The Board of Directors of Lottomatica Group S.p.A. approved the Condensed Consolidated Interim Financial Statements for the nine months at 30 September 2023.
9M 2023 Results
- Bets of €21.7 billion, +19% compared to the same period pro forma1 in 2022 (+34% reported)
- GGR2 of €2,844.1 million, +7% compared to the same period pro forma in 2022 (+10% reported)
o Total Online market share: at 21.2% in Q3 (+3.8pp versus FY 2022)
o iSports market share: at 20.4% in Q3 (+3.1pp versus FY 2022)
o iGaming market share: at 21.7% in Q3 (+4.5pp versus FY 2022)
- Revenues at €1,194.9 million, +12% compared to the same period pro forma in 2022 (+17%
o Online at €374.0 million, +30% compared to 9M 2022 pro forma (+56% reported)
o Sports Franchise at €277.4 million, +10% compared to 9M 2022
o Gaming Franchise at €543.5 million, +3% compared to 9M 2022
- Adjusted EBITDA3 at €426.4 million, +15% compared to the same period pro forma in 2022 (+25% reported)
- Operating cash flow4 at €344.7 million
- Net financial debt at €1,248.1 million equivalent to 2.2x on LTM run rate Adjusted EBITDA5
- Guidance for fiscal year 2023 confirmed: €1,630 – 1,690 million of revenues, €570 – 590 million6 of Adjusted EBITDA, (c. 50% of Adjusted EBITDA contributed by the Online segment), c. €65 million of recurring capex, c. €45 million of concession capex, c. €30 million of one-off growth capex and c. €35 million of payable for potential deferred consideration.
Guglielmo Angelozzi, Chief Executive Officer of Lottomatica Group, commented: “In this third quarter we have consolidated our leadership position and our Online business has continued to grow market share across all product segments and brands. In the first nine months we reached €426 million of EBITDA, up 15% compared to the same period in 20227. We are on track to achieving our guidance for fiscal year 2023 and to continue to execute our strategy of organic and M&A growth.”
The Board of Directors of Lottomatica Group S.p.A. approved the Condensed Consolidated Interim Financial Statements for the nine months ended 30 September 2023.
Key consolidated results for 9M 2023
Please note that Betflag has been consolidated on the reported numbers (“rep”) since 1st December 2022. Thus, the first nine months of 2023 results are commented compared to the pro forma (“PF”) amounts for the same period of 2022 as if Betflag acquisition occurred on 1st January 2022.
Bets by segment
|€ million; %||9M 2023||9M 2022 PF 9M 2022 rep||YoY PF %||YoY rep %|
|Total Bets||21,711||18,287 16,190||+19%||+34%|
In the first nine months of 2023, Lottomatica collected bets for €21.7 billion, +19% compared to the same period pro forma in 2022 (+34% reported). The Online segment continued to outperform with bets up 37% compared to the same period pro forma of 2022 (+83% reported).
Revenues by segment
|€ thousands; %||9M 2023||9M 2022 PF 9M 2022 rep||YoY PF %||YoY rep %|
Revenues amounted to €1,194.9 million in the first nine months of 2023, compared to €1,066.5 million in the same period pro forma of 2022, with +12% increase pro forma (+17% reported). Excluding the impact of the unfavourable payout8, revenues in Q3 were up +11% compared to Q3 2022 pro forma, substantially in line with the growth rate of the first two quarters.
The Online segment totalled €374.0 million revenues in 9M 2023, +30% compared to the same period of 2022 pro forma (+56% reported), with a strong double-digit performance also in the third quarter driven by the market share growth across all product segments and brands. Excluding the impact of the unfavourable payout8, revenues in Q3 were up +40% compared to Q3 2022 pro forma.
The Sports Franchise segment reported €277.4 million in revenues in 9M 2023, up +10% compared to the same period of the previous year. Excluding the impact of the unfavourable payout7, revenues in Q3 were up +8% compared to Q3 2022 pro forma.
The Gaming Franchise segment revenues reached €543.5 million in 9M 2023, +3% compared to the same period of 2022. Revenues in Q3 decreased by -3% compared to Q3 2022, which benefited from the removal of Covid-related restrictions.
Adjusted EBITDA and margin by segment
|€ thousands, %||9M 2023||9M 2022 PF 9M 2022 rep||YoY PF %||YoY rep
|168,768 58.6% 139,548 58.3%
79,169 31.3% 79,169 31.3%
123,612 23.5% 123,612 23.5%
|Adj EBITDA||426,381 35.7%||371,549 34.8% 342,329 33.6%||+15%||+25%|
Adjusted EBITDA reached €426.4 million in the first nine months of 2023, +15% compared to the same period pro forma of 2022 (+25% reported). Adjusted EBITDA margin reached 35.7% on revenues, compared to 34.8% in the same period pro forma of 2022 (33.6% reported) driven by the higher contribution of the Online business.
