Earnings report 2013 – Quarterly report October – December 2013
Quote from CEO, Per Eriksson
– Year 2013 has been a fantastic year and Net Entertainment has started to see
the effect from several investments that were carried out during 2012 and
revenues reached record levels. The fourth quarter is the strongest quarter
during a fiscal year and revenues increased 25 percent compared to last year.
The operating margin amounted to 31 percent.
Fourth quarter 2013
— Revenues for the fourth quarter increased by 24.5 % to SEK 180.1 (144.7)
million
— Operating profit amounted to SEK 55.6 (37.2) million
— Operating margin was 30.9 (25.7) %
— Profit after tax amounted to SEK 56.1 (34.0) million
— Earnings per share amounted to SEK 1.42 (0.86) before dilution and SEK 1.41
(0.86) after dilution
— Ten license agreements with new customers were signed, six new customers’
casinos were launched
Full year 2013
— Revenues for the full year increased by 19.8 % to SEK 630.7 (526.7) million
— Operating profit amounted to SEK 179.7 (153.1) million
— Operating margin was 28.5 (29.1) %
— Profit after tax amounted to SEK 167.1 (136.1) million
— Earnings per share amounted to SEK 4.23 (3.44) before dilution and SEK 4.21
(3.44) after dilution
— 27 new license agreements were signed and 20 new customers’ casinos were
launched
— Proposed transfer to shareholders is SEK 3.00 (2.25) per share
Important events in the fourth quarter
— An agreement was signed with bet365 one of the world’s largest gaming
operators
— William Hill, Ladbrokes and Lottomatica were launched
— Eight agreements were signed for delivery of Live Casino. Five customers
launched Live Casino in the quarter
— Two agreements were signed with customers for delivery of mobile games. 13
customer launched mobile games in quarter
Comments from Per Eriksson, President and CEO
Year 2013 has been a fantastic year and Net Entertainment has started to see
the effect from several investments that were carried out during 2012 and
revenues reached record levels. The fourth quarter is the strongest quarter
during a fiscal year and revenues increased 25 percent compared to last year.
The operating margin amounted to 31 percent. Net Entertainment also broke a
record in the number of game transactions, which increased by 31 percent in the
fourth quarter. For the full year the number of game transactions increased 32
percent to 16.2 billion.
From a sales perspective Net Entertainment reached yet another record and we
signed 27 new customer agreements during 2013 of which five with larger
operators, so called Tier-1 contracts. Net Entertainment’s market share was 31
percent1(27 percent 2012) despite that the Company still has a relatively small
presence in terms of revenues in Britain, which is Europe’s largest market. In
2012 Net Entertainment started a large effort to establish the Company in this
market and today we have signed agreements with several of the largest
operators facing the British market These operators have not yet reached their
full capacity for Net Entertainment and it will take some additional time
before they reach their full potential. I have high expectations that these
customers will contribute positively to Net Entertainment’s growth in coming
years.
One of the Company’s most successful efforts has been casino games through
mobile units. Net Entertainment has won several prices and received great
appreciation from the Company’s customers and is known as one of the world’s
most prominent suppliers within this segment. In the fourth quarter, 13
customers launched Net Entertainment’s mobile platform and in total, mobile
gaming represented 9 percent of the gross gaming yield in Net Entertainment’s
casino. Mobile games will continue to grow for Net Entertainment and will
continue to gain a significant role within the casino industry in the future.
In 2014 we will continue to invest in more games and improve the product
further to ensure we maintain our market leading position within this segment.
Live Casino is the latest addition in Net Entertainment’s product portfolio
which was launched in the beginning of 2013. The launch was gradual, starting
with roulette followed by a new type of Live Casino blackjack were the tables
can have an unlimited number of simultaneous players and finally traditional
blackjack was launched in the fourth quarter. The market for Live Casino is
growing rapidly and I am convinced that we will see good results from the
product as more customers launch and marketing among the operators increase.
Net Entertainment has signed agreements with a total of 30 operators of which
14 have launched the product.
Regulation of online gaming is expected to continue during 2014 and if the
prerequisites are right for the Company there is a high probability that we
will enter more regulated markets in coming years. We follow the developments
in the US and discussions are taking place with both operators and suppliers
and we are waiting for the right time, the right states and the right
conditions before establishing the Company on the US market.
Net Entertainment has an eventful year ahead with many exciting projects and
challenges. I am convinced we will strengthen our position further on the
market and maintain good growth with good profitability.
1The market share is based on the gross gaming yield from Net Entertainment’s
customers in relation to the european online casino market in 2013 which has
been estimated by H2 Gambling Capital in January 2014. The underlying data has
been adjusted as H2 Gambling Capital in 2013 made a re-classification which has
now been excluded to be comparable with year 2012.
For additional information please contact;
Per Eriksson, President and CEO Net Entertainment: Phone +46 8 57 85 45 00
per.eriksson@netent.com
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
www.netent.com.