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Edited Transcript of LEO.ST earnings conference call or presentation 14-Aug-19 7:00am GMT

Q2 2019 LeoVegas AB (publ) Earnings Call

STOCKHOLM Aug 23, 2019 (Thomson StreetEvents) -- Edited Transcript of LeoVegas AB (publ) earnings conference call or presentation Wednesday, August 14, 2019 at 7:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Gustaf Hagman

LeoVegas AB (publ) - Co-Founder, President & CEO

* Stefan Nelson

LeoVegas AB (publ) - CFO

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Conference Call Participants

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* Aurore Tigerschiöld

DNB Markets, Research Division - Research Analyst

* Hjalmar Ahlberg

Kepler Cheuvreux, Research Division - Equity Research Analyst

* Martin Arnell

DNB Markets, Research Division - Analyst

* Mikael Laséen

Carnegie Investment Bank AB, Research Division - Head of Software & Services and Financial Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by, and welcome to today's LeoVegas Interim Report January to June 2019 Conference Call. (Operator Instructions) I must advise you that this conference is being recorded today, Wednesday, the 14th of August 2019. I would now like to hand the conference over to your speaker today, Gustaf Hagman, Group CEO. Thank you. Please go ahead, sir.

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [2]

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Thank you, and good morning, everyone, and a warm welcome to our quarterly presentation for the second quarter of 2019. Together with me today, as always, our group CFO, Stefan Nelson. Good morning, Stefan.

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Stefan Nelson, LeoVegas AB (publ) - CFO [3]

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Good morning, Gustaf.

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [4]

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Let's hit the highlights -- the Q2 highlights. Our revenues during the second quarter amounted to EUR 94.4 million. That's an increase of approximately 8%. Excluding the U.K., our organic growth was 26%, which shows a stable underlying growth in general for the group. We had about 48% locally regulated revenues. Depositing customers were 334,961 and that's 8% higher than last year. New depositing customers, 138,758. And finally, an EBITDA of EUR 15.1 million, corresponding to an EBITDA margin of 16%. So all in all, a solid quarter, with strong growth and profitability. I think our focus on efficiency and cost control has shown results during the quarter.

And here, this is our quarterly revenue since launch of LeoVegas back in 2012. And in general, I'm satisfied with the Q2 numbers, LeoVegas has a strong and clear position in several markets. So let's have a look at our product mix during the quarter. Casino Classic, this is basically our slot games, 74%; Live Casino, 17%; Sport, 9%. And these percentages are by gross gaming revenues.

Business update. So LeoVegas is aiming to take the position as king of casino in all markets that we are present in or expand into, and we will do that with sustainable growth and strong profitability. Let's talk about the challenging external environment as a start. During the first half year of 2019, we generated a good underlying growth and profitability despite a difficult to navigate external environment in several of our markets. As an example, the U.K. market is continuous challenging with new requirements quite often from the regulator. And in Sweden, unclarity around moderate marketing is creating uncertainty. And today, it's a constant shifting environment and our compliance and business teams are doing a great job being on top of these situations in several markets.

Next topic, a more balanced geographical revenue mix. Since mid-last year, we've been working on a more balanced mix of countries and brands that generates revenues. And we do that in order to not be too dependent on one market or a few brands. All in all, in essence, this mix is less vulnerable and more stable. We have reduced the risk in the LeoVegas group. Our focus on product innovation and customer experience. It's core to us to focus on product innovation, and we believe that a great customer experience for all our customers is crucial in order to maintain loyalty. It is a competitive advantage to have the best product and customer experience, not least in regulated markets. And also our continuous efforts throughout the entire group to always strive for operational excellence, cost control and synergy creation. One or many initiatives were taken during the quarter to increase efficiency and optimization within the group is to restructure the country organizations in the U.K. and Italy. And of course, we continue to work on renegotiating supplier agreements in gaming, payments and marketing, where we benefit from our size and position as one of Europe's leading casino operators.

