Interim Report January-June 79 percent growth during the quarter and all time high results. Stefan Olsson, CEO
Interim Report January-June 2Md quarter, April-June Earnings rose by 381 percent, amounting to MSEK 97.7 (20.3). Operating profit rose to MSEK 26.5 (2.0), equivalent to an improvement of 1,225 percent. Profit after tax improved to MSEK 23.4 (1.7), equivalent to SEK 0.60 (0.04) per share. Net cash provided by operating activities amounted to MSEK 13.2 (1.5). Interim period, January June Earnings rose to MSEK 152.0 (42.6), equivalent to growth of 257 percent. Operating profit amounted to MSEK 37.9 (6.3), equivalent to an increase of 502 percent. Profit after tax was MSEK 33.4 (5.5), equivalent to SEK 0.86 (0.14) per share. Net cash provided by operating activities amounted to MSEK 12.5 (5.8). Events after the end of the period Earnings are continuing to grow in the 3rd quarter and the average earnings as at mid-august is higher than the equivalent period in the 2nd quarter. The work on launching the company on the stock market has been further intensified. The company intends to apply for a listing on Nasdaq First North at the start of September. The company s shares are planned to be listed in the 4th quarter. 100 INCOME, SEK M 30 OPERATING PROFIT/LOSS, SEK M 80 25 20 60 15 40 10 20 5 0 Q3 Q4 0 Q3 Q4 KEY FIGURES, SEK M Apr-Jun Apr-Jun Δ Jan-Jun Jan-Jun Δ Jan-Dec Income 97.7 20.3 381% 152.0 42.6 257% 97.0 Gross profit/loss 54.9 8.8 524% 83.8 19.9 321% 47.7 Gross margin 56% 43% - 55% 47% - 49% Operating profit/loss 26.5 2.0 1225% 37.9 6.3 502% 11.4 Operating margin 27% 10% - 25% 15% - 12% Profit/loss after tax 23.4 1.7 1276% 33.4 5.5 507% 10.3 Profit per share, SEK 0.60 0.04 1400% 0.86 0.14 514% 0.27 Net cash provided by operating activities 13.3 1.5 787% 12.5 5.8 116% 11.9 2 Global Gaming 555 AB 556721-0520
Interim Report January-June CEO s report 79 percent growth during the quarter and all time high results Second quarter The trend and results of the internally developed and produced marketing campaign for Ninja Casino could already be seen by the end of the first quarter in. When we compiled the second quarter, it became apparent that has led to a historic rise in players and sales. Ninja Casino also represents the majority of the growth during the quarter on the Nordic market, although we mustn t forget the many years of stable income furnished by the well-established brands on the Finnish market. It s clear that the PayNPlay solution alone (that forms the basis of Ninja Casino on the self-developed platform and run by the company s licensed subsidiaries) brings players something new and positive. In June, we received further confirmation of this when EGR in London awarded Ninja Casino Innovative Start-up of the Year. The benefit from these industry-specific awards must not be exaggerated when seen from an end customer perspective, but they have definitely had a positive effect on the image of the Group from the outside. This is very important when recruiting and, above all, retaining the best personnel and therefore maintaining growth and innovation. Recruitment, organisation and communication was also high on the agenda during the second quarter, since many of the roles that were previously handled by a handful of personnel, will from now on be handled by a growing team spread across several countries. Global Gaming has only just started its journey of growth and we hope it doesn t end for a long time with much work to be done. Remarks on the third quarter July (when this report was written) and August will see this path of growth continue. A further-developed version of the marketing campaign currently in progress in the second quarter for Ninja Casino will be launched at the end of the third quarter and continue until the end of the year. Through our subsidiaries we will again take some steps outside the