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LeoVegas AB Q3: Quarterly report 1 July– 30 September 2020

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THIRD QUARTER 2020: 1 julY–30 september

  • Revenue increased by 1% to EUR 88.9 m (88.2). Organic growth in local currencies was 2%.
  • EBITDA was EUR 11.9 m (12.7), corresponding to an EBITDA margin of 13.4% (14.4%).
  • The number of depositing customers was 438,691 (347,464), an increase of 26%.
  • Earnings per share were EUR 0.04 (0.05) before and after dilution, while adjusted earnings per share were EUR 0.08 (0.09).

Events during the quarter

  • GoGoCasino and Livecasino.com launched in Finland. An international launch of both brands is in progress.
  • Operations in Sweden have been affected by the temporary restrictions that were introduced on 2 July as a result of Covid-19
  • LeoVegas increased its ownership in the e-sports betting operator Pixel.bet to 85% from 51% previously.
  • Operating profit for the quarter includes costs of EUR 0.5 m in organisational streamlining and optimisation measures. Yearly net savings from these measures is expected to total EUR 1.5 m starting next year.

Events after the end of the quarter

  • Preliminary revenue in October amounted to EUR 33.0 m (26.0), representing growth of 27%.
  • Royal Panda has relaunched in Finland on the Group’s proprietary technical platform.
  • LeoVegas has launched Bingo as new product category.
  • Ahead of the forthcoming regulation of the German market, effective 15 October a number of changes have been made that affect the customer offering. This had a slight negative impact on revenue in October. LeoVegas expects to receive nationwide licences for the German market once they are available.

 

COMMENT FROM GUSTAF HAGMAN – GROUP CEO

THIRD QUARTER 2020
Once again, we have shown our ability to quickly adapt to new, external circumstances, such as those related to the continuing pandemic and the constant regulatory changes in our various markets. During the third quarter we maintained a high pace of innovation and investment, which is strengthening our long-term position and growth prospects.

During the quarter our customer base again reached a new record level. The number of depositing customers grew 26% compared with the same period a year ago, which confirms the strong development of our business. This is partly attributable to the ongoing structural shift from land-based gaming to online, but above all to our focus on creating the best product and experience for our customers. We continue to optimise scalability and reduce complexity in the organisation. During the quarter, among other measures we realised synergies from previous acquisitions and instituted a clearer organisational and Group structure. This has led to a slight level of staff redundancy, and operating profit was charged with EUR 0.5 m for measures coupled to this. At the same time, we estimate that yearly net savings from these measures will amount to roughly EUR 1.5 m starting with next year. Our efficiency improvement work equips us for continued profitable growth and makes us – combined with greater diversification of the revenue base – more resilient to rapid fluctuations in individual markets.

MARKETS
We had a favourable development in most of our markets during the quarter, with our growing customer base as the main driver. Many markets had double-digit growth compared with the same period a year ago.

In Sweden we are seeing a troubling development in which the unlicensed market continues to grow unhindered. A growing number of operators without licences are actively targeting Swedish players, including those who have been barred by the self-exclusion tool Spelpaus. This has been confirmed by, among others, several organisations that provide help to people with a gambling problem. These organisations have noted that the majority of those seeking help are playing with the unlicensed operators. The problem is big and is shaking the foundation of the entire Swedish licence system. Quick and strong measures are now needed by Swedish politicians and authorities to ensure a well-functioning Swedish gaming market.

In Germany the federal states have agreed to introduce a licence system for gaming, which is expected to be implemented during the second half of 2021. We are looking forward with confidence to Europe’s largest market finally being regulated. Ahead of implementation of the licence system, it is expected that operators will carry out certain limitations in their respective customer offerings in advance. LeoVegas has already begun implementing such limitations, which will initially have a negative impact on revenue. Details on regulation of the German market are provided in the Legal update section in this report. LeoVegas today has a licence in the German state of Schleswig-Holstein and expects to receive nationwide licences once they are available. Germany generated approximately 17% of the Group’s total revenue during the third quarter.

technology and products
The quarter was intense for our technology and product organisation, with the completion of a number of major projects. For example, we implemented the German regulatory requirements on short notice and launched the GoGoCasino and Royal Panda brands in Finland on our proprietary platform. We also are seeing higher demand for broader entertainment games among our players and therefore recently launched our Bingo product.

comments on fourth quarter
Preliminary revenue for the month of October amounted to EUR 33.0 m (26.0), corresponding to annual growth of 27%. The changes introduced in the German market on 15 October have had a slightly negative impact on revenue.

With a positive start to the fourth quarter, a record-large customer base and many exciting initiatives I am looking forward to a strong end to the full year.

