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LeoVegas AB Q1: Quarterly report 1 January – 31 March 2021

George Miller

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Expekt being launched anew to offer the Nordic region´s ultimate gaming experience
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“A good start to the year and increased focus on sports”
Gustaf Hagman, Group CEO

first quarter 2021: 1 january–31 march        

  • Revenue increased by 8% to EUR 96.7 m (89.4). Organic growth in local currencies was 8%.
  • Organic growth when excluding Germany was 19%.
  • Adjusted EBITDA was EUR 10.9 m (9.0), corresponding to an adjusted EBITDA margin of 11.3% (10.0%). Reported EBITDA was EUR 10.4 m (9.0).
  • The number of depositing customers was 462,386 (413,269), an increase of 12%.
  • Adjusted earnings per share were EUR 0.07 (0.06).

events during the quarter

  • LeoVegas acquired Expekt from Betclic Group for a total purchase price of EUR 5 m. Expekt is one of the most well-known sports betting brands in Sweden and the Nordic markets, and strengthens LeoVegas’ brand portfolio ahead of the intensive sport event years in 2021 and 2022. The acquisition of Expekt is expected to be completed in May 2021.
  • LeoVegas’ shares were taken up for trading in USD on OTCQX Markets in the USA. This is a way for the company to meet a steadily growing interest from US investors.
  • Via LeoVentures, LeoVegas invested EUR 1.1 m for 25% of the shares in SharedPlay, a company that makes it possible for players to share their gaming experiences with others through the industry’s first multiplayer solution.

Events after the end of the quarter

  • Preliminary revenue in April amounted to EUR 32.7 m (37.5), representing negative growth of 13%. Excluding Germany, revenue grew 4%.
  • The Royal Panda brand has been migrated to the Group’s proprietary technical platform, Rhino. All of the Group’s wholly owned brands are now run on the Rhino platform.
  • LeoVegas has started its own game studio, Blue Guru Games, to develop new and innovative games. The studio will develop exclusive games for LeoVegas as well as for other operators. The first games will be released in late 2021.
  • LeoVegas was issued a sanction fee of SEK 2 m by the Swedish Gambling Authority. The company intends to appeal the decision.

 

COMMENT FROM GUSTAF HAGMAN – GROUP CEO

FIRST QUARTER
We are pleased with the start of the year and increased our revenue by 8% during the first quarter. Excluding Germany, which has been affected by new restrictions related to the upcoming regulation, revenue increased by 19%. Our growth has been driven mainly by our loyal customer base, which reached a new record level during the period. We have maintained a high pace of investment, and despite this we achieved adjusted EBITDA growth of 22%, driven by our scalability and good cost control.

ACQUISITION OF EXPEKT – increased FOCUS ON SPORTS BETTING
During the first quarter we acquired the well-known sports betting brand Expekt. The acquisition gives us one more leg to grow on and complements the Group’s brand portfolio and product offering in a strategically good way. We are looking forward to Expekt once again becoming a leading sports betting brand in Sweden and thereafter also in other markets. The acquisition is expected to be completed in May in connection with our migration of the brand to our own technical platform. The timing of the acquisition is perfect as we are now facing two years filled with major sports events, and we plan to launch Expekt well in advance of the UEFA European Football Championship, which starts in June.

MarKETS
During the first quarter we saw the full effect of the changes taking place in the German market. Operators in the market are acting differently with respect to implementing the new restrictions, which unfortunately has led to a skewed competitive situation. The assessment is that up to 70%-80% of the German market for casino has temporarily been shifted over to operators that have chosen to not adapt to the coming market regulation. Our hope is that this will soon be sorted out by the German authorities, which is a prerequisite for the licence system’s success, with a high level of channelisation and consumer protection. Germany generated approximately 6% of the Group’s total revenue during the first quarter, compared with 15% a quarter earlier. Despite this development in Germany we delivered good growth at the Group level, which reflects our strong performance in many other key markets, including Italy, Canada and Spain. Our business is more diversified than ever before, and growth at the Group level is proof that our data-driven way of working and allocating marketing investments is effective.

I also want to highlight Sweden, where the strength of the LeoVegas brand and our product breadth is appreciated by our customers. Our Swedish customer base set a new record during the quarter, and in March we grew on a yearly basis for the first time since the temporary Covid-19 restrictions were implemented in July 2020.

leoventures
The first quarter was an intensive period for our investment vehicle LeoVentures. Among other things we invested in SharedPlay, a company that makes it possible for players to share their gaming experiences with others through the industry’s first multiplayer solution. For a long time we have created successful,  exclusive games with the help of external providers. We are now taking the next step by starting our own game studio – Blue Guru Games. This venture will give us full control and greater flexibility in developing new games, a unique offering to our players, and also a new revenue stream for the Group.

COMMENTS ON the SECOND QUARTER
Revenue for the month of April amounted to EUR 32.7 m (37.5), corresponding to negative growth of 13%. Excluding Germany, growth in April was positive at 4%.

Finally I want to urge you to be on the lookout for the new launch of Expekt in Sweden towards the end of May – you won’t be disappointed!

