Net Entertainment: Ernings report 2009

FOURTH QUARTER 2009

• Revenues for the fourth quarter increased by 37.8 % to SEK 85.4 (62.0) million
• Operating profit increased by 16.2 % to SEK 35.4 (30.5) million
• Operating margin was 41.4 (49.1) %
• Profit after tax increased by 19.5 % to SEK 32.4 (27.1) million
• Earnings per share amounted to SEK 0.82 (0.69)
• Three new license agreements were signed for CasinoModule™

FULL YEAR 2009

• Revenues for the full year increased by 46.0 % to SEK 300.1 (205.6) million
• Operating profit increased by 36.9 % to SEK 120.2 (87.8) million
• Operating margin was 40.1 (42.7) %
• Profit after tax increased by 34.7 % to SEK 107.7 (80.0) million
• Earnings per share amounted to SEK 2.72 (2.02)
• Ten new license agreements were signed for CasinoModule™ and 14 new customer’s casinos were launched
• Two agreements were signed for CasinoCafé™ in January 2009
• Proposed dividend is SEK 2.00 (1.25) per share

Comment from Johan Öhman, President and CEO

We saw strong growth at the end of 2009 with a revenue growth of 12 percent during the fourth quarter compared to quarter three. The increase was the result of organic growth by existing licensees. The number of game transactions increased by 23 percent during the same period. Combined, this result shows that there is a strong market development and demand for our products. This positive trend has continued in January.

We have a solid order backlog comprising e.g. Expekt and Microgame which, together with Sportingbet rolling out CasinoModule™ on additional geographical markets, will create new license revenues. The implementation of Seamless Wallet is ongoing with our major licensees. This functionality enables operators to place Net Entertainment’s games in other parts of the web portal than the casino and thereby offer games to a larger share of their players. This creates a foundation for increased gaming revenues from new player segments. CasinoCafé™ had positive development during the fourth quarter with increasing volumes; however, from a low level. Delta Invest continues the roll-out of CasinoCafé™, which has been slower than expected, with focus primarily on the Ukraine market.

The market for online gambling is in transition. Several countries have announced that they will introduce a licensing scheme. Italy is first, followed by Denmark and France. A regulated online gambling market creates new opportunities for both the industry and Net Entertainment as private companies will be able to become licensed. In return, they will be taxed on the profits. A regulated online gaming market will attract new players and thereby create new business opportunities. I view regulation as positive for our business with opportunities to gain new customers and revenues. Prompted by the high pace of market change there are high expectations on suppliers to prepare for new market circumstances. Naturally this may lead to costs being incurred before revenues are realized.

About Net Entertainment

Net Entertainment is a premium supplier of digitally distributed gaming systems used by some of the world’s most successful online gaming operators. The core product, CasinoModule™, is a complete gaming platform comprising high quality games and a powerful administration tool. Operators are provided a customized solution that is easily integrated ensuring short time to market and a cost efficient operation. Revenues consist of royalties based on revenues generated by the company’s products and setup fees when new agreements are signed. Net Entertainment is a pure development company and thus does not conduct any gaming operations of its own. The company’s brand is internationally recognized and associated with innovation, service, and quality.

All technical development is carried out at the Group’s Stockholm office and all commercial operations such as sales, marketing and product management are carried out from the Malta office. The company also has an office in Gibraltar.

The parent company is listed on NASDAQ OMX Stockholm since January 13, 2009. Prior to this, the Company’s share was listed on the Nordic Growth Market (NGM) Equity since April 2007.

For more information please contact;

 Johan Öhman, CEO Net Entertainment; Phone +46 8 57 85 45 00

 johan.ohman@netent.com.

For full report, please click here.

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