Allwyn announced a 114.7% increase in revenue year-on-year to EUR2,05bn ($2.20bn/£1.75bn) during the second quarter. This was driven by its acquisitions Camelot UK Lotteries (Camelot LS) and Camelot Lottery Solutions.
After first reaching an agreement in Oct 2022, the group acquired Camelot UK. The agreement covers Camelot UK’s operations including the current right to operate the National Lottery up until February 2024. Allwyn takes over at this time, having been awarded the Fourth National Lottery Licence.
Allwyn had already signed an agreement in January to purchase US-facing Camelot LS – now known as Allwyn LS Group. Both were bought from the Ontario Teachers’ Pension Plan Board (OTPP).
Allwyn’s performance was significantly affected by the addition of these businesses in Q2, the first quarter after the acquisitions. The revenue was up significantly year-on-year and adjusted EBITDA also increased.
Robert Chvatal, Allwyn’s chief executive officer, praised the performance of the group and spoke up about the potential for growth with the two newly acquired businesses.
Chvatal stated, “I’m pleased to report Allwyn delivered another strong quarter of growth, profitability and strategy progress.” We delivered organic revenue growth in all markets, and saw an increase in profit and cash flow generation due to the fact that this was our first full quarter as owners of recent acquisitions.
Chvatal spoke also of the ongoing digital growth within Allwyn’s company, saying that this will help drive growth on a long-term basis.
He said: “I’m happy to report that our good performance in existing geographies has been driven by strong growth in the digital space, where we’ve sustained our momentum in innovation and product development.”
“We continue to evolve the physical retail customer proposition and digitalise it. We saw a continued resilience in the demand for our products during the third quarter, despite a consumer spending environment that is still under pressure.
Allwyn’s impact of the Camelot acquisitions is clear
The group revenue reached EUR2.00bn in the three-month period ending 30 June for the first ever. EUR1,96bn of this total was gross gaming revenues, an increase of 115.3% over last year.
Without the two Camelot purchases, the total revenue would have been EUR1.02bn. It was 7.1% higher than the EUR953.1m revenue of the previous year. EUR979.8m was gross gaming revenue.
The UK is the leading market with revenues approaching EUR1.00bn
Allwyn’s Q2 performance was dominated by the UK. The region’s revenue was EUR980.3m. This is all attributed to gross gaming revenues related to the National Lottery.
The Italian revenue was EUR557.0m while Greece and Cyprus revenues were EUR521.0m. This is due to a strong digital performance.
Austria revenues reached EUR373.5m. Allwyn noted a strong performance in instant lotteries, casinos, video lottery terminals, and igaming. The EuroMillions jackpot cycle was shorter, which affected the numerical lotteries.
Allwyn also reported that its operations in the Czech Republic were successful, with its instant lottery and igaming products. Allwyn LS Group also contributed EUR47.1m to the Illinois state lottery.
Adjusted EBITDA rises 34.6%
Allwyn didn’t publish the full financial breakdown for the quarter but did provide details about EBITDA.
Operating EBITDA increased by 29.3%, to EUR357.2m. Adjusted EBITDA was up 34.6% at EUR381.0m.
The group reported EUR362.8m of adjusted free cash flows, an increase of 31.5%.
The first half of the story is similar.
In the six-month period ending 30 June, revenues almost doubled from EUR1.87bn EUR3.69bn. Without the impact of acquisitions, group revenue increased 11.8% to EUR2,09bn.
The UK’s revenue for H1 was EUR2.00bn. Italy’s revenue was EUR1.14bn. Greece and Cyprus generated EUR1.07bn. Austria’s revenue was EUR761.8m. The Czech Republic had EUR251.6m. Allwyn LS Group’s revenue was EUR93.6m.
Operating EBITDA grew by 26.3% to EUR686.6m, and adjusted EBITDA grew by 31.6% from EUR727.7m. The adjusted free cash flow for the first half increased by 30.0%, to EUR685.0m.
Chvatal stated that “we continued to deliver solid margins and free cash flow, with only limited impact of inflation to our cost base. Our largest cost categories are directly related to revenue, and we focus on cost- and capital efficiency.”
“I am generally very satisfied with Allwyn’s progress.” “I believe that we are in a good position for the remainder of 2023, and the next chapters in our growth story.”