2021 proved to be a strong year for IGT, with the firm detailing its ‘best revenue, profit, and cash flow performance in the last four years’.
Publishing its fourth quarter and full-year 2021 results, IGT stated it had built ‘strong foundations’ throughout a year capped with full-year revenues reaching $4.08bn, a 31% boost from $3.11bn in 2020, and a fourth-quarter revenue increase of 19% to $1.05bn, up year-on-year from $885m in 2020.
Operating income switched from a $107m loss in FY2020 to a $902m profit in FY2021, attributed to ‘double-digit revenue growth’ and ‘strong profit flow-through in Global Lottery segment’.
“Our 2021 financial results reflect the best revenue, profit, and cash flow performance in the last four years, meeting or exceeding target levels on strong performance across the portfolio,” commented Vince Sadusky, CEO.
“We made important progress on several strategic objectives, and I am excited to be leading IGT in the next chapter of its evolution. We have set aggressive but achievable multi-year goals and we have a focused strategy to maximise value for all stakeholders.”
Breaking down performance by vertical, global lottery continued to lead IGT’s operations, delivering $2.81bn in 2021, up 30% year-on-year attributable to ‘20% same-store sales growth’ and around $165m in benefits from ‘certain discrete items’ in H1.
High margin sales in Italy led to lottery operating income to swell to $1.09bn, up 69% on 2020’s figure of $642m.
Other divisions saw gaming revenue increase 33% to $1.11bn up from 2020’s $837m due to its ‘continued recovery driving key performance indicators higher’, with digital and betting up 44% year-on-year to $165m.
The newly introduced digital and betting division saw operating income explode 421% from $6m to $33m, with the firm stating that it is due to the introduction of new jurisdictions and customers. Gaming operating income swung from a $212m loss to a $43m profit after it benefited from ‘structural cost savings’.
Strategically, IGT completed the sale of its Italian B2C gaming business in a bid to reduce its net debt, which shrank 19% from $7.32bn to $5.92bn in the last twelve months. This leaves the firm’s total leverage at 3.5x, the lowest level in its history and a year ahead of schedule.
Given the strength of the firm’s performance throughout FY2021, the board has reaffirmed the full-year 2022 guidance issues in its recent investor day and has approved a shareholder dividend of $0.20 per share.
“Improving leverage to 3.5x a year ahead of schedule enables us to pursue a balanced capital allocation framework that supports investing for growth, continued debt reduction, and the reinstatement of capital returns through quarterly dividends and share repurchases,” added Max Chiara, CFO. “As we enter 2022, the company is in a very good place with a solid financial condition and a strong foundation for further growth.”