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 50 69 21 80, UK: +44 (0) 20 71 92 80 00, US: +1 63 15 10 74 95, Confirmation code: 6888544 or join at the web https://edge.media-server.com/mmc/p/x6q2utt4

This information is information that LeoVegas AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was submitted for publication, through the agency of the contact person set out below, at 08:00 CET on 6th of May 2021.

eSports

EsportsBets Partners with Esports Charts

George Miller

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EsportsBets Partners with Esports Charts
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EsportsBets, a Catena Media product and leading source for curated esports tournaments and betting-focused content, is pleased to announce that it has partnered with business intelligence firm Esports Charts (an ESM.one Inc. product). The partnership further strengthens the EsportsBets’ ability to inform and educate its audiences worldwide.

EsportsBets has already established itself as a go-to source for understanding and navigating the growing esports betting space. The esports data provided by Esports Charts will allow EsportsBets.com to further its commitment to offering the most up-to-date information to its vast readership base.

“I’m a great believer in data science and statistics,” said Gianfranco Capozzi, Head of Esports at Catena Media and Product Manager for EsportsBets. “Our users are some of the most inquisitive on the Internet and highly active when it comes to in-depth research — not just on Google, but also on community sites such as Reddit, specialized forums, and social media. This opportunity to cooperate with Esports Charts will give us the chance to back our editorial and publishing efforts, showing that our content is not just sentiment-driven, but also based on actual data.”

Talking more specifically about esports and the gambling markets, Capozzi added:

“Esports bettors are new-age bettors who will ultimately disrupt the market. We need innovation and technology developments able to meet the requirements of this new generation. Thanks to the real numbers and stats tracked by Esports Charts, I am confident that we can also prove to the most skeptical bookmakers, the huge potential of the burgeoning esports market.”

Sergii Rudenko, Head of Sales & Partnership for Esports Charts, added:

“We’re excited to work with EsportsBets and help them achieve their editorial and content goals. Esports Charts is positioned to help the industry in many ways and we will continue to bring value for our clients and partners.”

The global esports betting market is worth approximately $17.2 billion as of the end of 2020, according to Wholesale Investor. As casinos and traditional sporting events continue to adjust to the global pandemic, many organizations — and esports fans — have turned to esports betting as an additional source of revenue. That is why it is crucial that consumers have access to the most accurate data available.

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eSports

BETER enters into strategic partnership with Bayes Esports

George Miller

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BETER enters into strategic partnership with Bayes Esports
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One of the betting industry’s leading provider of fast sports & esports content, live streaming, live data and odds, BETER has brokered a deal with esports data company Bayes Esports. In addition to providing a significant impetus to the further growth of BETER’s esports department, this landmark deal will also allow BETER to supply odds with pin-point accuracy.

According to experts’ latest estimates, total esports viewership is projected to grow 9% annually over the next 2 years and reach 646 million views by 2023. In other words, the esports audience will be double in 2023 what it was in 2017. With this in mind, BETER constantly strives to further strengthen its dedicated esports department and improve the quality of services which it offers.

“We’re proud that we signed a partnership agreement with Bayes Esports. It will definitely help us achieve the goals set for 2021: to maximise the distribution of our content to new clients and markets, including in Asia, where betting also plays a big role. For more than three years, we at BETER continue to make BETERable content, as well as help our clients to harness new market opportunities and provide thrilling content for bettors,” said Alex Barkar, CEO at BETER.

As a part of the agreement, Bayes Esports will supply real-time data for popular esports tournaments to BETER, whereas BETER’s esports trading department will offer odds with even better accuracy and increase open odds uptime to 95%.

“We see this partnership as a great synergy of client-focused services and robust solutions. By combining our technology-driven products and machine learning algorithms with BETER’s trading team’s experience, we will make a real impact in the betting industry,” said Mark Balch, VP Esports Betting Services at Bayes.

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Latest News

Norwich City Terminates Sponsorship Deal with BK8 Sports

Niji Narayan

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Norwich City Terminates Sponsorship Deal with BK8 Sports
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Norwich City has terminated its sponsorship deal with bookmaker BK8 Sports.

The sponsorship deal, which was confirmed last Monday, had been met with widespread criticism by fans of the club, who had uncovered “sexually provocative” social media marketing campaigns published across BK8’s channels.

“The club and BK8 have taken on board feedback from its supporters and partners, and after continued discussions we have agreed to immediately end the partnership,” Norwich City said.

Ben Kensell, chief operating officer of Norwich City, said: “We have worked hard to build trust and engagement through our countless initiatives with our supporters and partners. We place huge value on our open and honest relationships with our community and supporters.

“As a self-financed club there is always a fine balance between generating the revenue levels required to help maintain that model, whilst working within our visions and values.

“On this occasion, we made an error of judgement. Our standards were not at the levels we demand of our football club.

“We can now only apologise to our supporters and former players, Grant Holt and Darren Eadie, who were across the BK8 promotional launch campaign, for any offence caused.

“We remain highly committed to diversity and equality across our football club and its community. We want to continue to embed a highly inclusive culture across the club, together with an accessible and welcoming environment free of demeaning and discriminatory behaviours.”

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