Allwyn has reported an 11% decline in preliminary Q2 2024 adjusted EBITDA as lower profitability from the UK took a toll on the pan-European lottery business.
Adjusted EBITDA for the period is expected to slip from €381m (£322m) to €340m, with adjusted EBITDA from the UK plummeting 92% from €50m to €4.2m.
Bosses said the significant decrease in earnings was due to a “new incentive and profitability mechanism” that was implemented in February as Allwyn took on the UK National Lottery licence.
However, excluding the UK, adjusted EBITDA for the group is expected to tick up 4% to €338.1m.
Additionally, group Q2 revenue is anticipated to rise 5% year on year (YoY), from €2.04bn to €2.1bn.
The gains are expected to be driven by growth in Austria and Greece and Cyprus.
Austrian revenue should increase 7% to €401m while adjusted EBITDA will rise 4% to €69.6m. Allwyn said the market’s growth was driven by igaming, double-digit growth in numerical lotteries and a “strong contribution” from EuroDreams.
In Greece and Cyprus, revenue is also due to rise 7%, albeit to a significant €558.2m, with adjusted EBITDA flat at 2% growth to €183.9m.
Bosses pointed to strong sports betting and igaming growth, both online and retail, for the gains in the region.
However, revenue from the group’s US-facing operations where it runs a state lottery in Illinois, will only rise 3% to €48.6m with a 61% slump in adjusted EBITDA to €3.1m.
Allwyn said revenue in Illinois partly derives from an incentive fee, which was lower in the quarter and therefore pushed EBITDA down.
Away from financial performance, Allwyn has officially taken a 70% stake in Instant Win Gaming as of 5 September.
The investment, totalling $242.7m, which also includes the possibility of earnouts, will see Allwyn strengthen its hand in North America.
Robert Chvátal, Allwyn CEO, said: “I am pleased to report another quarter of continued progress and solid financial performance, reflecting continued execution of our growth strategies.
“We delivered good top line momentum and solid growth in profitability in most geographies, with our overall financial performance reflecting the new incentive and profitability mechanism under the new licence in the United Kingdom.
“Overall, I am pleased with our continued progress and believe we are well-placed for the remainder of 2024 and the next chapters of our growth story,” he added.
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