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LeoVegas AB: Q4 report and financial targets pushed one year to 2021

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LeoVegas AB: Q4 report and financial targets pushed one year to 2021Reading Time: 9 minutes

 

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 m (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 licence 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 licence 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 – an educational year for a seven-year old
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 multibrand 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 totalled 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.

Sweden – finally a regulated market
The day we have been waiting for has finally arrived, when Sweden became a regulated market. We were among the first companies to be granted a licence, which is a quality seal and confirms our position as a leading, long-term and serious player in the industry. In January, LeoVegas’ Pixel.bet brand also received a licence in Sweden for casino and sports betting. Pixel.bet has the ambition to take the leading brand position in esports betting.

A regulated market has extensive guidelines for responsible gaming. We have good experience from other regulated markets, and we have developed the organisation and our marketing methods to offer our games in the best, sustainable way. We look forward to working side-by-side the Swedish Gambling Authority and our licensed competitors to ensure a sound and responsible market that impedes the presence of unlicensed actors.

With regulation of the market, all licensed gaming companies are now free to operate in stores. LeoVegas was the first one to grasp this opportunity in January. There is important symbolic value in having a physical presence at betting agents in connection with the implementation of the new gambling law in Sweden. We will now be able to truly challenge to the old monopoly through a greater exposure of our LeoVegas brand with an even closer presence to our customers in a new type of environment.

Regulation of the market in Sweden also made it possible for us to launch the popular Swish mobile payment method in the Swedish market. Swish both strengthens our customer offering and is expected to significantly lower our transaction costs.

Improvements in the product combined with increased marketing led to a strong fourth quarter in Sweden, with 18% sequential growth, which affirms our position as the leading casino brand. The new year has also started on a positive note for LeoVegas in Sweden. We have seen record-high customer activity, with 28% growth of our Swedish depositing customer base compared with the same period a year ago. At the same time, revenue is down somewhat compared with the same period a year ago, which is partly due to many customers initially using their welcome bonuses, but also to some trim-in challenges during the first two weeks following the start of regulation, and to the fact that players are getting accustomed to certain modifications in the gaming experience.

It is still hard to accurately predict the market dynamics in Sweden in the near term, but with a record-large active customer base and a large number of exciting product and marketing initiatives under way during the year, we are well positioned in our home market. As previously, we are confident that our product, customer experience, competence in responsible gaming, very strong brand and data-driven marketing will lead to higher market shares in Sweden.

UK
The UK is Europe’s largest gambling market and a market in which LeoVegas sees continued major growth potential in the long term. Together with our brands in Rocket X, LeoVegas and Royal Panda we have a unique multibrand position in casino. In the near term the market continues to be challenging, and after a transitional period we are now working from a new, lower level on which to grow. Our revenue continued to decrease sequentially during the fourth quarter, but with gradual improvements in both revenue and KPIs. This positive development continued on Group level during January. It is still too early to declare that we have turned the corner yet in the UK, but we are confident with the plan we have charted out.

Scale-up markets
We are satisfied with our performance in most of our markets during the fourth quarter. Germany continues to be a strong growth market and once again delivered a record quarter with growth of more than 200%. In addition to Germany – Finland, Denmark and Canada amongst other markets delivered good results during the quarter.

Changes in Group Management team
As previously communicated, Richard Woodbridge has been recruited as our new Chief Operating Officer. He took up his position on 7 January and has overarching responsibility for operations in LeoVegas. Richard is based at LeoVegas’ offices in Malta.

Group Management has also been reinforced with Avshalom Lazar, who we recruited as Chief Compliance & Legal Officer. Avshalom, who is based in Malta, will strengthen the Group Management team with relevant knowledge about the industry and an understanding of and experience in the higher requirements that are placed on companies in regulated markets.

