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LeoVegas AB: Fourth quarter: 1 October-31 December 2017

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LeoVegas AB: Fourth quarter: 1 October-31 December 2017
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“Three acquisitions, a listing change, unicorn status, refined strategy and one of our strongest quarters ever.”

                                                                                  Gustaf Hagman, Group CEO and co-founder

 

Fourth quarter: 1 October-31 December 2017

  • Revenue increased by 65% to EUR 67.8 m (41.2). Organic growth was 48%. Organic growth excluding markets closed in 2017 was 82%.
  • Revenue from regulated markets accounted for 29.0% (11.0%) of total revenue.
  • Mobile deposits accounted for 69% (67%) of total deposits, which increased by 62% to EUR 224.6 m (139.1).
  • The number of depositing customers was 253,299 (176,306), an increase of 44%. The number of new depositing customers was 128,409 (85,384), an increase of 50%. The number of returning depositing customers was 124,890 (90,922), an increase of 37%.
  • EBITDA was EUR 6.1 m (10.0), corresponding to an EBITDA margin of 9.0% (24.2%). EBITDA adjusted for items affecting comparability was EUR 7.1 m (10.0), corresponding to an adjusted EBITDA margin of 10.5% (24.2%).
  • Earnings per share were EUR 0.02 (0.10) before dilution and EUR 0.01 (0.10) after dilution.
  • LeoVegas’ board of directors proposes a dividend of SEK 1.20 (1.00) per share, for a total of SEK 119,634,564 (EUR 12.2 m).

Events after the end of the quarter

  • Net Gaming Revenue (NGR) totalled EUR 24.8 m (14.1) in January, representing growth of 76%. Excluding the acquisition of Royal Panda, NGR in January was EUR 20.9 m, representing growth of 48%.
  • LeoVegas acquired 51% of the shares in the company behind the streaming network CasinoGrounds.com for SEK 30 m (EUR 3.1 m), with a maximum potential earn-out of SEK 15 m (EUR 1.5 m). LeoVegas completed the acquisition and gained possession of the shares as per 1 January 2018. See page 10 for further information.
  • LeoVegas entered into an agreement to acquire, for GBP 65 m (EUR 73.5 m), assets from Intellectual Property & Software Limited and related assets from two additional companies that operate several brands, including 21.co.uk, slotboss.com, Bet UK and UK Casino. See page 10 for further information.
  • LeoVegas carried out its change in listing to Nasdaq Stockholm on 5 February.

Comment from Gustaf Hagman – Group CEO and co-founder

An incredibly eventful quarter

Q4 2017 was one of our best quarters ever, with very strong underlying growth. Compared with Q4 2016 and excluding markets that we closed in 2017, our organic growth was an incredible 82% during the quarter. We even set a record for new depositing customers.

During the Q4 LeoVegas passed an important milestone, namely, a market cap higher than a billion dollars, which means that we became a “Unicorn”.

I am very proud that we managed to carry out our first major acquisition during the fourth quarter, Royal Panda. During the last two years we have scoured the gaming market for companies that fit our overall expansion strategy, which Royal Panda does through its strong presence in the UK and its great global brand. Moreover, they earn a higher share of their revenue from mobile devices than the industry on average.

Royal Panda contributed EUR 5.6 m in revenue during the fourth quarter, which is slightly lower than their Q3 figure. This is because Royal Panda was included for only two months of the quarter, and because the company closed a number of markets during the year for the same reason that LeoVegas closed the Czech Republic and Australia. This was according to plan, and adjusted for these markets, Royal Panda grew 57% in Q4. Royal Panda is showing continued good performance in early Q1 2018, and I am very proud of how well our collaboration works already today.

During the quarter we acquired 51% of the shares in GameGrounds United AB (CasinoGrounds). The company operates the site www.casinogrounds.com, which in a short time has become a platform for casino streaming, with an active social casino forum.

In CasinoGrounds we are seeing a new behaviour in which people interested in casino games watch others play casino games via YouTube and Twitch. The combination of proprietary content and video format is creating interesting opportunities going forward and is in line with LeoVegas’ strategy to be an innovative and entrepreneur-driven company. Our ambition now is to scale up existing operations to more markets.

