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Lottomatica exceeds IPO expectations with positive FY23 results

| By Marese O'Hagan
Lottomatica reported revenue of €1.63bn (£1.39bn/$1.77bn) for its 2023 financial year, up by 17.0%, as the company “exceeded expectations” set by its IPO.

The year had been eventful for Lottomatica, with the company announcing an initial public offering (IPO) on the Euronext Milan exchange in April, which ran between 24-27 of the month. The price range was set between €9 and €11, giving a market capitalisation of €2.67bn.

The IPO has had a lasting effect on Lottomatica’s earnings. In its third quarter 2023 results, it reported €2.8bn in gross gambling revenue (GGR).

During November, Lottomatica acquired SKS365 Malta, which had an enterprise value of €639m at the time. In the same month, Lottomatica announced that it would issue and sell €500.0m in notes to help fund the acquisition. The deal with Lottomatica proved to be the nail in the coffin for Playtech, which had previously opened talks to acquire SKS365.

Guglielmo Angelozzi, CEO of Lottomatica, said the year had seen the company grow on all business fronts – including the IPO.

“2023 marked a very strong year for our group, in which we consolidated our leadership position across all segments and brands,” said Angelozzi. “We exceeded expectations set at IPO and subsequent upgrades, with revenues of €1,632 million and adjusted EBITDA of €596 million at normalised payout.”

“We continued to grow both organically, increasing market share for the fifth quarter in a row and, through M&A, signing the acquisition of SKS365 and executing our bolt-on strategy.”

Online segment and bets stand out for Lottomatica

The full-year revenue was up 12.0% on a pro-forma basis. The report noted that the pro-forma numbers take Lottomatica’s acquisition of Betflag – which occurred in November 2022 – into account for the whole 2022 year.

Breaking down the revenue, the largest growth was seen in Lottomatica’s online segment, which shot up 33.3% to €520.7m. But the company’s gaming segment outperformed in terms of revenue, bringing in €743.4m. This represented a rise of 2.4%. Lottomatica’s sports franchise segment generated €368.2m.

A total of €30.1bn was generated in bets, up 17.9% pro-forma. More than half of this – €16.20bn – came from Lottomatica’s online segment. Its gaming segment made up €11.10bn of the total, while the sports franchise segment made up the remaining €2.82bn.

Lottamatica GGR for the year was €3.86bn, up by 6.0%. Total online market share stood at 21.7% in Q4, while online sports market share was 22.1% during the quarter. Online gaming market share was 21.5% in Q4.

adjusted ebitda for 2023 was at €580.4m – up by 16.6% on a pro-forma basis.

Full-year break down and 2024 guidance

Other income for Lottomatica amounted to €18.5m for the year, bringing the total revenues and income to €1.65bn. Looking at costs and expenses, cost of services delivered the largest blow here, rising 10.6% to €972.7m. Finance expenses topped €220.2m, while depreciation, amortisation and impairments hit €194.1m.

The overall costs brought the profit before tax to €137.6m, a 3.2% improvement year-on-year. Following €63.4m in income tax expense, the net profit for the year totalled at €74.2m, down from €78.4m.

Adjusted EBITDA for 2023 was €580.4m. This was up by 16.6% on a pro-forma basis.

For Lottomatica’s 2024 full-year projections, it noted that it expects revenue between €1.80bn-€1.84bn. Adjusted EBITDA is projected to be between €625m-€645m, with an estimated 53.0% generated by the online segment.

Updated guidance is set to be released after the SKS365 acquisition has closed. This is expected to take place during H1 2024.

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