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Cherry Interim Report January–June 2018

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Cherry Interim Report January–June 2018

16-Aug-2018:  Continued expansion and innovative investments

SECOND QUARTER
• Group revenue increased by 41 percent to MSEK 753 (536), with organic revenue growth amounting to 39 percent (37).
• Profitability improved, and EBITDA increased by 78 percent to MSEK 165 (93) and the EBITDA margin was 22 percent (17).
• Profit for the period amounted to MSEK 91 (15).
• Earnings per share before and after dilution amounted to SEK 0.77 (0.03) and SEK 0.76 (0.03) respectively.
• The Board of Directors appointed Gunnar Lind as Acting CEO.
• Cherry has completed the acquisition of 44 percent of the shares in the affiliate company, Game Lounge, with Cherry now holding 95 percent of shares outstanding. The purchase consideration amounted to MEUR 9.8 and 1,554,017 newly issued shares in Cherry AB.
• A further 7.5 percent of the shares in the online gaming company Almor Holding were acquired, with Cherry now holding 90 percent of the shares outstanding. The purchase consideration amounted to MEUR 2.2 and 299,504 newly issued shares in Cherry AB.

SIX MONTHS
• Group revenue increased by 33 percent to MSEK 1,434 (1,077), with organic revenue growth amounting to 32 percent (40).
• Profitability improved, and EBITDA increased by 103 percent to MSEK 357 (176) and the EBITDA margin was 25 percent (16).
• Profit for the period amounted to MSEK 180 (51).
• Following new share issues, the number of shares has increased to 4,988,000 Class A shares and 100,680,026 Class B shares, as of 30 June 2018, totalling 105,668,026 shares.
• Earnings per share before and after dilution amounted to SEK 1.56 (0.27) and SEK 1.55 (0.26) respectively.

EVENTS AFTER THE END OF THE PERIOD
• On 3 July, Cherry was granted a sports betting license in Poland.
• On 7 August Cherry exercised its option to acquire an additional 7.8 percent of the shares in the gaming specialist Highlight Games. Cherry also acquired shares corresponding to 15.1 percent in the company and now holds of 60.4 percent of the shares outstanding in Highlight Games.
• On 9 August Game Lounge acquired two premium domains in North America, BetNJ.com for sports betting and casino in New Jersey, and the Mexican domain OnlineCasino.mx.

Comments by the CEO
“Strong and broad operations”

With a revenue increase of 41 percent, of which organic growth amounted to 39 percent, the quarter was characterized by expansion and investment. Investments during the quarter were made primarily in the marketing of existing and new brands, and of games developed in-house by Yggdrasil and Highlight Games. Cherry has strong and broad operations meeting the market’s demand for quality in everything we deliver, and it is gratifying to note that July demonstrated that our investments have generated returns in line with our expectations.

The second quarter of 2018 was characterized by a focus on growth, in the short term as well as long term. Investments in marketing were significant and effective. Online Gaming is expanding and strengthening its position in key markets, while the business area’s new brands are also rapidly building awareness and establishing a good customer base. Game Development and Online Marketing have also acted proactively through increased investment in game development, acquisitions and a clearer presence in Sweden. To me, as acting CEO, this is a secure situation providing opportunities to continue strengthening Cherry in its core markets and, in parallel, to assess complementary growth alternatives.

Over the quarter, the Group’s revenues increased from MSEK 536 to MSEK 753 and EBITDA increased by 78 percent, from MSEK 93 to MSEK 165. The foremost individual explanation for this trend is continued favourable development within the Online Gaming business area. The gaming operator holds a strong market position and has launched new brands meeting the market’s wishes. Beyond this, company management, now with permanent CEO Lahcene Merzoug at the helm, is continuing to optimize the cost base. Cherry’s subsidiary Almor, including the German brands Sunmaker and Sunnyplayer Casino, experienced one of its strongest quarters, thereby strengthening Cherry’s market position in the regulated Schleswig-Holstein market (Germany).

