Interim report January-September 2011
Strong quarter driven by organic growth
Third quarter 2011
– Revenues for the third quarter increased by 21.7 % to SEK 111.4 (91.6) million
– Operating profit amounted to SEK 34.0 (34.1) million
– Operating margin was 30.5 (37.2) %, 36.5 % excluding costs amounting to SEK
6.7 million related to former senior executives
– Profit after tax amounted to SEK 31.0 (30.0) million
– Earnings per share amounted to SEK 0.78 (0.76) before and after dilution
– Three new license agreements were signed, and five new customers’ casinos
First nine months 2011
– Revenues for the first nine months increased by 14.1 % to SEK 306.5 (268.7)
– Operating profit amounted to SEK 87.5 (102.7) million
– Operating margin was 28.5 (38.2) %, 30.7 % excluding costs amounting to SEK
6.7 million related to former senior executives
– Profit after tax amounted to SEK 79.0 (91.4) million
– Earnings per share amounted to SEK 2.00 (2.31) before and after dilution
– Five new license agreements were signed, and nine new customers’ casinos were
Important events in the third quarter
Revenue growth for the third quarter was 24.1 percent in local currency
compared to the third quarter 2010. The strengthened Swedish currency has held
back revenue growth in SEK which was 21.7 percent.
The number of game transactions amounted to 2.2 billion in the third quarter,
an increase of 13.5 percent compared to the previous quarter and 53.5 percent
compared to the same period in 2010.
In July 2011, a new legislation took effect regarding online gaming in Italy.
Net Entertainment has signed agreements with several large operators for the
Italian market. Gioco Digitale was first to launch, followed by Unibet and
Betclic. Microgame was launched at the end of the quarter.
Net Entertainment’s strategic efforts are progressing well and are necessary to
strengthen delivery capacity as the company grows, market matures, new
customers are added and customers become larger. In addition, the regulation of
the online market creates extensive requirements that must be faced but at the
same time creating large business opportunities. The development of mobile
games has continued during 2011 and the first games are expected to launch
during the fourth quarter.
During the quarter, Johan Öhman left his position as CEO of the company. During
the process to recruit a new CEO, Björn Krantz has taken on the position as
Acting President and CEO. Björn is currently on leave from his former duties as
Sales Director and CEO of Net Entertainment Malta Ltd.
Comments from Björn Krantz, Acting President and CEO
Taking on the position as Acting President & CEO of Net Entertainment during a
strong quarter with several positive events has been very exciting and
encouraging. Revenues increased by 21.7 percent compared to last year which is
a result of strong casino performance with existing licensees combined with the
launch of five new customers in both new and existing markets. In addition, Net
Entertainment signed three new customer agreements during the quarter, one of
which was G.Matica, focusing on the Italian market.
Net Entertainment launched its first customer on the newly regulated Italian
market on July 18, followed by three additional customers later in the quarter.
The initial performance has been in line with our expectations and we now start
to see results from the investments and efforts we have put into establishing
our presence in Italy. I am very excited about the future developments as we
launch additional licensees and as the market prepare for commercial launch of
slots, which is predicted during first half of 2012.
Local regulation of our industry is ongoing, and we continuously monitor and
evaluate each market individually to assess the impact on the company both from
a financial, organizational and strategic perspective. As for latest regulatory
initiatives in Denmark we are currently working with necessary system, and game
compliance planning, with an objective to establish on the local market which
is scheduled for opening in the beginning of 2012.
The development of Mobile games has entered its final testing stage and the
games are expected to be launched before year-end. Mobile games are a natural
complement to our existing product portfolio, which will create a new channel
for additional revenue streams. Two of our most successful slot games, Gonzo’s
Quest and Jack Hammer, will both be part of the initial launch.
In the end of September, our slot game Mega Fortune paid an 11.7 million euro
jackpot to a lucky 20-year old Norwegian, making it the largest ever jackpot in
the history of online gaming. We launched a new platinum slot, Robin Hood,
during the quarter which holds superior graphics, animations and mathematical
design. We continue to push the limits in gaming entertainment and we have a
strong commitment to provide our licensees with the most exciting content in
order to maximize player experience.
Our strategy to establish a solid footprint in UK remains firm, and as
separately announced, we have signed an agreement in October to provide casino
games content to Sky Betting and Gaming, which will further strengthen our
presence in the UK.
We follow our strategic plan and continue to invest in operational, and
portfolio excellence, which will safeguard our competitive edge and long term
profitable growth moving forward. I look forward to Net Entertainment’s future
which holds great opportunities.
For additional information please contact;
Björn Krantz, Acting CEO Net Entertainment; Phone +46 8 57 85 45 00
About Net Entertainment
Net Entertainment is a premium supplier of digitally distributed gaming systems
used by some of the world’s most successful online gaming operators. The Net
Entertainment casino is a complete gaming solution comprising both a complete
management platform and a full suite of high quality games. Operators are
provided a customized casino that is easily integrated ensuring short time to
market and a cost efficient operation. Net Entertainment is listed on Nasdaq
OMX Stockholm (NET-B). More information about Net Entertainment is available at