Allwyn Records Positive 2023 Results

by Muhammad Gregory, 14 April 2023

Incoming National Lottery operator Allwyn has announced positive financial results for 2022. The group experienced growth across the board in a year that saw a number of key acquisitions take place. Allwyn will officially enter the UK lottery market next year, and has also secured a position in the US market through its Camelot takeover.

Allwyn will take over the fourth National Lottery licensing contract in February next year.
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2022 Results See Growth

International lottery giant Allwyn has revealed that it experienced strong revenue growth across the business last year. Publishing its preliminary unaudited financial results for 2022, the incoming National Lottery operator has laid a robust foundation ahead of the launch of its UK operations next year.

It recorded consolidated total revenue of €3,988.2 million, a 24% uptick on the previous year. Continuing its organic growth, its consolidated adjusted EBITDA stood at €1,167.4 million, a 21% increase on the year before. Its margin stood at 46.1%, a minor decrease on the previous year’s 48.5%.

Allwyn International continued to see growth in its online sales. Its online channel was responsible for 44% of gross gaming revenue in the Czech Republic, compared to 38% in 2021. Despite the lingering impact of the Covid-19 pandemic and pressures on consumer spending, demand for its products remained resilient.

The fourth quarter saw Allwyn pass a key milestone, as quarterly gross gaming revenue exceeded €1 billion for the first time. Publishing a statement on the financial results, CEO Robert Chvatal took the opportunity to thank the entire Allwyn team for their hard work last year. Speaking on behalf of the group, Chvatal commented:

“I am pleased to report that Allwyn achieved another year of strong financial results in 2022, reflecting our continued successful execution of our organic and inorganic growth strategies. These results demonstrate how much the business has progressed in the last several years, with both Total Revenue and EBITDA growing by over 90% since 2019.”

Continuing, the CEO stated that Allwyn has deleveraged by more than 1x adjusted EBITDA, increasing ownership in its existing businesses. The lottery giant has also strengthened and diversified its platform by securing entry in the UK and US gambling markets. Chvatal reiterated the group’s commitment to its stakeholders and to safer gambling.

Key Acquisitions

2022 saw Allwyn undertake a number of key strategic developments, including increasing its shareholding in OPAP to more than 50%. This was achieved through open market purchases and participation in OPAP’s scrip dividend program. OPAP is the leading gambling operator in Greece, holding exclusive rights over sports betting and lotteries.

In April, the group also acquired a 36.75% interest in Kaizen’s activities outside Greece and Cyprus. A wholly owned subsidiary of OPAP, Kaizen is a fast-growing online betting and gaming operator using proprietary gaming technology.

The purchase consists of an upfront cash consideration of €50.0 million on a debt and cash free basis, and performance-based earnout payments. The acquisition, which was completed on December 27th, results in an 18.4% increase in the group’s interest in the operator.

Allwyn’s most notable successes of the year were agreements to acquire both Camelot UK and Camelot LS Group. The purchases came as a surprise to many, as Camelot had been the group’s main rival in the competition to secure the fourth National Lottery license in the UK. The National Lottery is the UK’s most lucrative public sector contract, with the estimated potential to generate up to £100 billion in ticket sales over the course of the ten-year license.

The Gambling Commission announced Allwyn International as its preferred applicant to operate the National Lottery in March 2022, following a thorough tender process. However, legal battles ensued as Camelot accused the judges of changing key rules in favor Allwyn midway through the competition.

Allwyn was officially awarded the license in September after Camelot dropped its legal challenge. Allwyn will take over the license in February 2024, becoming the first operator to overthrow Camelot since the launch of the lottery in 1994. Allwyn has promised to modernize the National Lottery by creating a cutting-edge technology platform, improving player protections and doubling the amount allocated to good causes.

UK and US Lottery Markets

Allwyn announced its agreement to acquire Camelot UK Lotteries in November 2022. The acquisition was completed on February 5th 2023 and will support the transition between the two licensing periods. Camelot was previously owned by the Ontario Teachers’ Pension Plan Board.

While the purchase has seen Allwyn attain a jumpstart in its control of the National Lottery, Camelot will continue to be operated separately in accordance with the terms of the third license until its handover next year. The acquisition has already seen a number of key changes to Camelot’s top management team.

Clare Swindell and Neil Brocklehurst have moved from their roles as Chief Financial Officer and Commercial Director to joint Co-Chief Executives. As such, they will lead the operator through to the end of its current license. Sir Hugh Robertson, who had acted as Camelot’s Chairman since 2018, has stepped down. He has been replaced by Sir Keith Mills.

Alongside Camelot’s UK operations, Allwyn also agreed a takeover of the Camelot LS Group, which operates the Illinois Lottery. The acquisition, Completed in March this year, adds a seventh lottery market to the operator’s portfolio. No changes were planned for its leadership team following the change in ownership.

By securing a foothold in the US lottery market, Allwyn has consolidated its position as an international leader in lottery entertainment. Camelot LS Group is partnered with the Arkansas Scholarship Lottery. Commenting on the takeover, CEO Chvatal explained what the group’s US entry would entail, stating:

“We have always viewed the US market as an important part of Allwyn’s future growth story, and the acquisition of Camelot LS Group, is the right step. Allwyn’s goal is building better lotteries, and helping them raise more for good causes, through innovation, technology, efficiency and safety in our quest for enhanced player engagement.”

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