NetEnt Holds the Course Despite Lags in Native ScandinaviaPublished February 19, 2020 by Lee R
The momentum of NetEnt is a testament to a global brand to use strength in its best regions to absorb growing pains in new jurisdictions.
Scandinavia operator NetEnt held firm despite turbulence.
The 2019 Overall Gain
The slight year-on-year gain in revenue for the Stockholm-listed casino game developer to SEK1.79bn (£143.3m/€170.4m/$186.1m) in 2019.
Saved from Scandinavia
The progress was considered a rescue of sorts, with “weaknesses” in Sweden and Norway salved by the company’s acquisition of Red Tiger Games against a decline in the gaming supplier's profits.
Revenue Totals Breakdown
NetEnt's SEK1.79b in revenue was made up of royalties totaling SEK1.71bn, which was down 1.0% year-on-year. Setup fees took in SEK56.2m in revenue, for a 10.2% jump; other revenues increased almost seven-fold to SEK26.2m.
NetEnt CEO Speaks
NetEnt CEO Therese Hillman said US revenues grew against Sweden and Norway.
The Red Tiger Hold
The Red Tiger acquisition brought in SEK 126m in revenue.
Hillman reflected on the Red Tiger acquisition as “a vital part of our ongoing improvement efforts within the NetEnt Group.”
NetEnt further had to overcome an increase in operating expenses of 7.1% to SEK1.26bn; the largest expense remained personnel, which declined 8.4% to SEK491.1m.
D and A
Depreciation and amortisation costs increased 51.8% to SEK326.5m for an operating profit of SEK528.7m and a drop of 12.0%.
Red Tiger Impact
Red Tiger’s take of SEK 73.0m represented an increase of 17.4%, a total which was swallowed by the almost tripling of financial expenses to SEK128.5m, resulting in a 24.1% pre-tax profit decline to SEK472.1m.
After tax yield ended at SEK44.3m, with NetEnt's full-year profit of SEK428.9m down 25.7%.
Adjusted from the drop of Swedish Krona against the British Pound, NetEnt’s total attributable to shareholders dropped 3.1% to SEK566.9m.
As for Q4 2019, NetEnt revenue rose 10% to SEK512.0m for a record high quarter which left Hillman bullish about 2020:
CEO Hillman Reflects
“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.”
Time will tell how much growth this bold prediction becomes.