INTRALOT S.A. INTEGRATED LOTTERY SYSTEMS AND SERVICES INTRALOT Group
ANNOUNCEMENT
OF FINANCIAL RESULTS
for the nine-month period ended September 30th, 2023
Public
PRESS RELEASE
"INTRALOT announces Earnings €9m with 15% EBITDA growth at €101m and operating cash flow growth 44% at €97.6m y-o-y in 9M23"
November 24th, 2023
INTRALOT SA (RIC: INLr.AT, Bloomberg: INLOT GA), an international gaming solutions and operations leader, announces its financial results for the nine-month period ended September 30th, 2023, prepared in accordance with IFRS.
OVERVIEW
Group Revenue at €280.0m in 9M23 (-7.2%y-o-y).
EBITDA at €101.0m (+14.7% y-o-y) in 9M23, with EBITDA margin reaching 36.1% from 29.2% in 9M22. On a quarterly basis, 3Q23 vs. 3Q22, EBITDA posted an increase of 15.9%.
LTM EBITDA rose to €135.8m, up by 10.5% vs FY22. EBT in 9M23 shaped at €32.1m vs. €19.4m in 9M22.
NIATMI (Net Income After Tax and Minority Interest) at €9.0m, vs. €-0.5m a year ago.
Operating Cash Flow at €97.6m in 9M23 (+44.1% y-o-y).
Group CAPEX in 9M23 was €22.2m.
Group Cash at the end of 9M23 at €122.0m.
Net Debt at €458.2m at the end of 9M23, lower by €32.3m vs. Dec-22 and €51.5m vs. 9M22. Net Leverage ratio at 3.4x in 9M23 vs. 4.0x in FY22 and 4.4x the respective period last year.
On a pro-forma basis after the completion of the Share Capital Increase of €135.0m, Group Equity stands at €49.0m and Net Leverage Ratio at 2.4x. Gross Debt stands at €454.2m after repayment of €126.0m.
On October 30, 2023, INTRALOT announced the successful completion of Share Capital Increase by raising funds of a total amount of €135,000,000.18 and the issuance of 232,758,621 new, common, dematerialized, registered, voting shares, with a nominal value of €0.30 each.
On October 31, 2023, INTRALOT announced the extension of its agreement with OPAP from 01.08.2025 till 31.07.2026. INTRALOT and OPAP further agreed to grant OPAP the right to exercise two further one- year extension options, under the same terms, to 31.07.2027 and 31.07.2028 respectively.
On November 8, 2023, the New Shares raised from the Share Capital Increase were admitted and commenced to be traded in the Main Market of the Athens Stock Exchange, while the same day the shares of the Company were transferred from the surveillance segment to the Main Market of the Stock Exchange.
On November 15, 2023, INTRALOT announced that its 100% subsidiary INTRALOT CAPITAL LUXEMBOURG SA completed the early partial redemption of €126,000,000 in principal amount, plus accrued interest, of the outstanding 5.250% Notes due September 2024, with previous outstanding balance of €355,568,000.
Note:
Due to rounding, numbers presented throughout this, and other documents may not add up precisely to the totals.