Excluding the impact of the unfavourable payout7, Adjusted EBITDA in Q3 was up +18% compared to Q3 2022 pro forma, in sequential acceleration compared to the first two quarters.
Operating cash flow
|€ thousands||9M 2023||9M 2022 rep|
|Operating cash flow||344,726||297,826|
Operating cash flow in the first nine months was €344.7 million, compared to €297.8 million for the same period in 2022, as a result of the increase in Adjusted EBITDA partially offset by concession payments.
Net financial debt
Net leverage 2.2x
Net financial debt amounted to €1,248 million as of 30 September 2023, equivalent to a net leverage of 2.2x on LTM run rate Adjusted EBITDA9.
Management will hold a conference call at 10:00 CET on 31 October 2023 to comment the consolidated results to the market. The event can be followed:
- Via phone: +39 02 802 09 11 or +44 121 281 80 04 or +1 718 705 87 96
- Via Webcast
The manager in charge of preparing the company’s accounting documents, Laurence Lewis Van Lancker, declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Finance Act, that the accounting information contained in this press release corresponds to the documented results, books and accounting records.
ZEAL to streamline Executive Board as Sönke Martens leaves as CCO
After almost 10 years with ZEAL, Sönke Martens, Chief Commercial Officer of ZEAL, has decided not to extend his Board contract expiring end of June 2024. Going forward, ZEAL Network SE will streamline its Executive Board to three members effective 1st December 2023.
Sönke Martens will step down from his position on the ZEAL Executive Board effective from 30 November 2023. He will continue to serve ZEAL until the end of February 2024 to ensure a seamless transition of his responsibilities to respective management leaders of ZEAL.
“I would like to thank Sönke Martens for his relentless dedication towards ZEAL and its brands LOTTO24 and Tipp24 in the past years.”, said Peter Steiner, Chairman of the Supervisory Board of ZEAL Network SE. “With his innovative spirit, he has shaped ZEAL’s culture and made significant contributions to making ZEAL a best-in-class e-commerce company and the market leader for online lotteries”
Helmut Becker, Chief Executive Officer of ZEAL Network SE: “On behalf of the entire Executive Board I would like to extend my gratitude and best wishes to Sönke for his passion and startup spirit he brought to the company. Only this year, he and his team successfully launched the biggest marketing campaign in the history of LOTTO24. Under his leadership ZEAL tripled billings in the core business, successfully integrated the LOTTO24 and Tipp24 businesses, and achieved a significant improvement in customer lifetime values and the way we win new customers. We regret his decision to leave ZEAL and pursue entrepreneurial opportunities outside of ZEAL, and wish him the best for the future.”
Sönke Martens has been part of the ZEAL Group since 2014. He held various management positions, initially as Head of Product, later as Managing Director responsible for the operational business and, among other things, shaped the multi-brand strategy following the LOTTO24 takeover. Since July 2021 he serves as member of the Executive Board of ZEAL. In his role he was responsible for product management, marketing and customer operations, data science, as well as the German LOTTO24 business and ZEAL Iberia.
Elys Game Technology Bets Big on U.S. Market with Third Location
Elys Game Technology Corp. is a growing sports betting and iGaming platform globally in regulated B2B and B2C markets. In particular, the online gaming platform has achieved success in the robust Italian market in part by bringing sports betting to small business venues, and it is now aggressively expanding across North America and setting up new trends in the evolving U.S. sports betting landscape.
The small business sportsbook model could provide Elys with the leverage to be a significant challenger to more established players like DraftKings, FanDuel, and BetMGM.
Whenever a new company enters a market, it’s important for investors to look at its competitive advantages. These advantages are what will attract customers and help the company win market share away from its competitors. In Elys’ case, it has two key advantages.
Advantage 1: Small Business Sportsbooks
Elys Game Technology offers a convenient way for small businesses to offer cost-effective sports gambling to their most loyal customers.
This model has already proved successful at Elys’ first U.S. location – Grand Central Sportsbook in Washington D.C. The company reports that the location has been a significant revenue driver for the company, averaging $67,500 per month in Gross Gaming Revenue (GGR) for the operator, which is approximately 700% above initial expectations. Its success has also encouraged Elys to open two more locations in D.C.
While major companies like DraftKings and FanDuel are spending hundreds of millions to dominate the national conversion, Elys is winning customer loyalty by going local.
Advantage 2: The “Best Odds” Model
Elys Game Technology has also won favor among bettors due to its unique “best odds” approach. The “best odds” model is an odds-making strategy aimed at attracting and retaining clients by providing the most competitive odds on various sporting events. This approach prioritizes long-term customer loyalty over short-term market share growth. It is another example of how Elys is going against the grain of the industry.
