YEARBOOK 2016 OLYMPIC ON THE MAP
ESTONIA
LATVIA
LITHUANIA
SLOVAKIA
ITALY
MALTA
SNAPSHOT
6 COUNTRIES
3,024 EMPLOYEES
205.1 REVENUE (M EURO)
44.2 GAMING TAX (M EURO)
29.8 NET PROFIT (M EURO)
120 CASINOS
4,123 SLOT MACHINES
ELECTRONICAL ROULETTE 106 TERMINALS
170 GAMING TABLES
TOURNAMENT POKER 64 GAMING TABLES
31 BETTING POINTS TIMELINE
1993 Company founded by Chairman of the Board Armin Karu, opening numerous casinos in Estonia
1997 Opening of flagship Reval Park Hotel & Casino
2001 First casino opened in Lithuania
2002 First casino opened in Latvia
2004 First casino opened in Ukraine
2005 First casino opened in Belarus
2006 Listing on Tallinn Stock Exchange
2007 First casino opened in Poland Listing on Warsaw Stock Exchange
First casino opened in Romania
2008 First casino opened in Slovakia
2009 Exiting Ukrainian market
2010 Entering online gaming market
2011 Recovery in all other countries, exiting Romanian market
2012 Entering Italian market
2013 Expansion in Latvian market
2015 Opening of the Casino Malta by Olympic Casino in Saint Julian’s, Malta
2016 Exiting Belarusian market
2016 Opening of the Hilton Tallinn Park and the new flagship Olympic Park Casino Hilton Tallinn Park & Olympic Park Casino Grand Opening June 9th, 2016. Official opening ceremony of Hilton Tallinn Park (from left): General Manager of Olympic Park Casino Mr. Heikki Rinta-Panttila, Chairman of the Board of OEG Mr. Armin Karu, Senior Vice President and Commercial Director of Hilton EMEA Mrs. Patricia Page-Champion, President of Estonia His Excellency Toomas Hendrik Ilves and Mrs. Ieva Ilves, General Manager of Hilton Tallinn Park Mr. Daniel Habersatter. At the back: superstar Kerli Kõiv, the first Estonian singer-songwriter to reach the Billboard chart in the USA.
6 The year our strengths were put to fruition
Armin Karu Chairman of the Board
Any story worth telling can be divided into of our development story - the completion of the different periods, and it’s exactly the same with Hilton Tallinn Park hotel and Olympic Park Casino organizations and enterprises. The story of the 23rd in the Estonian capital Tallinn, the launch of year of operations of the Olympic Entertainment Casino Malta by Olympic Casino in Malta’s most Group is that of a successful organization and of attractive tourist area in St Julian’s and the new how to even more accurately target the focus in Olgiate Olona gaming room developed according order to reveal its true strengths. We showed very to our own standards in Italy. determined development and good results both in our historic core markets, Estonia and Latvia, This was the best year in our history, but our as well as in newer markets in Italy and Malta. potential and ambitions give us the confidence to look with optimism also into tomorrow, where in In all our operating markets we have, for many addition to today’s markets, the flag of the years, been known as pioneers of our field Olympic Entertainment Group is flying high in the – Olympic Casino’s state of the art games and sky of new entertainment markets. entertainment of the highest quality are what have created new standards on the market every- where. In addition to our so-called classic, land- based casino entertainment, in recent years we have, under the OlyBet trademark, successfully OUR VISION demonstrated the ability to evolve in the online gaming segment too and most importantly, Our vision is to be a global casino and managed to find a way of increasing the synergy resort operator, best known for our between these two segments. excellent service and creative design.
