Press release of unaudited annual earnings January December operating profit for the whole rose just over 10-fold to MSEK 122 Stefan Olsson, CEO
Press release of unaudited annual earnings January December 4th quarter, October - December Earnings rose by 451 percent, amounting to MSEK 174.6 (31.7). Operating profit rose to MSEK 42.0 (2.0) Profit after tax improved to MSEK 37.9 (1.8), equivalent to SEK 1.06 (0.05) per share Operating cash flow amounted to MSEK 51.0 (5.1), January December Earnings rose to MSEK 458.0 (97.0), equivalent to growth of 372 percent Operating profit amounted to MSEK 122.0 (11.7) Profit after tax was MSEK 108.3 (10.3), equivalent to SEK 2.78 (0.27) per share Operating cash flow amounted to MSEK 124.3 (11.9) The Board of Directors propose to the annual general meeting that MSEK 57.2 (5.8), equivalent to SEK 1.40 (0.15) per share be distributed to the shareholders Events after the end of the period The Group has signed agreement with two new game providers. Evolution Gaming for Live Casino services and Yggdrasil for slot machines. 175 INCOME, SEK M 50 OPERATING PROFIT/LOSS, SEK M 140 40 105 30 70 20 35 10 0 Q1 Q2 0 - - -Q1 -Q2 - - KEY FIGURES, SEK M Δ Δ Income 174.6 31.7 451% 458.0 97.0 372% Gross profit/loss 106.2 17.5 507% 267.2 47.7 460% Gross margin 61% 55% - 58% 49% - Operating profit/loss 42.0 2.0 2000% 122.0 11.7 943% Operating margin 24% 6% - 27% 12% - Profit/loss after tax 37.9 1.8 2006% 108.3 10.3 951% Profit per share, SEK 1.06 0.05 2020% 2.78 0.27 930% Net cash provided by operating activities 51.0 5.1 900% 124.3 11.9 945% 2 Global Gaming 555 AB 556721-0520
Press release of unaudited annual earnings January December CEO s report - Let me start by saying that was, in all respects, a good for Global Gaming. Earnings have risen and, over the 4th quarter, have increased by 33 percent on the previous quarter. Annual turnover rose from MSEK 97 to MSEK 458 and the operating profit for the whole increased more than ten-fold to MSEK 122. A lot of time and effort was put into listing the shares on First North over the, which successfully took place on 19 October. It s great to see that, since then, there is still a hive of trading activity and that the interest from investors and savers remains strong. innovative and ahead of the field. We have yet to detect any weakening due to the competition. In the first half of the first quarter of 2018, growth in Ninja Casino was 35 percent higher compared to earnings during the first half of the previous quarter. In response to the new competition - and to develop our model - we will be launching a new brand on the Swedish market in the first quarter. The brand will be operated from Malta under the group s Maltese gaming licence. The started well and we are continuing to grow in both existing and new markets. That it took as long as it did before we saw any competitors in the PayNPlay segment was something we d dared to hope for. We knew it would happen eventually and it s now giving us an opportunity to show that we can continue to be Ninja Casino is working on securing a new domicile within the EU through an Estonian gaming licence. We can see a lot of advantages by licensing Ninja Casino in Estonia. Just like Malta, Estonia is subject 100% to EU jurisdiction, which acts as security for both our customers and us. Estonia is also a country that is right on the sharp Global Gaming 555 AB 556721-0520 3
Press release of unaudited annual earnings January December edge of technological development and expertise. There is an openness and desire among the Estonian authorities to work with new, secure technical solutions. Hence, we will hold on to our extremely simple registration process, which got our name out there. Customers will therefore still have the option of whether they provide their mobile number and e-mail address. The entire PayNPlay concept is the result of a cooperation with a payment services provider regulated by the Swedish Financial Supervisory Authority. A new contract concerning the licensing in Estonia has been negotiated with this provider. One of its terms is that, for a certain period, Global Gaming has the sole right to provide this specific customer experience via an Estonian gaming licence. We are aiming to shortly be able to offer our customers games via more European jurisdictions