his presentation is being followed by a series of meetings with the investment community commencing in London and Milan. "It is our goal for the Lottomatica Group to be the leading commercial operator and provider of technology in the regulated worldwide gaming markets. We’ll achieve this by delivering best-in-class products and services, with a steadfast commitment to the highest levels of integrity, responsibility, and shareholder value creation," said Chairman and CEO Lorenzo Pellicioli.
"Over the next three years, we will maintain our global leadership position in the public gaming markets. The key to our success is that we have a worldwide footprint that affords us access to opportunities. We understand the preferences and behaviors of gaming customers and we are able to manage and deploy best in class technology solutions. Finally, we have the scale to effectively compete and invest in new opportunities for growth."
Managing Director of Lottomatica Marco Sala commented, "The Italian Gaming market is healthy and growing, and our objective will be to maintain our leadership position. In the lotteries segment, we plan to continue our Scratch & Win growth. We will further develop Sports Betting benefiting from expected market growth through our existing network and brand strength. In the Gaming Machines segment, we intend to play a leading role in the market consolidation process. We will also pursue any European opportunity to leverage our expertise as operator."
Gtech President and CEO Jaymin B. Patel said, "Our strategy is simple and direct. We will drive same store sales by employing best practices to tap into the significant potential of our existing customer base. And, we will grow into new markets and expand into new delivery channels through a combination of acquisitions and product innovation. As evidenced by the recent acquisitions of Atronic, an international gaming machine manufacturer for the commercial gaming market, and our expected acquisition of St Minver and Boss Media, companies concentrating on betting and interactive gaming, Gtech is well positioned to maintain its leadership in the public gaming markets, expand in the commercial gaming market and become a key provider in the quickly-growing sports betting and interactive markets."
Lottomatica Group’s strategy is to address the gaming markets through four basic segments: Traditional and Instant Lottery; Gaming Solutions; Sports Betting and Interactive. Gtech’s activities are focused on the "business to business" category primarily as a technology solutions provider and Lottomatica on the "business to consumer" category primarily as a gaming operator.
Overall, in 2008, revenues are expected to be in the range of 1.95 billion to 2.05 billion euros. In 2010, revenues are expected to grow to approximately 2.40 billion to 2.5 billion euros. The Compound Annual Growth Rate (CAGR) for the three-year plan is expected to be in the range of 13% to 15% versus Financial Year 07 actual figures.
Earnings per share as reported for 2008 are expected in the range of 0.75 to 0.85 euros, growing to 1.45 to 1.55 euros by 2010. 2008 Operating Income is estimated in the range of 420 million to 435 million euros, growing to 600 million to 650 million euros by 2010, with a CAGR of 15% to 18% versus FY’07 actual figures.
A competitive dividend policy is included in the three-year plan with an expected dividend distribution of 125 million euros in 2008 and 150 million euros in 2010.
Lottomatica Group will also maintain a healthy financial position. Un-levered Free Cash Flow (before acquisitions) will be in the range of 550 million - 600 million euros by 2010. By 2010, the Net Debt/EBITDA Ratio will be 2.5x, or 1.75x if adjusted for the hybrid bond.
It is expected that Lottomatica Group will maintain its investment grade credit rating, as well as preserving an efficient and competitive capital structure. The company will also maintain sufficient financial flexibility to pursue growth, take a disciplined approach to capital allocation, and deploy free cash flow for growth investments in the existing business while repaying debt, as scheduled, and distribute dividends.