I NNOVATIVE STAKES - Cision
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I N NOVATIVE STAKE S
Cherry’s strategy is to create shareholder value by owning and
developing fast-growing and profitable gaming, media and
entertainment companies. The Group intends to grow organically
and implement strategic acquisitions of entrepreneurial companies.
In 2017, Group revenue increased by 104 percent,
of which organic growth was 27 percent.
ANNUAL REPORT 2017
• I M P O RTA N T E V E N T S
GAME DEVELOPMENT
SIGNIFICANT EVENTS Yggdrasil Gaming launched new and
innovative games, with Jungle Books
at the forefront. The second company
in the business area, Highlight Games,
initiated the launch of its major game
SOCCERBET.
Read more on pages 16-17.
GAMING TECHNOLOGY
XCaliber develops effective solutions
for gaming and payment solutions.
The company won several important
contracts during the year.
Read more on pages 20-21.
ONLINE GAMING ONLINE MARKETING RESTAURANT CASINO
In 2017, ComeOn launched several Continued strong growth for Game Lounge The stable growth in Cherry Spelglädje
new products and brands, including in 2017. The company was established in continued. The company grew organically
Snabbare.com. Japan and started a new business segment. and through acquisitions.
Read more on pages 14-15. Read more on pages 18-19. Read more on pages 22-23.
CONTENTS
1 2017 in brief 33 Group Management
2 Business model 34 Board
4 A word from the CEO 36 Administration report
6 Business concept and strategy 40 Sustainability report
7 Financial goals 42 Financial statements
8 Dialogue with stakeholders 50 Notes
10 Market Overview 73 Proposed appropriation of profit
14 Online Gaming business area 74 Signatures of the Board of Directors
16 Game Development business area 75 Auditor’s Report
18 Online Marketing business area 78 The share and shareholders
20 Gaming Technology business area 81 Multi-year review
22 Restaurant Casino business area 82 Financial definitions
24 Case – Acquisition 84 Definitions
26 Employees 85 Financial calender/Annual General Meeting
27 Corporate Governance Report 85 Addresses
Revised Board of Directors’ Report and financial
statements include pages 36-74.
Cherry AB (publ) is a Swedish public company based in Stockholm, Sweden. Corporate identity number: 556210-9909. LEI code: 549300PFWW1URKGIPU90. The annual
report is published in Swedish and English. The Swedish language version is the original document and, in the event of any discrepancy between the original and the
translation, the Swedish version takes precedence. The printed version of the Annual Report is distributed only to the shareholders who have ordered it. The Annual Report
in its entirety is available on the company’s website: www.cherry.se. The 2017 Annual Report was published in April 2018. All amounts are expressed in Swedish kronor.
Kronor is shortened to SEK, thousands to SEK thousand, and millions to SEK million or SEKm. Figures in brackets refer to the previous year unless otherwise stated.
This report contains forward-looking information based on Cherry’s current expectations. No guarantee can be provided that these expectations will prove to be correct.
Consequently, future outcomes may vary considerably compared with forward-looking information based on, among other things, changing economic, market and competi-
tion conditions, changes in legal requirements and other policy measures, fluctuations in exchange rates and other factors. ©2018 Cherry AB (publ)
CH E R RY AB (PU B L) AN N U AL R E P O RT 2 0 1 7
• 2017 IN BRIEF
2017 IN BRIEF
Cherry’s strong development continued in 2017. The Group has gained market share
and strengthened its position in the value chain.
Another successful year for Cherry.
Revenues for the Group increased by 104 percent to SEK 2,525 The Group strengthened its position in all business areas
million, compared with the previous year. Organic growth in through technology development, product refinement and
2017 was 27 percent (32). marketing efforts, providing good conditions for the Group’s
Profitability for the full-year was good. Profit (EBITDA) companies to continue to grow profitability.
amounted to SEK 429 million, an increase of 146 percent,
compared with the full-year 2016.
The Group, SEKm 2017 2016
Revenue 2,252 1,102
Q1
EBITDA 429 174
EBIT 295 115
REVENUE PER QUARTER
Diluted earnings per
AND BUSINESS AREA, 2017
share) 0.53 1.27
SEKm
Equity/assets ratio (%) 34% 14% 625
• Anders Holmgren is appointed
CEO of Cherry AB. 500
Business areas, SEKm 2017 2016
• Yggdrasil initiated new business 375
Online Gaming concept, Yggdrasil Dragons.
Revenue 833 250
1,823
Q2
EBITDA 277 120 125
EBIT 167 81 0
Q1 Q2 Q3 Q4
Amount deposited 5,502 2,288
Online Gaming
Active customers Game Development
at year-end 929,900 557,885 Online Marketing
• Christine Rankin is appointed Gaming Technology
CFO of Cherry AB. Restaurant Casino
Game Development
• Issue of additional secured options
Revenue 169 87 in the amount of EUR 134.5 million.
EBITDA 71 40 Available funds designated to
finance acquisition of remaining
EBIT 59 27 51 percent in ComeOn Malta Ltd.
Integrated operators 67 30 • Cherry called on the option to
acquire 7.5 percent in Almor and
subsequently owns 82.5 percent.
Q4
Online Marketing
• XCaliber signed contract with its
Revenue 146 57 first external customer.
EBITDA 96 19 • Cherry completed acquisition of 25
percent of the shares in game deve-
EBIT 89 14
lopment company Highlight Games.
Gaming Technology* • Trading of Cherry AB’s Class B share
Q3
launched on Nasdaq Stockholm
Revenue 39 - Mid Cap.
EBITDA 4 - • New acting CEO of ComeOn
is appointed.
EBIT 4 -
• Cherry revised the full-year
forecast for 2017.
Restaurant Casino • Cherry carried out a 1:5 share split • Cherry acquired another 12.5 percent
Revenue 157 157 irrespective of class. of the shares in Highlight Games and
• Cherry adjusted full-year forecast. the remaining 44 percent in Game
EBITDA 17 17
• Final acquisition analysis of Lounge (with effect from 2018).
EBIT 13 13 ComeOn is completed.
*The business area is separately reported
as of 1 January 2017.
C H E R RY A B (PU B L ) A N N U A L R E PO RT 2 0 1 7 1
• BUSINESS MODEL, STRENGTHS AND OPPORTUNITIES
CHERRY CREATES VALUE WITH
A COMPLETE BUSINESS MODEL
Cherry invests in, owns and develops fast-growing gaming, media and entertainment companies.
