Camelot acquisitions push revenue up 114.7% at Allwyn in Q2
The group acquired Camelot UK in February this year, having first reached an agreement in October 2022. The agreement covers all Camelot’s UK operations, including current rights to operate the National Lottery until February 2024. Allwyn will take over from this date, after it was awarded the fourth National Lottery licence.
This followed Allwyn finalising an agreement to acquire US-facing Camelot LS – since renamed Allwyn LS Group – in January. Both were purchased from the Ontario Teachers’ Pension Plan board (OTPP).
The addition of the businesses significantly impacted Allwyn’s performance in Q2, its first full quarter since the acquisitions completed. Revenue was significantly higher year-on-year, while adjusted EBITDA was also up.
Allwyn chief executive Robert Chvátal praised the group’s performance and talked up further growth potential with the two acquired businesses.
“I am pleased to report that Allwyn delivered another quarter of strong growth, profitability and strategic progress,” Chvátal said. “We delivered organic revenue growth across markets and also saw a further step up in profit and free cash flow generation owing to this being the first full quarter of ownership of our recent acquisitions.”
Chvátal also spoke of ongoing digital growth across Allwyn’s business, saying this will help to drive growth in the long-term.
“I am happy to report that the good performance in our existing geographies was driven primarily by strong growth in digital, where we have sustained our momentum in product development and innovation,” he said.
“Alongside this, we continue to evolve and digitise the customer proposition in physical retail. During the quarter, we once again saw resilience of demand for our products, even in an environment where consumer spending remains under pressure.”
Camelot acquisitions impact clear for Allwyn
Group revenue exceeded €2.00bn for the first time during the three months to 30 June. Of this total, €1.96bn was gross gaming revenue, up 115.3% from last year.
Excluding the impact of the two Camelot acquisitions, total revenue would have amounted to €1.02bn. This was still 7.1% ahead of €953.1m in the previous year and €979.8m of this was gross gaming revenue.
UK the key market as revenue edges towards €1.00bn
Breaking this down by geographical performance, the UK was the stand-out Q2 market for Allwyn. Revenue in the region amounted to €980.3m, all of which was attributed to gross gaming revenue related to the National Lottery.
Italian revenue reached €557.0m, while Greece and Cyprus revenue hit €521.0m, helped by a strong digital performance.
Austria revenue amounted to €373.5m, with Allwyn noting a good performance in video lottery terminals and casinos, instant lotteries and igaming. However, numerical lotteries were impacted by shorter jackpot cycles in EuroMillions.
A further €126.2m came from operations in the Czech Republic, where Allwyn reported a successful period across its igaming and instant lotteries products. In addition, €47.1m came from Allwyn LS Group, relating to operations of the state lottery in Illinois.
Adjusted EBITDA rises 34.6%
Allwyn did not publish a full breakdown of finances for the quarter, but it did reveal details on EBITDA performance.
Operating EBITDA climbed 29.3% to €357.2m, while adjusted EBITDA for the quarter was 34.6% higher at €381.0m.
The group also reported €362.8m in adjusted free cash flow, a rise of 31.5%.
Similar story in the first half
Looking at the six months to 30 June, revenue almost doubled year-on-year from €1.87bn to €3.69bn. Excluding the acquisition impact, group revenue climbed 11.8% to €2.09bn.
UK revenue in H1 hit €2.00bn, while Italian revenue reached €1.14bn and Greece and Cyprus revenue €1.07bn. Revenue in Austria amounted to €761.8m, Czech Republic €251.6m and Allwyn LS Group €93.6m.
Operating EBITDA was 26.3% higher at €686.6m and adjusted EBITDA increased by 31.6% to €727.7m. Adjusted free cash flow in the half climbed 30.0% to €685.0m.
“We continued to deliver strong margins and solid free cash flow generation, with only a limited impact of inflation on our cost base, reflecting our favourable cost structure, with our largest cost categories being directly linked to revenue and our focus on cost and capital efficiency,” Chvátal said.
“Overall, I am very pleased with Allwyn’s continued progress. I believe we are well placed for the rest of 2023 and the next chapters of our growth story.”