Thank you all for standing by, and welcome to today's LeoVegas Q2 Report 2021 conference call. Our presentation for today will be followed by a question and answer session. To ask a question over the phone, can you press star one on your telephone keypad? Please be advised today's call is being recorded. I would now like to hand the conference over to our CEO, Mr. Gustaf Hagman. Thank you. Yeah. Thank you. Good morning, everyone, and warm welcome to our quarterly presentation for the second quarter of 2021. Together with me today, as always, our CFO, Mr. Stefan Nelson. Good morning, Stefan. Morning, Gustaf. Let's kick off with the Q2 highlights. In the second quarter, our revenues amounted to EUR 96.8 million, and that's a decrease of 13%. Excluding Germany, however, we grew with 3%. Our EBITDA decreased compared with the same period a year ago. Last year, we had a record-strong EBITDA, so I'm not surprised about the decline. However, we achieved stable earnings compared with the previous quarter, and with an adjusted EBITDA of EUR 10.6 million. This is despite a high level of investment and a number of important strategic ventures, including preparation for the launch in the US, a stronger focus on sport, and the investment in Expekt and our new game studio. During the quarter, we also continued to invest in growth, and Stefan Nelson will get back to the market investments in a few slides. We had about 65% locally regulated and taxed revenues in Q2, same as in Q1. Depositing customers, 6% higher than last year. New depositing customers had a decline of 9%. Our total customer base reached another all-time high. Revenues since launch of LeoVegas back in 2012. This is our quarterly revenues. We can see the spike in Q2 last year when the entire world was in lockdown. I think we all can admit it was not a normal quarter, Q2 last year. Most of our markets have continued to develop very well, with high double-digit growth in key markets like Italy and Spain. The development in Sweden is encouraging, with record-high revenues during the quarter. We are also growing rapidly in North America. The re-regulation in Germany continued to negatively impact our numbers during the period. Excluding Germany, our Group revenues increased by 3% to a new record-high level despite tough comparison numbers due to the pandemic, as we can see here in the graph, the second quarter of 2020. Of course, the greater competition from other entertainment activities right now, such as restaurants, travels, et cetera. We expect to see positive growth for the Group on a yearly basis during the third quarter. Let's have a look at our product mix during the quarter. Casino Classic, which is basically our slot games, 74%, Live Casino 15%, and Sports 11%. It's encouraging to see the sportsbook performing very well, and it's grown by 156% year-on-year, and 24% compared to last quarter. It's a really strong start of the sports year. Business update then. A few words around Expekt. Expekt is one of LeoVegas Group's initiatives to widening our focus into sport. The brand has the ambition to take a leading position within sports betting. We are starting out in Sweden. The relaunch was very successful, and we are looking into which new markets to launch Expekt in. Since completion in mid-May, we have managed to double Expekt's revenue and market share in Sweden. North America. The region North America stands at 10% of the group's total revenues and grows 33% in Q2. This is also why we choose to disclose North America segment today. Our plans for the U.S. are on track, and we are currently working on adapting and certifying our technical platform, our PAM, player account management system. During the autumn, we will establish a local organization. We expect to welcome our first American customers during the first half of 2022. Canada is moving into an interesting phase where the Province of Ontario, which is home to roughly 40% of the Canadian population, is conducting preparations to introduce a local license for online gaming. LeoVegas has built a strong brand, along with a large and loyal customer base in Canada, among other things, with help from former hockey legend Mats Sundin. According to our assessment, LeoVegas is one of the largest and most well-known casino brands in the Canadian market. Both the launch of Expekt and growing in new regions like North America are in line with the group's strategy to diversify our revenues. Market comments, Nordics. The Nordics stands for 41% of the group revenues. Sweden. I'm very proud to say that Sweden reached an all-time high in NGR and in the player base, despite the current restrictions and the low channelization in the country. We also had a strong performance by LeoVegas and also, of course, the relaunch of Expekt, as already mentioned. The temporary deposit limits in Sweden is expected to be removed from the 14th of November as of this year. Other Nordics, mixed performance in the other Nordic markets. Rest of Europe stands for 39% of the group revenues. Speaking about Germany then, the re-regulation situation in Germany with strict product limitations and unfair competitive situation and a high tax, is having a negative effect on the group in the short-term. The regulation has unfortunately been on failure so far and resulted in low channelization in the market, which will be a disadvantage for all stakeholders such as customers, serious operators, and also the authorities. The new legislation was implemented the 1st July, we think it will take time to create a balanced and fair market climate in Germany. For LeoVegas, Germany declined 81% in the quarter. The rest of Europe, high double-digit growth in Italy and Spain. Really strong and large countries that are growing really fast for