The Group consists of online gaming operations, performance-based marketing services, develop-
ment of gaming technology and gaming development to own and external gaming operators.
Acquisition of company/project Optimize long-term value
– Clear development potential – Strengthen Cherry's position as the
business the most comprehensive company within
– Strategically important acumen gaming, entertainment and media
– Committed people financing
– Create stable companies with
clear earnings capacity
Own innovation
corporate
network governance – Disposal, as the company can
– Identify business opportunities (skills) develop better on its own
– Support and supplementing or in another structure
of skills
Ongoing value creation: Operational efficiency, growth, management and capital structure
DEVELOPMENT FROM IDEA TO ment and analysis, sales and marketing with the Group and its subsidiaries.
PROFITABLE GROWTH knowledge as well as financial reporting. Foresight, innovation, innovative
Cherry’s business model involves owning • Financing includes Cherry, in thinking, organic growth and value
and developing fast-growing and profit- various ways, ensuring the acceleration creation are key concepts that govern
able companies as well as identifying and of development through efficiently sup- the structure and development of the
supporting innovations at an early-stage plying capital, with the optimal com- diversified business areas. Cherry has a
in various categories within gaming, bination of equity and external capital. long-term investment model and sup-
entertainment and media. Investment decisions can be made at the ports the business areas in their growth
The foundation of our success right time and on the right terms. phases. We strive to be a market leader
is committed, driven people and our • Network include both internal and in each business area where we operate,
ambition to develop strong and strategic external partners that have an interest in while continuously seeking and exploring
partnerships through offering the found- contributing to strengthening Cherry’s new business opportunities.
ers and management of the companies subsidiaries through the right contacts
a clear role in which to continue running and skills. OPTIMIZE LONG-TERM VALUES
the operations. Cherry’s objective is to create value The core of Cherry’s strategy is to
Our starting point is to develop our through commitment and active owner- develop stable companies with good and
companies over time, as long as we see ship and we exercise our influence pri- increasing earning capacity. This creates
continued potential for value creation. marily through the boards of the respec- cash flow and room for additional acqui-
tive subsidiary, where the management sitions and the possibility of dividends
CHERRY THE GAMING ENGINE has a clear and complete operational man- to shareholders in Cherry AB. In certain
With our common knowledge from date and responsibility. In parallel with situations, the assessment may be that
different parts of the gaming market, the formal corporate governance, we want a company would develop better with
Cherry’s Board and management teams to create a partnership and a joint plan another principal owner, or that Cherry
assist in tactical as well as strategic issues for the company’s development. Clear would prefer to adjust the distribution
according to the conditions that each and transparent corporate governance within its operations, in which case we
company faces. Important areas are: permeates our work and is the foundation actively pursue a process to find a new
• Business acumen, entails that we for creating trust among all the various suitable owner while maximizing the
together ensure good business develop- stakeholders who choose to do business value for our shareholders.
2 CH E R RY AB (PU B L ) AN N U AL R E P O RT 2 0 1 7
• BUSINESS MODEL, STRENGTHS AND OPPORTUNITIES
THE SUSTAINABILITY OF As an employer, we focus on providing
OUR BUSINESS MODEL a safe and inspiring work environment,
We actively support all of our companies where respect for each individual and
in decisions that lead to value creation, ethical behaviour are key factors. This
which means that they may, during enables us to recruit and retain the best
certain periods, report slightly lower talent.
earnings in favour of long-term value- As several companies are in an
creating investments. We are convinced early stage of development, much of the
that innovation, committed people in development of the Group’s sustain-
close dialogue with key stakeholders, a ability work is done within Cherry AB.
strong market position and compliance The company supports the UN Global
with regulations are the most important Compact and the OECD Guidelines
factors for long-term value creation. for Multinational Enterprises. It is of
the utmost importance that we always
SUSTAINABILITY EFFORTS comply with laws and regulations. Every
Cherry AB has limited operations of its employee and consultant working for
own, and works primarily through the Cherry, and other representatives of the
boards of the individual subsidiary to Group, is expected to follow the Group’s
continually raise the Group’s ambitions instructions and policies. In order to
within the areas of social, environ- continuously update the organization on
mental and economic issues. We internal rules, courses are held regularly
strive to provide a good example within each subsidiary.
for our companies, employ- In 2018, Cherry intends to develop
ees and investors. a more structured programme for the
Group’s sustainability efforts.
Online Gaming Game Development Online Marketing Gaming Technology Restaurant Casino
– ComeOn – Yggdrasil Gaming – Game Lounge – XCaliber – Cherry Spelglädje
Cherry is an operator of & Highlight Games Game Lounge conducts XCaliber develops and Cherry Spelglädje
around a dozen gaming Yggdrasil Gaming devel- performance-based manages a technology delivers a complete
sites that offer custom- ops, designs and moni- marketing aimed at platform for gaming solution including staff,
ers casino, lottery, poker tors games for mobiles, online gaming op- and payroll solutions. game equipment and
and betting gaming via tablets and desktops, erators as well as other The business model payment systems.
mobiles, tablets and and these games are verticals, such as loan entails XCaliber receiv- The business model
desktops. licensed to online references. ing both an integration entails Cherry sharing
The business model gaming operators. The business model fee and royalties based the gaming surplus less
entails the games The business model entails the company on the percentage of Cherry’s costs with the
generating a net gam- entails Yggdrasil receiv- receiving payment in transactions that take facility owner. Games
ing surplus (stakes less ing a one-time fee when the form of a lump sum place through the offered are Blackjack
winnings and customer a game is integrated with per registered customer platform. and Roulette, located
bonuses before tax). an operator and subse- or part of the gaming in hotels, nightclubs,
From the net gaming quently receiving royalty surplus generated by bars and restaurants.
surplus, a percentage- payments based on the the customer as long as Cherry also provides
based royalty fee is paid percentage of the game’s the customer is active. these at different
to the game provider. generated gaming sur- In addition, the compa- events.
plus. In 2018, Highlight ny can receive fees for
Games will launch its advertising and other
innovative products for marketing efforts.
the virtual sports gaming
market, both online
and physically.
