Interim report January–March 2016

Quote from Per Eriksson, President and CEO

- ”We have had a strong start to the year with high growth in revenues, profits and cash flow. In January we released the slot game Guns N Roses,which became our most successful game release so far. The game is part of our new concept NetEnt Rocks, which also includes upcoming games based on music and graphics of Jimi Hendrix and Motörhead. We have an exciting year ahead of us and I am positive about the future.”

First quarter 2016

  • Revenues for the first quarter increased by 33.7% to SEK 345.4 (258.3) million
  • Operating profit amounted to SEK 128.1 (81.8) million, an increase of 56.6%
  • Operating margin was 37.1 (31.7)% 
  • Profit after tax amounted to SEK 121.7 (74.2) million, an increase of 64.1%
  • Earnings per share amounted to SEK 3.04 (1.86) after dilution 
  • 9 new license agreements were signed, 8 new customers’ casinos were launched

Important events in the first quarter

  • License agreement signed and games launched with PokerStars in New Jersey
  • NetEnt became associated member of World Lottery Association (WLA)
  • Administrative Court of Appeal ruled in NetEnt’s favor in tax dispute
  • Guns N Roses slot game was released 
  • NetEnt won prestigious awards at International Gaming Awards, Gaming Intelligence Awards and EGR Nordic Awards

Comments from Per Eriksson, President and CEO

We have had a strong start to the year with high growth in revenues, profits and cash flow. Revenues for the first quarter increased by 33.7 percent and operating profit increased by 56.6 percent, compared to the first quarter of last year. The operating margin was 37.1 percent, a significant improvement from the same period last year thanks to rising revenues and economies of scale. The number of gaming transactions was 8.9 billion in the first quarter, representing an increase of 37 percent compared to the previous year.
We follow our growth strategy and the expansion in Europe and North America continues. We signed nine new license agreements and launched eight new customers’ casinos in the first quarter. We also extended our collaboration with PokerStars and went live with our games on their site in the state of New Jersey. We have successfully signed up all gaming operators in New Jersey and have quickly gained market share and traction with our games there, which is good for our future growth not only in New Jersey, but also in other US states if and when they decide to reregulate the online gaming market. Mobile games and the UK market continue to contribute significantly to our growth. Revenues from the UK almost doubled compared to the same period last year and mobile games represented 33 percent of our gamewin in the quarter, a sharp increase from the level of 21 percent last year.
In March NetEnt became associated member of the World Lottery Association (WLA), a member-based organization that promotes the interests of state-authorized lotteries and gaming operators around the world. The membership will support our efforts to gain business in this strategically important market segment.
NetEnt continues to drive the market for digital casino entertainment by creating innovative games of the highest quality. We won several prestigious industry awards in the quarter and participated as usual at ICE - the largest trade show of the year in the European gaming industry. In January we released the much-anticipated slot game Guns N Roses, which became our most successful game release so far. The game is part of our new concept NetEnt Rocks, which also includes upcoming games based on music and graphics of Jimi Hendrix and Motörhead. We have an exciting year ahead of us and I am positive about the future.

Presentation

On Tuesday, April 19, 2016, at 9.00 a.m. CET the interim report will be presented by CEO Per Eriksson live via webcast. The presentation can be followed in real-time on NetEnt’s website at www.netent.com.

The information in this interim report is such information that NetEnt AB (publ) is required to publicly disclose under the Securities Market Act and/or Financial Instruments Trading Act. The information was submitted for publication on April 19, 2016 at 7.30 a.m. CET.

About NetEnt

NetEnt AB (publ), previously Net Entertainment NE 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 700 people in Stockholm, Malta, Kiev, Gothenburg, Gibraltar and New Jersey. For more information, please visit www.netent.com.


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