LeoVegas shows growth in third quarter report
News on 7 Nov 2018
News on 7 Nov 2018
Despite LeoVegas reporting double digit revenue growth in third quarter results, chief executve officer and co-founder Gustaf Hagman expressed dissatisfaction with growth and profitability as the company traversed a “transitional” period.
Key financials for the three month period ending September 30, 2018, include:
Revenue increase of 41 percent to Euro 78.6 million (Q3/2017: Euro 55.6 million).
Organic growth in local currencies excluding markets closed in 2017 was 14 percent.
EBITDA was Euro 9.0 million (Q3/2017: Euro 7.6 million), corresponding to an EBITDA margin of 11.4 percent (Q3/2017: 13.7 percent).
Net Gaming Revenue (NGR) from regulated markets was 35.5 percent (Q3/2017: 25.3 percent) of total NGR.
Depositing customers increased 57 percent to reach 318,189 (Q3/2017: 202,980).
Earnings per share before and after dilution were Euro 0.13 (Q3/2017: Euro 0.06).
The operator had a busy quarter with the launch of sports betting brand BetUK and the acquisition of a majority share in esports betting operator pixel.bet, while addressing changes in compliance requirements.
Hagman keenly anticipates the opening of the newly regulated Swedish market, saying LeoVegas holds a leading market position.
“Despite the important improvement efforts, we are not satisfied with our growth or profitability during the third quarter,” Hagman said referring to adherence to new compliance requirements along with the impact of significant projects undertaken to improve growth in the long term.
“On the whole, a picture has emerged in which our work in this area has had an adverse effect on growth during the third quarter, but at the same time entails that we are even better positioned for long-term growth. With these newly implemented routines we will have the best opportunity to work effectively and sustainably in a regulated environment – something that will only be possible for operators that have invested in the routines and processes required. We see this as a major competitive advantage.”
The company maintains its financial targets for 2020 of at least Euro 600 million in revenue and EBITDA of at least Euro 100 million.
“These targets are obviously more challenging today than when we communicated them this past spring, but we see good opportunities to reach them,” Hagman concluded.
