Interim report January – June 2016

Quote from Per Eriksson, President and CEO

-”The second quarter featured strong demand for our products and strong growth. Revenues increased by 30 percent and operating profit rose by 32 percent. The operating margin was 34.8 percent, which was an improvement compared to the previous year. I am optimistic going into the second half of 2016 – the conditions look good for continued strong growth.”

Second quarter 2016

  • Revenues for the second quarter increased by 29.8% to SEK 352.1 (271.2) million
  • Operating profit amounted to SEK 122.4 (92.7) million, an increase of 32.1%
  • Operating margin was 34.8 (34.2)% 
  • Profit after tax amounted to SEK 113.5 (86.5) million, an increase of 31.1%
  • Earnings per share amounted to SEK 0.47 (0.36) after dilution 
  • 12 new customer agreements were signed, 6 new customers’ casinos were launched

First six months 2016

  • Revenues for the first six months increased by 31.7% to SEK 697.4 (529.5) million
  • Operating profit amounted to SEK 250.5 (174.5) million, an increase of 43.6%
  • Operating margin was 35.9 (33.0)%
  • Profit after tax amounted to SEK 235.2 (160.7) million, an increase of 46.3%
  • Earnings per share amounted to SEK 0.98 (0.67) after dilution
  • 21 new customer agreements were signed and 14 new customers’ casinos were launched

Important events in the second quarter

  • NetEnt games went live with Tropicana in New Jersey
  • Gaming licenses obtained in Romania 
  • Customer agreement signed with Rank Group 
  • NetEnt won prestigious awards at the eGR B2B Awards
  • Distribution of SEK 320.2 million to shareholders and share split 6:1

Comments from Per Eriksson, President and CEO

Revenues and operating profit for the second quarter amounted to SEK 352 million and SEK 122 million, respectively. Compared to the same period last year, revenues increased by 30 percent and operating profit rose by 32 percent. The second quarter featured strong demand for our products and strong growth. The number of gaming transactions in our systems amounted to a full 8.8 billion in the second quarter, representing growth of 36 percent compared to last year. The operating margin was 34.8 percent in the second quarter, which was an improvement compared to the previous year.
NetEnt continues to drive the digital casino market with innovative, cutting-edge gaming solutions and entertaining games that are best-in-class. In yet another sign of appreciation, we won several prestigious trophies at the eGR B2B Awards in London – in the categories Innovation in Mobile, RNG Casino Supplier and Innovation in Slot Provision. Mobile live casino is an innovative product that we have recently started to launch in a beta version with some of our customers, and it has been very well received by both operators and players. Mobile gaming continues to be an important growth driver for us. Revenues from mobile doubled compared to the same period last year and accounted for 37 percent of revenues in the second quarter.
We signed 12 new customer agreements and launched six new customers’ casinos in the second quarter, among which was Tropicana in New Jersey, USA. We continue to see high levels of activity with our games in New Jersey and hope to see more US states follow suit and open up for online gaming. Recently, encouraging steps in the right direction have been taken by lawmakers in Pennsylvania and Michigan.
Great Britain continues to be one of our most important markets, where we keep seeing strong growth. In June, we signed a license agreement with Rank Group, one of the largest gaming operators in Europe with a strong market position in the UK. It is difficult to assess how online gaming demand will be affected by Brexit going forward. In the short term, we see mainly currency effects as we invoice most of our UK customers in British pounds. However, since the UK referendum, weakness in the Swedish krona against the euro has compensated for the weaker pound.
At NetEnt we want to be a role model for the IT and gaming industries when it comes to diversity and gender balance, because we believe it creates better conditions for innovation and growth. Our target is to achieve a 50/50 gender balance for the entire Company by 2020. Therefore, we were really pleased by the number of awards and nominations received at this year’s Women in Gaming Awards in London in May as well as our ranking number 14 in AllBright’s annual review of all the listed companies on the Stockholm Stock Exchange.
I am optimistic going into the second half of 2016 – the conditions look good for continued strong growth.

Presentation of interim report

On Thursday, July 14, 2016, at 9.00 a.m. CET the interim report will be presented by CEO Per Eriksson live via audio webcast. The presentation can be followed in real-time on NetEnt’s website at www.netent.com. The dial-in number for the telephone conference is +46 8 56642690 for Sweden and +44 20 30089802 for the UK. The link to the audiocast is: http://financialhearings.nu/?160714/netent/

For additional information please contact:

Per Eriksson, President and CEO, NetEnt AB (publ)
Phone: +46 8 57 85 45 00
per.eriksson@netent.com

This information is information that NetEnt AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 7:30 a.m. CET on July 14, 2016.

About NetEnt

NetEnt AB (publ) is a leading digital entertainment company, providing premium gaming solutions to the world’s most successful online casino operators. Since its inception in 1996, NetEnt has been a true pioneer in driving the market with thrilling games powered by a cutting-edge platform. NetEnt is committed to helping customers stay ahead of the competition, is listed on Nasdaq Stockholm (NET–B) and employs more than 800 people in Stockholm, Malta, Kiev, Krakow, Gothenburg, Gibraltar and New Jersey. For more information, please visit www.netent.com.

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