Cherry posts a strong fy-2016 report

News on 21 Feb 2017

The Cherry AB gambling group has posted a strong Q4-2016 and FY-2016 annual report covering the period 1 January – 31 December 2016, with the following highlights:


* Revenues up grew 201 percent y-o-y to SEK 519.4 million (SEK 172.5 million) and profits improved significantly. Organic growth accounted for 41 percent in revenue terms;

* EBITDA increased 353 percent year-on-year to SEK 106.3 million (23.4). EBIT amounted to SEK 580.6 million (16.4) and includes a revaluation of the purchase price for the ComeOn acquisition of SEK 510.5 million. Adjusted to this, EBIT amounted to SEK 70.2 million (16.4);

* Profit after tax was SEK 578.2 million (12.9). Adjusted for the revaluation mentioned above, the result after tax amounted to SEK 67.7 million;

* Online gaming revenue grew organically by 51 percent y-o-y. Including ComeOn the revenue grew by 294 percent. EBITDA amounted to SEK 87.8 million (11.5). The number of active online customers increased by 339 percent to 310,706 (70,746). During the fourth quarter, the number of new customers registered was 1,798,546 (91,275), including the ComeOn acquisition.

* Game Lounge’s revenue grew by 138 percent and EBITDA grew by 37 percent to SEK 5.3 million (3.9);

* Yggdrasil Gaming’s revenue grew by 207 percent and EBITDA increased 171 percent to SEK 13.2 million (4.9);

* Restaurant Casino’s revenue amounted to SEK 42.8 million (44.3) and EBITDA amounted to SEK 4.9 million (4.9).

* Cherry launched a new business area in November; Gaming Technology – XCaliber. The business area will be reported separately from the first quarter of 2017;

* In December, Cherry exercised its option to acquire the remaining 51 percent of the shares in ComeOn Malta Ltd. As a result of this acquisition and strong organic growth, Cherry is expected to triple its revenues and expects to generate total revenues for FY-2017 of between SEK 2,600 million and SEK 2,700 million with an EBITDA of SEK 550 million and SEK 600 million.

For FY-2016, Cherry reported the following highlights:

* Revenues grew 109 percent to SEK 1,102.4 million (528.7) with a strong profit;

* EBITDA increased by 393 percent and amounted to SEK 177.7 million (35.9). EBIT amounted to SEK 625.6 million (13.3). EBIT includes a revaluation of the purchase price for the ComeOn acquisition of MSEK 510.5 million. Adjusted to this, EBIT amounted to SEK 115.2 million (13.3);

* Profit after tax came in at SEK 635.2 million (6.4) Adjusted for the revaluation mentioned above, the result after tax amounted SEK 124.7 million. The result was burdened with acquisition costs for ComeOn and Nasdaq listing costs of SEK -10.2 million;

* The board intends to delay the decision regarding the distribution of dividends until the ComeOn purchase is finalised. The dividend policy of distributing at least 50 percent of the net profit remains.

* Former CEO Frank Burvall departed the company for family reasons but his services will remain until summer 2017. He has been succeeded by Anders Holmgren;

Holmgren commented on the results, noting that the company’s activities span five divisions and encompass the entire gaming industry, and that it owns and manages a range of interesting companies run by strong and motivated individuals, with a mix of entrepreneurs and specialists.

“The combination of Cherry iGaming and ComeOn is among the largest B2C companies in online gaming in the Nordic market, and a serious player for the future,” he said. “The integration between Cherry iGaming and ComeOn continues as planned and with great success.

“XCaliber is Cherry’s latest launch within B2B gaming technology. XCaliber allows Cherry to capitalize on its high-end gaming platform and its payment and affiliate system, by offering these to partners and gaming operators. In 2017 the company expects to sign its first partnership deals with external customers.

“Game Lounge continues its outstanding development and is one of the fastest growing companies in performance-based online marketing. Game Lounge has also entered the Japanese market, where it launched its first affiliate page at the end of 2016. The company now operates in nine markets with the ambition to expand even further.

“Yggdrasil Gaming continues its outstanding progress in the fourth quarter, delivering the strongest quarter in the company’s history. Yggdrasil has signed agreements with several new major operators and has, during the fourth quarter, also introduced a number of innovations to the industry. The company has grown to a level where it is now well positioned and beginning to compete with the industry’s biggest gaming development companies, while retaining the motto that one should be “the best, but not necessarily the biggest.

“Yggdrasil has started the process, in accordance with the technical requirements in Italy, to certify its games to allow it to enter the Italian market. During the second quarter of 2017, the first eleven games are expected to be available to the Italian market. Yggdrasil will also pursue opportunities in other regulated markets that make commercial sense. In addition, Yggdrasil also initiated a new business concept to support and cooperate with other gaming companies and entrepreneurs – Yggdrasil Dragons. The idea of the initiative is to give committed gaming companies and entrepreneurs new, innovative and exciting ideas, access to Yggdrasil’s resources, experience and knowledge, and hand-in-hand, take these concepts from idea to reality.”

Holmgren reported that Cherry continues its work towards a change of listing to NASDAQ Stockholm during the first half of 2017, and said that there was still “plenty of room” for creativity and innovation in the gaming industry.

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