LeoVegas posts flat Q4 revenue as Germany and Netherlands issues hit home
Swedish operator reaffirms commitment to return to Dutch market as underlying growth suggests silver linings
LeoVegas posted a flat year-on-year (YoY) revenue in Q4 2021 as the impact of regulatory headwinds in Germany and the Netherlands took their toll.
The Stockholm-listed operator recorded revenue of €98.2m (£82.5) for Q4 2021 compared to €98.4m in Q4 2020.
LeoVegas highlighted the difficulties it had faced due to the issues in the Netherlands and Germany, as excluding the two markets when comparing YoY revenue growth saw an increase of 26%.
The group left the Dutch market following its re-regulation on 1 October 2021, and a 5.3% turnover tax on slots and casino product restrictions in Germany have made it difficult for operators to return positive financial results.
The Netherlands represented 6% of the group’s revenue total in Q3 2021 and LeoVegas confirmed it would apply for a licence to re-enter the market during Q1 2022.
Elsewhere, the firm also posted a flat rise in adjusted EBITDA of just 1% from €11.5m in Q4 2020 to €11.6m in Q4 2021.
Cashflow fell significantly by 64% from €20.8m to €7.5m. LeoVegas said its working capital had been impacted by a variety of factors including licence payments, jackpot provisions and a €16.1m deferred tax payment in Austria.
The Nordics continue to be the most fruitful region for LeoVegas with 50% of the group’s net gaming revenue coming from the area.
A further 29% came from the rest of Europe, down slightly due to the impact of leaving the Netherlands, and 21% came from the rest of the world.
Casino continues to drive revenue too, with 74% of gross gaming revenue coming from the vertical compared to 14% from live casino and 12% from sportsbook.
Gustaf Hagman, LeoVegas CEO, said: “I am proud of how we concluded 2021 and how we offset the revenue loss related to the ongoing regulatory changes in Germany and the Netherlands.
“Adjusted EBITDA improved somewhat year-on-year, despite ceasing to provide our services in the Netherlands while waiting for a gaming licence, which was previously one of our most profitable markets,” he added.
Hagman went on to confirm the group’s commitment to return to the Netherlands, to go live in Canada and his hopes moving forwards.
He said: “At the start of 2022, we have applied for licences in the Netherlands and Ontario.
“We always aim to be at the forefront of customer focus, technology and data, but also continue to continually challenge ourselves to be better in all areas. I can affirm that LeoVegas with all its employees will continue to drive the industry forward with the mobile gaming experience in the spotlight,” he concluded.
LeoVegas shares were down around 2% in early trading.