online growth strong performance in italy but continual struggles in sweden these are some of the topics we'll be discussing in part three of the jr huddle sweden focus with leo vegas ceo gustav hogman [Music] hi gustav thanks for joining us hi guys good afternoon thanks for inviting in the invitation yeah it's our pleasure to have you on um we're speaking with you for part three of our sweden focus and also because last week leo vegas reported your your q4 financial results uh could you to start off with give us your your rundown of leo vegas's q4 and the full year financial report sure yeah well all in all i think uh really solid quarter we managed to reach around nine percent in growth and uh actually 25 ebta margin for for the quarter of for the quarter as for the full year but there was also a lot of innovation they made last quarter as i'm particularly proud of the leo jackpot which went live during the quarter which is our own unique jackpot solution uh it's actually a around six million euros at uh at this moment but also our open banking solution which is uh really really good for the future and the strategy that we are sort of digging more into the food chain uh in this industry so all in all a strong quarter um and we had a really good update also for january so there is a lot of positive things going on right now absolutely yeah you've mentioned some positivity overall and some specific positive points uh one thing i wanted to ask you about uh particularly you mentioned uh leo vegas mentioned in its report that italy is now one of its uh top five markets i believe um i wanted to ask you exactly how that's kind of been achieved given that there was obviously an advertising ban in italy and there was a lot of concern among operators that you know this would this will impact performance so how has that uh transpired that italy is now actually doing so well for leo vegas well i think it's a tribute to the team uh we bought a company in italy milan a few years ago and been they've been working really hard in order to put us on the map for italy and also to sort of um being um well being in forefront when it comes to the mobile and put the position on mobile uh elia vegas's position on mobile in italy and i think and believe strongly in the product uh since we can't do any marketing then the one who has the best product will win the race more or less and during the lockdowns in italy of course people were shopping around for the best product online and best product on the mobile and then they came across leo and then stayed at leo vegas that's essentially what's happening right now we can see um as you said a really good uptick in in the italian market so very very happy about that sure so it italy is a positive market at the moment another market that you mentioned in the report was uh was germany and uh that leo vegas had to implement a number of changes ahead of forthcoming regulations um this uh leah vegas mentioned it impacted revenue what kind of changes exactly did this involve so yeah well um the new german legislation will come into force in july this year and ahead of that they have um came out with a series of implementations that needs to be made ahead of their new new regulations there's a requirements that came out 15th of october and then the second set in in december it's things like 1000 euro deposit limit on a monthly basis and a 5 second spin between spin and maximum stakes at one euro etc and all of these things of course impact the the customer experience i would say so and we we managed to implement everything in time during october and december and that has impacted us substantially in both uh q4 but also uh in january so i believe oh yeah sorry more or less we took the full hit of everything in january and um found ourselves on the new ground and now we are ready to grow from grow from where we are today so uh and we also been transparent we were around 50 to 55 60 percent uh when it was the worst week so to speak down in germany um but we feel that we hit the ground and we can take it from there sure yeah um so the question i was going to ask um because you mentioned obviously kind of um speed play and deposit limits um uh will you be facing similar in the in the uk with the kind of the new slot kind of guidance and regulation that has been uh put forward by the the garland commission well yeah we are waiting for uh sort of what's going to come out of the uk and there's a lot of talks right now a little bit of rumors as well of course um we'll see what happens it's um to some extent we have already implemented some mesh measures uh at least at least um follower guidelines etc but yes it will it will most likely has have some kind of impact on the market uh when it when that when it will be dis disclosed um of course and that's a trend that again leo vegas has already kind of referred to in its report because um the company said that in all core markets except sweden and the uk uh there's been sort of double-digit growth um obviously this is uh the sweden focus so you know we've got we've got plenty to talk about when it comes to sweden and i know for our ceo especially we already did discuss sweden kind of at length as well um i wanted to ask specifically how exactly did leo vegas perform in sweden in q4 and last year i'm given kind of everything that's going on at the moment in the market i think given everything that's going on in sweden we're doing quite we're doing okay or actually well we've been growing sequentially month on month for for five or six months or something in in the swedish market so that's a good sign and there is there's other things going on in the swish market as well but it's very high up on the presentation from the government now is actually the uh to implement b to business to business licenses on the swedish market but also to protect the swedish market for for um unlicensed operators uh to protect the channelization in sweden because it's very low uh it's i think it's also hit its ground around 72 to around 75 percent so there is a black market of 25 in sweden right now which is huge actually and it's that's kind of a failure for them for the new new um legislation here because they said one of the milestones for them were when the goals for them were to have a generalization about 90 and now it's 75 so it's quite far off but they have acknowledged that and they are working on it so that's a good sign yeah in in part one of our series we we spoke with with gustav hofstede about what kind of this this exact channelization and black market issue um you mentioned kind of sequential growth um are you kind of uh year on year exactly how are you impacted given kind of the lack of channelization in the market well if i can tell you that if if there weren't any unlicensed operators then of course leo vegas would have grown a lot better and and uh because we have a really really strong brand we are the strongest brand in sweden when it comes to casino and a great product suitable for