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

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LeoVegas Group to acquire game developer Push Gaming
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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.

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MERKUR UK strike 3-year University project to research next-generation gaming technologies

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MERKUR UK is pioneering the development of the gaming machines of the future following a partnership agreement with the University of Central Lancashire (UCLan).

A group of ten students from the University’s technology department will participate in the three year project entitled ‘The next generation of gaming technology’.

The research project will explore machine design, the use of composite materials to reduce manufacturing and transport costs and how AI can be applied in predictive machine maintenance.

Sascha Blodau, General Manager at MERKUR UK said: “I am delighted to confirm this dynamic project which will bring a fresh and exciting perspective on how technology can be deployed to develop the next generation of gaming machines.”
He added: “This type of collaboration is a first in the UK land-based sector and the outcomes could well have profound implications for the way in which gambling entertainment is delivered to and enjoyed by players.”

MERKUR UK joins an illustrious list of UCLan research partners which includes NASA, the English Football Association, the Professional Golfers Association and the International Olympic Committee.

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FeedConstruct Extends Partnership with ECL Beachtour for Exclusive Streaming and Data Collection Rights

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FeedConstruct Extends Partnership with ECL Beachtour for Exclusive Streaming and Data Collection Rights
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FeedConstruct is excited to announce the prolongation of its partnership with ECL Beachtour, securing exclusive international streaming and data collection rights for the prestigious beach volleyball tournament series.

Under this renewed partnership, FeedConstruct will provide comprehensive coverage of all five events held in Zurich, St. Gallen, Basel, Luzern, and Bern, ensuring that fans do not miss any of the thrilling matches. The exclusive rights will enable FeedConstruct to deliver high-quality streaming and precise data, offering in-depth insights into the matches.

The Swiss ECL Beachtour, established in 1996, is renowned as the highest national tournament series in beach volleyball in Switzerland and is considered one of the best beach volleyball tournament series worldwide. ECL Beachtour is especially popular among spectators, with an average attendance of 5,000 people per tournament.

FeedConstruct’s partnership extension with the Swiss ECL Beachtour highlights the company’s dedication to providing fans with exceptional access to premier beach volleyball content. This collaboration is set to bring the excitement and energy of beach volleyball, solidifying FeedConstruct’s position as a top sports streaming and data provider.

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BETCORE Announces Partnership with Unliment

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BETCORE Announces Partnership with Unliment
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BETCORE is thrilled to announce a groundbreaking partnership with Unliment, a leading provider of sports betting and iGaming solutions. This strategic collaboration promises to deliver unparalleled entertainment and innovation to players worldwide.

Unliment is renowned for its innovative solutions, offering a full range of products and services, including Sportsbook, RNG & Live Dealer Casino, Skill Games, Virtual Sport, and more. Their latest innovation, the limitless Bonus Engine, revolutionizes player rewards by creating multistep awards at every point of the player’s journey.
As part of this exciting partnership, Unliment has seamlessly integrated BETCORE’s TVBET and FASTSPORT verticals into their comprehensive iGaming platform. This integration enhances Unliment’s offerings, providing players with an even richer gaming experience.

Danuta Janicka-Mierzwa, Deputy Head of Sales at BETCORE, expressed her enthusiasm for the partnership, stating, “We’re thrilled to partner with Unliment and integrate our TVBET and FASTSPORT verticals into their cutting-edge iGaming solutions. This partnership signifies our commitment to delivering unparalleled entertainment and innovation to players worldwide.”

This collaboration marks a significant milestone for both BETCORE and Unliment as they embark on this exciting journey together. Players and partners can look forward to more groundbreaking developments and enhanced gaming experiences in the near future.

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