LeoVegas' record customer base drives revenue growth in Q3

LeoVegas reported Thursday its financial results for the third quarter ended September 30. Revenue increased by 1% to EUR 88.9 million (USD 105.22 M) compared to the same period of the prior year. Ebitda dropped to EUR 11.9 million from EUR 12.7 million, corresponding to an EBITDA margin of 13.4%. The number of depositing customers was 438,691 (347,464), an increase of 26%, a new record level for the company's customer base.

LeoVegas Group CEO Gustaf Hagman said the company's new record level of its customer base is partly attributable to the ongoing structural shift from land-based gaming to online, "but above all to our focus on creating the best product and experience for our customers." Hagman noted a favourable development in most of the operator's markets during the quarter, with many seeing double-digit growth year-over, mainly driven by the growing customer base.

The company said operations in Sweden have been affected by the temporary restrictions that were introduced on 2 July as a result of Covid-19. "In Sweden we are seeing a troubling development in which the unlicensed market continues to grow unhindered," Hagman said in a press release. "A growing number of operators without licences are actively targeting Swedish players, including those who have been barred by the self-exclusion tool Spelpaus. This has been confirmed by, among others, several organisations that provide help to people with a gambling problem. These organisations have noted that the majority of those seeking help are playing with the unlicensed operators. The problem is big and is shaking the foundation of the entire Swedish licence system. Quick and strong measures are now needed by Swedish politicians and authorities to ensure a well-functioning Swedish gaming market."

As for the recently regulated German market, Hagman said LeoVegas has already begun implementing limitations in their respective customer offerings in advance that operators are expected to carry out ahead of the implementation of the licence system, which he said will initially have a negative impact on revenue. The new licence system for gaming is expected to be implemented during the second half of 2021. "LeoVegas today has a licence in the German state of Schleswig-Holstein and expects to receive nationwide licences once they are available. Germany generated approximately 17% of the Group's total revenue during the third quarter."

As for preliminary revenue for the month of October, it amounted to EUR 33.0 million, corresponding to an annual growth of 27%. Hagman said the changes introduced in the German market on 15 October have had a slightly negative impact on revenue.

See full LeoVegas Q3 report here.