Key performance indicators of the Group
| H1 2016 | H1 2015 | H1 2014 | ||
| Revenues | m€ | 92.4 | 81.0 | 72.2 |
| Gaming tax | m€ | 17.1 | 15.5 | 14.3 |
| EBITDA | m€ | 17.1 | 18.4 | 16.7 |
| EBIT | m€ | 12.0 | 14.5 | 12.6 |
| Net profit | m€ | 9.8 | 11.8 | 10.3 |
| EBITDA margin | % | 18.5 | 22.7 | 23.1 |
| Operating margin | % | 13.0 | 17.9 | 17.5 |
| Net margin | % | 10.5 | 14.6 | 14.3 |
| Assets | m€ | 188.9 | 125.0 | 115.4 |
| Equity | m€ | 108.8 | 106.8 | 97.8 |
| ROE | % | 9.2 | 12.2 | 10.8 |
| ROA | % | 5.8 | 9.8 | 8.8 |
| Current ratio | times | 0.8 | 2.2 | 2.3 |
| Casinos at end of period | # | 125 | 96 | 93 |
| Casino floor area at end of period | m2 | 40,122 | 30,263 | 31,060 |
| Employees | # | 3,260 | 2,653 | 2,593 |
| Slot machines at end of period | # | 4,159 | 3,275 | 3,072 |
| Electronic roulette terminals at the end of period | # | 148 | 104 | 102 |
| Gaming tables at end of period | # | 198 | 182 | 190 |
| Tournament poker gaming tables at the end of period | # | 63 | 44 | 32 |
Key developments of the Group during the first half-year of 2016
- The Group’s consolidated sales revenues for H1 2016 amounted to EUR 92.0 million, up 14.0% or EUR 11.3 million y‑o‑y.
- Gaming revenues accounted for 93.6% (86.1 m€) and other revenues for 6.4% (5.9 m€) of the Group’s consolidated sales revenues for H1 2016. A year before the revenue split was 94.0% (75.9 m€) and 6.0% (4.8 m€), respectively.
- The Group’s consolidated EBITDA for H1 2016 amounted to EUR 17.1 million, a decline of 6.9% from EUR 18.4 million a year before. The Group’s consolidated operating profit decreased EUR 2.4 million (-16.9%) to EUR 12.0 million.
- The Group’s consolidated net profit attributable to equity holders of the parent company for H1 2016 totalled EUR 9.8 million compared to EUR 11.8 million a year ago.
- Group company Baina Investments Sp. z o.o. signed the agreement on 14 January 2016 to acquire a 20% holding in the Polish subsidiary Casino Polonia-Wrocław Sp. z o.o., increasing Group holding to 100%.
- After receiving an approval from the Estonian Competition Authority, on 16 February 2016 Group completed the acquisition of 100% shareholding in Estonian casino operator AS MC Kasiinod, which is also the 100% owner of the subsidiary OÜ Oma & Hea, which is providing casino bar services. As a result of the completion of the transaction Group owns 24 casinos in Estonia.
- The Estonian subsidiaries of Group, Olympic Casino Eesti AS and the casino operating company AS MC Kasiinod which was acquired in winter of 2016, concluded a merger agreement on 21 March 2016. The merger was finalised in May 2016 and during the course of the merger AS MC Kasiinod merged with Olympic Casino Eesti AS.
- The Slovak subsidiaries of Group, Olympic Casino Slovakia S.r.o. and Olympic F&B S.r.o., concluded a merger agreement on 22 March 2016. The merger was finalised in April 2016 and during the course of the merger Olympic F&B S.r.o. merged with Olympic Casino Slovakia S.r.o.
- On 31 March 2016 Group decided to liquidate its Dutch subsidiary Siquia Holding B.V., which does not have any business activity. The area of activity for the subsidiary was holding activities. The liquidation was finalised on 30 June 2016.
- The Latvian subsidiaries of Group, Olympic Casino Latvia SIA AS and the casino operating company SIA Garkalns which was acquired in autumn 2015, concluded a merger agreement on 20 May 2016. The merger will be finalised within the current year and during the course of the merger SIA Garkalns will be merged with Olympic Casino Latvia SIA.
- On 1 June 2016 Group opened a new hotel and entertainment complex in Tallinn investing over 45 million euros in the building that accommodates the Baltic's first Hilton and the flagship casino of OEG.
