LeoVegas reports slight revenue increase for Q1 2022

LeoVegas has posted a modest 2% year-on-year (YoY) increase in revenue to €98.5m (£82.54m) for Q1 2022 as the firm’s exclusion from the Netherlands put a dent in its financials. When taking the Dutch market out of the mix, revenue increased by 9% fuelled by solid growth in its home market of Sweden. The gaming-centric operator also reported that EBITDA was €14.1m which meant an EBITDA margin of 14.4%, although the number of depositing customers was slightly down from 462,386 in Q1 2021 to 455,843. While new depositing customers increased by 1% compared with Q4, they fell by 6% (YoY). Operationally, it was a busy Q1 for LeoVegas as it became a registered gaming operator in Ontario and re-launched LeoVegas and Royal Panda brands when Ontario went live on 4 April. Net gaming revenue (NGR) from the regulated markets that the business operates in was 71% of total NGR, including the newly regulated Ontario market. The biggest plus from the opening quarter’s results was that its sports offering grew 44%, which was mainly driven by Expekt after LeoVegas purchased the heritage Swedish sports betting brand for just €5m in March last year. Overall, NGR totalled €96.6m, a YoY increase of 4% and 1% better than Q4 2021. In terms of product mix, ‘classic’ casino and live casino accounted for 72% and 16% of revenue respectively. Sports betting has now increased to 12% from single figures last year. The business also opened two new tech hubs in the first quarter of the year, the first being in the Polish capital Warsaw and the other in Malaga, Spain. LeoVegas aims to hire 100 developers for these offices in the next two years as a form of future-proofing. Speaking to EGR on whether this is just the beginning of the opening of more tech hubs, LeoVegas CEO Gustaf Hagman commented: “No, those are the two recent ones, we are struggling with supporting our Ukrainian team but other than that, the Malaga and Warsaw are the ones we are exploring for now.” On the company’s performance in Q1 2022, Hagman said in a statement: “LeoVegas began the year in solid fashion with revenue growing 2% in the first quarter. Excluding the Netherlands, growth was 9%. “The improved EBITDA margin of 14.4% was mainly the result of improved payment and supplier terms and lower marketing investments. “These factors more than offset increased personnel costs mainly in product and technology, as well as costs related to strategic projects such as the US launch. Overall, these results demonstrate the scalability of our business model.” The firm is already looking at continued growth in Q2 2022, as numbers posted up for April show that revenue is up 4% to £34m and up 12% when the Dutch market is excluded. Yesterday, LeoVegas revealed it had received a $607m bid for the business from US casino giant MGM Resorts. The LeoVegas board is recommending that shareholders accept the offer.