A word from the CEO

Welcome to Cherry

Cherry was founded in 1963, and is Scandinavia’s oldest casino company. The company has developed into an innovative and fast-growing gaming company where online gaming accounts for more than 80% of sales. The casino industry has seen many changes throughout the years, and today an ever-increasing share of our customers choose to play online and via smartphones. New types of games come and go, but the essence remains – the fun and excitement. The notion of Cherry is based on the respect for the player, offering them a growing selection of exciting and entertaining games.

Cherry is today a company that invests, owns, and develops successful operations within the gaming industry. Based upon traditional casino games as Blackjack and Roulette, we are today growing rapidly online. Our investments in Game Development via Yggdrasil Gaming, and the Online Gaming via Cherry iGaming, as well as acquiring Game Lounge, Almor, and ComeOn, is in line with Cherry’s strategy to generate growth and shareholder value within game and casino. Furthermore, Cherry’s strategy is to keep delivering a high organic growth, combined with strategic acquisitions. The company is focusing on four main areas with the objective and potential to grow faster than the market, and with a revenue distribution within different value chains.

In this regard, I would like to thank our nearly 800 fantastic employees, and wish ComeOn’s 250 employees a very warm welcome to the Cherry family.

Online Gaming - Cherry iGaming

Since 2012, we have launched several new brands on our own platform, which have been developed with the latest technology and support both desktop, mobile, and tablet devices. The development of our own flexible platform makes it easier and faster for us to integrate new brands, payment solutions, and products. Cherry aims to deliver the best player experience in the industry and continues to invest in order to increase customer engagement. Examples of these investments are functions that enhance individual customisation, more efficient payments and withdrawals, maximised performance on the various gaming sites, and an optimised flow for registering and depositing. Another important factor is our multi-brand strategy and by using locally customised brands, integrated in the platform, a wide and competitive product portfolio is created. This enables the company to target a number of segments and groups at a low cost. We will continue to invest in online gaming to ensure a stable growth. Together with ComeOn, we will maximise our shared values and promotions to our players, with the main objective to strengthen our operations.

Gaming technology - XCaliber

XCaliber is Cherry Group’s most recently launched business area. XCaliber is a B2B company offering its innovative products and services to partners and gaming operatiors. Customers gets access to the market leading platform along with several built in innovative tools, tracking systems and payment methods. The company have its head office in Malta and a development team in Poland.

Performance-based Marketing - Game Lounge

Game Lounge continues to develop positively and is one of the fastest growing European companies within performance-based marketing and the creation of customer contacts (leads) on the internet. Game Lounge focus on operators within online gaming. The company is a B2B segment that co-operate with online gaming operators. The company attracts online players through various products and services and then forwards them to various gaming operators. The company works with a business model that is based on revenue sharing with the operators, where Game Lounge delivers high quality customers to operators through organic traffic. Game Lounge is working with building strong brands for its sites and is investing considerably in marketing, content on sites and search engine optimisation (SEO) for various keywords. The company currently operates in nine markets. We expect continuous strong growth with increased margins going forward. Game Lounge has over recent time completed two successful acquisitions, the first one during 2015 of Happiness Hunters that contributed with a number of Finnish affiliate sites, and during 2016 the company made an acquisition of Interclick Ltd. that contributed to further adding valuable internet sites with high SEO.

Game Development - Yggdrasil Gaming

Yggdrasil Gaming was developing very strongly in 2015, seeing a revenue growth and making a profit in the fourth quarter, only two years after the company was founded. Yggdrasil supplies all the new games on the iSENSE 2.0 platform, which is based on HTML5. Combined with innovative game supply throughout the year, this has allowed Yggdrasil to establish itself as a quality supplier on the market. Yggdrasil’s product portfolio has been endorsed with a number of quality hallmarks, winning iGaming Software Supplier of the Year at the International Gaming Awards and Software Rising Star and Slots Provider of the Year at the EGR B2B Awards.

Yggdrasil was awarded an operator’s licence in the United Kingdom in the fourth quarter of 2015, and applied for an operator’s licence in Gibraltar in early 2016. Expanding revenues to locally regulated markets is expected to broaden Yggdrasil’s revenue base. The company’s gaming portfolio consists of more than 20 video slots, plus a number of innovative lotteries and number games. Yggdrasil work with over 30 gaming operators, the biggest ones being bet365, bwin, Unibet and Betsson. As new actors are set into operation, more games are being released, the portfolio is growing, and this will increase Yggdrasil’s revenue and profit even further.

Restaurant Casino - Cherry ‘Spelglädje’

Restaurant Casino, via Cherry ‘Spelglädje’, continues to strengthen its position in the Swedish market, both through new acquisitions and re-acquisitions from our competitors. This has created economies of scale for the company and currently, Cherry has around two thirds of the total number of tables in Sweden. It is also very satisfying that our long-term efforts to continuously improve quality, service and modernising our payment solutions have paid off. Operations are highly stable, well-functioning, and the profitability is more than satisfactory.

We will keep develop our concept, focusing on making it easier for our customers to submit payments. We aim to provide higher deposit limits and take on a bigger market share. Cherry ‘Spelglädje’ is today the only private member of the State Gambling Investigation Group, regarding re-regulations of the Swedish gaming legislation. We at Cherry welcome a gaming market that is open to everyone with transparent and responsible actors, and we want to create more jobs in Sweden and compete on an even playing field.

The Future

Although we have proven that we can deliver both growth and dividends to our shareholders, we still have much to do before we are completely satisfied. We aim to show that online gaming can continue to grow and earn money, integrate ComeOn, and deliver good results. We are also going to establish Yggdrasil Gaming as a leading supplier of quality online gaming. We believe that the re-regulation of several European markets will impose new requirements on operators. We look forward to a regulation that permits gaming on fair conditions for both operators and players. The re-regulation will open new opportunities for those who can best adapt to the new gaming rules.

I am convinced that Cherry has both the competence and the motivation required to succeed in a rapidly changing market, and we are well equipped to manage the different rules and regulations in different regions. Our strategy and differentiated business areas create good conditions for continual growth, and we look forward to keep spreading fun and excitement, both online and in our restaurant casinos.

Anders Holmgren, Acting CEO Cherry