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Group Headline Figures | ||||||||||
% | % | |||||||||
(in € million) | 9M23 | 9M22 | 3Q23 | 3Q22 | LTM | |||||
Change | Change | |||||||||
Revenue (Turnover) | 280.0 | 301.7 | -7.2% | 104.8 | 96.9 | 8.1% | 371.1 | |||
GGR | 262.2 | 256.6 | 2.2% | 98.6 | 88.1 | 11.9% | 349.5 | |||
OPEX1 | (76.5) | (70.2) | 8.9% | (29.6) | (20.8) | 42.6% | (106.1) | |||
EBITDA2 | 101.0 | 88.0 | 14.7% | 38.2 | 33.0 | 15.9% | 135.8 | |||
EBITDA Margin (% on | 36.1% | 29.2% | + 6.9pps | 36.5% | 34.0% | + 2.4pps | 36.6% | |||
Revenue) | ||||||||||
EBITDA Margin (% on | 38.5% | 34.3% | + 4.2pps | 38.7% | 37.4% | + 1.3pps | 38.9% | |||
GGR) | ||||||||||
Capital Structure | - | (1.1) | -100.0% | - | (0.8) | -100.0% | (0.1) | |||
Optimization expenses | ||||||||||
D&A | (48.6) | (53.8) | -9.7% | (16.7) | (17.2) | -3.2% | (64.8) | |||
EBT | 32.1 | 19.4 | 65.8% | 15.8 | 11.3 | 39.3% | 42.5 | |||
EBT Margin (%) | 11.5% | 6.4% | + 5.1pps | 15.1% | 11.7% | + 3.4pps | 11.5% | |||
NIATMI | 9.0 | (0.5) | - | 4.6 | 0.1 | 6820.9% | 21.4 | |||
Total Assets | 603.1 | 620.9 | - | - | - | - | - | |||
Gross Debt | 580.2 | 608.4 | - | - | - | - | - | |||
Net Debt | 458.2 | 509.6 | - | - | - | - | - | |||
Operating Cash Flow | 97.6 | 67.7 | 44.1% | 47.8 | 26.3 | 81.8% | 126.1 | |||
from total operations | ||||||||||
CAPEX | (22.2) | (15.2) | 46.0% | (8.2) | (4.7) | 73.0% | (33.5) | |||
Adjusted Equity following Share Capital Increase | ||||||
SCI | ||||||
(in € million) | 9M23 | SCI Fees (est.) | Pro-Forma | |||
Share Capital | 111.4 | 69.8 | 0.0 | 181.2 | ||
Share Premium | 62.1 | 65.2 | (4.5) | 122.7 | ||
Other Equity Elements | (274.6) | 0.0 | (0.1) | (274.7) | ||
Total Equity attributable | ||||||
to Shareholders of the | (101.1) | 135.0 | (4.7) | 29.3 | ||
Parent | ||||||
Non-Controlling Interest | 19.7 | 0.0 | 0.0 | 19.7 | ||
Total Shareholders' | (81.4) | 135.0 | (4.7) | 49.0 | ||
Equity | ||||||
Net Leverage ratio | 3.4x | 2.4x | ||||
- OPEX line presented excludes the capital structure optimization expenses.
- The Group defines "EBITDA" as "Operating Profit/(Loss) before tax" adjusted for the figures "Profit/(loss) from equity method consolidations", "Profit/(loss) to net monetary position", "Exchange Differences", "Interest and related income", "Interest and similar expenses", "Income/(expenses) from participations and investments", "Write-off and impairment loss of assets", "Gain/(loss) from assets disposal", "Reorganization costs" and "Assets' depreciation and amortization".
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INTRALOT Chairman & CEO Sokratis P. Kokkalis noted:
"9M2023 results demonstrate Intralot's new strengths returning to Net profits, strong Ebitda growth
and cash flow generation, hence fulfilling all the goals we have set out. We have recently completed
an important Share Capital Increase via rights issues of €135m that attracted wide support
demonstrating that Intralot represents a very attractive investment case. I would like to thank all the investors who participated and trusted our vision and capability to deliver even stronger results in
the future. "
OVERVIEW OF RESULTS
REVENUE
Reported consolidated revenue posted a decrease compared to 9M22, leading to a total revenue for the nine-month period ended September 30th, 2023, of €280.0 (-7.2%). Excluding the impact from the discontinuation of Malta license, underlying revenue from continuing operations increased by 8.6%.
- From a contribution perspective, Lottery Games remain our largest contributor to Group turnover with a share of 56.8%, followed by Sports Betting with a share of 19.0%, Technology contracts with a share of 12.3% and VLTs monitoring with a share of 11.8%.
- Reported consolidated revenue for the nine-month period is lower by €21.7m year over year. The main factors that drove top line performance per Business Activity are:
- €-49.2m(-59.8%) from our Licensed Operations (B2C) activity line with the variance driven by:
- Absence of revenue in Malta (€-43.9m) due to the license expiration early July 2022 and
- Lower revenue in Argentina (€-5.3m or
-13.8%) affected by the adverse impact of the FX currency translation. In local currency, current year results posted a +120.9% y-o-y increase.
- €+16.6m (+46.9%) from our Management (B2B/ B2G) contracts activity line with the variance driven by:
- Strong momentum of our Turkish operations (€+16.0m or +77.1%), driven by Bilyoner's improved performance, favored by the growth of the online market. In 9M23, the local Sports Betting market expanded close to 1.9 times y-o-y. Performance in Euro terms was partially mitigated by the headwinds in Turkish lira (+60.6% Euro appreciation versus a year ago),
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- Higher revenue from our US Sports Betting contracts (€+0.3m or +8.2%) and
- Higher revenue in Morocco (€+0.2m or +2.2%).
