NEW MARKETS CREATE LARGE OPPORTUNITIES GOING FORWARD
THIRD QUARTER 2010
- Revenues for the third quarter increased by 20.8 % to SEK 91.6 (75.8) million
- Operating profit increased by 13.8 % to SEK 34.1 (30.0) million
- Operating margin was 37.2 (39.5) %
- Profit after tax amounted to SEK 30.0 (20.8) million
- Earnings per share amounted to SEK 0.76 (0.53) before and after dilution
- Two new license agreements were signed
FIRST NINE MONTHS 2010
- Revenues for the first nine months increased by 25.2 % to SEK 268.7 (214.6)
million
- Operating profit increased by 21.0 % to SEK 102.7 (84.8) million
- Operating margin was 38.2 (39.5) %
- Profit after tax amounted to SEK 91.4 (75.3) million
- Earnings per share amounted to SEK 2.31 (1.90) before and after dilution
- Eight new license agreements were signed, including Gioco Digitale/bwin.it,
Interwetten, Intralot and Stan James, and eight new customers' casinos were
launched
IMPORTANT EVENTS IN THE THIRD QUARTER
Revenue growth for the third quarter was 35.1 percent in local currency
compared to the third quarter 2009 and 6.0 percent compared to the previous
quarter. The strengthened Swedish currency has held back revenue growth in SEK.
The regulation of casino games online in Italy continued during the quarter.
The market is still expected to open at year-end. The integration has continued
during the quarter.
Agreements were signed with an operator in South America, which is a region
expected to become an important market for online gaming in the future. The
integration of Stan James has progressed well and launch is still planned for
the fourth quarter.
Net Entertainment has received a license to offer its casino solution to gaming
operators who are licensed by the Alderney gaming authority or other reputable
gaming authorities. In addition, this gives an opportunity to further
strengthen the customer offering by providing alternative hosting if serious
disturbances occur, so called disaster recovery.
COMMENTS FROM JOHAN ÖHMAN, PRESIDENT AND CEO
We saw good development during the third quarter with a 21 percent revenue
growth (35 percent in local currency) which should be compared with the 14
percent market growth predicted by H2 Gaming Capital for the full year of 2010.
Our growth was supported by underlying market growth combined with royalty
contributions from new licensees and a slightly increased average bet. The
impact on Net Entertainment from the regulatory development in France, which
had a negative effect on some of our licensees, was cushioned as a result of
our pricing model.
A contributing factor behind our successful development is the constant flow of
new high quality games whereby our operators can attract and retain high value
players. The performance of our most recent games in particular speaks for
itself and we have recently completed the development of Boom Brothers which is
the next Platinum game to be released in December (following Gonzo's Quest).
The announced agreement with Universal will allow us to develop games based on
well recognized brands where the first release will be made during the first
half of 2011. Net Entertainment is today one of the absolute front-runners in
game development which is the result of a dedicated strong organization and
focused efforts.
The regulatory development in Italy is progressing well and the first casino
licenses are expected to be awarded around year end. Operators holding an
existing license in Italy will be first out which will benefit Net
Entertainment as several of the licensed operators are existing customers to
us. Several other countries are looking at alternatives in the process of
regulating online gaming and we are closely following this development which no
doubt will change the marketplace going forward introducing both challenges and
new business opportunities.
Significant efforts have gone into setting up a hosting facility in Alderney
which will be commissioned during the fourth quarter. The Alderney Gaming
Commission issued license which was received during the fourth quarter will
enable us to better address certain markets such as the UK but equally to
provide disaster recovery services to our existing licensees.
For additional information please contact;
Johan Öhman, CEO Net Entertainment; Phone +46 8 57 85 45 00
johan.ohman@netent.com
or
Bertil Jungmar, CFO Net Entertainment; Tel +46 8 57 85 45 00
bertil.jungmar@netent.com
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.
