During the three months leading up to September 30, Allwyn reported a total consolidated revenue of €2.14 billion (£2.00 billion/$2.55 billion). This result exceeds the £2.01 billion achieved in the third quarter of 2023, according to preliminary numbers released by Allwyn on December 9.
This third-quarter figure is nearly equivalent to the €2.14 billion recorded in the second quarter and represents a 1% increase compared to the €2.11 million earned in the first quarter. Gross gaming revenue, which accounts for revenue from betting activities minus payouts, also experienced a year-on-year increase. The €2.06 billion reported in Q3 surpasses the previous year’s €1.92 billion by 7%.
Additionally, net revenue rose by 11% to reach €2.06 billion for the quarter, and adjusted EBITDA grew by 12% in correlation with this rise. The adjusted EBITDA margin stayed consistent at 41.8% during Q3.
CEO Robert Chvatal noted the rise in total revenue, attributing it to the expanding digital sector, ongoing product development efforts, and a commitment to delivering high-quality content to customers.
“Our organic growth strategy execution remains attentive to stakeholder responsibilities, with a strong focus on safe play. The quarter benefited from favorable jackpot cycles in the lottery, contrasting with last year’s third quarter, which faced unfavorable jackpot cycles and sports results that favored customers,” Chvatal mentioned.
### Growth Continues Excluding UK and US Acquisitions
The group’s overall results take into account the entirety of Allwyn’s operations, inclusive of the Camelot acquisitions in the UK and the US.
In February 2023, Allwyn acquired Camelot UK Lotteries, the earlier operator of the UK’s National Lottery, preparing to take over the National Lottery operations, a transition completed in February. By March 2023, Allwyn also finalized its acquisition of Camelot Lottery Solutions in the US.
Even when excluding these acquisitions, revenue increased in Q3. Without the UK and US operations, total revenue stood at €1.32 billion, marking a 13% growth compared to the previous year. Gross gaming revenue increased by 11% to €1.07 billion, and net revenue went up by 13% to €720.7 million. Adjusted EBITDA saw a 21% year-on-year rise to €384.3 million.
This performance highlights that while Allwyn’s UK operations have garnered significant attention recently, its existing business ventures continue to perform strongly.
Chvatal explained, “We maintained solid profitability, with strong growth in Greece and Cyprus and favorable tax effects positively impacting our equity method investees, contributing to profitability.”
### European Achievements for Allwyn
As highlighted by Chvatal, some European markets witnessed considerable growth in Q3. Greece and Cyprus led with a 17% rise in consolidated revenue to €591.4 million, and adjusted EBITDA increased by 26% to €213.4 million.
This success was driven by online expansion and robust performances in numerical lotteries, sports betting, and igaming, including a notably favorable jackpot cycle in Tzoker, which experienced its second-largest jackpot.
In Austria, revenue grew by 7% year-on-year to €407.3 million, although adjusted EBITDA decreased by 2% to €74.0 million, due mainly to double-digit growth in numerical lotteries (17%) and igaming (12%).
Yet, not all European news was positive. Revenue from Italy decreased by 6% to €521.9 million, which Allwyn attributed to a notably strong comparison period in 2023.
In the Czech Republic, where Allwyn started its operations, revenue fell by 4% to €118.1 million, predominantly owing to the sale of a non-gaming business impacting results.
### UK Revenue Approaches €1.00 billion in Q3
Within the UK, revenue rose by 3% year-on-year to €980.9 million despite activities remaining relatively stable compared with the previous year.
While marketing initiatives and new instant lotteries progressed, the current performance emphasizes limited product and channel developments under the new license framework. Efforts are focused on “transforming” the National Lottery, including upgrading systems to support the product range and enhancing the customer experience.
Despite revenue growth, adjusted EBITDA in the UK decreased by 84% to €7.0 million due to a new incentive and profitability arrangement under the new National Lottery license.
### North America Boosted by IWG Acquisition
In North America, revenue increased by 5% in Q3 2023, reaching €55.8 million, with adjusted EBITDA rising by 1% to €11.1 million.
Revenue from non-gaming activities comes from private management services for the state lottery’s operations in Illinois and from providing gaming technology solutions to group entities and external customers.
In Q2, Allwyn completed an investment in Instant Win Gaming (IWG), acquiring a 70% stake in the online content developer, which now forms part of its North American division.
According to Allwyn, North American Q2 results are reported as if IWG had been fully consolidated in both periods.
### Year-to-Date Revenue Exceeds €6.39 billion
For the first nine months ending September, Allwyn’s consolidated revenue climbed to €6.39 billion, up 12% compared to last year.
During this period, gross gaming revenue increased by 12% to €6.14 billion, and net revenue rose by 10% to €2.86 billion. Year-to-date adjusted EBITDA increased slightly by 1% to €1.11 billion.
Even excluding the UK and US acquisitions, year-to-date figures show positive trends. Revenue with these exclusions rose by 7% year-on-year to €3.32 billion, gross gaming revenue grew by 7% to €3.18 billion, and net revenue by 7% to €2.11 billion. Adjusted EBITDA without the UK and North America increased by 9% to €1.06 billion.
Overall, Chvatal expressed satisfaction with the ongoing progress, stating, “I am pleased with our continued progress, and I believe we are well-positioned for the remaining part of 2024 and the ensuing chapters of our growth journey.”