Revenue for the three months to 31 March hit €2.11bn (£1.80bn/$2.30bn). This is some way clear of the €1.65bn Allwyn posted in Q1 of the previous year – and in line with earlier issued guidance.
Gross gaming revenue – revenue from gaming activities – increased 27.1% to €2.02bn. Allwyn also reported a 16.0% rise in net revenue for the quarter to €940.9m.
Analysing the performance, CEO Robert Chvatal says the main catalyst for growth was Allwyn taking over the National Lottery. The official handover took place on 1 February with Allwyn replacing Camelot, which had run the National Lottery since its launch in 1994.
Allwyn now holds responsibility for all National Lottery operations and products. This covers online and retail sales for the main Lotto draw as well as Set For Life, Thunderball and Hotpicks. It also includes scratchcards and UK access to the Europe-wide game EuroMillions.
Chvatal described the transition as a key milestone in Allwyn’s history. He also praised the first few months of operation, saying the group has seen a successful start to its tenure as licensee.
“This represented the coming to fruition of many years of dedication by a team from across our geographies,” Chvatal said. “We’re excited to have already started work on transforming The UK National Lottery for the benefit of all stakeholders.”
Allwyn hails M&A impact
Chvatal also highlighted recent M&A activity and the impact this had on performance during Q1.
The group purchased Camelot UK, former operator of the National Lottery, in February 2023. It also acquired Camelot Lottery Solutions (Camelot LS) earlier in 2023. The US-facing business is now known as Allwyn LS Group.
This allowed Allwyn to fully prepare for taking control of the National Lottery. The Camelot UK acquisition in particular proved useful, granting Allwyn insight into lottery operations ahead of it taking control.
Excluding the impact of UK operations and the Allwyn LS acquisition, revenue would have only been 3.0% higher in Q1.
In addition, Q1 saw Allwyn build on this by agreeing to purchase a 70% stake in Instant Win Gaming. The deal with the online content developer is focused on global growth, with Chvatal backing the purchase to further extend Allwyn’s reach.
“Through our inorganic growth strategy, we continue to expand our footprint and capabilities.”
Digital dreaming in Q1
Looking at the bigger picture in Q1, Chvatal picked out other factors that also helped drive growth. These include further expansion within its digital business across various markets.
Other highlights include ongoing product development and innovation, as well as the launch of Eurojackpot in Greece. This, Chvatal says, brings a multi-national jackpot game to Greek players for the first time.
In addition, Chvatal said Allwyn continued to show progress in customer loyalty schemes and the digitalisation of retail.
Coupled with UK developments and the Allwyn LS acquisition, this pushed both revenue and adjusted EBITDA up year-on-year. Adjusted EBITDA was 141.6% higher at €41.8m, with a margin of 38.0%.
In addition, Allwyn was able to strengthen its financing in Q1, signing €500.0m of accordion facilities under its senior facilities agreement. These efforts continued after quarter end, with the recent syndication of a $450.0m term loan B facility.
“This was our debut term loan B transaction, further diversifying our access to capital,” Chvatal said. “I am very pleased that both transactions were well supported by existing and new lenders.
“Overall, I am pleased with the start to the year. I believe that we are well-placed for the remainder of 2024 and the next chapters of our growth story.”
Original article: https://igamingbusiness.com/finance/quarterly-results/uk-national-lottery-launch-drives-q1-revenue-allwyn/
