LeoVegas AB reported sluggish financial results, with market exposure to altered regulatory conditions in the Netherlands and Germany weighing on company performance. 

LeoVegas fourth quarter report

According to the firm’s Q4 trading statement, period like-for-like corporate revenues remained constant at €98 million. The Stockholm-listed online casino and sports betting operator advised investors that period revenues would have climbed by 26% “without Germany and the Netherlands.”

Q4 adjusted EBITDA was €11.5 million, up 1% on 2020 figures of €11.4 million – a better-than-expected performance given the suspension of all Dutch market services during the trading period. Awaiting a Dutch license — and realigning its German platform and goods – player growth remained flat at 460,000 depositing clients across LeoVegas brands. 

Meanwhile, quarter EBIT decreased by 3% to €8.4 million (Q42020: €8.7 million), as the business disclosed that its NGR from locally taxable markets climbed to 74%. (67 percent ). Gustaf Hagman, Group CEO, remarked on the fourth-quarter results, saying, “Sales remained flat year over year in the fourth quarter.” However, excluding Germany and the Netherlands, growth was almost 26%, indicating a robust underlying increase.

Adjusted EBITDA increased slightly year over year, even though they ceased operations in the Netherlands while awaiting a gaming license, which was previously one of our most profitable regions. Simultaneously, it paid more gaming taxes than at any point in history throughout the quarter. Profitability was increased as a result of cost containment and increased marketing efficiency. Due to Q4 headwinds, LeoVegas’ full-year 2021 corporate sales were €391 million, up 1% from €387 million in FY2020.

Due to the company’s struggling topline results, adjusted EBITDA fell 19 percent to €44.6 million in FY2021 (from €55 million in FY2020), while cash flow from operating activities decreased to €45 million (from €69 million in FY2020). Despite difficult business conditions, the company remains confident in its capacity to grow in its home market of Sweden (GGR +36 percent), which experienced its highest trading performance in Q4. This helped counterbalance the persistent downturn in Western European markets (-39 percent ).

In addition, LeoVegas will extend its sports betting vertical, where it will continue to develop the proprietary resources of Nordic heritage bookmaker Expekt – a new brand acquired in 2021. Moreover, the corporation emphasized its position as one of the most regionally diverse and capable operators in the field. Leadership stated that it intends to increase its ‘Rest of World’ (RoW) revenue through North America in order to swiftly surpass that generated in mature European markets.

Corporate Insights

Hagman noted that Expekt’s relaunch has been a huge success, with sales nearly quadrupling since the acquisition. They now intend to expand into further markets. Additionally, they have begun operations in the United States, where the online gaming business is still in its infancy. They see considerable opportunity in North America, where they already have a dominant position in Canada, for a smartphone-oriented casino expert like LeoVegas. They’ve also made an investment in our own gaming studio this year. The first games are scheduled to premiere in the next months, with over 15 titles planned for 2022. Our exclusive material enables them to create a more unique gaming experience, increase client loyalty, and reduce costs.