C H E R RY A B (PU B L ) A N N U A L R E PO RT 2 0 1 7 3
• A WORD FROM THE CEO
INNOVATION AND CORPORATE GOVERNANCE
FORM THE CORE OF CHERRY’S
BUSINESS MODEL
Cherry’s strong development continued in 2017. We captured REVENUE GROWTH 2017
SEKm
market share and our companies strengthened their positions. 160
120
After a year as President and CEO of organization, market and finances. In or-
Cherry, I am able to confirm that Cherry der to ensure sustainable development,
80
can report yet another good year, from we have developed management systems
both a financial and operational per- and governance documents as support, 40
spective. A year ago, I wrote that there and we ensure risk assessment and risk
remained an incredible amount to be management are given high priority. See 0
done in the gaming industry, and that more details about our business model Q1 Q2 Q3 Q4
what is great about Cherry is that its on pages 2-3. Online Gaming
five diversified business areas span the Online Marketing
Game Development
entire gaming industry and that Cherry GOOD PROGRESS OVER THE YEAR Gaming Technology
AB owns and manages highly interesting WITH POTENTIAL FOR IMPROVEMENT Restaurant Casino
companies. We have already benefited In 2017, Cherry delivered well, achieving
from this strength and progressed some revenue growth of 104 percent, of which
distance in our plans. 27 percent was organic. Our largest
I still have the same feeling; Much lays business area, Online Gaming, accounted operators and additional innovative games
ahead of us, and Cherry is the natural ac- for 80 percent of the Group’s revenue in were launched. The company has made
tor to be able to take advantage of all these 2017 and 65 percent of EBITDA. significant investments in marketing and
opportunities. We will continue to focus During the year, we integrated the strengthened its relationships with both
on companies run by strong and ambi- operations of B2C company ComeOn, operators and players. The result was the
tious people with a mix of entrepreneurs Cherry’s largest acquisition to date. For highest number of game rounds to date
and specialists. Creativity and hard work the most part, this process has pro- and substantial payouts of jackpots. In
drive the products forward, also allowing gressed as planned, although, in mid- regulated markets, such as Italy, develop-
Cherry’s business areas to grow faster 2017, we saw that the company’s costs, ment has exceeded expectations.
than their respective markets. The key to market focus and management were not During 2018, Yggdrasil will also
our success is that we consistently succeed living up to our expectations. Following rejuvenate the gaming experience in classic
in renewing our customer offering thanks an intense period in the second half of table games such as Blackjack, Roulette
to fantastic efforts from all employees, in the year, the company is back on the and Baccarat. Players will be offered an
combination with good corporate gover- growth curve that we envisaged. enhanced experience in a virtual 3D envi-
nance and business acumen. ronment and will be able to interact with
Cherry’s business model can be HIGH LEVEL OF ACTIVITY AND ACQUISI- a digital dealer. First out is Blackjack, a
summed up in the words ”entrepreneurs TIONS IN GAME DEVELOPMENT game in which the company has applied its
for entrepreneurs”, that is, we see Cherry Yggdrasil completed yet another success- REDUX™ technology, developed in-house.
as an organization with enthusiastic and ful year with a number of new deals and We took a strategically important
innovative individuals helping each other launches of several new games. In 2018, step in second quarter of the year with
through rapid growth and strengthen- bingo games will be launched with a host the acquisition of Highlight Games,
ing their market position. We do this of new features that work smoothly on which broadened Cherry’s gaming
through our range of products and ser- mobile phones. The company continued to development operations. Highlight
vices as well as multi-faceted experience sign important customer licence agree- Games develops innovative products for
among senior executives who know the ments during 2017 with major, established the virtual sports gaming market both
CH E R RY ’S H I STO RY 1 9 6 3 – 2 0 1 7
1999
1984 1996 Launch of maritime 2010
Acquisitions of Introduces new operations in the Acquisition of
1963 1972 Swedish gaming generation prize- Mediterranean. AutomatGruppen 2012
Restaurang Cherry is launched companies lay the based games for Investments in IT 2003 makes Cherry Cherry divests the
Rouletter AB is and the cherry sees foundation for a Swedish restaurant companies, mainly Buys into the online Maritime Gaming
formed the light of the day new group and bingo market within Internet Betsson.com market leader business area
1968 1978 1992 1998 2000 2006 2011
The operations The ban on slot Cherry streamlines Cherry acquires Cherry launches Cherry’s shares Launches
become nationwide machines hits operations. 35 percent in new logo and the are distributed Eurolotto.com
in Sweden Cherry hard Activities in Eastern Net Entertaiment AB parent company’s to shareholders
Europe are shelved Class B shares and listed on
are listed on the Aktietorget
OM Stockholm
Exchange’s O-list
4 CH E R RY AB (PU B L) AN N U AL R E P O RT 2 0 1 7
• A WORD FROM THE CEO
Listing on Nasdaq Stockholm.
On Wednesday, 18 October 2017, Cherry AB’s
Chairman, Morten Klein, and Cherry AB’s CEO,
Anders Holmgren, rang the stock
exchange bell at Nasdaq Stockholm.
INVESTMENTS IN INNOVATION
Cherry has a robust and broad business
model that enables effective build-up
phases in associates and subsidiar-
ies while delivering good returns. All
companies in the Group continue to be
engaged in ongoing efforts to ascertain
what the market demands – monitoring
consumer behaviour and technological
strong offerings for the gaming industry development is crucial to success. An
and other areas where the company’s important part of retaining our leading
online and land-based, including content unique skills make a difference. market position is to maintain contacts
from league football. The company is with entrepreneurs who have good ideas
in an early and exciting stage and has RE-REGULATION OF THE SWEDISH and seek to grow profitably.
launched test versions in various markets. GAME MARKET In 2018, we will increase our range
The timetable for the new Swedish of contacts and ensure we become
ONLINE MARKETING BROADENS gaming policy stands firm. The proposal more active in seeking out candidates
ITS MARKET includes a licensing system that will be for acquisition or collaboration. There
Game Lounge’s performance-based in place as of 1 January 2019. Cherry has is great potential in both the Nordic
marketing operations continue to grow participated in parts of the hearing and countries and other European countries.
at a rapid pace and with good profitabil- has expressed its view that the proposed We, therefore, look forward to further
ity. We are seeing that enhanced search tax rate of 18 percent is excessive, as legal- developing our portfolio of investments
engine optimization, combined with ization of the gaming market with a high in new innovative and successful busi-
building strong brands, has had a positive degree of channelling should be the main nesses that strengthen our position as
effect. In the Japanese market, we saw purpose of the regulation. The UK has an important part of the ecosystem for
a continued increase in the number of successfully achieved a 95 percent chan- gaming, entertainment and media.
