NetEnt posts Q2 and H1 2018 numbers

Online gambling games and software provider NetEnt has posted Q2 and H1 numbers for 2018, noting that competition has increased as the Nordic and UK markets mature, but that the company has taken action in several areas to maintain its position.

Q2-2018 highlights included:

* Revenue up 5.9 percent at SEK 437 million;

* EBITDA of SEK 202 (187) million, on a margin of 46.3 (45.2) percent;

* Operating profit up 1.2 percent at SEK 149 (147) million, on a margin of 34.0 (35.6) percent;

* Profit after tax of SEK 139 (136) million;

*  Cash flow after investments increased by 35.8 percent to SEK 178 (131) million in the quarter;

^ Eight new customer agreements signed bs seven new online casinos launched for clients;

* Mobile games accounted for 58 (56) percent of total gamewin in the quarter;

* Five new slot games released, including Archangels Salvation, Lost Relics and Jumanji;

* Beta-launched slot games for Social Casino.

Highlights for the first half of the year included:

* Revenue rose to SEK 867 (806) million;

*  EBITDA of SEK 384 (350) million, a margin of 44.3 (43.5) percent;

* Operating profit at SEK 283 (274) million, a margin of 32.6 (34.0) percent;

* Profit after tax of SEK 285 (251) million;

* 14 (21) new customer agreements signed, and 15 (14) new customers’ casinos launched.

Therese Hillman, Group CEO reported that the company’s core markets in the Nordics and the UK are maturing, and competition has increased. In responding to this NetEnt has moved to strengthen its customer offering, cut lead times, and free up resources for new commercial projects.

At the same time, management continued to review cost structures to improve scalability across the business as growth slows, with the objective of generating higher growth in revenues than costs.

Referring to the upcoming liberalisation of the Swedish gambling market, Hillman said that preparations were well advanced with the goal of ensuring that NetEnt games are certified and ready to go in the market on January 1 2019. She said the company was working closely with customers on all fronts to ensure a successful market entry.

Hillman said that among other projects NetEnt will present a new game concept with the launch of BerryBurst in August, which is based on player feedback and insights.

“A new initiative is the beta-launch of our games in the form of Social Casino games on Facebook, which in the longer-term perspective could add new revenues and strengthen our game brands with players on many different markets. Through this initiative, we capitalize on our existing digital assets,” she said.

“With regards to Live Casino, the new product called Live Beyond Live was launched on desktop for Mr Green at the end of May, and since that we have noticed a steady increase in number of players, bets and gamewin.

“Just in time for the FIFA World Cup, we introduced a new type of functionality for Live Casino, called Sports Betting Widget, which allows players to place bets on sports without leaving the roulette table. As a first step, the feature has been rolled out to a handful of customers. We see good demand for our bespoke, virtual multi-table solutions – Live Beyond Live being the first such product – and expect to launch new customer-exclusive tables for several customers this year,” Hillman said.

Hillman said that recent legal developments in the United States opening up the sports betting market were a positive sign, and that NetEnt is well positioned in the New Jersey market to benefit from this.

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