Most major players in the industry have won market share by spending millions on marketing campaigns and offering steep customer promotions. But, while promos might drive short-term signups, they do not always lead to long-term customer loyalty.
If Elys Game Technology’s “best odds” model proves to offer a better customer experience, then it could help the company dethrone larger competitors as America’s preferred sports betting platform.
Sports Betting in the US
In 2018, the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA). This paved the way for each state to determine its own sports betting laws. Since then, legal sports betting has taken off in the US.
30 states have already legalized sports betting in some capacity. Revenue from legalized online sports betting is projected to hit $7.62 billion this year, according to Statista.
By 2027, this market is expected to reach $31.09 billion, growing at a compounded annual growth rate (CAGR) of 12.89% over 2023-2027.
Statista estimates that just under 50 million Americans will participate in sports gambling by 2027, roughly 19% of the adult population.
To understand the popularity of sports betting in the US, investors should look no further than the success of the National Football League (NFL). The NFL Championship – the Super Bowl – routinely draws in around 100 million viewers. And, of the 50 most valuable sports franchises in the world, 30 are NFL teams.
Sports betting will likely continue to grow in America, thanks in large part to the popularity of the NFL. As sports betting becomes more mainstream, providers like Elys, with their extensive experience in the industry, appear well positioned to join in the success.
Elys Game Technology U.S. Expansion Plans
Elys Game Technology recently announced plans to expand its footprint in Washington D.C. by adding a third location on H Street. This new location will build on the success of Elys’ other two D.C. locations: Grand Central Sportsbook and the Cloakroom Gentlemen’s Club Over Under Sportsbook Lounge.
Elys plans to use this D.C. base to expand sequentially into the following states:
Once it has established a foothold in local bars/restaurants, Elys will have plenty of room to expand its offering outside of just sports betting. This is because it offers a full suite of omnichannel leisure gaming products and services including online casino and slot games, poker, bingo, lottery, and more interactive gambling games.
National Lottery Heritage Fund Supports Dean Heritage Centre
A collaborative project involving University of Gloucestershire, the Dean Heritage Centre and local volunteers and schools to establish a unique literary collection, has been awarded £133,8867 by the National Lottery Heritage Fund.
The literary papers of past Forest of Dean writers will be conserved and made available to researchers, schools and the public.
The new project will bring together a unique collection of material spanning more than 200 years, some written in local dialect, that reflects the landscape, people and places of the Forest of Dean.
The Forest of Dean Writers Collection will complement Dean Heritage Centre’s archive of British television playwright Dennis Potter (1935-1994), which was also the product of previous work with the University.
The two-year-long project will see the original handwritten manuscripts, including poems, novels, play scripts, notebooks, drawings and photographs held by descendants from all over the UK and the US, become part of the Forest community museum’s permanent collection.
Specialists from University of Gloucestershire will work with museum staff and local volunteers to research and catalogue the more than 400 unique items making up the new collection, while a series of events and exhibitions will showcase the fascinating new material.
Schools will have access to the collection’s literary, historical and dramatic content, to give their cross-curriculum work a local flavour and raise literary aspirations.
Among the unique material making up the new collection are previously unknown poems by “Forest Poetess” Catherine Drew (1784-1867); work by poet, biographer and literary editor Leonard Clark OBE (1905-1981); books once belonging to war-poet FW Harvey (1888-1957; a never-before seen novel by Valerie Grosvenor Myer (1935-2007) better known as an academic and biographer; a memoir by former collier and farmer Fred Boughton (1897-1985) written in Forest dialect with parallel “Queen’s English” translation.
Many of the papers were discovered by Dr Jason Griffiths and Dr Roger Deeks during their research for the University’s “Reading the Forest” project that was launched in 2015 to engage the public with the work, life stories and achievements of writers and poets from the Forest.
Dr Jason Griffiths said: “We’re so thrilled to hear we’ve received this support from the Heritage Fund. Thanks to The National Lottery players, more people will learn about the Forest of Dean’s rich and distinctive literary heritage.
“The work of these authors is of intense local interest, but it is also part of a much wider national body of work that captures the rich texture of this country’s fascinating places and people.”
Dr Roger Deeks said: “The literary heritage of the Forest of Dean is an important part of its wider cultural heritage. Many of these writers overcame economic hardship and class prejudice to achieve what they did. The story of their lives and careers will inspire young Foresters.”
Dean Heritage Centre manager, Mark George, said: “This new collection plays an important part in our plans to diversify the museum’s displays and the new stories we tell about the Forest’s history. It will bring new visitors to the Centre too.”
Nicola Wynn, head of collections at Dean Heritage Centre, said: “This is fantastic news. I am so looking forward to working with this new collection. Alongside our existing Dennis Potter archive, this new material demonstrates the incredible depth of creative talent that has come out of the Forest of Dean over the years.
“Engaging young people with this work could create a whole new generation of Forest writers and poets.”
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