visitors, although these contributed only nelization, with a tax rate of 15 percent. Cherry is a fast-growing company in
marginally to fourth quarter revenue. The an exciting market, and we challenge old
plan is to continue expanding the opera- RESPONSIBLE GAMING structures. We see opportunities where
tions into several new geographic markets. For Cherry, responsible gaming has others see challenges, and the Group
In the fourth quarter, the market been a central issue for many years, comprises many different people with
broadened in which the company’s which we systematically manage on a unique skills and who are dedicated to
expertise is combined with existing daily basis. Within the Group’s compa- developing the company as well as their
infrastructure to put borrowers in contact nies, we have clear policies, regulations own role. We are committed to finding
with lenders offering terms suiting the and experienced managers who can the right employees and ideas, and I
borrower’s circumstances. handle gaming addiction situations. We look forward to welcoming many more
After the end of the period, Game work with several external specialists and in 2018. In addition, I will spend a great
Lounge invested in another complemen- partners, such as the Swedish National deal of my time meeting with entrepre-
tary segment – services optimizing Association for Gambling Addicts and neurs and creative talent. 2018 will be an
gaming for accustomed players who Gambling Therapy. Together, we provide intensive year!
seek greater control over their gaming. the customer with tools to counteract
With the acquisition of slottracker.com, unhealthy gaming behaviour and the Anders Holmgren
Game Lounge will continue to develop opportunity to play responsibly. CEO Cherry AB (publ)
2017
2013 2016 Anders Holmgren 2017
Divests Automat- 2016 Cherry launches a appointed President Cherry acquires
Gruppen for 2015 Cherry issues new B2B business and CEO, Christine 25 percent of
SEK 286 million Yggdrasil Gaming 2016 a covered bond 2016 area focused on Rankin as CFO, and game development
and acquires receives operator Cherry acquires 49 listed on Nasdaq Cherry Spelglädje gaming technology Morten Klein elected company Highlight
CherryCasino.com license in the UK percent of ComeOn Stockholm acquires Betman – XCaliber Chairman of Cherry AB Games
2014 2016 2016 2016 2017 2017
Cherry is awarded Cherry is awarded the Yggdrasil Gaming Game Lounge Cherry issues covered Cherry takes
the IGA Online IGA Online Gaming receives gaming awarded Affiliate bonds of EUR 134.5 home big wins at
Gaming Operator Operator of the Year licence in Gibraltar of the Year million for acquisition the International
of the Year award award for the third and Romania of remaining 51 percent Gaming Awards
consecutive year of shares in ComeOn
C H E R RY A B (PU B L ) A N N U A L R E PO RT 2 0 1 7 5
• BUSINESS CONCEPT AND VISION
BUSINESS CONCEPT VISION
Cherry’s strategy is to create shareholder value Cherry’s vision is to be a model of entrepreneurship,
by owning and developing fast-growing and responsibility and dedication. This means that Cherry
profitable gaming, media and entertainment will provide the best environment for developing
companies. profitable and fast-growing projects and companies
within gaming, entertainment and media.
CORE VALUES
Cherry’s core values should permeate everything the company does:
Entrepreneurship
Responsibility
Commitment
6 CH E R RY AB (PU B L ) AN N U AL R E P O RT 2 0 1 7
• F I N A N C I A L TA R G E T S
FINANCIAL GOALS
The following financial targets are to guide the Group’s activities
over an economic cycle:
GROWTH CAPITAL STRUCTURE
Cherry’s target is to grow more quickly than the European Cherry’s capital structure should allow for a high degree of
gaming market over an economic cycle, driven primarily by its financial flexibility as well as the possibility for acquisitions.
business areas that focus on online gaming: Online Gaming, The company’s target is for the equity/assets ratio to be at least
Game Development and Online Marketing. 30 percent.
Since 2012, Cherry’s revenue has increased by an average As at 31 December 2017, the equity/assets ratio was 34 percent
of 71 percent per year, while the online casino market in Europe (14).
grew on average by 12 percent per year. In 2017, the Group’s
revenue increased by 104 percent, while market growth in DIVIDEND POLICY
Europe during the year was estimated at 11 percent. The revenue According to the dividend policy adopted by the Board, Cherry’s
increase is explained by both growth of existing customers, target is to distribute more than 50 percent of net profit as
launches of new games and the inflow of new customers as dividend. However, the company’s financial position, cash flow,
well as acquisitions of companies. The objective is to continue opportunities for acquisitions and future prospects should be
to grow organically and structurally. taken into account.
As for the 2016 financial year, Cherry AB’s Board of
MARGIN Directors proposes to the Annual General Meeting that no
Cherry’s target is to increase the EBITDA margin over time dividend be paid for the 2017 financial year.
and in the medium term (3-5 years) achieve an EBITDA margin
of between 15 and 18 percent.
2017
104
11 European market Cherry
For the full-year 2017, Cherry reported an EBITDA margin
of 19.1 percent (15.8).
2016 109
11
2015 56
13
104
2017
11 European market Cherry
GROWTH,
2016 %11 109
104 The financial targets are based on the
2017 56
2015 11 European market Cherry
13 following assumptions:
2016 109
11
• Continued migration to online gaming via mobiles,
2015 56 tablets and desktops.
13
2017
TARGET: to grow more quickly than the European gaming market
19.0 • Cherry and its subsidiaries continue to be given an
over an economic cycle opportunity to focus on the European market for
2016 15.8
online gaming and games development.
2015 6.8
EBITDA-MARGIN, % • The company continues to be able to handle its
2017 19.0
cost structure and cope with the effects of entering
markets and paying applicable taxes.
2016 15.8
2015 6.8 • The Group’s customer offerings are perceived as
2017 19.0 attractive.
2016
TARGET: 15-18% 15.8
• The company retains the licences necessary for its
2015 6.8
operations.
EQUITY/ASSETS RATIO, %
•N
o significant adverse effects occur as a result of
2017 34 material changes in the political, fiscal, market and
2016 14 administrative treatment of the Group.
2015 52
TARGET: At least 30%
2017 34
2016 14
2015 52
2017 34 C H E R RY A B (PU B L ) A N N U A L R E PO RT 2 0 1 7 7
2016 14
2015 52
• D I A LO G U E W I T H S TA K E H O L D E R S
CONTINUOUS DIALOGUE WITH
STAKEHOLDERS BUILDS TRUST
The Cherry Group’s offering is based on games and media
that are entertaining and engaging.
