Full year results 2020

Sazka Group revenue boosted by Stoiximan and Casinos Austria deals in 2020

| By Richard Mulligan
Sazka Group saw a 12% rise in gross gaming revenue and double-digit increase in profit after tax in the final quarter of 2020 as it benefitted from the addition of income from Casinos Austria and Stoiximan.

In releasing its results for 2020, the pan-European lottery and gaming group said consolidated gross gaming revenue reached €597.2m in the three months to 31 December 2020.

The final quarter of the year saw a new wave of Covid-19 restrictions introduced in October and November mainly impacting its physical retail businesses in Greece and casinos in Austria and internationally.

Prague-headquartered Sazka saw a 12% increase in GGR to €96.3m in the Czech Republic, where physical retail businesses remained open and functional, although this was impacted by an increase in lottery taxes from 23% to 35% at the start of the year.

The group saw a 24% drop in GGR in Austria to €270m – this included €235m from its Austrian Lotteries (CASAG) business, which was consolidated into the group in June and benefitted from new lottery initiatives and growth in online and digital.

Greece and Cyprus saw a 48% year-on-year decline in GGR to €230.8m due to agents’ stores and gaming hall closures in Q4. Stoiximan, which was consolidated into the group in November, injected €92m into the business.

In the quarter, consolidated operating EBITDA decreased by 41% year-on-year to €96m, while consolidated profit after tax increased by 42% year-on-year to €134m.

Taking the year as a whole, Sazka reported GGR of €2.02bn, which was up 6% compared to the prior year.

The group acquired a 17.19% stake in CASAG in June, taking the shareholding to 55.5%. In July and November, it acquired an additional stake in Stoiximan, the leading online gaming business in Greece and Cyprus, giving an 84.5% combined effective stake. Excluding the addition of Stoiximan and Casinos Austria (CASAG), GGR was down 26% to €1.41bn in 2020.

When breaking its results down by region, Sazka provided full-year revenue for its 2020 acquisitions, meaning the combined revenue figure is higher than its €2.02bn.

Austrian operations were down 21% for the full year to €1.08bn, with €850m from Austrian Lotteries. Czech Republic business was up 10% to €315.2m, with Greece and Cyprus down 30% to €1.13bn and Stoiximan making up €268m of that.

During the year, Sazka saw strong growth in revenues from digital-only games and

sales of other products through online channels sustained. Total amounts staked with the business were up 25% during the course of the 12 months.

Operating expenses increased by 7% year-on-year to €1.0bn, leaving consolidated operating EBITDA down by 22% year-on-year to €459m. Excluding CASAG and Stoiximan, operating EBITDA decreased by 38% year-on-year to €335.4m.

Adjusted EBITDA was down 11% but margin was down only 1.6%, supported by a large proportion of variable costs, specific cost-saving initiatives and a targeted approach to marketing.

Restructuring personnel costs of €50.6m, €115.6m in financing costs and a €142.7m gain from the revaluation of its Stoiximan stake led to the group reporting profit before tax of €260.1m, which was down 27% year-on-year. Profit after tax was down 28% to €224.4m.

Excluding the addition of CASAG and Stoiximan, profit before tax was down 72% to €86.9m and the after-tax figure was down 78% to the after-tax figure was down 78% to 57.9m.

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