News
LeoVegas AB: Fourth quarter: 1 October-31 December 2017
“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
Source: European Gaming Media and Events
A partnership between game developer Turbo Games and iGaming solution provider and aggregator Slotegrator began in November 2022 via the APIgrator game integration solution. Since then, the collaboration has been developing successfully — and now it’s time to analyze what made it successful.
Turbo Games has noticed how the new technologies spreading throughout the industry can work for the good of brand transparency and player loyalty: “We can already see how blockchain technology has made it possible to make betting checks more accessible to players. All you need is a blockchain-hash and a decoder service. We think we will continue to move in this direction. Many traditional online casinos do not offer the possibility to check the bet. Sooner or later we all have to come to this. Perhaps the development of artificial intelligence will help here, because we are already seeing its involvement in all spheres of human life.”
Turbo Games specializes in provably fair games. Provable fairness is a concept where players can verify their wins or losses using blockchain technology — the outcome of the game is dictated by a smart contract and is absolutely random, barring the possibility of any human involvement. Using cryptographic hashing algorithms, the gambling site and the player’s device both generate seeds (random strings of numbers). Players receive a key that allows them to check the results; if the results are the same as the game round they witnessed, it proves that there was no foul play.
According to statistics from Turbo Games, the audience for provably fair games is mostly between 18 and 25 years old. However, there are also players aged 35-40 who prefer traditional games but would like to try something new, and have turned their attention to provably fair games.
There are good odds that the technology of provably fair games will become more popular, if not even commonplace, because it gives players a feeling of transparency and proves that the business is trustworthy without the need to search through dozens of reviews. Whereas many innovations in iGaming simply add entertainment, provable fairness addresses security concerns and reassures players that they’re not being exploited, which is invaluable.
Provably fair games are beneficial for both players and online casinos. Vadim Potapenko, Head of Sales at Turbo Games, comments: “It often happens that the users are not satisfied with the result, because gambling is not only about big wins, but also possible losses. By allowing them to check the fairness of a bet, we make life easier for platforms and players. Of course, this allows us to communicate with partners and users that we work honestly and that’s why they should trust our games.”
Ayvar Gabidullin, Business Development Manager at Slotegrator, adds that “this type of game is now becoming more and more popular and has great potential for both players and game providers in the future. On the part of the player, the advantage is that the player can always be sure that his game is fair and he can independently check any of his bets. And for the game provider, this also simplifies the process of implementing casino games, since now it will not be necessary to obtain the appropriate certificates from independent laboratories before launching new games, they can immediately enter the market with these games and where anyone can check the result and make sure that that there is no cheating with players. Many game providers are starting to look towards this type of game. And as far as I see, many operators are starting to think about adding these games.”
What do players in 2023 need? The iGaming industry is all about reputation and trust. Players have a huge number of platforms to choose from, making them pickier and pickier. There’s an abundance of forums where players leave reviews, so if players view a brand as untrustworthy, there are plenty of places they can share their opinion. Provable fairness not only stops that from happening, it provides evidence to the contrary, giving players something else to talk about.
Slotegrator also recommends investing time and effort into localization and creating an effective and detailed marketing strategy — before trying provably fair technology players need to get to the platform, and there is no acquisition without marketing.
ABOUT SLOTEGRATOR
Since 2012, Slotegrator has been one of the iGaming industry’s leading software and business solution providers for online casino and sportsbook operators.
The company’s main focus is software development and support for online casino platforms, as well as the integration of game content and payment systems.
The company works with licensed game developers and offers a vast portfolio of casino content: slots, live casino games, poker, virtual sports, table games, lotteries, casual games, and data feeds for betting.
Slotegrator also provides consulting services in gambling license acquisition and business incorporation.
More information: https://slotegrator.pro/
ABOUT TURBO GAMES
Turbo Games — a provably fair games provider that belongs to Turbo Stars company — has an ambitious goal to establish widespread recognition throughout the iGaming world. Even though it is young, the company consists of professionals who have been working on the brand for over five years and are even planning to introduce a new brand for a wider audience soon.
Turbo Games also works in Europe, India, and South Africa, where the company sees the most potential and expects the same “hype” as in Brazil.
The portfolio of Turbo Games consists of 21 titles, including well-known games like Mines, Crash X, DoubleRoll, Hi-Lo, and Plinko. The studio releases a game every month. However, not all games are developed from scratch. Wicket Blast and Spin Strike, the last two releases, are based on cricket and the Indian Premier League. Crash X remains the most popular fast game in the Turbo Games portfolio, and the studio reports that crash games enjoy stable levels of popularity. Overall, the main focus of the brand is provably fair games.
More information: https://turbogames.io/
Looking to take your career to the next level in the games industry? Then, Nordic Game Talents is the place to be! Games Factory Talents has teamed up with Nordic Game to bring you Nordic Game Talents.
From Oct 27-29, the online and interactive event is dedicated to recruitment and career building in the creative & games industry within the Nordic region. The event empowers participants to be part of a bigger community and motivates them to explore new paths in achieving their career goals.
