LeoVegas has reported a 13% drop in revenue to €96.8m for the second quarter of 2021. The situation in Germany coupled to re-regulation, with strict product limitations, and extremely high gaming tax and a skewed competitive situation, is having a negative effect on the group.

Revenue in Germany decreased by 81% compared with a year ago and accounted for only 4% of Group revenue during the quarter. Excluding Germany, growth was positive 3%. Adjusted EBITDA was EUR 10.6 m, corresponding to a margin of 10.9%. Reported EBITDA was EUR 9.8 m.The number of depositing customers was 460,697, an increase of 6%.

Gustaf Hagman, LeoVegas’s CEO, commented: Most of our markets have continued to develop well, with high, double-digit growth in key markets like Italy and Spain. The development in Sweden is encouraging, with record-high revenue during the quarter. We are also growing rapidly in North America, which now accounts for 10% of consolidated revenue. However, re-regulation in Germany continued to negatively impact figures during the period.

Excluding Germany, Group revenue increased by 3% to a new record level despite tough comparison figures from the start of the pandemic during the second quarter of 2020 and greater competition from other entertainment activities as societies are now opening up again. We expect to see positive growth for the Group on a yearly basis during the third quarter.

Our operating profit decreased compared with the same period a year ago, while we achieved stable earnings compared with the preceding quarter. This is despite a high level of investments and a number of important, strategic ventures, including our forthcoming launch in the USA, a stronger focus on sports with the acquisition of Expekt, and our new game studio. Marketing costs in relation to revenue were higher than the historic average, coupled among other things to the relaunch of Expekt and investments in a number of key markets in which we see high customer growth. Investments in marketing during the quarter weighed down earnings short-term but are driving value long-term and will also enable us to accelerate out of the revenue drop in Germany. As revenues increase, the share of marketing investment will decrease. At the same time, we have maintained good cost control, and our operating expenses have more or less been unchanged over the last three-year period.