us. That's encouraging to see. Somewhat softer quarter in the U.K. due to tough comparables last year, as already mentioned, but also a sportsbook-driven quarter this year. A little bit more on the German impact then. With the backdrop of the situation of Germany, we wanted to share some additional information about the revenue development in Germany. Here we have two graphs. Last year, Germany was a large and important market for LeoVegas as a group. Today it's a low single-digit market with only 4%. Looking at the development, it's clear that we have taken the hit in Germany by now and it can't get any worse. Given the situation in Germany, the focus and investment has shifted to other more profitable markets for the time being, as already mentioned, like Italy, Spain, Canada, Sweden, et cetera. I think our ability to be agile and move rapidly and change our focus is a competitive advantage and strength within the group. If we look at the graph on the right-hand side, our revenues in the market reach an all-time high if you exclude Germany. All right. The rest of world then. Rest of world stands for 20% of the group revenues. Canada, strong performance during Q2, and most key markets in rest of world continues to deliver solid growth. General business update. Capital allocation. We carried out share buyback program of EUR 4.9 million during the quarter. Two out of the 4 quarterly dividend has been paid out to the shareholders. Each quarterly dividend is SEK 0.4 per share. Other business updates. LeoVegas' framework and routines for ensuring responsible gaming has been assessed by the independent company, eCOGRA. The external assessment shows that LeoVegas is compliant with all relevant recommendations and requirements for responsible gaming published by the European Commission. The brand Royal Panda migrated to the group's PAM, player account management system. It feels strong that we have both Royal Panda and Expekt now on our own technical solution. LeoVegas has also started its own game studio called Blue Guru Games. Current trading. It's a solid start of Q3 with EUR 32.8 million in revenues. That's a growth of 7% compared to July last year. If we continue to exclude Germany, we delivered a growth of 23%. This shows the strength in the other markets. Well, if we include Germany then. We do expect to see positive growth for the Group on a yearly basis during the third quarter. With this, I leave to Stefan to run our business KPIs. Over to you, Stefan. Thanks, Gustaf. Starting off with our KPIs and with our customer base on page 16. Our new depositing customers decreased 9% year-on-year and 5% quarter-on-quarter. Of course, worth pointing out is that last year, the NDC intake was positively affected by the lockdown situation in large parts of the world. Meanwhile, our returning depositing customers reached a new all-time high level and was up 18% year-on-year and also up versus Q1, which results in that our total customer base has increased 6% year-on-year. If we take out Germany from the equation, the growth has been higher than that as well. Our average player value declined 19% year-on-year, but was slightly up quarter-on-quarter. The trends, as we talked about before, are higher share of leisure players, but also we have seen the restrictions in Sweden and Germany, which affect the player value versus a year ago. If we move over to deposits and our NGR, the deposits decreased 14% from last year, but was up 3% from the prior quarter. We have, as you know, a tough comparison figures from the start of the pandemic during Q2. If we move over to our NGR, it also decreased by 14% versus last year and that also increased slightly from Q1. As Gustaf pointed out, we do expect to see positive year-on-year growth for the group from Q3. That is both including and excluding Germany. Our game margins increased slightly from the previous quarter. Our hold decreased slightly to 31% from 32%. If we move over to the customer acquisition cost and marketing, as Gustaf already mentioned. Next page, marketing. There we go. As Gustaf already mentioned, we spent quite a lot on marketing in the second quarter, and that also results in a higher marketing cost in relation to revenue compared to the historical average. Important reasons are, of course, the relaunch of Expekt during the period, and also investments in a number of key markets. These investments weigh down our earnings short-term, but drive long-term value for the group. It's strategically also important that it enables us to accelerate out of the revenue drop in Germany while diversifying our revenues into more markets, which are becoming quite significant for us. The customer acquisition cost increased year-on-year by 26%. Explanation for that quite significant increase is the unusually low levels we saw during Q2 last year and at the start of the pandemic. As we talked about many times before, we have a scalable business model, and when our revenues increase, the share of marketing investments will also come down, and that we expect to see that trend in Q3 if we compare it to Q2. If we then move over to financials. Our EBITDA, as Gustaf mentioned before, was EUR 10.6 million in the quarter adjusted levels, and that reflects our EBITDA margin of nearly 11%. This is quite a stable level compared to Q1, despite the higher marketing cost that I mentioned. Meanwhile, reported EBITDA in Q2 was EUR 9.8 million. The reported EBITDA includes EUR 0.8 million in non-recurring costs, which relates to an additional tax provision for Denmark from prior periods. No further provisions for historical taxes are expected to be made going forward, so this should be the last one. If we go into a bit more detail and look at Q2 versus Q1, we have done a slight increase