Through the Cherry Group’s expansive and we will strengthen this position carry out the necessary measures – often
presence in the gaming industry, the every day, primarily by listening to the together with the customer. In addition,
Group has continuous contact with a various perspectives of our stakeholders, all employees who have customer contact
number of stakeholders. This group and the customer naturally has a key undergo special training programmes on
includes players, customers, employees, role in these perspectives. We at Cherry an ongoing basis. These programmes are
suppliers, capital market players and understand the importance of having evaluated and adapted to the respective
government agencies. games that are entertaining. jurisdiction in which Cherry or its sub-
The companies within the business For Cherry and our subsidiaries, sidiaries operate. The company has its
areas Online Gaming and Restaurant responsible gaming is a broad concept own staff and external experts working
Casino are gaming operators and have that includes customer safety, combating to strengthen the methods that enable
direct contact with thousands of end money laundering and customer verifica- companies to effectively develop their
customers in the gaming industry on a tion and authentication. A fundamental work within responsible gaming.
daily basis. The nature of the contact be- requirement for all companies within the
tween the companies and the customer Cherry Group is to actively comply with Physical meetings in connection
varies between the different business laws and regulations in order to maintain with games
areas. Within Restaurant Casino, custom- their gaming licences as well as to study The Cherry Group is unique among the
ers meet the company’s employees at developments in markets where regula- companies active in the Swedish gaming
a physical gaming table, while contact tion, licences and other conditions of the market by offering games both via Res-
within the Online Gaming business area industry are discussed and facing change. taurant Casino and online. The majority
takes place over the Internet. We know that, in some cases, our of employees within Restaurant Casino
products and services can contribute to are dealers in Blackjack and Roulette. As
Responsible gaming the risk that some players will develop these employees are the company’s face
The basis for all communication is that gambling problems. We therefore have to the public, who meet customers, high
there is trust and mutual respect in the a number of systems that monitor each demands are placed on their training
relationship. Cherry’s ambition is that transaction to determine the level of risk. in responsible gaming. All employees
our stakeholders should be able to trust High-risk activities are then controlled by undergoing training in responsible
that we act properly, make the right deci- a dedicated team that manages the risk gaming and how to treat customers.
sions and act responsibly. Since 1963, in the situation through appropriate cus- Furthermore, there are games with low
Cherry has built a strong brand on trust, tomer review and is subsequently able to stakes and winnings where each game is
8 CH E R RY AB (PU B L ) AN N U AL R E P O RT 2 0 1 7• D I A LO G U E W I T H S TA K E H O L D E R S
carried out over a long period in a con- other market players, to prevent gaming- tions and must verify and authenticate
trolled environment. Restaurant Casino related problems. their customers. We have developed a
is a very safe gaming form, and very few Cherry has clear guidelines against proprietary and established third-party
people develop gambling problems as a moneylaundry and corruption, as well software to ensure we have control over
result of Restaurant Casino games. as a handbook on money laundering the data required to meet regulatory
and financing of terrorist activities. The requirements. Cherry’s online gaming
Know Your Customer – “KYC” majority of Cherry’s employees undergo business is one of the few gaming compa-
The term “Know Your Customer – KYC” training in anti-corruption and anti- nies to currently allow mobile BankID as
refers to verifying the identity of custom- money laundering, and the Group in- a verification method. The use of Mobile
ers. All financial companies and banks tends to further strengthen and broaden BankID is the safest way for customer
are required to identify their customers its work in this area in the coming years. verification, that is, to determine if the
to ensure they know who they are. This customer really is the person they claim
comprises requiring customers at gaming Customer verification and authentication to be. This method of customer verifica-
companies to identify themselves digitally Cherry’s different companies fall under tion is also used by, among others, most
or, in some cases, by sending documents different regulations in different jurisdic- Swedish banks and authorities.
to prove their identity, in accordance with
applicable laws and conditions attached
to the gaming licences in their respective
jurisdictions. In addition to being able to
verify the identity of customers, the EU’s SLOTTRACKER.COM GIVES
Anti-Money Laundering Directive also PLAYERS TOOLS FOR CONTROL
places requirements on internal guide- In early 2018, Cherry’s subsidiary
lines and policies for risk management, Game Lounge acquired US site
compliance with regulatory requirements, Slottracker.com. The product is a
training of staff, and procedures for cus- unique solution that offers customers a
tomer documentation and records. better overview and control of their gambling.
With the help of the site’s various tools, the customer
Combating money laundering can register every bet that he or she makes in different
The gaming companies that are in direct games online. By choosing Slot Tracker, players are able
contact with end customers in the gam- to have their information saved about what games and
ing industry face similar challenges as bets are made, as well as winnings and bonuses paid.
financial institutions such as banks; they The customer can thereby follow his or her development
process a large number of transactions and analyze which casino works best, based on their
daily and must follow comprehensive specific requirements and gaming tactics, including the
rules for combating money launder- ability to set limits for amounts and stakes as well as
ing. The Group’s companies in the B2B daily playing time.
sector also work actively, and in close
cooperation with its customers and
TOOLS
FOR
SELF-
CONTROL
C H E R RY A B (PU B L ) A N N U A L R E PO RT 2 0 1 7 9• MARKET OVERVIEW
MARKET WITH STRONG
UNDERLYING GROWTH
The gaming market has shown stable growth, regardless of the economic cycle.
The market is driven primarily by the development of entertaining games, increased availability
thanks to digitized platforms combined with regulation and re-regulation of markets.
Overall, the global gaming industry is ONLINE GAMING LAND-BASED GAMING
expected to have increased revenue The main segments of online gaming The restaurant casino segment is esti-
(Gross Gaming Revenue) by about in Europe are betting (41 percent), mated to represent less than one percent
3 percent to EUR 382 billion in 2017, casino (31 percent), lotteries (13 percent), of the total gaming market in Sweden and
of which the online gaming share of the poker (7 percent) bingo (5 percent) and has been characterized by a slow decline
total market is expected to have increased others (3 percent). In the last five years, in sales and profitability over the past
from 10.0 to 10.6 percent. Operators, lotteries have had the highest growth 10 years.
game developers, platform providers and rate (15.4 percent), followed by betting
performance-based companies are all (14.7 percent) and casino (12.8 percent).
exposed to the online gaming segment. These are the segments Cherry is
The European online gaming market primarily exposed to.
is currently growing by just over 10 per
cent per year and is expected to show
an aggregate annual growth rate of
approximately 7.7 percent over the next
five years, with total sales of close to
EUR 31 billion in 2022.