2016 was the year when several large projects progressed from their development phases to effective launches and the first good results. I cannot emphasize enough the real major events
7 8 Making the most of the oppor- tunities of growth
Madis Jääger CEO
It may not be surprising that the financial results for Olympic Casino Sunrise, due to the expiry of our 2016 represented the best-ever year for the Group location specific activity license. Unfortunately, but it is definitely a source of joy for the shareholders the risk of which we were aware of and for which of the Olympic Entertainment Group. we had warned the shareholders, materialized. To minimize operating costs we have frozen our In 2016, our consolidated revenue increased by 15.8% activity in Poland. At the same time, we are still when compared to the previous year, totalling interested in operating in this market and plan EUR 205.1 million. Even stronger growth was recorded to participate in the upcoming public tenders for in EBITDA, which increased by 36.2% and amounted to the licenses. EUR 53.8 million, including non-recurring profit from the sale of newly built hotel property. It also gives me In September, after eleven years of active presence great pride to announce that at EUR 29.8 million, our in Belarus, we decided to exit the market due to the net profit for 2016 set a record in the company’s inefficient operations caused by the macroeconomic 23 years of operations. situation and by the poor prospects of increasing profitability. This will give us considerably more time All our key markets also showed good individual and energy, which can be dedicated to preparing results as revenues by segments grew by: development projects that are more promising in 27.6% in Estonia (EUR 45.4 million), 21.6% in Italy terms of achieving OEG goals, including preparations (EUR 26.8 million), 18.2% in Latvia (EUR 66.2 million) for expansion into new markets and their and in 14.9% in Lithuania (EUR 25.3 million). implementation.
Casino Malta by Olympic Casino, which held its opening ceremony at the beginning of the year, also In addition to strong revenue growth made a strong start, with first year revenues in excess in its main markets of operation, in July of EUR 11 million. 2016 OEG earned significant additional
In Warsaw, the capital of Poland, we were forced, in profit from the sale of the newly built September 2016, to close down our flagship casino, hotel property of EUR 17.8 million.
9 Proportion of segments in the Group’s total revenue
22% Estonia 8% Slovakia
32% Latvia 13% Italy
12% Lithuania 6% Malta
7% Poland 0% Belarus
Net profit
29.8 30 27.1 25 Without a doubt and in many ways the true highlight 22.4 of 2016 was the completion of Hilton Tallinn Park. 20 The opening of the very first Hilton Worldwide in 15 the Baltic countries was a memorable event for the hotel market of the whole region, for which the City 10 of Tallinn presented OEG with the Tourism Deed of 5 the Year Award. Secondly, Olympic Park Casino, the long-awaited new flagship of Olympic Casino opened 0 2014 2015 2016 doors in the same complex, becoming the undis- puted gem of the entire region’s casino business. The completion of the complex has put OEG into a significantly better position for developing casino The Group’s consoli- tourism in the Baltic countries. And last but not least, dated total revenue only a few weeks after opening the new hotel and entertainment complex building, OEG sold the whole property for EUR 48 million to ECB3 Tallinn, which 250 is part of the investment company East Capital. OEG 205.1 200 earned a profit of EUR 17.8 million as a result of the 177.2 transaction. The hotel and casino operations were 157.8 150 not part of the sales transaction and will continue to be owned by the Group. The sales transaction allowed 100 OEG to release capital that has been invested into real estate and to focus on the core business of the Group - 50 operating casino and entertainment complexes. 0 2014 2015 2016
10 HILTON TALLINN PARK
• 202 rooms • 27 suites • • Restaurant seating 176 • • SPA with pool, fitness centre and saunas • • Conference rooms seating 800 •
OLYMPIC PARK CASINO
• 18 gaming tables • 97 slot machines • 10 poker tables • 2 sports betting terminals • Special area for VIP players • • Spacious casino bar with stage and lounge area •
11 12 Mediterra- nean flavour is becoming ever stronger
Meelis Pielberg COO
Olympic Entertainment Group, which has so far In Italy, we opened Olgiate Olona, the first gaming been known as the pioneer of Central and Eastern room built according to our own standards and in Europe’s casino market has, in recent years, changed the true Olympic style. In Malta, Casino Malta by its geographical focus of activity. We have signifi Olympic Casino successfully completed its first full cantly expanded our grip in Europe and added a lot year of operations as the newest and most modern of so-called Mediterranean flavour to it. casino of this popular tourist destination.
At the end of 2016, OEG operated 120 casinos and 2016 was a year filled with acquisitions and deve 31 betting shops in six countries and employed lopment but the main goal of OEG remained the a total of 3,024 people. successful launch of projects which had been in the pipeline and which in turn would open the way 2016 was a breakthrough year in Estonia, during for new expansion projects within the foreseeable which, in addition to completing the Hilton Tallinn future. Park and our new flagship Olympic Park Casino, we successfully concluded the acquisition and integration of casino operator MC Kasiinod AS which operated under the Monte Cristo brand.
