Lottomatica continues to benefit from SKS365 acquisition in Q3
Lottomatica has reported an 18.7% year-on-year increase in revenue for the third quarter to ā¬1.42 billion (Ā£1.19 billion/$1.54 billion). This comfortably surpasses the ā¬1.19 billion reported last year.
Lottomatica continues to benefit from the SKS365 acquisition after taking ownership of the operator in April this year. The acquisition has bolstered its online performance ever since. This was seen in the latter part of H1 and now in the following three months, with Q3 growth pushing year-to-date revenue up even further.
Online revenue rockets 37.3% at Lottomatica
Breaking down the nine-month performance, online growth is clear. During the period, revenue in this segment topped ā¬513.6 million, some 37.3% ahead of last year.
The expanded Lottomatica online business now includes the PlanetWin365, Goldbet, and Betflagthanks brands belonging to the SKS365 acquisition. These additions, coupled with the existing Lottomatica.it operation, helped push overall player bets up 48.7% to 17.1 million.
With this, Lottomatica said it had a 24% share of the total online market in Italy for the nine month period, However, for Q3, this was at 30%.
Looking at other segments, gaming revenue edged up 3.2% to ā¬560.6 million, meaning it is still Lottomaticaās main revenue source. Betting volume was level year-on-year at 8.2 million for the period.
Finally, revenue from its sports franchise increased 12.9% to ā¬313.2 million, with total bets also up 23.3%. This was again helped by the SKS365 deal, which also saw Lottomatica take on a retail footprint of 1,000 sports betting outlets.
Acquisition costs bite at bottom line
Total revenue for the nine months was ā¬1.43 billion. This is 18.1% higher than the previous year.
However, while revenue growth is positive for Lottomatica, the acquisition led to higher spending. Expenses for the nine-month period were higher across several area including cost of services, the main outgoing at ā¬855.2 million, up 21.4%.
As a result, pre-tax profit slipped 7.9% to ā¬108.4 million. Lottomatica paid ā¬51.4 million in tax and dedicated ā¬4.5 million worth of net profit attributable to non-controlling interests.
This meant it ended the period with a net profit of ā¬52.5 million, down 13.9%. However, adjusted EBITDA increased 13.3% year-on-year to ā¬483.1 million.
Lottomatica still on track to hit full-year goals
However, it was not all good news as higher costs during the nine months hit bottom line, with net profit lower year-on-year at ā¬52.5 million. Despite this, Lottomatica CEO Guglielmo Angelozzi is upbeat about long-term growth prospects, especially with the impact of SKS365.
āWeāre very pleased with the progress achieved so far this year,ā Angelozzi said. āOur business has experienced double digit growth and in Q3 our online market share reached an all-time high across all verticals.
āThe integration with SKS is advancing at a fast pace and we upgraded the level of synergies we expect to extract.ā
The group also took the opportunity to reiterate guidance for the full year. Upon posting its H1 results, Lottomatica released updated financial targets after a positive start to the year.
Revenue for 2924 is expected to range between ā¬2.03 billion and ā¬2.08 billion. This exceeds the initial guidance of ā¬2.02 billion to ā¬2.07 billion prior to the H1 update.
In addition, adjusted EBITDA remains on target for between ā¬630 million and ā¬700 million.
