LeoVegas claims record numbers in Q2-2018

Online gambling group LeoVegas AB has released its Q2-2018 numbers, reporting:

* Revenue increased by 76 percent y-o-y  to Euro 87.4 million (49.7);

* EBITDA was Euro 15 million (6.1), corresponding to an EBITDA margin of 17.2 percent (12.4%);

* Organic growth of 38 percent (excluding markets closed in 2017);

* NGR from regulated markets was 38.8 percent (25.1 percent) of total NGR;

* NGR from Royal Panda and Rocket X accounted for 15.6 percent and 12.8 percent, of total NGR;

* Depositing customers reached 309,987 (173,034), an increase of 79 percent.

* Management expects to achieve 2020 targets of Euro 600 million and EBITDA of Euro 100 million;

* The company has registered with Gamstop, the UK self-exclusion system, and has integrated all group brands with LeoSafePlay;

* The company launched a new front-end platform with new and improved technology;

* LeoVegas also launched its Sportsbook 2.0 product;

* Management believes the group is strongly positioned to prosper from the liberated Swedish market due to open early in 2019;

Looking ahead, group CEO Gustav Hagman said that NGR in July grew 45 percent to Euro 26.4 million (18.3) auguring well for Q3 as the company continues to improve sustainability and growth. During the third quarter Management expects marketing in relation to revenue to be at roughly the same level as during the second quarter.

He applauded company staff for achieving record profit numbers following a reduction in marketing costs as the company applied its data-driven marketing strategies.

The advent of the GDPR had resulted in the company focusing more tightly on compliance and LeoVegas stopped working with a large number of affiliates in the British market, Hagman revealed.  This had impacted customer inflow and growth during the quarter.

Turning to compliance issues, Hagman said:

“The online gaming business in Europe is currently undergoing a fundamental change. A growing number of markets are choosing to embrace local regulation. The compliance requirements for operators are both growing and becoming more complex. This elevated focus on compliance is having a short-term effect on growth. In long term, however, we see this as an opportunity – since only professional and responsible operators will be able to work in this environment.

“For some time LeoVegas has been engaged in talks with the UK Gambling Commission on improvements that LeoVegas can make in compliance. It is a productive discussion on how we will improve with respect to compliance in certain areas.”

Hagman revealed that in parallel with the launch of sports betting for LeoVegas.com, subsidiary Rocket X will also launch sports betting under its Bet UK brand. Rocket X has chosen SB Tech as its provider. The Group will thereby be working with three different providers in sports betting: Kambi, Betconstruct, and SB Tech.

The proposed Italian advertising ban was addressed by Hagman, whp said:

“Italy is one of Europe’s largest gambling markets. More than 3 million people in Italy play online every month, and it is a growth market that we believe strongly in. Italy’s government has now proposed a ban of all gambling advertising.

“We firmly believe that such a ban would benefit unlicensed actors, and a debate has now ensued about this, where LeoVegas is engaged and is trying to educate politicians about what we as licensed operators are doing in the areas of sustainability and responsible gaming. The outcome of the proposal is highly uncertain at present, and we are monitoring developments closely.”

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