Czech-based lottery group Allwyn International announced its preliminary results for the first quarter of 2023, posting a huge increase in revenue to reflect strong organic growth across all existing markets.
Driving Organic and Inorganic Growth
For the three months ended March 31, 2023, Allwyn registered total revenue of €1.65 billion ($1.78 billion), up 80% compared to the group’s Q1 2022 revenue figure. The increase Allwyn attributed mainly to the acquisitions of Camelot UK and Camelot LS Group both of which concluded during the reported quarter.
Commenting on the results, Allwyn’s chief executive officer, Robert Chvatal, was pleased to see the business perform strongly from the beginning of the year, driven by its “ongoing focus on driving organic growth” alongside progress in its inorganic growth strategy, stressing that all seven lottery markets contributed to the result.
The completion of two landmark acquisitions in the first quarter underscores our continued success in executing our inorganic growth strategy.
Robert Chvatal, CEO, Allwyn
Chvatal noted that the acquisition of Camelot UK ensured the operation of the UK National Lottery over the next decade, while Camelot LS Group opened the door to the US market.
Excluding the effect of both acquisitions, consolidated revenue was €1.07 billion ($1.16 billion), registering an increase of 17% year-over-year. Consolidated Adjusted EBITDA was €325.5 million ($351.5 million), up 20% from Q1 2022.
The increase was attributed to the further progress in digital channels and Allwyn’s customer proposition in physical retail and was supported by ongoing product and technology innovation. The result was also influenced by the negative pandemic impact in Q1 2022.
On a pro-rata basis, total revenue was €2 billion ($2.16 billion), posting an increase of 176% year-over-year, while Adjusted EBITDA posted an increase of 62% to €280.2 million ($302.6 million), highlighting further the massive impact of both acquisitions.
In fiscal 2022-23, Camelot UK experienced a remarkable year in sales and revenue growth, achieving its second-best annual profit since its launch in 1994 and surpassing the previous year’s result by almost £100 million ($126 million).
Differing Business Models, Inflation, Energy Cost
Allwyn stated that the business models of both Camelot UK and Camelot LS Group differ from those of their other existing markets making consolidated metrics incomparable directly to prior periods. Furthermore, as both acquisitions were completed during Q1 2023, future quarter comparisons will be also affected.
Another factor that influenced the results was the impact of inflationary pressures on the general consumer sentiment, albeit very limited, due to resilient revenues supported by the low price point of Allwyn’s products, low average spend per customer, and a large number of regular players.
Last, profitability was supported by the low proportion of energy in the company’s cost base while a significant portion of the cost base is directly linked to revenues.
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