NetEnt: Year-End Report 2015 and Quarterly Report October – December 2015

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QUOTE FROM PER ERIKSSON, PRESIDENT AND CEO

- “2015 was yet another fantastic year for NetEnt. Continued growing demand for digital casino entertainment and for our products helped us reach new record levels in terms of revenues, profits and cash flow. The fourth quarter featured many new signed and launched customers, and strong growth. Revenues increased by 34.0 percent to 323.1 MSEK and operating profit rose by 51.6 percent to 121.8 MSEK, compared to last year. We see good conditions for continued strong growth in 2016 supported by growing market shares in the UK, a large pipeline of signed customers yet to be launched, mobile growth and the expansion in North America.”

FOURTH QUARTER 2015

· Revenues increased by 34.0% to SEK 323.1 (241.1) million

· Operating profit amounted to SEK 121.8 (80.3) million, an increase of 51.6%

· Operating margin was 37.7 (33.3)%

· Profit after tax amounted to SEK 115.7 (77.1) million, an increase of 50.0%

· Earnings per share amounted to SEK 2.89 (1.93) after dilution 

· 14 license agreements with new customers were signed, 16 new customers’ casinos were launched

FULL YEAR 2015

· Revenues for the full year increased by 33.0% to SEK 1,132.4 (851.7) million

· Operating profit amounted to SEK 401.6 (261.7) million, an increase of 53.5%

· Operating margin was 35.5% (30.7%)

· Profit after tax amounted to SEK 374.0 (243.2) million, an increase of 53.8% 

· Earnings per share amounted to SEK 9.34 (6.09) after dilution 

· 43 new license agreements were signed and 37 new customers’ casinos were launched

· Proposed transfer to shareholders is SEK 8.00 (5.00) per share

IMPORTANT EVENTS IN THE FOURTH QUARTER

· Several strategically important clients were launched in New Jersey, USA and games were launched with Gala Coral in the UK and Codere in Spain

· Customer agreement signed with Gamesys US for Tropicana in New Jersey

· Åsa Bredin, new Chief Development Officer, joined NetEnt

· NetEnt won Game of the Year prize at EGR Operator Awards in London

COMMENTS FROM PER ERIKSSON, PRESIDENT AND CEO

"2015 was yet another fantastic year for NetEnt. Continued growing demand for digital casino entertainment and for our products helped us reach new record levels in terms of revenues, results and cash flow. The fourth quarter featured many new signed and launched customers, and strong growth. Revenues increased by 34.0 percent to 323.1 MSEK and operating profit rose by 51.6 percent to 121.8 MSEK, compared to last year. The operating margin was 37.7 percent in the fourth quarter, the highest level since the beginning of 2010. The number of game transactions in our systems increased by 34.4 percent to 8.2 billion, which means that in 2015, we handled a total of 27.7 billion transactions.

We continue to deliver on our long-term strategy for profitable growth with new products, new customers and new markets. In the fourth quarter we signed 14 new customers and launched 16 new customers, while we continued to see strong underlying growth among our existing customers. The expansion in New Jersey continues according to plan and during the quarter we launched Golden Nugget, Caesars Interactive and Resorts Casino. We also signed Gamesys US for the brands of Tropicana and VirginCasino in New Jersey, meaning that we have customer agreements with all the major online operators in the state. UK and mobile games continue to be particularly important growth drivers. Gamewin from the UK more than doubled compared to the same quarter last year and the UK is now the second largest market for us in terms of revenues. Gamewin from mobile games rose by 144 percent compared to the fourth quarter of last year and accounted for 30 percent of our total gamewin. During the year we shifted all our game development to HTML5, which brings synergies and will support innovation and quality in our game development going forward. We are currently developing a mobile solution for Live Casino, a product segment that looks very interesting going forward.

Customer satisfaction is the foundation for our long-term growth and our approach is to have a business partner mindset for shared success. In our annual customer survey, 99 percent of all our customers expressed that NetEnt has a top reputation in the industry. Innovation is a key word in everything we do and in November we won the prestigious prize “Game of the Year” at the EGR Operator Awards with Spiñata Grande, a creative and thrilling game inspired by the colorful Mexican concept called piñata. In total, we won seven industry awards in 2015, in various categories for innovation and quality. In November, a truly synced multichannel release took place with Koi Princess, a game jointly developed with William Hill that was also released on gaming machines in betting shops across the UK.

Dedicated and talented employees are a key success factor for NetEnt and we continued to recruit new competence in the fourth quarter. Our new Chief Development Officer Åsa Bredin joined the organization in October, coming from previous senior positions at King and Betsson. NetEnt keeps growing internationally and we are opening a new game development studio in Polen. In November we also signed a new rental agreement for a move to new attractive offices in central Stockholm. The move will take place at the end of 2016 and will strengthen our creative and fast-growing organization.

There is a clear trend – people spend more and more time and money online, consuming digital entertainment including online casino games. The global online gaming market is supported by ongoing migration from land-based gaming. We will continue to focus on premium digital casino solutions, solutions that enable success for our customers. We see good conditions for continued strong growth in 2016 supported by growing market shares in the UK, a large pipeline of signed customers yet to be launched, mobile growth and the expansion in North America."

PRESENTATION 

On Thursday, February 11, 2016, at 9.00 a.m. the earnings report will be presented by CEO Per Eriksson live via webcast. Link to the presentation: http://financialhearings.nu/?160211/netent

The information in this earnings 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 February 11, 2016 at 7.30 a.m. CET.

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 700 people in Stockholm, Malta, Kiev, Gothenburg, Gibraltar and New Jersey. For more information, please visit www.netent.com

This information was brought to you by Cision http://news.cision.com

Contacts

NetEnt
Press Office
+46 8 57 85 45 00

Contacts

NetEnt
Press Office
+46 8 57 85 45 00