IGT hits FY financial goals despite Global Lottery decline
The tech giant was able to reduce certain costs across the business in line with its strategy, while group revenue was higher year-on-year, with growth noted within both its Global Gaming and PlayDigital businesses.
While IGT did report a decline in Global Lottery operations, the group said 2022 was a year of “significant” financial accomplishments and the business is in a strong position across all segments moving in to 2023.
“We achieved all our financial goals last year while strengthening product leadership positions across our Global Lottery, Global Gaming and PlayDigital activities,” IGT chief executive Vince Sadusky said.
“Important strategic work executed over the last few years has transformed IGT into a company with higher growth prospects, a better profit profile and a solid path to delivering on our long-term goals.
“It has also enabled record capital returns to shareholders in 2022. We enter 2023 from a position of strength with good momentum across business segments.”
Beginning with IGT’s performance in the fourth quarter and revenue for the three months to 31 December was $1.09bn (£906.5m/€1.03bn), up 4% from $1.05bn in the corresponding period in the 2021 financial year.
Global Lottery revenue slipped 7% to $639m as strong multi-jurisdiction jackpots and product sales were offset by impact of Italian commercial services sales.
However, Global Gaming revenue jumped 21% to $389m, helped by growth across service and product sale revenue streams, while PlayDigital hiked 56% to a record $65m due to organic growth, market expansion and contributions from the iSoftBet acquisition.
In terms of geographical performance, $714m of all revenue in Q4 from activities in the US, while $226m was generated in Italy and $153m the rest of the world.
Looking at spending, operating expenses were level at $863m, although non-operating costs increased 114.7% to $161m. As such, pre-tax profit reached $70m, down 36.9% from $111m in the previous year.
IGT paid $101m in tax and also accounted for a $34m profit from non-controlling interests which, when taken away from the final total, left a net loss attributable to IGT of £64m for the quarter, in contrast to a $19m profit in 2021. However, adjusted EBITDA was 8% higher at $419m.
As to how this impacted IGT’s full-year performance, revenue for the 12 months through to 31 December increased 3% from $4.09bn to $4.23bn.
Segment performance made for similar reading as in Q4, with Global Lottery revenue down 8% to $2.60bn due to lower same-store sales in Italy and the impact of Italian commercial services sales.
Global Gaming revenue climbed 28% to $1.40bn, helped by significantly higher US and Canada replacement machine unit sales and increased installed base yields, while PlayDigital jumped 27% to a record $209m, driven by igaming organic growth, market expansion and the iSoftBet deal.
US and Canada operations accounted for $2.55bn of group revenue, with Italy revenue at $1.06bn and rest of world revenue $618m.
Operating expenses increased 3.6% to $3.30bn, although a reduction in interest expenses meant non-operating costs were lowered by 10.7% to $333m.
Pre-tax profit was 11.3% higher at $589m, although after accounting for $175m in income tax payments and the subtraction of $139m in profit from non-controlling interests, this meant a net profit attributable to IGT of $275m, down 43.0% year-on-year. Adjusted EBITDA also slipped 1% to $1.66bn for the year.
“2022 was another year of significant financial accomplishments,” IGT chief financial officer Max Chiara said. “With reduced interest expense and improvements to the effective tax rate, 2022 adjusted EPS highlights IGT’s significantly improved earnings power.
“We generated strong cash flow while funding increased investments for future growth. This, coupled with proceeds from sales of non-core businesses, allowed us to meaningfully reduce debt and leverage to the lowest levels ever.
“The company’s enhanced credit profile and significant liquidity provide solid support and flexibility as we execute our multi-year plan.”