IRSA Gaming Corporation, the sector’s largest company in Spain, generated an operating profit of 368.8 million euros (USD 418 M) in 2018. This was 5.1% more than in 2017, despite the strong adverse impact of the euro’s exchange rate versus other currencies in the Latin American countries where the Company operates. The operating income was 1,469.1 million euros (USD 1.667,28 M), a 5.2% increase over the previous financial year.
In the words of Joaquim Agut, President and CEO of CIRSA, "its acquisition by Blackstone has made 2018 a key year for the Company. I want to highlight the trust placed by the new shareholder in our Strategic Plan and in CIRSA’s team. I personally would like to thank everyone at CIRSA for their efforts and their full commitment to both the transaction and the Group’s continuous growth."
Agut stated that the immediate future will see "the further implementation of our Strategic Plan, following the lines of action of the past 13 years, with a firm commitment to sustained, cost-effective growth, and focusing on each of the businesses and locations where we operate. This has enabled us to grow uninterruptedly for the past 50 quarters."
Agut added that "in order to maintain its leadership and keep moving forward as a trustworthy, reliable company, CIRSA will basically need to ‘anticipate the future, focusing on teamwork and its ability to perform; take initiatives related to efficiency and profitability, and rely on our in-depth knowledge of both our business and our clients. This is how we can continue to make a financial, social and environmental contribution in the 9 countries where we have a presence."
One of the major highlights of 2018 was the Company’s capacity for overall, organic growth in all the subsectors where it operates. This notably included the acquisition of Casino Jaragua in the Dominican Republic, Winland Casino in Mexico, and Bingo Salou in Tarragona. The excellent performance of the B2B division should also be stressed, with the release of the new Elite cabinet and the ‘Pearl of the Caribbean’ and ‘On the Rocks’ games, as well as the new SENSATION multi-game model for gaming halls.
All these achievements have taken place in the midst of a generally acceptable economic environment, despite the significant impact of the devaluation of the currencies from the Latin American countries where the company operates versus the euro.
FY 2018 summary by business division:
The Company’s revenues increased in the local currencies in the eight countries where it operates casinos. Despite the adverse impact of the exchange rate, it had an improved revenue trajectory in euros versus 2017.
The main acquisitions were Le Mirage Casino in Agadir, Morocco; Casino Jaragua, in the Dominican Republic; and two new halls, El Fuerte and Dorado Mall in Panama, as well as 7 major casino enlargement and refurbishment projects, mainly in Latin America.
The Slots division’s revenues in Spain continued to increase in 2018. This trend started four years ago, supported by some selective purchases that optimized the return on investment and the application of operational synergies. This improvement was also enhanced by the successful introduction of the ‘Pearl of the Caribbean’ and ‘On the Rocks’ models, developed by the industrial division (UNIDESA). The Slots division continued to implement efficiency and productivity programmes, focused on expanding services and revenues.
In 2018 the Italian Parliament approved several tax increases, applicable to last year and to the subsequent three years. This is having a significant impact on revenues. However, despite having reduced the number of AWP machines by more than 1,800 (-20%) by the end of the second quarter as legally required, overall revenues remained stable.
CIRSA’s leadership in Italy over the past financial years, including 2018, has focused on maximizing the revenue per terminal for both AWP machines and VLTs. This has been mainly due to the optimization of the product mix and of the points of sale, both in the HORECA channel and in gaming halls.
The Bingo Halls division in Spain has seen a noticeable improvement in its revenues and has experienced significant growth. Of note was the successful refurbishment and expansion project of halls in Andalusia, the improvements to Dynamic Bingo in Madrid and the sales policies implemented across the entire network. An important development was also the acquisition of Bingo Salou (Tarragona, Spain).
A major highlight in Mexico was the acquisition of Winland Casino, located in Guadalajara, at the end of June 2018. It offers 575 machines, 26 tables, sports bets, a wide range of food and drink services, and 400 car park spaces. Another significant highlight was the complete integration of the casinos in the port city of Manzanillo and in Vallarta, purchased in 2017. There was a constant improvement in the sales strategy, resulting in a greater number of visitors and higher revenues which, together with the productivity programmes implemented, translated into substantially better performance.
The successful development of this division continued in 2018, reinforced by the selective opening of new arcades and the gradual implementation of the new Toka image and concept. The implementation of the new Forward Systems management solution from UNIDESA, and the installation of SENSATION multi-game machines (also manufactured by UNIDESA) and Alfastreet’s Lucky 8 roulettes (distributed by the same industrial division) all contributed to the division’s good performance.
Another important aspect was the arcade staff training and development programme, which was essential to meet the objectives set.
CIRSA’s industrial division maintained its leading position in the hotel and catering channel thanks to the excellent performance of the new Elite cabinet, and of the new technological platform that incorporated the ‘Pearl of the Caribbean’ and ‘On the Rocks’ models in 2018. A significant development in the arcade channel was the successful release of the SENSATION multi-game machine.
The highlight in the Interactive area was the sales growth of the ‘Forward Systems’ gaming hall management system, which has already been installed in nearly 100 gaming halls.
Sportium performed excellently in 2018 both in its retail and digital sales channels, with significant increases in revenues and market share. Its current leadership has become increasingly established thanks to: its organic growth plan; the great popularity of the technological innovations applied to self-service terminals (Sportplay and Sportbox); and the success of exclusive products such as Pro6 and French horse racing (PMU). In 2018 Sportium reached 3,000 points of sale.