Delivering on key corporate restructuring initiatives, LeoVegas AB has detailed a strong opening to 2020 trading, recording a 4% increase in group revenues to €89 million (Q12019: €86m).
The Stockholm-listed online gambling group completed the migration of its 12 UK brands onto its proprietary technology platform, vastly improving game offerings, payment services and engagement functionalities, while also reducing group operating complexities.
LeoVegas maintained revenue growth, despite period trading being impacted by circa €1.4 million in negative currency fluctuations.
Group-wide operating efficiencies were reflected by LeoVegas after it recorded a 6% increase in depositing customers to 413,000 (Q12019: 388,000).
Period highlights included LeoVegas recovering market share from 2019 regulatory setbacks in its home market of Sweden. In addition, LeoVegas pointed towards market gains in Germany, in which its brands had been impacted by the restriction of payment services.
Recovering ground across key markets, LeoVegas traded on a higher operating margin of 10%, with the company recording a Q1 2020 EBITDA of €9 million (Q12019: €7.2m).
Improved metrics saw LeoVegas close Q1 accounts by declaring a group operating profit of €2.2 million (Q12019: €600,000).
Gustaf Hagman, LeoVegas AB President and CEO, said: “Our operating profit grew 24% compared with the same period a year ago despite negative currency effects and a high level of investment, which confirms that our focus on operational efficiency and cost control is generating the desired results.”
Entering Q2, Hagman pointed to strong trading during April, with a 23% growth in revenues despite facing COVID-19 headwinds.
Operating in unforeseen circumstances, LeoVegas management will continue to undertake market assessments on an individual basis. Within certain markets, LeoVegas believes that it can mitigate COVID-19 circumstances and its brands could gain a greater share of the market.
Hagman added: “It is hard to predict the long-term effects for LeoVegas, but the longer the crisis continues, the greater the risk is that revenue will be negatively impacted by consumers’ reduced purchasing power.
“At the same time, an accelerated structural shift is expected from land-based to online gaming, which makes LeoVegas well-positioned for the future.”