- €+10.9m (+5.9%) from our Technology and Support Services (B2B/ B2G) activity line, with the variance driven by:
- US operations' increased revenue (€+4.6m or +4.1% y-o-y), as 9M23 performance was supported by the growth in the categories of Numerical, i-Lottery and Instant games,
- Higher revenue in Croatia (€+3.5m or +64.2%) as a result of the local market growth,
- Higher revenue from rest jurisdictions (€+3.1m or +6.3%) triggered by the new Lottery contract in Taiwan and
- Lower revenue in Australia (€-0.4m or -2.4%) impacted by the negative FX movement (7.7% Euro appreciation versus a year ago - in YTD average terms).
- On a quarterly basis, revenue increased by 8.1% compared to 3Q22, leading to total revenue for the three-month period that started οn July 1st, 2023, and ended on September 30th, 2023, of €104.8m. Increased revenue for the quarter (€+7.8m) is primarily attributed to the favorable y-o-y sales improvement of our operations in Turkey (Bilyoner) and Croatia, coupled also with the sale from our new contract in Taiwan. However, the sales surplus in 3Q23 was partially offset by the top line under-performance in Argentina.
GROSS GAMING REVENUE & Payout
- Gross Gaming Revenue (GGR) concluded at €262.2m in 9M23, posting an increase of 2.2% (or €+5.6m) year over year. License expiration in Malta and the higher payout ratio in Argentina (- 63.0% y-o-yon wagers from licensed operations3) did not manage to absorb the increased top line contribution of our operations in Turkey and US, along with the sale in Taiwan. 9M23 Payout Ratio4 was higher by 4.0pps vs. 9M22 (62.6% vs. 58.6%). In 3Q23, GGR increased by 11.9% (or €+10.5m y-o-y).
- Licensed Operations Revenue also include a small portion of non-Payout related revenue, i.e., value-added services, which totaled €4.5m and €5.2m for 9M23 and 9M22 respectively, and €1.6m and €2.2m for 3Q23 and 3Q22 respectively.
- Payout ratio calculation excludes the IFRS 15 impact for payments to customers.
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OPERATING EXPENSES5 & EBITDA6
- Total Operating Expenses ended higher by €6.3m (or +8.9%) in 9M23 (€76.5m vs. €70.2m) as a result of rising expenses in USA and Turkey in order to support top line growth. On a quarterly basis, Operating Expenses posted an increase of €8.8m (or +42.6%) in 3Q23 (€29.6m vs. €20.8m in 3Q22).
- Other Operating Income ended at €21.7m presenting an increase of 20.9% y-o-y (or €+3.8m). On a quarterly basis, Other Operating Income exhibited an increase of 11.1% or €+0.7m.
- EBITDA developed to €101.0m in 9M23, posting an increase of 14.7% (or €+13.0m) compared to 9M22. Strong EBITDA growth was achieved through top line boost across key regions (mainly Turkey, USA and Croatia), combined also with the equipment and services sale in Taiwan. EBITDA improvement was in part counterbalanced by increased operating expenses and the impact from Malta license termination.
- On a yearly basis, EBITDA margin on sales improved to 36.1%, from 29.2% in 9M22 (+6.9pps).
- On a quarterly basis, EBITDA increased by €5.2m (or +15.9%), while EBITDA margin on sales posted an increase of 2.4pps.
- LTM EBITDA stands at €135.8m, up by 10.5% vs. FY22.
EBT / NIATMI
- EBT in 9M23 amounted to €32.1m compared to €19.4m in 9M22 fueled by the significant EBITDA contribution. On a quarterly basis, EBT settles at €15.8m, higher by €4.5m vs. 3Q22.
- NIATMI in 9M23 concluded at €9.0m compared to €-0.5m in 9M22.
- Operating Expenses analysis excludes expenditures related to capital structure optimization.
- EBITDA analysis excludes Depreciation & Amortization, and expenditures related to capital structure optimization.
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CASH FLOW
- Operating Cash-flow in 9M23 posted a considerable increase by €29.9m to €97.6m, compared to €67.7m in 9M22. The main contributors to this variance were the higher recorded EBITDA y-o-y and the favorable working movement.
