International Game Technology said that it met all its financial goals in its 2022 financial year despite a decline in its core Global Lottery section.
The tech giant was able reduce costs in the business to align with its strategy. Group revenue was also higher year-over-year with growth within its Global Gaming and PlayDigital businesses.
Although IGT reported a decrease in Global Lottery operations in 2022, the group stated that 2022 was a year with “significant” financial accomplishments. The business is also in a strong position in all segments going into 2023.
Vince Sadusky, chief executive of IGT, stated that “We reached all our financial goals last fiscal year while strengthening product leader positions across our Global Lottery and Global Gaming activities.”
“IGT has become a company with better growth prospects, a better profit profile, and a solid track to achieving our long-term goals through strategic work over the past few years.
It has also allowed record capital returns for shareholders in 2022. We are in a strong position with good momentum across all business segments and we enter 2023.
Beginning with IGT’s performance in the fourth quarter and revenue for the three months to 31 December was $1.09bn (PS906.5m/EUR1.03bn), up 4% from $1.05bn in the corresponding period in the 2021 financial year.
Global Lottery revenues fell 7% to $639m due to strong multi-jurisdictional jackpots and product sales. However, the impact of Italian commercial service sales offset this.
Global Gaming revenue rose 21% to $389m thanks to growth across all service revenue streams. PlayDigital climbed 56% to a record $65, due to organic growth and market expansion, and contributions from the iSoftBet purchase.
Geographic performance: $714m of total revenue in Q4 was generated by US activities, while $226m was generated by Italy, and $153m for the rest of the world.
Operating expenses were stable at $863m. However, non-operating costs rose 114.7% at $161m. Pre-tax profit was $70m, a 36.9% decrease from $111m the year before.
IGT paid $101m tax and also accounted a $34m profit form non-controlling interest which was taken out of the final total left a net loss of PS64m attributable IGT for the quarter. This contrasts to a $19m profit for 2021. The adjusted EBITDA however was higher at $419m, which is 8% more.
How did this impact IGT’s full year performance? Revenue for the twelve months ended 31 December rose 3%, from $4.09bn up to $4.23bn.
Segment performance was similar to Q4, with Global Lottery revenues down 8% to $2.60bn from lower same-store sales and the impact of Italian services sales.
Global Gaming revenue grew 28% to $1.40bn. This was due to significantly higher US and Canada replacement unit sales and increased installed base yields. PlayDigital grew 27% to a record $309m. This is due to igaming organic and market expansion, and the iSoftBet agreement.
US and Canada operations contributed $2.55bn to group revenue. Italy revenue was $1.06bn, and the rest of the world revenue was $618m.
Operating expenses rose 3.6% to $3.30bn. However, interest expenses decreased by 10.7% to $233m.
Pre-tax profit increased 11.3% to $589m. However, after accounting for $175m income tax payments and subtracting $139m profit from non-controlling interest, this resulted in a net profit attributable IGT of $275m. This is 43.0% less year-on-year. The adjusted EBITDA fell 1% to $1.66bn in the same year.
Max Chiara, chief financial officer at IGT, stated that “2022 was yet another year of significant financial achievements.” IGT’s greatly improved earnings power is highlighted by 2022 adjustedEPS, which highlights IGT’s lower interest expense and higher effective tax rate.
“We created strong cash flow and funded future growth investments with increased funding. This, combined with the proceeds from non-core business sales, enabled us to significantly reduce our debt and leverage to their lowest levels.
“The company’s improved credit profile and substantial liquidity provides solid support and flexibility for us as we execute our multiyear plan.”