the swedish market so it's um and we've been here for nine years so it's um yeah uh of course it would have looked even better if um if it weren't for the generalization and and the unlicensed operators but again they are working on it the government and the other stakeholders are working on that exactly you mentioned the acknowledgement from the from the government and perhaps from the regulatory side has there been any any significant kind of recent progress from the government and their spokespeople in this area well that there's been some talks in media and some discussions going on and i know from sort of inside when it comes to the swiss sta that they are this is high up on their agenda so i i know that they are working on it which is good and it has to do with trust as well of course if if the entire new new legislation is going to be trustworth trustworthy they need to address the issue that the channelization is just 75 and not 90 which were their goal it's it's um it's quite far off of course and given this kind of this uh acknowledgment uh do you see more long-term hope i mean looking at the past couple of years obviously the signs not too encouraging early early on i do yeah i do um i do see hopes for the swedish market and in particular but well there is a lot of markets growing for the vegas right now it's we spoke about italy but also spain and several other markets are doing it really well and uh we also come back to growth in in the uk actually uh month and month the last five 46 months so that's that's also a good sign for the uk market for us absolutely when we talk about sweden kind of what needs to to change to to kind of achieve this uh improved channelization but at the same time still you know protect customers as best as possible well i think the switch government's never going to use ip blocking as maybe other countries in europe will do but they're not going to use that not they're not going to be that sort of harsh or hard but they will start with business business licenses and primarily for the gaming suppliers which is of course very very good because then unlicensed operators won't have any content um well they will have content but less credible content maybe um and then hopefully they will include also the payment side and the payment providers because if they do that then you will really sort of shut down a lot of unlicensed operators on the swedish market because they then you won't be able to as a customer you won't be able to transfer money so that's going to be a huge sort of if they manage to include even payment suppliers in in that new b2b licenses then that will be our game changer i think are these realistic prospects for for 2021 and uh if so what would your projections be for the market um that's a good question i know that they are um i know that as as of now i think it's going to be implemented 2022 or at some point but um so i i don't think we should have too much hopes on 2021 actually um but at least on in in the beginning of 2022 hopefully i would say so does that really leave 2021 um more or less on par with 2020 for kind of performance and some regulatory issues continuing well the thing is that we have temporary restrictions uh as well um which is they most likely gonna be lifted if sort of the society opens up again they will be lifted the first of july this year and then of course it will be better for from a competitive point of view it will be better for the licensed operators as well against towards the unlicensed guys right now we have 5000 swedish on weekly basis for deposits and also a bonus cap for new customers and hopefully that will be left already first of july so then that would be that that would be a change as well going back to where we were before yeah and i i know we've we've discussed these these restrictions um and then they came in i mean i i i kind of you said your views before but looking back now kind of we have we had several months with these kind of swedish restrictions would you say they would you still say that they failed in terms of their uh intended purpose to protect players or you know has has the sga kind of found some balance or what would you say kind of with with more time now and to look back on sorry again what if look back on what look back on yeah sorry so so now that we've had these restrictions for for kind of a few more months because when we spoke um a couple of months back you know you you weren't you weren't impressed really with the way the re-regulation had gone and these these added restrictions are you still of their opinion or kind of can you see that the sga is kind of having to balance these things at the moment maybe a bit more but uh still it's um it's one thing when it comes to bonuses for for new customers i think that's one of the things that new customers actually are searching for or googling at and then they will end up on unlicensed sites that's that part is uh really bad when when it comes to protecting customers the 5 000 swedish month as sort of weekly deposit limit of course that sort of as well but then again if you look at our customer base right now it's a lot of um much more recreational players and casual players that are playing at leo vegas we have a huge database today and a lot of new customers coming in so they're playing for less which i think is more healthy as well the average place ben has come down a lot so it's around 65 70 euros on a monthly basis and hey that's just like i don't know that's like a restaurant visit or going to a restaurant or a cinema or something like that it's it's it's more like entertainment we're taking from the entertainment wallet a little bit i would say yeah absolutely and my final kind of topic for you because obviously we've spoken at length about sweden um but you were keen to mention that there were lots of positive markets other than sweden for leo vegas um looking at kind of overall performance and looking at all your different markets what are your projections kind of for the year ahead anything specifically to look out for with leo vegas and how do you see your performance kind of growing in in 2021 well we will continue to um we're willing to innovate there will be more really good innovation coming out such as we have the leo jackpot and open banking which will change a lot of things for us going a long long term we will continue to enter new markets will be a couple of new markets during the year and we will continue to dig where you stand as well to improve our products conversion rates everything and the customer experience uh towards the journey of king or casino basically well uh gustav thanks very much for your time and for your answers and best of luck for the year ahead um especially in sweden where as you say there's there's plenty still going on thanks a lot guys thanks thanks tim for more from gustav hagman check out our ceo special interview with the leo vegas ceo on gaming insider.com and the january february edition of gambling cider magazine you