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To further strengthen competitiveness and increase efficiency NetEnt is implementing changes in the organization and a full integration with recently acquired Red Tiger. The changes mean a reduction in the workforce by approximately 120 employees, mainly in Stockholm.

NetEnt has previously communicated its ambition to integration further with Red Tiger, which was acquired in September of 2019. The acquisition has exceeded expectations and offers significant potential synergies, increased efficiency and economies of scale. A restructuring is now being implemented to speed up the full integration within the NetEnt group, which means that several functions are relocated and that 120 full-time positions are made redundant in Stockholm and Malta.

These measures are in line with NetEnt’s strategy to continuously improve all parts of the business to strengthen competitiveness and increase value creation in the company. The restructuring is estimated to result in annual savings of approximately SEK 150 million on a cash-flow basis, beginning in the second half of 2020. This means that NetEnt is increasing its initial estimate of potential synergies from the acquisition to around SEK 250 million annually (from previously announced SEK 150 million per year).

Restructuring costs are expected to amount to approximately SEK 25 million, which will be reported as non-recurring items negatively affect operating profit for the first quarter of 2020.

Today, NetEnt also announces that the earn-out consideration for Red Tiger will be redeemed through a directed issue of new shares and cash payment.

The effects of COVID-19 are difficult to forecast, and conditions change rapidly. However, NetEnt’s operations have so far not been negatively affected by the pandemic outbreak. Revenues for the NetEnt Group have developed in line with market expectations during the first quarter of 2020 and are expected to be in the range of approximately SEK 490-500 million.


(Source: NetEnt)