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LeoVegas Group has released its financial results for the third quarter of 2021, showing an increase in revenues of 11.8%, to €99.4m, up from €88.9 in Q3 2020.

The operator said that excluding the German market, where regulations have dramatically affected operator earnings, revenues increased by around 31% year-on-year.

“All key markets performed well during the quarter, where our home market in Sweden was the brightest star,” said group president and chief executive, Gustaf Hagman.

“The favourable revenue growth for the Group confirms that the strategy to simultaneously scale up a number of markets and relaunch the Expekt brand has been a success. The company today is more diversified than ever, and we have succeeded in compensating for the sharp drop in revenue in Germany.”

Nordic markets continued to be the operator’s largest contributor, bringing in 44% of the group’s net gaming revenue (NGR). The rest of Europe brought in a further 34%, while the rest of the world brought in the remaining 22%.

In addition to Sweden, Hagman said: “Other markets that performed extra well during the quarter included Italy, Spain and Canada, all of which grew between 40% -70% during the third quarter.”

Traditional online casino products accounted for the majority of the group’s GGR, at 76%, while live casino accounted for 14%. Sportsbook brought in the remaining 10%.

After cost of sales of €17.1m and gaming duties of €15.9m, the business was left with a gross profit of €66.3m.

Marketing costs were the group’s biggest expense, at €36.2m, while personnel costs came to €12.4m. After other operating expenses of €9.9m, and a benefit from capitalised development and other income of €3.6m and €67,000, respectively, the business declared EBITDA of €11.5m.

EBITDA was down 3% from €11.9m last year, at a margin of 11.6%, down from 13.4%. After €3.0m in costs related to depreciation and amortisation, and a further €3.0m in amortisation of acquired intangible assets and impairment of assets, operating profit (EBIT) came to €5.5m.

After financial costs of €1.1m, profit before tax came to €4.3m. The business paid €204,000 in income tax, leaving a net profit for the period of €4.1m, 0.3% ahead of Q3 2020.

The operator saw 188,221 new depositing customers during the quarter, up from 178,995 in Q3 2020, and returning depositing customer numbers were up to 281,500, from 259,696 in Q3 last year.

During the quarter, LeoVegas repurchased €2.5m in shares and expanded its existing bond issue by SEK200m (€20.0m), as well as launching new AI-powered functionality to scale up the Group’s efforts surrounding responsible gaming. 

Customers in the UK were the first to receive product-integrated and personalised messages based on their own behaviours and gaming history.

From 30 September, the operator withdrew from the Dutch market, which accounted for around 6% of its revenue during Q3, but said it will apply for a licence in the jurisdiction during Q4.

Following the end of the quarter, revenues in October amounted to €31.1m, down from €32.8m in October 2020. LeoVegas said excluding the Netherlands and Germany, however, revenue increased by 21%.

Sportsbook margin was also unusually low in October, leading to a further negative impact on revenue, but the operator said underlying customer activity has remained strong.

LeoVegas was also granted renewed licences by Danish Gambling Authority, Spillemyndigheden, in October, allowing it to continue operating in the market until 2026.

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