Industry News
NetEnt: Year-end report 2019 and quarterly report October – December 2019
Quote from Therese Hillman, Group CEO
“Since December, we have seen all-time highs in the number of players for our Live Casino, which supports our belief in growing revenues from this segment. Since the acquisition, Red Tiger has exceeded our expectations and now forms a vital part of our ongoing improvement efforts within the NetEnt Group. We see good conditions for NetEnt to deliver growth in 2020, supported by our combined game portfolio and Live Casino.”
Fourth quarter 2019
- Revenues for the fourth quarter amounted to 512 (465) SEKm
- EBITDA of 261 (204) SEKm, corresponding to a margin of 51.0 (43.9)%
- EBIT of 161 (146) SEKm, corresponding to a margin of 31.4 (31.4)%
- Earnings after tax of 113 (137) SEKm. Earnings per share of SEK 0.47 (0.57) before and after dilution
- Red Tiger contributed 96 SEKm to revenues and 70 SEKm to EBITDA
Full year 2019
- Revenues for the full year amounted to 1,793 (1,782) SEKm
- EBITDA of 855 (816) SEKm, corresponding to a margin of 47.7 (45.8)%
- EBIT of 529 (601) SEKm, a margin of 29.5 (33.7)%
- Earnings after tax of 429 (577) SEKm. Earnings per share of SEK 1.79 (2.40) before and after dilution
- The results include SEK 59 million of acquisition-related transaction costs and amortization, and SEK 29 million of acquisition-related financing costs
- Red Tiger was consolidated in September and contributed 126 SEKm to revenues and 93 SEKm to EBITDA
- Proposed ordinary cash return to shareholders of SEK 1.00 (2.25) per share
Important events in the fourth quarter
- NetEnt released 13 (6) slot games, of which Ozzy Osbourne was the most successful
- Red Tiger released 9 (6) slot games, of which Dynamite Riches was the most successful
- The platform service NetEnt Connect was introduced in December, with Red Tiger as first supplier
- Within Live Casino, a new Auto-Roulette studio was launched
Growth through acquisition
Revenues for the last quarter of the year increased by 10.0 percent to the highest level ever, SEK 512 million (465 SEKm), of which SEK 96 million came from Red Tiger, which was acquired in September. Pro forma(1) in euro terms, our total revenues including Red Tiger decreased by 4.8 percent compared to the corresponding period of 2018. Growth was held back by continued weakness in mainly Sweden and Norway, while our revenues in the US continued to grow significantly. During the period January 1 to February 10, 2020, total gamewin proforma(1) in euro terms for the NetEnt Group including Red Tiger increased by 4.9 percent compared to the same period of the previous year.
Operating income and cash flow in the fourth quarter
Earnings before interest, tax, depreciation and amortization (EBITDA) amounted to SEK 261 (204) million in the quarter, of which SEK 70 million was contributed by Red Tiger. The EBITDA margin was 51.0 (43.9) percent. Red Tiger was acquired with the objective to create shareholder value through increased growth and profitability for the new group. The transaction was enabled by NetEnt’s strong balance sheet, which went from a net cash to net debt position, and our long-term goal is to deliver enhanced shareholder returns with a balanced capital structure. Hence, the proposed cash return to shareholders for 2019 is SEK 1.00 (2.25) per share, which supports the company’s cash flow generation and allows for debt to be reduced. This payout level is in line with the company’s dividend policy.
High level of activity and deeper integration with Red Tiger
We released more games than ever in the fourth quarter – 13 (6) from NetEnt and 9 (6) from Red Tiger – and continued to sign deals with and launch customers at a high pace. In addition, the quarter was marked by deepening integration with Red Tiger to realize both revenue- and cost synergies. Red Tiger adds complementary competence to the NetEnt group and we are running a number of common projects at full speed to deliver a significantly enhanced customer offering and player experience. Our first combined game with jackpot mechanics, Piggy Riches, was released in January and has so far been the best release ever for Red Tiger. During 2020, we will be releasing several new jointly developed games. In December, we launched our content aggregation service, NetEnt Connect, with Red Tiger as the first supplier. In 2019, we reduced the number of employees at NetEnt (excluding Red Tiger) while at the same time we stepped up our game production and efforts to develop our Live Casino offering. We continue to focus on cost control and efficiency throughout the NetEnt Group and the integration of Red Tiger forms a vital part of this process.
All-time high in player numbers for Live Casino
We continue according to plan to improve our product and organization within Live Casino, and in December we launched a new Auto-Roulette studio. Feedback on the product enhancements made during 2019 has generally been positive and since December, we have seen all-time highs in player numbers for our Live Casino. We are now expanding the studio in Malta and will soon be offering physical tables to our customers for the first time, as an alternative to our tables with blue screen technology, which should contribute to increased revenues from Live Casino in 2020.
Future outlook
We recently unveiled a number of product news at the ICE exhibition in London, such as a new jackpot concept called Starburst Power Pots, as well as branded games in collaboration with Gordon Ramsay, Street Fighter and Fashion TV – again showing our commitment to creating a world-class player experience.
I would like to take this opportunity to extend my thanks to our employees, customers and shareholders for their support during 2019. Backed by our ongoing focus on efficiency and the acquisition of Red Tiger, we are entering the new year in a stronger position. Our global distribution and two strong brands give us the right basis to increase our market shares in online casino. We see good conditions for NetEnt to deliver growth in 2020, supported by our combined game portfolio and Live Casino.
