ECOND QUARTER 2015
§ -Revenues increased by 32.3% to SEK 271.2 (205.0) million
§ -Operating profit amounted to SEK 92.7 (56.7) million, an increase of 63.3%
§ -Operating margin was 34.2 (27.7)%
§ -Profit after tax amounted to SEK 86.5 (52.5) million, an increase of 64.9%
§ -Earnings per share amounted to SEK 2.17 (1.33) before dilution and SEK 2.16 (1.32) after dilution
§ -Nine license agreements with new customers were signed, eight new customers’ casinos were launched
FIRST SIX MONTHS 2015
§ -Revenues for the first six months increased by 34.6% to SEK 529.5 (393.4) million
§ -Operating profit amounted to SEK 174.5 (107.9) million, an increase of 61.7%
§ -Operating margin was 33.0 (27.4)%
§ -Profit after tax amounted to SEK 160.7 (98.6) million, an increase of 63.0%
§ -Earnings per share amounted to SEK 4.03 (2.49) before dilution and SEK 4.02 (2.48) after dilution
§ -20 license agreements were signed with new customers and 15 new customers’ casinos were launched
IMPORTANT EVENTS IN THE SECOND QUARTER
§ -Launched with bwin.party, Gamesys, PokerStars and Danske Spil
§ -Entered cross-license patent agreement with IGT for North America
§ -Granted local gaming licenses in Spain and launched with several customers
§ -First two customer agreements were signed in New Jersey, with bwin/Borgata and Caesars Interactive Entertainment
§ -Launched first game in William Hill’s betting shops across the UK
Comments from Per Eriksson, President and CEO
"The strong growth continued in the second quarter and we took several important steps towards entering new markets such as the US and Spain. We also launched operations with William Hill retail, meaning that for the first time our popular games are available in betting shops across the UK.
In the second quarter our revenues increased by 32.3% in SEK and 28.2% in EUR, compared to the corresponding quarter last year. The operating margin was 34.2%, which is a significant improvement from last year. The margin increase was driven by growing revenues and economies of scale, offsetting continuing investments in new staff, product development and new markets. Profit after tax rose by 64.9% to SEK 86.5 million and our operations continued to generate strong cash flow. At the end of the second quarter we had a net cash position of SEK 219.3 million, after ordinary cash distribution to shareholders of SEK 199.5 million in the form of an automatic redemption program. During the quarter we handled 6.5 billion transactions in our systems, representing 26 percent growth compared to last year. The trend of increasing mobile gaming continues; we see strong growth in our mobile games and they accounted for 23 percent of total game win in the quarter, up from a share of 13 percent in the same quarter 2014.
Our growth strategy is to expand on regulated markets and we had a very eventful second quarter with regards to new customers and new markets. We were granted local gaming licenses in Spain in June and thanks to good preparations, shortly thereafter we were able to go live with several large customers in the country. Further, we launched our games with Danske Spil, the Danish state-owned operator that is part of World Lottery Association (WLA), which is a strategically important customer segment for us. We also signed our first two customer agreements in New Jersey, with bwin/Borgata and Caesars Interactive Entertainment, and entered a cross-patent licensing agreement with IGT for the North American market. These contracts are very important as they form the basis for our licensing process and entrance into the North American market. We continue to take market shares in the UK, which has become our third largest market in revenue terms and a key factor behind our strong growth overall. Live Casino is an important product where we continue to see growth and market share gains. In May we launched the product on the Italian market.
We constantly develop our offering to be at the forefront in terms of technology, innovation and quality. In June we won three prestigious industry awards at the annual eGaming Review B2B Awards in London, in the prize categories for Innovation in mobile, Slot Provider and Mobile supplier – further proof that our investments generate results.
The conditions for future growth continue to be good in Europe, especially in Britain and Spain. Longer term, we see great potential in North America and Asia. We also expect solid growth from mobile for many years to come. Retail is a new distribution channel for us that could become important in the future. Around 95 percent of all casino gaming still takes place offline and it is strategically important for us to capitalize on the trend of increasing convergence between offline and online. I look forward to the second half of this year – the growth potential is great and we have a strong position within digital entertainment on the fast-growing online casino market."