Market comment. The Nordics stands for 40% of the group revenues; Sweden, revenues have developed positively every month during the quarter, but also rest of Nordic delivered solid growth. If we look at Sweden specifically, LeoVegas today is the single largest casino brand in Sweden, and we are gaining market share in the Swedish markets. And I believe that our focus on customer experience and knowledge about regulated markets and our strong brand position contribute to this positive development. So in general, I'm satisfied about the development in Sweden, that we managed to navigate despite the challenging and somewhat unclear environment.

Rest of Europe. The rest of Europe stands for 47% of the group revenues. U.K. continue to be challenging. We have really good performance in other markets outside the U.K. And during the quarter, we were granted a license in Spain, and we are already live. And then also we chosen not to apply for license in the recently re-regulated Swiss markets, and Switzerland stand for EUR 2.2 million in revenues during the second quarter.

Rest of world. So rest of world stands with 13% of group revenues. We had about 63% growth in rest of world during the quarter. Among the highlights, a strong quarter for rest of world markets, where Canada being the largest markets. And we're also live in Brazil.

Continuing on the business update. On the tech side, we migrated our tech stack to Google Cloud. This has been a huge internal project that has been going on for quite some time. What the new environment gives us is the ability to scale the technical infrastructure without having to invest in hardware and to reduce maintenance costs. It will also make us faster in setting up and adapting to new markets and regulations. A couple of new features was launched at LeoVegas during the quarter, such as improved search functionality, multiplay for mobile and new exclusive games for LeoVegas.

And on the management side, there's been changes. We hired Dersim Sylwan, appointed as Chief Marketing Officer. And Dersim has over 11 years of experience in the gaming industry and becomes an appreciated addition to the management team. But also Louise Nylén, our Deputy CEO, has been with us almost 6 years, but are now leaving LeoVegas. Her role will not be replaced. Louise has contributed significantly to the success of LeoVegas, and I wish Louise all the luck in the future.

Financial targets, our financial targets by 2021 is to reach EUR 600 million in revenues and EUR 100 million in EBITDA. We'd like to highlight that our targets not only include organic revenues, but also potential future acquisitions. And our long-term organic growth that outperforms the online gaming markets and also at least 15% EBITDA margin, assuming 100% regulated markets. And in the end also to pay a dividend over time of at least 50% of profit after tax.

Current trading update for the Q3. So July started with EUR 29.7 million in revenues, and that's a growth of 9% compared to July last year, and this is also slightly above the growth in the last quarter.

And with that, I leave to Stefan to run our business KPIs.

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Stefan Nelson, LeoVegas AB (publ) - CFO [5]

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Thank you, Gustaf. So looking at our business KPIs, I'll start with the customer base. Our new depositing customers increased by 3% year-on-year but was down 20% from the record high number in Q1. And to comment on this, this is a return to more normal levels after Q1, which was boosted by the Swedish new regulation as well as intensive marketing during the first quarter of the year. Meanwhile, our returning deposit customers increased 12% year-on-year and was flat quarter-on-quarter and is basically at an all-time high. And this leads to our total depositing customers increasing by 8% year-on-year.

If we move on to our player value. Our average deposit per depositing customer in Q2 increased 18% from Q1 and was flat on a year-on-year basis. Our average NGR per depositing customer increased by 22% quarter-on-quarter but was down 1% year-on-year. The main explanation for the significant increase versus the prior quarter is primarily a change mix in the player base given the higher share of RDCs and also much lower bonus costs, especially in Sweden, where we only provide bonuses to new customers. Long term, we don't see any change to the trend with the lower share of high-value players and a shift to more casual players, which means that over time, our player value will likely be stable or down a bit over time.

Next page. Our game margin in Q2 saw a minor drop versus Q1 to 3.7%. This is in line with historical average. Our Hold levels in Q2 increased to 32% from 31% in Q1, which is above average levels. And this is also partly related to less bonuses.

So in conclusion, these KPIs drive our deposits and NGR, and our deposits reached a new all-time high in Q2 with an 8% increase versus last year. Our NGR also reached new all-time high, was up 8% versus Q2 last year and up 9% sequentially versus Q1. And the NGR and deposit trends reflect the steadily growing depositing customer base versus last year, with the average player value being the primary growth driver versus Q1 basically. And also just note that the difference between our NGR and group revenue relates to, among other things, LeoVentures revenues and jackpot provisions.

