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LEOVEGAS AB Q3: QUARTERLY REPORT 1 JULY – 30 SEPTEMBER 2021

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“Record quarter in Sweden!” – Gustaf Hagman, Group CEO

THIRD QUARTER 2021: 1 JULY – 30 SEPTEMBER

  • Revenue increased by 12% to EUR 99.4 m (88.9). Organic growth in local currencies was 8%.
  • Excluding Germany, growth was positive 31%.
  • EBITDA was EUR 11.5 m (11.9), corresponding to an EBITDA margin of 11.6% (13.4%).
  • The number of depositing customers was 469,721 (438,691), an increase of 7%.
  • Adjusted earnings per share were EUR 0.07 (0.08).

EVENTS DURING THE QUARTER

  • LeoVegas repurchased shares for EUR 2.5 m and paid out the second dividend (EUR 3.9 m) of a total of four quarterly dividends to the Parent Company’s shareholders.
  • LeoVegas expanded its existing bond issue by SEK 200 m.
  • LeoVegas launched new AI-powered functionality to scale up the Group’s efforts surrounding responsible gaming. Customers in the UK were the first to receive product-integrated and personalised messages based on their own behaviours and gaming history.
  • Following recent policy changes in the Netherlands, LeoVegas decided to stop providing its services in the country as from 30 September 2021. The Netherlands accounted for 6% of the Group’s total revenue during the third quarter, with higher profitability than for the Group average. LeoVegas will apply for a licence in the Netherlands during the fourth quarter.

EVENTS AFTER THE END OF THE QUARTER

  • Preliminary revenue in October amounted to EUR 31.1 m (32.8), corresponding to negative growth of 5%. Excluding Germany and the Netherlands, revenue increased by 21%. The sportsbook margin was abnormally low in October, which had a negative impact on revenue, while underlying customer activity has remained strong.
  • The Swedish government has confirmed that the restrictions for online casino remain in effect through 14 November 2021 and will not be extended thereafter.

COMMENT FROM GUSTAF HAGMAN – GROUP CEO

THIRD QUARTER
We are satisfied with our performance during the third quarter and increased our revenue by 12% compared with the same period a year ago. Excluding Germany, which has been dramatically affected by the ongoing re-regulation, consolidated revenue increased by 31%.

All key markets performed well during the quarter, where our home market in Sweden was the brightest star. The favourable revenue growth for the Group confirms that the strategy to simultaneously scale up a number of markets and relaunch the Expekt brand has been a success. The company today is more diversified than ever, and we have succeeded in compensating for the sharp drop in revenue in Germany.

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During the quarter we delivered a stable operating profit compared with a year ago, despite a sharp increase in paid gaming taxes and higher marketing investments in relation to revenue compared with a year ago. In pace with growing revenue, the share of marketing investment is expected to gradually decrease from the current levels. At the same time, we have continued to invest in product and technology ahead of forthcoming market expansions, including the upcoming US launch. We are seeing some normalisation of office and travel-related costs as the pandemic is hopefully nearing its end, while general cost control in the Group continues to be good. All in all, we expect – through the economies of scale provided by a larger revenue base – to be able to deliver good earnings growth going forward.

MARKETS
Sweden had a good quarter in which both revenue and the customer base reached new, record levels. The acquisition of Expekt has exceeded our expectations, and the strong growth since its re-launch at the end of May confirms that the brand’s sport profile is appreciated by customers. The LeoVegas brand has also performed well, which shows the power of well-known brands combined with a competitive product. It is positive that the company can show strong performance in one of the world’s most competitive and strictly regulated gaming markets. Other markets that performed extra well during the quarter included Italy, Spain and Canada, all of which grew between 40% -70% during the third quarter.

REGULATION
It is an intensive re-regulation period with simultaneous implementation of local regulations in the Netherlands, Germany, and the Canadian province of Ontario. Internal preparation work is going full throttle to make us ready for the new regulations. In parallel we are conducting development work to adapt our proprietary technical platform ahead of our expansion to the USA next year.

Re-regulation processes can be turbulent and arbitrary. Such has been the case in the Netherlands, when the authorities changed their policies with short notice at the end of September, entailing that all gaming operators that had not yet been granted a gaming licence were forced to stop providing their services in the country. The company’s sales and earnings will thus be negatively affected starting with the month of October. The Netherlands accounted for 6% of the Group’s total revenue during the third quarter, with higher profitability than the Group’s average. LeoVegas will apply for a licence in the Netherlands later this year.

Developments in the market, with numerous re-regulation processes in progress and a number of regulated markets that are implementing new laws and new interpretations of regulations, are creating a somewhat turbulent and difficult to navigate current situation in the gaming industry. However, as the conditions gradually clear, we have a firm positive view on the outlook, as regulated markets create a more sustainable environment to work in, while the long-term growth potential in the online segment of the industry is enormous. The new regulatory environment favours established and well-invested operators like LeoVegas with competitive products, well-known brands and focus on responsible gaming.

