Allwyn International maintains organic growth within its legacy markets, as corporate accounts adjust to transformative developments in the UK and North American markets.
Publishing a preliminary (unaudited) trading update, the global lotteries group reported Q3 revenues of €2.14bn, up 7% on the 2023 comparative figure of €2bn.
Detailed Q3 growth reflects “strong organic growth in Austria (GGR +7% year-on-year) and Greece and Cyprus (+17% year-on-year), alongside modest growth in the United Kingdom (GGR +1% year-on-year on a constant currency basis and +3% year-on-year on a reported basis).”
Period trading saw Allwyn double its capital expenditure (CAPEX) to €71m, “primarily due to higher investment in the UK in support of Allwyn’s plans to transform the National Lottery.”
In North America, Allwyn completed its investment in Instant Win Gaming (IWG), acquiring a 70% stake in the leading supplier of “online instant games“ for North American lotteries.
Group accounts stated: “The net consideration was $242m, with the possibility of earnouts dependent on the performance of the business,” as the deal is primarily focused on accelerating Allwyn’s North American content and technology.
Excluding UK and North American segments, Allwyn reports Q3 adjusted EBITDA of €410m, up 12% compared to €368m in 2023.
Group CEO Robert Chvatal commented: “I am pleased to report another quarter of good progress and financial performance, in which we delivered strong top-line growth—with standout performance in Greece and Cyprus—and once again achieved solid profitability and cash flow generation.
Total revenue increased by 7% year-on-year, driven by the continued growth of the digital channel, our ongoing efforts in product development, and our focus on delivering best-in-class content to customers. In executing our organic growth strategy, we remain focused on our responsibilities to all stakeholders, including our resolute focus on safe play.”
A breakdown of operations saw OPAP in Greece and Cyprus deliver exceptional performance, with revenue reaching €591m, a 17% year-on-year (YoY) increase. This was driven by strong growth in the online channel, favourable jackpot cycles in Tzoker, and robust iGaming and sports betting results. Adjusted EBITDA grew significantly by 26% YoY to €213.4m, supported by cost efficiencies and favourable operating conditions.
Casinos Austria also achieved steady growth, with revenue rising by 7% YoY to €407.3m, propelled by a 17% increase in numerical lotteries and a 12% rise in iGaming. However, adjusted EBITDA in Austria declined slightly by 2% YoY to €74.0m due to higher personnel costs.
Allwyn UK reported modest 3% YoY revenue growth to €980.9m, despite limited product and channel development as the new UK National Lottery licence commenced. Adjusted EBITDA in the UK fell sharply by 84% YoY to €7.0m, reflecting the impact of new licensing profitability mechanisms.
Year-to-date (YTD) total revenue for the company reached €6,398.3m, reflecting a 12% increase compared to the same period in 2023, while adjusted EBITDA totalled €1,108.6m, representing a modest 1% year-on-year growth.
Chvatal concluded:”We delivered solid profitability, including excellent growth in Greece and Cyprus, and once again benefited from strong performance from our equity method investees, where profitability also gained from a favourable tax effect this quarter. Adjusted EBITDA increased by 12% year-on-year, and excluding the United Kingdom, Allwyn LS Group, and the recent acquisition of Instant Win Gaming, it increased by 21%.
With respect to our inorganic growth strategy, we are delighted to have completed our planned investment in a 70% interest in Instant Win Gaming in September. This transaction has expanded our footprint and capabilities in content and further advanced our position in the North American market. During the quarter, we also saw a slight increase in our interest in OPAP due to its share buyback programme.
Overall, I am pleased with our continued progress and believe we are well-placed for the remainder of 2024 and the next chapters of our growth story
