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LeoVegas AB: Second quarter: 1 April-30 June 2018

Zoltan Tundik

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Published: 08:00 CEST 01-08-2018 /GlobeNewswire /Source: LeoVegas AB / : LEO /ISIN: SE0008091904

LeoVegas AB: Second quarter: 1 April-30 June 2018

A quarter with record earnings and new initiatives in sustainability and technology lays the foundation for continued strong growth

 – Gustaf Hagman, CEO and co-founder

Second quarter: 1 April-30 June 2018[1]

  • Revenue increased by 76% to EUR 87.4 m (49.7).
  • EBITDA was EUR 15.0 m (6.1), corresponding to an EBITDA margin of 17.2% (12.4%).
  • Organic growth excluding markets closed in 2017 was 38%.
  • NGR from regulated markets was 38.8% (25.1%) of total NGR.
  • Net Gaming Revenue (NGR) from Royal Panda and Rocket X[2] accounted for 15.6% and 12.8%, of total NGR and strong margins.
  • The number of depositing customers was 309,987 (173,034), an increase of 79%.
  • Adjusted earnings per share were EUR 0.13 (0.05).

 

Events during the quarter

  • New financial targets for the full year 2020 were presented on 19 April. The goal is to achieve revenue of at least EUR 600 m and EBITDA of at least EUR 100 m.
  • On 7 May it was announced that Stefan Nelson will be the new CFO, starting on 22 August 2018.
  • LeoVegas took a further step in responsible gambling by registering with GAMSTOP, a central system in the British market that helps customers restrict their gambling with online gambling companies licensed in Great Britain. LeoVegas has also integrated all of the Group’s brands with LeoSafePlay.
  • LeoVegas launched a new front-end platform. The technology gives LeoVegas new and improved opportunities to continue offering the best, fastest and most innovative mobile gaming experience.
  • Sports book 2.0 was launched on LeoVegas.com with a new design and new, improved gaming experience. On 7 June 2018 Swedish parliament voted in favour of new gambling legislation. The new legislation will take effect on 1 January 2019 and is in line with the previous proposal.

 Events after the end of the quarter

  • Net Gaming Revenue (NGR) in July amounted to EUR 26.4 m (18.3), representing growth of 45%.
  • LeoVegas made changes in its Group Management to optimise work with the strategic agenda in sustainability and the continued journey of growth, entailing stronger focus on responsible gaming and LeoSafePlay.
  • In Italy the government has proposed a ban on advertising for gambling, which would take effect in June 2019. At present the situation is unclear, and it is expected that the situation may change further by June 2019.

Comment from Gustaf Hagman – Group CEO and co-founder

A quarter with focus on sustainability and technology

The second quarter was one of LeoVegas’ most intense quarters ever. We not only launched a new sports book and design in time for the FIFA World Cup – we also adapted to the GDPR, stricter demands for compliance, and the forthcoming regulation in Sweden. These are just a few examples of projects that we have been working intensively with. On top of this, we have worked hard and completed a number of initiatives that will be important over the long term for the Company’s continued growth, for sustainability, and for a new technical platform.

Development during the quarter

Revenue totalled EUR 87.4 m (49.7) during the second quarter, an increase of 76%. Organic growth was 27%. Organic growth excluding markets that were closed in 2017 was 38%. EBITDA totalled EUR 15.0 m (6.1), corresponding to an EBITDA margin of 17.2% (12.4%).

Royal Panda and Rocket X are developing according to plan, with a strong EBITDA margin of 30.0% for Royal Panda and 21.8% for Rocket X.

We generated a record profit during the quarter, and the main explanation is lower marketing costs. Our data-driven marketing model works in such a way that we invest only if we see a sufficiently high return in our marketing channels. During the FIFA World Cup, many gaming companies that work primarily with sports betting significantly increased their advertising budgets, and as a result the long-term customer value of our marketing was deemed to be uncertain. Our models indicated not to advertise in certain channels, and accordingly we quite simply refrained. This in turn resulted in slightly lower growth but at the same time significantly higher EBITDA. I am very happy about the strong earnings in the quarter.

