Revenue for the three months to September 30 was € 99.4 million (£ 85.1 million / $ 114.1 million), up from € 88.9 million over the same period last year.

Classic casino games accounted for 76.0% of all revenue during the quarter, before live casino at 14% and sportsbook at 10%, while LeoVegas experienced a 5.4% increase in customer deposits to EUR 308.6 million.

The number of new deposit customers reached 188,221, an increase of 5.2% compared to last year and also the highest quarterly amount since the second quarter of 2020. Recurring deposit customers amounted to 281,500, an increase of 8.4% compared with the previous year.

In terms of geographical performance, the Nordic region remained the operator’s core market and accounted for 44.0% of all revenues during the third quarter. Net gaming revenues in the region increased by 39.0% compared with the previous year, thanks to the acquisition of the Expekt brand in May and its subsequent relaunch.

Sweden in particular had a good quarter with record high revenues and customer numbers, stated President and CEO Gustaf Hagman, with the help of a better-than-expected development from Expekt and a stronger performance from LeoVega’s core brand.

“All key markets developed well during the quarter, where our home market in Sweden was the brightest star,” said Hagman. “It is positive that the company can show strong performance in one of the world’s most competitive and strictly regulated gaming markets.”

Revenues from the rest of Europe accounted for 34% of all revenues for the quarter, with net gaming revenues in the region increasing by 19.0% compared to last year due to growth in both Spain and Italy. However, changes in the law in Germany, together with the ongoing regulatory process, hampered growth.

LeoVegas noted that excluding its operations in Germany, total sales for the third quarter would have increased by 31.0%. Germany’s state treaty on gambling (Glücksspielneuregulierungstaatsvetrag), which requires a bet limit of € 1 per spin on online slots among other restrictions, has affected operators’ results across the industry and already contributed to a year-on-year decline in LeoVega’s revenue in the second quarter.

The rest of the world’s revenue, net gaming revenue, increased by 42.0% on an annual basis and accounted for 22% of all revenue during the third quarter. LeoVegas said that development was particularly strong in Canada, where it had double-digit growth for the period.

“The favorable revenue growth for the Group confirms that the strategy of simultaneously scaling up a number of markets and relaunching the Expekt brand has been a success,” said Hagman.

“Today, the company is more diversified than ever and we have managed to compensate for the sharp decline in revenue in Germany.”

Looking at expenses, selling expenses increased by 8.9% to EUR 17.1 million and costs of gaming fees increased by 28.2% to EUR 15.9 million. Personnel costs were at the level of EUR 12.4 million, but marketing costs were 13.8% up to EUR 36.2 million, capitalized development costs by 50.0% to EUR 3.6 million and other operating expenses 33.8% to 9.9 million Euro.

Profit before interest, tax, depreciation and amortization (EBITDA) was 0.8% lower at EUR 11.8 million, but operating profit increased by 7.8% to EUR 5.5 million.

After reporting other expenses, including EUR 1.1 million in financial expenses, this resulted in a profit before tax of EUR 4.3 million, a decrease of 8.5% compared to last year. LeoVegas paid EUR 204,000 in tax, which resulted in a net profit of EUR 4.1 million, the same level as the year before.

In terms of how this affected the operator’s performance so far this year, revenues in the nine months to the end of September were 1.3% higher at EUR 292.9 million.

EBITDA decreased by 27.6% to EUR 31.8 million, while operating profit decreased 49.6% to EUR 11.9 million and profit before tax 60.9% to EUR 9.0 million. LeoVegas paid EUR 1.4 million in taxes, giving a net profit of EUR 7.6 million, a decrease of 64.3% from last year.

Looking ahead, the fourth quarter began with revenue falling by 5.2% to € 31.1 million in October, with ongoing fighting in Germany exacerbated by LeoVegas’ withdrawal from the Netherlands. The Dutch market accounted for 6% of third quarter revenue and generated higher profits than most. Excluding these markets, revenues would have increased by 21%.

But an “abnormally low” sportsbook margin also had a negative impact, although underlying customer activity remained stable, Hagman noted.