Olympic Entertainment Group 2 Olympic in Snapshot Total Revenues m EBITDA m First casino opened in Estonia in 1993 98 landbased casinos in 7 countries Online casino services since 2010 ID: 146868
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Slide1
Investor update Q4 2014
Olympic Entertainment GroupSlide2
2
Olympic in Snapshot
Total Revenues (m€)
EBITDA (m€)
First casino opened in Estonia in 1993
98
land-based casinos in 7 countriesOnline casino services since 2010# 1 operator in Baltic countries3,481 slot machines, 195 gaming tables Shares listed in Tallinn and Warsaw Stock ExchangesWinner of Best Land-based Casino Operator award for 2013 by Totally Gaming Awards
Total Revenue Mix by SegmentsSlide3
3
6
casinos,
2
27
slot machinesKey Markets
18 casinos, 737 slot machines,19 gaming tablesEstonia
3
7
casinos,
1,0
5
9
slot machines,
18 gaming tables
Latvia
1
6
casinos,
516
slot machines,
6
4 gaming tables
Lithuania
Belarus
2 casinos, 210 slot machines,41 gaming tables
Poland
7 casinos, 308 slot machines,53 gaming tables
Slovakia
Italy
1
2 casinos,
424
slot machinesSlide4
4
2014
Revenues up
3.3%
y-o-y
Revenue Bridge by Segments (‘000€)Latvia generated the largest portion of Group’s revenues largely due to the acquisition of existing casino chain with 17 locations on 28 June 2013
Active operations in Italy since November 2012Polish revenues suffering from non-renewable slot licenses that could not be prolongedQuarterly Sales Revenues (m€)Gaming Revenue Mix by Segments Slide5
5
2014
EBIT down
18.8%
y-o-y
Operating Profit Mix by Segments
EBIT Bridge by Segments (‘000€)Quarterly EBIT (m€)Polish operations suffering from one slot hall closureSlovak operations suffering from heavy competition in slot halls marketEstonian results are also influenced by the termination of hotel operations in Tallinnin Q4 2013Belarusian operations influenced by Ukraine conflictSlide6
6
Olympic Casino in Malta
About 2,700
m
2
258 slots17 gaming tables
10 open poker tablesOpening planned to autumn 2015Extension of two additional floors of luxurious 6 star suitesNew 100 room Holiday Inn Express hotelInvestment in a 3,600 m2 conference and incentive venueTotal of 652 rooms
OEG will operate in Malta under a management agreementSlide7
7
Investment Highlights
Strong management team
Leading position in Baltic states
Growth
Strong financials
Market leader in Estonia and Lithuania, second largest in Latvia Strong brand awareness in the Baltic marketDevelopment of the first casino hotel in Tallinn, Estonia. The 202-room hotel operated by Hilton will open in the beginning of 2016Actively searching for expansion projects in new markets, primarily in EU countriesCash generating operations
Strong balance sheet is the basis for further expansion
Proven track record of managing international casino operations in number of countries
Experienced management to navigate market fluctuationsSlide8
8
Hilton Tallinn Park Project in Estonia
202-room upscale hotel to be operated by Hilton
Total cost of ca 40 million euro
s
Opening planned to beginning 2016
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 rooms26 suitesRestaurant seating 176SPA with pool, fitness centre and saunasConference rooms seating 800Slide9
9
Upgraded Online Casino ServicesSlide10
10
AppendixesSlide11
11
Company History
1993
Company
founded by
currentChairman of the Board Armin Karu
Opening numerous casinos in Estonia1997 Opening of flagship Reval Park Hotel & Casino2001 First casino opened in Lithuania2002 First casino opened in Latvia2004 First casino opened in Ukraine2005 First casino opened in Belarus2006 Listing on Tallinn Stock Exchange
2007 First casino opened in Poland
2007 Listing
on Warsaw Stock Exchange
2007
First
casino opened in Romania
2008
First
casino opened in Slovakia
2009
Exiting
Ukrainian market
2010
Entering
online casino gaming market
2011
Exiting
Romanian market
2011 Recovery in all countries2012 Entering Italian market2013 Expansion in Latvian market
2014 Start of construction of new upscale
hotel Hilton Tallinn Park Slide12
12
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. Slide13
13
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; since 2012 as CEO Previous work experience as an audit engagement leader in PricewaterhouseCoopers (joined PwC in 2001)Meelis Pielberg, COO Joined OEG in 1996; since 2012 as COO Country Manager in Estonia 2009-2011
Aigar Hain, Country Manager in Estonia
Jozef Skuben, Country Manager in Slovakia
Gints Pakarklis
, Country Manager in Latvia
Alessio Liverani
,
Country Manager in Italy
Saulius Petravičius
, Country Manager in Lithuania and Belarus
Veiko Krünberg
,
Head of Online Operations
Cezary
Gizka
, Country Manager in PolandSlide14
14
Business Model
HOURS PLAYED
Client playing slot on average 900 games per hour =
coin-in
of EUR 900AVERAGE BETAverage bet of € 1 per game
HOUSE EDGEAverage house edge of 5% for € 1 bet results € 45 per hour
AVERAGE BET
Average bet of € 1
0
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 playerSlide15
15
Consolidated Income Statement
‘000
€
Q4
2014
Q4 2013Changey-o-y20142013Change
y-o-y
Income from gaming transactions
37,600
37,285
0.8%
141,077
135,921
3
.
