LeoVegas 2021 Revenue Reveals Challenges Posed by Changing Regulations
The LeoVegas Mobile Gaming Group has reported a small year-on-year revenue growth for 2021 and a decline in net profit. However, in the fourth quarter, the company managed to reduce the impact of new regulations in key markets.
Revenue last year was €391.2 million, up 1% from the previous year. Over the course of the year, the number of new depositing customers dropped 3.3% year on year, but this was balanced by returning depositing customers increasing by 12.5%.
According to LeoVegas, progress in 2021 was held back by changes to regulations in Germany, where a 5.3% turnover tax was introduced for online poker and casino. The tax means that the market contributed just 2% of group revenue in Q4 compared to 15% the previous year. LeoVegas was also forced to stop operations in Holland ahead of the country opening its regulated market as it hopes to secure a license in the future.
Last year also saw LeoVegas acquire Expekt for €5 million and relaunch its brand in the Nordics region. The company also purchased a 25% stake in SharedPlay, and it reached an agreement with Caesars Entertainment to launch a casino in New Jersey.
The company’s expenses rose faster than revenue grew last year. The biggest expense was marketing, which was up 8.5% to €143.8 million, followed by personnel expenses, which were up 5.4% to €143.8 million. Adjusted earnings before interest, tax, depreciation, and amortization (EBTIDA) was down by 19.5%, from €55.4m in 2020 to €44.6m.
Overall, there was an operating profit of €18 million, down 21.1% year-on-year, and a net profit of €11.8 million, down 38.9%.
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. We demonstrate a high ability to adapt and continue to drive innovation even when faced with turbulent times. An increasing number of European countries are becoming regulated, and some 74% of our revenue is currently regulated and/or taxed. The external market environment will remain erratic and turbulent in places, but we are well-positioned to manage this. Armed with all of our ongoing growth initiatives, I feel optimistic ahead of 2022.
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