Allwyn ready for UK landing backed by solid Q2 trading

Allwyn International cites confidence in achieving its full-year 2023 corporate objectives as group subsidiaries (legacy and acquired) maintain ‘organic growth’. 

Publishing its Q2 ‘preliminary results’, an enlarged Allwyn sees its lottery portfolio generate consolidated revenues of €2bn for the first time and adjusted EBITDA of €381m (+35%). Headline growth reflects a 115% year-on-year increase, primarily driven by the recent acquisition of Camelot Group and its related subsidiaries completed during Q1 trading.

Excluding Camelot acquisitions, Allwyn maintained a 7% increase in Q2 group revenues to £1bn (Q22022: £953m), combined with a 9% increase in operating EBITDA to €301m Q22022: £276m).

Robert Chvatal, Allwyn CEO, commented: “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.” 

In its breakdown of existing subsidiaries (excluding Camelot), the lottery group registered revenue growth across all core markets combined with mixed EBITDA results.

OPAP led the performance of existing units providing a Q2 revenue contribution of €521m (+12%) and operating EBITDA of €178m (+10%) – as its Greek subsidiary “maintained robust growth across all major product categories.”

In Italy, the group’s LottoItalia business generated revenues of €557m (+5%), however Q2 EBITDA results remained flat at €94m.

The Casinos Austria unit generated revenues of €373m (+1%). However, EBITDA decreased by 7% to €67m – “competing against a 2022 period benefitting from cost phasing activities”.

Concluding the results of existing subsidiaries, the Czech SAZKA unit saw Q2 revenues increase by 9% to €126m, attributed to improved instant lottery sales. Yet, SAZKA 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.”

Declaring its first ‘UK segment’ results, Q2 trading disclosed that Camelot, the operating company of the National Lottery (until February 2024), had achieved 1% growth in revenues to €980m (Q22022: €963m).

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%).

Period trading saw the integration of Camelot’s B2B managed lottery services business, which operates under the new segment of ‘Allwyn LS Group’.

The new unit, which operates the managed contract of the Illinois lottery, recorded a 4% decline in revenues to €47m and adjusted EBITDA decreased 24% to €8m as results were set against “unusually strong results in the comparative period.”

Allwyn remains confident in achieving its 2023 objectives, but leadership continues to monitor the factors and conditions of the War in Ukraine, Europe’s changing macroeconomic environment and consumer sentiment.

“Since the end of the quarter our business has continued to perform and develop well, despite a background of relatively weak general consumer sentiment.” read Allwyn’s outlook statement.

“Our trading since the start of the year has been broadly in line with our expectations at the start of the year. The impact of key external factors, in particular the macroeconomic environment and consumer sentiment, remains limited and in-line with previous quarters.”