The CFO of Italian gaming operator Lottomatica said the operator would consider acquisitions, but only if it sees the right opportunity, after a successful Q2 allowed the business to increase its cash holdings and reduce its debt.
Lottomatica in its current form is a relatively new entity: having been created as a gaming multi-national IGT sold its Lottomatica-branded B2C operations to Gamesnet Group – which then adopted the Lottomatica brand.
As a result, much of the revenue and profit growth was due to the acquisition.
Revenue was up by almost 350%, to €801.0m.
Online revenue grew from €128m to €164m for the period of six months ending 30 June, a 27.3% increase, while retail betting grew from €10m to €174m, and gaming machines segment from €40m to €463m – both representing an over tenfold increase due to the sector’s 2021 affection by Covid-era changes in consumer behaviour and government enforced shutdowns of retail premises.
The operator reported a €61m profit for the six-month period from 31 December 2021 to 30 June 2022 as opposed to losses of €54m and €67m for the two previous six-month periods respectively.
In Q2, the business recorded earnings before interest, tax, depreciation and amortisation (EBITDA) of €234m, compared to EBITDA of €125m for Q1.
The growth was driven by both strong online growth and a recovery of the businesses retail operations which were affected by the covid-19 pandemic.
Online accounts now account for 39% of total EBITDA compared to 16% in H1 2019, a long-term trend accelerated by social changes wrought by the pandemic.
The report also heralded the positive regulatory outlook due to the Italian government’s 11 July decision to extend Italian betting concessions a further two years until 2024, amid a wider Italian gambling reform effort.
Lottomatica additionally noted the success of its integration efforts in which the business migrated its retail and digital offerings to a single platform, merged its Lottomatica Scommesse and GoldBet divisions and rolled out a single shopfront virtual betting product.
The strong Q2 showing led to higher cash reserves and lower debt, and therefore created questions during the earnings call regarding the company’s M&A appetite.
“We are actively monitoring the market, assessing those assets with the same approach we have previously discussed. But for now there is no update. When there is an update we will clearly communicate to the market that is what we want to do,” said chief financial officer Laurence van Lancker.
Van Lancker continued arguing that there needed to be a business case for an acquisition.
“We don’t want to do acquisitions for the sake of EBIDTA or the sake of growth, we want to have a profitable, sustainable and disciplined growth for the right conditions – but we keep on being very active in this space.”