and under these licences continue rolling out our unique concept to other EU markets during the. We are confident that our regulatory strategy and organisation is well equipped to apply for and expand our portfolio of local licences wherever this can be justified. Compared with many other companies in the sector, our marketing costs are low since we have strict control of the effectiveness of the campaigns we run. With respect to the campaign profiled during the for the Ninja Casino brand, the marketing budget was increased, which of course effects the margin. The importance of continuing to build and invest in the brand - especially in Sweden ahead of the pending re-regulation in 2019 - cannot be stressed enough. Focusing right now on our own brands and new licences is clearly the right path. All B2B Whitelabel customers who were able to utilise the group s technical platform were contacted during the first quarter. The arrangement for these customers was that they could utilise the group s licences to market their brands in return for a share in the revenue. In line with the tightening up of requirements for licensees and the introduction of new requirements, especially in the area of personal data and marketing laws, Global Gaming has decided to produce a new B2B service in 2018 aiming towards fewer - yet potentially larger - customers. Being a listed company driven by innovative technical solutions and having an objective to continue at a rapid rate of growth, while holding onto and maintaining a number of gaming licences and products, requires organisation. During the quarter, staffing levels rose, especially on Malta where staff also moved into a new office. Happily we have created a good name for ourselves in the industry and we are continuing to attract a competent and experienced workforce to enable us to continue our expansion and growth. Increased marketing, a bigger workforce, new offices and a strong focus on innovative technology and infrastructure are all investments in the future, so we can continue our strong, organic growth. Although organic growth is our primary objective, we won t exclude the possibility that acquisitions may well turn out to be a way of gaining new markets. In summation, I can look happily and proudly back on a demanding and successful. We can only prophesy about the future, however myself and my competent and committed employees can assure you that we are looking ahead with confidence and that we will do all we can to continue to create value for those of you with shareholdings in Global Gaming. Stefan Olsson CEO 4
Press release of unaudited annual earnings January December About Global Gaming The Group s activities focus on the development and supply of games on the internet, primarily in casinos. The company s own-developed platform is used to provide gaming services both to own brands (B2C) and to brands marketed by other companies (Turnkey/Whitelabel/B2B are all sector-specific terms for this type of service). The platform handles payments, customer information, transactions and game offers. Income is generated by a margin on the end customers stakes. Global Gaming s objective is to provide innovative and secure gaming services and has, in addition to what in the industry is considered standard responsible gaming (such as the possibility for the end customer to limit his deposits/withdrawals and levels), also developed the PayNPlay concept which is based on self-registration through an eid in the local country. A secure identity before any transaction (deposit or play) takes place prevents underage players from taking part and also guarantees that an identity that was previously blocked due to game abuse, cannot lift this block by simply creating a new account. In addition to the brands on our own platform, Global Gaming drives and markets a number of brands on a platform from Aspire Global. Global Gaming s shares have been listed for trading on Nasdaq First North since 19 October under the abbreviated name of GLOBAL. The company s registered office is in Stockholm. Learn more about the Group on globalgaming.com The Group s income and results INCOME Earnings over the quarter amounted to MSEK 174.6 (31.7), a rise of 451 percent and, over the whole, earnings rose by 372 percent to MSEK 458.0 (97.0). The increase in