If we take a look at our marketing KPIs, our marketing spend decreased to about EUR 28 million in Q2. Reasons for the decrease versus Q1 is lower marketing investments in Sweden, especially, also some reduced affiliate cost and a few postponed campaigns from Q2 to Q3. Our level in Q2, our marketing spend was a bit less than we had planned for ahead of the quarter. The customer acquisition costs increased 7% quarter-on-quarter but declined 11% year-on-year, and this reflects overall good marketing efficiency, a higher share of organic traffic and previous quarter's marketing investments paying off. And our current assessment is that marketing costs in Q3 will be higher than in Q2, both in absolute terms and in share of revenues. And as always, our data-driven marketing approach enables us fast and safe spending between channels and markets, depending on the opportunity and ROI potential that we see.

Moving on to our financial results. As Gustaf mentioned, we generated an EBITDA in Q2 of EUR 15.1 million, and this is an EBITDA margin of 16%. Our reported and adjusted EBITDA are the same in Q2. This is a new all-time high level for us. But worth noting is that the IFRS 16 accounting principle added EUR 0.9 million to EBITDA in Q2 this year, which we didn't in the prior years.

Now I'd like to provide a bit more granularity on the build-up to Q2 EBITDA compared to Q1, where we've reached EUR 7.2 million. And most importantly, we have obviously benefited from about EUR 8 million higher revenue sequentially. This has in turn driven our direct costs and our gaming duties increased by EUR 1.3 million compared to Q1. While our cost of sales also increased, although a bit less than our revenues. And this can comment on better terms with various suppliers, which we are working on a ongoing basis.

Our marketing spend decreased by EUR 4.7 million versus Q1, which I already mentioned before, and this, of course, supports our EBITDA in the short term. Our personnel expenses as a percentage of revenue decreased in Q2 but increased slightly in absolute terms. And this reflects an initiated shift from consultants to own tech personnel, which has been ongoing for a couple of quarters, but also some certain temporary costs reflecting organization optimization efforts. We saw a slight increase in operational expenses, which also partly reflects this temporary cost and some adverse FX rates. Finally, we capitalized slightly less in Q2, which takes us to the EUR 15.1 million mark on EBITDA

Quickly on the buildup from EBITDA to net income. Our adjusted EBIT for the period was EUR 12.6 million when excluding amortization. And as in previous quarters, we amortized about EUR 4 million relating to the past acquisitions. This means that our reported EBIT including amortizations was EUR 8.5 million. We have financial expenses of EUR 0.5 million, relating mainly to our bank loan and also had EUR 0.6 million in reported tax.

And this in conclusion resulted in a net income of EUR 7.4 million. And finally, on the financials, let's have a look at our financial position and cash flow. We have a solid financial position and a strong underlying cash generation from the business. Our cash flow from operating activities before changes in working capital amounted to EUR 14.8 million, which is driven by the underlying EBITDA result. With a small buildup of working capital in the quarter and also paid income taxes of EUR 4.5 million. This payment was made in Q3 last year. We paid back EUR 10 million of our bank loan during the quarter, and we also distributed EUR 5.7 million in dividends to our shareholders in Q2 as part of the semi-annual dividend. And this has left us with around EUR 49 million in cash on the balance sheet at the end of the quarter.

So with this, I'll leave the word back to you, Gustaf.

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [6]

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Great. Thanks, Stefan. So let's have a look at the summary. So all in all, revenue of EUR 94.4 million, which is 8% growth and an EBITDA of EUR 15.1 million. Sweden performing well when we are gaining market share. We're live in Spain and Brazil. Dersim Sylwan appointed as new CMO. And LeoVegas has chosen not to apply for license in the Swiss markets. And then July revenues, EUR 29.7 million. So all in all, a strong quarter with growth and high profitability. Q2 2019 was the best quarter ever, and we continue to take market share. And with that summary, I would like to open up the Q&A session.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We now have your first question sir, from the line of Martin Arnell.

