July 2013 - Olympic Entertainment Group

July 2013 - Olympic Entertainment Group

Olympic Entertainment Group
Investor update Q4 2013
Olympic in Snapshot
• First casino opened in Estonia in 1993
Total Sales Revenue Mix by Segments
• 82 land-based casinos in 7 countries
• Online casino services since 2010
11%
Latvia
• # 1 operator in Baltic countries
Lithuania
• 3,038 slot machines, 191 gaming tables
Poland
Belarus
• Winner of Best Land-based Casino Operator award for 2013
by Totally Gaming Awards
Total Revenues (m€)
126.4
24%
12M 2013
145.3 m€
19%
Slovakia
• Shares listed in Tallinn and Warsaw Stock Exchanges
160
140
120
100
80
60
40
20
0
2%
2%
Estonia
15%
Italy
27%
EBITDA (m€)
135.9
145.8
50
40
112.8
38.7
39.5
2012
2013
32.0
30
21.1
20
10
0
2010
2011
2012
2013
2010
2011
2
Key Markets
Estonia
• 18 casinos, 737 slot machines, 19 gaming
tables
• Market share – 56%
• Largest competitors - Pafer 14%, Grand
Prix 11% and City Casino 7%
Latvia
• 38 casinos, 1,044 slot machines, 18 gaming
tables
• Market share – 24%
• Largest competitors - Alfor and Admiralu
Clubs together (Fenikss) 45% and Joker 14%
Lithuania
• 12 casinos, 424 slot machines, 62 gaming
tables
• Market share – 69%
• Largest competitors - Nese Pramogu Bankas
16% and VSGA (Tornado) 12%
Poland
• 3 casinos, 271 slot machines, 39 gaming
tables
• Market share – 12%
• Largest competitors - ZPR and Orbis
together ca 25%, Casinos Poland 16%
Slovakia
• 5 casinos, 263 slot machines, 53 gaming
tables
• Market share – 76%
• Largest competitor - Casinos Slovakia
18%
Belarus
• 4 casinos, 187 slot machines
Italy
• 2 casinos, 112 slot machines
3
12M 2013 Sales Revenues up 7.8% y-o-y
Sales Revenue Bridge by Segments (‘000€)
'000 €
150 000
145,251
145 000
140 000
5,723
134,721
199
1 497
919
-1,023
2,627
+589
135 000
• Latvia generated the largest portion of Group’s sales
revenues in 2013 largely due to the acquisition of
existing casino chain with 17 locations on
28 June 2013
• Active operations in Italy since November 2012
130 000
125 000
Sales
Estonia
revenue
2012
Latvia Lithuania Poland
Slovakia Belarus
Italy
Sales
revenue
2013
Quarterly Sales Revenue (m€)
• Belarusian market suffering from new regulation,
which requires customer identification
Sales Revenue Mix by Segments
50,00
2%
2%
Estonia
40,00
11%
Latvia
30,00
24%
Lithuania
20,00
Poland
10,00
Slovakia
0,00
19%
12M 2013
145.3 m€
Belarus
Q1
Q2
Q3
2010
Q4
Q1
Q2
Q3
2011
Q4
Q1
Q2
Q3
2012
Q4
Q1
Q2
Q3
Q4
Italy
15%
27%
2013
4
12M 2013 Operating Profit up 11.9% y-o-y
Operating Profit Bridge by Segments (‘000€)
35 000
30 000
1,884
28,397
1,016
-224
423
-1,012
-186
1,485
31,783
• Best ever operating profit earned in Q3 2013
• Belarusian market suffering from new regulation,
which requires customer identification
25 000
• While Latvia accounted for 46.3% of Group’s
operating profit the y-o-y growth was highest in
Poland.
20 000
15 000
EBIT
2012
Estonia
Latvia Lithuania Poland Slovakia Belarus
Italy
EBIT
2013
Quarterly Operating Profit (m€)
Operating Profit Mix by Segments
12,00
Estonia
10,00
Latvia
8,00
Lithuania
6,00
Poland
4,00
Slovakia
2,00
12%
24%
12m 2013
31.8 m€
Belarus
0,00
-2,00
4%
14%
Q1
Q2
Q3
2010
Q4
Q1
Q2
Q3
2011
Q4
Q1
Q2
Q3
2012
Q4
Q1
Q2
Q3
Q4
Italy
46%
2013
5
Investment Highlights
Leading position
in Baltic states
Growth
Strong
management
team
• Market leader in Estonia and Lithuania, second largest in Latvia
• Strong brand awareness in the Baltic market
• Core focus on expansion in existing markets through acquisitions. Recently acquired casino chain
with 17 locations in Latvia
• Expanding online gaming to the currently established land-based operating countries
• Development of the first casino hotel in Tallinn, Estonia. The 202-room hotel operated by Hilton
will open in end 2015
• Proven track record of managing international casino operations in number of countries
• Experienced management to navigate market fluctuations
• Cash generating operations
• Strong balance sheet is the basis for further expansion
Strong financials
6
New Casino Hotel Project in Estonia
•
•
•
•
•
202-room upscale hotel to be operated by Hilton
Total cost of ca 36 million euros
Opening planned to December 2015
Casino at 1,600 m2 will be holding separate areas for slot machines,
gaming tables and club poker, special area for VIP players, spacious
casino bar with stage area and comfortable lounge.