- CAPEX in 9M23 was €22.2m, higher by €7.0m compared to 9M22, with US projects consuming most of the CAPEX needs.
- Net Debt, as of September 30th, 2023, stood at €458.2m, decreased by €32.3m compared to December 31st, 2022 resulting from the strong cash flow7 generation and the positive impact of the gross debt movements. Favorable Gross debt movements include the capital payments towards the Term Loan in US and the benefit from the lower interest accrued in comparison with Dec-22, fully offsetting the adverse FX impact on our US denominated debt.
7 Free Cash Flow defined as "Net Cash from Operating activities" adjusted for "Net Dividends", "Capex", "(Purchases)/ sales of subsidiaries & other investments", "Repayment of leasing obligations", "Reorganizations costs paid", "Exchange differences" and "Return of Capital to minority shareholders of subsidiary"
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OUTLOOK / RISKS
In Group Management view, growth of the Lottery and Sports Betting online markets and the expansion of regulated i-lottery markets, combined with the evolution of INTRALOT's new technological solutions for Lottery digital transformation, put the Company in the position to capture new opportunities, bringing new technology projects with stronger profit margins than in previous years.
Macroeconomic and geopolitical uncertainties have strong impact on all economies worldwide. Despite sign of resilience shown earlier in the year, the impact of policy tightening to reduce inflation is expected to slow down recovery of economic activity going forward.
Despite that, gaming industry shows good resilience and above average growth in most regions. On the other hand, increased interest rates have a direct impact on finance cost, with INTRALOT not being an exemption.
The Management of the Company closely monitors developments, both geopolitical and in global economy, and is ready to take all the necessary measures for protecting its operations.
RECENT / SIGNIFICANT COMPANY DEVELOPMENTS
- On August 31, 2023, a new ten-member Board of Directors of the Company by the decision of the Ordinary General Meeting of the Shareholders of the Company dated 30th of August 2023 was elected. The Board of Directors has been formed into a Body and appointed its executive and non-executive members, as follows:
- Sokratis P. Kokkalis, Chairman and CEO, Executive member
- Constantinos G. Antonopoulos, Vice- Chairman, Non-Executive member
- Chrysostomos D. Sfatos, Deputy CEO, Executive member
- Konstantinos E. Farris, Executive member
- Soohyung J.H. Kim, Non-Executive member
- Dimitrios S. Theodoridis, Non-Executive member
- Vladimira D. Mircheva, Non-Executive member
- Ioannis K. Tsoumas, Independent Non-Executive member
- Adamantini K. Lazari, Independent Non-Executive member
- Dionysia D. Xirokosta, Independent Non-Executive member.
- Based on the decision of the Ordinary General Meeting dated 30.08.2023 and following the suggestion of the Board of Directors, it was decided that the Audit Committee of the Company will continue to be a Committee of the Board of Directors, in accordance with the provisions of article 44 of Law 4449/2017, as in force, its term to be equal to the term of the Board of Directors and its members to be the three (3) Independent Non-Executive Members, selecting as members of their Audit Committee the following:
- Ioannis Tsoumas son of Konstantinos, Chairman of the Audit Committee
- Adamantini Lazari daughter of Konstantinos, Member of the Audit Committee and
- Dionysia Xirokosta daughter of Dimitrios, Member of the Audit Committee.
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- On October 3, 2023, INTRALOT announced that the BoD of the Company during its meeting held on 02.10.2023, decided to approve the Company's share capital increase by an amount of € 69,827,586.30, with the issuance of up to 232,758,621 new shares with a nominal value of €0.30, paid in cash and with a pre-emption right of the existing shareholders of the Company. All the information for the process of the increase included in the Prospectus, which approved by the Hellenic Capital Market Commission and have been uploaded on Company's website:
Share Capital Increase 2023 (intralot.com). -
On October 16, 2023, INTRALOT, based on notifications from the legal entities ALPHACHOICE SERVICES LIMITED, INTRACOM SA HOLDINGS and CLEARDROP HOLDINGS LIMITED, which are affiliated with Mr. Sokratis Kokkalis, Chairman of the Board of Directors and CEO of
INTRALOT, announced that these entities, in the context of the Company's share capital increase, proceeded on October 13, 2023, to the following pre-agreed Over the Counter (OTC) transactions: - ALPHACHOICE SERVICES LIMITED sold 120,401,087 pre-emption rights with a total value of €120,401.09.
