Key performance indicators of the Group
| 2017 | 2016 | 2015 | ||
| Revenue before gaming taxes | m€ | 215.1 | 205.1 | 177.2 |
| Gaming tax | m€ | -42.7 | -44.2 | -40.4 |
| Net revenue | m€ | 172.4 | 161.0 | 136.8 |
| Total net revenue and income | m€ | 172.6 | 179.4 | 137.4 |
| EBITDA | m€ | 47.3 | 53.8 | 39.5 |
| EBIT | m€ | 34.4 | 34.6 | 31.4 |
| Net profit | m€ | 30.6 | 29.8 | 27.1 |
| EBITDA margin | % | 27.4 | 33.4 | 28.9 |
| Operating margin | % | 19.9 | 21.5 | 22.9 |
| Net margin | % | 17.8 | 18.5 | 19.8 |
| Assets | m€ | 170.1 | 152.7 | 162.3 |
| Equity | m€ | 145.3 | 129.9 | 122.9 |
| ROE | % | 22.8 | 24.4 | 23.4 |
| ROA | % | 19.0 | 18.9 | 18.8 |
| Current ratio | times | 2.7 | 2.1 | 1.4 |
| Casinos at end of period | # | 115 | 120 | 119 |
| Casino floor area at end of period | m2 | 36,960 | 39,083 | 33,969 |
| Betting points at the end of period | # | 27 | 31 | 34 |
| Betting points floor area at end of period | m2 | 690 | 856 | 970 |
| Employees | # | 2,938 | 3,024 | 3,118 |
| Slot machines at end of period | # | 4,029 | 4,123 | 4,101 |
| Electronic roulette terminals at the end of period | # | 110 | 106 | 122 |
| Gaming tables at end of period | # | 163 | 170 | 183 |
| Tournament poker gaming tables at the end of period | # | 59 | 64 | 65 |
Key developments of the Group during 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 2017 amounted to EUR 215.1 million, up 4.9% or EUR 10.0 million y‑o‑y.
- Total gaming revenue before gaming taxes accounted for 89.6% (192,7 m€) and other revenues for 10.4% (22.4 m€) of the Group’s consolidated total sales revenues for 2017. A year before the revenue split was 92.4% (189.5 m€) and 7.6% (15.7 m€), respectively.
- The Group’s consolidated EBITDA for 2017 amounted to EUR 47.3 million, a decline of 12.1% from EUR 53.8 million a year before. The Group’s consolidated operating profit decreased EUR 0.2 million (0.7%) to EUR 34.4 million. 2016 respective numbers included profit from the hotel real estate sales transaction in amount of EUR 17.8 million and impairment of goodwill and assets in Poland (Polish segment’s operating loss for 2016 was EUR 7.8 million).
- The Group’s consolidated net profit attributable to equity holders of the parent company for 2017 totalled EUR 30.0 million compared to EUR 29.3 million a year ago.
- In the current financial statements, Polish and Belarusian segments have been classified as discontinued operations, for which the net profit for 2017 amounted to EUR 0 million (in 2016 net loss of EUR 9.6 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. After receiving permission from the Polish Financial Supervision Authority the Group announced that its shares are delisted from Warsaw Stock Exchange as of 19 September 2017.
- 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 was the adjustment of the group’s structure.
- On 29 May 2017 OEG announced of the liquidation of its Belarusian 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 June 2017. The merger was completed on 31 August 2017 and during the course of the merger Orakulas UAB was merged with Olympic Casino Group Baltija UAB. The aim of the merger was the adjustment of the group’s structure.
- On 18 October and 13 November OEG filed an action with a court regarding the decisions of cancellation of a permit to organise gambling activities in two and five casinos respectively located in Riga.
- Due to the expiry of the term of office for the members of the Management Board on 31 December 2017, the Supervisory Board of Olympic Entertainment Group AS decided on 7 December to prolong the term of office for CEO until 31 December 2020 and COO until 31 December 2019.
