Information regarding Q1 2020 and impact from COVID-19

Net Gaming provides an update regarding Q1 2020 and the impact from COVID-19 and decides to postpone the AGM and publication of the annual report

Due to the prevailing situation around COVID-19 and the postponements and cancelations of sporting events globally, Net Gaming has decided to provide a trading update on the business’ performance for Q1 2020 together with a summary of potential near-term effects from COVID-19.

COVID-19 and its impact on financial and operational performance

• 90% of Net Gaming’s revenues are expected to be generated from the Casino and Poker verticals in Q1 2020. The two verticals have performed well in March, with increasing traffic and no negative effect can be seen following the outbreak of COVID-19. The demand for casino and poker traffic currently shows a positive trend, which is expected to continue throughout the second quarter of 2020.
• Net Gaming currently has limited exposure to betting as only 9% of the Company’s total revenues is expected to be generated from the vertical in Q1 2020. Therefore, the Company expects a limited impact from the postponement and cancellation of sports events globally. Further, Net Gaming expects part of the betting revenues, which, would have been materialised in H1 2020, to be postponed until H2 2020 or 2021, depending on if and when events are rescheduled. Direct costs related to the Betting vertical are rather limited with only a few employees working directly with Betting assets today.
• The well-being and safety of Net Gaming’s employees and partners is a top priority. The Company is following the government’s advice in each jurisdiction and have enacted a contingency plan to minimise any disruption to the business and to guarantee the safety for both Net Gaming’s employees and partners. Employees are enabled to work from home and physical meetings have been replaced with virtual alternatives. The Company’s productivity has remained intact and no damages to overall operations can be seen so far.

Trading update Q1 2020

• Revenues is expected to amount to EUR 3.1m for Q1 2020, 5 percent lower compared to Q4 2019
• EBITDA is expected to amount to EUR 1.7m, 11 percent lower compared to Q4 2019. The EBITDA margin for Q1 2020 corresponds to 55 percent
• Operating expenses in absolute terms is expected to remain relatively constant compared to Q4 2019
• 61 percent of the Company’s revenues is expected to be generated from Europe during Q1 2020. 18 percent is expected to be generated from North American and 21 percent from other regions
• The Casino vertical is expected to constitute 73 percent of the Company’s revenues during Q1 2020. Poker is expected to represent 16 percent, Betting 9 percent and Other 1 percent
• Revenue share agreements are expected to constitute approximately 60 percent of the Company’s revenues during Q1 2020 and cost per acquisition is expected to represent approximately 40 percent of revenues
• Operating cash flow for Q1 2020 is expected to amount to approximately EUR 1.7m, with a cash conversion to adjusted free cash flow of 86%
• As per 31 March 2020, cash and cash equivalents is estimated to be EUR 2.6m. The Company’s net interest-bearing debt is expected to amount to EUR 21.2m, equivalent to a leverage of 2.8x Net Debt/EBITDA, based on estimated LTM EBITDA 31 March 2020.

Refinancing process

Net Gaming is continuously working with its advisors in order to secure a refinancing of its bond loan maturing in September 2020. The Company intends to communicate further details as soon as possible.

Postpones the AGM and publication of annual report

Due to the prevailing situation around COVID-19, Net Gaming's Board of Directors has decided to postpone the Annual General Meeting to 25 June. The postponement of the Annual General Meeting has resulted in Net Gaming also deciding to postpone the publication of the annual report until April 30.

 “COVID-19 has disrupted societies across the globe. We are continuously evaluating the current situation and continue to adapt our organisation to the ever-changing circumstances. A majority of Net Gaming’s revenues (~90%) are generated from casino and poker, which has develop strongly in March. The length of current disruptions to sports events globally remains hard to predict. However, Net Gaming expects limited financial impact from sportsbetting and remains committed to its long-term strategy of further growth within the Betting vertical”

Robert Andersson, President and CEO

All figures are unaudited and based on management accounts. The next financial update is scheduled to be made in connection to the first quarter interim report, 20 May 2020.

For further information please contact:

Robert Andersson, President and CEO
+356 9999 8017

Gustav Vadenbring, Group CFO
+356 9967 6001

Net Gaming Europe AB (publ)
Telephone: +46 8 410 380 44
E-mail: info@netgaming.se
Website: www.netgaming.se

Certified Adviser: FNCA Sweden AB, info@fnca.se, +46 8 528 00 399

This information is information that Net Gaming Europe AB (publ) is required to disclose under the EU Market Abuse Regulation. The information was provided by the contact person above for publication on 31 March 2020 at 08.45 CET.

About Net Gaming
Net Gaming owns, operates and develops high-quality comparison sites, mainly in iGaming affiliation, for the purpose of helping our partners by channelling high-quality users to the Company’s customers – primarily iGaming operators. Through the sites, Net Gaming generates high-quality users, primarily to global iGaming operators. The Company, which was founded in 2003, has just over 70 employees and is headquartered in Malta. The share (NETG) is listed on Nasdaq First North Growth Market Premier. Certified Adviser: FNCA Sweden AB, info@fnca.se, +46 8 528 00 399

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