We are also adding a new role to the Group Management, Chief Product and Technical Officer (CPTO), where we are combining the CTO and CPO roles. Mattias Wedar has been recruited to this new position and will begin at LeoVegas during the spring. Mattias joins us most recently from a similar role and has solid experience in product development and keen industry knowledge. With this new position, the product and technology organisation will have a single leader, which will increase its effectiveness and cooperation within the Group.

Tech update
We have previously presented the upgrade of our technical front-end platform, which took place during the second quarter. This has improved our organic search capabilities and during the fourth quarter we saw an increase in organic traffic by more than 70% compared to the same period last year. We expect to see continued positive effects from this combined with our data-driven marketing.

The Rocket X managed UK brands encountered certain technical issues that impacted the site performance during part of the fourth quarter. The issues are now to a large extent solved which is confirmed by a higher revenue and customer activity in January compared to December.

Our technology organisation has been through an intensive period, and during the fourth quarter, three parallel platform adaptations were made to the locally regulated markets in Sweden, Germany and Spain – an impressive record for LeoVegas. We are now beginning to gradually free up resources for a renewed focus on product innovation, new brands and markets – areas that are expected to drive our growth going forward.

Financial targets and focus on growth with profitability
Following a year burdened by a number of external factors and large internal projects, we are now well prepared for the future with a renewed focus on growth. Our direction remains firm, with financial targets in absolute figures to reach EUR 600 m in revenue and EUR 100 m in EBITDA. However, we have decided to push back these targets one year, until 2021, as our adaptation to the increased regulatory requirements in the important UK market caused us to temporarily lose our tempo compared with the previous business plan.

It is also increasingly clear for us that the coming years will be decisive for who will be the long-term winners in our industry and who will not be able to cope with the increased complexity, compliance, technological development and higher tax burden. We are therefore currently in a very exciting period in the gaming industry, and we are well prepared.

As more markets become locally regulated – with more regulatory requirements and higher tax pressure – it is important to be a company that is both agile and of a size that enables economies of scale. We are convinced that this requires proprietary technology and a world-class user experience while at the same time being well invested in responsible gambling and compliance – and having a diver­sified operation both geographically and in terms of brands. Moreover, we will continuously evaluate our marketing and our organisational set-up, all in line with our focus on growth with increased profitability in an increasingly complex business environment.

We have also decided to conduct a strategic evaluation of our portfolio companies within LeoVentures, with the intention to further intensify focus within the Company on our end goal – to be the market-leading mobile casino operator globally. At the same time, we believe that the years ahead will offer a number of new growth opportunities within casino for operators with the strength and ability to act quickly, as smaller actors have a hard time adapting to the growing requirements and complexity.

Comments regarding Q1 2019
2019 has begun on a good note for LeoVegas, with Revenue of EUR 28.7 m (24.8) in January, representing growth of 16%. Underlying customer activity remains strong, with 42% growth in depositing customers compared to the same period last year.

We have now forged ahead through both an eventful and challenging year with several acquisitions, accolades, higher regulatory requirements, a number of major platform projects and a change in listing to the Stockholm Stock Exchange’s main market list. We at LeoVegas now look forward to 2019, where we have put casino front and centre and have our full focus on profitable growth.

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 56 61 84 67, UK: +44 (0) 84 44 81 97 52, US: +1 64 67 41 31 67, Confirmation code: 9775259 or join at the web https://edge.media-server.com/m6/p/jtyut9im

This information is information that LeoVegas AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was submitted for publication, through the agency of the contact person set out below, at 08:00 CET on 12 February 2019.

 

 

About the LeoVegas mobile gaming group:
LeoVegas’ passion is “Leading the way into the mobile future”. LeoVegas is the premier GameTech company and is at the forefront of using state-of-the-art technology for mobile gaming. A large part of this success can be credited to an extreme product and technology focus coupled with effective and data-driven marketing. Technology development is conducted in Sweden, while operations are based in Malta. LeoVegas offers casino, live casino and sports betting, and operates two global and scalable brands – LeoVegas and Royal Panda – as well as a number of local brands in the UK. The company’s shares are listed on Nasdaq Stockholm. For more about LeoVegas, visit www.leovegasgroup.com.