Refined strategy

For several years we have been searching for acquisition candidates, and we have now successfully carried out our first acquisition. This is yet another milestone in the Company’s history. LeoVegas will always focus on organic growth, but we will also make complementary acquisitions when we believe that they will develop our overall business. I want to add, however, that in the near-term we will focus on integrating these recent acquisitions.

Our expansion strategy is to grow in regulated markets and markets that will soon become regulated, and to carry out strategic, complementary acquisitions.

Our product strategy is to be the most innovative and pioneering company in the gaming industry.

Change in management team

LeoVegas Mobile Gaming Group is striving to be the most innovative, entrepreneurial and fastest growing company in our industry. To strengthen this pursuit, we are working intensively with our company culture, among other things.

Toward this end, I have created a new position, Chief Human Resources officer (CHRO), and brought Caroline Palm onto the Group Management team. In recent years Caroline has served as head of HR for a technology and entrepreneur-driven company grouping with more than 2,000 employees.

During the quarter we have seen the strengths of Jarl Modén’s work, and as a result we have promoted him to the permanent position of Chief Product Officer (CPO) on the Group Management team.

Authentic Gaming

Authentic Gaming unveiled very exciting news with the announcement of an agreement with Foxwoods Resort Casino, the largest casino resort in the USA. This has made it possible for the first time for casino gamers in Europe to play live casino streamed directly from casino tables in the USA. The service is distributed through Authentic Gaming’s network of operators, which includes LeoVegas.

4Q’17 figures

Revenue during the fourth quarter amounted to EUR 67.8 m (41.2), an increase of 65%. Organic growth was 48%. EBITDA adjusted for items affecting comparability related to consulting services for acquisitions and our listing on Nasdaq Stockholm was EUR 7.1 m (10.0), corresponding to an adjusted EBITDA margin of 10.5% (24.2%). Revenue from regulated markets accounted for 29% (11%) of total revenue during the quarter.

2017 – The year as a whole

We grew by 53% during 2017. But our organic growth during the year, excluding markets that we closed, was a full 61%. This is outstanding performance and figures that we at LeoVegas are very proud of.

In terms of personnel we grew from 365 employees at the start of the year to 566 at year-end, which of course puts high demands on our managers and organisation.

We have expanded our offices, and during the year we moved to new premises in Stockholm – all to create the best conditions for continued growth of the Company.

Denmark

During the year Denmark went from being a small market to a very important one and has thereby shows that our model, combined with hard work, is successful. LeoVegas is now one of the absolute strongest gaming brands in Denmark and continues to grow.

Canada

During the quarter, we launched our free-to-play site, LeoVegas.net, in Canada with the hockey legend Mats Sundin as an ambassador. At LeoVegas.net you can play mobile casino games without wagering real money and this will provide good marketing opportunities.

Our position – GameTech

Ever since LeoVegas was established we have been extremely product- and technology-driven. We therefore view ourselves not only as a mobile gaming company, but as a leading tech company in the gaming industry. Explaining LeoVegas to people in our external environment when it comes to identity, culture and way of working is described best by the term GameTech.

Start of 2018

Rocket X

We began the year with another large acquisition, with focus on the UK, when we entered into an agreement to acquire assets from Intellectual Property & Software Limited (“IPS”) along with related assets from two related companies with highly-ranked brands such as 21.co.uk, Slotboss, Bet UK and UK Casino. We now refer to this collectively as Rocket X.

Since its launch in 2012 LeoVegas has had a very successful global brand strategy. Following the acquisition of Royal Panda, LeoVegas has two scalable brands. In larger markets these global brands, LeoVegas and Royal Panda, can be complemented with a local, multibrand strategy, which has now been made possible through the Rocket X acquisitions. The UK market is sufficiently large and mature to justify working with several brands. In Rocket X we have identified several features that have caught our interest, and they have great momentum – both in their growth and profitability. This, combined with one of the market’s most effective customer acquisition models, gives us a stronghold in the UK plus 85 new employees with local expertise. With this acquisition we have also get a company culture that has a sharp focus on technology and products, which is a perfect match for LeoVegas.

In connection with the acquisition of Royal Panda, the Group secured debt financing of EUR 100 m, of which EUR 20 m was utilised in connection with the acquisition. We thus have scope of up to EUR 80 m to settle the Rocket X acquisitions.

