LeoVegas’ Online Business Sees Small Rise In Q1

As a result of the current health crisis, LeoVegas announced a small impact on its online business as sales for the first quarter of the year rose four percent to €89.4 million (2019: €86.3 million).

The cancellation of global sporting events saw a decrease of nine percent for the sports betting division of the business, with LeoVegas saying that it possibly took market shares in casino mainly from the land-based industry as well as from more sportsbook-oriented rivals.

In the Q1 report LeoVegas claims in favour of a prosperous gaming industry, responsible gaming and positive social growth that its data has shown no indicators that gambling issues have increased between existing and new customers.

LeoVegas President and CEO Gustaf Hagman speaking of the sustainability goals of the company said: “LeoVegas has decided to set clear ambitions, targets and measures for sustainability based on environmental, social and governance factors.

“We have done this to show in a transparent, clear and concrete way what LeoVegas aims to achieve in building a sustainable company and advocating for a sound gaming industry. Today approximately 10 per cent of the group’s employees work in specific roles in compliance and responsible gaming.”

Maintaining that long-term financial expectations remain unchanged, Hagman also praised the “clear effect” of action taken in the United Kingdom with all brands now working on the same platform and in “a good position to grow.”

Development in Germany, as well as the federal states of the country having agreed to control their online gaming industry at the national level by the end of 2021, is also being touched on and applauded.

“We are waiting with confidence for all of the details surrounding future regulation in the market and hope that Germany draws from the experiences of other regulated markets to ensure successful regulation with a high level of channelisation, Hagman continued.

“On the whole, the Nordics region had a slightly weaker quarter, which was partly affected by a decrease in sports betting activity at the end of the period and greater restrictions on bonus and deposit limits in the Danish market.

“In Sweden we continued to gain market share during the quarter. Following the successes in Sweden, a launch of the GoGoCasino brand is planned for the Finnish market during the second quarter.”

Q1 gross profit for the group rose 3.2 percent to €59.8 million (2019: €57.9 million), the EBITDA rose 25% from €7.2 million to €9 million and consumer depositors jumped 6 percent to 413.269 (2019: 388.747). Locally controlled sector net gaming revenue was 53 percent (2019: 50 percent) of total NGR.

The gross profit after the quarter was €59.8 million (2019: €57.9 million) in the first quarter, which corresponds to a gross margin of 66.9 percent (2019: 67.1 percent).

With his CEO comments drawing to a close, Hagman emphasised: “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.”