 


Source: Latest News on European Gaming Media Network
This is a Syndicated News piece. Photo credits or photo sources can be found on the source article: LeoVegas AB: Q4 report and financial targets pushed one year to 2021

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Casino Innovations: Market-Ready

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Casino Innovations: Market-ReadyReading Time: 2 minutes

 

Every year the gaming industry prepares to unveil the latest trends and technologies at ICE Totally Gaming and G2E Las Vegas and Asia. As an example, in February 2018, casino developers were able to show a wide selection of innovations across international regions. These innovations help to cater all areas of land-based and interactive gaming.

New Products
One of the innovating products were the new cabinets that included 4K monitors, new single games, new game mixes, a variety of electronic table games that run on specific platforms, such as Novomatic Media Technology platform. These new cabinets, contain games that come from different cultures, such as From Dusk Till Dawn, Viking & Dragon and other new progressive games.

Among the newest products, there is also a compelling line-up of new cabinets, something like the Ainsworth products. These line-up products welcomes the player with games, such as Pac-Man Dynamic Edition, Pac-Man Wild Edition, Desert Dusk and others. The new technology displays also include progressive games similar to Hao Yun Dao. Several brands who made their debut included games like Fire Power and Raging Roosters Reloaded.

For the European region, casino developers, such as Novomatic, was present at ICE London with new games for the arcane and pub market. Novomatic is a well-known casino company in Europe. So it is natural to see a lot of development and innovations for the European market. As an example, for UK, Novomatic created themed products like Austin Powers, Batman and Sherlock Holmes. Meanwhile, for Germany, Lowen Entertainment had displayed new solutions. In addition, Novomatic Italia, Novomatic Netherlands and Novomatic Gaming Spain together with GiGames and showed their portfolio for Italy, the Netherlands and Spain.

Greentube, another casino developer company, was able to show its capabilities as well, by promoting a number of interactive products, such as Greentube Pro, a social gaming platform. In addition, from top performing land-based titles to an extensive portfolio of casino games, like Crazy Birds, Greentube was able to demonstrate that it is a capable full-service provider.

In other words, many companies, besides Novomatic, like Apex Gaming, Scientific Games and others, came with a comprehensive product portfolio. The range seems quite long, from high-end casino equipment, system and management solutions to the arcade and pub products, that can be played online, mobile and are social too. Some of the newer games can also be found on online casinos, like Admiral Casino Online.

Last Words
One of the CEOs, who is regularly present at these casino gatherings, Harald Neumann, the CEO of Novomatic AG. said that events such as ICE London, is a trade of showing appearance. Most of the companies still continue to prove themselves as a full-service provider. Some of the companies are among the world’s leading gaming technology groups, furthermore, specific honors are given away. The top companies get “Supplier of the Year” recognition and such. As an example, the Novomatic Group received an “Casino Supplier of the Year” credentials at ICE London 2018.

Neumann also added that companies grew a lot in the recent years because most companies were focused on innovations. In addition, in 2018, some of them focused more on increasing the synergies between the partner companies and, of course, more attention was added on the internal structures. And when an interview is just around the corner, most of CEOs remark that their company will continue to make improvements where needed, and work more into adding innovations for players and operators.


Source: Latest News on European Gaming Media Network
This is a Syndicated News piece. Photo credits or photo sources can be found on the source article: Casino Innovations: Market-Ready

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Nektan builds on B2B momentum with Dench partnership

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Nektan builds on B2B momentum with Dench partnershipReading Time: 2 minutes

 

Nektan plc the fast-growing international gaming technology platform and services provider, has boosted its global reach and commercial partnership network after securing a deal with turnkey gaming platform, Dench eGaming Solutions.