In addition, owing to the launch of our new front-end platform, certain links to our marketing partners needed to be redone. The same thing happened when we upgraded our back-end platform three years ago. This was a known risk and affected our customer inflow for a limited period.

This – together with the enactment of the GDPR and a generally stronger focus on compliance, where we stopped working with a large number of affiliates in the British market – affected our customer inflow and growth during the quarter. As we now enter the third quarter, we are well prepared. Our new platform has been launched, we have made good progress with our compliance efforts, and the World Cup is over. The third quarter will thereby be a quarter with focus on growth and on further driving our business forward.  

During the second quarter we also won three prestigious awards at the EGR M&I Awards: “Brand of the Year”, “Affiliate Marketing of the Year” and “Innovation in Mobile & Tablet”. We are proud and thrilled about all three of these distinctions – most notably “Brand of the Year”, which recognises our determination and drive to work with innovation and development of our brand.

Sustainability

The LeoVegas Mobile Gaming Group conducts responsible and sustainable business. Part of this involves increasing transparency surrounding the routines and regulations that we and other actors in the business work according to. Our vision entails changing the mindset in the gaming business. Going forward we have an ambition to work together with others in the business to initiate a long-term, joint effort to change the perception of the industry’s operations. Responsible business will contribute to sustainable growth, and this is the clear goal for the LeoVegas Mobile Gaming Group.

 

Compliance

The online gaming business in Europe is currently undergoing a fundamental change. A growing number of markets are choosing to embrace local regulation. The compliance requirements for operators are both growing and becoming more complex. This elevated focus on compliance is having a short-term effect on growth. In long term, however, we see this as an opportunity – since only professional and responsible operators will be able to work in this environment.

 For some time LeoVegas has been engaged in talks with the UK Gambling Commission (UKGC) on improvements that LeoVegas can make in compliance. It is a productive discussion on how we will improve with respect to compliance in certain areas.

GDPR

The EU General Data Protection Regulation (GDPR) took effect on 25 May, and the greatest impact for us was in our retention work. As a result of the GDPR, some customers have opted out of accepting offers from us. The fact that we cannot communicate as broadly with our customers is a new reality that we must adapt to. In this regard we are convinced that our award-winning product and investments in our brand give us a good position for continued growth.

Responsible gaming and LeoSafePlay

Responsible gaming is one of LeoVegas’ most important focus areas, and we have now laid the foundation for creating the next generation’s system for responsible gaming. Our data-driven approach is the foundation of our way of working, and the system is based on machine learning. This makes it possible in the most effective way to identify players who have or are showing signs of unsound gaming behaviour.

New financial targets for 2020

During the quarter we presented new financial targets that underscore our continued focus on strong growth combined with a sound view of profitability. The goal is to achieve revenue of at least EUR 600 m and EBITDA of at least EUR 100 m.

Technology

During the second quarter we launched our new front-end platform. The advantages of the new platform are many and show that LeoVegas is the leading GameTech company. Among other things, the technology improves our ability to continue to offer the best, fastest and most innovative mobile gaming experience. It will also enable us to be more effective in our product development due to the faster speed at which we can put new functions into production.

The new platform is also improving LeoVegas’ work with search engine optimisation (SEO). The value of improved SEO is that customers are routed directly to Leovegas.com via search engines instead of via third parties. LeoVegas expects to gradually increase its organic traffic and thereby become less dependent on affiliates for customer acquisition via search engines.

Sports book 2.0 and new design for LeoVegas.com

Our new sports book is our largest release in the sport vertical since we launched sports betting in spring 2016. We have taken technical ownership of large parts of the sport client and have introduced an entirely new design that is more intuitive and more attractive. With effective filtering and a strong focus on relevance, our customers get the right offering presented in a simple way.

Our new product design is a modern rendition of our brand and highlights all verticals.

In parallel with the launch of sports betting for LeoVegas.com, Rocket X will also launch sports betting under its Bet UK brand. Rocket X has chosen SB Tech as its provider. The Group will thereby be working with three different providers in sports betting: Kambi, Betconstruct, and SB Tech. This gives us great flexibility to be able to offer the best experience and adapt our offering to local preferences. Over time we see that it will be fully possible to use more providers for the same brand and thereby achieve the best possible sports betting experience for our customers.

