NetEnt Leader Acknowledges the Necessity of Adaptation In Face of H1 ReportPublished July 17, 2018 by Lee R
The H1 Report from NetEnt shows proactive organisational measures tempered by external challenges.
Newly appointed NetEnt CEO Therese Hillman has confirmed she is updating strategy after attributing disappointing Q2 revenue growth to the slowdown in the UK.
Year-on-year the gains were not as strong as expected, with an underwhelming 6% rise to SEK437m (£39m/€44m/$51m) amounting to an 0.8% decline in euro terms.
Earnings before tax were also fell substantially below expectations, for a modest 1.2% gain to SEK149m. This also resulted in NetEnt's share price on the Nasdaq Stockholm dropping nearly 17% following release of the Q2 report.
Hillman further tempered expectations for any significant improvement over the next two quarters either, while acknowledging that “the slowdown in the UK has made a difference and the UK is a challenging market.
The company’s “game portfolio” and “line-up of new customers to launch in Q3 and Q4” are drivers of growth, while she claims the company needs help from growing live casino and having related growth initiatives “kick in” to “strengthen our customer offering, cut lead times, and free up resources for new commercial projects.”
Figures aside, Hillman suggests a turnaround of NetEnt for the autumn in the form of “improved efficiency and many new products and growth initiatives that all have players and customers in focus.”
More Growth Figures
Operating profit (EBIT) reached SEK 283 (274) million, for a margin of 32.6 (34.0)%, and profit after tax reached SEK 285 (251) million. Earnings per share topped out at SEK 1.19 (1.04) before and after dilution. Another 14 (21) new customer agreements were signed, and 15 (14) new casinos launched.
A significant addition to the NetEnt Board’s appointment of Hillman was the AGM election of Fredrik Erbing as new Chairman of the Board of Directors.
New Games and Agreements
New Slot games released included Archangels Salvation, Lost Relics and Jumanji
Beta-launched slot games for Social Casino, and the key customer agreement came from the Hard Rock group in New Jersey.
Hillman points to maturing markets in the Nordics and UK and increasing competition as signs that the ship will right itself once the UK slowdown has been absorbed. With causes being attributed to everything from bad weather to Brexit difficulties, the true duration appears an x factor.