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NetEnt: Year-end report 2019 and quarterly report October – December 2019

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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.

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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

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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.

 

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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.

Industry News

Meridian Donate: Revolutionizing CSR in the Betting and Gaming Industry

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  • Innovative engagement strategy positions MeridianBet as a leader in CSR within the betting and gaming industry
  • Optimized brand loyalty as active customer participation in CSR strengthens connection and loyalty
  • Scalable impact, as the model is designed for expansion and could be adapted to new markets, indicating potential for widespread adoption and growth

Transforming Customers into Environmentalists and Humanitarians

MeridianBet’s pioneering initiative, Meridian Donate, is transforming the betting industry by engaging customers directly in corporate social responsibility (CSR) actions. This unique platform allows customers to actively participate in and fund various environmental, societal and humanitarian projects, setting a new standard for customer engagement and community impact.

Key Features of Meridian Donate:

  • Direct customer involvement: Customers are not just donors but active participants in CSR decisions
  • Diverse programs: Offers choices from global afforestation to local humanitarian efforts
  • Partnerships with renowned organizations: Collaborates with entities like the Red Cross and UNICEF

Expanding Impact: A Year-by-Year Growth

The Meridian Donate platform has seen substantial growth in its scope and impact:

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  • Number of individual campaigns: Grew from 8 in 2021 to 20 in 2023
  • National markets Integrated: Expanded from 3 in 2021 to 8 in 2023
  • Direct Beneficiaries: Increased from 43 NGOs in 2021 to 159 in 2023

In 2023 alone, the platform’s expansion into eight markets facilitated 20 customer-funded campaigns, directly benefiting 159 NGOs, up from 122 the previous year.

Continued Commitment to Innovation and Community Involvement

Meridian Donate not only showcases MeridianBet’s dedication to CSR but also redefines the role of digital marketing within the industry. By converting sports bettors into active CSR participants, Meridian Donate enhances customer loyalty and brand value, making it a critical element of MeridianBet’s market strategy.

Recent Successes and Future Outlook

In its recent operation, Meridian Donate has launched an ambitious global afforestation initiative, committing to plant 20,000 seedlings across various regions. This project not only underscores our environmental commitment but also enhances our brand’s community presence. Already, several hundred contributions have been recorded in the platform’s first month, indicating robust customer engagement and support.

The post Meridian Donate: Revolutionizing CSR in the Betting and Gaming Industry appeared first on European Gaming Industry News.

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Games Global Announces Launch of IPO

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Games Global Limited (“Games Global”), a leading developer, distributor and marketer of innovative online, casino-style gaming (“iGaming”) content and integrated business-to-business solutions to iGaming operators, announced today that it has launched the roadshow for its initial public offering (“IPO”) of 14,500,000 ordinary shares. The offering consists of 6,000,000 ordinary shares offered by Games Global and 8,500,000 ordinary shares to be sold by Games Global’s existing shareholder (the “Selling Shareholder”). Games Global will not receive any proceeds from the sale of the shares by the Selling Shareholder. The underwriters will have a 30-day option to purchase up to an additional 2,175,000 ordinary shares from the Selling Shareholder at the IPO price, less underwriting discounts and commissions. The IPO price is currently expected to be between $16.00 and $19.00 per share. Games Global has applied to list its ordinary shares on the New York Stock Exchange under the symbol “GGL”.

J.P. Morgan, Jefferies and Macquarie Capital are acting as joint lead book-running managers for the proposed offering. Barclays and BTIG are acting as book-running managers for the proposed offering.