Changes in Group Management

To optimise our work on driving the Company’s strategy with responsible gaming and growth, we have made changes to our Group Management team.

As previously communicated, LeoVegas’ CFO, Viktor Fritzén, will take on a new role as Senior Advisor. Viktor will focus his work on strategic matters surrounding growth and value creation. Our new CFO will be Stefan Nelson, who joins us from a director role at SEB Corporate Finance and will take office on 22 August. Stefan has a solid background with 20 years of experience, including as an equities analyst for the gaming sector. This, combined with a breadth of experience in M&A, will make Stefan a key team member for our future endeavours.

Louise Nylén has taken on a newly created role as Deputy CEO. She has previously served as Chief Marketing Officer for LeoVegas. Richard Woodbridge has been hired as our new Chief Operating Officer and will have overarching responsibility for operations at LeoVegas’ offices in Malta. Our current COO, Marcus Nylén, will stay on in that role until Richard takes office and when Richard starts, will leave Group Management in order to focus on LeoVegas’ expansion. Richard Ljungman is leaving his role as Chief Commercial Officer and will leave Group Management to be able to focus entirely on responsible gaming and LeoSafePlay.

Markets

NGR from locally regulated markets was 39 percent of total and is the highest we’ve ever had. We are very pleased that the share of regulated markets is growing and is in line with our expansion strategy.

Sweden

On 7 June the decision was finally made to introduce a licence system in Sweden. The new legislation will take effect on 1 January 2019 and is something we highly welcome.

Italy

Italy is one of Europe’s largest gambling markets. More than 3 million people in Italy play online every month, and it is a growth market that we believe strongly in. During the quarter we migrated the Italian operation to LeoVegas’ technical platform, Rhino, which gives our Italian customers the real LeoVegas experience! Italy’s government has now proposed a ban of all gambling advertising. We firmly believe that such a ban would benefit unlicensed actors, and a debate has now ensued about this, where LeoVegas is engaged and is trying to educate politicians about what we as licensed operators are doing in the areas of sustainability and responsible gaming. The outcome of the proposal is highly uncertain at present, and we are monitoring developments closely.  

Comments on the third quarter

July has started out with Net Gaming Revenue (NGR) of EUR 26.4 m (18.3), representing growth of 45%, which is lower than what we expected considering that the customer base has developed quite well.

During the third quarter we expect marketing in relation to revenue to be at roughly the same level as during the second quarter.

Our work during the second quarter has given us a stable foundation to continue to improve. This gives us a boost in the third quarter and good opportunities to create long-term growth and work towards our financial targets.

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: SE: +46 (0) 8 5664 2753, UK: +44 (0) 330 336 9128, US: +1 646 828 8144, Confirmation code: 5362090 or join at the web https://edge.media-server.com/m6/p/zupwii5n

This information is information that LeoVegas AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014 and in accordance with the Financial Instruments Trading Act (1991:980). The information was submitted for publication, through the agency of the contact person set out below, at 1 of August  2018 CET on 08:00.

For further information, please contact:

Gustaf Hagman, Group CEO: +46 (0) 8 410 367 66, gustaf.hagman@leovegas.com

Viktor Fritzén, Group CFO: +46 73-612 26 67, viktor.fritzen@leovegas.com

Philip Doftvik, Head of Investor Relations and Corporate Finance: +46 73 512 07 20, philip.doftvik@leovegas.com

About the LeoVegas mobile gaming group

LeoVegas’ passion is “Leading the way into the mobile future”. LeoVegas is Sweden’s premier GameTech company and is at the forefront of using state-of-the-art technology for mobile gaming. In 2017 the company passed the threshold for being classified as a unicorn, i.e., a start-up valued at more than USD 1 billion. A large part of this success can be credited to an extreme product and technology focus coupled with effective and data-driven marketing. Technology development is conducted in Sweden, while operations are based in Malta. LeoVegas offers casino, live casino and sport gaming, and operates two global and scalable brands – LeoVegas and Royal Panda – as well as a local, multibrand operator collectively referred to as Rocket X. The company’s shares are listed on Nasdaq Stockholm. For more about LeoVegas, visit www.leovegasgroup.com.