- The general meeting of shareholders held on 16 June 2016 decided to pay out dividends in amount of EUR 22,768,680.90 (EUR 0.15 per share), of which EUR 0.10 per share was paid out to shareholders on 15 July 2016 and EUR 0.05 will be paid out to shareholders on 14 October 2016.
The Group’s consolidated sales revenues by segments:
| ‘000€ | Q2 2016 | Q2 2015 | Change | H1 2016 | H1 2015 | Change |
| Estonia | 10,592 | 9,068 | 16.8% | 20,123 | 17,412 | 15.6% |
| Latvia | 15,205 | 13,959 | 8.9% | 31,229 | 26,052 | 19.9% |
| Lithuania | 6,003 | 4,923 | 21.9% | 12,291 | 10,789 | 13.9% |
| Poland | 4,656 | 6,843 | -32.0% | 9,229 | 13,339 | -30.8% |
| Slovakia | 4,791 | 4,076 | 17.5% | 8,714 | 7,806 | 11.6% |
| Belarus | 64 | 203 | -68.4% | 186 | 487 | -61.9% |
| Italy | 2,759 | 2,525 | 9.3% | 5,465 | 4,825 | 13.3% |
| Malta | 2,552 | 0 | N/A | 4,738 | 0 | N/A |
| Total | 46,622 | 41,597 | 12.1% | 91,975 | 80,710 | 14.0% |
Number of casinos by segment:
| 30 June 2016 | 30 June 2015 | |
| Estonia | 24 | 20 |
| Latvia | 57 | 37 |
| Lithuania | 19 | 17 |
| Poland | 1 | 1 |
| Slovakia | 8 | 7 |
| Belarus | 1 | 2 |
| Italy | 14 | 12 |
| Malta | 1 | |
| Total | 125 | 96 |
The Group’s consolidated operating expenses for H1 2016 amounted to EUR 80.4 million, up 20.9% or EUR 13.9 million y‑o‑y. The growth was highest in personnel expenses (+4.2 m€, +18.9%), gaming tax (+1.7 m€, +10.9%), marketing expenses (+1.7 m€, +32.5%), amortisation and depreciation costs (+1.2 m€, +29.9%) and rent expenses (+1.2 m€, +18.5%). Personnel expenses (26.4 m€) and gaming tax (17.1 m€) represented the largest cost items accounting for 54.1% of total operating expenses.
Overview by markets
Estonia
The sales revenues of Estonian segment for H1 2016 amounted to EUR 20.1 million (+2.7 m€, +15.6%), EBITDA to EUR 2.1 million (-1.0 m€, -32.3%) and operating profit to EUR 0.9 million (-1.3 m€, -59.5%). Gaming revenue increased 13.2% y-o-y amounting to EUR 18.8 million.
At the end of H1 2016, there were 24 Olympic casinos with 973 slot machines, 26 electronic roulette terminals, 22 gaming tables and 17 poker tournament tables operating in Estonia. As at 30 June 2016 Estonian operations employed 667 people.
Latvia
The sales revenues of Latvian segment for H1 2016 amounted to EUR 31.2 million (+5.2 m€, +19.9%), EBITDA to EUR 12.6 million (+0.8 m€, +6.7%) and operating profit to EUR 10.8 million (+0.5 m€, +4.7%). Gaming revenue increased 19.3% y‑o‑y amounting to EUR 28.6 million.
At the end of H1 2016, there were 57 Olympic casinos with 1,511 slot machines, 8 electronic roulette terminals, 19 gaming tables and 9 poker tournament tables operating in Latvia. As at 30 June 2016 Latvian operations employed 932 people.
Lithuania
The sales revenues of Lithuanian segment for H1 2016 amounted to EUR 12.3 million (+1.5 m€, +13.9%), EBITDA to EUR 0.9 million (-0.7 m€, -42.6%) and operating profit to EUR 0.1 million (-0.9 m€, -87.0%). Gaming revenue increased 14.7% y-o-y amounting to EUR 11.7 million.
At the end of H1 2016, there were 19 Olympic casinos with 536 slot machines, 8 electronic roulette terminals, 62 gaming tables and 2 poker tournament tables operating in Lithuania. As at 30 June 2016 Lithuanian operations employed 791 people.
Poland
The sales revenues of Polish segment for H1 2016 amounted to EUR 9.2 million (-4.1 m€, -30.8%), EBITDA to EUR 0.7 million (-1.0 m€, -57.6%) and operating profit to EUR 0.5 million (-0.8 m€, -60.0%). Gaming revenue decreased 30.9% y-o-y amounting to EUR 9.1 million.