In Latvia, our strongest market, we successfully OUR MISSION completed the acquisition and integration of the Vulkan brand of casinos. In Poland, in connection To give our guests a customer with the expiry of the license of our flagship orientated, secure and safe environment casino, we froze our operations. At the same time, with the finest design and craftsmanship, we decided to leave the Belarusian market, unparalleled in the industry and mainly due to the lack of development prospects, and opted to instead focus on expanding in new supported by the excellence of our name markets through solid expansion prospects. and reputation.
13 Saulius Petravicˇius
Jozef Skuben
Hindrek Vain Armin Karu
Kaspars Sapranovics Meelis Pielberg
Piret Barlo Madis Jääger
Armin Karu – Chairman of the Board Kaia Kivistik – Finance Director Madis Jääger – Chief Executive Officer Hindrek Vain – Casino Operations Manager Meelis Pielberg – Chief Operating Officer Piret Barlo – Purchasing Manager Veiko Krünberg – Chief Online Operations Officer Oleg Jurtšenko – Chief Information Officer Gints Pakarklis
Erki Tavas
Alessio Christos Liverani Charistas
Oleg Jurtšenko
Aare Reinsalu
Kaia Kivistik
Sławomir S´witalski Madis Jääger
Veiko Krünberg
Erki Tavas – Managing Director in Estonia Alessio Liverani – Managing Director in Italy Gints Pakarklis – Managing Director in Latvia Aare Reinsalu – Casino Operations Manager in Italy Saulius Petravicˇius – Managing Director in Lithuania Christos Charistas – Managing Director in Malta Jozef Skuben – Managing Director in Slovakia Sławomir S´witalski – Managing Director in Poland Kaspars Sapranovics – Casino Operations Manager in Slovakia OlyBet is not only General Sponsor of top European basketball club Žalgiris Kaunas, the Baltic’s all-time most successful sports team, but has also teamed up with the club’s cheerleaders, voted the best in the Euroleague multiple times.
16 OlyBet – market leader with great growth potential
Veiko Krünberg Managing Director of Online Operations
We can say with great satisfaction that OlyBet, the Poker Festival which, in a few years, has become remote gaming and sports-betting brand of the largest festival of its kind in the Baltic and Olympic Entertainment Group, is now the largest Nordic countries, as well as the most important operator of the vertical in the Baltic countries annual meeting point for the region’s poker combined. OEG, which launched online gaming in community. Estonia in 2010, continues to regard it as a segment with significant growth potential. One of the key objectives of the Group, for the year 2017, is to improve its position in the online The acquisition of Lithuanian operator Orakulas, services segment and to create additional at the end of 2015, strengthened our position in synergies with other operating segments of the online gaming market and added many the Group. betting shops into our portfolio bringing, by the end of the year, the number of betting shops in Lithuania to 31.
Without a doubt, a well-planned and versatile Notable strengthening of its market contribution to sports is one of the cornerstones of position in Lithuania made OlyBet the OlyBet’s success. OlyBet continues to be the main Baltic market leader in remote gaming sponsor of Žalgiris Kaunas, the most renowned and sports-betting. sports team in the Baltic countries which plays in the basketball Euroleague.
