NetEnt | Better Gaming

NetEnt: Interim report January-March 2015


— Revenues for the first quarter increased by 37.1% to SEK 258.3 (188.4)
— Operating profit amounted to SEK 81.8 (51.2) million, an increase of
— Operating margin was 31.7% (27.2%).
— Profit after tax amounted to SEK 74.2 (46.1) million, an increase of
— Earnings per share amounted to SEK 1.86 (1.17) before dilution and SEK
1.86 (1.16) after dilution.


— 11 new license agreements were signed, including Danske Spil in Denmark,
Codere in Spain and Gamesys in the UK
— Seven new customers’ casinos were launched
— Casino games were launched with Rational Group´s Full Tilt
— Local licenses were obtained in the UK


“We have made a very strong start to 2015, reaching new record levels for both
revenues and profits. Our innovative gaming solutions as well as our strong
expansion on new and existing markets are among the reasons for the high growth
and good profits.

In the first quarter we increased revenues by 37.1% in SEK and 29.8% in EUR
compared to the corresponding quarter last year. The operating margin was
31.7%, which is a substantial improvement from last year. Profit after tax
increased by 60.9% to SEK 74.2 million. We achieved this strong increase
despite our continuing investments in new staff and an enhanced mobile
offering. During the quarter we handled a full 6.5 billion transactions in our
systems, representing an increase of 30.8% from last year. Mobile gaming
continues to grow fast and accounted for 20.6% of total game win in the first
quarter – almost a doubling from the level in Q1 2014.

Our growth strategy is to expand on regulated markets and in March we entered a
license agreement with Denmark´s largest gaming operator, Danske Spil, which is
owned by the Danish government and is part of World Lottery Association (WLA).
The agreement enables faster expansion in the country while it is also
strategically important for us to grow globally in the large WLA-segment. In
Spain, the online market for slot games has recently been regulated and in
March we signed an agreement with Codere, one of the largest gaming operators
in Spain with large land-based operations in Spain and Latin America, and that
has recently started to offer casino games online. As we have previously
stated, we are hoping to obtain a Spanish license this year, after which we
could launch our games and see the first revenues. In the UK, new regulation
was introduced in the autumn of 2014 and at the end of March we were granted
local licenses from the UK Gambling Commission. During the quarter we continued
to increase our market share with existing customers in the UK and our
expansion in this market was a key contributing factor to the strong revenue
growth for the Company in Q1. We signed a new agreement with Gamesys, a leading
British online gaming operator with well-known brands such as Jackpotjoy and
Virgin Games. In Italy the process continues to cease deliveries to operators
that have not started the license application process in the country and, as
previously communicated, our revenues could be negatively impacted in the short
term. The licensing process in New Jersey continues according to plan with the
aim to offer our products and services to this market in the second half of

We are constantly developing our offering to be at the forefront in terms of
technology, innovation and quality. In surveys with customers we can see that
they also consider NetEnt to be at the cutting-edge and that we have the best
reputation in the industry. As of the second quarter of 2015 all newly released
games – for both desktop and mobile – will have been developed in in HTML5,
which is expected to bring some synergies going forward. In the first quarter
we increased our portfolio of world-class games with the release of Spiñata
Grande, Steam Tower and Tornado Farm Escape. We also announced a new and
exciting project with Universal, in which we will develop a video slot game
based on the music of the iconic rock band Guns N’ Roses. In February we won
the awards for Slots Provider/Supplier Product of the Year for both online and
land-based at the International Gaming Awards in London.

I look forward to the rest of 2015. We have strong momentum – our customer
offering is world-leading and we are well prepared to seize new business
opportunities on the growing digital casino market.”

For additional information please contact:

Per Eriksson, CEO NetEnt; Phone +46 8 57 85 45 00