Third Quarter, July – September 2019
- Revenue for the period amounted to SEK 60.3 (253.1) million.
- Operating profit was SEK -37.6 (60.3) million.
- Profit after tax for the period was SEK -37.0 (54.3) million, or SEK -0.91 (1.33) per share.
- Cash flow from operations for the period amounted to SEK -34.9 (59.8) million.
January – September 2019
- Revenue for the period amounted to SEK 354.6 (679.5) million.
- Operating profit was SEK -92.1 (130.6) million.
- Operating profit before non-recurring write-downs was SEK -80.5 (130.6) million.
- Profit after tax for the period was SEK -90.3 (109.0) million, or SEK -2.21 (2.70) per share.
- Cash flow from operations for the period amounted to SEK -85.7 (154.1) million.
Events in the third quarter
- The appeal for injunctive relief from the regulator’s decision was rejected by the Administrative Court of Appeal. Review permit was not granted by the Supreme Administrative Court.
- Partnership Agreement signed with the Finnplay OY Group, a Finnish developer and provider of technology and platforms for online gaming.
- Nanocasino.com launched in the Swedish market in collaboration with Viral Interactive, a subsidiary of Finnplay and the holder of a Swedish licence.
- Tobias Fagerlund appointed CEO and President.
- Accounting firm BDO Mälardalen AB was appointed as the group’s new auditor, with Carl-Johan Kjellman as Auditor in Charge.
- Personnel restructuring plans were established and implemented.
- Global Gaming deepened the collaboration with Viral Interactive Ltd and transferred the Ninjacasino.se domain.
Events after the end of the period
- The appeal of the licence revocation decision was rejected by the Administrative Court.
I had opened my previous CEO’s message by saying that we were experiencing the most turbulent time in the company’s history. There was a change of CEO, we successfully implemented a set of corrective measures and had started to turn the negative start of the year around. We managed to handle challenging and delicate tasks and we were confidently looking at Summer and positive financial results to come. When the Swedish Gambling Authority revoked our Swedish licences in mid-June, the word challenge took on a whole new meaning for us. At the beginning of the third quarter, we were in a whole new reality with just over three quarters of our revenue gone overnight and we were no longer able to operate in Sweden, our home market. Saying it was dark times would be a gross understatement.
The regulator’s decision and our attitude towards it were discussed extensively both in our own communications and elsewhere, including in the media. Perhaps my personal perception of the legal system has had to endure a blow, but rest assured I understand the motives of the authorities and legislators. The regulator’s eagerness to show decisiveness, instead of offering guidance and support in how the new regulations should be interpreted, has led to the present situation. Fundamentally, I am very positive about the Swedish re-regulation but, like many others, am of the opinion that the so-called channelisation does not work satisfactorily and that the number of operators who attract Swedish players with unauthorised methods and offers is increasing, while the SGA insists on focussing on those who have applied for and obtained a licence in order to comply with and adapt to the new legislation.
We are naturally disappointed that the Administrative Court rejected our appeal and we will pursue this further and apply for a review permit in the Administrative Court of Appeal. Whilst I will not dwell on the subject, allow me to say that we stand firm in our opinion that the SGA’s decision was wrong and disproportionate. We are still confident in our position and are of the opinion that the regulator’s decision needs to be thoroughly examined and needs reviewing in higher courts. This is important not just for us but for the legislation and the future of the gaming industry in Sweden.
Rather than dwelling on the ongoing legal process, I think it’s important for me to convey what we have done during the quarter and what’s to come. Our situation is unsurprisingly still difficult and there are no magic tricks that can restore our results or the market’s confidence and belief that we can bounce back. All we can do is work hard with the determination to do just that – bounce back.
As mentioned in the previous report, we have worked on every possible front during the Summer and Autumn. Adapting the business to the circumstances restoring revenue-generation and growth is a long-term endeavour and will continue for a while yet, but I’m pleased to note that we are already able to see the results of our efforts. The effects of our restructuring, cost saving measures, changes in strategy and technology are immediately tangible.
