Digital drives Allwyn revenue growth, UK National Lottery investment impacts profit
Growth is primarily due to growth within its digital business. In a trading update published yesterday (11 March), Allwyn said total group revenue hit €8.8 billion for the 12-month period.
Total revenue excluding its UK, North America, technology and content segments was up 8% to €4.6 billion, while GGR also increased 8% year-on-year to €4.4 billion.
While Allwyn said growth was apparent across several areas, it highlighted its digital segment as the key driver in 2024. Revenue from this area of the business was up 20% and it represented 39% of group GGR for the year.
As for group net revenue, this was 11% higher year-on-year at €4 billion.
Allwyn CEO Robert Chvatal said that during the period Allwyn had moved to a new incentive and profitability mechanism in the UK, associated with the start of its national lottery licence in February 2024. This reflected lower profitability in the market.
The group said adjusted EBITDA increased 4% in 2024 to €1.55 billion, with a lower profit margin of 38.6%, compared to 41.2% in 2023. Excluding the UK, North America, and tech and content, adjusted EBITDA was €1.45 billion, up 11% on 2023.
“[This] was another year of record financial performance and strategic progress,” Chvatal said in the operator’s earnings report.
“We delivered good growth in profitability in 2024,” Chvatal said, “This performance was achieved despite the move to a new incentive and profitability mechanism in the United Kingdom, following the start of the new licence in February.”
The group is due to publish its 2024 results in full on 21 March.
Lottery updates hindering UK profit?
The company closed the year with €255.8 million in capex, an increase of 151% from 2023, to support its investment in transforming the National Lottery, it said.
After securing the licence, Allwyn operated the previous systems put in place by former UK lottery licence holder Camelot UK Lotteries after it acquired the business in February 2023.
Reports in November suggested the company was facing delays in its updating the technology needed to operate the National Lottery.
But Allwyn told iGB at the time it had made “significant progress” in transforming the National Lottery.
“We’ve started overhauling our 40,000-strong National Lottery retail estate, launched a number of new campaigns and products – including Paris 2024, Lotto and Set For Life campaigns – and introduced a number of new player protection measures, including our pioneering new scratchcard purchase limit,” the spokesperson said.
What about Q4 at Allwyn?
The trading update also included certain figures for Q4. Total revenue came in at €2.4 billion and GGR hit €2.3 billion, 10% higher than the previous year. Net revenue also rose 12% to €1.12 billion.
As for adjusted EBITDA, this increased 12% to €437 million, with a profit margin of 39.1%.
Without the UK and US, total revenue rose 11% to €1.28 billion and net revenue 9% to €807.1 million. Adjusted EBITDA with the same exclusions increased by 16% to €397.3 million.
Impact of other acquisitions
On the subject of acquisitions, Chvatal also referenced several other recent deals and their expected impact.
In September, the group completed a planned investment in a 70% interest in Instant Win Gaming. Following this, it took a 51% majority stake in Logflex MT Holding, the owner of Novibet, in December.
“Both transactions are in line with our strategy of making selective acquisitions in relevant products, technologies and content to support our future growth,” Chvatal said, reiterating similar comments he made after the Logflex deal was announced.
“The new year has started well. Allwyn is well positioned for 2025 and for the next chapters of its growth story.”