The Group’s consolidated total revenue before gaming taxes by segments:
| ‘000€ | Q4 2017 | Q4 2016 | Change | 2017 | 2016 | Change |
| Estonia | 15,213 | 12,924 | 17.7% | 56,665 | 45,364 | 24.9% |
| Latvia | 17,915 | 17,922 | 0.0% | 69,000 | 66,185 | 4.3% |
| Lithuania | 7,146 | 6,956 | 2.7% | 27,386 | 25,286 | 8.3% |
| Slovakia | 4,127 | 3,866 | 6.7% | 17,388 | 16,546 | 5.1% |
| Italy | 7,760 | 7,900 | -1.8% | 30,395 | 26,838 | 13.3% |
| Malta | 4,396 | 2,731 | 61.0% | 14,280 | 11,169 | 27.9% |
| Poland | 0 | 35 | -100.0% | 0 | 13,565 | -100.0% |
| Belarus | 0 | 0 | n/a | 0 | 185 | -100.0% |
| Total | 56,557 | 52,334 | 8.1% | 215,114 | 205,138 | 4.9% |
Number of casinos by segment:
| 31 December 2017 | 31 December 2016 | |
| Estonia | 24 | 24 |
| Latvia | 53 | 54 |
| Lithuania | 17 | 18 |
| Slovakia | 6 | 8 |
| Italy | 14 | 15 |
| Malta | 1 | 1 |
| Poland | 0 | 0 |
| Belarus | 0 | 0 |
| Total | 115 | 120 |
Overview by markets
Estonia
Total revenue before gaming taxes of Estonian segment for 2017 amounted to EUR 56.7 million (+11.3 m€, +24.9%), EBITDA to EUR 10.7 million (-12.4 m€, -53.6%) and operating profit to EUR 7.0 million (-12.8 m€, -64.7%). The reason for the EBITDA and operating profit decline is that last year´s numbers included profit from the hotel real estate sales transaction in amount of EUR 17.8 million. Gaming revenue before gaming taxes increased 13.3% y-o-y amounting to EUR 44.4 million.
At the end of December 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 31 December 2017 Estonian operations employed 709 people.
Latvia
Total revenue before gaming taxes of Latvian segment for 2017 amounted to EUR 69.0 million (+2.8 m€, +4.3%), EBITDA to EUR 29.0 million (+1.2 m€, +4.4%) and operating profit to EUR 25.0 million (+0.8 m€, +3.4%). Gaming revenue before gaming taxes increased 3.5% y‑o‑y amounting to EUR 62.7 million.
At the end of December 2017, there were 53 Olympic casinos with 1,473 slot machines, 8 electronic roulette terminals, 24 gaming tables and 9 poker tournament tables operating in Latvia. At 31 December 2017 Latvian operations employed 920 people.
Lithuania
Total revenue before gaming taxes of Lithuanian segment for 2017 amounted to EUR 27.4 million (+2.1 m€, +8.3%), EBITDA to EUR 4.0 million (+1.7 m€, +75.3%) and operating profit to EUR 2.1 million (+1.4 m€, +185.6%). Gaming revenue before gaming taxes increased 8.3% y-o-y amounting to EUR 26.0 million.
At the end of December 2017, there were 17 Olympic casinos with 511 slot machines, 8 electronic roulette terminals, 54 gaming tables and 2 poker tournament tables and 27 betting shops operating in Lithuania. At 31 December 2017 Lithuanian operations employed 716 people.
Slovakia
Total revenue before gaming taxes of Slovak segment for 2017 amounted to EUR 17.4 million (+0.8 m€, +5.1%), EBITDA to EUR 1.4 million (+0.3 m€, +25.3%) and operating profit to EUR 0.2 million (+0.2 m€). Gaming revenue before gaming taxes increased 5.7% y-o-y amounting to EUR 15.5 million.
At the end of December 2017, there were 6 Olympic casinos with 249 slot machines, 30 electronic roulette terminals, 40 gaming tables and 19 poker tournament tables operating in Slovakia. At 31 December 2017 Slovak operations employed 315 people.
Italy
Total revenue before gaming taxes of Italian segment for 2017 amounted to EUR 30.4 million (+3.6 m€, +13.3%), EBITDA to EUR 1.3 million (+0.3 m€, +30.6%) and operating profit to EUR 0.5 million (-0.1 m€, -14.2%). Gaming revenue before gaming taxes increased 13.0% y-o-y amounting to EUR 30.0 million.
