Cherryforetagen Q3 Results
Sunday November 13, 2011 : Group growth continues to date
Swedish gaming company, Cherryforetagen announced its Quarter 3, 2011 and nine-month interim report this week showing strong results in customer growth and the online gaming sector of its business.
Key Group Performance Indicators for the nine month period ending September 30, 2011 include:
• Group turnover up 20.8 percent amounted to SEK 325.4 million (9M/2010: SEK 269.4 million).
• EBITDA amounted to SEK 20.1 million (9M/2010: SEK 21.2 million).
• EBIT amounted to SEK 11.8 million (9M/2010: SEK 12.7 million). EBIT was affected by high marketing cost related to the launch of EuroLotto and non-recurring expenses of SEK-3.7 million, in connection with the replacement of the chief executive officer.
• New online players rose by 117 percent, to 178 763 customers (9M/2010: 82 378).
Key Group Performance Indicators for the Third quarter period ending September 30, 2011 include:
• Group turnover increased with 6 percent and amounted to SEK 118.3 million (Q3/2010: SEK 111.6 million).
• EBITDA amounted to SEK 11.3 million (Q3/2010: SEK 11.9 million).
• EBIT amounted to SEK 8.8 million (Q3/2010: SEK 9.1 million).
• The number of active players rose 186 percent in Q3 to 40 994 customers (Q3/2010: 14 320).
The Group's online arm that includes PlayCherry.com, SverigeAutomaten.com, NorgesAutomaten.com, DanmarksAutomaten.com and EuroLotto.com showed a strong Third quarter performance with key indicators including:
– Revenues rose by 20.3 percent amounting to SEK 56.8 million (Q3/2010: SEK47.2 million)
– EBIT amounted to SEK 6.7 million (Q3/2010: SEK 8.5 million).
– Number of new customers increased by 325.7 percent during the third quarter amounting to 31 900 (Q3/2010: 7 494)
– Number of active customers grew by 186.3 percent to 40 994 (Q3/2010: 14320)
– Deposits increased by 22.9 percent amounting to SEK 164.5 million (Q3/2010: SEK 133.8 million).
Cherry Malta's extensive marketing efforts for EuroLotto and the other gaming sites has had a negative short-term effect on the profit. The launch of EuroLotto burdened the interim net profit sharply, however Cherry's core products; SverigeAutomaten, NorgesAutomaten and DanmarksAutomaten delivered stable results.
Key Business movements to date include:
– The appointment of Marius Anderson as chief operating officer for online gaming
– Euro Lotto launched with a minimum Euro 25 000 000 jackpot
– A sponsor agreement between Cherry Malta and Euro Lotto with rally driver Petter Solberg
– A beneficial agreement with the Special Olympics and Euro Lotto
– The launch of an affiliate portal to increase marketing efforts
Cherry is contesting a Norwegian Gaming and Foundation Authority injunction demanding that Cherry cease with its marketing efforts and availability of the Euro Lotto to Norwegian players. The Norwegian authority intends pursuing the matter through Lottetrinemnda (the lottery board).
Chief executive officer, Emil Sunvisson comments on the results:
"The third quarter has brought satisfactory growth in the segment of Online Gaming but at the same time the results was burdened by the costs of launching new products. EuroLotto remains in an expansionary phase with good growth of customers. The launch of EuroLotto has been costly and has had a negative affect on the Group results in 2011."
