Allwyn records double-digit increase in Q3 adjusted EBITDA despite UK decline
Lottery giant reports strong growth in Greece and Cyprus as UK adjusted EBITDA slumps in the three months to end of September
Allwyn has reported a double-digit growth in adjusted EBITDA in its preliminary Q3 results on the back of strong performances in Greece and Cyprus.
Total revenue for the quarter stood at €2.1bn need, a 7% year-on-year (YoY) increase, which the pan-European operator said was due to “strong organic growth” in Austria and Greece and Cyprus.
The operator noted that growth was also a result of continued momentum in its digital arm.
Adjusted EBITDA stood at €410.8m, representing a 12% YoY leap for the business. However, a “significant” decline in UK EBITDA did offset gains made elsewhere.
In fact, adjusted EBITDA excluding the UK, US and tech and content arms was up 21% YoY to €384.3m.
In the UK, where Allwyn officially took on the fourth National Lottery licence in February, adjusted EBITDA slumped drastically to €7m from €44.4m, an 84% YoY decrease.
The adjusted EBITDA hit was primarily as a result of the “introduction of a new incentive and profitability mechanism with the start of the new licence”.
For the three months ending 30 September, total revenue for the UK division grew 3% YoY to €980.9m.
On the UK, Allwyn said: “We remain focused on executing our plans to transform the UK National Lottery, including upgrading legacy systems to support developing the product portfolio and elevating the customer proposition.”
Meanwhile, Greece and Cyprus saw double-digit growth in total revenue, up 17% YoY to €591.4m, and adjusted EBITDA rose 26% YoY to €213.4m.
Allwyn said this was down to growth in the online channel alongside lotteries, sports betting and igaming.
The operator noted it had benefited from a favourable jackpot in Tzoker, which reached its second biggest jackpot in its history, and a full sporting event calendar which coincided with the last two weeks of Euro 2024.
In Austria, total revenue grew 7% YoY to €407.3m, with adjusted EBITDA down 6% to €74m. Czechia recorded a 4% YoY drop in total revenue to €118.1m, alongside a 5% YoY decreased in adjusted EBITDA to €27.5m.
Total revenue for North America, technology and content grew 5% to €55.7m, while adjusted EBITDA increased 1% to €11.1m.
In Italy, net revenue and adjusted EBITDA decreased 2% YoY to €113.2m and €91.2m, respectively.
Speaking on the operator’s results, Allwyn CEO Robert Chvátal said: “I am pleased to report another quarter of good progress and financial performance, in which we delivered strong top line growth – with standout performance in Greece and Cyprus – and once again achieved solid profitability and cash flow generation.
“Total revenue increased 7% year on year, with the continuing growth of the digital channel, our ongoing efforts in product development, and our focus on bringing best-in-class content to customers being the key drivers.
“In executing our organic growth strategy, we remain focused on our responsibilities to all our stakeholders, including our resolute focus on safe play. The quarter also benefited from favourable jackpot cycles in lottery.
“This contrasted with the third quarter last year which, in addition to the impact of unfavourable jackpot cycles, was also impacted by customer-friendly sports results,” he added.