As part of the agreement, Nektan will aggregate its premium casino content to Dench’s operator network via E-Lite, Nektan’s content distribution platform.

Dench partners will significantly expand their casino offering with direct access to more than 800 HTML5-developed slots and table games from the industry’s leading providers, available across all desktop and mobile devices.

This latest partnership further strengthens Nektan’s B2B division and highlights the growing appeal of its B2B E-Lite platform from global tier one operators to platform providers alike.

Dench specialises in providing a turnkey gaming platform, white label services and real-time marketing automation solutions for the iGaming industry. It focuses on customer bonusing, rewards and engagement.

Jane Ryan, Chief Operating Officer of B2B at Nektan, said: “We’re delighted to be delivering our B2B E-Lite platform to Dench eGaming Solutions. This latest commercial agreement will allow us to grow our international scale even further, while providing Dench customers with access to a growing portfolio that is brimming with premium content.

“Nektan’s B2B division is enjoying significant growth at present thanks to our proprietary technology and ease of access to world-class casino content. We look forward to announcing more commercial contracts over the coming months as demand builds for our services.”

Dobromir Mitev, Chief Executive of Dench, said: “We’re really excited to be working alongside Nektan, allowing our client base to instantly enhance their casino offering with the addition of such a diverse range of games, to suit all tastes and preferences.

“Nektan shares similar values to ourselves, with our company mission to bring the next generation of casino game experiences to operators through strong and reliable technology.”

 


Source: Latest News on European Gaming Media Network
This is a Syndicated News piece. Photo credits or photo sources can be found on the source article: Nektan builds on B2B momentum with Dench partnership

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Inaugural Casino Marketing Boot Camp A Success

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Inaugural Casino Marketing Boot Camp A SuccessReading Time: 2 minutes

 

The inaugural Casino Marketing Boot Camp, held March 10-12, 2019 in Winter Park, Colorado, was a success, and plans are already in the works to hold a second event in 2020.

 

“Our small group size allowed us to deliver one-on-one consultation-level attention to each participant,” said Julia Carcamo, president of New Orleans-based marketing agency J Carcamo & Associates, and co-founder of Boot Camp. “We were able to share casino industry knowledge as well as insights from leaders in the fields of strategic thinking, learning, and business management of seasonal business.”

Held over two days, participants participated in interactive sessions from dynamic speakers such as Len Hernstein, CEO of ManageCamp; Josh LeDuff, EMPATHIQ chief strategy officer; and Jeff Klem, co-founder of Adventures in Leading.

“I feel like I came into this training knowing nothing about Marketing and came out with just enough information to be ‘dangerous’,” said participant Martha George-Sachava, manager-in-training, Suquamish Clearwater Casino Resort.

“We gathered a group of casino marketers from across the country and provided them with content relevant to their day-to-day business along with the opportunity to share their challenges and best practices,” said Nicole Barker, Boot Camp co-founder and loyalty program/database analytics marketing consultant with Relationship Marketing Solutions Inc. “They left ready to implement what they learned.”

Outside of the working sessions, participants and session leaders continued the discussion while exploring the local sights of their host community with a whiskey tasting and tour at Idlewild Distillery.

“I think this (conference) would be good for my managers up to the director-level,” said Jennifer Johnson, vice president – loyalty marketing, Foxwoods Casino.

Sarah Barten, chief communications manager, Grand Casino Mille Lacs furthered, “I valued making connections with this small intimate group. Our challenges are similar to the ones other casinos face. We were able to delve into our casino database and identify areas where our players are falling through the cracks. A big takeaway for me was the brand framework we built that will help us as we rebrand our casino.”

 

The 2020 Casino Marketing Boot Camp is scheduled for March 2020 in New Orleans, LA. More information is available at www.casinomarketingbootcamp.com


Source: Latest News on European Gaming Media Network
This is a Syndicated News piece. Photo credits or photo sources can be found on the source article: Inaugural Casino Marketing Boot Camp A Success

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