earnings over the quarter amounted to 33 percent compared to the 3rd quarter. The continued growth is mainly due to Ninja Casino s success in the Nordic region. Out of the number of customers on Ninja Casino during the quarter, 71 percent played via their mobile, (69 percent for the whole ). GROSS MARGIN The Group s gross margin rose to 61 (55) percent during the quarter and totalled 58 (49) percent for the whole of the interim period. Compared to the previous quarter, the gross margin rose by two percentage units. MARKETING COSTS Marketing costs during the quarter amounted to MSEK 39.4 (5.3) and for the whole of the interim period to MSEK 85.8 (7.9). The increase is due mainly to ongoing marketing ventures for the Ninja Casino brand on the Nordic market. Marketing campaigns have been carried out on TV, radio, digital media and also via offline media. During the quarter, Global Gaming ran its biggest campaign to date for the Group s brands. The marketing costs for the quarter was equivalent to approx. 23 percent of earnings. The costs proportion of earnings may vary considerably over time due to the intensity of various campaigns and/or launch of new markets. Since Global Gaming intends to grow further on existing markets to strengthen its position, as well as invest in new markets, the marketing costs will increase. Global Gaming 555 AB 556721-0520 5
Press release of unaudited annual earnings January December PERSONNEL COSTS Personnel costs during the quarter amounted to MSEK 9.4 (6.5) and during the interim period the costs amounted to MSEK 28.9 (18.8). The average number of employees for the whole was 40 (23) and at the end of the reporting period the number of employees was 57. Global Gaming will continue to grow and increase its number of employees both in Sweden and abroad over the coming quarters. The main focus is on the Group s activities on Malta, which are estimated to consist of 25 employees at the end of the 1st quarter of 2018. OTHER EXTERNAL COSTS Other external costs during the quarter amounted to MSEK 10.5 (3.3) and for the whole to MSEK 22.3 (8.8). The rise in costs was due in part to the upscaling of the Group to achieve its growth objectives and expansion. The results have been impacted by non-recurring costs of MSEK 2.5 during the quarter and MSEK 3.3 for the whole ahead of the listing on Nasdaq First North. RESULTS Operating profit (EBIT) for the quarter amounted to MSEK 42.0 (2.0) and, for the whole, it increased to MSEK 122.0 (11.7). The operating margin for the quarter was 24.1 (6.3) percent and, for the whole, it was 26.6 (12.1) percent. The profit before tax for the quarter amounted to MSEK 42.0 (2.0) and the profit after tax amounted to MSEK 37.9 (1.8), equivalent to 1.06 (0.05) kronor before dilution. For the whole, the Group s profit/loss before tax amounted to MSEK 122.0 (11.7) and profit/loss after tax amounted to MSEK 108.3 (10.3), equivalent to 2.78 (0.27) kronor per share before dilution. Cash flow, investments and financial position CASH AND CUSTOMER BALANCES Cash and cash equivalents at the end of the amounted to MSEK 154.0 (14.5). Short-term player liabilities and jackpot liabilities amounted to MSEK 5.9 (2.5), while short-term receivables from payment providers amounted to MSEK 18.6 (4.0). CASH FLOW Cash provided by operating activities during the quarter amounted to MSEK 51.0 (5.1) and for the whole of the to MSEK 124.3 (11.9). FINANCING Global Gaming has a strong cash flow from operating activities and does not use any interest-bearing external financing. During the quarter, a relatively small amount of shares at MSEK 22 were issued with the aim of spreading ownership before the listing on Nasdaq First North. Equity The Group s equity as at the balance sheet date amounted to MSEK 229.6 (100.9), equivalent to 5.78 (2.61) kronor per share. The company raised MSEK 22.0 from a new issue in October. Company employees bought 650,000 warrants in the /2020 programme out of the 800,000 issued in total. The strike price is SEK 25 per warrant. The Group received SEK 21,450 as payment for the warrants, which was added to equity. In terms of the warrants based on the /2018 programme, all warrant holders (CEO, CFO and CMO) have announced their intention to exercise their warrants, therefore subscribing altogether for 1.2 million shares in the company during the 1st quarter of 2018. In total, MSEK 7.2 will be added to equity. 6 Global Gaming 555 AB 556721-0520