At the end H1 2016, there was 1 Olympic casino with 64 slot machines, 46 electronic roulette terminals, 32 gaming tables and 4 poker tournament tables operating in Poland. As at 30 June 2016 Polish operations employed 245 people.
Slovakia
The sales revenues of Slovak segment for H1 2016 amounted to EUR 8.7 million (+0.9 m€, +11.6%), EBITDA to EUR 1.0 million (+0.9 m€, +1081.5%) and operating profit to EUR 0.4 million (+0.8 m€). Gaming revenue increased 13.3% y-o-y amounting to EUR 7.8 million.
At the end of H1 2016, there were 8 Olympic casinos with 292 slot machines, 42 electronic roulette terminals, 44 gaming tables and 21 poker tournament tables operating in Slovakia. As at 30 June 2016 Slovak operations employed 334 people.
Belarus
The sales revenues of Belarus segment for H1 2016 amounted to EUR 0.2 million (-0.3 m€, -61.9%), EBITDA to EUR -0.1 million (+0.0 m€, -2.3%) and operating loss to EUR -0.1 million (+0.0 m€, -2.1%). Gaming revenue decreased 61.5% y‑o‑y amounting to EUR 0.2 million.
At the end of H1 2016, there were 1 Olympic casinos with 33 slot machines operating in Belarus. As at 30 June 2016 Belarus operations employed 6 people.
Italy
The sales revenues of Italian segment before deducting the gaming tax of Italy for H1 2016 amounted to EUR 12.7 million (+2.1 m€, +19.6%), EBITDA to EUR 0.4 million (+0.0 m€, +4.5%) and operating profit to EUR 0.2 million (+0.1 m€, +53.2%).
At the end of H1 2016, there were 14 VLT slot casinos with 465 slot machines operating in Italy. As at 30 June 2016 Italian operations employed 78 people.
Malta
The sales revenues of Maltese segment for H1 2016 amounted to EUR 4.7 million, EBITDA to EUR -0.3 million and operating loss to EUR 0.8 million.
At the end of H1 2016, there was 1 Olympic casino with 285 slot machines, 18 electronic roulette terminals, 19 gaming tables and 10 poker tournament tables operating in Malta. As at 30 June 2016 Maltese operations employed 207 people.
Financial position
As at 30 June 2016, the total assets of the Group amounted to EUR 188.9 million, up 51.1% or EUR 34.4 million compared to the same period a year ago.
Current assets totalled EUR 45.1 million or 23.9% of total assets, and non-current assets EUR 143.8 million or 76.1% of total assets. The liabilities amounted to EUR 80.2 million and equity to EUR 108.7 million. The largest liabilities included dividend liabilities (22.8 m€), loans and borrowings (22.0m€), suppliers payables and advances (14.8 m€), tax liabilities (6.9 m€) and payables to employees (5.3 m€).
Investments
In H1 2016, the Group’s expenditures on property, plant and equipment totalled EUR 26.0 million (+14.1 m€, +118.5%), of which EUR 21.8 million was invested into into construction of hotel and construction and reconstruction of casinos (+13.0 m€, +147.7%) and EUR 2.5 million into new gaming equipment (-0.4 m€, -13.8%).
Cash flows
In H1 2016, the Group’s cash flows generated from operating activities amounted to EUR 14.4 million (-2.4 m€, -14.5%) and cash flows used in investing activities to EUR -31.0 million (-21.3 m€). Financing cash flows amounted to EUR 13.8 million (+29.2 m€). Net cash flows totalled EUR -2.7 million (+5.5 m€).
Staff
As at 30 June 2016 Group employed 3,260 people, up by 607 y-o-y mostly due to expansion in Estonia, Latvia and Malta.
In H1 2016, total personnel expenses amounted to EUR 26.4 million (+4.2 m€, +18.9%). In H1 2016, 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 741 thousand (EUR 518 thousand in H1 2015) and EUR 74 thousand (EUR 74 thousand in H1 2015), respectively.