However, the extent of our contribution to the sports community is much wider, ranging from the support of national Olympic Committees to the recognition of the best sports journalists and from ice hockey to wrestling and rally. A special mention should go to the OlyBet Kings of Tallinn
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1 2 3 4 5 6 Olympic Casino has become a Prime Minister of Malta Mr Joseph Muscat, Following the launch of OEG’s new flag- meeting place for different cul with Mrs Michelle Muscat, and surround- ship venue, Tallinn has become the poker tures and, as a tradition, we ed by Kevin De Cesare, Managing Direc- capital of the Nordic and Baltic regions. also celebrated New Year’s ac tor of our Maltese partner Eden Leisure In addition to the OlyB et Kings of Tallinn cording to the Russian, Chinese Group, Armin Karu, Chairman of the Board festival, growing extensively each year, and Estonian calendars, with of OEG, and Madis Jääger, CEO of OEG, Olympic Casino was proud to host the people dancing the night away to celebrated the grand opening of Casino European Poker Dealer Championship. the music of diva Anne Veski. Malta by Olympic Casino together with over a thousand invited guests. 2 4
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7 8 9 10 11 12 13 14 15 Olympic Casino’s birthdays are re- One of the highlights of 2016 was the launch Nowadays, everything OlyBet is engaged nown for being the parties of the of a new pop-up party series, the Secret with quickly turns into sports and challen year. This time round we hosted Nightclub, which attracts hundreds of youn ges, whether it is TV celebrity Kristel Estonia’s top pop icon Liis Lemsalu, ger clubbers into meeting internationally Aaslaid in action at a roadside construction No. 1 rap artist Genka, and Euro- renowned DJs such as Russian duo Filatov & site after losing a side bet, world champion vision star Ott Lepland as well as Karas, Norwegian top electronic music pro- wrestler Heiki Nabi signing his portrait for the world’s top bartenders for who ducer Alan Walker and others. charity or OlyBet presenting the annual Olympic has become famous for. sports media awards. KEY FIGURES BY COUNTRY
ESTONIA • Casinos 24 • Slot machines 990 + 36 (elect. roulette terminals) • Gaming tables 24 + 22 (open poker) • Employees 715
LATVIA • Casinos 54 • Slot machines 1,475 + 8 (elect. roulette terminals) • Gaming tables 24 + 9 (open poker) • Employees 915
LITHUANIA • Casinos 18 • Slot machines 543 + 8 (elect. roulette terminals) • Gaming tables 59 + 2 (open poker) • Betting shops 31 • Employees 750
SLOVAKIA • Casinos 8 • Slot machines 291 + 36 (elect. roulette terminals) • Gaming tables 44 + 21 (open poker) • Employees 324
ITALY • Casinos 15 • Slot machines 539 • Employees 88
MALTA • Casinos 1 • Slot machines 285 + 18 (elect. roulette terminals) • Gaming tables 19 + 10 (open poker) • Employees 209
20 CONSOLIDATED SUMMARY FINANCIAL STATEMENTS
21 CONSOLIDATED SUMMARY STATEMENT OF FINANCIAL POSITION
(EUR ‘000) 31.12.2016 31.12.2015
Current assets Cash and cash equivalents 37,933 34,710 Financial investments 99 1,835 Receivables and prepayments 4,552 5,537 Prepaid income tax 913 551 Inventories 1,532 1,366 Total current assets 45,029 43,999
Non-current assets Deferred tax assets 426 801 Financial investments 4,988 3,512 Other long-term receivables 776 914 and prepayments Investment property 295 288 Property, plant and equipment 51,250 58,877 Intangible assets 49,932 53,942 Total non-current assets 107,667 118,334 TOTAL ASSETS 152,696 162,333
22 (EUR ‘000) 31.12.2016 31.12.2015
Current liabilities Borrowings 0 292 Trade and other payables 19,806 27,680 Income tax payable 292 1,058 Provisions 1,329 1,842 Total current liabilities 21,427 30,872
Non-current liabilities Borrowings 0 7,952 Deferred tax liability 693 513 Other long-term payables 703 127 Total non-current liabilities 1,396 8,592 TOTAL LIABILITIES 22,823 39,464
EQUITY Share capital 60,716 60,716 Share premium 258 258 Statutory reserve capital 4,860 3,574 Other reserves 538 329 Translation reserves -26 -1,156 Retained earnings 57,825 51,822 Total equity attributable to 124,171 115,543 equity holders of the parent Non-controlling interest 5,702 7,326 TOTAL EQUITY 129,873 122,869 TOTAL LIABILITIES AND EQUITY 152,696 162,333
23 CONSOLIDATED SUMMARY STATEMENT OF COMPREHENSIVE INCOME
(EUR ‘000) 2016 2015
