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Allwyn generates EUR2bn in revenue quarterly after gaining National Lottery License

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Allwyn International is expecting to report Q1 revenues of over EUR2bn ($2.17bn/£1.70bn/£2.17bn), when it releases its first quarter results after becoming UK’s National Lottery Licensee.

Allwyn stated in a recent trading update that gross gaming revenues (GGR) could reach EUR2,05bn for the time period up to 31 March, 2024. In the lower range, EUR2bn still represents almost $500m over Q1 2023.

Allwyn purchased UK National Lottery Operator Camelot on March 20, 2023, and was licensed to operate the UK National Lottery by 1 February 2024. This acquisition enabled Allwyn’s GGR to increase by 97.5% in 2023 and total EUR7.87bn.

The group outlined a solid GGR trend in most markets, as well as UK contributions for Q1 2024. Allwyn stated that this was a reflection of its focus on organic growth.

Austria’s GGR increased year on year during the third quarter. This was largely due to a positive performance by igaming. The Czech Republic saw a GGR increase of double-digits on an annual basis, based on constant exchange rates (FX). The growth was due to the fact that all of the major products were growing. FX was a six-point headwind, which resulted in a mid-single digit growth percentage on a reported base.

Numerical Lotteries performed better than the UK GGR on an annual basis.

Allwyn’s growth is constrained by marketing costs

When its preliminary, unaudited results are announced on the 7th of June, adjusted EBITDA is expected to be between EUR355m and EUR365m. The 2023 EUR346.7m figure would have been slightly higher.

The growth in adjusted EBITDA was supported by an increase of equity method investors. The boost in EBITDA was offset partially by increased marketing costs for new products and personnel costs.

The UK result was a strong showing in January. This month marked the end of the old licence. Allwyn’s profitability dropped significantly from the 1st of February, due to a change in profitability measures.

CAPEX in Q1 2020 was EUR45.0m, an increase of EUR20.5m on the previous year. This was due to increased investment in the UK. The increase was to support Allwyn’s plan to transform the UK National Lottery. Other segments saw CAPEX remain flat.

Allwyn “well positioned” says CEO

Robert Chvatal said that the success of Allwyn in 2024 will be a result of its first quarter.

He said that “2024 is off to a good start, and trading has been in general line with expectations.” This reflects our continued focus on delivering our growth strategy and good financial and operational performance.

The first quarter saw a solid growth in GGR. Allwyn has successfully begun the new 10-year license period for the UK National Lottery. Our adjusted EBITDA has continued to improve. Allwyn is well-positioned to grow into 2024.

Allwyn signed an agreement in Q1 to buy a 70 percent stake of the online content creator Instant Win Gaming.

IWG provides online instant-win games to over 25 state and national lotteries in the United States. IWG’s content portfolio currently contains over 250 titles. IWG’s EBITDA for the fiscal year ending 30 April 2023 was PS18.2m ($22.9m/EUR21.3m).

A loan of $450m has been announced

Allwyn International announced that Allwyn Entertainment Financing has launched a new offering for a Term loan B. The amount of the principal is $450m.

The proceeds of the offering will allow Allwyn Entertainment Financing UK plc to fully redeem the EUR400m principal outstanding on the Floating Rate notes due 2028. The proceeds will be used to pay for the costs and fees incurred by Allwyn Entertainment Financing (UK) plc in relation to this offering, as well as general corporate purposes. It is anticipated that a substantial part of the proceeds will be converted to EUR at floating rates.

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