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COMMENTS ON THE FOURTH QUARTER
Revenue for the month of October amounted to EUR 31.1 m (32.8), representing negative growth of 5%. Excluding Germany and the Netherlands, revenue increased by 21%. The sportsbook margin was abnormally low in October, which had a negative impact on revenue, while underlying customer activity has remained solid.

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The untapped potential of SEO in iGaming

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With Filip Podborschi, SEO Strategist at The Unit

From our experience in SEO in igaming, there are a number of areas where we see room for improvement and common mistakes which can be rectified. Let’s take a look at these facets of SEO one by one, with our best tips for how to make sure you can maximise your search ranking and drive more volume to your website.

Keyword strategy

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The first thing operators should do in this area is identify the best performing keywords that result in higher search volumes on each post. It’s pages that rank rather than websites, so you need a different search intent on each page, and that increases the list of keywords you’re ranking for.

The way to do this is by checking the search volume, and then implementing the keywords according to SEO best practices, which means having primary and secondary keywords and adjusting repetition accordingly.

The common mistake we see here is that companies don’t go into enough depth when conducting competitive analysis; especially when they’re new to the industry. Identifying what exactly your competitors are doing regarding SEO is harder than it looks, and it’s an area where marketing agencies tend to be quite lazy. They may use some tools which will show the standout competitors by algorithm, but they won’t crawl for long enough to ascertain what services they offer and provide a comparison with their client’s service. You need to find out which sites could be ranking better than you, and why.

We also see issues with the ranking of sites based on the user’s location. For example, you may have a website that ranks well in Canada, and when I as a user based in Romania search for that category, I’m not going to get the same list of results as a user who is based in Canada. The best thing to do is use a VPN to gauge how your websites are ranking and performing with your specific audience in your domestic geographical area.

SEO tags optimisation

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With SEO tags, which are essentially the page title and description you see on the search engine results page, the page title has the highest ranking power. Google will first check the page title to get an idea of what the page is about and what searches it is relevant for. It will then check the H1 and the content, and it may look through the H2 as well.

A common issue here is some websites have templated SEO tags, especially for the inner pages, so it’s more of a formula within the code to generate a random structure. It is very obvious they are templated and that the operator doesn’t really care about the length.

The key thing with tags is to make sure your pages have titles that don’t exceed the ideal length. This is a big mistake if you get this wrong, and it is very important to optimise your titles. SEO tags can be optimised around keywords. Once doing so, it is very important to prioritise your main pages. If you have 10 pages as part of the main menu, then you should optimise those, before optimising the inner pages.

Identifying duplicate pages is also important, as well as making sure meta inscriptions include CTAs; those inscriptions don’t impact rankings directly, but they do impact the CTR. You have to do that without being too spammy though, so it’s advisable to avoid words like ‘sale’ or calls to “CLICK HERE NOW”.

Headings

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Keywords must be implemented in headings; especially in H1s and H2s. Make sure not to overuse H2s and keep them optimised for content value.

If we structure the ranking power of the elements that are bringing results, we would optimise with the page title first, H1 second, content third and H2s fourth. It is better to have five H2s with three of them being optimised around the same search intent that is highlighted in H1, than it is to have 3/10 optimised around keywords. Too many H2s will just confuse Google about your search intent. You can have similar search intent as with H1s, and also have H3s and H4s to highlight value to the reader.

Interlinking strategy

Interlinking between pages is often missing. I’m not talking about interlinking from the main menu, as every page has the ability for you to go back, but I’m talking about interlinking within content, which Google considers to be much more important, because it cares about the relevancy. Google will consider pages with high-quality content as a higher authority page.

Our advice would be to implement anchor links on both branded and non-branded keywords. You should make sure there is an anchor link to the parent page. For example, domain.com/blog is a parent for domain.com/blog/igaming-seo.

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It’s very important to have child pages linking to the parent page, passing authority to the parent page. Having that interlinked structure will pass more authority to that parent page.

To explain that in a little more detail, let’s say you have a sportsbook page with 10 more child pages that reflect a particular set of sports. Having each of those 10 pages optimised so they have some authority and linking them to the parent page would pass authority to that parent page. Parent pages usually have a keyword with higher search volume, and passing as much authority as you can to the child page is very important. Too often websites lack content on child pages.

The future of SEO and experience needed

Going forward, we see AI as one of the most significant developments in SEO. At this point, we are not able to rank user engagement in AI, and it is important to keep yourself updated with how Google is reacting to this.