Game developer Yggdrasil had an active quarter that included the launch of five new games, including “Sonya Blackjack”, the first game in the new “Table Games” product vertical. During the quarter, Yggdrasil signed distribution agreements with 13 operators. The number of employees (FTE) of Yggdrasil at the end of the period was 243 (134). Following the end of the period, a global distribution agreement was reached with 888 Holdings, one of the world’s most popular gaming operators. An agreement was also reached with Intralot, which has a strong position in Italy, complementing Yggdrasil’s existing collaboration with Lottomatica. In April, Northern Lights became the first independent game studio to use Yggdrasil’s partner program, YGS Masters, and we make the assessment that this will be an excellent way to collaborate with companies in early phases of development. Following the end of the quarter, Yggdrasil was also certified for the fast-growing Spanish market – an important milestone in Yggdrasil’s strategy to grow in regulated markets.

At the beginning of the year, Highlight Games launched its virtual soccer game, SOCCERBET, in selected African markets, while the company also prepared for its introduction in Italy. During the third quarter, Highlight Games, alongside Eurobet and other leading Italian operators, will launch the game in Italy, where the virtual gaming market is expected to generate sales of some EUR 2 billion in 2018, as assessed by the independent data specialist H2 Gambling Capital. Highlight Games has favourable prospects of capturing significant market share, thus Cherry has acquired additional shares in the company and Cherry’s holdings in August totalled 60.4 percent and, accordingly, consolidated as a subsidiary effective from August 2018.

The Group’s affiliate company, Game Lounge, is developing according to plan. The company has established a new office in Stockholm and has a total of 60 employees. During the quarter, Game Lounge acquired assets, including some 1,500 websites, various search engine optimization (SEO) tools and services, and a team of ten employees with unique SEO expertise to aid the expansion of the company into new verticals. In August, Game Lounge acquired two premium domains in North America, which will be important bridgeheads in New Jersey and Mexico.

In June, we were able to complete the acquisitions of additional shares in subsidiaries Game Lounge and Almor Holding. The payment for the additional 44 percent and 7.5 percent respectively consisted in part of new shares in Cherry AB, now bringing the total number of shares in the company to 105,668,026. Both companies are experiencing a positive development trend, and with Cherry’s support, we perceive good opportunities for them to develop at a higher pace and with a broader offering.

During the quarter, the Board took the decision to terminate Anders Holmgren’s employment as the President and CEO of Cherry. At the same time, the Board resolved to appoint the undersigned as CEO until a permanent CEO has been appointed. With my previous experience as CEO of Cherry and as a Board member in the company, I was able to get started relatively quickly.

The recruitment of a permanent President and CEO has been initiated and includes both internal and external candidates. I am sure the Board of Directors is doing a thorough job and, as its work progresses, I am focusing on developing the Group in accordance with the established strategy, supported well by all employees.

Gunnar Lind
Acting President and CEO

MARKET OUTLOOK
The gaming market is currently growing strongly and Cherry estimates that demand in the Group’s largest geographic markets will continue to develop favourably. The Group continuously studies conditions for new business within the related business areas and geographic markets in and outside Europe.

The Group’s focus is on generating shareholder value by being an active participant in the development of new and existing companies in the gaming, media and entertainment sector. The objective is for the companies to become market leaders in their respective areas by building their core values of entrepreneurship, responsibility and commitment. These are important prerequisites for the Group to be able to achieve its financial targets and to continue its successful profitable growth, through both organic growth and acquisitions, in existing and new verticals and geographic markets.

PRESENTATION OF THE INTERIM REPORT
The company’s Executive Chairman, Morten Klein, Acting President and CEO, Gunnar Lind, and CFO Christine Rankin, will present and comment on the report at a telephone conference at 10:00 a.m. CET on 16 August 2018. The presentation materials will be available approximately one hour earlier at www.cherry.se. The presentation can be followed via www.cherry.se and/or www.financialhearings.com. To participate by phone, call +46 8-566 426 97 (SE) or +44 203 008 9807 (UK).

