The financial landscape for Lottomatica has changed momentously, with the company having charted a successful course through the dynamic waters of the global gambling industry, culminating in a remarkably successful initial public offering (IPO) and a series of strategic acquisitions that have fortified its market presence.
Earlier in the year, the gaming giant announced its IPO on the Euronext Milan exchange, which took place between April 24th and 27th. An offering price range between €9 and €11 had been decided which subsequently placed Lottomatica’s market capitalization at an impressive €2.67 billion.
As the year unfolded, the impact of the IPO on the company’s financials became increasingly evident. For its third quarter, Lottomatica reported a staggering €2.8 billion in gross gambling revenue (GGR), an indicator of the company’s resilient and ascending growth trajectory.
November was a particularly notable month for Lottomatica as it acquired SKS365 Malta, commanding an enterprise value of €639 million at that juncture. In the same breath, Lottomatica announced the sale of €500.0 million in notes, a strategic move designed to support funding for this substantial acquisition. This agreement sounded the death knell for Playtech’s previous discussions to acquire SKS365.
CEO Guglielmo Angelozzi expressed his satisfaction with the company’s performance over the past year, celebrating its solidified leadership across business segments. According to Angelozzi, 2023 was a landmark year, surpassing expectations established at the IPO and from subsequent forecasts. He reported revenues of €1,632 million with an Adjusted EBITDA of €596 million at normalized payout. Angelozzi credited this success to organic growth and the company’s proactive approach to mergers and acquisitions, such as the SKS365 deal.
On a pro-forma basis, full-year revenue increased by 12.0%. These pro-forma figures reflect the inclusion of Betflag’s acquisition in November 2022, as if it had been part of the company for the entire year of 2022.
Diving deeper into the revenue streams, Lottomatica’s online segment experienced the largest growth, skyrocketing 33.3% to €520.7 million. However, the gaming segment exceeded expectations in terms of sheer revenue, securing €743.4 million, marking a rise of 2.4%. Meanwhile, the sports franchise segment carved out a significant slice of the revenue pie, contributing €368.2 million.
Across all markets, the company reported total bets of €30.1 billion, an uplift of 17.9% on a pro-forma basis. The online segment was primarily responsible for this surge, with €16.20 billion of the total bets placed. The gaming and sports franchise segments contributed €11.10 billion and €2.82 billion, respectively.
Reflecting on their exceptional performance, Lottoamatica’s GGR for the year was €3.86 billion, a 6.0% increase from the prior year. Dominating the online market, Lottoamatica held a 21.7% share in Q4, while the online sports market share was slightly higher at 22.1% during the same quarter. The online gaming market share stood at 21.5% in Q4.
Adding to the GGR, other income for Lottomatica for the year was €18.5 million, thereby swelling the company’s total revenues and income to €1.65 billion. Examining costs and expenses more closely, cost of services took the largest hit, rising 10.6% to €972.7 million. Finance expenses were profound at €220.2 million, and depreciation, amortization, and impairments were evaluated at €194.1 million.
With these figures in play, the profit before tax reached €137.6 million, a year-on-year enhancement of 3.2%. After an income tax expense of €63.4 million, the net profit for the year settled at €74.2 million, a slight dip from the previous €78.4 million.
Adjusted EBITDA for 2023 witnessed a promising ascent of 16.6% on a pro-forma basis, reaching €580.4 million. Making projections for the full year of 2024, Lottomatica forecasted that revenues should range between €1.80 billion and €1.84 billion. Adjusted EBITDA is anticipated to be in the band of €625 million to €645 million, with over half expected to be generated by the online segment.
Final guidance will be issued after the closing of the SKS365 acquisition, which is scheduled during the first half of 2024, a reflection of the company’s vision to maintain its aggressive growth strategy and to enhance shareholder value in the competitive gaming market.
