | 115,369 | 118,277 |
Consolidated statement of comprehensive income
(in EUR thousands)
| Q2 2014 | Q2 2013 | H1 2014 | H1 2013 | |
| Income from gaming transactions | 34,977 | 31,766 | 67,696 | 62,650 |
| Revenue | 2,208 | 2,322 | 4,296 | 4,497 |
| Other income | 149 | 23 | 251 | 248 |
| Total revenue and income | 37,334 | 34,111 | 72,243 | 67,395 |
| Cost of materials, goods and services | -794 | -742 | -1,517 | -1,448 |
| Other operating expenses | -17,926 | -16,278 | -34,453 | -32,247 |
| Staff costs | -9,796 | -8,629 | -19,290 | -16,932 |
| Depreciation, amortisation and impairment | -2,095 | -2,092 | -4,055 | -4,200 |
| Other expenses | -153 | -34 | -284 | -95 |
| Total operating expenses | -30,764 | -27,775 | -59,599 | -54,922 |
| Operating profit | 6,570 | 6,336 | 12,644 | 12,473 |
| Interest income | 11 | 23 | 41 | 56 |
| Interest expense | -7 | -4 | -10 | -9 |
| Foreign exchange losses | -4 | -57 | -6 | -52 |
| Other finance income and costs | 0 | 0 | -1 | -621 |
| Total finance income and costs | 0 | -38 | 24 | -626 |
| Profit from operating activities | 6,570 | 6,298 | 12,668 | 11,847 |
| Income tax expense | -811 | -891 | -1,773 | -1,688 |
| Net profit for the period | 5,759 | 5,407 | 10,895 | 10,159 |
| Attributable to equity holders of the parent company | 5,423 | 5,079 | 10,304 | 9,660 |
| Attributable to non-controlling interest | 336 | 328 | 591 | 499 |
| Other comprehensive income | ||||
| Currency translation differences | -21 | -426 | 84 | -852 |
| Total comprehensive profit for the period | 5,738 | 4,981 | 10,979 | 9,307 |
| Attributable to equity holders of the parent company | 5,402 | 4,653 | 10,388 | 8,808 |
| Attributable to non-controlling interest | 336 | 328 | 591 | 499 |
| Basic earnings per share* | 3.6 | 3.4 | 6.8 | 6.4 |
| Diluted earnings per share* | 3.6 | 3.4 | 6.8 | 6.4 |
* euro cents
Madis Jääger
CEO
Olympic Entertainment Group AS
Tel + 372 667 1250
E-mail madis.jaager@oc.eu
http://www.olympic-casino.com
