Allwyn reported a 114.7% year-on-year increase in second-quarter revenue to €2.05 billion (£1.75 billion/$2.20 billion), driven by the acquisitions of Camelot UK Lotteries and Camelot Lottery Solutions (Camelot LS).
The group acquired Camelot UK in February this year after first entering into an agreement in October 2022. The agreement covers all of Camelot’s operations in the UK, including the current rights to operate the National Lottery until February 2024. Allwyn will take over management from that date, having received its fourth national lottery license.
This comes after Allwyn completed an agreement to acquire US-based Camelot LS – now renamed Allwyn LS Group – in January. Both were purchased by the Ontario Teachers’ Pension Plan Board (OTPP).
The addition of the companies had a significant impact on Allwyn’s performance in the second quarter, its first full quarter since the acquisitions were completed. Sales were significantly higher than the previous year, and adjusted EBITDA also increased.
Robert Chvátal, CEO of Allwyn, praised the group’s performance and spoke of further growth potential with the two acquired companies.
“I am pleased to report that Allwyn achieved another quarter of strong growth, profitability and strategic progress,” said Chvátal. “We achieved organic sales growth across all markets and also experienced further increases in profit and free cash flow generation as this was the first full quarter in which we owned our recent acquisitions.”
Chvátal also spoke of continued digital growth across Allwyn’s business, saying this will help drive growth in the long term.
“I am pleased to report that the good performance in our existing regions was driven primarily by strong growth in digital, where we maintained our momentum in product development and innovation,” he said.
“In addition, we are continuing to develop and digitize the customer offering in stationary retail. During the quarter, we continued to see robust demand for our products, even in an environment where consumer spending remains under pressure.”
The impact of the Camelot acquisitions is clear to Allwyn
Group sales exceeded the 2.00 billion euro mark for the first time in the three months to June 30th. Of this, gross gaming revenue accounted for 1.96 billion euros, 115.3% more than in the previous year.
Without the impact of the two Camelot acquisitions, total sales would have been 1.02 billion euros. This was still 7.1% higher than the previous year’s figure of €953.1 million, of which €979.8 million was attributable to gross gaming revenue.
The UK is the key market as sales amount to 1.00 billion euros
By geographical performance, the UK was Allwyn’s standout market in the second quarter. Revenue in the region was €980.3 million, which was entirely attributable to gross gaming revenue related to the National Lottery.
Sales in Italy reached 557.0 million euros, while sales in Greece and Cyprus reached 521.0 million euros, supported by strong digital performance.
Sales in Austria amounted to 373.5 million euros, with Allwyn noting good performance in video lottery terminals and casinos, instant lotteries and igaming. However, numerical lotteries have been impacted by shorter jackpot cycles on EuroMillions.
A further €126.2 million came from operations in the Czech Republic, where Allwyn reported a successful period with its igaming and instant lottery products. In addition, €47.1 million came from Allwyn LS Group in connection with the operation of the state lottery in Illinois.
Adjusted EBITDA increases by 34.6%
Allwyn did not release a full financial breakdown for the quarter, but did provide details on EBITDA performance.
Operating EBITDA increased 29.3% to €357.2 million, while adjusted EBITDA for the quarter increased 34.6% to €381.0 million.
In addition, the group reported adjusted free cash flow of EUR 362.8 million, an increase of 31.5%.
Similar story in the first half
If you look at the six months up to June 30th, sales almost doubled year-on-year from 1.87 billion euros to 3.69 billion euros. Without taking the acquisition effects into account, consolidated sales rose by 11.8% to €2.09 billion.
Sales in the UK reached 2.00 billion euros in the first half of the year, while sales in Italy reached 1.14 billion euros and in Greece and Cyprus 1.07 billion euros. Sales in Austria amounted to €761.8 million, in the Czech Republic €251.6 million and in the Allwyn LS Group €93.6 million.
Operating EBITDA increased by 26.3% to €686.6 million and adjusted EBITDA increased by 31.6% to €727.7 million. Adjusted free cash flow increased by 30.0% to €685.0 million in the first half of the year.
“We continued to deliver strong margins and solid free cash flow generation, with only a limited impact from inflation on our cost base, reflecting our favorable cost structure, with our largest cost categories directly linked to revenue and our focus on cost and capital efficiency .” “said Chvátal.
“Overall, I am very pleased with Allwyn’s continued progress. I believe we are well positioned for the remainder of 2023 and the next chapters of our growth story.”