• We have launched and intensified the organisational changes we had previously communicated, and they were implemented and expensed during the period. The total headcount in early 2020 will be less than 90, less than half what it was at the end of the second quarter. Our operation in Malta has shrunk considerably and the technical team in Malmö is gone entirely. Our Swedish office, consisting mainly of corporate functions, will move to smaller and more appropriate premises in Malmö in early 2020.
• The organisational changes, together with tight cost control and awareness of the changed conditions we operate in, have significantly impacted our fixed cost base. We estimate that at the beginning of the year it will be over 50% lower than at the end of Q1 2019 when the programme was launched, and we will continue to be prepared for further adjustments and changes. It is a continuous effort, permeating everything we do.
• The marketing commitments undertaken for 2019 and only partially utilised still constitute a financial burden. Contractual commitments for the year amounted to approximately SEK 210 million. We will of course continue to market our business and brands in future, although marketing commitments of this sort are definitely a thing of the past.
• The collaboration we launched with Finnplay during the period proceeds as planned and we are truly pleased with its development. Q4 will see us transferring operations from our own technology platform and wholly onto theirs. We expect to fully reap the benefits of this transfer from the first quarter of 2020.
• A further step in the collaboration with Finnplay was the launch of the Nano Casino brand, that’s so far had a positive reception in the Swedish market. Nano Casino is operated by Viral Interactive, a company in the Finnplay Group. Viral Interactive is the SGA licence holder and fully responsible for the operation of NanoCasino in Sweden. Via a subsidiary, Global Gaming acts as a marketing partner, assisting with resources and expertise in marketing, customer experience and brand management for Nano Casino. Given the current conditions in a Swedish market marked by stiff competition and uncertainty, the launch of Nano has met our expectations, and we noted that the interest and flow of customers it generates is considerable, although it has not produced any major financial results yet. Considering the positive market reception, it will be interesting to follow the further development of Nano Casino in the coming quarters.
• We have also worked extensively on our strategy to try and define the Global Gaming of the future and what we want to achieve and be. Our internal goals are ambitious and aim at not only taking us back to what we have lost in 2019, but at making us even more successful within the next few years. Our vision is to be a global player, delivering top-class products and returns by being responsible, making data and knowledge-based decisions and by delivering quality on time.
• Although we both hope and believe that Ninja Casino will return to the Swedish market, it’s important for me to stress that it is not our main focus. We have good and growing revenues from other markets and are focussing on launching our products and brands on other and new markets – which we’ll show in 2020.
Like many of our shareholders, I am frustrated and disappointed by how 2019 turned out. For what it’s worth, I’d like to reassure all those who are interested that we are by no means out for the count. Granted, we have a lot of hard work ahead of us and it will take time, but we still have a lot to give and you can expect to see results even short term. We are working relentlessly and the processes we can affect ourselves are moving forward according to our high expectations. Of course, we’d like to see quicker results and our patience may be stretched at times, but the future appears brighter now than it has for many months. We are in the process of building a long-term, flexible and high-quality business with the only aim to deliver positive financial results and return on investment to our shareholders.
Tobias Fagerlund, CEO
For further information, please contact:
Tobias Fagerlund, CEO
Phone: +46 (0)704 15 05 85,
Niklas Jönsson, CFO
Phone: +46 (0)8 551 154 31,
About Global Gaming
Global Gaming is a challenger in the iGaming industry, delivering innovative and safe gaming services and operating a number of successful casino brands. Its flagship, Ninja Casino, builds on the PayNPLay technology, allowing players to enjoy a safe and seamless online casino experience by simplifying and shortening the registration process. Global Gaming 555 AB is listed on Nasdaq First North Growth Market. The company’s Certified Adviser is Redeye AB, with contact information, +46 (0) 8 121 576 90, firstname.lastname@example.org. The report is available for download here https://globalgaming.com/report/.
The information in this press release is such that Global Gaming 555 is required to disclose under the EU Directive of Market Abuse Regulation. The information was submitted for publication through the agency of the contact persons set out above on 21 November 2019 at 08:00 CET.