For further information, please contact:

Christine Rankin, CFO, Telephone: +46 76 539 94 92, christine.rankin@cherry.se
Anders Antonsson,  IR & Communications, Telephone: +46 709 994 970, anders.antonsson@cherry.se

 

CHERRY IN BRIEF:

Cherry is an innovative and fast-growing gaming company with operations in gaming, entertainment and media. The company was founded in 1963 and today, Cherry operates through five diversified business areas: Online Gaming, Game Development, Online Marketing, Gaming Technology and Restaurant Casino. The objective is to grow organically in combination with strategic acquisitions of fast-growing companies. Cherry employs some 1,400 people and has about 9,250 shareholders. The company’s class B-share has been listed on the Nasdaq Stockholm exchange, Mid Cap segment since 18 October 2017.


Source: Press Releases Published on European Gaming Media Network

Press Releases

BiG Africa Supershow 2019 Speaker Interview: Jason Foster

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Interview with Jason Foster

Jason Foster

Head of iGaming

Chalkline Sports

Jason Foster is Head of iGaming at US based Chalkline Sports, a media technology company that powers platforms for communities and marketplaces of sports bettors. Jason has more than 20 years’ experience in sports betting operations and online sports betting technology and has worked with sports betting operators around the world. Some of Jason’s previous achievements include being the co-founder of South Africa’s first online bookmaker and a former General Manager of Sun International’s sports betting division, Sunbet. Other than gambling industry knowledge, Jason has extensive mathematical and statistical training.

Jordan: Jason, you were the co-founder of South Africa’s first online bookmaker, how have online sportsbooks evolved in South Africa ever since?

Jason: In a single word: mobile. Ten years ago, when we founded Volbet (later Sunbet), it was a big deal to simply take a bet online. It sounds a bit silly today, but that was the reality in 2008.

Today, Africa is a case study in mobile growth. The proliferation of mobile devices and connectivity on the continent is creating opportunities for digital inclusion, financial inclusion and innovation. The average person spends hours each day on their phone.

The impact on sports betting has been seismic. 75% of all online bets in Africa are taken on a mobile device.

This past summer, we ran World Cup 2018 programs for several clients in South Africa. Over 90% of all engagement was on a mobile device. We expect these percentages to hold strong or edge up as the overall size of the online betting market continues to grow rapidly.

Jordan: Chalkline Sports utilizes powerful Artificial Intelligence to generate content for bookmakers, how prevalent would you say AI is starting to become in the gaming sector?

Jason: As an industry, we’ve only just begun to tap the potential of AI. Many operators are using AI-enabled applications (like their CRM tools) that have AI-driven components.

In the sports betting space, many operators work with risk-management tools that use AI or machine learning.

However, we’ve only started with AI. Five years from now, when we think about gaming and AI, the response will be much more elaborate.

Jordan: You recently spoke about giving customers what they want at Gambling Indaba, what do punters really want?

Jason: At Chalkline Sports, we think about what punters want in three ways:

  1. Simplicity. Punters want simple, fun experiences on their phone, and they don’t want to spend a lot of time figuring things out. Facebook is easy. WhatsApp is easy, everything should be simple. No matter how complex the technology behind any application, the product must be simple to use.
  2. Personalization. Give punters what they care about. If you’re a serious rugby fan, you should first get info on Super Rugby. If you’re an EPL fan, you should get information on your favourite team. If you’re a casual fan, you should get the most popular games that day.
  3. Games. Punters want fun, and different types of games are changing the online experience every day. There’s more to sports betting than straight bets and parlays. Virtual games, lotto plus sports betting and season-long jackpot games are all examples of where the gaming world is going.

Jordan: Can you give us any hints as to what you will be presenting at the BiG Africa Supershow this year?

Jason: Yes. The emergence of mobile technology and data has created opportunities for operators that they can take advantage of to build and retain their customer base now. We’ll have a few case studies from forward-looking operators around the globe that will demonstrate the benefits of this approach.

Jordan: What do you look forward to by being a part of the 6th Annual BiG Africa Supershow?

