Light & Wonder CEO Barry Cottle has lauded the ‘transformation’ of the company’s balance sheet following the sale of its lottery business to Brookfield Business Partners.
Publishing its Q1 results, L&W highlighted the lottery sale as a ‘significant milestone’ in its history as it aims to become ‘a leading cross-platform global game company’.
The sale of its lottery business delivered $5.6bn in gross cash proceeds, giving the company significant reserves to embark on its long-term corporate aims.
Cottle commented: “We kicked off 2022 with a number of significant achievements and strong momentum across our businesses with strong revenue growth of 26% in the quarter.
“The sale of our Lottery Business was another significant milestone as we de-lever and maximize cash, which transformed our balance sheet reducing our net debt leverage ratio from a peak of 10.5x just over 15 months ago to an adjusted net debt leverage ratio of 3.7x, or by approximately seven turns.”
Revenues for the period ending March 31 amounted to $572m, up 26% YoY and primarily attributed to continuous recovery in gaming revenues alongside the growth witnessed in igaming and ‘SciPlay’ YoY and sequentially.
Such revenue growth ensured that the group’s net loss reduced YoY, falling from $88m to just a $67m net loss in Q1 of 2022. Further displaying improved profitability, L&W’s AEBITDA for the period stood at $202m, up 42% YoY attributed to 60% AEBITDA growth in gaming.
Connie James, the firm’s CFO, added: “The performance during the quarter is reflective of the enthusiasm and energy felt throughout Light & Wonder as we entered 2022 with strong momentum across all our businesses, generating double-digit top and bottom-line growth. I also want to congratulate the team on the successful close of the Lottery Business sale and refinancing transactions.
“Collectively, these transactions significantly change the complexion of our balance sheet, substantially reduce our outstanding debt, and meaningfully strengthen our credit profile.”
“With our strengthened balance sheet we are actively executing on our capital allocation priorities, including $140m return on capital through the repurchase of our shares just since the beginning of March.”
Breaking down revenues per division, L&W saw a 45% increase in turnover from gaming operations up to $355m as the division showed continued signs of recovery.
The SciPlay division grew 5% to $158m thanks to a marked increase in monthly active paying users and a higher payer conversion rate.
Finally, igaming saw a turnover increase of 2% YoY boosted by acquisitions made back in 2021. Despite this, AEBITDA from igaming remained flat due to ‘investments supporting ongoing growth’.
Concluding its update to shareholders, L&W detailed that it will host an investors day in New York City on May 17 to offer further updates on its strategy and ‘progress on key initiatives’.
Cottle stated: “We are delivering on our promises to create great content cross-platform while expanding in high-growth digital markets and enabling a seamless player experience. With a reconstituted balance sheet, sustainable double-digit growth and strong cash generation, we now have the ability to significantly enhance shareholder value through a disciplined approach to capital allocation.
“With the right assets, at the right time and with the right talent, Light & Wonder is fostering a high-performance culture with all the pieces in place to deliver on our vision. We are very excited about the next phase of our journey and look forward to discussing our key strategies and the path to drive shareholder value at our upcoming investor day on May 17th.”