NetEnt CEO Demands Improvement Despite 2018 Revenue Growth

World-famous supplier of digitally distributed gaming systems, Swedish company NetEnt, reported an 8.9% revenue growth during 2018…

…although the company’s profit declined a bit in Q4 due to increased personnel costs.

The supplier’s revenue in 2018 grew to SEK1.8 billion ($192 million), and they also signed 31 supply deals while launching their products with 38 different partners.

The major part of the revenue came from the mobile channel that ed for 61.4% of game wins last year.

NetEnt in 2018

Last year, the company saw a 12% increase in operating expenses because of the rise of personnel expenses. It also saw a beneficial period because the Swedish Kronor suddenly weakened…

…so the company’s financial income rose to SEK62.1 million and offset finance-related expenses doubled up to SEK41 million.

NetEnt’s tax profit also saw a major growth to SEK622.1 million while their yearly profit grew 5.5% to SEK577.2 million.

In Q4 of 2018, the company’s year-on-year revenue grew 9.5% to SEK465.4 million. Also, this supplier released six new titles during the last three months of 2018, and several of them have already become a huge hit.

It signed eight new license deals during that same period and inked contracts with nine new customers. But, it was a slight decrease in the number of new customers in 2018. Last year there were 22, while in 2017 there were 30 of them.

Markets Performing Well

Around 14% of game win came from Sweden, while 16% came from other Nordic markets. The UK had a 13% part in the company’s game win…

…while the other 49% came from the rest of the European market. The other parts of the world, including New Jersey, Mexico, and British Columbia contributed 9%.

Big Plans for 2019

During the first few weeks of 2019, NetEnt’s CEO, Therese Hillman, noted that the company’s game win in Euros saw a 5% decrease…

…and she supposes that it is due to lower volumes in the newly regulated Swedish market.

“While it is still too early to predict the mid- to long-term effects of the Swedish regulation, we expect the key customer gs in Q4 2018 and our game releases to contribute to new revenues in 2019. When it comes to organic earnings growth, we have clearly higher ambitions than the pace we saw in 2018,” Hillman said.

Growth in the USA

Also, she wanted to highlight that the company has been really active in the USA and that they are now focused on the new decision coming from the Department of Justice regarding the revision of the Wire Act.

“This has created some uncertainty, but at this stage, we do not see any reason to reconsider our US growth plans, which include growing on the regulated markets in New Jersey and Pennsylvania. With regards to timing, however, we see that the launch in Pennsylvania will be delayed due to changes in the regulatory requirements,” Hillman added.

NetEnt plans on releasing 35 new games in 2019 (in 2018 they released 21 games), and to do so, they had to cut down money by saying goodbye to 55 employees in their Stockholm headquarters.

Source:

“NetEnt CEO Demands Improvement Despite 2018 Revenue Growth”, igamingbusiness.com, February 12, 2019.