 



[1] Throughout this report, figures in parentheses pertain to the same period a year earlier.

[2] Rocket X is consolidated as from 1 March 2018, and Royal Panda is consolidated as from 1 November 2017.

 

LeoVegas – Second quarter 1 April – 30 June 2018

After starting out as an affiliate in 2009 and developing some recognized review portals, I have moved deeper into journalism and media. My experience has lead me to move into the B2B sector and write about compliance updates and report around the happenings of the online and land based gaming sector.

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Gluck Games break a Guinness World Record at iGB Live

George Miller

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Gluck Games break a Guinness World Record at iGB Live
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This iGBLive in Amsterdam made history by breaking a Guinness World Record: the largest number of people scratching scratchcards! Previously the record was held by the lottery in the Philippines, but Gluck and the people at iGBLive scratched that out with 386 people taking part in the final record attempt.

Stewards ushered in the people, before the doors were closed and the official Guinness World Record adjudicator called for the scratching to begin! The sound of nearly 400 people beginning to scratch off to find out if they had won, filled the massive hall. Those without keys, coins or scratching implements resorted to their nails. One participant took off an engagement ring and used the diamond to get scratching – while a man with nails cut too short, made a worrying attempt on the card with his teeth!

Winner Winner!

No matter what they used, people were anxious to find out – were they one of the lucky winner? There were ten top 450€ prizes – making some very happy people at the conference – including two support staff from the venue itself for whom this was the best show they’ve ever worked at! Others expressed amazement at having won – convinced the winning cards must be a promotion, rather than an actual cash sum! One winner said how she had never won anything before, ‘not even a raffle!’

10 winners from 386 participants translates to a 1 in 38 win rate – while the chance of winning just £140 in the National Lottery is 1 in 2,180 – making it clear that the Guinness World Record was about more than just the glory for some lucky people.

Scratch the Record!

There was a nerve-racking rate as each steward confirmed the tally of participants. Overseen by an official Guinness World Record judge and gaming legend, Michael Caselli, the win was announced to excited cheers from the anxious organisers at Gluck Games.

The guys and gals at Gluck Games wish anyone else attempting a record well: “there can never be too much fun in the world,” says Chief Commercial Officer and Founder, Helen Walton. “We love playing scratch cards ourselves and we’ve always wanted the honour of a World Record. Now we can truly say this was a world-record breaking event and an occasion we will never forget!”

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Family/Indoor Entertainment Centres Market Growth Driven by Availability of Diversified Gaming and Entertainment Options

George Miller

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Family/Indoor Entertainment Centres Market Growth Driven by Availability of Diversified Gaming and Entertainment Options
Reading Time: 3 minutes

 

Family/Indoor Entertainment Centers Market: Dynamics & Forecast

 

The family/indoor entertainment centers are designed to engage each and every member of the family at very low prices. Family/indoor entertainment centers provide a variety of entertainment to individuals of all ages. Family/indoor entertainment centers follow strategies such as loyalty programs, the offering of gift cards, bonuses, and incentives that expire after a particular period. This helps boost the number of visitors to a particular family/indoor entertainment center.

The family/indoor entertainment centers market is estimated to grow at a CAGR of 13.5% during the forecast period. The family/indoor entertainment centers market was valued at US$ 22,783.9 Mn in 2018, and is expected to grow significantly to reach US$ 80,641.5 Mn by 2028 due to the diversified gaming and entertainment options available in the family/indoor entertainment centers market.

Family/Indoor Entertainment Centers Market: Segmentation

In this report, PMR has segmented the global family/indoor entertainment centers market by type, by facility size, and by region. By type, the family/indoor entertainment centers market is segmented into arcade studios, VR gaming zones, indoor go-kart tracks, sports arcades, and trampoline and indoor adventure parks. The arcade studios subsegment of the global family/indoor entertainment centers market is expected to register a 30.3% market share at the end of 2018. Moreover, the VR gaming zones subsegment is estimated to register a CAGR of 14.9% in the family/indoor entertainment centers market over the projected period. In addition, the arcade studios subsegment is expected to create an opportunity of US $ 17,300.4 Mn in the family/indoor entertainment centers market from 2018 to 2028.