Press release of unaudited annual earnings January December Other significant events during the quarter The company shares were admitted for trading on Nasdaq First North on 19 October. Before this, new shares were issued at MSEK 22, in order to spread ownership, which were oversubscribed 18-fold. The Group has been granted a Maltese gaming licence (MGA Class 1). No other significant events took place during the quarter. Significant events after the end of the period The Group has signed an agreement with two new game providers. Evolution Gaming for Live Casino services and Yggdrasil for slot machines. No other significant events took place after the end of the period. The company has not issued any forecasts. Parent company The parent company, Global Gaming 555 AB's, activities comprise management, consultancy activities in IT, production and sales (licence) of software. The parent company s earnings for the period amounted to MSEK 54.8 (14.3) and profit/loss after tax amounted to MSEK 57.3 (26.5). The parent company s cash and cash equivalents at the end of the period amounted to MSEK 117.9 (3.9). Shares and shareholders The shares listed on First North on 19 October continue to see a hive of trading activity and investor interest remains strong. Average sales from the listing up to 15 February have been MSEK 9.3 a day. The total number of outstanding shares and votes in Global Gaming 555 AB is 39,677,500. As of the end of December, the three biggest shareholders were Mika Leppänen (through a nominee) with 16.65 percent, Ahti Tiainen with 12.25 percent and Per Hildebrand (through a nominee) with 6.70 percent. Altogether, the company had 2,940 shareholders at the close of the. Annual general meeting and dividends Global Gaming s annual general meeting will be held in Stockholm on 16 May 2018 (time and place to be notified later). The Board of Directors propose to the annual general meeting that MSEK 57.2 (5.8), equivalent to SEK 1.40 (0.15) per share be distributed to the shareholders based on the current dividend policy. The amount calculated takes account of the conversion of warrants into 1,200,000 shares based on the /2018 programme during the 1st quarter of 2018. Note that a change in the number of shares may affect the total amount. Upcoming reports Annual Report : 25 April 2018 Interim Report Jan-Mar 2018: 15 May 2018 Annual Report 2018: 16 May 2018 Interim Report Jan-Jun 2018: 15 August 2018 Interim Report Jul-Sep 2018: 22 November 2018 Press release of unaudited annual earnings 2018: 28 February 2019 This interim report has not been the subject of any specific inspection by the company s auditor. Malmö, 28 February 2018 Stefan Olsson CEO and Group CEO Global Gaming 555 AB 556721-0520 7
Press release of unaudited annual earnings January December Group s summarised profit/loss accounts SEK M Income 174.6 31.7 458.0 97.0 Operating expenses in gaming activities -68.4-14.2-190.8-49.3 Gross profit/loss 106.2 17.5 267.2 47.7 Marketing costs -39.4-5.3-85.8-7.9 Other external costs -10.5-3.3-22.3-8.8 Personnel costs -9.4-6.5-28.9-18.8 Depreciations -0.2-0.1-0.3-0.1 Other operating income/expenses -4.7-0.3-7.9-0.4 Operating expenses -64.2-15.5-145.2-36.0 Operating profit/loss 42.0 2.0 122.0 11.7 Financial income and expenses 0.0 0.0 0.0 0.0 Profit/loss before tax 42.0 2.0 122.0 11.7 Tax -4.1-0.2-13.7-1.4 Profit/loss for the period (assignable to parent company s 37.9 1.8 108.3 10.3 shareholders) Profit per share Before dilution (kronor) 1.06 0.05 2.78 0.27 After dilution (kronor) 1.03 0.05 2.74 0.27 Gross margin (percent) 60.8 55.2 58.3 49.2 Operating margin (percent) 24.1 6.3 26.6 12.1 Summarised consolidated report on overall results SEK M Profit/loss for the period 37.9 1.8 108.3 10.3 Other total profit/loss Items that have been or can be transferred to the profit/loss for the Exchange rate differences on conversion foreign activities 4.3-0.6 4.2 3.3 Other total profit/loss for the period (after tax) 4.3-0.6 4.2 3.3 Overall total profit/loss for the period 42.2 1.2 112.5 13.6 8 Global Gaming 555 AB 556721-0520