in revenues compared to Q1. This also led to an increase of gaming duties compared to the previous quarter. Our cost of sales increased. Here it includes a reclassification of currency conversions coupled to gaming payments, which we moved to our cost of goods sold from the OpEx line. That also means that our operating expenses are lower due to this. Other operational expenses were also slightly down compared to last year. Our personnel costs increased slightly versus the previous quarter. That leads to the EUR 10.6 million in adjusted EBITDA in Q2. If we go further down the profit line, our adjusted EBIT for the period was EUR 7.7 million. That as always excludes amortizations relating to previous acquisitions. Our net financial items primarily relate to the corporate bond. The share of profit after tax from associated companies was positive by EUR 0.2 million and relates to sale of one of our subsidiary's IP assets during the quarter. That leads us to an adjusted net income for the period of EUR 6 million. If we also take a look at the cash flow. The cash flow from operating activities before changes in working capital amounted to EUR 10.1 million. We had an unusually low working capital in the quarter, which supported the cash flow, but the working capital, as always, fluctuates between the quarters. On the other hand, we paid EUR 10.2 million in corporate taxes in Q2, where we expect a refund for a quite substantial part of this amount already in Q3. That will support the cash flow in the third quarter instead. We also made the final payment for Expekt. As Gustaf mentioned, we did share buybacks of about EUR 5 million in the quarter and also paid out a quarterly dividend of EUR 4.9 million. That leaves us with a solid financial position, where we had cash at the end of the quarter of EUR 60.3 million and EUR 44 million if we exclude the player balances. Finally, taking a further look at our financial position. We have a strong situation right now with the current net debt to EBITDA rates of 0.2 times. As previously, we continue to have a strong cash flow generation, and we have above 100% cash conversion during the past 12 months. With those words, I leave it back to you for some concluding remarks. Well, thank you, Stefan. Let's summarize the quarter and the outlook for Q3. In Q2, revenues amounted to EUR 96.8 million, excluding Germany, a 3% growth. Adjusted EBITDA of EUR 10.6 million, and that's a 10.9% margin. We have had a successful relaunch of Expekt. Revenues and market share doubled in Sweden since completion in mid-May. An all-time high in revenues and customer base in Sweden. The region North America stands for 10% of the group's revenues and grew 33% in the quarter. Germany declined 81% and now only stands for 4% of the group. Clearly we have taken the hit in Germany, and we are turning to other markets. We are launching several important strategic initiatives during the period. We also have had a stable start to Q3. July revenues are EUR 32.8 million. That's a growth of 7% and 23% growth when excluding Germany. I'm looking forward to the second part of the year, and to start delivering on all our new initiatives, such as our expansion into the U.S. and preparation for that, our new game studios, and increased focus on sports, to mention a few. That, together with our strategy to diversify our revenues, puts us in a great position to continue to increase our market share. With those final remarks, I'd like to open up to the Q&A session. Thank you. Ladies and gentlemen, we'll now begin the question and answer session. To ask a question over the phone, please press star one on your telephone keypad and wait for your name to be announced. To cancel your request, can you press the hash key. First question is from the line of Oscar Erixon from Carnegie. You may ask your question. Thank you. Good morning, guys. Couple of questions from me. First of all, on the Nordics, quite encouraging performance here in Sweden. Could you talk a little bit about that and also perhaps go into the Nordic performance overall? I think you said it was a bit mixed in the other markets. If you could talk a little bit more about that, would be helpful. Thank you. Well, good morning, Oscar. Yes, so as you mentioned, extremely encouraging in Sweden. I think it's both due to LeoVegas. It's a strong brand, a really good product, and the customer loves LeoVegas. We have Expekt, of course, which are boosting the numbers. That's really good. In the other Nordic markets, yes, it's a mixed situation in the other Nordic markets. What markets are performing well otherwise and not so well in the Nordics? Hi, Stefan here. Of course, we have tough comparables compared to a year ago when we had the lockdown situation. I would say the market where we see the kind of negative growth in that sense is Denmark, while the other two countries are doing a bit better. We're also kind of mindful of the tough comparison. Understood. Thank you. Rest of Europe here, Germany, obviously a disaster here year-over-year, as expected, while other markets are picking up partly the slack sequentially. Italy has performed strongly. What are you seeing in July? There was a bit of a lower revenue for the market in June. Is July better? What can you say about other markets' performance? Well, overall in other parts of Europe, strong performance in the markets that you mentioned, Italy, Spain, growing really strong, besides the Swedish markets, of course. All in all, good growth drivers in other markets in Europe. You should remember also that Italy is, beside U.K., the largest gaming market in Europe. Really good for LeoVegas to have a great position in the Italian market. Perfect. On Italy there, do you see this as a structural shift, or are