At the end of December 2017, there were 14 VLT slot casinos with 523 slot machines operating in Italy. At 31 December 2017 Italian operations employed 88 people.
Malta
Total revenue before gaming taxes of Maltese segment for 2017 amounted to EUR 14.3 million (+3.1 m€, +27.9%), EBITDA to EUR 0.8 million (+0.9 m€) and operating loss to EUR 0.3 million (+0.9 m€). Gaming revenue before gaming taxes increased 28.1% y-o-y amounting to EUR 14.1 million.
At the end of December 2017, there was 1 casino with 285 slot machines, 18 electronic roulette terminals, 21 gaming tables and 5 poker tournament tables operating in Malta. At 31 December 2017 Maltese operations employed 189 people.
Financial position
At 31 December 2017, the total assets of the Group amounted to EUR 170.1 million, up 11.4% or EUR 17.4 million compared to the same period a year ago.
Current assets totalled EUR 65.9 million or 38.7% of total assets and non-current assets EUR 104.2 million or 61.3% of total assets. The liabilities amounted to EUR 24.8 million and equity to EUR 145.3 million. The largest liabilities included suppliers payables and advances (9.1 m€), tax liabilities (5.6 m€) and payables to employees (5.3 m€).
Investments
Within 2017, the Group’s expenditures on property, plant and equipment totalled EUR 10.2 million (‑22.9 m€, ‑69.2%), of which EUR 6.2 million was invested into construction and reconstruction of casinos and EUR 3.4 million into new gaming equipment. 2016 also includes investments into the hotel construction, which is why investments for 2017 were lower.
Cash flows
Group’s cash flows generated within 2017 from operating activities amounted to EUR 46.0 million (+11.5 m€) and cash flows used in investing activities to EUR -10.0 million (+14.2 m€). Financing cash flows amounted to EUR ‑15.4 million (‑8.3 m€). Net cash flows totalled EUR 20.6 million (+17.4 m€).
Staff
At 31 December 2017 Group employed 2,938 people, down by 86 y-o-y.
Within 2017, total personnel expenses amounted to EUR 55.3 million (+1.8 m€, +3.3%). In 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 1,000 thousand (2016: EUR 1,286 thousand) and EUR 149 thousand (2016: EUR 149 thousand), respectively.
Consolidated statement of financial position
| (EUR thousands) | 31.12.2017 | 31.12.2016 | |
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalents | 58,482 | 37,933 | |
| Financial investments | 919 | 99 | |
| Receivables and prepayments | 4,554 | 4,552 | |
| Prepaid income tax | 286 | 913 | |
| Inventories | 1,658 | 1,532 | |
| Total current assets | 65,899 | 45,029 | |
| Non-current assets | |||
| Deferred tax assets | 507 | 426 | |
| Financial investments | 457 | 4,988 | |
| Other long-term receivables and prepayments | 3,957 | 776 | |
| Investment property | 323 | 295 | |
| Property, plant and equipment | 49,046 | 51,250 | |
| Intangible assets | 49,935 | 49,932 | |
| Total non-current assets | 104,225 | 107,667 | |
| TOTAL ASSETS | 170,124 | 152,696 | |
| LIABILITIES AND EQUITY | |||
| Current liabilities | |||
| Trade and other payables | 22,082 | 19,806 | |
| Income tax payable | 612 | 292 | |
| Provisions | 1,780 | 1,329 | |
| Total current liabilities | 24,474 | 21,427 | |
| Non-current liabilities | |||
| Deferred tax liability | 0 | 693 | |
| Other long-term payables | 309 | 703 | |
| Total non-current liabilities | 309 | 1,396 | |
| TOTAL LIABILITIES | 24,783 | 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 | 566 | 538 | |
| Translation reserves | 19 | -26 | |
| Retained earnings | 71,209 | 57,825 | |
| Total equity attributable to equity holders of the parent | 139,034 | 124,171 | |
| Non-controlling interest | 6,307 | 5,702 | |
| TOTAL EQUITY | 145,341 | 129,873 | |
| TOTAL LIABILITIES AND EQUITY | 170,124 | 152,696 |
Consolidated statement of comprehensive income
Summary of the income statements of continued and discontinued operations is presented on page 13 of the report.
