INTRALOT announces +34.4% revenue growth

The pandemic impact for 1H21 has been contained. by INTRALOT.

09/10/21

INTRALOT’s strong performance continued into the second quarter of 2021, resulting in 106.5% growth of EBITDA in the first six months of the year.

Press release.- The international gaming solutions and operations company INTRALOT announces its financial results for the six-month period ended June 30th, 2021, prepared in accordance with IFRS.

INTRALOT Chairman & CEO Sokratis P. Kokkalis noted: “INTRALOT’s strong performance continued into the second quarter of 2021, resulting in 106.5% growth of EBITDA in the first six months of 2021 and 34.4% growth in revenue. These financial results, in combination with the completion of INTRALOT’s debt restructuring in the beginning of August, set the Company in a stable course to fulfill its potential in its key markets, build new partnerships, and tap on new opportunities under its new, significantly deleveraged capital structure, with a leaner operating model.”

Revenue

Reported consolidated revenue posted an ncrease compared to the first half of 2020, leading to total revenue for the six-month period ended June 30th, 2021, of €202.6m (+34.4%).

Lottery Games was the largest contributor to our top line, comprising 59.5% of our revenue, followed by Sports Betting which contributed 18.3% to Group turnover for the six-month period. Technology contracts accounted for 12.2% and VLTs represented 9.5% of Group turnover, while Racing constituted the 0.5% of total revenue for the first half of 2021.

Reported consolidated revenue for the six month period is higher by €51.9m year over year. The main factors that drove top line performance per Business Activity are:

€+21.0m (+52.2%) from our Licensed Operations (B2C) activity line. The increase was attributed to higher revenue in Malta (€+15.4m), with the variance attributable mainly to the COVID-19 impact in the first half of 2020; and Argentina (€+5.6m or +58.0% y-o-y), mainly impacted by the COVID-19 pandemic in the previous year, while partially offset by the adverse impact of the FX currency translation. In local currency, current year results posted a +126.4% y-o-y increase.

€+18.5m (+18.7%) from our Technology and Support Services (B2B/ B2G) activity line. The increase was attributed mainly to the strong momentum of the US operations (€+15.5m or +24.6% y-o-y), mainly driven by the continued growth in our Lottery operations, further boosted by a significant jackpot in January 2021 and higher merchandise sales in the current period, despite the effect from the adverse USD movement (10.0% Euro appreciation versus a year ago — in YTD average terms).

Also, it was atributed to Australia (€+1.9m), driven mainly by the higher COVID-19 impact in the first half of 2020,
while partially offset by a one-off merchandise sale in 1Q20; and sales from other jurisdictions (€+1.1m), favorably impacted by the lower COVID-19 impact in the current period and the launch of the new project in Croatia in 2Q21, while partially counterbalanced by lower merchandise sales vs. 1H20.

€+12.4m (+105.1%) from our Management (B2B/ B2G) contracts activity line. The variance was driven by the surplus from our Turkish operations (€+6.2m), driven by Bilyoner’s improved performance, favored by the strong growth of
the online market. In 1H21, the local Sports Betting market expanded close to 2.0 times y-o-y, with the online segment representing close to 89% of the market at the end of 1H21. Performance in Euro terms was partially mitigated by the headwinds in Turkish lira (33.1% Euro appreciation versus a year ago – in YTD average terms),

Also, it was driven by Morocco’s (€+3.7m) improved performance, due to the COVID 19 impact in 1H20; and the launch of US Sports Betting in Montana and Washington, D.C. in late 2020 (€+2.5m).

On a quarterly basis, revenue increased by 65.0% compared to 2Q20, leading to total revenue for the three-month period that started οn April 1st, 2021, and ended on June 30th, 2021, of €105.1m. Increased revenue for the quarter (€+41.4m) is primarily attributed to the significant y-o-y growth of our US operations in both Lottery and Sports Betting, the higher COVID-19 impact in 2Q20 across all key regions and especially in our operations in Malta, Argentina, Australia and Morocco, as well as the improved performance of Bilyoner in Turkey. The increased revenue y-o-y was only partially offset by the adverse FX currency movements and the one-offs from our new contract in Germany in 2Q20.

Constant currency basis: In 1H21, revenue – net of the negative FX impact of €21.2m – reached €223.8m (+48.4% y-o-y), while 2Q21 revenue, net of the negative FX impact of €9.4m, reached €114.5m (+79.8% y-o-y).

Other data

Operating Cash Flow at €51.3m in 1H21 (+183.4% y-o-y).
Group Net CAPEX in 1H21 was €9.5m, lower by 37.5% compared to a year ago.
Group Cash at the end of 1H21 at €83.2m.
Net Debt at €646.1m at the end of 1H21.
The Covid-19 pandemic impact for 1H21 has been contained in the vicinity of c. €1.5m at Group’s EBITDA level.
On August 3rd, 2021, INTRALOT announced the completion of the two consensual exchange offers resulting in extension of its 2021 Notes maturities by at least three years and achieving a total deleverage of €163m.
On August 24th, 2021, Fitch upgraded INTRALOT’s IDR to CCC+ and on September 9th, 2021, Moody’s upgraded INTRALOT’s CFR to Caa1, as a result of its new capital structure.