Jason: African gaming is evolving rapidly. BiG Africa is a key a part of the growing conversation. The opportunity to meet and engage with operators, vendors, regulators and stakeholders is why we’ll be there.

 

Jason Foster looks forward to meeting you all in person at the 6th Annual BiG Africa Supershow. See more information on the BiG Africa Supershow and how you can register below.

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Press Releases

SPiCE Gaming Conference and Exhibition to be held in Goa Marriott Resort & Spa in February 2019:

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The second edition of the premier gaming conclave of India, namely the Strategic Platform for iGaming Conference & Exhibition (SPiCE), is set to be held on 26th and 27th February 2019, at the Goa Marriott Resort & Spa, located in Miramar, Panaji.

The two day conference and exhibition, hosted by Hong Kong-based Eventus International, will be held at the serene Goa Marriott Resort & Spa, which is strategically located close to the capital city of Panaji, with easy access to the offshore and onshore casinos of the state.

The event will see eminent experts and industry leaders brainstorm on the developments in the gaming and betting industry and the road ahead for the sector over the course of two days.

A SP’iCE’ Breaker Networking Drinks will be held on the eve of the event, i.e. on 25th February 2019 at the Goa Marriott Resort & Spa, wherein the attendees will get an opportunity to discuss, deliberate and network over drinks while gazing out over the beautiful oceanic view of the Arabian sea.

After Day One of SPiCE 2019 (26th February), attendees will also see a fun-filled casino visit to Deltin Royale casino in the evening and a USD150 buy-in poker tournament as well as canapés and drinks for the all.

On Day Two (27th February), there will be a VIP Networking Event, namely Table Talk Dinner, wherein the VIP attendees of the event will be invited to gather over a 5-star three-course dinner and drinks.

The theme for the event is to promote Indian culture and therefore participants and speakers are encouraged to attend the conference in their best ethnic attire.

Yudi Soetjiptadi, Managing Director at Eventus International notes, “SPiCE is turning out to be the most anticipated gaming event in India and the response that we have received so far is truly overwhelming. We aim give a unique experience to all participants and also promote Indian culture, which is why we are encouraging all participants to come out in their best ethnic wear for the event. SPiCE will not just be a platform to network and exchange views, but also have a memorable and fun-filled experience in a serene environment.”

Eventus International is a highly professional, independent and global event producing company that specialises in gaming conferences and exhibitions; across Asia and Africa, attended by hundreds of senior delegates from the private and public sector. For more information on Eventus International, kindly visit – http://www.eventus-international.com/

SPiCE is scheduled to take place on the 26th & 27th February 2019 at Goa Marriott Resort & Spa, India.

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Press Releases

SPiCE India 2019 – We’re Adding Some Flavour to Networking

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SPiCE isn’t just a 2-Day Conference and Exhibition. It is an “all-in-one” networking platform for the gaming industry to connect and grow together over formal and informal settings. Spartan Poker is the proud Co-Networking Drinks Sponsor for the “SP’iCE’ Breaker” networking event on the 25th of February 2019. During this event attendees who arrived early, can register to beat the queue on the next day, as well as BREAK THE ICE at SPiCE with HOT conversation and ICE COLD drinks, while gazing out over the beautiful oceanic views of Goa.

 

And… this is not the only way to network at SPiCE! Here follows all networking opportunities during SPiCE 2019:

  • SP’iCE’ Breaker Networking Event: Co-Sponsorship (25 Feb, 5pm – 9pm)

    • Sponsored Welcoming Drinks (26 – 27 Feb, 9am – 10am)

    • Sponsored VIP Lounge & Bar (26 – 27 Feb, 10am – 5pm)

    • SPiCE IT UP Poker Tournament: Co-Sponsorship (26 Feb, 8pm – Late)

    • Table Talk Dinner VIP Networking Event: Co-Sponsorship (27 Feb, 7pm – 10pm)

Interview with Amin Rozani

Amin Rozani

Managing Director

The Spartan Poker

 

Amin Rozani is the co-founder and Managing Director of The Spartan Poker, one of India’s leading real money gaming portals. A Six Sigma Black Belt, Mr. Rozani comes from a banking process background having worked and consulted with brands such as Birla, Wipro, WNS and Standard Chartered Bank among others.