| (EUR thousands) | Q4 2017 | Q4 2016 | 2017 | 2016 | |||||
| Continuing operations | |||||||||
| Gross gaming revenue | 50,489 | 47,211 | 192,720 | 175,998 | |||||
| Other revenue | 6,068 | 5,088 | 22,394 | 15,390 | |||||
| Total revenue before gaming taxes | 56,557 | 52,299 | 215,114 | 191,388 | |||||
| Gaming taxes | -10,884 | -10,032 | -42,672 | -37,497 | |||||
| Net revenue | 45,673 | 42,267 | 172,442 | 153,891 | |||||
| Other income | 85 | 61 | 112 | 18,201 | |||||
| Total net revenue and income | 45,758 | 42,328 | 172,554 | 172,092 | |||||
| Cost of materials, goods and services | -1,605 | -1,506 | -6,004 | -5,331 | |||||
| Other operating expenses | -16,280 | -17,179 | -63,574 | -60,311 | |||||
| Staff costs | -14,305 | -13,287 | -55,302 | -50,667 | |||||
| Depreciation, amortisation and impairment | -3,579 | -3,138 | -12,982 | -11,371 | |||||
| Changes in fair value of investment property | 28 | 7 | 28 | 7 | |||||
| Other expenses | -163 | -97 | -357 | -525 | |||||
| Total operating expenses | -35,904 | -35,200 | -138,191 | -128,198 | |||||
| Operating profit | 9,854 | 7,128 | 34,363 | 43,894 | |||||
| Interest income | 8 | 2 | 13 | 26 | |||||
| Interest expense | -1 | 0 | -2 | -41 | |||||
| Foreign exchange gains (losses) | -13 | 2 | -50 | 16 | |||||
| Other finance income and costs | -1 | -1 | -21 | -23 | |||||
| Total finance income and costs | -7 | 3 | -60 | -22 | |||||
| Profit before income tax | 9,847 | 7,131 | 34,303 | 43,872 | |||||
| Income tax expense | -329 | -1,655 | -3,670 | -4,448 | |||||
| Net profit for the period from continuing operations | 9,518 | 5,476 | 30,633 | 39,424 | |||||
| Net profit for the period from discontinued operations | 0 | -188 | 0 | -9,618 | |||||
| Net profit for the period | 9,518 | 5,288 | 30,633 | 29,806 | |||||
| Attributable to equity holders of the parent company | 8,886 | 5,630 | 30,028 | 29,292 | |||||
| Attributable to non-controlling interest | 632 | -342 | 605 | 514 | |||||
| Other comprehensive income | |||||||||
| Items that may be subsequently reclassified to profit or loss | |||||||||
| Currency translation differences | 21 | 678 | 45 | 1,130 | |||||
| Total comprehensive profit for the period | 9,539 | 5,966 | 30,678 | 30,936 | |||||
| Attributable to equity holders of the parent company | 8,907 | 6,308 | 30,073 | 30,422 | |||||
| Attributable to non-controlling interest | 632 | -342 | 605 | 514 | |||||
| Basic earnings per share* | 5.9 | 3.7 | 19.8 | 19.3 | |||||
| From continuing operations | 5.9 | 3.8 | 19.8 | 25.6 | |||||
| From discontinuing operations | 0.0 | -0.1 | 0.0 | -6.3 | |||||
| Diluted earnings per share* | 5.8 | 3.7 | 19.8 | 19.3 | |||||
| From continuing operations | 5.8 | 3.8 | 19.8 | 25.6 | |||||
| From discontinuing operations | 0.0 | -0.1 | 0.0 | -6.3 | |||||
* euro cents
Madis Jääger
CEO
Olympic Entertainment Group AS
Tel + 372 667 1250
E-mail madis.jaager@oc.eu
http://www.olympic-casino.com
