Earnings report 2011 – Quarterly report October – December 2011

2011 WAS A YEAR OF NEW INITIATIVES FOR CONTINUED SUSTAINABLE GROWTH

FOURTH QUARTER 2011

• Revenues for the fourth quarter increased by 21.6 % to SEK 121.1 (99.6) million
• Operating profit amounted to SEK 42.2 (33.8) million
• Operating margin was 34.9 (33.9) %
• Profit after tax amounted to SEK 36.6 (29.0) million
• Earnings per share amounted to SEK 0.93 (0.73) before and after dilution
• Two new license agreements were signed, and two new customers’ casinos were launched

FULL YEAR 2011

• Revenues for the full year increased by 16.1 % to SEK 427.6 (368.3) million
• Operating profit amounted to SEK 129.7 (136.4) million
• Operating margin was 30.3 (37.0) %, 31.9 % excluding costs amounting to SEK 6.7 million related to former senior executives
• Profit after tax amounted to SEK 115.6 (120.5) million
• Earnings per share amounted to SEK 2.92 (3.05) before and after dilution
• Seven new license agreements were signed, including G.Matica and Sky Betting & Gaming. Eleven new customers’ casinos were launched
• Proposed transfer to shareholders is SEK 2.00 (2.00) per share

IMPORTANT EVENTS IN THE FOURTH QUARTER

Revenue growth for the fourth quarter was 21.6 percent compared to the fourth quarter 2010. The strengthened Swedish currency has held back revenue growth in SEK. In local currency, revenues increased by 23.1 compared to the fourth quarter 2010.

The number of game transactions amounted to 2.6 billion in the fourth quarter, an increase of 19.6 percent compared to the previous quarter and 48.9 percent compared to the same period in 2010.

During the fourth quarter agreements were signed for delivery of the casino portfolio to several large operators on the newly regulated online market in Denmark. On January 1 2012 Denmark opened up as a regulated market. Operators signed include Betsson, Unibet, Bet24, Sportingbet (including Scandicbookmaker and Danbook). Companies who intend to operate on the local market must fulfill the gaming authority’s compliance requirements during the fourth quarter 2012.

During 2011, Net Entertainment has adjusted and developed the Company’s system and games to be compliant with mobile units. In December the first mobile games were launched on the market. The initial launch includes mobile games supporting IOS terminals, i.e. Iphone, Ipad and Ipod, with three of the Company’s most successful casino games, Gonzo’s Quest, Jack Hammer and Blackjack. Net Entertainment’s mobile offering will be launched under the name NetEnt Touch™ and will include some of the best games from both the existing portfolio and new game releases. The launch of new mobile games will follow a phased roll-out approach to several partners during 2012.

Net Entertainments strategy is to be the leader within online casino. It is a continuous process to improve and expand the product portfolio and the Company constantly analyzes new opportunities. As a result from this, the Company has decided to launch its own Live Casino product with a planned release to the market around year-end 2012. This product segment is a complement to the Company’s existing games portfolio and is estimated to contribute positively to the Company’s growth in the future.

During the fourth quarter Per Eriksson was appointed CEO of Net Entertainment with a start date on March 1, 2012. Per is presently serving as CEO and President of Dustin Group AB. Prior to that, Per has had a long career within Dell, where he left as Head of Dell EMC (Europe, Middle East and Africa).

Intralot Interactive was launched in Italy where Net Entertainment is now live with five out of eight operators.

COMMENTS FROM BJÖRN KRANTZ, ACTING PRESIDENT AND CEO

Year 2011 was a year of new markets and product initiatives to secure continued solid growth for Net Entertainment moving forward. Revenues increased by 21.6 percent during the fourth quarter which is a result of organic growth. Net Entertainment has been successful in strengthening the position as a leading supplier of games and systems within online casino and our focus on customer closeness and product and technology leadership will continue to differentiate us. During 2011 our market share in Europe increased to 22.4 percent compared to 19.3 percent in year 2010 1.

Net Entertainment has a clear focus on online casino and to complement the existing product portfolio and strengthen the Company’s offering it was decided during the fourth quarter to launch our own Live Casino product with a planned release around year-end 2012. Live Casino is a relatively new form of gaming which has proven to be successful and is also expected to show good growth in the coming years.

We are committed to and take part in the ongoing regulation of our industry in Europe. Whether Net Entertainment enters a regulated market or not, is evaluated from case to case with regards to the financial, organizational and the strategic impact on the Company as a whole. Net Entertainment was among the first to enter Italy which regulated the market in July 2011 and Denmark which was regulated in January 2012.

We have now commercially launched five out of eight operators in Italy. The roll-out of remaining customers will take place as soon as practically possible. In addition, it is our ambition to launch slots as soon as the Italian authority allows it.

As a response to the growing mobile market the first mobile games were completed and launch took place according to plan during December 2011. Ongoing launches of new mobile games will take place during 2012 and we will monitor the development closely. The launch of new customers will take place continuously during 2012.

