Lottomatica announced an 18.7% year-on-year growth in third-quarter revenue to €1.42 billion (£1.19 billion/$1.54 billion). This easily outpaces the €1.19 billion reported last year.
Lottomatica continues to gain from its acquisition of SKS365, which was completed in April of this year. Since the takeover, its internet performance has improved significantly. This was observed in the latter part of H1 and will continue in the coming three months, with Q3 growth driving year-to-date revenue even higher.
Lottomatica’s online revenue has increased by 37.3%.
Breaking down the nine-month results, online growth is evident. During the quarter, revenue in this segment exceeded €513.6 million, representing a 37.3% increase over the previous year.
Lottomatica’s enlarged online operation now includes the PlanetWin365, Goldbet, and Betflagthanks brands acquired from SKS365. These developments, together with the existing Lottomatica.it operation, helped increase overall player bets by 48.7% to 17.1 million.
Lottomatica stated that it had a 24% share of the whole online market in Italy for the nine-month period, although this was only 30% in Q3.
Looking at other segments, gaming revenue increased 3.2% to €560.6 million, indicating that it is still Lottomatica’s primary revenue source. Betting volume remained flat year on year, at 8.2 million.
Finally, revenue from its sports franchise rose 12.9% to €313.2 million, while total bets jumped by 23.3%. This was aided once more by the SKS365 agreement, which also saw Lottomatica expand its retail base to 1,000 sports betting outlets.
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Acquisition costs pinch at the bottom line.
The total revenue for nine months was €1.43 billion. This is 18.1% up over the previous year.
Lottomatica’s revenue growth is encouraging, however the purchase resulted in increased spending. Expenses increased in various areas during the nine-month period, with the cost of services being the largest outgoing at €855.2 million, up 21.4%.
As a result, pretax profit fell 7.9% to €108.4 million. Lottomatica paid €51.4 million in taxes and set aside €4.5 million of net profit for non-controlling interests.
This means it concluded the quarter with a net profit of €52.5 million, a 13.9% decrease. However, adjusted EBITDA rose 13.3% year on year to €483.1 million.
Lottomatica is still on track to meet its full-year targets.
However, it was not all good news, as increasing costs during the nine months impacted the bottom line, with net profit falling year on year to €52.5 million. Despite this, Lottomatica CEO Guglielmo Angelozzi is optimistic about long-term development possibilities, particularly given the impact of SKS365.
“We’re very pleased with the progress achieved so far this year,” Angelozzi told me. “Our business has experienced double-digit growth, and our online market share reached an all-time high in Q3 across all verticals. Our integration with SKS is progressing quickly, and we have increased the level of synergies we anticipate extracting.”
The group also used the occasion to restate advice for the entire year. Lottomatica released updated financial targets after releasing its H1 results, following a strong start to the year.
Revenue for 2924 is estimated to be between €2.03 billion and €2.08 billion. This exceeds the initial projection of €2.02 billion to €2.07 billion before the H1 update.
Furthermore, adjusted EBITDA remains on track for between €630 million and €700 million.
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