NetEnt interim report for January - September 2015

(PRESS RELEASE) -- The NetEnt Interim Report from January through September 2015 contains the following highlights:

THIRD QUARTER 2015
· Revenues increased by 28.8% to SEK 279.8 (217.2) million
· Operating profit amounted to SEK 105.3 (73.4) million, an increase of 43.5%
· Operating margin was 37.6 (33.8)%
· Profit after tax amounted to SEK 97.6 (67.5) million, an increase of 44.5%
· Earnings per share amounted to SEK 2.44 (1.69) before and after dilution
· Nine license agreements with new customers were signed, six new customers’ casinos were launched

FIRST NINE MONTHS 2015
· Revenues for the first nine months increased by 32.5% to SEK 809.3 (610.6) million
· Operating profit amounted to SEK 279.8 (181.3) million, an increase of 54.3%
· Operating margin was 34.6 (29.7)%
· Profit after tax amounted to SEK 258.3 (166.1) million, an increase of 55.5%
· Earnings per share amounted to SEK 6.45 (4.16) before and after dilution
· 29 license agreements were signed with new customers and 21 new customers’ casinos were launched

IMPORTANT EVENTS IN THE THIRD QUARTER
· Signed customer agreement with Gala Coral in the UK
· Signed customer agreement with Golden Nugget - Atlantic City in New Jersey, USA
· Granted transactional waiver to launch games with Borgata Hotel Casino and Spa and bwin.party by the regulator in New Jersey
· Launched games with Borgata in New Jersey

COMMENTS FROM PER ERIKSSON, PRESIDENT AND CEO
The third quarter featured new record levels in both revenues and profits. We reached a historic milestone as our games became available on the regulated market in New Jersey, USA, for the first time.

Our revenues amounted to SEK 279.8 million in the quarter, which is a 28.8% increase compared to the third quarter of last year. Operating profit was SEK 105.3 million, representing an increase of 43.5% over the same quarter last year. The operating margin also improved significantly to 37.6%. Profit after tax rose by 44.5% to SEK 97.6 million and cash flow after investments amounted to SEK 84.8 million in the quarter. At the end of the quarter our net cash position was SEK 316.8 million. The number of game transactions in our systems grew by 26% to 6.6 billion in the quarter. The share of revenues from mobile continues to grow and accounted for around 28% of game win in the third quarter, compared to 16% a year ago. We continue to see strong demand for our products and in the third quarter we signed nine new customer agreements and launched six new customers’ online casinos. Among others, we signed Gala Coral, a major gaming operator with a strong presence on the important markets in the UK and Italy.

A key part of our growth strategy is to enter new regulated markets and during the quarter our market entry in the US state of New Jersey continued at full speed. We signed our third customer agreement - with Golden Nugget - a well-known brand in the US casino industry with large casino resorts in Atlantic City and Las Vegas. Further, we were granted a transactional waiver from the regulator to launch games with bwin.party and Borgata while our full license application is still under review. Subsequently, we could launch our games with Borgata at the end of September and we are now also awaiting transactional waivers to go live with Caesars Interactive and Golden Nugget.

We continuously attract core competencies to all our offices and in the third quarter we also initiated the process of opening a new office for game development in Krakow, Poland. We are doing this to add more capacity in order to meet the demand for our products.

At the end of September we were awarded the prize for Digital Industry Supplier of the Year at the Global Gaming Awards in Las Vegas, a further sign that our offering is appreciated on the market. We continue to develop our Live Casino offering and have recently started to work on a mobile solution. With regards to game releases, we keep producing at least one new title a month for all our customers, while we also develop customized games at a growing pace. We are currently working on a game based on the famous rock band Guns N Roses. This is a large game production that is expected to be ready for release in January.

We continue to sign up new operators while the number of customers to be launched stood at 26 at the end of the quarter, which should support our growth going forward.