Several successful games have been lunched during 2011. Frankenstein was developed as part of our collaboration with Universal Studios and during the fourth quarter the development of Scarface was initiated which is one of the most well known brands ever in the movie industry. Two new platinum games were launched during the year, Robin Hood and Jack and the Beanstalk with graphics and a gaming experience which truly proves why Net Entertainment is the leading premium supplier of online games on the market today.

We will continue to invest in our business and organization to secure the opportunities identified by the Company, and to ensure short and long term competitiveness. We are taking another step towards becoming a full scale provider within online casino and it is very exciting to be able to offer our partners a broader product portfolio which strengthens both business and customer value in our strategic delivery responsibility as a supplier. I am convinced that Net Entertainment is well positioned for 2012 and I look forward to another exciting year.

(1), The market share is based on the gross gaming yield with Net Entertainment’s customers in relation to the European online casino market, estimated by H2 Gaming Capital in December 2011.

Net Entertainment is very proud to announce the launch of its first mobile portfolio games to the market. Players can now play Net Entertainment’s casino games wherever they are, whenever they want. Initial launch will include mobile games for IOS devices, i.e. Iphone, Ipad and Ipod, with three of the Company’s most successful casino games, Gonzo’s Quest, Jack Hammer and Blackjack. Net Entertainment’s mobile offering will be released to the market under the name NetEnt Touch™, which will consist of best in breed games from its existing portfolio, as well as new game releases.

The launch of Net Entertainment’s mobile games will follow a phased roll-out approach with several partners during 2012.

“The Net Entertainment brand is about quality and passion for gaming. This is a great moment for Net Entertainment, our partners and their player base, and I am confident that our mobile games will be very well received as the usability and total experience is truly magnificent. Our partners have been waiting for the day Net Entertainment introduces its first mobile games, and I am very happy that we now can offer their players a great end to end experience moving forward. We will continue to build up a solid portfolio of mobile games, which will frequently be launched to the market,” comments Acting CEO Björn Krantz.

Best Net Entertainment Casinos: Betsson Casino, Unibet Casino and Cherry Casino.

Net Entertainment, the world’s leading provider of high quality casino games, announces the release of its latest platinum game, 3D video slot Jack and the Beanstalk.

Based on the popular English folktale, Jack and the Beanstalk follows the story of young boy Jack on his quest for riches. Players join Jack on his wild adventures, experienced through impressive 3D graphics and animations, exceptional sound production and a host of unique game features.

The adventure begins with a brand new Walking Wilds feature in the main game followed by an unforgettable Free Spins game play, including the Treasure Collection feature in which players collect keys to unlock Stacked, Expanding and other types of Wilds.

“Jack and the Beanstalk is a well known fairytale that has proven enduringly popular over the years in its many stage productions and film adaptations” comments Björn Krantz, Act. President and CEO of Net Entertainment. “In the development of this game, as with all of our others, we aimed to deliver the highest level of innovation and quality whilst keeping our global audience in mind. Jack and the Beanstalk is a game that instantly captivates and delivers a truly exciting game play.”

Jack and the Beanstalk takes players to heights unheard of in video slot games offering the players the most rewarding gaming experience in a visually stunning atmosphere.

Play Jack and the Beanstalk slots at Unibet Casino or at Betsson Casino now.

Net Entertainment, the world’s leading provider of high quality casino games, is pleased to announce the release of its latest game production Fruit Shop™.

Fruit Shop™ has captured the classic feel and flow of the original fruit slots style into an upbeat, energetic and colorfully captivating new style. Fruit Shop™ belongs to the Smart Range™ family of games, offering record short load times without compromising quality and player experience.

The fun starts with 5-reels and 15 fixed bet lines in the main game and in Free Spins. Players will be happy to see the Wild substitutions awarding them with a x2 multiplier for fruity wins. Free spins are trigged by any fruit symbol on a bet line win and to add energy, all wins are multiplied by x2. To increase the anticipation, the players can make additional wins in Free Spins if they receive the Wild symbol which awards a x4 multiplier!

Fruit Shop™ is the perfect choice for inexperienced players as well as for those who enjoy non-stop excitement and high paced games.

Play Fruit Shop video slot game online at Unibet Casino or at Betsson Casino now.

Net Entertainment, the world’s leading provider of high quality casino games, is pleased to announce the release of its latest game production Mythic Maiden™.

Mythic Maiden™ proves Net Entertainment’s ambition to fulfil desires of a truly authentic online gaming experience. If anticipation is quality, Net Entertainment offers it in the latest game production, Mythic Maiden TM – a brand new 5-reel and 30 bet line video slot taking place in a mysterious attic.

The excitement factor in Mythic Maiden is created by the Free Spins mode in which the player can multiply their winnings up to x10 and additional Free Spins are revealed from within an Iron Maiden that randomly fires out win multipliers. Mythic Maiden™ offers multipliers that can reach up to x30, increasing anticipation and providing great winning opportunities for the players.

Mythic Maiden™ has all the visual appeal characteristics of Net Entertainment games. The mysterious Mythic Maiden TM theme combined with groundbreaking mathematics, rich graphics, creepy animations and innovative multipliers captures the attention of video slot players of all ages and backgrounds.

Play Mythic Maiden video slot game at Unibet Casino or at Betsson Casino now!