Press release of unaudited annual earnings January December Group s summarised balance sheets SEK M 31/12/ 31/12/ Assets Intangible fixed assets 80.9 78.6 Tangible assets 1.8 0.3 Deferred tax payable 6.2 10.0 Total fixed assets 88.9 88.9 Short-term receivables 32.1 11.7 Cash 154.0 14.5 Total current assets 186.1 26.2 Total assets 275.0 115.1 Equity and liabilities Equity 229.6 100.9 Deferred tax liabilities 0.9 1.2 Total long-term liabilities 0.9 1.2 Other short-term liabilities 44.5 13.0 Total short-term liabilities 44.5 13.0 Total equity and liabilities 275.0 115.1 Group s summarised cash flow statements SEK M Operating activities Profit before tax 42.0 2.0 122.0 11.7 Adjustment for items not included in net cash 1.4 0.2 1.6 0.2 Tax paid 0.0-0.1-1.0-0.3 Net cash provided by operating activities before changes in operating capital 43.4 2.1 122.6 11.6 Changes in working capital 7.6 3.0 1.7 0.3 Net cash provided by operating activities 51.0 5.1 124.3 11.9 Investment activities Investments -1.4-0.3-1.8-0.3 Net cash provided by investment activities -1.4-0.3-1.8-0.3 Financing activities New issue 22.0-22.0 - Received premiums for warrants - - - 0.2 Amortisation of loans - - - -0.9 Dividends paid out - - -5.8 - Net cash provided by financing activities 22.0 0.0 16.2-0.7 Change in cash and cash equivalents 71.6 4.8 138.7 10.9 Cash and cash equivalents at beginning of period 81.6 9.7 14.5 3.4 Exchange rate differences, cash 0.8 0.0 0.8 0.2 Cash and cash equivalents at end of period 154.0 14.5 154.0 14.5 Global Gaming 555 AB 556721-0520 9
Press release of unaudited annual earnings January December Summarised changes in Group s equity SEK M Balance brought forward 165.4 99.7 100.9 87.1 Overall total profit/loss for the period 42.2 1.2 112.5 13.6 Changes in wealth excluding transactions with the company s owners 42.2 1.2 112.5 13.6 New issue 22.0-22.0 - Received premiums for warrants 0.0-0.0 0.2 Dividends paid out - - -5.8 - Equity at end of period (attributable to parent company s shareholders) 229.6 100.9 229.6 100.9 Parent company s summarised profit/loss accounts SEK M Income 54.8 14.3 Operating expenses -31.8-12.5 Operating profit/loss 23.0 1.8 Financial items 39.4 25.1 Profit/loss before tax 62.4 26.9 Tax -5.1-0.4 Profit/loss for the period and overall results 57.3 26.5 Parent company s summarised balance sheets SEK M 31/12/ 31/12/ Assets Tangible assets 1.0 0.1 Financial fixed assets 57.3 62.3 Total fixed assets 58.3 62.4 Short-term receivables 63.1 21.9 Cash 117.9 3.9 Total current assets 181.0 25.8 Total assets 239.3 88.2 Equity and liabilities Restricted equity 39.7 79.6 Unrestricted equity 119.3 5.9 Total equity 159.0 85.5 Other short-term liabilities 80.3 2.7 Total short-term liabilities 80.3 2.7 Total equity and liabilities 239.3 88.2 10 Global Gaming 555 AB 556721-0520
Press release of unaudited annual earnings January December Quarterly data GROUP S PROFIT/LOSS ACCOUNTS, SEK M Income 174.6 131.4 97.7 54.3 31.7 22.7 Operating expenses in gaming activities -68.4-54.2-42.8-25.4-14.2-12.4 Gross profit/loss 106.2 77.2 54.9 28.9 17.5 10.3 Marketing costs -39.4-20.5-16.7-9.2-5.3-0.8 Other external costs -10.5-4.8-4.6-2.4-3.3-2.1 Personnel costs -9.4-8.1-6.3-5.1-6.5-4.1 Depreciations -0.2-0.1 0.0 0.0-0.1 0.0 Other operating income/expenses -4.7-1.6-0.8-0.8-0.3 0.1 Operating expenses -64.2-35.1-28.4-17.5-15.5-6.9 Operating profit/loss 42.0 42.1 26.5 11.4 2.0 3.4 Financial income and expenses 0.0 0.0 0.0 0.0 0.0 0.0 Profit/loss before tax 42.0 42.1 26.5 11.4 2.0 3.4 Tax -4.1-5.1-3.1-1.4-0.2-0.4 Profit/loss for the period 37.9 37.0 23.4 10.0 1.8 3.0 Q2 Q1 GROUP S BALANCE SHEETS, MSEK Fixed assets 88.9 89.5 90.4 89.1 88.9 90.2 Current assets 186.1 115.1 65.8 40.5 26.2 21.0 Total assets 275.0 204.6 156.2 129.6 115.1 111.2 Equity 229.6 165.4 129.6 110.8 100.9 99.7 Provisions and long-term liabilities 0.9 2.3 1.7 1.4 1.2 0.9 Short-term liabilities 44.5 36.9 24.9 17.4 13.0 10.6 Total equity and liabilities 275.0 204.6 156.2 129.6 115.1 111.2 Q2 Q1 GROUP S CASH FLOW STATEMENTS, SEK M Net cash provided by operating activities 51.0 60.8 13.2-0.8 5.1 1.0 Net cash provided by investment activities -1.4 0.0-0.1-0.2-0.3 0.0 Net cash provided by financing activities 22.0 0.0-5.8 0.0 0.0 0.0 Total net cash 71.6 60.8 7.3-1.0 4.8 1.0 Q2 Q1 Global Gaming 555 AB 556721-0520 11
