LeoVegas AB has published its latest results from the Nasdaq stock exchange after integration into MGM Resorts portfolio, reporting positive trading in Europe although some international markets proved difficult.
Total group-wide revenue over the three-month period rose 1% to €99.5m (Q4 2021: €98.2m), although various business costs meant that adjusted EBITDA fell by 77% to €3.7m (€11.6m), with a margin of 3.8% (11.8%).
The firm explained that ‘transaction-related cost and provisions for incentive programmes’’ were largely responsible for the sharp drop in EBITDA, totaling €1.6m, whilst items affecting yearly comparability included a €500,000 sale of a customer database.
These costs meant that LeoVegas reported an EBIT loss of€2.5m (€6.1m), whilst adjusted EBIT stood at a negative €0.2m, down from €8.5m the prior year, with an EBIT margin of -0.2%.
Despite these costs, gross profit for the Stockholm-founded company remained steady, rising marginally by just under 1% from €65.3m to €65.8m, corresponding to a gross margin of 66.2%, slightly lower than the prior year’s margin of 66.5%.
A geographic breakdown saw LeoVegas perform strongest in its home markets of the Nordics, where NGR increased year-on-year by 9%, whilst Sweden in particular ‘posted another good quarter driven by new records for the brand Expekt’.
In the rest of Europe, NGR rose by 4%, with LeoVegas highlighting two markets as standing out despite regulatory changes, although another major sector which has recently undergone legislative change remained a thorn in its side.
LeoVegas explained: “The UK and Spain posted healthy growth during the period while Germany continued to negatively impact the region’s sales.”
However, in the Rest of World region, NGR fell by 15% from the previous year, having been ‘adversely impacted in the short term’ by the closure of smaller markets earlier in 2022.
Despite this, LeoVegas maintained that ‘the trend was favourable in most markets in the region’, as it started its tenure as an MGM-owned enterprise with stable revenues in the face of high costs.
A specific breakdown of costs saw marketing spend reach €34.7m (€33.8m) – corresponding to 34.9% of group revenue – whilst personnel costs in relation to revenue increased year-on-year to 17.7% (14.2%) and other expenses were up to 16.6% (10.8%).
Although LeoVegas delisted from the Nasdaq Stockholm exchange in September following the completion of its takeover by MGM, the company still has bonds on the market, and so made the decision to publish its quarterly results.
The fourth quarter represents an improvement for the firm on Q3 – ahead of the $605m buyout last year, LeoVegas reported a 1% decline in revenue to €98m, along with a drop in EBIT.