LeoVegas posts marginal revenue increase for Q2 2022
Casino continued to be the key driver for the Stockholm-headquartered operator as US operations put on pause due to MGM bid
LeoVegas has recorded a modest 1% year-on-year (YoY) increase in revenue to €98m (£80.2m) for Q2 2022 as the firm’s exclusion from the Netherlands continued to put a dent in its financials.
When taking the Dutch market out of the mix, revenue increased by 9%, fuelled by solid performance in the Nordics.
The Nordic countries comprised the biggest chunk of LeoVegas’ net gaming revenue (NGR) in Q2 taking a 53% share, with the rest of Europe making up 26% and the rest of the world accounting for 21%.
Casino accounted for 73% of the firm’s gross gaming revenue (GGR), with live casino representing for 15% and sports betting up one percentage point share to 12%.
The reason for this growth was attributed to the firm’s Expekt brand.
Meanwhile, the company announced there was a 4% YoY decrease in depositing customers from 460,697 to 442,647.
New depositing customers also declined 11% YoY from 195,329 to 158,149. This figure is also down 10% from Q1 2022. The decline was due to a change in focus to high-quality customer acquisition channels in Latin America and new legislation in Finland.
NGR from the regulated markets the business operates in was 79% of total NGR, rising from 65% in Q2 2021, as the operator noted that this was in line with its strategy.
The gaming-centric operator also reported adjusted EBITDA of €9m, falling 15% from €10.6m and a decreasing EBITDA margin from 10.9% to 9.2%.
Operationally, it was a busy Q2 for LeoVegas as it launched in Ontario and released its first proprietary games through its in-house gaming studio Blue Guru Games.
LeoVegas also provided an update on MGM Resorts’ £607m bid for the business, with the firm stating it seemed “likely” that the offer would be accepted by shareholders.
LeoVegas said that once accepted, it would lead to the company’s shares being delisted from Nasdaq Stockholm later in the year.
The acceptance period for the bid expires on 30 August.
LeoVegas also confirmed that MGM Resorts holds approximately 27% of outstanding shares in the company.
The swoop by MGM Resorts has led to LeoVegas pausing its expansion project in the US and New Jersey, although the operator confirmed should the acquisition fall through, it would resume its US strategy.
Touching on the MGM offer, LeoVegas CEO Gustaf Hagman said: “The expansion project in the US and New Jersey was paused at the end of the quarter due to the ongoing bid and the initiatives and obligations that MGM already has in the US market.
“The assessment is therefore that the most responsible course of action is to pause the expansion until we know whether the bid on LeoVegas will be accepted. If a launch is made possible in the future, we will be able to resume the US expansion with a short start-up period.”
Hagman also revealed LeoVegas plans to launch in the Netherlands in the autumn after having applied for a licence, and that the group is set to expand its football sponsorship marketing strategy.
The firm is already looking at continued growth in Q3 2022, as preliminary numbers recorded for July show revenue has remained flat at €32.8m and up 8% when the Dutch market is excluded.