Google in time may provide additional options if you want to be eligible for a particular set of results in that environment. Keep an eye on what features it will offer and the types of websites. Google may consider implementing specific types of results for betting, such as displaying odds or a comparison of odds from three or four sites at the same time.

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With all these issues, it is vital to have the relevant experience on board, particularly when it comes to the skill of conducting very in-depth competitor analysis, and this is something The Unit can provide. Conducting competitor analysis is something we have done across several industries, and not just in igaming. The main strength you can have with SEO is to know your competitors inside out, and those skills can be adjusted based on your needs.

The post The untapped potential of SEO in iGaming appeared first on European Gaming Industry News.

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Hub88 strikes exclusive partnership with crypto giant Stake.com

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Hub88 has entered into a partnership with Stake, which will see it become the exclusive aggregation partner to the trailblazing crypto behemoth.

Through the alliance, Stake will integrate the entire content portfolio of Hub88 and provide its players with games from 120+ of the industry’s most sought-after studios.

As well as hit slot titles, Stake will benefit from live dealer and other iGaming content available via Hub88’s premium platform offering, as well as value-added propositions such as HubWallet Banking, Crypto Payments, and chat services which is part of the provider’s ecosystem.

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Stake is a community-based betting platform that was established in 2017 and quickly became the world’s biggest cryptocurrency sportsbook and casino. The operator also has a substantial sweepstake casino offering, providing free-to-play casino experiences to users.

The exclusive deal is an extension of an already successful partnership between the two brands and will help both companies significantly propel their ambitious commercial growth goals.

Mark Taffler, Commercial Director of Hub88, said: “We’re delighted to take our relationship with Stake to the next level. Fundamentally, we come from the same place as crypto is at the heart of what we both do.

“We will now be able to work even more closely with Stake. and help them boost their business by providing our best-in-class tech offering, content supply and account management while further adding value by delivering our business-enabling propositions such as Banking, Crypto Payments, and our HubWallet solution.”

Eddie Craven, Owner of Stake, said: “We’ve grown to trust Hub88 implicitly and their transparency and approach to business makes us secure that we are provided with the best content offering with a superior tech stack and back-end support.

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“Hub88 is genuinely an extension of our own business and as a trusted and well-established partner, we’re super excited to take this to the next level.”

The post Hub88 strikes exclusive partnership with crypto giant Stake.com appeared first on European Gaming Industry News.

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Peter & Sons bolsters its senior management team with new hire

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Innovative game studio Peter & Sons has today announced the expansion of its senior management team with the appointment of Lauryn Duncan to the role of Head of Sales and Marketing.

In her new role, Lauryn will be primarily responsible for new partnerships with clients across multiple jurisdictions that Peter & Sons is licensed. She will also be tasked with managing client relationships at every level of the collaboration from initial discussions right through to launch and ongoing account management.

Lauryn embarked on her slot game journey at Wazdan, spearheading the successful launch of many tier 1 operators. Her skills led her to Microgaming, a premier iGaming content supplier, where she undertook diverse roles encompassing sales, partnerships, and team management. Her most recent tenure at gaming powerhouse Games Global showcased her expertise in client onboarding across key markets in Europe and Canada.

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Peter & Sons already has access to the largest regulated markets including the UK, Italy, Ontario, Sweden, Greece, and Denmark. Additionally, the studio is set to go live in Spain, Portugal, and New Jersey – allowing Peter & Sons to cater to the true powerhouses of the iGaming space.

Over the last couple of years, Peter & Sons has created some of the most spectacular slots and has become a challenger brand within the iGaming industry. To achieve this, the company has built a highly skilled team of artists, mathematicians, and musicians to create some of the most entertaining content that players have come to love.

 

Yann Bautista, Commercial Director and Founder of Peter & Sons, said: “We are absolutely thrilled to welcome to our family someone of Lauryn’s calibre. Lauryn is joining at a pivotal moment for Peter & Sons, as we continue to strengthen our partnership roster.

“In the last 12 months alone, we have integrated with more than 50 new operators and aggregators, including big names such as Playtech, IGT, Hub88, Reevo, Groove and AzureTech.

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“Lauryn’s experience, network and passion for delivering excellence, coupled with the fact that we are perfectly aligned with our vision for the future of Peter & Sons, makes her the perfect candidate for this role.”

Commenting on her appointment, Lauryn Duncan, Head of Sales and Marketing, added: “This is a wonderful opportunity for me to be involved with Peter & Sons, which has fast become one of the most exciting slot game providers.

“This is an incredible opportunity for me to join forces with Peter and Sons, a company that is fast becoming one of the most exciting slot provider. After working with many studios, one develops a sense of what sets exceptional studios apart, and Peter and Sons has that unique spark of a company in its breakthrough stage.”

The post Peter & Sons bolsters its senior management team with new hire appeared first on European Gaming Industry News.

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