you confident that it will not sort of go back to at least pre-pandemic levels, but also lower levels than we've seen here during the spring in April and May? Would be interesting to hear. Thank you. It's a little bit different in different markets. Some markets we can see some little bit lower activity when the society opens up again, like restaurants and travels, et cetera. We don't know what the future will hold for us. Some countries are closing down again, and so on. All in all, it's a stable development in the other markets in Europe. Great. Just two final questions here, if I may. Sweden, the July trading update here, 7% growth year-on-year. Is it driven by continued solid performance sequentially by Sweden, or do any other markets stand out in this typically seasonally a little bit weaker quarter? I think Sweden is one of the markets. As we remember a year ago in July, these temporary restrictions were introduced. Of course, if you put it that way, the comparables in Sweden are easier as well. It's of course, more markets than one that are driving the growth. I think if you look at Q3 in general versus Q2, again, we had very tough comparables and this lockdown situation in many markets, which was extreme for many companies, not only in our industry. Q3 last year was more a bit of a normal quarter even kind of somewhat of a backlash maybe if you may, with markets opening up and a lot of sports events at the same time. It's been a bit of a strange year if you try to compare it with a year ago. What we're happy with, of course, that we see the continued kind of positive trends in most of our markets apart from Germany then. Excellent. Very helpful. Finally, just the marketing here in the second half of the year and Q3, you mentioned, you indicated slightly lower marketing in Q3. What should we expect for both Q3 and, yeah, early indication on Q4 as well, perhaps? Yeah. That's a good question. We don't want to guide on marketing because things tend to change even in short time periods. We're still in investment mode, if you may. We have a lot of initiatives, not least Expekt, which we're very happy about. On the other hand, as we also pointed out, we do expect the growth to turn positive, and that's where we also get leverage in our business model in kind of marketing in terms of revenues. Long term, we do expect the kind of marketing ratio to gradually go down. We've been on a abnormally high levels. Great. Thank you very much. That's it from me. Thank you. Thank you. Our next question is on the line of Robert Simmons from EGR. Your line is now open. Hi. Good morning, guys. Good morning, Gustaf. Hi, good morning. Hi, good morning. Firstly, congratulations on the Expekt acquisition and its impact on your Swedish operations. I've got three questions I'd like to ask you. Obviously, that has been something of a boon for the business and coming in despite the challenging environment for online casino in Sweden. Given the high impact of Expekt, are you likely to pivot more towards sports betting in Sweden over the next few months? Well, as we already considering the difference between Q1 and Q2, where we had 9% sport in Q1 and then 11% in Q2. We already see some impact of Expekt in that sense. Okay. Secondly, regarding Germany, obviously it's a big negative for the group during the quarter. You've mentioned there's a skewed competitive situation, and that you believe it will take time to create a fair and balanced market, and that you've shifted your investments to other, more profitable markets. I wondered if you could provide some more color on your expectations in terms of the time it will take to create this balanced market and more about where you've shifted and the proportion of investments you've shifted to other markets. Well, yeah. We believe it will take some time. I can't give you any sort of if it's one quarter or two quarters. It depends on how the authorities are tackling the situation and most about the channelization in Germany. If we declined, and you read the other operators' reports as well, with declines of even more than LeoVegas. All those customers, they've gone somewhere, and they've gone to the unlicensed market in Germany and sort of the gray-black market in Germany, which is about to happen. It depends on how the authorities are enforcing against the black operators in Germany and how they tackle the situation. I think that there's some light spots in terms of, in Germany, it's going to be the tax authorities that are driving the enforcement, which is, I believe, stronger than in most of the other countries where you have the gaming authorities doing it. It will be hopefully a harder and stronger enforcement, but we don't know how long time it will take before that happens. Shifting your investments? Yeah. Of course, we shift, of course, into Italy, Spain, other European markets, Sweden, the launch of Expekt, and so on. I think it's a strength that we actually managed to grow what we did in July. It's 7%, and excluding Germany, 23%. I think that gives you some indications for the future. We've taken the hit in Germany. In numbers, it can't get any worse. It is what it is, and it's taken, and now we are focusing on other things. Okay. Lastly, regarding the U.S. expansion, obviously that's going to be something that's very important to the business in the long term. Could you provide some color on the roadmap there, the technical platform you're going to use, and maybe the brands that you're looking to roll out in there? Sure. Yes, it's extremely encouraging to see now, well, North America as a region, it's about 10% and growing 33% year-over-year. That's strong growth for the region itself. We are in the development phase and preparation phase for the U.S. We launch in