LeoVegas sees organic revenue growing 8% in Q2

LeoVegas Group saw its revenue increasing organically by 8% from €87.4m to €94.4m during Q2 2019, as compared to the same period a year earlier, according to a press release by the group. Preliminary revenue grew by 9%, from €27.1m to €29.7 in July, as compared to the same month a year earlier.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) was €15.1m, compared to €15m of Q2 2018, corresponding to an EBITDA margin of 16% which was 17.2% during the same period of the previous year.

“We reiterate our ambitious financial targets to achieve €600m in revenue and EBITDA of €100m by 2021. We want to clarify that the targets are based primarily on organic growth, but also include revenue from potential future acquisitions,” said Gustaf Hagman, CEO of LeoVegas group.

The number of depositing customers increased by 8%, from 309,961 to 334,961 and the number of returning depositing custmers also grew by 12%, from 175,500 to 196,203, compared to Q2 2018. Earnings per share were €0.07 before and after dilution, with no change reported.

‘Balanced’ revenue mix

“Compared to a year ago, LeoVegas has a more balanced geographic revenue mix. This means that we are not as sensitive to challenges that may arise in a specific market, which in turn means that we have lower business risk in the Group,” said Mr Hagman. 

“This work is helping to create necessary economies of scale and is countering the effect of that we are paying more gambling taxes. As previously communicated, our marketing investments also decreased compared with the first quarter of the year,” Mr Hagman added. “A contributing factor to this is more restrained marketing in Sweden during the quarter. In addition, the postponement of a few campaigns from the second to the third quarter has affected costs and contributed to operating profit, which will have a reverse effect during the third quarter.”

Furthermore, LeoVegas obtained a gaming licence in Spain and two weeks after the company launched its business in Spain, according to the press release sent to BM.

“This shows the strength and speed of LeoVegas and further demonstrates that our experience from regulated markets benefits us. Spain is a step in our continued expansion, and we have also recently carried out launches in other Spanish-speaking countries, such as Chile and Peru, as well as in Brazil,” continued Mr Hagman.

Moreover, Sweden has now been a regulated market for more than six months, and the development is beginning to indicate what kind of market the group will have over the long term. Leovegas also launched GoGoCasino and Pixel.bet.

“The investments made in 2018 and efficiency improvement work carried out thus far in 2019 are beginning to generate returns in the form of greater scalability of operations,” concluded Mr Hagman.