During the fourth quarter of 2017 Rocket X had revenue of GBP 11.7 m and adjusted EBITDA of GBP 3.8 m, for an adjusted EBITDA margin of 32.6%. Revenue for the fourth quarter grew 49% compared with a year earlier. Of total revenue, 96% comes from the UK and 73% via mobile devices.

The acquisition is contingent upon the fulfilment of conditions, and possession is expected to be transferred during the latter part of Q1’18.

If both Royal Panda and Rocket X had been part of LeoVegas during the entire fourth quarter, consolidated revenue would have been EUR 84 m.

Product news

Apple Pay and facial recognition

Fifty-five per cent of LeoVegas’ customers in the UK use iPhones. The launch of Apple Pay is thereby contributing to an improved experience for these customers. Being able to offer Apple Pay requires that the market is locally regulated, which the UK is. The UK is the first market in which LeoVegas is launching Apple Pay, but we already have plans to introduce it in more markets. Using state-of-the-art technology, LeoVegas is also launching facial recognition for log-ins and approval of payments using Apple Pay. This is possible owing to LeoVegas’ own technology paired with Apple’s new iPhone X, allowing customers to log in in a few hundredths of a second and approve payments via Apple Pay just as fast.

Expanded focus on live sport

LeoVegas is working intensively to improve and build the best sports betting experience ahead of the forthcoming UEFA World Cup. As part of this we are expanding our live streaming offering in the Nordic markets. LeoVegas Sport now has a strong offering of some 10,000 live broadcast sport events.

Exclusive games

LeoVegas is working closely with a number of game developers, including NetEnt and Yggdrasil, to come up with innovative and exclusive games, which we call LeoVegas Originals. One example is WitchCraft Academy from NetEnt, which was launched in January, and more games are in the starting blocks for launch.

Nasdaq Stockholm’s Main Market list

I am very happy to note that as from 5 February LeoVegas is traded on Nasdaq Stockholm’s Main Market list. This change in listing will strengthen the Company and give us an even better quality seal in our communication and cooperation with authorities, licensors and partners. For institutional investors – both in Sweden but even more so abroad – we will become more accessible and attractive as a company.

Other comments on Q1 2018

January has begun well, with Net Gaming Revenue (NGR) of EUR 24.8 m (14.1), representing growth of 76%. Growth excluding acquisitions and closed markets was 72%. During the first quarter we expect marketing in relation to revenue to be slightly lower than the average for 2017.

We continue to win numerous accolades – most recently at the EGR Nordics Awards, where the most successful and innovative gaming companies were highlighted. In tough competition LeoVegas won three distinctions: “Nordics Operator of the Year”, “Casino Operator of the Year” and “Sports Betting Operator of the Year. It’s always fun to win!

With several great acquisitions, awards, our change in listing and a strong start to the first quarter, all of us at LeoVegas are looking forward to an exciting 2018.

Presentation of the report – today at 09:00 CET

To participate in the conference call, and thereby be able to ask questions, please call one of the following numbers: SE: +46 (0) 8 5065 3942, UK: +44 (0) 330 336 9411, US: +1720 543 0214 code: 492 82 23 or join at the web https://edge.media-server.com/m6/p/o7um9xoi

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7-Eleven selects Jackpot.com as their official lottery partner

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Online Lottery Courier Service Jackpot.com Announces Exclusive Collaboration with 7-Eleven, Inc.

Jackpot.com will serve as the official lottery courier service of 7-Eleven, Inc., initially launching in Ohio and Massachusetts  

Jackpot.com – the online lottery courier service that allows consumers to purchase official state lottery tickets on their phone, tablet, or computer – announced today an exclusive collaboration with 7-Eleven Inc., the largest convenience store chain in the world, to serve as their official lottery courier service.

As part of the collaboration, 7-Eleven customers in Ohio and Massachusetts will be able to sign up and play lottery games and scratchers on the Jackpot.com app or website. The program will initially be launched in over 600 7-Eleven and Speedway stores in Ohio and Massachusetts, with a special launch promotion that gives 7-Eleven customers a free lottery ticket on their first deposit by using promo code, “7Eleven”.

“We’re thrilled to work with 7-Eleven, the leading retailer of lottery tickets in the country,” said Akshay Khanna, CEO and co-founder of Jackpot.com. “Leveraging our technology and innovation, we can provide additional convenience for their customers, while adding an additional source of revenue. A true win-win relationship for all.”

