NetEnt posts FY 2017 numbers

Online gambling software and games developer NetEnt has published its Q4 and FY numbers for 2017, with management highlighting the following KPIs:

Fourth quarter 2017

* Revenues increased by 4.7 percent to SEK 419 (400) million;
* Operating profit down 3.9 percent at SEK 150 (156) million;
* Operating margin was 35.8 (39.0) percent;
* Profit after tax up 1.5 percent  at SEK 152 (150) million;
* 8 new customer agreements were signed and 11 new customers’ casinos were launched.

Important events in the fourth quarter

Customer agreement signed with Caliente in Mexico
New digital marketing service launched with Ve Global
The games Planet of the ApesTM and Finn and the Swirly SpinTM were released
Live Casino Black Jack for mobile was launched

Full year 2017

* Revenues up by 11.7 percent to SEK 1,625 (1,455) million;
* Operating profit up 9.5 percent at SEK 587 (536) million;
*Operating margin was 36.1 (36.8) percent;
* Profit after tax up 9.5 percent at SEK 552 (504) million;
* 37 new customer agreements signed and 35 new customers’ casinos launched;
* Proposed cash distribution to shareholders of SEK 2.25 (2.25) per share .

CEO Per Eriksson characterised the full year as one delivering continued strong growth, although not meeting management expectations in the fourth quarter.

“In 2018, we are increasing our commercial focus and optimizing our organization to make sure that revenues grow more than costs,” he said.

“Our strategy to grow on regulated markets remains in place and during 2017 we terminated deliveries of games to operators in Australia, Poland and Czechia, which affected revenues negatively by three percentage points in the fourth quarter.”

Discussing the fourth quarter performance, Eriksson said that the lower-than-expected revenue growth resulted in a lower operating margin compared to the previous year as the company continued to make growth-enabling investments to strengthen product and sales organization, enhance the Live Casino offering and moved to new, larger offices in Malta.

Eriksson said that NetEnt continued to invest in mobile games for online casino and in November released Finn and the Swirly Spin, a ground-breaking game with a new type of game mechanic, developed to offer the ultimate mobile gaming experience.

“So far the game has been very well received by players. Further, we introduced a mobile version of Black Jack Live Casino. Mobile games accounted for 54 percent of our revenues in the fourth quarter,” he revealed.

NetEnt plans to release at least 20 new games in 2018, compared to 14 in 2017, including two branded games, Jumanji and Vikings, Eriksson said. A third branded game was unveiled at ICE based on the popular Netflix-series Narcos and will be released in Q1 2019.

Turning to the year ahead, Eriksson said: “For 2018, we see conditions for profitable growth, supported by a large pipeline of new games, growing revenues from regulated markets, the mobile channel and new customers to be launched.”

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