Investor update Q1 2013 - Olympic Entertainment Group

Olympic Entertainment Group
Investor update Q1 2013
Company Vision and Mission
Vision
To be a global casino and resort operator with a passion for
service excellence
Mission
To give our guests a customer orientated, secure and safe
environment with the finest design and craftsmanship,
unparalleled in the industry and supported by the
excellence of our name and reputation.
2
Key People
Armin Karu, Chairman of the Board
Founded company 1993
First casino established in Tallinn Olympic Yachting Centre
Owns directly (and by controlled companies) 46% of the shares
Madis Jääger, CEO
Joined OEG in 2010 as CFO
Previous work experience as an audit engagement leader in PricewaterhouseCoopers (joined PwC in 2001)
Meelis Pielberg, COO
Joined OEG in 1996
Country Manager in Estonia 2009-2011
Aigar Hain, Country Manager in Estonia
Cezary Gizka, Country Manager in Poland
Gints Pakarklis, Country Manager in Latvia
Jozef Skuben, Country Manager in Slovakia
Saulius Petravičius, Country Manager in Lithuania and Belarus
Kaido Ulejev, Head of Online Operations
3
Olympic in Snapshot
Market Cap: €304 million
As of 31 March 2013
IPO price: EUR 2.34
35% free float
Average daily turnover YTD: EUR 216 th.
Olympic Net Profit (Loss)
€ in millions
40,0
24,2
13,8
20,0
4,6
1,1
Strong quarter
• €33.3 million consolidated revenues,
up 3.5% y-o-y
• Operating profit of €6.1 million,
up 5.9% y-o-y
• Improved efficiency of operational activities
Focus on investments
• Total investments in Q1 2013 amounted to
€3.6 million, up 2.5x y-o-y due to
construction and reconstruction of venues
and purchases of new slot machines
0,0
2009
-20,0
2010
2011
2012
Q1 2013
-32,9
-40,0
Q1 2013
Q1 2012
7
6
66
61
Floor area (m2)
25,232
23,478
Gaming tables
184
183
Slot machines
2,693
2,446
Employees
2,388
2,296
Countries
Casinos
4
Casino Market & Competition
Casino Market Position
Main Competitors by Markets
• Estonia:
• Pafer 14%
• Grand Prix 11%
• City Casino 7%
100%
€52m
€150m
€26m
€190m
€19m
€32m
80%
60%
Competitors
40%
Olympic
20%
54%
20%
Estonia
Latvia
69%
12%
76%
29%
Slovakia
Minsk
(Belarus)
0%
Lithuania Poland
Olympic has increased its market share in
all of its markets mainly due to efficient
management compared to competitors.
• Latvia:
• Alfor and Admiralu Clubs together (Fenikss) 45%
• Joker 14%
• Lithuania:
• Nese Pramogu Bankas 16%
• VSGA (Tornado) 12%
• Poland:
• ZPR and Orbis together ~ 25% (estimation)
• Casinos Poland 16%
• Slovakia:
• Casinos Slovakia 18%
• Regency Casino 4%
• Belarus (Minsk):
• Maxbet ~ 20-25% (estimation)
5
Business Model
Olympic operates slots, gaming tables, online gaming and hotel
Business Model describing gaming revenues
AVERAGE BET
Average bet of € 1 per
game
HOURS PLAYED
Client playing slot on
average 900 games per
hour = coin-in of EUR 900
HOUSE EDGE
Average house edge of 5%
for € 1 bet results € 45 per
hour
GROSS GAMING REVENUE AVERAGE
HOUSE
HOURS
=
×
×
GGR FOR SLOT
BET
PLAYED
EDGE
AVERAGE BET
Average bet of € 10 per
game
HOURS PLAYED
Client playing Blackjack on
average 60 games per hour
= turnover of EUR 600
HANDS PER HOUR
With 7 players on the table
dealer plays on average 60
games per player
HOUSE EDGE
Average house edge for
reasonable player of 1% for
€ 10 bet results € 6 per
hour per player
GROSS GAMING REVENUE AVERAGE
HANDS
HOUSE
HOURS
=
×
×
×
GGR FOR TABLES
BET
PLAYED
PER HOUR
EDGE
6
Costs have been cut, ready for growth
2009
2010
2011
2012
7
7
6
7
40
68
66
61
63
30
Floor area (m2)
25,700
25,800
24,014
24,030
10
Gaming tables
176
182
180
178
0
Slot machines
2,388
2,519
2,471
2,594
Employees
2,348
2,397
2,336
2,277
Staff costs (EUR th.)
31,993
29,959
30,500
33,005
Premises rent (EUR th.)