Press release of unaudited annual earnings January December NOTE 1 ACCOUNTING PRINCIPLES This summarised interim report for the Group has been drawn up in accordance with IAS 34 Interim financial reporting and applicable provisions in the Swedish Annual Accounts Act. The interim report for the parent company has been drawn up in accordance with Chapter 9 of the Swedish Annual Accounts Act, Interim Report. The same accounting principles and calculation bases have been applied for the Group and parent company as in the Annual Report, pages 23-29. Information according to IAS 34.16A is provided not only in the financial reports and its applicable notes but also in other parts of the interim report. The reported value is considered to be a reasonable approximation of the actual value for all the Group s financial instruments, which essentially comprises short-term receivables and short-term liabilities. IFRS 15 Revenue from Contracts with Customers IFRS 15 regulates the reporting of revenue from contracts with customers. IFRS 15 is to be applied from 1 January 2018. The standard supersedes the current standards for reporting revenue from contracts with customers. Global Gaming has assessed the effects of the standard on the Group s revenue recognition and established that no tangible effects arise from the transition to IFRS 15. The standard will, however, result in additional reporting requirements. IFRS 9 Financial Instruments IFRS 9 Financial Instruments supersedes IAS 39, the current standard for reporting and valuing financial instruments in IFRS. IFRS 9 contains changes with regard to the hedge accounting, classification and valuation of financial assets as well as the writing down of financial receivables. The Group does not use financial instruments for hedging purposes and is therefore not affected by the changes regarding hedge accounting. Nor will the introduction of IFRS 9 affect how the Group classifies financial assets. IFRS 9 also sets out that receivables must be written down based on expected credit losses, in contrast to IAS 39, which states that a credit loss is only written down once it has occurred. The Group s exposure to credit risk is mainly attributable to receivables from financial counterparties who provide the payment solutions used by the Group s gaming sites as well as to cash in the form of bank balances. The counterparties have a high credit rating and the terms of the receivables are short. IFRS 9 will therefore not have any significant effect on how the Group makes provision for credit losses. NOTE 2 SIGNIFICANT RISKS AND RISK FACTORS This report contains forward-looking statements, such that the actual results may differ considerably from the forecast. The results are effected by competitive developments, the effect of the economic situation, national and international laws and regulations, tax rules, the effectiveness of the copyright protection of computer systems, technological development, exchange rate and interest rate fluctuations as well as political risks. s. For a description of significant risks and risk factors, reference is made to page 13 of the Annual Report. Global Gaming s Board of Directors and group management have ed a review of how these significant risks s and risk factors have developed since publication of the Annual Report and confirm that there have been no changes with respect to the Group s and conduct- parent company s exposure to significant risks and risk factors compared to that stated on page 13 of the Annual Report. 12 Global Gaming 555 AB 556721-052056721-05
OTHER INFORMATION Global Gaming intends to publish financial information as follows: Upcoming reports Annual Report :...25 April 2018 Interim Report January-March 2018:... 15 May 2018 Annual Report 2018:... 16 May 2018 Interim Report January-June 2018:... 15 August 2018 Interim Report January-September 2018:...22 November 2018 Press release of unaudited annual earnings 2018:... 28 February 2019 CONTACT DETAILS Stefan Olsson, CEO and Group CEO +46 8 551 154 32 stefan.olsson@globalgaming.com Christoffer Tell, CFO +46 8 551 154 31 christoffer.tell@globalgaming.com Based on its content, Global Gaming 555 AB is obliged to publish the above information in accordance with the EU s rules on market abuse. The information was submitted for publication under the responsibility of the above contacts on 28 February 2018, at 8:00 am CET. Global Gaming 555 AB Hästvägen 4E 212 35 Malmö Sweden