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Martin Arnell, DNB Markets, Research Division - Analyst [2]

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So my first question is on Sweden. And it looks like you're gaining market share here? And can you elaborate a little bit on how that is possible and what you expect here in the near term moving forward?

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [3]

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Well, we believe that we are benefiting from our strong brands. LeoVegas has been present in Sweden since 2012. So we have a really strong brand and people like LeoVegas and that also creates loyalty, and, of course, continuous products innovation. It's very important and great customer sort of journey so to speak. Those would be the main pillars behind the growth as we'd announced, of course, we have experience from regulated markets. We are today in 7 different regulated markets. So we have knowledge about how to handling regulated environment.

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Martin Arnell, DNB Markets, Research Division - Analyst [4]

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Okay. And how much do you think this issues at one of your key competitors, Ninja, has impacted you?

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [5]

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Well, we -- hard to say, we don't really believe it has any major impact on LeoVegas. Martin, you should remember, the market is still fairly fragmented. So it's not that kind of easy to see where any new players will be coming from a specific operator.

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Martin Arnell, DNB Markets, Research Division - Analyst [6]

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Sure. And do you expect this positive trend in Sweden to continue here in the second half of the year?

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [7]

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Well, it looks good. It feels good. It's good momentum. So well, it's hard to say, and we will not tell you exactly what we think, but yes, feels good.

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Martin Arnell, DNB Markets, Research Division - Analyst [8]

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Yes. Okay. And looking at your marketing spending and the ROI. I mean your marketing was down, but you still have pretty good revenue growth. Can you give us some input on your marketing ROI and what is driving that?

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [9]

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We feel we have good marketing ROI. We have worked hard to improve it on a continuous basis, and it is still key for us to continue to become more efficient in our marketing. We also believe that our size, our previous investments in our brand and our credibility as a licensed and sustainable operator should benefit us in our negotiations and that's obviously always a negotiation with various marketing partners. But our position has improved, I think, and we expect also to continue working on getting better terms with our partners.

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Martin Arnell, DNB Markets, Research Division - Analyst [10]

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Okay. And you're guiding now for Q3, that marketing will be up, but that's typically quite normal, right?

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [11]

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Yes, I wouldn't say that's out of the ordinary. Q2 was, as we commented, a bit less than we planned for when we went into the quarter, and that's how it is sometimes. There were a few campaigns that we planned for at the end of Q2 that were kind of delayed over to Q3. So that, of course, has an effect. But as always, marketing is kind of a bit volatile between periods. And we invest a lot in Q1, not less than Sweden, which we instead cut down a lot in Q2, which was according to plan. And going forward, our plans now are a bit higher in Q3 than Q2.

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Martin Arnell, DNB Markets, Research Division - Analyst [12]

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Yes. Okay. And looking at your staffing, are you happy with the levels where you are now? And you still view this year as a more stable year in terms of staffing?

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [13]

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We view it as a more stable year in terms of staffing.

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Martin Arnell, DNB Markets, Research Division - Analyst [14]

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Okay. And my final question, could you just say why you didn't -- why you chose not to be part of the Swiss market?

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [15]

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Well, the thing is that it's not really commercially wise. You need to partner up with a land-based casino in Switzerland, and then we simply believe that there are other markets that are better for us right now to expand into.

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Operator [16]

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(Operator Instructions) Your next question is from the line of Mikael Laséen.

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Mikael Laséen, Carnegie Investment Bank AB, Research Division - Head of Software & Services and Financial Analyst [17]

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My first question is regarding the U.K. development, if you can say something about your performance there in the quarter and the development for your brands and implications from the new compliance measures or regulations that the regulatory implemented in Q2?

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Stefan Nelson, LeoVegas AB (publ) - CFO [18]

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Okay. Sure. The U.K. markets, one of those -- well, maybe the only market that remains challenging for us in the near term, but we're gradually making improvements in the U.K., working very hard, of course. It's important to remember though LeoVegas today does not have any market that are larger than 20% and our geographical risk is much lower today compared to a year ago. So all in all, we believe we're fighting in the U.K., but -- and it's a huge market out there. So eventually, we will -- it will go better and better.

