Lottomatica considers M&A options following record Q1
Lottomatica reported record first-quarter revenue of €584.5 million ($659.8 million) on the back of double-digit growth across its online and sports betting segments in Q1. Speaking to analysts after the earnings release on Wednesday, the Italian-facing operator refused to rule out further M&A activity to expand its offering.
Revenue in the three months to 31 March surpassed the previous year by 33%, figures from Lottomatica showed. It is the highest Q1 revenue total in the company’s history.
The increase was driven by growth within the group’s online and sports betting businesses. Both segments reported a 59% year-on-year rise in revenue during the quarter, with total bets also higher across each business.
CEO Guglielmo Angelozzi said the record quarter “paved the way” for a successful 2025.
“We are off with a very good start of the year,” Angelozzi said. “The online market continues to grow in a very healthy manner. Payout for sports is also very good. It was better than normalised levels both online and retail and much better than the same period last year.
Can we expect more M&A from Lottomatica?
Given the healthy showing in Q1, Angelozzi was pushed on potential M&A. Last year, the group was buoyed by the acquisition of SKS365, which completed in April 2024. The benefit of this was clear to see in its FY24 results.
While Angelozzi said the company has a “strong filter” on any possible additions, it is considering a number of options.
“On bolt-ons, we continue to look at them with a very strong filter in the sense that we are very selective about the quality of the assets,” he said. “We are more and more selective about the quality of the assets that we look at, and we continue to be disciplined on price.
“But for sure, there are some interesting opportunities out there that we continue to scout, and we will continue to execute on.”
Chief Financial Officer Laurence Van Lancker added: “We maintain our framework of analysis of M&A, which is Europe B2C regulated and the second verticals in which we operate. I think there are clear opportunities that we continue to monitor.
“I would say that nothing has changed in terms of our approach to M&A internationally. In Italy, we’re talking about continuing very selectively our bolt-on strategy. We’re working on a pipeline, and we continue to maintain the same discipline on price.”
Elsewhere, Angelozzi told analysts the operator was “resilient” in the face of possible incoming tariffs in the US.
“We are resilient to tariffs, that’s pretty much self-explanatory. But more importantly, we believe the business is very resilient to macro headwinds in general. This was the case in previous economic shocks and recessions. Think about February, the global financial crisis and high inflation period lately,” he said.
SKS365 continues to drive online and sports betting growth
Incidentally, it was the addition of SKS365, now referred to as PWO by Lottomatica, that pushed online and sports betting revenue up in Q1. Starting with online, now the main source of revenue for the group, a 59% increase to €239.8 million was reported for the business.
The same acquisition led to exactly the same growth in the sports betting business. Revenue hiked 59% year-on-year to €150.4 million, with Lottomatica also noting a favourable sports pay-out during the quarter.
Gaming was the only segment not to benefit from the deal as revenue stayed level at €195.5 million in Q1.
As for betting volume, again the acquisition impact was clear to see. Online bets jumped 46% to €7.36 billion, sports betting wagers climbed 27% to €1.05 billion, while gaming wagers slipped 3% to 2.77 billion.
In addition, the rise in revenue pushed adjusted EBITDA to €220.5 million, up 47% and a new Q1 record for Lottomatica. Online adjusted EBITDA increased 55%, while for sports betting, it rocketed 132%. Gaming adjusted EBITDA edged down 1% during the quarter.
Net profit clears €50 million
In terms of spend, operating costs were higher across the board. Depreciation, amortisation and impairment charges also climbed, though finance expenses were reduced.
As such, pre-tax profit for the quarter stood at €77.8 million, a rise of 49% from last year. The group paid €26.3 million in tax, leaving a net profit of €51.5 million, up 71.9% year-on-year.
However, after removing €1.3 million in net profit from non-controlling assets, this meant bottom-line net profit attributable to Lottomatica reached €50.3 million, a rise of 77.7%.