Hiring creative & games studios – Supercell, Funcom, Panzerdog, Tactile Games, Gamecan, Fingersoft, Dazzle Rocks, Redhill Games to name a few from the Nordic region will be participating in the event. These studios will share information on their latest projects, work culture and what it takes to be part of their team. The individual games associations from Finland, Denmark, Sweden, Norway and Estonia will share insights through live sessions on the booming games industry in their respective countries. Career development topics pertinent to job seekers like – How to have a successful first interview, Creative Portfolio reviews will also be discussed.
Experienced game industry professionals and individuals beginning their careers from around the world are welcome to join the event. One-to-one interviews with the hiring studios can be scheduled through the event platform. A great opportunity to get to know the studios and network with game professionals from around the world.
Participating in the event
As a job seeker attending Nordic Game Talents, take a few minutes to fill out a simple registration form. After filling the registration form you will receive a link to the online event platform – PINE, to join the event on 27th October. Participants joining Nordic Game Talents will also receive a free-of-charge pass to the Nordic Game Conference.
To view the complete agenda, please click here and to learn more about the event please visit Games Job Fair
About Games Factory Talents
A Helsinki-based talent attraction agency dedicated to the games & creative industry. Our services include direct recruitment, organizing game job fairs and managing a community of game industry professionals through our GameDev Talent Board.
To learn more about Games Factory Talents visit – Games Factory Talents
810 THE SPREAD
Cumulus Media Launches 810 THE SPREAD, the Bay Area’s First Sports Station Focused on Sports Betting
Cumulus Media (NASDAQ: CMLS) announces that it has launched the Bay Area’s first Sports radio station focused on sports betting, 810 THE SPREAD. The new station brings sports and sports betting news, information, and insights to the burgeoning and underserved sports betting audience in San Francisco. 810 THE SPREAD will deliver behind-the-book perspectives from experts in a highly entertaining and engaging format. 810 THE SPREAD goes live today on the legendary 810am frequency that has been the 80-year home of historic Talk Radio KGO-AM. Cumulus San Francisco also launched the station’s new website at www.810thespread.com. Kevin Graham, Program Director of Cumulus’ sister sports stations KNBR 680AM/104.5FM and 1050 KTCT, adds Program Director duties for 810 THE SPREAD.
Larry Blumhagen, Vice President/Market Manager, Cumulus San Francisco, said: “810 THE SPREAD joins our sports brands KNBR 680AM/104.5FM and 1050 KTCT for a trifecta of dynamic sports content across four signals and streaming everywhere. We are excited about this new chapter and look forward to serving the Bay Area’s passionate sports fans in an incomparable way.”
Blumhagen added: “This is a bittersweet day for us, as it’s hard to say goodbye to the legendary KGO, which has been a part of listeners’ lives for so many years. We want to thank all the people who have been a part of KGO’s historic run these many years – and the listeners who loyally tuned in to the station. Times change, and we must change with them.”
Kevin Graham, Program Director, 810 THE SPREAD, said: “810 THE SPREAD will be the Bay Area’s best bet for sports fans and sports betting enthusiasts, and we are pleased to introduce sports-betting radio to our community. The station will feature a lineup of expert personalities that deliver unique sports talk and sports betting insights that entertain, inform, and engage, along with Cal Football and Basketball as well as select professional and college sports play-by-play events. While 810 THE SPREAD will feature specific gambling information, we believe our entertaining presentation will make it a favorite for all Bay area sports fans and a perfect complement to the legendary KNBR and KTCT. With its addition, it truly shows Cumulus’ commitment to the Bay area as ‘The Sports Leader’!”
The weekday programming lineup for 810 THE SPREAD includes:
6am-9am – Bet QL Daily – The must-consume show for sports fans and betting fans alike. Hosted by Joe Ostrowski, Joe Giglio, and Erin Hawksworth.
9am-12pm – Jim Rome - Aggressive, informed sports opinions, rapid-fire dialogue, and plenty of sports smack. As one of the most prolific sports talk hosts in America, Rome draws massive tune-in with legions of fans known as clones, who live for Rome’s take on the day’s largest issues in sports.
12pm-4pm – You Better You Bet – Nick Kostos and Ken Barkley have you covered for the best bets on the biggest matchups, the latest line movement and updates in the futures market. We’ll have up-to-the-minute coverage of backdoor covers and bad beats, and the cheers and tears that come with them. It’s sports betting conversation like you’ve never heard before.
4pm-8pm – Bet MGM Tonight – Live sports betting updates for all the night’s games as they happen – plus live “look-ins” for Major League Baseball games in progress. Get the latest scores, sides, totals, props, parlays, futures, and much more with hosts Quinton Mayo, Trysta Krick, and Ryan Horvat.
8pm-12 Midnight – CBS Sports Radio
BetQL Network programming is provided by Cumulus Media’s Westwood One through a partnership with Audacy.
For more information or to stream 810 THE SPREAD, visit: http://www.810thespread.com.
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