LeoVegas Q2 revenue rises 17% as Covid-19 online shift aids growth
Stockholm-listed operator reports 34% uptick in depositing customers for July to mark record monthly level
LeoVegas has reported a Q2 2020 year-on-year revenue increase of 17% to €110.7m (£100m) as players continue to switch online amid Covid-19.
Company EBITDA amounted to €23m (£20.8m) during the quarter, corresponding to an EBITDA margin of 20.8%, a figure up by almost 5% (4.8%) from the same period in 2019.
Net gaming revenue (NGR) increased by 18% during Q2 to €109.4m (£99m), with 51% of NGR coming from locally regulated markets.
At a local market level, Nordics region NGR dropped by 2% annually during the quarter, but NGR from the rest of Europe jumped by 30% in the same period.
“The markets in which society was partly shut down in response to the Covid-19 crisis showed the strongest growth in April and May, while figures for June indicated a return to more normal player behaviour,” LeoVegas said in its Q2 report.
The biggest annual rise in Q2 NGR was experienced in the rest of world segment, where NGR grew by 35%.
LeoVegas gross profits increased by 17% during Q2 2020 to €74.7m (£67.5m), as gross margin remained the same at 67.5%. Gambling taxes paid by the group rose by 33% due to an increase in regulated market revenue.
Marketing costs also climbed to €32.7m during the quarter, accounting for 29.6% of revenue, however personnel costs in relation to revenue fell to 11.9% from 14% in Q2 2019, despite LeoVegas increasing its staffing in product and technology areas.
LeoVegas CEO Gustaf Hagman
At a H1 2020 level, revenue increased by 11% to €200.2m (£181.1m), with a corresponding increase in EBITDA, which rose to €32m amid an EBITDA margin of 16%.
LeoVegas said July revenue was up by 5% to €30.7m (£27.7m), however deposit and bonusing restrictions in Sweden have negatively impacted revenue. These measures have been heavily criticised by the group, which added its support to a BOS-authored letter opposing them in June.
“There is a large risk that these restrictions, implemented entirely without supporting factual data, are undermining the Swedish regulation system and driving players to companies without Swedish licences, where player protection is non-existent,” the firm said in its report.
During the quarter, LeoVegas concluded the successful migration of 12 UK-based brands to its proprietary tech platform as well as launching its LiveCasino and GoGo Casino brand across a number of markets.
CEO Gustaf Hagman welcomed the positive results as delivering “solid growth and profitability” for the business.
“The positive trend in our customer base is continuing into the third quarter, and the number of depositing customers increased by 34% in July compared with the same period a year ago, to a new record level for a single month,” said Hagman.
“We will maintain a continued high rate of investment during the third quarter, partly linked to the launch of new brands and market establishments,” he added.
LeoVegas’ share price went up by nearly 9% in early trading.