accepted norm to get our message across keep a lookout for our Ninjas... For the rest of, the focus will be on new markets, licences and services - which, in the short term, will increase costs, but we feel is necessary to generate more secure sources of income and growth over time. One step in this process is to increase the Group s activities on Malta. In the third quarter, a number of personnel with many years experience in the industry decided to become part of the growing Global Gaming family on Malta, which we re delighted about. Our plans to list the company on First North during the fourth quarter are also progressing. This process doesn t come cheap and will impact the results for the third quarter with a number of one-off costs, but which in the long term will place the company in a position in which organic growth can be combined with acquisitions. Stefan Olsson CEO Global Gaming 555 AB 556721-0520 3
Interim Report January-June 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 (B2B/Turnkey/Whitelabel). 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. In the interim period, the company decided to focus on the brands driven on our own platform, but is planning in 2018 to move (migrate) the brands from Aspire Global to our own platform, as this will not only save costs but above all will also provide another experience for the end customer. Learn more about the Group at www.globalgaming.com The Group s income and results INCOME Earnings over the quarter amounted to MSEK 97.7 (20.3), a rise of 381 percent and during the interim period earnings rose by 257 percent to MSEK 152.0 (42.6). The increase is primarily due to the successful investment in and focus on the growth of Ninja Casino games in the Nordic region. Out of the number of customers on Ninja Casino during the quarter, 67 percent played via their mobile, (65 percent for the whole of the interim period). MARKETING COSTS Marketing costs during the quarter amounted to MSEK 16.7 (0.8) and for the whole of the interim period to MSEK 25.9 (1.8). The increase is due entirely to 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. The marketing costs for the whole of the interim period was equivalent to approx. 17 (4) 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 and new markets, the marketing costs will increase. PERSONNEL COSTS Personnel costs during the quarter amounted to MSEK 6.3 (4.0) and during the interim period the costs amounted to MSEK 11.4 (8.2). The average number of employees during the interim period was 31 (19) and at the end of the reporting period the number of employees was 36. 4 Global Gaming 555 AB 556721-0520
Interim Report January-June To achieve its growth strategy, Global Gaming will continue to employ key personnel in Sweden and abroad over the coming quarters. The Group s activities on Malta are being developed further and are estimated to consist of 10 employees at the end of the financial year. Personnel costs will therefore increase and at the end of the year the Group is expected to have 60 employees. OTHER EXTERNAL COSTS Other external costs during the quarter amounted to MSEK 4.6 (1.8) and for the whole of the interim period to MSEK 7.0 (3.4). interim period amounted to MSEK 20.8 (8.7). Short-term player liabilities and jackpot liabilities amounted to MSEK 4.3 (2.6), while short-term receivables from payment providers amounted to MSEK 29.8 (3.2). CASH FLOW Cash provided by operating activities during the quarter amounted to MSEK 13.3 (1.5) and for the whole of the interim period to MSEK 12.5 (5.8). FINANCING Global Gaming has a strong cash flow from operating activities and does not use any interest-bearing external financing. The rise in costs was due in part to the upscaling of the company to achieve its growth objectives and expansion and in part to the increased costs of preparations ahead of being listed on