Cherry delivers in third quarter report

Cherry AB reported on its third quarter today (Wednesday), delivering strong growth in group revenues despite a delay in the full integration of the ComeOn! business.

Key performance highlights for the third quarter ending September 30, 2017 include:

Group:

• Revenue increase of 165 percent to SEK 567 million (Q3/2016: SEK 214 million).

• Reported organic revenue growth of 30 percent.

• Profitability improved and EBITDA increased by 263 percent to SEK 112 million (Q3/2016: SEK 31 million) and the EBITDA margin was 20 percent (Q3/2016: 14 percent).

• Profit for the period amounted to SEK 42 million (Q3/2016: SEK 31 million).

• Earnings per share before and after dilution* amounted to SEK 0.22 (0.27) and SEK 0.21 (0.27) respectively.

iGaming:

• Revenue increased 214 percent to reach SEK 448.5 million (Q3/2016: SEK 142.8 million).

• Organic growth was 14 percent.

• Profit improved significantly and EBITDA increased by 269 percent to SEK 67.0 million (Q3/2016: SEK 18.1 million). EBITDA margin for the period increased from 13 percent to 15 percent.

• Assuming ComeOn was reported as fully consolidated for Q3 2016, the business area’s proforma revenue for Q3 2016 was estimated at SEK 404 million, compared to SEK 448 million for Q3 2017, an increase of 11 percent.

• Deposits increased by 270 percent and amounted to SEK 1,375 million (Q3/2016: SEK 371 million).

• Mobile share of the business area’s surplus from gaming amounted to 59 percent (Q3/2016: 36 percent). Casino Share was 83 percent (Q3/2016: 98 percent). Sportsbook share was 17 percent.

Highlights for the first nine months of the year to 30 Sepember 2017 include:

• Group revenue increase of 182 percent y-o-y to SEK 1,644 million (9M/2016: SEK 583 million).

• Organic revenue growth amounted to 36 percent.

• Profitability improved and EBITDA increased by 304 percent to SEK 288 million (9M/2016: SEK 71 million) and an EBITDA margin of 17 percent (9M/2016: 12 percent).

• Profit for the period amounted to SEK 93 million (9M/2016: SEK 57 million).

• Earnings per share before and after dilution amounted to SEK 0.49 (9M/2016: SEK 0.49) and SEK 0.49 (9M/2016: SEK 0.48) respectively.

Commenting on the results, Anders Holmgren, chief executive officer of Cherry AB (Publ) said:

“Cherry’s operations continue to develop strongly. As the industry’s most complete gaming company, our offering has a broad base and we are able to respond quickly when we perceive opportunities.

Strong development in the third quarter offset the loss in momentum of Cherry’s online gaming business (see previous report). Holmgren is confident a return to performance is imminent following the appointment of a new management team for the ComeOn! business, some of whom served at the company pre-acquisition.

“We are continuing to grow with good profitability and, in Online Marketing (previously Performance-based Marketing) in particular, we continue to note strong development due to effective solutions. In Online Gaming, we are now in a new phase and, with the right conditions, we will be able to increase both growth and profitability,” Holmgren said.

Cherry is pleased with progress from its Yggdrasil and Highlight Games subsidiary saying they have both developed strongly.