Interim report January - March 2012

Net Entertainment 

26.04.2012 07:30
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Eleven new customer agreements signed for mobile games



First quarter 2012

- Revenues for the first quarter increased by 33.9 % to SEK 127.5 (95.2) million

- Operating profit amounted to SEK 40.1 (26.3) million

- Operating margin was 31.4 (27.6) %

- Profit after tax amounted to SEK 34.6 (22.9) million

- Earnings per share amounted to SEK 0.88 (0.58) before and after dilution

- Five new license agreements were signed and two new customers' casinos were
launched 



Important events in the first quarter

Revenues increased by 33.9 percent in the first quarter compared to the first
quarter 2011. The increase is mainly derived from increased volumes which are
primarily driven by existing customer's growth and new customer agreements
signed. The amount of set-up fees for the quarter also contributed positively
to the revenue increase. The establishment on the Italian market which was
recently regulated has contributed positively to the revenue growth in the
first quarter compared to the corresponding period 2011. 

The number of game transactions amounted to 3.0 billion in the first quarter
which is an increase of approximately 15 percent compared to previous quarter
and 58 percent compared to the same period 2011. 

In January 2012 a new legislation took effect in Denmark where operators can
now offer online games on the local market via a license. The legal framework
includes sports and horse betting, casino and poker online. The casino games
include blackjack, roulette, slots, baccarat and punto banco. Net Entertainment
has launched several customers; Betsson, Unibet, Bet24, Scandicbookmarkers and
Danbook. During the first quarter Net Entertainment has signed an additional
agreement with an existing customer for the Danish market. Companies that
intend to be present on the local market must fulfill the gaming authority's
requirements no later than during the fourth quarter 2012. 

On 1 March, Per Eriksson started as the new President and CEO of Net
Entertainment. Per most recently served as CEO at Dustin Group AB. Prior to
that, Per has had a long career within Dell, where he left as Head of Dell EMC,
EMEA (Europe, Middle East and Africa). 

During the first quarter G.Matica was launched on the Italian market.

During the first quarter, Net Entertainment signed agreements with eleven
operators for delivery of the Company's mobile product NetEnt Touch(TM). In total
the Company has signed 14 agreements for mobile games, of which three are live.
During the first quarter development of the mobile platform was initiated to be
compliant with Android units. In addition, development of several new mobile
games have been initiated which will be launched during 2012. 



Comments from Per Eriksson, President and CEO

The development for Net Entertainment has been positive during the first
quarter. Revenues increased by 33.9 percent and operating profit increased 52.4
percent compared to the same period the previous year. The revenue growth is
primarily a result of increased volumes with our existing customers but also
due to new agreements signed and the launch of new customers. We are also
starting to see results from the investments we have made in Italy which is now
the Company's third largest market, where Norway and Sweden are the two largest
markets. Despite that slots are not yet allowed, the development has been
positive in Italy where volumes have increased. We are ready to launch slot
games as soon as the gaming authority allows it. 

The number of gaming transactions continued to increase and amounted to three
billion in the first quarter which represents an increase of 58 percent
compared to last year. The number of gaming transactions is an indication of
the success of our games and the demand on the market. 

Several strategic initiatives have proceeded during the first quarter which
will continue during 2012. During the first quarter we launched Betsson,
Unibet, Bet24, Scandicbookmakers and Danbook on the recently regulated Danish
market. We also signed an additional agreement with an existing customer for
delivery of Net Entertainment's casino in Denmark. 

The development of a Live Casino product is progressing according to plan and
we plan to launch the product around the end of 2012. We have launched mobile
games with three customers and signed an additional eleven new agreements for
mobile during the first quarter. We plan to launch several mobile games during
2012. I am looking forward to following this development and I am convinced
that it will add significant value for Net Entertainment over time. 

Historically, Net Entertainment has had a small presence on the UK market,
which is Europe's largest market for online games. Positive discussions are
ongoing with several operators. The sales and integration process is complex
and certain adjustments are needed on Net Entertainment's platform in order to
be able to integrate with the operator's IT architecture. This development work
is expected to be completed during the second half of 2012. 

With new games under development in combination with ongoing strategic
initiatives, Net Entertainment has a solid position going into an exciting
future. 



For additional information please contact;

Per Eriksson, 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.
News Source: NASDAQ OMX



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Language:     English
Company:      Net Entertainment
              
               
              Sweden
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ISIN:         SE0001989252
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