CEO of Leo Vegas: "We are not satisfied"

"Leo Vegas is a growing company, but for the first time, our growth is no better than the previous quarter, which we are obviously unhappy with," said CEO Gustaf Hagman at the presentation of the report. from Wednesday.

He pointed out that compliance was part of the pace of growth and that the company had now affected many more employees working with compliance.

"Leo Vegas has always focused on responsible gaming," he said.

"We are calibrating our business to find the right balance between regulatory compliance and high level of gaming protection, while ensuring the best gaming experience," commented the game manager.

He described the situation as difficult and pointed out that the "player value" was passed on to several of the company's main markets and that this was the main reason for the decline in the growth rate in the third quarter, described as a quarterly intensive.

In the Swedish market, the company is preparing for the next regulation at the end of the year. While regulatory compliance is under consideration in the UK market in the near term, the company sees tremendous potential over the long term.

The United Kingdom, Leo Vegas' largest market, is closely associated with Sweden, which accounted for about half of the company's revenue in the third quarter.

Organic growth in the United Kingdom reached 32% in the third quarter.

"Despite long-term improvement efforts, we are not satisfied with third quarter growth and profitability. Our regulatory compliance efforts mainly affected the short-term growth of our two largest markets, Great Britain and Sweden. the value of the player decreases, which in the short term was not mitigated by a new record number of depositing customers during the quarter, "writes the chairman of the report and continues:

"The second reason that had a noticeable impact is the larger projects that we launched in the second quarter, we will see the long-term effects and they also had a blocking effect of our resources that could not focus on growth initiatives. "

The financial targets for 2020, with a turnover of at least 600 million Euros and an ebitda of at least 100 million Euros, are more ambitious than they were this spring. However, the company was firmly in line with its forecasts for 2020.

"If one of our major markets, Great Britain, is changing, I want to reiterate our financial goals," said Gustaf Hagman. It was a good opportunity to achieve these goals.

The chief financial officer realized that organic growth was virtually unchanged at the beginning of the fourth quarter, but expected a gradual seasonal improvement over the last quarter. And if you exclude the UK, Leo Vegas' organic growth would be really interesting, said the CFO and pointed out that Britain was the height of the growth drama.

Marketing costs, relative to revenues, in the fourth quarter have been estimated at the present time, to a large extent, without any deviation from the third quarter.

By 2019, it was too early to comment on how the company envisioned its marketing efforts.

Spelaktien had raided 23 percent at lunchtime after the third quarter failed to meet average analyst expectations according to the Bloomberg consensus, and the beginning of the fourth quarter was disappointing according to analysts' comments.

"It's the report itself, and especially the underlying activity, that is not working well." The report was far worse than the company had guided all analysts. the fourth quarter versus the consensus, "commented one analyst to be anonymous, the sharp decline on the part, and further asserts that the problems for Leo Vegas will likely continue even next year.