Continuing operations Gross gaming revenue 175,998 142,468 Other revenue 15,390 9,844 Total revenue before gaming taxes 191,388 152,312 Gaming taxes -37,497 -28,409 Net revenue 153,891 123,903 Other income 18,201 342 Total net revenue and income 172,092 124,245 Cost of materials, goods and services -5,331 -3,473 Other operating expenses -60,311 -44,379 Staff costs -50,667 -39,122 Depreciation, amortisation and impairment -11,371 -7,591 Changes in fair value of investment property 7 20 Other expenses -525 -605 Total operating expenses -128,198 -95,150 Operating profit 43,894 29,095 Interest income 26 31 Interest expense -41 -24 Foreign exchange gains (losses) 16 -6 Other finance income and costs -23 -9 Total finance income and costs -22 -8 Profit before income tax 43,872 29,087 Income tax expense -4,448 -3,714 Net profit for the period from 39,424 25,373 continuing operations Net profit (-loss) for the period from -9,618 1,712 discontinued operations Net profit for the period 29,806 27,085 Attributable to equity holders of 29,292 25,719 the parent company Attributable to non-controlling interest 514 1,366 Other comprehensive income Items that may be subsequently reclassified to profit or loss Currency translation differences 1,130 264 Total comprehensive profit for the period 30,936 27,349 Attributable to equity holders of the parent company 30,422 25,983 Attributable to non-controlling interest 514 1,366
24 Independent auditor’s report on the consolidated summary financial statements To the Shareholders of Olympic Entertainment Group AS
Our opinion In our opinion, the accompanying consolidated summary financial statements of Olympic Entertainment Group AS (the Company) and its subsidiaries are consistent, in all material respects, with the audited consolidated financial statements.
The consolidated summary financial statements The Company’s consolidated summary financial statements derived from the audited consolidated financial statements for the year ended 31 December 2016 comprise: the consolidated summary statement of financial position as at 31 December 2016; and the consolidated summary statement of comprehensive income for the year then ended. The consolidated summary financial statements do not contain all the disclosures required by International Financial Reporting Standards as adopted by the European Union. Reading the consolidated summary financial statements and the auditor’s report thereon, therefore, is not a substitute for reading the audited consolidated financial statements and the auditor’s report thereon.
The audited consolidated financial statements and our audit report there on We expressed an unmodified audit opinion on the audited consolidated financial statements in our report dated 28 March 2017. That report also includes the communication of key audit matters. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the audited consolidated financial statements of the current period.
Other information The Management Board is responsible for the other information contained in the yearbook in addition to the consolidated summary financial statements and our auditor’s report thereon. Our opinion on the consolidated summary financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated summary financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated summary financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management for the consolidated summary financial statements Management is responsible for the preparation of the consolidated summary financial statements that are derived from the audited consolidated financial statements.
Auditor’s responsibility Our responsibility is to express an opinion on whether the consolidated summary financial statements are consistent, in all material respects, with the audited consolidated financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing 810 (Revised), “Engagements to Report on Summary Financial Statements”.
AS PricewaterhouseCoopers
Ago Vilu Lauri Past Certified auditor in charge, auditor’s certificate no.325 Auditor’s certificate no.567
28 March 2017
AS PricewaterhouseCoopers, Pärnu mnt 15, 10141 Tallinn, Estonia; License No. 6; Registry code: 10142876 T: +372 614 1800, F: +372 614 1900, www.pwc.ee
25 PASSION FOR SERVICE EXCELLENCE
Estonia Olympic Casino Eesti AS Pronksi 19, 10124 Tallinn, Estonia Ph: +372 667 1250 E-mail: [email protected]
Latvia Olympic Casino Latvia SIA Kronvalda 3, LV-1010 Riga, Latvia Ph: +371 678 92975 E-mail: [email protected]
Lithuania Olympic Casino Group Baltija UAB Konstitucijos ave. 12, LT-09308 Vilnius, Lithuania Ph: +370 526 38638 E-mail: [email protected]
Slovakia Olympic Casino Slovakia s.r.o. Viedenskà cesta 7 851 01, Bratislava, Slovakia Ph: +421 905 985159 E-mail: [email protected]
Italy The Box S.r.l. Via Busto Fagnano 44 21057, Olgiate Olona (VA), Italy Ph: +39 0331 678378 E-mail: [email protected]
Malta OEG Malta Gaming Ltd Eden Place, St. Augustine’s Street, St. George’s Bay, St. Julian’s, STJ 3310, Malta Ph: +356 237 10555 E-mail: [email protected]