Allwyn International expects to clear its 2023 financial targets as the group prepares to take on a major new tender in the UK National Lottery next year.
Preliminary results for Q2 saw the firm hit the €2bn revenue mark for the first time, a 115% increase bolstered by the takeover of Camelot UK and its subsidiaries in Q1, alongside adjusted EBITDA up 35% to €381m.
When outgoing National Lottery operator Camelot is discounted, group-wide revenue rose 7% during the second quarter to £1bn (Q22022: £953m) and operating EBITDA rose €301m (Q22022: £276m).
Robert Chvatal, Allwyn CEO, said: “I am pleased to report that Allwyn delivered another quarter of strong growth, profitability and strategic progress.
“We delivered organic revenue growth across markets, and also saw a further step up in profit and free cash flow generation owing to this being the first full quarter of ownership of our recent acquisitions, Camelot UK and Allwyn LS Group (formerly Camelot LS Group).
“Our Total Revenue increased by 115% year-on-year in Q2 2023, reflecting growth of 7% in our existing geographies as well as the significant contribution from the Camelot Acquisitions.”
Geographically, Allwyn reported its first UK results – consisting of the continued operations of Camelot, the firm Allwyn untreated in the Fourth National Lottery licence contest, and subsequently acquired along with its B2B segment, the Camelot LS Group.
Camelot UK, due to end its tenure as National Lottery operator and hand over to Allwyn in February 2024, reported 1% growth in revenue to €980m (Q22022: €963m).
The Watford-based subsidiary Camelot UK benefited from a 24% gain in margin contribution, owing to a ‘mixed impact effects on British taxes and contribution to Good Causes’ helping operating EBITDA stand at €50m (+18%).
Its group-wide operations, which include management of the Illinois lottery, took a 4% hit to revenue of €47m and a 24% drop off in adjusted EBITDA to €8m – with results going up against ‘unusually strong results in the comparative period’.
In other European markets Allwuyn continued to report a strong performance. Its Greek holding, OPAP, maintained ‘robust growth across all major product categories’ to achieve revenue growth of 12% to €521m and operating EBITDA up 10% to €178m.
The Italian LottoItalia business saw revenue growth of 5% to €557m, although Q2 EBITDA results remained flat at €94m. Similarly, Casinos Austria revenue swerved up 1% to €67m but EBITDA fell 7% to €67m.
Lastly, the Czech SAZKA business saw Q2 revenues increase by 9% to €126m, attributed to improved instant lottery sales, but again EBITDA dropped by 2% to €30m, as Allwyn cited “inflationary pressures on certain costs”.
Chvatal commented: “I am happy to report that the good performance in our existing geographies was driven primarily by strong growth in digital, where we have sustained our momentum in product development and innovation.
“We continued to deliver strong margins and solid free cashflow generation, with only a limited impact of inflation on our cost base, reflecting our favourable cost structure, with our largest cost categories being directly linked to revenue, and our focus on cost and capital efficiency.”
Closing the first half of the year, Allwyn is confident of achieving its 2023 objectives but stated that it is mindful of factors affecting international business, including the ongoing Russo-Ukrainian War, changing macroeconomic conditions across Europe and consumer sentiment.