Revenue for the three months to 31 March amounted to €96.7m (£83.6m/$116.2m), up from €89.4m in the same period last year. However, excluding Germany, revenue increased 19.0% year-on-year.
The operator said Germany made up 6% of revenue in Q1 of 2021, suggesting it brought in around €5.8m. The reported 19.0% increase in non-German revenue, meanwhile, suggests that the market brought in €13.1m in 2020, meaning revenue dropped 55.7%, or by €7.3m.
In addition, LeoVegas said the market made up 15% of revenue, or €14.8m, in Q4 of that year, meaning German revenue dropped by €9m, or 60.9%, quarter-on-quarter.
Breaking down LeoVegas’ entire revenue performance geographically, rest of world was the largest region for LeoVegas in Q1, accounting for 42.0% of total revenue. Some 38.0% of revenue came from the Nordics, while the remaining 20.0% was attributed to rest of Europe operations, which include Germany.
“During the first quarter we saw the full effect of the changes taking place in the German market,” LeoVegas president and chief executive Gustaf Hagman said. “Operators in the market are acting differently with respect to implementing the new restrictions, which unfortunately has led to a skewed competitive situation.
“The assessment is that up to 70%-80% of the German market for casino has temporarily been shifted over to operators that have chosen to not adapt to the coming market regulation.
“Our hope is that this will soon be sorted out by the German authorities, which is a prerequisite for the licence system’s success, with a high level of channelisation and consumer protection.”
Classic casino games remained by far the main source of income for the operator, with this segment representing 74.0% of all total revenue in Q1, ahead of live casino on 17.0% and sports betting with a 9.0% share.
Total customer deposits were up 2.8% to €295.8m in the quarter, with a 3.6% drop in the number of new depositing customers to 186,510 offset by a 25.5% increase in returning depositing players.
Turning to costs, marketing was the largest outgoing for LeoVegas in Q1, with spend here rising 15.3% to €36.1m. Staff costs were also up 9.9% to €13.3m, while capitalised development expenses climbed 33.3% to €3.2m.
However, higher revenue offset this higher spending, with earnings before interest, tax, depreciation and amortisation (EBITDA) up 15.6% to €10.4m.
After including €2.7m in depreciation and amortisation costs and a further €4.1m from the amortisation of acquired intangible assets and impairment of assets, including goodwill, this left an operating profit of €3.7m, up 68.2%.
LeoVegas incurred €1.1m in financial costs, meaning it posted €2.6m in profit before tax, an increase of 8.3% on last year. After paying €178,000 in income tax, the operator ended the quarter with €2.4m in comprehensive net profit, up 4.4% year-on-year.
“Our growth has been driven mainly by our loyal customer base, which reached a new record level during the period,” Hagman said. “We have maintained a high pace of investment, and despite this we achieved adjusted EBITDA growth of 22%, driven by our scalability and good cost control.”
Hagman also noted the acquisition of the Expekt sports betting brand from Betclic Group in Q1, saying this, the purchase of a 25% stake in startup SharedPlay and the launch of a new games development studio this month will support further growth in Q2 and beyond.
“For a long time we have created successful, exclusive games with the help of external providers,” Hagman said. “We are now taking the next step by starting our own game studio – Blue Guru Games.
“This venture will give us full control and greater flexibility in developing new games, a unique offering to our players, and also a new revenue stream for the group.”
Looking ahead, LeoVegas revenue declined in April, which was due in part to particularly high revenue in the comparative period of April 2020 with most markets under lockdown. Excluding Germany, revenue was up 4%.