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Mikael Laséen, Carnegie Investment Bank AB, Research Division - Head of Software & Services and Financial Analyst [19]

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Okay. And the brand performance, you can talk about.

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [20]

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Royal Panda, Rocket had a little bit weaker quarter in the U.K. last quarter, but core Leo, LeoVegas.com had a really strong and good quarter.

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Mikael Laséen, Carnegie Investment Bank AB, Research Division - Head of Software & Services and Financial Analyst [21]

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Okay. And a comment that you made in the report, that growth was 26%, excluding the U.K., if I'm not mistaken that means that the U.K. declined maybe 35% year-on-year. Is that a correct assumption or in the right ballpark?

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [22]

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Well, you -- I think you have good Excel spreadsheets, where we can get probably also quite a good view. We don't comment on specific markets, more than what we do in the report, but it's probably -- you can probably make your own conclusion there.

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Stefan Nelson, LeoVegas AB (publ) - CFO [23]

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All in all, we are happy that we have a better market mix. Revenues are coming from different markets today than we had a year ago. It's lowered the entire risk in the company.

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Mikael Laséen, Carnegie Investment Bank AB, Research Division - Head of Software & Services and Financial Analyst [24]

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Okay. Got it. But do you see any changes in the market situation in the U.K.? Or that starts to -- EBIT more stable on a sort of monthly basis or in terms of KPIs and how the operations are performing in the U.K., I mean?

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [25]

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I said we're not seeing any changes to the market. It's hard to comment on the total market for us. We have different brands, which are probably in different stages as well in the market. What we're doing also is that we are finding synergies between the brands and putting more of the brands kind of together under one team. So we're doing what we feel is necessary to creating this good position. But we think that U.K. long term is still a fantastic market, with -- it's huge risk, still growth there, but short term. It is quite volatile. And we're seeing quite a few operators now leaving the market, which will improve our position long term.

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Mikael Laséen, Carnegie Investment Bank AB, Research Division - Head of Software & Services and Financial Analyst [26]

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Okay. Great. And can you also say something here about Spain and Brazil, what do you expect from those two countries? And if they can contribute already in Q3?

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [27]

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Well, it's early days in both Spain and Brazil, of course. As for the rest of the Latin American countries, sort of where we are in, today, Chile, Peru, really early days. We'll not say that they contribute significantly in Q3. But then again, it's really -- that finally we have a Spanish and Portuguese language on LeoVegas opens up more countries for us and the opportunities out there.

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Mikael Laséen, Carnegie Investment Bank AB, Research Division - Head of Software & Services and Financial Analyst [28]

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Okay. And final one is about the restructuring and the organization changes that you made in Italy and the U.K. And you mentioned -- you talked about nonrecurring costs may be related to that. Can you say a bit -- talk about -- more about what is happening there and the cost impact?

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [29]

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We can start with the cost. We have chosen not to separate that. We have not made any kind of provisions for future cost. But of course, when we do organizations, there were some redundancies and also other costs associated with that. But it's nothing that we'll say that's big enough to highlight as an adjustment. This is the -- these are things that we will continue to do on a regular basis to optimize the organization.

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Operator [30]

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Your next question is from the line of Hjalmar Ahlberg.

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Hjalmar Ahlberg, Kepler Cheuvreux, Research Division - Equity Research Analyst [31]

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I just wanted to ask if you have any view on the seasonality going into August, September. I mean now -- July revenues of EUR 29.7 million. Do you have any views on seasonality for the rest of the Q3? Is that stronger typically? What should you say?

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [32]

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I think that the main difference is, of course, the [food] process to start again in August. Sports is not our biggest product that -- but that -- we don't really think that also businesses should be less, (inaudible) but of course, July is in the middle of the summer. So we'll have somewhat different target for that.

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Operator [33]

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(Operator Instructions) Your next question is from the line of Aurore Tigerschiöld.

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Aurore Tigerschiöld, DNB Markets, Research Division - Research Analyst [34]

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Can you hear me now?

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Stefan Nelson, LeoVegas AB (publ) - CFO [35]

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Yes, we can hear you.

