LeoVegas grabs share in Sweden as UK struggles continue
Stockholm-headquartered operator outperforms many competitors as Nordics net gaming revenue rises 14% in Q3
LeoVegas today reported Q3 revenue growth of 12% to €88.2m after gaining market share in Sweden’s re-regulated market.
EBITDA rose by more than 40% to €12.7m as the operator avoided the financial downturn of its Sweden-focused competitors, while hailing strong performance in Finland, Denmark and Italy.
The number of new depositing customers for the third quarter also increased by 5% to 334,042 as organic growth in local currencies was 13%.
Nordics net gaming revenue increased by 14% from the same period last year, while NGR from the rest of Europe decreased by 4%.
LeoVegas CEO Gustaf Hagman
LeoVegas CEO Gustaf Hagman revealed returning customers in Sweden were at an all-time high but echoed his colleagues by insisting claims of a 91% channelisation rate were wide of the mark.
Hagman said: “The all-time-high is proof that our focus on product and customer experience coupled with a commitment to responsible gaming is paying off in a regulated environment.
“We estimate that channelisation of online casino in Sweden is far below the Swedish Gambling Authority’s goal of 90%.
“We therefore look positively upon the fact that the Gambling Authority to a greater extent has begun prioritising measures to curb unlicensed actors.
“This is needed to ensure that the market’s regulation is successful and results in greater consumer protection,” he added.
The operator is instead facing challenges in the UK thanks in part to the poor performance of its Royal Panda casino brand.
According to regulus Partners estimates, UK revenues were down 32% YoY to 15% mix and down around 12% QoQ, albeit with some seasonality.
Germany also caused the Swedish operator problems after PayPal stopped offering gaming-related payments in the market, affecting revenue and customer acquisition numbers.
Marketing costs were flat during Q3 at €27.7m, although the operator expects that to increase significantly heading into the fourth quarter.
Regulus Partners analyst Paul Leyland said: “Cutting marketing can flatter the bottom line in the short-term, but the key test for LeoVegas is whether it’s very strong product and operational capabilities are enough to carry forward the topline in a more stringent cost and regulatory environment.”