 

Eventus: What are the challenges faced in the online poker space at present?

Amin: The area of opportunity here is the taboo associated with real money gaming. There is still a prevailing thought (among those who aren’t full aware) that poker is a game of chance. That mind-set has been changing over the past 5 years especially but there is some way to go before poker gains complete acceptance as a mind sport that is skill-based.  Of course, there are advertising and marketing hurdles faced by us when we try to promote the sport and our brand as mainstream advertising is unavailable to us. There is also a lack of clarity about regulation which needs to be addressed if this industry is to achieve the growth it is capable of in a shorter duration of time.

 

Eventus: Poker leagues are burgeoning and also being televised. What are the opportunities in the sportification of skill games?

Amin: Certainly it is terrific mainstream exposure for the sport and the more that happens, the faster we will see this game grow in India. If you ask people like us who first started playing/following the sport back in the mid-2000s, watching shows like the World Poker Tour on Indian television really opened us to how developed poker was in mature markets like US and Europe.

The other advantage of televising poker is the creation of Indian poker celebrities. While there are stalwarts in the game across the world, that one can admire, it’s a different feeling to look at home-grown heroes as a source of pride and inspiration.

Eventus: Although there are various restrictions on international operators starting something in India, what are the possibilities in the present scenario?

Amin: The poker industry in India is a very niche one which is closed off. There are several entry barriers for international operators to venture into India despite it being a very attractive proposition and one of ‘last frontiers’ in terms of poker markets. So any international operator who wishes to enter needs to understand these challenges and will require substantial funding to make a dent in this market.

Eventus: There are various legal cases going on in High Courts that will decide the fate of skill-based games like poker and rummy. How has the progress been in the matters so far and what may be expected in terms of legal and regulatory challenges going forward?

Amin: Poker is still in its nascent stages. The industry has exhibited immense growth despite various challenges. This upward trend will continue and considering that there are more opportunities than challenges, I am hopeful that those in charge of regulations will see the positives of making this sport mainstream and that it will happen sooner rather than later.

Eventus: Do you think other state governments are looking at opportunities in the casino and gaming space?

Amin: Certainly tourism-dependent states are always looking for opportunities to attract visitors. Gaming entertainment provides that and the significant revenue it would generate will help those states in funding various other developmental initiatives..

Eventus: What are the innovative products that can be offered in the current market and are you looking to expand your offering?

Amin: Within poker, there are many variants like Open Face Chinese Poker (OFC), a fast paced variant such as Boost (also known as Zoom on PokerStars), a jackpot style variant called Windfall and many more products are already on offer for players. Beyond poker, there’s games like rummy, fantasy sports and even play money casino which we are looking to get into. As such we are constantly seeking to innovate and new product development is an on-going activity

Eventus: What do you look forward to by being a part of SPiCE 2019?

Amin: SPiCE will allow me the opportunity to listen to and interact with industry leaders and veterans who will share their past experiences as well as their vision for the gaming industry’s future. Such insights are immensely useful to newcomers as well as to brands like ours which been around for a while. We can learn from the pillars of the industry which will help us avoid making errors and improve on existing processes. After all we are in the service business and the ongoing goal is to always serve our customers better.

 

 

After successfully hosting Sports Betting & Gaming India (SBGI) summit in Goa in February this year, Eventus International has announced the rebranded Strategic Platform for iGaming Conference & Exhibition (SPICE), scheduled to take place on the 26th & 27th February 2019 in Goa, India.

The two-day event will delve into the impact and opportunities that comes with clear and well-defined legalised gambling. Presentations will discuss investment opportunities in online skill gaming and brick and mortar casinos, effective structuring of foreign investments and gaming businesses, responsible gambling and the player protection and the socio-economic and financial benefits of legalised gambling etc.

 

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