8%
Other revenue and income
2,678
2,647
1
.
2%
9,583
9,898
-3.2%
Total revenue and income
40,278
39,932
0
.
9%150,660
145,819
3
.
3%
Gaming taxes
6,998
7,502
-6.7%
28,171
28,937
-2.6%
L
ease and rent
4,150
3,177
30.6%
15,154
12,453
21.7%
Staff costs
10,440
9,875
5.7%
38,892
35,878
8.4%
Depreciation, amortisation and impairment
4,076
1,781
128,9%
10,356
7,764
33.4%
Other costs
9,597
8,480
13.2%
32,292
29,004
11.3%
Operating profit
5,017
9,117
-45.0%
25,795
31,783
-18
.
8%
Total finance income and costs
29
36
-19
.
4%
60
-
536
-
111
.
2
%
Income tax expense
532
1,444
-
63
.
2%
3,426
4,323
-20.7%
Net profit for the period
(equity holders of the parent company)
4,053
7,485
-45
.
9%
21,381
25,190
-15
.
1%Slide16
16
Consolidated Cash Flow
‘000
€
2014
2013
Changey-o-yNet cash flows from operating activities32,49233,224-2
.2%
Net cash flows from investing activities
-22,873
-6,736
239.6%
Incl. purchase of fixed assets
-18,716
-12,582
48.8%
Incl. acquisition of financial investments
-112
-
1
,
379
-
91
.
9
%
Incl. proceeds from sale of financial investments
0
11
,
150-100.0%Net cash flows from financing activities
-14,
118
-
17
,
872
-
21
.
0%
Net cash flows
-4,499
8,616
-152
.
2%
Cash and cash equivalents at the end of the period
40,117
44,582
-10.0%Slide17
17
Consolidated
Balance Sheet
‘000
€
31.12.2014
31.12.2013Changey-o-yCash and cash equivalents40,
11744,582
-10.
0%
Other current assets
7,046
5,390
30
.
7%
Total current assets
47,163
49,972
-5
.
6%
Total non-current assets
79,068
68,305
15
.
8%
Total assets
126,231
118,277
6
.
7%
Total current liabilities
15,539
15,691
-
1
.
0%
Total non-current liabilities
1
,
488
615
142
.
0
%
Total liabilities
17,027
16,306
4.4%
Total equity of the parent
103,865
97,555
6
.
5%
Non-controlling interest
5
,
339
4
,
416
20
.
9%
Total equity
109,204
101,971
7
.
1%Slide18
18
Regulatory Environment and Taxes
Estonia
Latvia
Lithuania
Belarus
PolandSlovakia
ItalyTaxes
Regulatory environment
Unit based taxation
remains for tables and
changes for slots to revenue-based and fixed combination taxation in 2015 (slots were EUR 447 per month per slot and will be
EUR 300 + 10% from GGR. Online regulation established.
No major regulatory changes expected in near future.
Online regulation established
.
Unit based taxation. Effective revenue-based tax calculated for 2014 is
15
%.
No major regulatory changes expected in near future, except for possible online regulation.
Unit based taxation. Effective revenue-based tax calculated for 2014 is 1
2
%.
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.
Revenue-based tax 29% for casino slots will change to yearly
unit based tax of EUR 5,000.
Revenue based taxation of 29% from GGR.
No major regulatory changes expected in near future.
Unit based taxation. Effective revenue-based tax calculated for 2014 is
24
%.Unit based taxation. Effective revenue-based tax calculated for 2014 is 10%.No significant changes expected.
Effective revenue-based tax calculated for 2014 is 5
4%.Slide19
Thank You
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