12,954
9,951
9,687
9,541
Countries
Casinos
50
5000
4000
20
3000
2009
2010
Staff costs
2011
2012
GGR per employee
15
450
400
10
350
Ratios per month (in EUR)
GGR per m2
5
285
346
409
435
GGR per table
14,436
15,952
17,782
18,917
GGR per slot
1,734
2,250
2,494
2,642
GGR per employee
3,204
4,142
4,557
4,592
300
0
250
2009
2010
Premises rent
2011
2012
GGR per m2
7
Q1 2013 Revenues up 3.5% y-o-y
Quarterly revenues
Q1 2013 revenues by segments
€ in millions
40
Estonia 23%
Latvia 23%
Lithuania 15%
30
Poland 19%
Slovakia 11%
20
Belarus 2%
Italy 6%
10
Revenues
€ in millions
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2009
2010
2011
2012
2013
150
109
113
126
136
100
50
33
0
2009
2010
2011
2012
Q1 2013
8
Q1 2013 Operating Profit up 5.9% y-o-y
Q1 2013 revenues by segments
Quarterly operating profit
€ in millions
Estonia 23%
10
Latvia 46%
8
Lithuania 14%
6
Poland 12%
4
Slovakia 4%
2
Belarus 2%
Italy 0%
0
-2
-4
-6
-8
-10
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2009
2010
2011
2012
2013
Olympic EBITDA and margin
€ in millions
50
30%
40
25%
20%
30
15%
20
10%
10
5%
0
0%
2009
2010
2011
2012
Q1 2013
9
Future Plans
•
•
•
•
•
•
•
Development of the first casino hotel in Tallinn, Estonia: 13 floors, 190 hotel rooms, Olympic flagship casino.
Continue actively to look for new acquisition or start up possibilities.
Expanding online gaming to the currently established land-based operating countries.
Development of casino tourism: attracting players from Russia to Baltic States, but also to Slovakia and Poland.
Renewal of gaming equipment
Investments into existing casinos
Rough budget for flagship casino EUR 5-6 million and ordinary casino hall EUR 1 million
10
Appendixes
11
Company History
1993
1997
2001
2002
2004
2005
2006
2007
2007
2007
2008
2009
2010
2011
2011
2012
Company founded by current Chairman of the Board Armin Karu
Opening numerous casinos in Estonia
Opening of flagship Reval Park Hotel & Casino
First casino opened in Lithuania
First casino opened in Latvia
First casino opened in Ukraine
First casino opened in Belarus
Listing on Tallinn Stock Exchange
First casino opened in Poland
Listing on Warsaw Stock Exchange
First casino opened in Romania
First casino opened in Slovakia
Exiting Ukrainian market
Entering online casino gaming market
Exiting Romanian market
Recovery in all countries
Entering Italian market
12
Number of Casinos, Tables and Slots
Market
Casinos
Gaming Tables
Slot Machines
Employees
Estonia
18
20
739
524
Latvia
21
18
673
493
Lithuania
12
59
414
640
Poland
3
37
266
355
Slovakia
5
50
263
268
Belarus
5
-
226
101
Italy
2
-
112
7
Total
66
184
2,693
2,388
13
Consolidated Cash Flow (EUR th.)
Q1 2013
Q1 2013
Cash flows from operating activities – net
4,569
8,308
Cash flows from investing activities – net
6,804
1,644
Cash flows from financing activities – net
-60
-778
Net cash flows
11,313
9,174
Cash and cash equivalents at the end of the period
47,301
42,590
14
Consolidated Income Statement (EUR th.)
Q1 2013
Q1 2012
30,884
29,569
Other revenue and income
2,400
2,555
Total revenue and income
33,284
32,151
Gaming taxes
-6,800
-6,654
Premises lease and rent
-3,127
-2,441
Staff costs
-8,303
-8,035
Depreciation, amortisation and impairment
-2,108
-2,901
Other costs
-6,809
-6,323
Operating profit
6,137
5,797
Total finance income and costs
-588
290
Income tax expense
-797
-703
4,580
5,122
Income from gaming transactions
Net profit for the period (equity holders of the parent company)
15
Consolidated Balance Sheet (EUR th.)
31.03.2013
31.03.2012
Total current assets
55,315
53,792
Total non-current assets
57,865
55,407
113,180
109,199
15,166
15,480
682
736
Total liabilities
15,848
16,216
Total equity of the parent
91,477
87,300
5,855
5,683
97,332
92,983
Total assets
Total current liabilities
Total non-current liabilities
Non-controlling interest
Total equity
16
Regulatory Environment and Taxes
Market
Regulatory Environment
Taxes
Estonia
Unit based taxation will change to revenue-based and
fixed combination taxation in early 2014. Online
regulation established.
Unit based taxation. Effective revenuebased tax calculated for Q1 2013 is 18%.
Latvia
Online regulation will be amended in one year time.
No major regulatory changes expected in near future.
Unit based taxation. Effective revenuebased tax calculated for Q1 2013 is 9%.
Lithuania
New gaming law draft in parliament. Online regulation
will be approved in few years time. No major
regulatory changes expected in near future.
Unit based taxation. Effective revenuebased tax calculated for Q1 2013 is 11%.
Revenue based taxation of 50% from GGR.
Poland
No extension of street machine licenses and slot hall
licenses. Limited number of casino licenses based on
the population. Online gaming is prohibited.
Slovakia
No major regulatory changes expected in near future.
Revenue based taxation of 29% from GGR.
Belarus
Taxation will change to revenue-based and fixed
combination taxation in few years’ time.
Unit based taxation. Effective revenuebased tax calculated for Q1 2013 is 16%.
No major regulatory changes expected in near future.
Effective revenue-based tax calculated for
Q1 2013 is 52%.
Italy
17