The gaming market has enjoyed good growth regardless of the economic situation.
The market is driven principally by re-regulation of monopoly markets, a shift from offline to online,
increased mobile use and the development of innovative and entertaining games and products.
The gaming industry is expected to have in 2017 reached sales of
EUR 382
GLOBAL MARKET FOR ONLINE GAMING, EUR BILLION
billion ACCORDING TO H2 GAMBLING CAPITAL
%
20 450
18 418 427 400
400 410
16 382 391
360 368 362 371 350
14 328 341
308 300
12 287 292 295
273 250
10 256
240
223 200
8
150
6
4 51 53 57 100
34 37 41 44 47
17 19 21 23 25 27 31
2 7 9 12 14 15 50
0 0
03 04 05 06 07 08 09 10 11 12 13 14 15 16 17P 18E 19E 20E 21E 22E
Online gaming Land-based gaming Proportion of online gaming
10 CH E R RY AB (PU B L) AN N U AL R E P O RT 2 0 1 7• MARKET OVERVIEW
FROM OFFLINE TO ONLINE
EUROPEAN MARKET FOR ONLINE GAMING, EUR BILLION
35
7.7%
The European
30
31.1
online gaming market
29.2
25
12.1%
27.6 is growing by about
25.6
7.7
23.7
20 21.5
19.3
15 17.4
15.4
percent
10 13.3
5
0
2013 2014 2015 2016 2017E 2018E 2019E 2020E 2021E 2022E per year.
EUROPEAN ONLINE GAMING MARKET'S SEGMENTS (PROPORTION OF TOTAL INCOME)
3% 3% 3%
13% 13% 14%
5% 5% 5%
The main segments of online gaming
40% 41% 41% in Europe are betting (41 percent),
7% 7% 6%
casino (31 percent), lotteries (13 percent),
31% 31% 31% poker (7 percent) bingo (5 percent) and
others (3 percent). In the last five years,
lotteries have had the highest growth
2016 2017E 2018E
rate (15.4 percent), followed by betting
(14.7 percent) and casino (12.8 percent).
Betting Casino Poker Bingo Lotteries Other games
C H E R RY A B (PU B L ) A N N U A L R E PO RT 2 0 1 7 11• MARKET OVERVIEW ONLINE GAMING The different product segments have to remain positive over the next five years, largest product segment, even though generally had strong growth during the with betting expected to grow from the casino and lotteries are expected to grow last five-year period. The strongest growth current EUR 8.7 billion to 12.2 billion in at a faster rate. was within lottery and betting, at 15.4 2022, casino is expected to grow from Overall, the European online gaming percent and 14.7 percent average annual EUR 6.6 to 9.9 billion and lotteries are market is estimated to grow by an average growth rate, closely followed by casino expected to increase from EUR 2.9 to 5.0 of 7.7 percent per year over the next five (12.8 percent) and bingo (9.6 percent), billion. years, to reach sales of EUR 31 billion in according to H2 Gambling Capital. H2 Gambling Capital therefore esti- 2022. The trend for these segments is expected mates that betting will continue to be the 12 CH E R RY AB (PU B L) AN N U AL R E P O RT 2 0 1 7
• MARKET OVERVIEW
DRIVING FORCES WITHIN ONLINE GAMES
Games via the Internet are still a relatively undeveloped industry, which is expected to increase in the future
driven by a number of key factors:
Mobile share of the Higher entertain- Re-regulation of Greater confidence Internet and smart-
combined gaming ment value when the monopoly markets in e-commerce and phone penetration
market is still relatively technical development is increasing the use of, for example, is increasing and
small, but more plat- of gaming products, number of online banking and booking stabilizing at very
forms making it easier platforms and sites players and is services. high levels throughout
to play on mobiles and progresses and more opening the door all of Europe.
tablets are contributing interesting solutions to new operators,
to significant growth are added. such as media
opportunities. houses.
LAND-BASED GAMING
The restaurant casino market in Sweden is regu-
lated and is estimated to constitute less than one
percent of the total gaming market in Sweden.
The restaurant casino market is in a structural
decline driven by increased overhead combined
with a long period of ceilings on the allowed stake
per game. However, the forthcoming new gaming
legislation is expected to have a positive impact on
the restaurant casino segment due to the proposal
to increase the highest stake from the current
SEK 75 to about SEK 220.
The re-regulation in Sweden can also open the
door to new forms of gaming and opportunities
within online games. The new gaming legislation
is likely to be introduced in early 2019.
C H E R RY A B (PU B L ) A N N U A L R E PO RT 2 0 1 7 13• BUSINESS AREA ONLINE GAMING
ONLINE GAMING
The launch of snabbare.com at the end of 2017 shows that ComeOn is back as a fast-paced
company close to its customers and with a focus on profitable growth.
Business development The acquisition of ComeOn helped to and mobilebet.com were added to the
The operations have been character- significantly increase the share of reve- global brands while locally-profiled brands
ized by the extensive integration work nue from the important betting segment, were expanded with casinostugan.com,
undertaken following the acquisition which generated 17 percent of total rev- folkeautomaten.com, suomikasino.com,
of ComeOn. During the latter part of enues for Online Gaming. The number of getlucky.com and mobilautomaten.com.
2017, after the branding portfolio and registered customers increased by 36.6 With the acquisition of ComeOn, a
platforms were optimized, the business percent during the year to 4.3 million at leading position in the Nordic region will
area could once again focus on profitable the same time as the number of active be strengthened, which will continue to
growth and begin to realize the cost syn- customers in the fourth quarter increased be an important market in the future. In
ergies that exist between the operations. by 37,238 to 347,994, compared with the Europe, growth opportunities continued
Revenues from casino games accounted corresponding quarter the previous year. to be strong with many interesting coun-
for 83 percent of total revenue. During the year, comeon.com tries facing regulation in coming years.