By facility size, the global family/indoor entertainment centers market is subsegmented into <5,000 Sq. Feet, 5,001 to 10,000 Sq. Feet, 10,001 to 20,000 Sq. Feet, 20,001 to 40,000 Sq. Feet and > 40,000 Sq. Feet. The > 40,000 Sq. Feet subsegment is estimated to grow at a CAGR of 15% during the forecast period and the 20,001 to 40,000 Sq. Feet subsegment is projected to create an opportunity of US $ 17,179.2 Mn between 2018 and 2028 in the family/indoor entertainment centers market.

Family/Indoor Entertainment Centers Market: Regional Analysis

The report also offers insights as well as analysis regarding the growth opportunities in the family/indoor entertainment centers market across all the regions worldwide, which include North America (Canada & U.S.), Latin America (Mexico, Brazil, & the rest of Latin America), Europe (France, Germany, Spain, Italy, U.K., Russia, & the rest of Europe),  East Asia (China, Japan, and South Korea), South Asia (India, Thailand, Malaysia, Indonesia, Philippines, and the Rest of South Asia) and MEA (South Africa, GCC Countries, Israel, & the rest of MEA). The family/indoor entertainment centers market in East Asia is expected to increase at a CAGR of 14.3% over the projected period. Increasing disposable income and increasing middle-class population are among the factors boosting the family/indoor entertainment centers market in this region.

Family/Indoor Entertainment Centers Market: Competitive Landscape

As per PMR analysis, strategic developments, such as product innovations, the addition of new attractions, as well as others, are estimated to contribute to revenue generation in the family/indoor entertainment centers market. Some of the key players in the global family/indoor entertainment centers market report are Dave & Buster’s, Smaash Entertainment, Time Zone Entertainment, CEC Entertainment, Scene 75 Entertainment Centers, Bowlmor AMF, Main Event Entertainment, Legoland Discovery Center, Lucky Strike, Amoeba Services, Kidzania, Funcity, Nickelodeon Universe, Bandai Namco Entertainment, Tenpin, Toy Town, and Walt Disney. Among these, Main Event Entertainment is focusing on improving its market share by introducing new games and attractions in the family/indoor entertainment centers market. Dave and Buster’s is one of the strong players in the family/indoor entertainment centers market owing to its strong presence in the North America region.

These insights are based on a report on Family/Indoor Entertainment Centers Market by Persistence Market Research

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bwin Selects Fresh8 Gaming to Support Advertising across Germany and Austria

Niji Narayan

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bwin Selects Fresh8 Gaming to Support Advertising across Germany and Austria
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German sports betting company bwin has selected with Fresh8 Gaming to support their advertising across Germany and Austria.

bwin will use Fresh8 across their marketing channels including programmatic, display and social. The deal will see bwin adverts pushed automatically across tier 1 publishers including Bild and other big German sports news sites.

Fresh8 creates optimised marketing assets automatically from an operator’s event and CRM data. This optimises bwin’s marketing spend through real-time creative decisions and minimises the time and overhead of producing, and distributing, digital marketing assets by hand.

“We are thrilled to enter the German and Austrian market with the region’s market leader. Such an iconic brand backing our product and technology is a big win for us. They really understand how automation in marketing departments can be the next big driver of revenues for their business,” Andrew Sharland, CEO at Fresh8 Gaming said.

“bwin differentiates itself from the competition in its marketing through its deep customer understanding. We analyze target group behavior and generate as many touchpoints as possible across channels (digital, TV, out-of-home, print, sponsoring, social) on the fans’ way to match day. Thanks to the partnership with Fresh8 we are able to bring this difference home in real time and personalized for our customers. It also enables us to do this automatically and on a large scale across all our advertising channels,” a spokesperson of bwin said.

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