By launching in Ohio and Massachusetts in 2023 and 2024, respectively, Jackpot.com aims at adding another avenue for player convenience with one of the most widely recognized brands in the convenience-retailing space. With a presence in Ohio, the nation’s seventh-largest lottery market, and Massachusetts, whose state lottery produced $1.2 billion in net profit for the Commonwealth during the 2024 fiscal year, Jackpot.com’s collaboration with 7-Eleven represents an added layer of accessibility for players.

Jackpot.com remains committed to responsible play and has significantly invested in protocols by allowing customers of legal age to set spend limits and limits on daily deposits, all while providing access to local and national responsible gambling resources, self-exclusion, self-suspension and automated notifications that offer help should problematic behavior be detected. Jackpot.com is also the only lottery courier service to launch with an iCap certification from the National Council on Problem Gambling.

To learn more, visit jackpot.com. First-time users can also download the official Jackpot.com Lottery App on the iOS or Android App Stores, where available.

 

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The World Esports Summit 2024 Is Here!

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The IESF World Esports Summit returns this December to Busan, South Korea. Hosted at the Busan Esports Arena (BRENA) from December 5-6, the Summit will bring together prominent figures from Esports, global brands, government officials, and sports executives for a deep dive into the current Esports trends, its rapid transformations, and future challenges.

This year’s theme, “Building Bridges, Not Barriers, Through the Power of Esports,” will highlight the role of Esports in uniting cultures, ideas, and industries. Under the slogan “We Empower Success,” the

Summit provides a great platform for Esports experts to engage in meaningful discussions and sessions, sharing their insights on trends and presenting forward-looking ideas for our industry.

The event, strategically timed at the close of the competitive season, presents a perfect environment for reflection on the year’s biggest events, industry shifts, and the next steps for Esports. Attendees can follow the expert’s perspectives on topics like:

  • (R)Evolution in Esports
  • East Meets West
  • Esports Integrity: The Role of Referees
  • The Rise of International Esports Competitions
  • (In Korean) Korea’s Secret Sauce etc.

Also, featured at this year’s event are the IESF World Esports Training Camp and the World Esports Referee Academy.

These are very important IESF programs that are aimed at advancing the skills and professional standards of the next generation of Esports leaders.

Join us in Busan for two days designed to inspire, connect, and empower the international Esports community.

Registration for the World Esports Summit is free and open to all interested attendees.

To register, please complete our online registration form: iesf.formstack.com/forms/wes2024_participation_registration

See you in Busan!

 

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Akhil Sarin CMO at Easygo named as key note at ICE Esports Conference

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Clarion Gaming has confirmed that Akhil Sarin CMO at Easygo, the technology powerhouse behind the success of global brands Stake and Kick will headline the Esports & Games Conference (EGC) taking place on 21 January as part of the ICE Barcelona experience.

As a key member of the executive team, Akhil Sarin has been instrumental in securing the high-profile partnerships that have accelerated Stake’s growth, including the Stake F1 team, UFC, Drake, and Premier League Everton FC.

Through these strategic alliances he has amplified Stake’s brand presence at the same time as creating unique, immersive player experiences, in the process setting new industry benchmarks.

Announcing the high profile speaker Will Harding, Head of Esports at Clarion Gaming said: “Securing Akhil Sarin as EGC  key note at ICE Barcelona represents a remarkable opportunity for our attendees to gain invaluable insight into cutting-edge strategies in digital and influencer marketing .

“Akhil’s expertise with Stake and Kick.com embodies the forward-thinking, innovative approach that defines the digital marketing landscapes. His participation underscores the calibre of knowledge-sharing that we are  committed to delivering at ICE and he is sure to both inspire our attendees and elevate their strategic perspective.” 

Looking ahead to ICE Barcelona, Akhil Sarin stated:  “Collaborating with Clarion Gaming at ICE Barcelona is an exciting opportunity to showcase Stake’s journey and continued focus on bold partnerships and creative marketing strategies that resonate with audiences.”

He added “The EGC is a vital platform for exchanging transformative ideas and shaping the future of gaming and entertainment. I look forward to discussing Stake’s vision and collaborating with industry leaders to inspire growth and innovation across the sector.”

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