New Jersey, which will happen during the first half year, H1 next year. We are putting up everything from organization and finding an office, et cetera. We will use our own technical platform, as we mentioned previously, our own PAM. That's what we're doing now, certifying our own PAM for the U.S. expansion. I think that's a great strength, of course, for the future. It takes some time. It's a great strength to have your own platform in the U.S. Absolutely. Beyond New Jersey, where do you think the group might look to next? Well, yeah. We're already in talks with other states, et cetera. I can't give you any more details on that, but of course, we are preparing for New Jersey is just the first land grab in the U.S., and then we will go from there. Okay, that's great. Thanks very much, Gustaf. Thank you so much. Once again, if you wish to ask a question, please press star one on your telephone keypad. If there aren't any more questions, we have a couple of questions here on the web. One question here is, "What sort of development have you seen in Germany since the recently regulated markets?" Well, I think we already more or less explained that and answered that question. "What are your plans for the U.S.?" I think we already talked about that. "Will you launch Expekt in the U.S. as well?" Well, as of now, we don't know really. As of now, we are focusing on LeoVegas for the U.S. market and U.S. expansion as of now. We have another question here coming in. "July was up 7% year-over-year. What to expect on the activity levels for the rest of the third quarter compared to July? Well, what we've said in the report and at the presentation is that we expect growth for the group on a annual basis. We don't really provide guidance on a monthly basis apart from July. You all know what the quarter looked like last year. We're still in sort of summer season. There's no sports activity really right now. Usually, the seasonality also improves when we go into H2. Okay, we have a question here around how about Netherlands and Ukraine. Are these markets still a topic for LeoVegas? Of course, Netherlands are really interesting for us, I think we have a perfect brand with LeoVegas, the orange brand and so on, and also Royal Panda for the Netherlands. We are preparing for license preparations in the Netherlands. Ukraine, we are waiting a little bit with Ukraine. Okay, here comes a new one. Do you need to make a large investment in your PAM to launch in the U.S.? Well, of course, it's a large investment to adjust. Well, PAM for you who don't understand that's our technical software. Yes, it's a large investment, we think and believe that in the long run, that's a really core strength for the group. All right. If there aren't any more questions on the web or on the phone call, could give it one more second here. Actually, we have another question that just came through over the phone. Would you like to take it? Sure. Please go ahead. All right. The next one, it's for the line of Martin Arnell from DNB. Thank you. Hi, and good morning, guys. Morning, Martin. I just want to ask you on this new market environment with some pressure in your Western Europe markets and your shifting sort of investments from some markets into other new growth markets. You have the U.S., Canada, and new markets. I just want to ask you sort of how you look at your long-term financial targets in the context of this new environment. Well, it's a valid question. Currently, we don't see any reason to revise them. I think that, as you know also, we have a quite scalable business model and have been at levels also above our financial targets in certain quarters. Right now, we're still kind of investing a lot in growth. We also see we have both a financial target when it comes to our profitability, but also growth that we want to grow organically faster than the market. It's, of course, difficult when markets are looking very differently, and it's hard to say if, for instance, Germany if we're under or over-performing versus the compliant market. As we see it, we still believe in the financial targets we have. Okay, thanks. On your German investments, you said that you pulled some and spent it in other markets. Do you have more that you will shift from Germany, or are you at a stable level there when it comes to investments? Well, now looking forward, we're at a minimum level, if we put it that way. Of course, we do believe in Germany long-term. It's Europe's biggest market in terms of population. We still have a brand which is well-known in the market. We have no plans on leaving. With that said, short-term, we want to stay in the game, but we also need to be practical and smart about things. We have an ROI-driven approach in our marketing, and we see much better returns elsewhere. That's also why you're seeing good growth in our other markets right now, and not least in July. We prefer investing there for now. Yeah. On your marketing investments, you had fairly high spending in the second quarter, and do you expect the payoff from that to be more visible in Q3, Q4? Is that the way we should see it, or? Yes, of course. Some of the marketing we do, it's both short-term acquisition-driven marketing, but it's also on a brand level. Expekt is a good example, where we're relaunching the brand, where the payoff time is longer, but we expect to see that feed into deposits and NGR during a longer period of time as well. Definitely, that's how our marketing strategy works. Okay. Thanks, guys. That's all from me. Thanks, Martin. Thank you. All right. There are no further questions at this time. Okay. Thank you everyone for listening in, and have a great day. Thanks. That concludes our call for today. You may all disconnect. Thank you all for participating.