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Aurore Tigerschiöld, DNB Markets, Research Division - Research Analyst [36]

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Perfect. I had a question regarding your trading statement. You mentioned that in July, your revenue in Q2, 3 was -- Q3 was up 9% year-over-year. And last year, that there was 2 weeks with World Cup football finals in Q3. So I was just wondering how big was the positive impact last year in July from the football World Cup, just so we understand that year-over-year comparable.

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [37]

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It's -- yes, it's -- I mean as you know, Sports is not the big product for us. And we don't have the numbers front of us. I don't think we ever gave that. But for us, it's not a substantial as it is for maybe the big Sports set operators. We are -- our focus is being a casino so I don't think it made much of impact in July last year, actually. It's more of a seasonality thing.

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Operator [38]

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There are no further questions at this time. (Operator Instructions)

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [39]

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So there's a question here from -- on the web from [Tundra Maxwell] I read it out here. Marketing as a percentage of revenue is low in the quarter. Could you guide for higher level in Q3? Could you give some more granularity on where marketing expenses were lower than normal in Q2? So I'm asking Stefan here.

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Stefan Nelson, LeoVegas AB (publ) - CFO [40]

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Yes. And a part of the explanation was Sweden, where we did a lot coming into the new regulation, and then we had a more quiet period in Q2 and that was according to plan. But we did a bit more than normal in Q1 with a bit less than maybe, call, normal in Q2, then there were new campaigns in a few other markets that we chose to delay from Q2, which was our initial plan, into Q3 instead. So these have kind of been factors that I would say put us at somewhat lower marketing level than we planned for. Okay. I think that's explanation.

We've got one more here. It's a combination of questions here. Could you give any color on the start of July? And we talked about that, but 3 things in July. So first of all, seasonality and then somewhat weaker gaming margins than normal in July, which normally stabilized during the quarter. And then also the -- we turn down the Swiss market, of course, which is the impact. And then on -- there was a second question in the same question, what drove the result, the product mix? And how does it relate to June? Does it show momentum or slowing -- or slowly coming out from the Q2?

Well, we don't really comment on the current quarter in terms of the product mix, et cetera. But apart from what Gustaf said on Switzerland and maybe slight seasonality, we don't see any changes to the trends. So that will probably imply that our product mix is fairly stable.

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [41]

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Yes. And then there was also another question. Why is the personnel costs still increasing in Q2? How should we think about this going forward in absolute terms? It's a good question. So we are not planning to increase our personnel in any substantial case. However, personal costs are up based in Q2 versus Q1. There are some temporary costs associated with restructuring, some of our country organizations. And also it's important to point out that we have over, I would say, 9 months, shifted out IT consultants and instead recruited our own staff, and this staff is, of course, highly talented, highly skilled, and I'm probably a bit more expensive than the average. However, it's a much better equation for us than having IT consultants, and it's also great company culture to have our staff in-house. So with that said, that's probably explanation. And that could also mean that we're not guiding our personnel cost, but we want to have a highly educated, highly qualified workforce and -- which will help us become, over time, more efficient.

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Stefan Nelson, LeoVegas AB (publ) - CFO [42]

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And also one more question around the Chile cost. Can you tell us something about the Chile cost, so do you predict it to be higher for Q3 or do you -- or how will you do to keep it down? Well, Chilean costs, normally nothing we comment on like that but -- no.

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [43]

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No, we don't comment on a cost per mix. What we can say is that we're, of course, working hard to improve our ROI and marketing. And we feel that, that our position in the market is stronger and stronger, which, in turn, should support us getting better rates with our partners. That's something we work with every day.

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Stefan Nelson, LeoVegas AB (publ) - CFO [44]

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Okay. And then there was a question around this Sports margins in July as well. It's hard to comment on that. Costs will be up and down, depends on favorites, et cetera. So I think with that, we are -- actually are done with the questions.

And so we're done with the questions and would like to thank everyone to participate in today's report. Thank you all.

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Gustaf Hagman, LeoVegas AB (publ) - Co-Founder, President & CEO [45]

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Thank you.

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Operator [46]

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Thank you very much. And that does conclude our conference for today. Thank you for participating. You may all disconnect.