LeoVegas AB reports Q4 2018 results and financial targets
12 February 2019
(PRESS RELEASE) -- "After a challenging 2018 we now see improved momentum with a record strong December and a positive start to 2019. Entering the new year we have full focus on expansion, cost control, increased profitability and to continue building the world's best mobile casino." - Gustaf Hagman, Group CEO.
Fourth quarter 2018: 1 October– 31 December 2018
Revenue increased by 25% to EUR 84.5 million (67.8)
Organic growth in local currencies was 7%. Organic growth in local currencies excluding the UK was 14%
EBITDA was EUR 8.1 m (6.1), corresponding to an EBITDA margin of 9.6% (9.0%)
Net Gaming Revenue (NGR) from regulated markets was 33% (29%) of total NGR
The number of depositing customers was 327,156 (253,299), an increase of 29%
The number of returning depositing customers was 181,747 (124,890), an increase of 46%
Earnings per share were EUR 0.22 (0.02) before dilution and EUR 0.22 (0.01) after dilution.
Events during the quarter
LeoVegas has applied for a gambling licence for the Spanish market. Approval and implementation are expected during the first or second quarter of 2019
LeoVegas was one of the first operators to receive a license for both casino and sports betting in Sweden.
Events after the end of the quarter
LeoVegas has postponed its financial targets from 2020 to 2021 due to developments in the UK market. However, the direction remains unchanged with financial targets in absolute numbers to reach EUR 600 m in revenue and EUR 100 m in EBITDA.
The Group's Pixel.bet brand was granted a license for online casino and sports betting in Sweden
The Board proposes a total dividend of SEK 1.20 per share (1.20), to be paid out on two occasions during the year
Revenue amounted to EUR 28.7 m (24.8) in January, representing growth of 16%
Comment from Gustaf Hagman - Group CEO
2018 was the most challenging year in LeoVegas' history. We bumped into challenges that we have not previously encountered and saw a slowdown in growth as a result. It was also a year in which we carried out a number of strategically crucial projects that have taken us large steps forward on our growth journey. There is much left to do, and there's no doubt we can and will improve in many areas. We have learned a lot, and our position for achieving our long-term vision – to be the global market leader in mobile casino – is good. Today we are already the most appreciated brand in our home market in Sweden, and we are live in more markets than ever before. We are well-invested with our own technology, which makes us scalable and flexible, and we have taken large leaps in responsible gaming and compliance. Our multi-brand strategy is in place, enabling us to rapidly launch new casino brands, and we are ready to expand in more markets in 2019 with an overall focus on cost control and increased profitability.
During the fourth quarter we also returned to sequential growth following a slowdown during the third quarter, and we ended the year with all-time high revenues in December, and with record-high customer activity. The new year has also started on a promising note – for example, our depositing customer base was up 42% in January. LeoVegas has just celebrated seven years as a company. We have achieved a lot in a short period of time, but we are still just at the start of our growth journey.
Fourth quarter figures
Revenue during the fourth quarter amounted to EUR 84.5 m (67.8), an increase of 25%. Organic growth in local currencies was 7%. As in the preceding quarter, growth during the period was affected by weak performance in the UK. Excluding the UK, organic growth for the Group was 14% during the quarter, which shows healthy underlying growth. October was the weakest month during the quarter, and December the strongest.
EBITDA totaled EUR 8.1 m (6.1), corresponding to an EBITDA margin of 9.6% (9.0%). We increased our investments in marketing during the quarter, among other things to reassure our leading position in Sweden ahead of the market's regulation, but also in other key markets. Marketing costs amounted to 37.9% during the fourth quarter, compared with 35.6% during the third quarter. Our personnel costs in relation to revenue remained at a higher level than we are pleased with. We will thus now focus on cost control, improving efficiency in our ways of working, and increase automation in our operations. This is also necessary in order to adapt our cost base to rising tax pressure in our regulated markets.