Allwyn Gets Off to a Perfect Start This Year with a Massive Spike in Consolidated Revenue for Q1 2023
Author:
Muhammad Gregory
After ending 2022 with significant acquisition initiations and noteworthy growth in annual revenue, multi-national lotto operator Allwyn has started 2023 on the front foot. The Czechia-based entity is one of the most renowned lottery providers in the world, and it is constantly upgrading itself and its credibility in the market revenue that is skyrocketing consistently. In the first quarterly report of this year, Allwyn reported an 80 percent year-on-year (YoY) increase in consolidated total revenue after raking up €1.65 billion in the first three months of 2023.
Multi-national lotto operator Allwyn has started 2023 on the front foot.
?Ibrahim Boran/Unsplash
Allwyn frequently made the headlines across European media last year primarily because of its operations, revenue, and roadmap. Last year, the operator’s annual net revenue spiked 25 percent compared to the net annual revenue generated in 2021, with adjusted EBITDA rising by 21 percent. The consolidated gross gaming revenue (GGR) in 2022 also recorded a 24 percent YoY increase. The Czechia-based lottery operator’s consistently rising revenue numbers could be credited to the lottery markets where it is present. The lotto segment is less volatile and faces fewer regulatory risks than the other gambling segments. These factors, coupled with the increasing number of active users on Allwyn’s lottery-offering platforms, can be primarily credited for its growth. Last year, the entity generated an increased total revenue of €3.99 billion. Allwyn is the leading lottery provider in Austria, Cyprus, Greece, and its home country, the Czech Republic. Apart from the European Union, the operator is also the primary lottery provider in the United Kingdom and in the state of Illinois in the United States.
Two major acquisitions have increased the brand value of Allwyn. The initiation of a full takeover of Camelot UK and Camelot Lottery Solutions (LS) Group was one of the biggest highlights of 2022 for the multi-national lottery operator. Camelot UK has held the exclusive UK National Lottery license since 2009. The operator’s 15-year monopoly as the United Kingdom’s exclusive national lottery provider will end on January 31, 2024, after which the license of the now-Allwyn-owned subsidiary will not be renewed. Instead, Allwyn itself will gain the fourth National Lottery license and become the first lotto operator to beat Camelot since its establishment. After the United Kingdom Gambling Commission (UKGC) confirmed that Allwyn would attain the national lottery license, the Czechia-based operator vowed to modernize the country’s exclusive lottery by introducing state-of-the-art features to its platform while simultaneously implementing measures to boost player safety. Meanwhile, the complete Camelot UK acquisition was completed in February, earlier this year.
The cash inflow is impressive at Allwyn, but despite that, the operator confirmed loan deals with multiple banks to secure a total loan of $1.66 billion. $455 million was in amortizing term loans, another $455 million came in the form of bullet term loans, and $310 million was tied to a revolving credit facility. Three reasons were stated for acquiring this massive loan. The first was to repay a previous syndicate deal loan worth $643 million. Another $310 million was reserved to clear other debt. The remaining amount was kept to finance all the UK national lottery license-based expenses. Earlier this year, Allwyn withdrew another €160.0 million via the revolving credit facility in February. This decision was made to repay the Czech Bonds, who had exercised their put option. Allwyn increased the size of its Syndicate loan in March before withdrawing another €250 million. After increasing the size, the loan with accordion facilities could disburse up to €335 million. After withdrawing €250 million, Allwyn still has €85 million available to loan.
Detailed results of the first quarter
The total consolidated revenue of Allwyn jumped from €914 million in the first quarter of 2021 to €1.65 billion in the first quarter of this year. Powered by the entities it acquired, the revenue jumped 80 percent YoY. GGR was up 81 percent YoY after rising from €875.6 million to €1.59 billion in Q1 2023. The net revenue was 40 percent higher when compared to the corresponding quarter last year. The figure rose from €579.1 million to €811.2 million. Operating EBITDA spiked 23 percent and touched €329.4 million in the first quarter of this year. Last year, during the same period, the figure was €267.4 million. The adjusted EBITDA was also up 28 percent YoY as the sum increased from €270 million to €346.7 million. Adjusted free cash flow also rose by the same margin, from €251 million to €322 million.
The CEO of Allwyn, Robert Chvatal, was quite pleased with the numbers his company recorded in the opening quarter of the year.
“I am pleased to report that Allwyn had a strong start to the year, reflecting our ongoing focus on driving organic growth as well as continued progress in our inorganic growth strategy, with the results of the first quarter including the contribution from a total of seven lottery markets. Meanwhile, we have remained focused on our responsibilities to all our stakeholders and on safer gaming. Our Total Revenue increased by 80% year-on-year in Q1 2023, reflecting strong growth of 17% in our existing geographies as well as the first-time contributions of the United Kingdom, following the acquisition of Camelot UK, and Camelot LS Group, operator of the Illinois Lottery under a private management agreement.”
Operating, acquiring, and sponsoring too
Being a multi-national lottery operator, Allwyn is expected to conduct activities that all big brands conduct. In the first quarter of the current year, the Czechia-based operator completed two crucial acquisitions of Camelot LS and Camelot UK. The operating and acquisition roadmap and strategy of the group look promising, but that is not everything Allwyn looks at. Earlier this year, the operator announced a three-year partnership with the Wings for Life World Run – a fundraising race.
The race raises funds that are utilized to conduct special research that intends to find a cure for spinal cord injuries. In every edition of the race, people from around the world volunteer to participate. After signing up for this partnership, Allwyn encouraged its staff in European offices to partake in the event. Since it is an open-to-all race, anyone can sign up for it and run a specific distance within pre-set time.