the stock exchange. In the 3rd and 4th quarter, the Group will be subject to one-off increased costs due to the stock exchange listing. RESULTS Operating profit (EBIT) for the quarter amounted to MSEK 26.5 (2.0), equivalent to a rise of 1,225 percent and operating profit for the whole interim period rose to MSEK 37.9 (6.3), equivalent to a rise of 321 percent. The operating margin for the interim period amounted to 24.9 (14.8) percent. The profit before tax for the quarter amounted to MSEK 26.5 (2.0) and the profit after tax amounted to MSEK 23.4 (1.7), equivalent to 0.60 (0.04) kronor per share. The Group s profit/loss before tax amounted to MSEK 37.9 (6.3) and profit/loss after tax amounted to MSEK 33.4 (5.5), equivalent to 0,.6 (0.14) kronor per share. Cash flow, investments and financial position CASH AND CUSTOMER BALANCES Cash and cash equivalents at the end of the Equity The Group s equity as at the balance sheet date amounted to MSEK 129.6 (95.0), equivalent to 3.35 (2.46) kronor per share. Significant events during the period At the start of June, Ninja Casino was announced the winner in the category Innovative Start-up of the Year at the EGR Operator Marketing and Innovation Awards in London. On 21 June, the annual general meeting resolved to re-elect Peter Eidensjö, Tobias Fagerlund, Adriana Hamberg and Ollipekka Vahvaselkä as board members. Peter Eidensjö was re-elected as board chairman. The annual general meeting decided on a share dividend to the company s shareholders of MSEK 5.8, equivalent to 0.15. The annual general meeting also decided to authorise the Board to issue shares to an amount in Swedish kronor equivalent to a maximum of EUR 2,500,000 in connection with the forthcoming public share issue when the company is listed on Nasdaq First North. The annual general meeting also decided to authorise the Board to decide on a non-cash or Global Gaming 555 AB 556721-0520 5
Interim Report January-June offset issue of shares. equivalent to a dilution of maximum 10 percent of the capital, to enable capital to be acquired for mainly expansion and company acquisitions. It was also decided to introduce an incentive programme for key persons, totally 800,000 warrants. For complete information on the annual general meeting s resolutions, see the company s website. No other significant events took place during the period. Significant events after the end of the period The parent company s earnings for the period amounted to MSEK 10.8 (6.2) and profit/loss before tax amounted to MSEK -1.5 (10.1). The parent company s cash and cash equivalents at the end of the period amounted to MSEK 19.1 (2.5). Shares and shareholders The total number of outstanding shares and votes in Global Gaming 555 AB is 38,677,500. As of the end of June, the three biggest shareholders were Mika Leppänen (through a nominee) with 17.58 percent, Ahti Tiainen with 10.72 percent and Per Hildebrand (through a nominee) with 6.39 percent. The company s shares are managed by Euroclear, which reported 87 owners in the public nominee list of owners and 33 owners in the public shareholders register as of 30 June. Earnings are continuing to grow in the 3rd quarter and the average earnings as at mid-august is higher than the equivalent period in the 2nd quarter. Note that this information should not be seen as an assessment of the earnings for the third quarter, but an indication of how the quarter started. The work on launching the company on the stock market was further intensified after the end of the interim period. The company intends to apply for a listing on Nasdaq First North at the start t of September. The company s shares are planned to be listed in the 4th quarter. The unsettled bank situation on Malta for the Group s Curacao operations, which we commu-municated previously, has now been rectified by changing banks. No other significant events took place during the period. Parent company The parent company, Global Gaming 555 AB's, activities comprise management, consultancy activities in IT, production and sales (licence) of software. 6 Global Gaming 555 AB 556721-0520
