Q&A: Per Eriksson, NetEnt chief executive
Eriksson speaks to eGaming Review about his firm's impressive H1 results and victory at the eGR B2B Awards
NetEnt is very much a firm on an upward curve, a view backed-up by the supplier’s H1 results last week which showed a 35% rise in profits and a 62% hike in operating profit.
And the rapid growth, which has been boosted by the launch of 15 new customer casinos, shows no signs of slowing with its launch in Spain last month, coupled with its imminent entry into New Jersey, sure to add incremental revenues in H2.
And NetEnt’s progress, which follows on from a 35% increase in revenues achieved in 2014, hasn’t gone unnoticed, with the supplier picking up a hat-trick of prizes at last month’s eGR B2B Awards, topping the innovation in mobile, slot provider and mobile supplier categories.
eGaming Review caught up with NetEnt chief executive Per Eriksson to discuss the first six months of the year and how the firm planned to maintain its current momentum.
eGaming Review (eGR): Operating profit grew 62% on the back of an increase in margin from 27% to 33%. How did you achieve this?
Per Eriksson (PE): It’s very much scaling on the investments we have made throughout the years which are now paying off, especially the investments in the UK market where we see very good growth.
Of course we have new investments to come as well. We have the entry into New Jersey and also improvements and investment in our platform – so there will be new investments but we are very much enjoying the scale we are seeing now.
eGR: How do you balance your recent focus on regulated markets against the increased tax burden?
PE: Even though we have taxes to pay we are seeing such an increase in volume from entering the regulated markets it doesn’t really matter for us. We prefer the regulated markets because then we know the terms and conditions for being there.
Being in the dot.com space you never know what could happen – as it can close down at short notice. France was an example of that – overnight we lost all our French revenues so we are very much pro-regulation.
eGR: One of those regulated market is Spain, where you launched last month. How has that been performing so far?
PE: It looks really good, particularly coming from no revenue at all in Spain so every single Euro that comes in is incremental for us. We have got off to a good start but there are still more operators to sign and to come soon so we are really positive about that market.
eGR: And what’s the latest on your New Jersey licence application?
PE: We’ve said we expect something to happen in the second half of the year but you never know when it comes to licensing and regulation. As we saw in Spain, it can often take longer than everyone expects and it’s the same thing with New Jersey. There is a lot of red tape to get around so we’ve said second half but we hope it will be sooner rather than later.
eGR: Consolidation is taking place in the B2C sector, and some of your customers are currently involved in merger discussions. Do you consider consolidation to be a help or a hindrance?
PE: Consolidation gives us bigger companies to sell into. Also, it opens up opportunities for niche players and that has been very favourable to us – we have a good pipeline of small-to-midsize firms. So I wouldn’t say consolidation is a negative thing – perhaps it can be a little bit in the short-term but in the longer term it can be good.
eGR: You recent debuted your live casino product in Italy. How has that been going and do you wish you had entered the live casino market at an earlier stage?
PE: It is a competitive market and we see we are gaining good market share but are still relatively small in live casino. I believe our product is unique because it is on the same platform as our RMG games enabling us to do that little bit extra than our competitors and I think when the market sees that we will be even stronger.
Obviously if I knew then what I know today it would have been better if we had gone a bit earlier but it is still quite a nice thing to have in front of us – the opportunity to grow live casino. We have seen Evolution grow like a rocket and I believe we have a nice rocket to come.
eGR: Congratulations on your three B2B awards. How important is industry recognition for NetEnt?
PE: The awards are very important for us and we really appreciate them. We have really put a lot of effort into mobile so that was a big one for us – the growth we are seeing in mobile has been really good for us of late.