International edition
September 28, 2021

As compared to the same period last year

Intralot sees 47% drop in revenue in Q1 2020

Intralot sees 47% drop in revenue in Q1 2020
"We have kept witnessing an increase in the handled wagers and an improvement of the performance of technology contracts in North America, demonstrating the dynamics of the region," said Intralot Group CEO Christos K. Dimitriadis.
Greece | 06/05/2020

The international gaming solutions supplier posted consolidated revenue of €102.0m in the first quarter of the year, a -47.1% difference as compared to the €192.7 m figure reported in the first quarter of 2019.

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ntralot announced on Thursday its financial results for the three-month period ended March 31st, 2020, prepared in accordance with IFRS.

"During the first quarter of the year, we have kept witnessing an increase in the handled wagers and an improvement of the performance of technology contracts in North America, demonstrating the dynamics of the region," said Intralot Group CEO Christos K. Dimitriadis. "Group revenue and EBITDA were mainly impacted by the regulatory changes in Bulgaria, the developments in Turkey, and the impact of the pandemic in non-US jurisdictions."

Period Highlights:

  • Group Revenue at €102.0m in 1Q20.
  • EBITDA in 1Q20 at €15.8m, while Adjusted EBITDA at €13.7m.
  • EBITDA margins on sales/ GGR at 15.5% and 20.5%, respectively.
  • EBT at €-14.8m (EBT margin: -14.5%).
  • NIATMI (Net Income After Tax and Minority Interest) from continuing operations at €-17.6m.
  • Operating Cash Flow at €9.5m in 1Q20.
  • Net CAPEX in 1Q20 was €5.6m compared to €17.4m a year ago.
  • Group Cash at the end of 1Q20 at €142.0m; higher by €7.4m vs. 1Q19.
  • Net Debt at €611.1m, lower by €36.4m y-o-y.

By evaluating the latest available May 2020 data and known lockdown conditions per jurisdiction and the slow restart of sporting events, the Company’s best estimate impact for 2020 remains in the vicinity of €25m at Group’s EBITDA level.

On May 11th, 2020, Intralot Group announced the launch of eSports betting for its partner Intralot de Peru, supporting the leading lottery operator in Peru to enhance its sportsbook and offer an elevated player entertainment through content within one of the fastest-growing segment of the online game market.

On May 13th, 2020, Intralot announced the launch of “Sports Bet Montana” in Montana of USA. Intralot deployed in Montana its new Intralot Orion sports betting platform to enable the Montana Lottery’s sports wagering self-service terminals and mobile sports wagering offering.

On June 1st, 2020, Intralot and its U.S. subsidiary Intralot announced the launch of its Digital Sports Betting solution in Washington, DC. Intralot, as part of its current contract with the DC Lottery, deployed its new Intralot Orion sports betting platform to enable the GambetDC mobile and desktop sports betting offering.

WAGERS HANDLED

During the three-month period ended March 31st, 2020, Intralot systems handled €3.7b of worldwide wagers (from continuing operations), posting a 5.9% y-o-y increase. East Europe’s wagers increased by 76.5% (reflecting the new Sports Betting era dynamics in Turkey since September 2019), North America’s by 22.6% (driven mainly by Illinois full quarter contribution vs. launch in mid-February 2019), in part offset by South America’s decreased wagers by -29.9%, (Chile’s significant Jackpot in 1Q19, and the recent social unrest in the country), West Europe’s by -19.5%, Africa’s by -15.2%, and Asia’s by -7.7%, all mainly affected by the Covid-19 pandemic.

REVENUE

Reported consolidated revenue posted a decrease compared to 1Q19, leading to total revenue for the three-month period ended March 31st, 2020, of €102.0m (-47.1%).

Lottery Games was the largest contributor to the company's top line, comprising 65.1% of revenue, followed by Sports Betting contributing 13.5% to Group turnover. Technology contracts accounted for 13.0% and VLTs represented 7.8% of Group turnover, while Racing constituted 0.6% of total revenue of 1Q20.
Reported consolidated revenue for the three-month period is lower by €90.7m year over year.
The main factors that drove top-line performance per Business Activity are:

- €-77.5m (-65.1%) from Licensed Operations (B2C) activity line, with the decrease attributed mainly to lower revenue in:

Bulgaria (€-71.4m), driven by Eurofootball’s change in consolidation method (full vs. equity method) and by the impact of the discontinued contracts of Eurobet from mid February onwards, and
Malta (€-4.6m), with the variance attributable mainly to Covid-19 impact from mid-March 2020.

- €-15.9m (-66.3%) from Management (B2B/ B2G) contracts activity line with the variance driven by:

The deficit from Turkish operations (€-11.9m) driven mainly by Inteltek’s contract discontinuation post-August 2019, as well as by a decline in Bilyoner’s top-line performance following the transition to the new Sports Betting era in Turkey (driven by a market share reduction and revised commercial terms), as well as the impact of the Covid-19. In 1Q20 the Sports Betting market expanded close to 3.5 times y-o-y (with the rate of expansion being lower compared to that of the first 4 months of the new era primarily due to the Covid-19 pandemic impact), with the online segment representing close to 85% of the market. Performance in Euro terms was further impacted by the devaluation of the local currency (10.3% Euro appreciation versus a year ago – in YTD average terms), and

Morocco’s (€-4.0m or -58.0% y-o-y) performance mainly impacted by the revised commercial terms following the transition to the new contract, being further deteriorated by the Covid-19 impact in late 1Q20.

- €+2.7m (+5.4%) from Technology and Support Services (B2B/ B2G) activity line, with the increase attributed mainly to:

US operations’ increased revenue (€+5.1m), mainly driven by the full quarter contribution of the company's new contract in Illinois in the current period (project launched in mid-February 2019), and one-off revenue recognition in relation to a new project with BCLC in Canada, fully absorbing the Ohio CSP contract impact which expired in Jun-2019, the late 1Q20 Covid-19 impact, and a Powerball jackpot occurrence in 1Q19. Performance was also in part boosted by a favorable USD movement (3.5% Euro depreciation versus a year ago — in YTD average terms).
Partially offset by:

  • Chile’s lower performance in 1Q20 (€-1.9m), largely because of a significant Lotto jackpot in 1Q19, and the recent social unrest in the country.
  • Adjusting on a pro-forma basis for the impact of change in consolidation method of entities within 2019, consolidated revenue is -20.3% y-o-y.
  • Constant currency basis: In 1Q20, revenue — net of the negative FX impact of €6.0m —reached €108.0m (-44.0% y-o-y).

"Going forward, we expect that our new strategy, as presented during the AGM and as already being implemented, will return the company to growth," Dimitriadis concluded.

See the full financial results here.

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