Online Gaming develops and runs, as an range of casino, lottery and betting. This is such as NetEnt, Microgaming, Yggdrasil
operator, dozens of gaming sites that offer in order to provide customers the best pos- Gaming, Amaya and Betsoft.
customers casino games, lotteries and sible gaming entertainment. Being able to The business model is based on the
betting via mobiles, tablets and desktops. offer a wide range of games is an important game delivering a gaming surplus through
The business model entails the games gen- competitive tool. Therefore, Cherry licenses the repayment rate being 95-98 percent.
erating a net gaming surplus (stakes less from several leading gaming developers
winnings and customer bonuses). From the
net gaming surplus, a percentage-based
Systems suppliers
royalty fee is paid to the game provider. Stake amounts,
Gaming
Cherry strives to offer customers a high Services suppliers Profit sharing winnings and End users
operators
bonuses
repayment rate in combination with a wide Games suppliers
14 CH E R RY AB (PU B L) AN N U AL R E P O RT 2 0 1 7• BUSINESS AREA ONLINE GAMING
ComeOn considers the regulation occur- Online Gaming
ring at the national level to be positive as Target Strategic initiatives Activities 2017
development in the markets regulated
Organic growth Many different customer groups Well-niched brands for
in recent years has been very positive, Development of existing customers demographic breadth
especially for major players. Broad and attractive offering Quick, friendly and relevant
service
Acquisitions Ongoing analysis of what the
In April, Cherry increased its ownership end user wants to play
in the subsidiary Almor by 7.5 percent to Growth from new Markets with strong gaming Comprehensive coordination
82.5 percent. markets culture in focus of ComeOn
In May, Cherry completed the acqui- Ongoing review of additional acquisitions
sition of ComeOn Malta Ltd., now owned
Driving forces for Innovative approach by our staff Launched new quick
at 100 percent. ComeOn is Cherry’s larg- the business with deep technical know-how and good products
est acquisition to date.
Profitability Integrated systems for good transparency New reporting and business
Revenue, earnings and returns Management of operational risks system deployed
Cost synergies through acquisitions New supplier agreement
Revenue for business area Online Gaming
increased by 120 percent to SEK 1,823
Companies in the business area (Cherry’s portion of the shares as at 31 December 2017).
million (833), with acquisitions being ComeOn Malta Ltd (100%), Cherry Gaming Ltd (100%), Almor Holding Ltd (82.5%).
a strong contributing factor. Organic
growth was 18 percent. Operating profit
(EBITDA) increased by 131 percent to Market trends Driving forces
the new record level of SEK 277 million •C ontinued migration from offline to •A vailability: Games from mobile plat-
(120), which corresponds to an improved online forms increase the availability of the
EBITDA margin of 15.2 percent (14.5). • Increasing
share of games via mobiles products no matter where the player is
due to: located
Market - More capable mobile phones • Social acceptance: Games are becoming
The European online gaming market - Consumer behaviour has changed so an increasingly socially accepted form
is currently growing by over 10 percent that the mobile phone is increasingly of entertainment on the Internet
annually and is expected to show an ag- being used for a variety of purposes in • Re-regulation of monopoly markets
gregate annual growth rate of around 7.5 everyday life creates opportunities for new players
percent over the next five years, reaching - Enhanced infrastructure speeds provide to operate on the same terms
close to EUR 30 billion in revenue by better gaming experiences via mobiles
2022. • Increasing range of new game products Competition
The main segments of online for mobiles, such as live games during The main competitors in the gaming
gaming in Europe are betting (41 percent), a match operator business are Bet365, Betsson,
casino (31 percent), lotteries (13 percent), • Betting and state-run lotteries are GVC, Kindred, LeoVegas and Mr Green.
poker (7 percent), bingo (5 percent) and the fastest growing segments on the
other forms of gaming (3 percent). In European market, closely followed by
the last five years, lotteries have had casino games
the highest growth rate (15.4 percent), • An increasing number of markets are
followed by betting (14.7 percent) and preparing and introducing national
casino (12.8 percent). gaming regulations
4.3 million
Approximate number of registered customers as at year-end 2017
120%
Revenue increased to SEK 1,823 million
Online Gaming 2017 2016 YOY BUSINESS AREA'S BUSINESS
BUSINESS AREA'S
AREA'S BU
PROPORTION OF PROPORTION
PROPORTION OF OF PRO
Revenue (SEK million) 1,823 833 120% CONSOLIDATED CONSOLIDATED
CONSOLIDATED CO
EBITDA (SEK million) 277 120 131% NET INCOME, 2017 NET2017
EBITDA, INCOME, 2017 EBI
EBIT (SEK million) 167 81 105%
Active Customers* 347,944 310,706 12%
Amount deposited
(SEK million) 5,503 2,288 141%
80% 65%7%
*For the fourth quarter
Online Gaming OnlineGame
Gaming
Development Gam
Tomas Johansson
Acting CEO of ComeOn
C H E R RY A B (PU B L ) A N N U A L R E PO RT 2 0 1 7 15• BUSINESS AREA GAME DEVELOPMENT
GAME DEVELOPMENT
Cherry is active in Game Development through the subsidiary Yggdrasil Gaming and via the
associated company Highlight Games. Yggdrasil mainly develops slot machines licensed to
online game operators. Yggdrasil Gaming also offers customized slot machines.
Cherry’s associated company Highlight Games develops gaming products for the virtual
sports game market both online and land-based, including content from league football.
Business development (Italian market), Danish Games, Pinnacle, end of the year, an increase of 103 percent
The business has been characterized by LeoVegas and Jackpotjoy (Danish mar- compared with the previous year.
continued strong interest in Yggdrasil’s ket). At the same time, 11 new games New markets 2017: Italy, Denmark,
products. A total of 40 new licence agree- and an operator-exclusive game were Georgia.
ments were signed with various operators launched during the past year. The vol- Awarded “Innovator of the Year”
in 2017, including William Hill, Mara- ume of player transactions has continued at the International Gaming Awards.
thonbet, Betfred and Rank Group (UK to increase steadily during the year and “Slot Provider of the Year” at the
market), GVC, Eurobet and Snaitech reached a record-high 3.7 billion at the EGR B2B Awards.
Within Game Development, games are desktops. Games licensed to different fixed compensation on integration of new
developed and operated that are licensed gaming operators in Europe and Asia. games and subsequent royalties based
to gaming site operators offering custom- The business model entails the game on percentage of the game’s generated
ers casino games via mobiles, tablets and developer receiving a combination of gaming surplus.