- INTRACOM HOLDINGS acquired 68,766,112 pre-emption rights with a total value of €68,766.11.
- CLEARDROP HOLDINGS LIMITED acquired 5,501,289 pre-emption rights with a total value of €5,501.29.
- On October 17, 2023, INTRALOT announced that that the legal entity CQ LOTTERY LLC, which is affiliated with Mr. Soohyung Kim, Member of the Board of Directors of INTRALOT, proceeded on October 16, 2023, to pre-agreed Over the Counter (OTC) transactions selling 58,230,357 pre-emption rights with a total value of €58,230.36, in the context of the Company's share capital increase.
- On October 18, 2023, INTRALOT announced that Mr. Constantinos Antonopoulos, Vice- Chairman of the Board of Directors of INTRALOT, on October 17, 2023, sold 5,374,053 pre- emption rights with a total value of €16,122.16, in the context of the Company's share capital increase.
- On October 27, 2023, INTRALOT announced that the share capital increase in cash and with preemption rights in favor of the existing shareholders, was fully subscribed. In the same day, INTRALOT also notified the exercise of the pre-emption rights from persons who exercise managerial duties in the Company.
- On October 30, 2023, INTRALOT notified that the Company's share capital increase was covered as follows: 95.87% of the Increase was covered through subscriptions by those who exercised their pre-emptive right with the payment of a total amount of €129,419,941.40, corresponding to 223,137,830 New Shares and 4.13% of the Increase was covered through the exercise of the pre-subscription right with the payment of a total amount of € 5,580,058.78 corresponding to 9,620,791 New Shares. As a result, the final subscription percentage of the
Share Capital Increase is 100.00% and the amount of funds raised is €135,000,000.18. - On October 31, 2023, INTRALOT announced the extension of its agreement with OPAP for the provision of the license of INTRALOT's flagship LotosX lottery engine software and the development of all the related functionalities, after OPAP exercised its right to extend the agreement by one year, from 01.08.2025 till 31.07.2026. INTRALOT and OPAP further agreed to grant OPAP the right to exercise two further one-year extension options, under the same terms, to 31.07.2027 and 31.07.2028 respectively.
- On November 3, 2023, INTRALOT announced that its 100% subsidiary INTRALOT CAPITAL LUXEMBOURG, announced its decision to proceed on November 14, 2023, with the early partial redemption of €126,000,000 in principal amount, plus accrued interest, of the
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outstanding 5.250% Notes due September 2024, with current outstanding balance of €355,568,000.
- On November 7, 2023, INTRALOT announced the admission and commencement of trading of 232,758,621 new shares on ATHEX on November 8, 2023. At the same time, it was announced that the shares will now be traded on the Main Market of ATHEX.
- On November 8, 2023, INTRALOT announced that following the certification of payment of the amount of the Increase by the Board of Directors on 30.10.2023, its share capital now amounts to €181,228,686.30, divided into 604,095,621 common, nominal, intangible, voting shares, with a nominal value of €0.30 each.
- On November 9, 2023, and further to the notifications received by Mr. Sokratis P. Kokkalis and the companies "K-SYSTEMS" and "ALPHACHOICE SERVICES LIMITED", the company "INTRACOM HOLDINGS", as well as by Mr. Soohyung Kim and the company "Acme Amalgamated Holdings, LLC", regarding changes to the voting rights of these entities on the shares of INTRALOT following the completion of INTRALOT's share capital increase and the crediting of the new shares, the percentages of the main shareholders were shaped as follows: CQ LOTTERY LLC (26.861%) - Sokratis P. Kokkalis (20.502%) - INTRACOM (7.135%).
- On November 15, 2023, and further to its notification dated November 3, 2023, INTRALOT announced that, on November 14, 2023, its 100% subsidiary INTRALOT CAPITAL
LUXEMBOURG SA completed the early partial redemption of €126,000,000 in principal amount, plus accrued interest, of the outstanding 5.250% Notes due September 2024, with previous outstanding balance of €355,568,000. The principal amount was repaid with funds raised from the recent share capital increase of INTRALOT, in accordance with the provisions of the respective prospectus. Following the partial redemption, the outstanding balance now amounts to €229,568,000.
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Intralot Integrated Lottery Systems & Services SA published this content on 24 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 November 2023 07:49:11 UTC.
