News Column

OEG: consolidated unaudited results for Q2 and H1 2014

July 28, 2014

Key performance indicators of the Group H1 2014 H1 2013 H1 2012 --------------------------------- --------------------------------- Revenues mÄ 72.2 67.4 64.1 Gaming tax mÄ 14.3 14.0 13.5 EBITDA mÄ 16.7 16.7 17.3 EBIT mÄ 12.6 12.5 11.7 Net profit mÄ 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 mÄ 115.4 101.0 109.9 Equity mÄ 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 m2 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 Groupís 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 mÄ) and other revenues for 6.0% (4.3 mÄ) of the Groupís consolidated sales revenues for H1 2014. A year before the revenue split was 93.3% (62.6 mÄ) and 6.7% (4.5 mÄ), respectively. -- The Groupís 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 Groupís 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 2014Olympic 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 2014Olympic 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 2014Olympic 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 Groupís consolidated sales revenues by segments: Ď000Ä 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 Groupís 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 mÄ, +13.9%), rent expenses (+0.7 mÄ, +13.1%) and other services costs (+0.5 mln eurot, +44.0%). Amortization and depreciation cost declined the most (-0.1 mÄ, -3.5%). Personnel expenses (19.3 mÄ) and gaming tax (14.3 mÄ) 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 mÄ, -1.0%), EBITDA to EUR 3.9 million (+0.3 mÄ, +7.8%) and operating profit to EUR 3.0 million (+0.1 mÄ, +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 mÄ, +32.0%), EBITDA to EUR 8.3 million (+1.2 mÄ, +16.3%) and operating profit to EUR 6.8 million (+0.9 mÄ, +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 mÄ, +6.7%), EBITDA to EUR 2.1 million (+0.1 mÄ, +5.8%) and operating profit to EUR 1.6 million (+0.4 mÄ, +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 mÄ, -10.1%), EBITDA to EUR 1.8 million (-0.9 mÄ, -32.5%) and operating profit to EUR 1.5 million (-0.6 mÄ, -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 mÄ, +0.4%), EBITDA to EUR 0.6 million (-0.4 mÄ, -41.4%) and operating profit to EUR 0.0 million (-0.4 mÄ, -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 mÄ, -23.0%), EBITDA to EUR -0.2 million (-0.3 mÄ, -398.0%) and operating profit to EUR -0.2 million (-0.2 mÄ, -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 2014Olympic 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 mÄ), tax liabilities (4.2 mÄ) and payables to employees (3.8 mÄ). Investments In H1 2014, the Groupís expenditures on property, plant and equipment totalled EUR 9.5 million (+3.4 mÄ, +55.7%), of which EUR 4.2 million was invested into new gaming equipment (+0.5mÄ, +13.5%) and EUR 4.9 million (+2.5 mÄ, +104.2%) into construction of hotel and construction and reconstruction of casinos. Cash flows In H1 2014, the Groupís cash flows generated from operating activities amounted to EUR 13.2 million (+2.5 mÄ, +23.9%) and cash flows from investing activities to EUR -13.6 million (-15.8 mÄ). 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 mÄ). 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 mÄ, +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 92,687 97,555 parent 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 5,423 5,079 10,304 9,660 company 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 5,402 4,653 10,388 8,808 company 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.euhttp://www.olympic-casino.com Copyright © 2014 OMX AB (publ).


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Source: OMX


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