NetEnt's Organic Growth Continues in Q4Published February 22, 2019 by Lee R
The Q4 figures are in, and shareholders at NetEnt should be pleased moving forward.
Swedish giant NetEnt is looking bullish after Q4.
CEO Hillman Speaks
Group CEO Therese Hillman specified growth in the areas of games (several) and revenues (up 9.5%, 3.9 in Euros).
Q4 Growth Factors
Higher volumes, a weaker Swedish krona, and better cost control in Q4 brought adjusted EBIT margin to 37.3 percent.
The totals for Q4 in full include revenues that reached 465 (425) SEKm, with EBITDA reaching 204 (194) SEKm, for a margin of 43.9 (45.7)%, with the strong performance of NetEnt's six newly launched games raising revenues 9.5 percent (3.9 percent in euro) to 465 SEKm.
Reorganization-related costs came in at 22 SEKm to bring EBITDA to 226 (194) SEKm, for a margin of 48.7 (45.7)%.
Operating profit (EBIT) came in at SEK 146 (153) million for a margin of 31.4 (35.9)%.
Further Q4 figures include profit after tax coming in at 137 (155) SEKm, with earnings per share of SEK 0.57 (0.65) before and after dilution to go along with 8 new customer agreements and 9 new customers’ casinos launched.
Important Q4 events at NetEnt included the signing of customer contracts with ATG and Svenska Spel in Sweden, Veikkaus in Finland, and Churchill Downs (New Jersey) and Penn National Gaming (Pennsylvania); and a live casino contract signed with William Hill.
Full Year Context
As for the full year, NetEnt figures indicate total revenue of 1,782 (1,636) SEKm and EBITDA of 816 (740) SEKm for a margin of 45.8 (45.2)%.
Adjustments for Q4 reorganization-related costs and severance pay for the previous CEO brought EBITDA to 844 (740) SEKm for a margin of 47.4 (45.2)%. EBIT was at 601 (582) SEKm (margin of 33.7 at 35.6%). EBIT was 634 (582) SEKm (margin of 35.6 at 35.6%).
Profit after tax was SEK 577 (547) million with earnings per share at SEK 2.40 (2.28) before and after dilution.
For 2018, this translated to a proposed cash return to shareholders of SEK 2.25 (2.25) per share, along with a total of 31 (37) new customer agreements signed, and 38 (35) new customers’ casinos launched.
Cost management drove organic growth as one of iGaming's top entities expanded in Q4.