(1) Comparable figures from the previous year include Red Tiger.
About NetEnt:
NetEnt AB (publ) is a global gaming company, providing premium gaming solutions to the world’s most successful online casino operators. In addition to the company’s NetEnt brand, our portfolio also includes Red Tiger Gaming. Since our start in 1996, we have been a true pioneer in driving the market with innovative games powered by a cutting-edge platform. NetEnt is committed to creating the future of gaming, is listed on Nasdaq Stockholm (NET–B) and employs around 1 100 people in Malta, Stockholm, Sofia, Kiev, Krakow, Gothenburg, Gibraltar, Isle of Man, London and New Jersey. For more information, please visit www.netent.com.
Mohegan Tribal Gaming Authority, known globally for its renowned integrated entertainment resorts, has appointed Joseph J. Hasson as interim Chief Operating Officer. Jody Madigan, the current COO, has resigned effective August 1, 2024, and will be taking a leave of absence pending his departure.
Joseph J. Hasson will serve as interim COO and retain his current role as General Manager of Mohegan Casino at Virgin Hotels Las Vegas, subject to necessary regulatory filings or approvals. Mr. Hasson was an obvious choice for the Management Board, given his prior experience as the former Chief Operating Officer of Station Casinos LLC and Red Rock Resorts Inc. Joe brings considerable expertise to the executive team with a consistent track record of operating excellence and success over more than 40 years’ experience in the gaming and hospitality industry. Mr. Hasson will report to Ray Pineault, President and Chief Executive Officer of Mohegan.
“Joseph J. Hasson’s deep understanding of the gaming and hospitality industry makes him exceptionally qualified to maintain our high service and operational excellence standards. We are confident that Joe’s extensive experience and proven leadership will ensure continuity in our operations and guest experience,” Ray Pineault, President and CEO of Mohegan, said.
Jennifer Shatley, a recognized expert in the field and a highly sought speaker and advisor, has joined the Responsible Online Gaming Association (ROGA) as Executive Director.
Shatley has had 25+ years worth of experience, working closely with the treatment community, academics, researchers, government bodies, state councils, and gaming industry representatives to promote responsible gaming.
“Many of America’s largest legal mobile gaming operators will be establishing a framework that helps to aid in responsible gaming education and awareness. By coming together with a clear set of objectives, ROGA and our members will work to enhance consumer protections and help provide easier and more efficient access to responsible gaming tools for consumers to enjoy the entertainment of online gaming,” Shatley said.
IDnow, a leading identity verification provider in Europe, has unveiled VideoIdent Flex, a new version of its expert-led video verification service that blends advanced AI technology with human interaction. The human-based video call solution, supported by AI, has been designed and built to boost customer conversion rates, reduce rising fraud attempts, increase inclusivity, and tackle an array of complex online verification scenarios, while offering a high-end service experience to end customers.
The company’s original expert-led product, VideoIdent, has been a cornerstone in identity verification for over a decade, serving the strictest requirements in highly regulated industries across Europe. VideoIdent Flex, re-engineered specifically for the UK market, represents a significant evolution, addressing the growing challenges of identity fraud, compliance related to Know-Your-Customer (KYC) and Anti-Money Laundering (AML) processes and ensuring fair access and inclusivity in today’s digital world outside of fully automated processes.
As remote identity verification becomes more crucial yet more challenging, VideoIdent Flex combines high-quality live video identity verification with hundreds of trained verification experts, thus ensuring that genuine customers gain equal access to digital services while effectively deterring fraudsters and money mules. Unlike fully automated solutions based on document liveness and biometric liveness features, this human-machine collaboration not only boosts onboarding rates and prevents fraud but also strengthens trust and confidence in both end users and organisations. VideoIdent Flex can also serve as a fallback service in case a fully automated solution fails.
Bertrand Bouteloup, Chief Commercial Officer at IDnow, said: “VideoIdent Flex marks a groundbreaking advancement in identity verification, merging AI-based technology with human intuition. In a landscape of evolving fraud tactics and steady UK bank branch closures, our solution draws on our decade’s worth of video verification experience and fraud insights, empowering UK businesses to maintain a competitive edge by offering a white glove service for VIP onboarding. With its unique combination of KYC-compliant identity verification, real-time fraud prevention solutions, and expert support, VideoIdent Flex is a powerful tool for the UK market.”
Whereas previously firms may have found video identification solutions to be excessive for their compliance requirement or out of reach due to costs, VideoIdent Flex opens up this option by customising checks as required by the respective regulatory bodies in financial services, mobility, telecommunications or gaming, to offer a streamlined solution fit for every industry and geography.
Bouteloup added: “Identity verification is incredibly nuanced; it’s as intricate as we are as human beings. This really compounds the importance of adopting a hybrid approach to identity – capitalising on the dual benefits of advanced technology when combined with human knowledge and awareness of social cues. With bank branches in the UK closing down, especially in the countryside, and interactions becoming more and more digital, our solution offers a means to maintain a human relationship between businesses and their end customers, no matter their age, disability or neurodiversity.
“VideoIdent Flex is designed from the ground up for organisations that cannot depend on a one-size-fits-all approach to ensuring their customers are who they say they are. In a world where fraud is consistently increasing, our video capability paired with our experts adds a powerful layer of security, especially for those businesses and customers that require a face-to-face interaction.”
The post IDnow Bridges the AI-human Divide with New Expert-led Video Verification Solution appeared first on European Gaming Industry News.
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