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Net Entertainment 3rd Quarter Report

Operations launched for nine new customers, and five more in the pipeline
The Swedish online gambling software provider Net Entertainment has published its third quarter and year-to-date results, showing a strong and dynamic performance that features the launch of nine new online casino customers and signed agreements with five more new clients, including gaming operators Ladbrokes and William Hill, two of the largest operators in the world.
The company additionally signed a framework agreement with platform supplier GTech.
Third quarter 2013 performance included:
* Revenues for the third quarter increased by 25 percent to SEK 153.1 (122.5) million
* Operating profit up at SEK 44.5 (36.1) million
* Operating margin was 29.1 (29.5) percent
* Profit after tax up at SEK 39.4 (30.8) million
Important events in the third quarter included:
* Agreements were signed with Ladbrokes and William Hill, two of the world’s largest gaming operators
* Global framework agreement signed with GTech, a leading platform supplier
* Three agreements were signed with existing customers for delivery of Live Casino. One customer launched Live Casino in the third quarter
* Three agreements were signed with existing customers for delivery of mobile games. Six customer launched mobile games in the third quarter
The company delivered the following results in the first nine months of 2013:
* Revenues for the first nine months increased by 18.0 percent to SEK 450.6 (382.0) million
* Operating profit rose to SEK 124.2 (115.8) million
* Operating margin was 27.6 (30.3)  percent
* Profit after tax up at SEK 111.1 (102.2) million
* 17 new license agreements were signed and 14 new customers’ casinos were launched
Per Eriksson, President and CEO of the company said Tuesday:
"Revenues showed positive development compared to last year which primarily was a result of good underlying growth with our existing customer base in combination with the addition of 22 new customers that have been signed in the last twelve months.
"Net Entertainment has year after year showed proof of the company’s ability to generate good results for our partners, which has led to an increased demand for our products. This, in combination with a high commitment throughout the entire organisation, has led to several new agreements with some of the largest operators in Great Britain.
“I am excited about what the market in Great Britain can generate for Net Entertainment in the future when all operators are fully launched. Discussions are also on-going with all the large operators that have yet to sign up with Net Entertainment.
"Today, Net Entertainment is one of the world’s largest suppliers of online casino with approximately 80 customers that offer the company’s games via hundreds of online casinos to players all over the world, and the outlook for continued growth is good.
“The agreement that was signed with GTech is a framework agreement which allows Net Entertainment to offer its casino portfolio to GTech’s of the world’s largest suppliers of gaming content to WLA operators (World Lottery Association), which are often government owned gaming monopolies where Net Entertainment historically has had a very low market share. The agreement means an opportunity to increase the penetration in this market.
"Live Casino is a new exciting product that Net Entertainment launched in the beginning of 2013. During the summer a new scalable version of Live Casino blackjack was launched where the tables allow an unlimited number of simultaneous players and during the fourth quarter traditional blackjack will be launched.
“Currently the product is in an early stage with a total of 22 customers signed for the product of which nine have been launched. When the product reaches full capacity it is expected to generate good revenues for the company.
"Mobile games continue to grow strong but the product is still in an early stage. We see a continued demand from customers to develop more mobile games. We will therefore increase the investments in mobile games to further strengthen Net Entertainment’s leading position.
"In the third quarter Net Entertainment announced that the Swedish Tax Agency maintains its decision to impose additional taxes of SEK 92.1 million. We are now in the process of appealing the decision.
"Net Entertainment has a bright future. During the last quarter we have launched several exciting products, signed agreement with large new operators and I see great potential in new markets that will be regulated going forward."

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