Consolidated statement of financial position
| (in EUR thousands) | 30.06.2016 | 31.12.2015 | |
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalents | 31,980 | 34,710 | |
| Financial investments | 2,024 | 1,835 | |
| Receivables and prepayments | 8,879 | 5,537 | |
| Prepaid income tax | 567 | 551 | |
| Inventories | 1,642 | 1,366 | |
| Total current assets | 45,092 | 43,999 | |
| Non-current assets | |||
| Deferred tax assets | 793 | 801 | |
| Financial investments | 4,214 | 3,512 | |
| Other long-term receivables and prepayments | 1,016 | 914 | |
| Investment property | 288 | 288 | |
| Property, plant and equipment | 80,022 | 58,877 | |
| Intangible assets | 57,508 | 53,942 | |
| Total non-current assets | 143,841 | 118,334 | |
| TOTAL ASSETS | 188,933 | 162,333 | |
| LIABILITIES AND EQUITY | |||
| Current liabilities | |||
| Borrowings | 223 | 292 | |
| Trade and other payables | 54,659 | 27,680 | |
| Income tax payable | 219 | 1,058 | |
| Provisions | 1,756 | 1,842 | |
| Total current liabilities | 56,857 | 30,872 | |
| Non-current liabilities | |||
| Borrowings | 22,872 | 8,079 | |
| Deferred tax liability | 442 | 513 | |
| Total non-current liabilities | 23,314 | 8,592 | |
| TOTAL LIABILITIES | 80,171 | 39,464 | |
| EQUITY | |||
| Share capital | 60,716 | 60,716 | |
| Share premium | 258 | 258 | |
| Statutory reserve capital | 4,860 | 3,574 | |
| Other reserves | 416 | 329 | |
| Translation reserves | -1,322 | -1,156 | |
| Retained earnings | 38,277 | 51,822 | |
| Total equity attributable to equity holders of the parent | 103,205 | 115,543 | |
| Non-controlling interest | 5,557 | 7,326 | |
| TOTAL EQUITY | 108,762 | 122,869 | |
| TOTAL LIABILITIES AND EQUITY | 188,933 | 162,333 |
Consolidated statement of comprehensive income
| (in EUR thousands | Q2 2016 | Q2 2015 | H1 2016 | H1 2015 | |
| Income from gaming transactions | 43,552 | 39,165 | 86,066 | 75,888 | |
| Revenue | 3,070 | 2,432 | 5,909 | 4,822 | |
| Other income | 168 | 190 | 462 | 275 | |
| Total revenue and income | 46,790 | 41,787 | 92,437 | 80,985 | |
| Cost of materials, goods and services | -1,346 | -884 | -2,457 | -1,776 | |
| Other operating expenses | -23,583 | -19,850 | -46,157 | -38,421 | |
| Staff costs | -13,565 | -11,409 | -26,391 | -22,189 | |
| Depreciation, amortisation and impairment | -2,641 | -2,095 | -5,104 | -3,931 | |
| Other expenses | -120 | -57 | -294 | -186 | |
| Total operating expenses | -41,255 | -34,295 | -80,403 | -66,503 | |
| Operating profit | 5,535 | 7,492 | 12,034 | 14,482 | |
| Interest income | 8 | 15 | 47 | 31 | |
| Interest expense | -15 | -7 | -15 | -14 | |
| Foreign exchange income | 31 | 15 | 21 | 15 | |
| Other finance income and costs | -8 | -2 | -10 | -4 | |
| Total finance income and costs | 16 | 21 | 43 | 28 | |
| Profit from operating activities | 5,551 | 7,513 | 12,077 | 14,510 | |
| Income tax expense | -901 | -969 | -1,964 | -2,148 | |
| Net profit for the period | 4,650 | 6,544 | 10,113 | 12,362 | |
| Attributable to equity holders of the parent company | 4,652 | 6,330 | 9,750 | 11,800 | |
| Attributable to non-controlling interest | -2 | 214 | 363 | 562 | |
| Other comprehensive income | |||||
| Items that may be subsequently reclassified to profit or loss | |||||
| Currency translation differences | -347 | -274 | -166 | 247 | |
| Total comprehensive profit for the period | 4,303 | 6,270 | 9,947 | 12,609 | |
| Attributable to equity holders of the parent company | 4,305 | 6,056 | 9,584 | 12,047 | |
| Attributable to non-controlling interest | -2 | 214 | 363 | 562 | |
| Basic earnings per share* | 3.1 | 4.2 | 6.4 | 7.8 | |
| Diluted earnings per share* | 3.1 | 4.2 | 6.4 | 7.8 |
* euro cents
Madis Jääger
CEO
Olympic Entertainment Group AS
Tel + 372 667 1250
E-mail madis.jaager@oc.eu
http://www.olympic-casino.com