The proposed offering will be made only by means of a prospectus. Copies of the preliminary prospectus relating to the proposed offering, when available, may be obtained from:

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  • J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or by email at [email protected] or [email protected];
  • Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, NY 10022, by phone at (877) 821-7388, or by email at [email protected]; or
  • Macquarie Capital (USA) Inc., Attention: Equity Syndicate Department, 125 West 55th Street, New York, NY 10019, or by email at [email protected]

A registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective. This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

In any member state of the European Economic Area (the “EEA”) this announcement, and the offering, are only addressed to and directed at persons who are “qualified investors” (“Qualified Investors”) within the meaning of Regulation (EU) 2017/1129 (the “Prospectus Regulation”). In the United Kingdom, this announcement, and the offering, are only addressed to and directed at persons who are “qualified investors” within the meaning of the Prospectus Regulation as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”), (ii) are high net worth entities who fall within Article 49(2)(a) to (d) of the Order, or (iii) are persons to whom it may otherwise lawfully be communicated (all such persons being referred to as “relevant persons”).

This announcement must not be acted on or relied on (i) in the United Kingdom, by persons who are not relevant persons, and (ii) in any member state of the EEA, by persons who are not Qualified Investors. Any investment or investment activity to which this announcement relates is available only to and will only be engaged with (i) in the United Kingdom, relevant persons, and (ii) in any member state of the EEA, Qualified Investors.

The post Games Global Announces Launch of IPO appeared first on European Gaming Industry News.

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Genome and Chilli Partners join forces to revolutionize iGaming affiliate payouts

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Leading the charge in the convergence of financial technology and iGaming, Genome, a cutting-edge electronic money institution, is thrilled to announce its strategic partnership with Chilli Partners, a prominent iGaming affiliate program specializing in casino games.

The collaboration marks a pivotal moment in the iGaming industry, bringing together Genome’s expertise in online financial services and Chilli Partners’ prowess in affiliate marketing. The partnership is set to redefine the landscape of affiliate payouts, offering an array of benefits to both affiliates and the iGaming community at large.

“We are excited to embark on this journey with Chilli Partners. By combining our financial expertise with their influential position in the iGaming affiliate space, we aim to set new standards for efficiency and innovation in affiliate payouts,” – noted Genome’s CEO Daumantas Barauskas.

For one, the partnership offers efficient payouts. Affiliates can now enjoy expedited and secure payouts through Genome’s state-of-the-art financial infrastructure, enhancing their overall experience and satisfaction.

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It also provides global reach for Chilli Partners, as it can extend its reach to affiliates worldwide with Genome’s international payment capabilities. This allows Chilli Partners to foster a more diverse and expansive network.

The partnership streamlines financial workflows, ensuring seamless transactions and reducing administrative overhead for Chilli Partners, allowing them to focus on delivering top-notch affiliate services.

Genome is all about innovation in payments and online financial services. This approach brings new possibilities for payment options, providing flexibility and convenience for affiliates participating in the Chilli Partners program.

Lastly, the collaboration prioritizes compliance and risk management, assuring affiliates of secure and compliant transactions in accordance with industry regulations.

“This partnership aligns perfectly with our commitment to providing the best possible experience for our affiliates. Genome’s advanced financial services will play a crucial role in elevating our affiliate program to new heights”, – added Clayton Zammit Cesare, Head of Affiliates at Chilli Partners.

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As the iGaming industry continues to evolve, Genome and Chilli Partners stand united in their dedication to driving positive change, innovation, and reliability. The partnership is poised to create a ripple effect, positively impacting the entire iGaming ecosystem.

About Genome

Genome is a leading EMI that provides innovative financial services, including batch payouts, SWIFT, and SEPA transfers. With a focus on efficiency and compliance, Genome empowers businesses across various industries, including iGaming, to streamline financial operations and enhance user experiences.

For more information, please visit https://genome.eu/

About Chilli Partners

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Chilli Partners is a prominent iGaming affiliate program specializing in casino games. With a commitment to excellence, Chilli Partners connects affiliates with top-tier iGaming brands, offering a lucrative partnership that includes competitive commission structures and tailored support.

For more information, please visit https://chillipartners.com/

The post Genome and Chilli Partners join forces to revolutionize iGaming affiliate payouts appeared first on European Gaming Industry News.

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