Germany market adjustment batters LeoVegas, pushing overall YoY revenue down 12.5% in Q2

Online and mobile gaming operator LeoVegas has released its financial statement for the second quarter of 2021, showing a revenue decline compared to a year earlier.

Revenue hit €96.8 million down from €110.7 million in Q2 2020 (down 12.5 per cent).

However, the operator, which has a significant presence in Malta, claimed that excluding the German market, it actually saw a three per cent revenue growth.

LeoVegas blamed problems in this region on changing market conditions in the country, including strict production limitations and a “skewed competitive situation”.

“We believe it will take time to create a balanced and fair market climate and have therefore chosen to shift our investments to other, more profitable markets. Over the long term we still believe that Germany, with Europe’s largest population, offers great opportunities for the group”, said LeoVegas CEO Gustaf Hagman.

Only four per cent of the operator’s total revenue now comes from Germany, after NGR declined by 81 per cent during the quarter.

On the other hand, the largest market for LeoVegas was the Nordic region where the company made 41 per cent of its NGR, whereas 49 per cent came from the rest of Europe. A total of 20 per cent came from the rest of the world.

The number of depositing customers using the operator’s sites was up, by six per cent in the quarter, though this figure was actually representative of a year-on-year decline in the number of new depositing customers, which fell by nine per cent, while the number of returning depositing customers rose by 18 per cent.

Costs during the company were higher than the quarter earlier, and the cost of sales and gaming duties hit €32.4 million, meaning gross profit was €64.3 million.

Mr Hagman also commented on LeoVegas’ acquisition of Expekt in March, which was consolidated in the Q2 period, describing it as having had a successful start and adding that the company nearly doubled Expekt’s revenue and market share in Sweden since the acquisition was completed.