Cherry AB releases interim report

12 May 2015

(PRESS RELEASE) -- Cherry AB has released its first interim report for the year, covering the quarter from Jan. 1 to March 31.

Highlights:

First quarter: 49 percent growth for online gaming and 156 percent growth for Yggdrasil Gaming.

— Group revenue increased by 31 percent and amounted to MSEK 95.3 (previously 73.0). Online gaming makes up 63 percent (55) of the group revenue.

— EBITDA amounted to MSEK -4.5 (-4.3). EBIT amounted to MSEK -8.9 (-7.6).

— The result after tax amounted to MSEK -11.8 (-8.1), equivalent to SEK -0.88 (-0.59) per share after dilution.

— In January, Cherry acquired 51 percent of the shares in the affiliate company Game Lounge Ltd. This will enable Cherry to rapidly increase the number of customers at a significantly lower cost per customer than before.

— Online gaming grew by 49 percent and deposits increased by 54 percent.

— Restaurant Casino increased turnover by 6 percent and EBITDA amounted to MSEK 3.9 (3.1).

— Yggdrasil Gaming grew by 156 percent and EBITDA amounted to MSEK -0.4 (-1.2).

— In February, Cherry was awarded Online Gaming Operator of the Year for the second year in row at the International Gaming Awards.

Important events after the end of the quarter:

— On April 8, only two months after Cherry acquired Game Lounge, the joint white label Sveacasino was launched.

— As the first operator on the market, Cherry launched the game Joker Millions in the end of April — Yggdrasil’s first video slot with a pooled jackpot.

CEO comments on the first quarter:

The first quarter continues to show great growth and group turnover increased by 31 percent. Cherry's online business continues to grow and now accounts for 63 percent of total turnover. We also saw steps Cherry has taken, such as focusing on core business and supporting strategic acquisitions, begin to show results.

Within the online gaming industry, there is a certain degree of consolidation. Cherry is well positioned with a properly functioning platform, where new products can easily be integrated and new skins added. This means that Cherry has the ability to become a significant player within the trend of consolidation. Cherry's goal is to grow faster than the market both through acquisitions and organically, focusing on quickly reaching profitability.

In the first quarter, online gaming grew strongly by 49 percent, and our efforts to improve the gaming experience, to deliver joy and to increase our customer loyalty are now beginning to show results. We’ve seen a strong growth in mobile gaming and will continue to improve our mobile offerings. During the quarter, we launched a new design on SpilleAutomater and, in early April, launched our first white-label brand — SveaCasino.com. Already after one month, our expectations for SveaCasino.com were exceeded and it will be interesting to follow its progress. The acquisition of the 51 percent of shares in the affiliate company Game Lounge was consolidated as of February and the business contributes positively to Cherry's results in the first quarter.

During the first quarter, Yggdrasil has increased its revenues by 156 percent and has signed three new contracts with customers such as the AIM-listed GVC. Yggdrasil's roadmap for 2015 looks exciting and the first quarter also included the release of "The Dark Joker Rizes." After the first quarter, Yggdrasil's first progressive jackpot game "Joker Millions Progressive" was launched. Yggdrasil has also decided to release all of its games on the new platform, the HTML5-based iSense 2.0, making it possible to release games simultaneously on computer, tablet and mobile. This means that operators have greater ability to reach their players in connection with marketing campaigns. A proof of Yggdrasil's success is that it is nominated for "The EGR B2B Awards 2015" in four categories. As new operators are deployed and the games portfolio grows, revenues will increase.

Restaurant Casino continues to impress, showing positive progress. During the first quarter, the business delivered solid growth and improved results. With a stroke of a pen, politicians can put us in the position to to create around 1,000 new entry-level jobs in the industry, provided bets be raised from the current maximum of SEK 70 to SEK 200. Cherry will work to ensure that a bet increase is included in the directives that the government sets for the upcoming gaming investigation.

A new order is required on the Swedish gaming market. Sweden has rightfully been taken to the European Court after having, for too long, delayed a re-regulation. We are now heading towards the fourth gaming investigation since 2000. We look forward to a gaming market that is open for everyone, with transparent and responsible operators. We want to eliminate the anachronistic and broken-down gaming monopoly. We want to create more jobs in Sweden and compete in fair conditions.

We look forward to continue to spread the joy of playing games both online and at the pub!

Fredrik Burvall, CEO

Annual General Meeting:

The Cherry AB (PLC) Annual General Meeting will be held on Tuesday, May 12, 2015, starting at 16:30 in Redeye AB’s premises, Mäster Samuelsgatan 42 (Hötorgskrapa 4) level 10, Stockholm.

For further information please see the full Interim Report 1, 2015.
http://cherry.se/en/financial-reports/

This is a translation of the Swedish original.

Related Links
Sveacasino Site Details
Joker Millions Online Slot
Joker Millions Progressive Online Slot
The Dark Joker Rizes Online Slot
Yggdrasil Software Details
Cherry Ownership Details
Yggdrasil Gaming Limited iGaming Vendor Information
Swedish Gambling
The International Gaming Awards (IGA) 2015