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: 2874453 or join at the web https://edge.media-server.com/mmc/p/budae7ar
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Lee Hills Joins the International Association of Gaming Advisors

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SolutionsHub is proud to announce that its CEO, Lee Hills, has officially joined the International Association of Gaming Advisors (“IAGA”), the globally respected organization connecting the world’s leading legal, financial, and regulatory advisors through shared experiences and education to influence the advancement of global gaming.

As Director of SolutionsHub, he has been instrumental in establishing the company as a leading authority in licensing and regulatory compliance for innovative and emerging tech businesses. Under his leadership, SolutionsHub has become renowned for its deep understanding of complex regulatory and operational matters affecting gaming business.

“I am delighted to be joining IAGA, an organization I’ve long admired,” said Lee Hills. “This is an exciting opportunity to collaborate with some of the most respected minds in the field, and to contribute insight from our work at the cutting edge of iGaming and blockchain regulation.”

The International Association of Gaming Advisors includes prominent executives, attorneys, financial experts, regulators, and consultants. Membership provides access to high-level dialogue on gaming policy, regulatory challenges, and market evolution.

With Lee joining its ranks, IAGA gains a unique perspective from the Isle of Man, one of the world’s most forward-thinking regulatory environments, as well as specialist insight into Web3, tokenized economies, and esports betting.

The post Lee Hills Joins the International Association of Gaming Advisors appeared first on European Gaming Industry News.

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Promatic Group enters the Irish Market

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Gaming terminals from Polish manufacturer Promatic have made their debut on the Irish market. The company’s first slot machines can now be found in gaming halls and casinos operated by six local operators across 10 Irish cities: Dublin, Cork, Galway, New Ross, Wexford, Tallaght, Dun Laoghaire, Bray, Malahide, and Arklow.

The Polish manufacturer, one of the leading suppliers of gaming equipment for Poland’s state-owned chain slot gaming arcades operated by Totalizator Sportowy, has high hopes for the Irish market.

“The Irish love slot games, and access to them is relatively widespread in this country. That’s why we decided to enter the market and take part in the Irish Gaming Show. It led to a number of promising contracts that we are now looking to expand,” said Kacper Kupczyk, Key Account Manager.

“It’s no secret that many Poles live in Ireland and are already familiar with our games. They are also part of our target audience,” he added.

Currently, the Irish gaming market includes approximately 450 venues (arcades and casinos). In a country of over 5.3 million people, there are around 25,000 gaming machines installed.

Promatic is supplying Irish operators with four machine models: Casino 27, PRO 24, PRO 27 VIP, and PRO 32 VIP. These devices feature game packages such as Energy+Orange – the flagship product of the ENERGY series, Energy+Green, and the latest addition – Pro Selection, a multigame set featuring the best of Promatic’s retail and online titles. Pro Selection has only just debuted in Polish casinos.

Additionally, all Irish operators working with Promatic have opted to implement the Fruitpot Jackpot system – a progressive jackpot solution designed by Promatic for casinos and gaming arcades. The Promatic Group plans further expansion in Ireland and is also developing a local service and technical support base to ensure efficient and comprehensive assistance for operators.

“The initial results and customer feedback from the market are very promising, and all signs point to Ireland being a potentially strong market for us. The competition is tough here – but that’s the case in every mature market where players know what they want. I’m confident we can compete for a significant share of the Irish gaming pie,” concludes Kacper Kupczyk.

The post Promatic Group enters the Irish Market appeared first on European Gaming Industry News.

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Compliance Updates

St8 enters the United Kingdom after securing B2B licence

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Casino games aggregator St8 has secured a UK Gambling Commission (UKGC) remote gambling software licence, as the company continues its strategic expansion into key regulated markets worldwide.

The newly-granted licence means that St8 can now provide its market-leading casino aggregation platform to UK-licensed operators.

The platform has already won plaudits for streamlining integrations and delivering content with speed, simplicity and reliability.

Vladimir Negine, founder and CEO at St8, said: “Securing a UK licence is another major milestone for St8. The UK remains a benchmark for regulation and player protection, and we’re excited to bring our tech-led approach to this mature and competitive market. We’re absolutely committed to supporting our operator partners in regulated markets around the world, and we’re already working on securing additional licences.”

The UKGC licence adds to St8’s growing list of regulated market approvals, which already includes Romania, Malta, and the Isle of Man, with further jurisdictions in progress as part of its broader European and global growth strategy.

St8 partners in the UK and beyond enjoy the industry’s leading back office, built to offer real-time reporting, deeper insights and simple promo management.

The post St8 enters the United Kingdom after securing B2B licence appeared first on European Gaming Industry News.

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