Game supplier
Yggdrasil Gaming Royalty payments
Gaming End-consumer
based on gaming
Game supplier in the form
surplus, integration surplus
Sub-suppliers of Fees to of players
suppliers Highlight Games fees
data/information of e.g. data Game supplier
16 CH E R RY AB (PU B L) AN N U AL R E P O RT 2 0 1 7• BUSINESS AREA GAME DEVELOPMENT
Revenue, earnings and returns Game Development
Revenue for the Game Development Target Strategic initiatives Activities 2017
business area, for all material purposes
Organic growth Customer types Signed a contract with many
represented by Yggdrasil Gaming, in- Development of existing new tier 1 customers
creased by 95 percent to SEK 169 million customers Launched Dragons concept
(87). The proportion of Group income de- Launched new requested tools
creased during the year from 22 percent
to 13 percent. Operating profit (EBITDA) Growth from Prioritized markets Increased activity in regulated
new markets markets such as Italy and Denmark
increased by 78 percent to SEK 71 mil-
lion (40), while the EBITDA margin Driving forces Product launch Launched 11 new online games
decreased to 42 percent from 46 percent, for the business and one operator-exclusive game
compared with the corresponding period
Profitability Good transparency Built the internal economy and
in 2016, due to implemented strategic in the projects controller function
investments and expansion.
Companies in the business area (Cherry’s portion of the shares as at 31 December 2017
Market and any options outstanding 2018). Yggdrasil Gaming Sweden AB (84%), Highlight Games Ltd
Both Yggdrasil Gaming and Highlight (37.5%, option to acquire 12.5% before the end of May, and 5.5% before the end of November).
Games are exposed to the online gaming
market, where Yggdrasil Gaming is pri-
marily influenced by online casino games
and Highlight Games by the online betting Associated company Highlight Games Competition
segment. Casino games comprise one of has been consolidated as an associated The main competitors in the game
the fastest growing niches and continue company as of 1 June 2017. The compa- development business are NetEnt,
to show rapid market development. In ny, which is in a build-up phase, contrib- Playtech and Microgaming.
2017, Gross Gaming Revenue (”GGR”) for uted a negative SEK 1 million, which is
casino – the basis for revenue sharing – is recognized as profit/loss from participa-
estimated to have increased to EUR 10.6 tions in associates. The company has
billion, of which Europe accounts for more worked intensively with development
than 62 percent. The UK online casino and preparation for the launch of prod-
market is the largest and most significant ucts in several markets during 2018.
market, representing about 45 percent of
the European online gaming market, grow- Market Trends
ing at a rate of 9 percent annually. Other • Increased demand for mobile interfaces
important online casino markets are Italy, • Increased focus on gaming experience
Germany, Spain and the Nordic countries. • New regulations
These are expected to grow by 8-10 percent
annually over the next five years. Among Driving forces
the fastest growing markets is Poland, • Availability: mobile platforms increase
which belongs to the 10 largest European accessibility, and games are developed
markets measured in GGR, where the and adapted to these
online casino segment is expected to grow • The gaming business and practice win
by nearly 16 percent next year. market in line with increasing legitimacy
• Re-regulation of monopoly markets
78%
Acquisition of associated company
In May, Cherry acquired 25 percent of
ownership in UK game development
company Highlight Games, which is
developing a unique and patented product
within fantasy sports. In November, Cher- Increased operating profit
ry increased its holding to 37.5 percent. (EBITDA) for Yggdrasil Gaming 2017
Game Development 2017 BUSINESS
2016 AREA'SYOY BUSINESS
BUSINESS AREA'S
AREA'S BUSINESS
BUSINESS AREA'S
AREA'S BU
PROPORTION OF PROPORTION
PROPORTION OF OF PROPORTION
PROPORTION OF OF PRO
Revenue (SEK million) 87
169 CONSOLIDATED 95% CONSOLIDATED
CONSOLIDATED CONSOLIDATED
CONSOLIDATED CO
EBITDA (SEK million) 71 NET INCOME,
40 201778% NET2017
EBITDA, INCOME, 2017 NET2017
EBITDA, INCOME, 2017 EBI
EBIT (SEK million) 59 27 114%
Number of transac-
tions (million) 3,705 1,825 203%
Number of operators
80% 65% 7% 17% 6%
in which games are 67 30 123%
live
Online Gaming OnlineGame
Gaming
Development Game Development
Online Marketing O
Fredrik Elmqvist
CEO of Yggdrasil Gaming
C H E R RY A B (PU B L ) A N N U A L R E PO RT 2 0 1 7 17• BUSINESS AREA ONLINE MARKETING
ONLINE MARKETING
Several new markets are developing well. Game Lounge has recently been established
in Denmark, but the most recent, Spain and Italy, are also adding value.
Business development Acquisitions (EBITDA) continued to strengthen and
Operations have continued to develop at In 2017, Game Lounge focused primar- amounted to SEK 95.7 million (19.0).
a rapid pace in 2017. Work on building ily on organic growth with high profita- Thereby, Game Lounge managed to
strong brands and expanding to new bility but carried out an acquisition strengthen the EBITDA margin from
markets has shown good results during in November when the company 33.3 to 65.6 percent. New deposit players
the year. Among other things, Game acquired the Finnish loan comparison (NDPs) increased by 92 percent in full-
Lounge became the first European site Lainat.fi. This became the starting year 2017 to 44,103 (22,908).
affiliate company to establish itself in point for establishing Game Lounge in
the Japanese market. This is an impor- another sector, characterized by a wide Market
tant step for future positioning because range of contacts with a large number Market development for Online Marketing
the Asian market is at an early stage of customers and consumers. was characterized by new regulations and
of development, at the same time as legislation enabling expansion opportu-
interest in gaming is relatively larger Revenue, earnings and returns nities. There are clear indications that
than most European markets and has Revenue for business area Online market players have begun to plan and
been so for a long time. Online games Marketing developed strongly throughout prepare for the forthcoming Swedish
remain a grey zone, but new government 2017 and amounted to SEK 146 million re-regulation of the gaming legislation.
policy decisions have opened the door to (57), corresponding to an increase of Game Lounge sees new market channels
legalization offline and attitudes towards 156 percent. The increase in revenue for further growth as a result of the new
online gaming are becoming increasingly in 2017 was entirely organic revenue. gaming regulations.
positive. The share of intra-Group revenue has
Awarded Affiliate of the Year at also increased from SEK 10.2 million
the Malta iGaming Awards. to SEK 21.5 million. Operating profit
Online Marketing is conducted through together gaming sites that meet the compensation per customer who opens an
the Game Lounge subsidiary, which creates individual player’s requirements profile. account and deposits money. In addition,
qualitative customer contacts online to Revenue is generated in the form of the company can receive fees for advertis-
online gaming customers by bringing revenue sharing with the operator and/or ing and other marketing efforts.
18 CH E R RY AB (PU B L) AN N U AL R E P O RT 2 0 1 7You can also read
