Cherry's interim report for Q3 2017 - Focus on growth with enhanced profitability

• Group revenue increased by 165% year-on-year to MSEK 567 (214), with organic revenue growth amounting to 30%.
• Profitability improved and EBITDA increased by 263% to MSEK 112 (31) and the EBITDA margin was 20% (14).
• Profit for the period amounted to MSEK 42 (31).
• Earnings per share before and after dilution* amounted to SEK 0.22 (0.27) and SEK 0.21 (0.27) respectively.
• In the final acquisition analysis for ComeOn Malta Ltd, the previous revaluation of shares by MSEK 510 was adjusted, which does not affect profit for the year but does reduce goodwill and shareholders’ equity.
• In August, the Group’s forecast for the 2017 full-year was adjusted.

• Group revenue increased by 182% year-on-year to MSEK 1,644 (583), with organic revenue growth amounting to 36%.
• Profitability improved and EBITDA increased by 304% to MSEK 288 (71) and the EBITDA margin was 17% (12).
• Profit for the period amounted to MSEK 93 (57).
• Earnings per share before and after dilution* amounted to SEK 0.49 (0.49) and SEK 0.49 (0.48) respectively.

• On 18 Oct 2017, trading in Cherry’s class B shares commenced on the Nasdaq Stockholm exchange in the Mid Cap segment.
• The MD of ComeOn Malta Ltd has vacated that position. The company’s Chairman, Tomas Johansson, has been appointed acting MD and the recruitment of a permanent MD is in progress.
• On 1 November 2017, Cherry revised its full-year forecast and now estimates that consolidated revenue of approximately MSEK 2,200 will be generated in 2017 and EBITDA is expected to amount to MSEK 400.

"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. In the third quarter, we unfortunately saw our largest business area lose momentum, although the new management, with its extensive experience of the industry, has taken measures to increase both growth and profitability.
Cherry showed good development in the third quarter, with revenue increasing by 165 percent to MSEK 567, of which 30 percent was organic growth. 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. Consolidated EBITDA earnings increased by 263 percent to MSEK 112 and the EBITDA margin was 20 percent. Although this is good, we can do better, and the whole Group shall grow – with increased profitability.

Cherry’s largest business area, Online Gaming, which includes the ComeOn operations, reported revenue growth of 214 percent, from MSEK 143 to MSEK 448 and an EBITDA margin of 15 percent (13). The integration of the online gaming operations within ComeOn continued to affect growth and profitability negatively in the third quarter. We have continuously reviewed the integration process within the business area and can affirm that the lion’s share has been completed. Together with the new management, this lays a solid foundation for increased growth and profitability. To intensify efforts to achieve our objectives, several of people who have been with ComeOn from the outset have been appointed to lead the operations. The company’s Chairman, Tomas Johansson, will be the acting Managing Director while we recruit a new Managing Director. Together with the new company management, appointed in late October, he will focus on the market offer, cost reduction and growth. 

It is gratifying that Yggdrasil is continuing its very positive development. The third quarter of the year was another with both record revenue and earnings. This strong development builds on a number of important new customer licence agreements with major new operators and the company launching innovative games. In the third quarter, one of Yggdrasil’s largest investments, Jungle books, was launched, receiving a positive market reception from the outset. The company is also continuing its expansion, partly with more employees, and partly with a new development studio in Stockholm.

At Highlight Games, preparations are underway for the launch of the company’s innovative gaming products for the virtual sports gaming market, both online and physically, and with content from, for example, league football. During the third quarter, the company completed tests of different language versions of SOCCERBET, a game with content from league football. The company has also initiated negotiations on establishing operations in Italy, which, in addition to the UK, is one of the larger key markets in Europe. The company finds itself at an exciting phase, with both development and launch preparations in progress. In our assessment there are good opportunities to develop new products based on sports other than soccer and for launches in markets outside Europe. Cherry stepped in as a major investor and strategic partner, initially by acquiring 25 percent of the company. With access to the Group’s network, we believe the company has good opportunities to generate revenue in the coming fiscal year.

Operations in the Online Marketing business area (previously Performance-based Marketing) also continue to grow at a rapid pace and with good profitability. The strategy of growing organically means that the company has good control and flexibility, which means that operations established in new markets quickly generate revenue. There is more to be done and the plan to expand operations in several new markets continues. During the third quarter, visitor numbers increased in all markets, as did the number of new deposit customers. In the Japanese market, we saw a continued increase in the number of visitors, however contributing only marginally to third quarter revenue. 

On 18 October 2017, trading in Cherry’s class B shares (STO: CHER-B.T) commenced on the Nasdaq Stockholm exchange after 11 years on AktieTorget. This transfer allows us to continue our journey of growth, encountering new players in the capital market and other stakeholders, helping us strengthen our position as the most complete gaming company."

Prior to the release of its third quarter report, Cherry has conducted a more in-depth analysis of development in its subsidiary ComeOn. The process of integrating ComeOn has not been implemented according to plan, and the delay that occurred during the summer, combined with erroneous marketing decisions, has contributed to higher costs and poorer earnings performance than planned. On 26 October 2017, a new management team was appointed with extensive experience from establishing ComeOn as a market leader. This management will now undertake the steps necessary to improve the company’s earnings capacity and efficiency. On 1 November, Cherry revised its full-year forecast for 2017, from revenue of approximately MSEK 2,500 being generated to around MSEK 2,200 and a decrease in profit (EBITDA), from approximately MSEK 480 to about MSEK 400. The other business areas in the Cherry Group continue to develop well, with good cost control and well-balanced investments.

For further information, please contact:

Anders Holmgren, CEO, +46 708 607 534,
Christine Rankin, CFO +46 765 399 492,
Carolina Haglund Strömlid, Head of IR & Communications, +46 708 807 173,

This information is information that Cherry AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above on 8 November 2017 at 07:30 a.m. CET.

The interim report will be commented on by President and CEO Anders Holmgren and CFO Christine Rankin in a telephone conference tomorrow, on 9 November 2017 at 11:00 a.m. CET. The presentation materials will see available approximately one hour earlier at The presentation can be followed via and/or
To participate by phone, call +46 8 5664 2693 (SE) or +44 20 3008 9807 (UK).
Cherry in brief
Cherry is a Swedish innovating and fast-growing gaming company established in 1963. The business strategy is to create shareholder value by owning and developing fast growing and profitable businesses within the gaming and casino industry. Today, Cherry operates through five diversified business areas: Online Gaming, Online Marketing, Game Development, Gaming Technology and Restaurant Casino.
The objective is to grow organic in combination with strategic acquisitions of fast-growing companies. Cherry employs around 1,100 people and has almost 6,900 shareholders. The company’s class B-share has been listed on the Nasdaq Stockholm exchange, Mid Cap segment since 18 October 2017.

* Earnings per share are calculated based on the profit for the period excluding the minority share. 


About Us

Cherry is an innovative and fast-growing company within gaming, entertainment and media. Established in 1963, today Cherry operates through five diversified business areas: Online Gaming, Game Development, Online Marketing, Gaming Technology, and Restaurant Casino. The Group's objective is to grow organically in combination with strategic acquisitions of fast-growing companies. Bridgepoint Europe VI Fund is the principle owner of Cherry AB. The Company's class B share is listed on the Nasdaq Stockholm exchange, Mid Cap segment. More information is available at