Swedish online gaming firm goes from strength to strength

News on 10 May 2017

An interim first quarter 2017 report from Swedish gaming firm Cherry shows strong growth in revenues and improved profitability, despite an increase in marketing expenses and its outright acquisition of ComeOn’s remaining 51 percent.

Key performance highlights for the period ending March 31, 2017 include:

Group revenue increase of 205 percent year-on-year to SEK 541 million (Q1/2016: SEK 177 million), with organic revenue growth reported as 44 percent.

Improved profitability with EBITDA increasing 224 percent to SEK 83 million (Q1/2016: SEK 26 million) and an EBITDA margin of 15.4 percent (Q1/2016: 14.5 percent).

EBIT amounted to SEK 52 million (Q1/2016: SEK 17 million) and profit of SEK 36 million (Q1/2016: SEK 17 million).

Earnings per share before and after dilution amounted to SEK 1.21 (Q1/2016: SEK 0.81) and SEK 1.19 (Q1/2016: SEK 0.80) respectively.

Online Gaming – ComeOn! revenue grew by 282 percent to SEK 453 million (Q1/2016: SEK 119 million) and EBITDA increased by 375 percent to SEK 57 million (Q1/2016: SEK 12 million). Organic revenue growth was 44 percent.

Performance-based marketing – Game Lounge revenue grew by 201 percent to SEK 30 million (Q1/2016: SEK 10 million) and EBITDA increased by 222 percent to SEK 15 million (Q1/2016: SEK 5 million).

Game development – Yggdrasil Gaming revenue grew by 134 percent to SEK 33 million (Q1/2016: 14 million) and EBITDA increased by 68 percent to SEK 13 million (Q1/2016: SEK 8 million).

The Group’s forecast to generate total revenue for the full year 2017 of between SEK 2,6 billion and SEK 2,7 billion, with an EBITDA of SEK 550 million and SEK 600 million, remains.

Commenting on the results, Anders Holmgren, CEO Cherry, said:

”With a strong acquisition year behind us, the first quarter was mainly characterized by consolidation. At the same time, we grew as planned and with good profitability. Partnerships and synergies have enabled an even stronger focus on innovation, improved customer experience and continued growth”.

Holmgren highlighted strong performances across all business divisions but particularly from Yggdrasil Gaming and Game Lounge.

“Cherry has broadened the Group’s business to cover the entire value chain within gaming. A strong organic growth and further acquisitions of entrepreneurial companies give us a unique platform to continue to create value. Overall, within Cherry we have the strengths and advantages that give us the opportunity to continue to grow faster than the market,” Holmgren concluded.

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