Allwyn reported that taking over the UK National Lottery in the first quarter had an impact on the operations of the group. The company saw a 28,1% increase in revenues year-on-year.
The revenue for the quarter ending 31 March was EUR2.11bn ($2.30bn/£1.80bn). Allwyn’s Q1 revenue of EUR1.65bn was significantly lower than the EUR2.11bn it posted for the same period last year. This figure is in line with the earlier guidance.
The gross gaming revenue, or revenue generated from gambling activities, increased by 27.1%. Allwyn reported an increase of 16.0% in its net revenues for the third quarter, which totaled EUR940.9m.
Robert Chvatal, the CEO of Allwyn says that the National Lottery was the primary catalyst for the growth. Allwyn replaced Camelot as the National Lottery’s operator on February 1, replacing Camelot which ran it since 1994.
Allwyn is now responsible for the National Lottery’s operations and all its products. Allwyn is now responsible for all National Lottery operations and products, including online and retail sales of the main Lotto drawing as well as Set For Life Thunderball Hotpicks. This also covers scratchcards, UK access to EuroMillions and Set For Life.
Chvatal called the transition a major milestone in Allwyn’s history. He was also pleased with the success of the company’s first months in operation.
Chvatal stated that this was the culmination of years of hard work by teams from all over our world. We’re thrilled to announce that we have begun work on the transformation of The UK National Lottery, which will benefit all stakeholder groups.
Allwyn hails M&A impact
Chvatal highlighted the recent M&A activities and their impact on Q1 performance.
In February 2023, the group acquired Camelot UK (the former operator of National Lottery). The group also purchased Camelot Lottery Solutions, or Camelot LS, earlier in 2023. Allwyn LS Group is the new name for Allwyn’s US business.
Allwyn was able to prepare fully for the National Lottery. Allwyn found the Camelot UK purchase to be particularly useful. It gave it insight into how lottery operations work before taking over.
Revenue would only have been 3.0% greater in Q1 if you exclude the UK operations and Allwyn LS.
In Q1, Allwyn built on its success by purchasing a 70 percent stake in Instant-Win Gaming. Chvatal, who is backing this purchase in order to extend Allwyn’s reach globally, focuses on the global expansion of the deal.
We continue to grow our capabilities and footprint through our organic growth strategy.
In Q1, digital dreaming is a big deal.
Chvatal identified other factors in the Q1 picture that contributed to growth. This includes further expansion of its digital business in various markets.
Eurojackpot was launched in Greece. Chvatal claims that this is the first multi-national game available to Greek players.
Chvatal also said that Allwyn continues to demonstrate progress with regards to customer loyalty programs and digitalisation in retail.
This, along with the UK development and Allwyn LS purchase, pushed revenue and adjusted EBITDA higher year on year. The adjusted EBITDA margin was 38.0%, and the EBITDA increased by 141.6%.
Allwyn also strengthened its financial position in Q1, by signing EUR500.0m accordion facility under its Senior Facilities Agreement. The efforts to strengthen Allwyn’s financing continued even after the quarter ended, as a recent $450.0m syndication term loan B was completed.
Chvatal stated, “This is our first term loan B deal. This further diversifies our capital access.” I am pleased to say that existing and new lending institutions supported both transactions.
Overall, I’m pleased with how the new year has started. “I believe we’re well positioned for 2024, and our next growth chapters.”