Interim Report January-June Group s summarised profit/loss accounts SEK M April-June April-June Income 97.7 20.3 152.0 42.6 97.0 Operating expenses in gaming activities -42.8-11.5-68.2-22.7-49.3 Gross profit/loss 54.9 8.8 83.8 19.9 47.7 Marketing costs -16.7-0.8-25.9-1.8-7.9 Other external costs -4.6-1.8-7.0-3.4-8.8 Personnel costs -6.3-4.0-11.4-8.2-18.8 Depreciations 0.0 0.0 0.0 0.0-0.1 Other operating income/expenses -0.8-0.2-1.6-0.2-0.4 Operating expenses -28.4-6.8-45.9-13.6-36.0 Operating profit/loss 26.5 2.0 37.9 6.3 11.7 Financial income and expenses 0.0 0.0 0.0 0.0 0.0 Profit/loss before tax 26.5 2.0 37.9 6.3 11.7 Tax -3.1-0.3-4.5-0.8-1.4 Profit/loss for the period (assignable to parent 23.4 1.7 33.4 5.5 10.3 company s shareholders) Jan- June Jan- June Full year Profit per share Before dilution (kronor) 0.60 0.04 0.86 0.14 0.27 After dilution (kronor) 0.60 0.04 0.86 0.14 0.27 Gross margin (percent) 56.2 43.3 55.1 46.7 49.2 Operating margin (percent) 27.1 9.9 24.9 14.8 12.1 Summarised consolidated report on overall results April-June April-June Jan-June SEK M Profit/loss for the period 23.4 1.7 33.4 5.5 10.3 Jan- June Full year Other total profit/loss, Income Costs reported directly in equity Exchange rate differences on conversion foreign activities 1.2 1.4 1.1 2.2 3.3 Other total profit/loss for the period (after tax) 1.2 1.4 1.1 2.2 3.3 Overall total profit/loss for the period 24.6 3.1 34.5 7.7 13.6 Global Gaming 555 AB 556721-0520 7
Interim Report January-June Group s summarised balance sheets SEK M 30/06/ 30/06/ 31/12/ Assets Intangible fixed assets 79.5 77.4 78.6 Tangible fixed assets 0.6 0.1 0.3 Deferred tax payable 9.8 10.4 10.0 Other long-term receivables 0.5 0.5 - Total fixed assets 90.4 88.4 88.9 Short-term receivables 45.0 8.7 11.7 Cash 20.8 8.7 14.5 Total current assets 65.8 17.4 26.2 Total assets 156.2 105.8 115.1 Equity and liabilities Equity 129.6 95.0 100.9 Deferred tax liabilities 1.7 0.9 1.2 Total long-term liabilities 1.7 0.9 1.2 Other short-term liabilities 24.9 9.9 13.0 Total short-term liabilities 24.9 9.9 13.0 Total equity and liabilities 156.2 105.8 115.1 Group s summarised cash flow statements April- SEK M June April-June Jan-June Jan-June Full year Operating activities Profit before tax 26.5 2.0 37.9 6.3 11.7 Adjustment for items not included in net cash 0.1 0.2 0.2 0.2 0.2 Tax paid -1.0 0.0-1.0 0.0-0.3 Net cash provided by operating activities before changes in operating capital 25.6 2.2 37.1 6.5 11.6 Changes in working capital -12.4-0.7-24.6-0.7 0.3 Net cash provided by operating activities 13.2 1.5 12.5 5.8 11.9 Investment activities Investments -0.1 - -0.4 - -0.3 Net cash provided by investment activities -0.1 0.0-0.4 0.0-0.3 Financing activities Received premiums for warrants - - - 0.2 0.2 Amortisation of loans - - - -0.9-0.9 Dividends paid out -5.8 - -5.8 - - Net cash provided by financing activities -5.8 0.0-5.8-0.7-0.7 Change in cash and cash equivalents 7.3 1.5 6.3 5.1 10.9 Cash and cash equivalents at beginning of period 13.4 7.0 14.5 3.4 3.4 Exchange rate differences, cash 0.1 0.2 0.0 0.2 0.2 Cash and cash equivalents at end of period 20.8 8.7 20.8 8.7 14.5 8 Global Gaming 555 AB 556721-0520
