Playtech FY: Strong B2B segment drives 33% revenue growth
On this revenue Playtech reported a further 28% increase in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) from €317.1m in the prior year to €405.6m in 2022. While the business reported an adjusted post-tax profit on this of €160.5 – a 26% increase from the €127.6m it announced last year – the company’s actual profit declined 94% to €40.6m from €686.7m.
The supplier said this was primarily the result of unrealised value gain in derivative financial assets the previous year, which then declined in value in 2022. At €583.2m, this decline in the value of the company’s assets represented the rank majority of the fall in profit.
Despite this, the company hailed the record results, which CEO Mor Weizer (pictured) argued was the consequence of all sections of the business working in tandem.
“2022 was a year of considerable strength for Playtech, in which we delivered record revenues and EBITDA, ahead of market expectations,” he said. “All parts of the business contributed to this performance, with B2B powered by Europe (ex-UK) and the Americas, and B2C’s impressive performance underpinned by Snaitech’s continued strength in the Italian market in both retail and online.
Full-year
In Playtech’s B2B division, the company experienced “very strong” growth within regulated markets that saw total segment revenue growth 14% to €632.4m On this the organisation reported an adjusted EBITDA of €160.2m as opposed to the €139.2m Playtech achieved the previous year.
The provider noted that this growth took place against the background of the ongoing war in Ukraine, where Playtech employs over 700 staff, representing approximately 10% of the business’ total workforce.
“I’d like to acknowledge the bravery of our colleagues in the Ukraine and praise the work of our crisis management team, who have worked tirelessly to support our Ukrainian colleagues and their families,” said Weizer.
On a geographic basis, Europe – not including the UK – experienced 31% rise in revenue on a constant currency basis to €184.6m, which the company said was driven primarily by the Netherlands, “with strong contributions from Poland, Spain and Ireland”.
On the other side of the Atlantic, Playtech’s Americas B2B business also saw robust growth, seeing €144.7m in revenue, a 27% increase from 2021. The Isle of Man-based supplier said that this result was powered by Caliente in Mexico, as well as continued progress in the Brazilian market.
Playtech also said that it has made “significant progress” in executing its US strategy, pointing to a number of agreements that it announced over the prior year.
“Strategically we have also continued to deliver, executing the successful sale of Finalto continuing our simplification strategy, and making great progress in North America with the launch of the IMS platform with Parx Casino in Pennsylvania and having signed several significant new deals including Golden Nugget, WynnBet, Resorts and 888,” said Weizer.
“We have started the new financial year well and announced the signing of the landmark transaction with Hard Rock Digital, and in spite of the continued macro-economic and political uncertainty, remain confident in our future prospects, as well as our ability to deliver value to all our stakeholders in a sustainable and responsible way,” he added.
The organisation also reported strong cash generation in 2022, with an adjusted operating cash flow of €397.0m.
In terms of Playtech’s B2C operations, Snaitech saw a 54% rise in revenue, from €584.7m to €899.8m. This reflected a rebound in the operations following the business’ retail network being closed for almost the whole of H1 in 2021 due to the Covid-19 pandemic.
Rising costs
B2B costs rose 14% in 2022 to €472.2m compared to €415.1m the company reported the prior year. This comprised the organisation’s 12% rise in research and development costs to €87.5m, its 23% increase in general and administrative costs to €82.6m, a 16.8% growth in Playtech’s sales and marketing costs – which rose to €16.8m – and, most significantly, an 11% rise in its operations costs, to €285.2m.
Meanwhile, Playtech reported its B2C costs by subsidiary rather than activity. Snaitech also saw a 61% rise in costs from €182.6m to €254.2m – once again driven by the reopening of the company’s retail operations in 2022. Its Sun Bingo saw a 15% rise in costs to €63.3m, while HappyBet saw a more minor 4% rise in costs to €30.9m, against a revenue of €20.1m.
“This strong performance can be attributed to robust demand in Playtech’s business-to-business markets, particularly in regulated segments, which saw a 14% YoY growth with revenues of €632.4 million,” said Neil Shah, director of investment research firm Edison Group.
“Additionally, the company’s business-to-consumer segment, which includes Italian sports betting and gaming firm Snaitech, experienced a significant 48% surge in revenues, totalling €983.1 million,” he said. “Overall, these results demonstrate Playtech’s thriving position and represents a notable start to the year.”