Could you give us your rundown of LeoVegas’ Q4 financial report?
All in all, I think it was a really solid quarter. We managed to reach around 9% in growth and a 25% EBITDA margin for the quarter. But there was also a lot of innovation. I’m particularly proud of the LeoJackpot, which went live and is our own unique jackpot solution. It’s at €6m [$7.2m] at the moment. But there’s also our Open Banking solution, which is really good for the future and a strategy where we’re digging more into the food chain in this industry. So all in all a strong quarter and we had a positive update for January, too, so a lot of positive things going on right now.
LeoVegas mentioned in its report that Italy is now one of its top five markets. Exactly how has that been achieved, given the gambling advertising ban in Italy? There was a lot of concern from operators that this ban would impact performance.
Well, I think it’s a tribute to the team. We bought a company in Milan a few years ago and they’ve been working really hard to put us on the map in Italy, and at the forefront when it comes to our position on mobile there. I believe strongly in the product. Since we can’t do any marketing, the one with the best product will win the race, more or less. During lockdowns in Italy, people were shopping round for the best product online and the best product on mobile. They came across Leo and stayed. That’s essentially what’s happening now. We’re seeing a really good uptake in the Italian market.
Another market LeoVegas mentioned in its report was Germany, with the brand implementing a number of changes ahead of forthcoming regulation. This impacted revenue, but what exact changes did this involve?
The new German legislation will come into force in July this year. Ahead of that, they’ve come out with a series of implementations that need to be made. There are requirements that came out 15 October and the second set in December. These are things like a €1,000 monthly deposit limit, five seconds between spins and maximum stakes. All of these things impact the customer experience, I would say, but we managed to implement everything on time during October and December. That has impacted us substantially both in Q4 and in January.
More or less, we took the full hit of everything in January and found ourselves on new ground. Now we’re ready to grow from where we are today. We’ve also been transparent; we were around 50% to 60% down in Germany when it was the worst week, but we feel we hit the ground and we can take it from there.
Will you be facing the same in the UK with the new slot guidance and regulation put forward by the Gambling Commission?
We are waiting for what’s coming out of the UK, and there’s a lot of talk and some rumours at the moment. We’ll see what happens. To some extent we’ve already implemented some measures at LeoVegas, at least. But, yes, it will most likely have some kind of impact on the market when it’ll be disclosed.
That’s a trend you’ve already referred to, with LeoVegas’ report saying all core markets except Sweden and the UK enjoyed double-digit Q4 growth year-on-year. How did LeoVegas perform in Sweden for Q4?
I think given everything that’s going on in Sweden, we’re doing okay – or well. We’ve been growing sequentially, month-on-month, in the Swedish market for five or six months. So that’s a good sign. And there are a lot of things going on in the Swedish market as well. But very high up on the prioritisation from the Government is to implement B2B licences, to protect the channelisation in Sweden, which is very low. It’s around 75%, so there is a black market of 25% in Sweden right now, which is huge. That’s a failure for the new legislation here, because they said one of the goals or milestones for them was to have channelisation above 90%. But they have acknowledged that and are working on it, so that’s a good sign.
You mention sequential growth but how are you impacted in terms of year-on-year performance, given the lower channelisation?
I can tell you that if there weren’t any unlicensed operators, then of course LeoVegas would have grown a lot better. Because we have a really strong brand, we are the strongest brand in Sweden when it comes to casino, and a great product suitable for the Swedish market. We’ve been here for nine years so, of course, it would have looked even better if it wasn’t for the channelisation and unlicensed operators. But again, the Government and other stakeholders are working on that.
Has there been any significant recent progress from the Swedish Government?
There’s been some talk in the media and some discussions going on, and I know from inside knowledge that this is high up on the Swedish Gambling Authority’s agenda. I know they are working on it, which is good. It has to do with trust as well. If the new legislation is going to be trustworthy, they need to address the issue that channelisation is 75% and not 90%, which was their goal. It’s quite far off.
Looking at overall performance and all of LeoVegas’ markets, what are your projections for the year ahead?
Well, we will continue to innovate. There will be more really good innovation like the LeoJackpot and Open Banking, which will change a lot of things for us long term. We will continue to enter new markets, with a couple of new ones during the year. And we will continue to improve our products, conversion rates, and the customer experience towards the journey of ‘king of casino.’