Interim Report January-June Summarised changes in Group s equity SEK M April-June April-June Jan-June Jan-June Full year Balance brought forward 110.8 91.9 100.9 87.1 87.1 Overall total profit/loss for the period 24.6 3.1 34.5 7.7 13.6 Changes in wealth excluding transactions with the company s owners 24.6 3.1 34.5 7.7 13.6 Received premiums for warrants - - - 0.2 0.2 Dividends paid out -5.8 - -5.8 - - Equity at end of period (attributable to parent company s shareholders) 129.6 95.0 129.6 95.0 100.9 Parent company s summarised profit/loss accounts Jan- SEK M June Jan-June Full year Income 10.8 6.2 14.3 Operating expenses -12.3-4.9-12.5 Operating profit/loss -1.5 1.3 1.8 Financial items 0.0 8.8 25.1 Profit/loss before tax -1.5 10.1 26.9 Tax 0.0 0.0-0.4 Profit/loss for the period -1.5 10.1 26.5 Parent company s summarised balance sheets SEK M 30/06/ 30/06/ 31/12/ Assets Tangible assets 0.4 0.1 0.1 Financial fixed assets 62.9 56.4 62.3 Total fixed assets 63.3 56.5 62.4 Short-term receivables 13.3 12.0 21.9 Cash 19.1 2.5 3.9 Total current assets 32.4 14.5 25.8 Total assets 95.7 71.0 88.2 Equity and liabilities Restricted equity 79.6 79.6 79.6 Unrestricted Equity -1.4-10.5 5.9 Total equity 78.2 69.1 85.5 Other short-term liabilities 17.5 1.9 2.7 Total short-term liabilities 17.5 1.9 2.7 Total equity and liabilities 95.7 71.0 88.2 Global Gaming 555 AB 556721-0520 9
Interim Report January-June Quarterly data GROUP S PROFIT/LOSS ACCOUNTS, SEK M Income 97.7 54.3 31.7 22.7 20.3 22.3 Operating expenses in gaming activities -42.8-25.4-14.2-12.4-11.5-11.2 Gross profit/loss 54.9 28.9 17.5 10.3 8.8 11.1 Marketing costs -16.7-9.2-5.3-0.8-0.8-1.0 Other external costs -4.6-2.4-3.3-2.1-1.8-1.6 Personnel costs -6.3-5.1-6.5-4.1-4.0-4.2 Depreciations 0.0 0.0-0.1 0.0 0.0 0.0 Other operating income/expenses -0.8-0.8-0.3 0.1-0.2 0.0 Operating expenses -28.4-17.5-15.5-6.9-6.8-6.8 Operating profit/loss 26.5 11.4 2.0 3.4 2.0 4.3 Financial income and expenses 0.0 0.0 0.0 0.0 0.0 0.0 Profit/loss before tax 26.5 11.4 2.0 3.4 2.0 4.3 Tax -3.1-1.4-0.2-0.4-0.3-0.5 Profit/loss for the period 23.4 10.0 1.8 3.0 1.7 3.8 Q4 Q3 GROUP S BALANCE SHEETS, SEK M Fixed assets 90.4 89.1 88.9 90.2 88.4 87.3 Current assets 65.8 40.5 26.2 21.0 17.4 15.0 Total assets 156.2 129.6 115.1 111.2 105.8 102.3 Equity 129.6 110.8 100.9 99.7 95.0 91.9 Provisions and long-term liabilities 1.7 1.4 1.2 0.9 0.9 0.9 Short-term liabilities 24.9 17.4 13.0 10.6 9.9 9.5 Total equity and liabilities 156.2 129.6 115.1 111.2 105.8 102.3 Q4 Q3 GROUP S CASH FLOW STATEMENTS, SEK M Net cash provided by operating activities 13.2-0.8 5.1 1.0 1.5 4.3 Net cash provided by investment activities -0.1-0.2-0.3 0.0 0.0 0.0 Net cash provided by financing activities -5.8 0.0 0.0 0.0 0.0-0.7 Total net cash 7.3-1.0 4.8 1.0 1.5 3.6 Q4 Q3 10 Global Gaming 555 AB 556721-0520
Interim Report January-June 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. NOTE 2 SIGNIFICANT RISKS AND RISK FACTORS 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 conducted a review of how these significant risks 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 parent company s exposure to significant risks and risk factors compared to that stated on page 13 of the Annual Report. Certification by the Board The Board of Directors and managing director of Global Gaming 555 AB certify that the interim report gives a fair picture of the Group s and parent company s activities, position and results and describes the significant risks and risk factors faced by the parent company and companies making up the Group. Stockholm, 31 August Peter Eidensjö Chairman of the Board Tobias Fagerlund Board member Adriana Hamberg Board member Ollipekka Vahvaselkä Board member Stefan Olsson CEO and Group CEO This interim report has not been inspected by the company s auditors. Global Gaming 555 AB 556721-0520 11
OTHER INFORMATION Global Gaming intends to publish financial information for the financial year as follows: Quarterly report Q3 Interim report January September... 30 November Quarterly report Q4 Press release of unaudited annual earnings January December.. 28 February 2018 CONTACT DETAILS Stefan Olsson, CEO and Group CEO +46 (0) 702216050, stefan.olsson@globalgaming.com Christoffer Tell, CFO +46 (0) 703173494, christoffer.tell@globalgaming.com Global Gaming 555 AB Hästvägen 4E 212 35 Malmö Sweden