Greek lottery and gaming business Intralot will use the company’s improved financial results as a “runway” to ramp up the group’s online and US expansion.
Intralot said its improved financial health would provide it with the space to develop its long-term goals of expanding its digital presence, particularly in North America.
“Intralot’s significantly improved financial results for the nine-month period reflect the benefits from the extensive business and capital structure reorganisation efforts during 2021 and 2022 along with healthy cash flow generation and profit margins that create stability and provide us the runway to deploy our plans on opportunities, particularly in the online domain, in the US and around the world,” said CEO and chairman Sokratis Kokkalis.
Intralot already offers online sports betting in Washington DC, offering the technology for the DC Lottery’s Gambet product. However, Gambet has largely struggled, with revenue a long way behind market leader Caesars.
Gross gaming revenue for the business increased by 5.0% to €256.6m (£220.2m/$267.5m) in the nine-month period ending 30 September.
Intralot’s improved financial results in part reflects the fruits of an extensive business and capital restructuring process that has been ongoing in the previous years.
This can be seen in the business’ earnings before interest, tax, depreciation or amortisation (EBITDA), which improved 6.6% to €88m in the period.
In particular, Intralot CFO Andreas Chrysos pointed to “the accumulation of the efforts that the management has undertaken on the cost side in the last few years, especially at the headquarters,” in the business’ Q3 earnings call.
However, Intralot’s total turnover – which includes earnings in addition to the amount staked on its B2C operations – fell 0.3% to €301.7m.
Positive and negative shocks for Intralot
Other factors in the company’s results includes the end of pandemic restrictions in Australia, the ramp of Intralot’s operations in Croatia, improved results in certain key markets, and the positive effects of exchange rate fluctuations – especially with the US and Australian dollars strengthening against the euro.
The business also faced negative shocks, including a reduction in revenue from the US and the company’s Maltese licence expiring.
In 2020-21, falls in lottery tickets associated with Covid lockdowns, as well as contract renegotiations in key led to a slump in revenue. Intralot subsequently took on a substantial debt burden in order to ensure that it could pay its existing obligations. During Q3, the total debt increased to €509.6m.
The restructuring, as well as Intralot’s strong cashflow generation in the quarter, has had a positive effect on the business’ debt burden. However, since the majority of the debt is denominated in euros, currency fluctuations have been a net negative to the business debt, even while the same forces have been a boon to the business on the revenue front.