LeoVegas posts record Q2 revenues despite big market challenges

LeoVegas said it has found a more balanced geographical mix despite finding the UK market “challenging” and delivering just satisfactory results in Sweden.

The operator’s Group CEO Gustaf Hagman said that Q2 2019 was its best quarter ever, with revenues of €94.4 million (up 8 per cent from Q2 2018) contributing to “good underlying growth and profitability” for H1 2019 (January to June).

This was despite the “difficult-to-navigate environment” in several of its largest markets including the UK, which – according to Regulus Partners – accounts for an inferred 16 per cent of LeoVegas revenues (or c. €15 million). Excluding the UK, organic growth for the quarter came in at 26 per cent.

The revenue rise was paired with a flat EBITDA of €15 million (€15.0 for Q2 2018), while the number of depositing customers was up 8 per cent (309,987 to 334,961). The number of returning depositors enjoyed a 12 per cent hike from 175,500 to 196,203.

Marketing costs during the quarter totalled €28.1 million, down from €30.5 million, with marketing in relation to revenue down to 29.7 per cent from 38.0 per cent in Q1 2019 and 34.9 per cent from the same period a year ago (Q2 2019).

A contributing factor to this is more restrained marketing in Sweden, where LeoVegas said it has “found a new base to grow from following regulation of the market”. Revenue in Sweden developed in a positive direction month-on-month during the quarter, contributing to a 2 per cent Nordic growth to €37 million in quarterly revenues.

“We are satisfied with our performance in Sweden and believe that we are taking market shares,” said Hagman. “LeoVegas is today the single largest casino brand in Sweden. Our focus on product and customer experience, our knowledge about regulated markets and our strong brand position contribute to the positive development. 

“On top of this, the launches of GoGoCasino and Pixel.bet have been successful, and the brands are appreciated by our Swedish customers.”

One of the highlights of the quarter for Hagman was collecting a gaming licence in Spain. Two weeks after securing this licence, the company soft launched LeoVegas.es.

“Spain is a step in our continued expansion,” he said. “We have also recently carried out launches in other Spanish-speaking countries such as Chile and Peru, as well as in Brazil.”

Meanwhile, LeoVegas has opted to not apply for a licence in the recently re-regulated Swiss market and, as a result, is no longer accepting business in the market. Switzerland accounted for €2.2 million in revenue during the second quarter.

Finally, the company used the trading statement to reiterate its ambitious financial targets including €600 million in revenues and EBITDA of €100 million by 2021.

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