Hotel includes:
•
202 rooms
•
26 suites
•
Restaurant seating 122
•
SPA with pool, fitness centre and saunas
•
Conference rooms seating 720
7
Upgraded Online Casino Services
January 2010
July 2013
1 August 2013
• Olympic Casino Eesti AS, OEG subsidiary, received the first
Estonian online gaming license
• Olympic Casino Latvia SIA, OEG subsidiary, received the
second Latvian online gaming license
• Launching online casino games, poker and sports betting under
the new brand OlyBet.
8
Appendixes
9
Company History
Opening of
flagship
Reval Park
Hotel &
Casino
1993 1994
OEG founded
1995
1996
1997
1998
Listing on Tallinn Stock
Exchange
1st casino in
Belarus
1st
1999
2000
2001
casino in
Latvia
2002
2003
Exiting Romanian
market
Entering online
gaming market
Entering
Latvian online
gaming market
1st casino in
Slovakia
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Entering Italian
market
1st casino in
Lithuania
1st casino in
Ukraine
Exiting Ukranian
market
1st casino in Poland and
Romania
Listing in Warsaw Stock
Exchange
10
Company Vision and Mission
Vision
Our vision is to be a global casino and resort operator,
best known for our excellent service and creative design.
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.
11
Key People
Armin Karu, Chairman of the Board
Founded company 1993
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
12
Business Model
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
13
Consolidated Income Statement
Q4
2013
Q4
2012
37,285
34,856
7.0%
135,922
125,478
8.3%
Other revenue and income
2,647
3,073
-13.9%
9,897
10,467
-5.4%
Total revenue and income
39,932
37,929
5.3%
145,819
135,945
7.3%
Gaming taxes
7,502
7,383
1.6%
28,937
27,490
5.3%
Lease and rent
3,176
2,830
12.2%
12,453
10,214
21.9%
Staff costs
9,875
9,050
9.1%
35,878
33,005
8.7%
Depreciation, amortisation and impairment
1,781
2,313
-23.0%
7,764
10,273
-24.4%
Other costs
8,481
7,693
10.2%
29,004
28,397
2.1%
Operating profit
9,117
8,660
5.3%
31,783
28,397
11.9%
36
-865
-104.2%
-536
583
-192.0%
-1,444
-1,247
15.8%
-4,323
-3,961
9.1%
7,402
6,502
13.8%
25,694
24,199
6.2%
‘000 €
Income from gaming transactions
Total finance income and costs
Income tax expense
Net profit for the period period (equity holders
of the parent company)
Change
12M
2013
12M
2012
Change
14
Consolidated Balance Sheet
‘000 €
31.12.2013
31.12.2012
Change
y-o-y
30.09.2013
44,582
35,973
8,879
37,451
7,131
5,390
17,818
-12,428
7,004
-1,614
Total current assets
49,972
53,791
-3,819
44,455
5,517
Total non-current assets
68,305
55,407
12,898
64,475
3,830
118,277
109,199
9,078
108,930
9,347
15,692
15,480
212
14,300
1,392
613
736
-123
579
34
Total liabilities
16,305
16,216
-89
14,878
1,427
Total equity of the parent
97,554
87,299
10,255
89,941
7,613
4,418
5,684
-1,266
4,111
307
101,972
92,983
8,989
94,051
7,921
Cash and cash equivalents
Other current assets
Total assets
Total current liabilities
Total non-current liabilities
Non-controlling interest
Total equity
Change
q-o-q
15
Consolidated Cash Flow
‘000 €
12M 2013
12M 2012
Net cash flows from operating activities
35,493
34,678
-4.2%
Net cash flows from investing activities
-9,005
-10,705
-37.1%
-14,851
-7,571
66.2%
Incl. acquisition of financial investments
-1,379
-5,206
-73.5%
Incl. proceeds from sale of financial investments
11,150
2,696
313.6%
-17,872
-21,423
16.6%
8,616
2,550
237.9%
44,582
35,973
23.9%
Incl. purchase of fixed assets
Net cash flows from financing activities
Net cash flows
Cash and cash equivalents at the end of the period
Change
16
Regulatory Environment and Taxes
Regulatory environment
Taxes
Estonia
Unit based taxation will change to revenue-based and fixed
combination taxation in late 2014 or 2015. Online regulation
established.
Unit based taxation. Effective revenue-based
tax calculated for 2013 is 16%.
Latvia
Online regulation will be amended in 2014. No major
regulatory changes expected in near future.
Unit based taxation. Effective revenue-based
tax calculated for 2013 is 9%.
Lithuania
New gaming law draft in parliament. We expect new online
regulation to be approved in 2014. No major regulatory
changes expected in near future.
Unit based taxation. Effective revenue-based
tax calculated for 2013 is 11%.
Poland
No extension of street machine licenses and slot hall
licenses. Limited number of casino licenses based on the
population. Online gaming is prohibited.
Revenue based taxation of 50% from GGR.
Slovakia
No major regulatory changes expected in near future.
Revenue based taxation of 29% from GGR.
Belarus
Tax increase from 1 January 2014; additional 4% on GGR.
Unit based taxation. Effective revenue-based
tax calculated for 2013 is 17%.
Italy
No major regulatory changes expected in near future.
Effective revenue-based tax calculated for
2013 is 53%.
17
Thank You
www.olympic-casino.com