Allwyn nets 63% pan-European revenue growth as leadership monitors macro headwinds

Allwyn International (formerly SAZKA Group) has detailed ‘strong and stable’ growth across its European operations, as the recommended UK National Lottery steward records total GGR of €869.3m.

Representing a 63% increase on Q1 2021 earnings of €526.3m, the rebranded firm‘s GGR was coupled with a 89% growth rate for NGR to €534.4m (€283m), alongside a rise in Adjusted EBITDA of 86% to €268.8m (€144.4m).

Group growth was attributed to success across its Greek, Cypriot and Austrian business operations, Allwyn did also acknowledge that a reduced impact from COVID-19 conditions also had a positive effect on revenues. 

In particular, Allwyn noted that a return to physical operations in Greece and Cyprus had been key to the firm’s success in these markets, alongside increased sales for sports betting, instant lotteries, numerical lotteries and VLTs.

A breakdown of unit performance, saw Allwyn’s OPAP (Greece-&-Cyprus) subsidiary register a GGR increase of 162% to €457m (Q12021: €174m) – attributed to the strong recovery of its retail lottery network supporting the unit’s continued online growth.

Central European operations, meanwhile, saw positive growth in both Austria and the Czech Republic, where GGR increased by 21% and 7% respectively, reaching €309.3m and €102.8m.

Some hurdles were encountered in both countries, on the other hand, with a weaker performance for numerical lottery products recorded in Austria – although Allwyn maintained that this was offset by a return to normalised casino operations following lockdowns. 

Numerical lotteries and instant lotteries also experienced difficulty in Czechia, where growth in sports betting and igaming ‘more than compensated’ for the ‘slightly weaker performance’ of the aforementioned verticals. 

Registering a GGR decline of €18m (-14%) to €587m, the group’s LottoItalia subsidiary was the only unit to register negative results, as period trading was match against record comparative results.

In light of the group’s unit recovery matched against 2021 COVID-19 comparatives, Allwyn declared first quarter operating profits (after-tax) of €129m, up 287% on corresponding 2021 results of €33m. 

Robert Chvatal, Allwyn International CEO, said: “I am pleased that the first quarter in 2022 was mostly unimpacted by COVID-19, with only some operations in Austria, Greece and Cyprus, and Italy being subject to limited COVID-19 related restrictions, most of which have been subsequently lifted during Q2. 

“The fully reopened physical retail channel in these markets performed well while online sales continued to be strong across geographies, with the online channel contributing a record 43% of GGR in the Czech Republic.

“We note that general consumer demand has weakened in the last few months due to persisting inflationary pressures. However, our business has seen only a limited impact so far due to the low price point of our products and low average spend, as well as our large number of regular players.”

Allwyn remains optimistic in its trading outlook, despite its business facing a ‘weaker general consumer sentiment’, due to continued COVID-19 restrictions, the war on Ukraine and unsettled macroeconomic environments (inflation and cost of living) across key markets.

Moving forward, Allwyn noted two of the biggest developments for its international operations during the first three months of the year as being its success in the Fourth National Lottery Licence competition and listing on the New York Stock Exchange. 

However, following the UK Gambling Commission’s (UKGC) decision to award the UK-facing Allwyn Entertainment brand the next 10 year licence for the National Lottery – due to commence in February of next year – a legal challenge has been launched by incumbent operator Camelot.

This has prevented the UKGC from entering into any agreements with Allwyn, subsequently stalling the beginning of the necessary transition period.

“Last but certainly not least, I am absolutely thrilled that in March 2022 we were selected as the Preferred Applicant for the fourth UK National Lottery licence by the UK Gambling Commission,” Chvatal continued.

The CEO concluded: “Overall, I am pleased with Allwyn International’s financial and strategic performance in Q1 2022 and I look forward with confidence and excitement to the next quarters.”

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