SBC News Voice of the Sports Betting Industry
Allwyn Group has maintained year-on-year growth despite challenging Q3 headwinds in Greece. The lottery group has also reported strategic progress on core expansion initiatives while facing tough year-end trading conditions reflected across the gambling industry.
Publishing its Q3 unaudited accounts, the lottery conglomerate’s consolidated revenues stand at €2bn, doubling the comparative 2022 results of €1bn. The increase was attributed to the acquisition of Camelot UK and its US assets, with Allwyn set to take control of the National Lottery’s current operator before the UK government’s multi-billion-pound contract changes hands in 2024.
Excluding Camelot’s results, Q3 revenue on a pro-forma basis remained unchanged at €1bn. The year-end trading period was impacted by ‘customer-friendly sports results’ (a trend seen industry-wide) and unfavorable jackpot cycles.
The period trading saw the lottery group’s adjusted EBITDA stand at €368m, a 16% increase from Q3 2022 results of €316m, with an EBITDA margin of 41.7%. Excluding the impact of Camelot acquisitions, adjusted EBITDA remained consistent at €319m.
Further period metrics saw capital expenditure (CAPEX) increase by 206% to €32m, attributed to operational investments ahead of the next UK National Lottery licence commencing in February 2024.
Group CEO Robert Chvatal commented: “I am pleased to report that Allwyn delivered another quarter of solid financial performance and strategic progress, despite headwinds from customer-friendly sports results (which impacted the sports betting sector in general) as well as less favourable jackpot cycles.
“We continued to deliver solid margins and free cash flow generation, with only a limited impact of inflation on our cost base, reflecting our favourable cost structure, where our largest cost categories are directly linked to revenue, and our focus on cost and capital efficiency.”
A geographic breakdown revealed Q3 challenges for Allwyn’s OPAP unit in Greece and Cyprus, which recorded a 4% decrease in revenues to €503m and a 13% decline in adjusted EBITDA contribution of €169m. In Greece, OPAP’s performance was marred by “unfavourable jackpot rollovers, customer-friendly sports results, and adverse one-off natural events (floods, wildfires) which impacted the availability of some points of sale (POS)”.
Excluding the performance of Camelot assets, Allwyn maintained stable revenue growth in the markets of Austria (+2%), Czech Republic (+6%), and Italy (+6%).
Despite Q3 headwinds, corporate growth was maintained on a year-to-date (YTD) basis as Allwyn’s revenues, excluding Camelot assets, stood at €3.10bn, up 7% on YTD 2022’s results of €2.8bn.
The lottery group’s YTD adjusted EBITDA tracked at €968m, up 11% on 2022 comparatives of €869m. Year trading included a doubling in Capex expenditures to €67m for the first nine months of 2023.
Signing off Q3 accounts, Chvatal noted: “The steady performance in our existing geographies was underpinned by continued progress in digital, where we see the benefits of our ongoing focus on product development and the customer proposition.
“Alongside this, we continue to roll out a number of important game innovations, including new launches in the exciting annuity category in Austria, the Czech Republic, and Greece and Cyprus. In doing so, we remain committed to our responsibilities to all our stakeholders, including our relentless focus on safe play.
“Overall, despite the sector headwinds in the quarter, I am very pleased with Allwyn’s continued progress and believe we are well-positioned to end 2023 successfully and for the next chapters of our growth story.”
