Press Release

INTRALOT: COMPARABLE EBIDTA GROWTH 13.6%
31/03/2016

INTRALOT SA(RIC: INLr.AT, Bloomberg: INLOTGA),an international gaming solutions and operations leader, announces itsfinancial results for the twelve-month period ending December 31st, 2015, prepared in accordance with IFRS.

OVERVIEW

o   Comparable EBITDA up 13.6% in FY 2015 (+8.0% in 4Q15)

o   Reported EBITDA upward by 3.5% in 4Q15, delivering an increase of 1.0%  y-o-y

o   Group Revenues up 2.2% in 4Q15; reaching a 3.3% growth in FY 2015

o   Cash Flow positive in 4Q 2015 ; Net debt decreased by €6.4m in 4Q

o   Market share in Lottery Gaming Systems and Related Services maintained; 28% share in international public tenders in 2015

o   Significant wins /renewals in mature markets (US, Netherlands) and Africa

o   Strategic alliance with Gamenet is a milestone in partnering with strong local players

o   Product portfolio  strategy on track: investment in Bit8; granted 21 new patents, bringing patent portfolio to 120; new interactive CANVAS ® platform (dynamic content management system) developed and completed

Commenting on the FY 2015 Results INTRALOT Group CEO, Antonios Kerastaris, noted: “INTRALOT’s financial performance in 2015 confirms our resilience and growth potential in challenging times, marked by sustainable revenue and Ebidta, along with positive free cash flow in the last quarter of the year. 

New contracts and renewals in the US, the Netherlands, Morocco, Nigeria, and Kenya underscore our ability to sustain and grow our business through select markets across the globe.  Going forward we expect accelerating revenue and Ebidta growth, propelled by a healthy pipeline of new contracts (starting with the Chile National Lottery and Brazil Minas Gerais district lottery operations) coupled by an operating model that focuses on cashflow generation through a rationalization of our cost base and balance sheet structure.

Overall, we remain committed to transforming INTRALOT from a project-based company to a products and services gaming specialist. Implementing this strategy we first sharpen and diversify our offering through a combination of “gaming competence centers” and targeted investments in companies such as Bit8 and its acclaimed CRM platform.  Secondly we expand our global partnership network in licensed operations and managed services: our recent alliance with Gamenet in Italy is the first in a series of potential transactions that seek to rebalance our footprint, release growth capital and unleash INTRALOT’s full potential as a unique player in the global gaming scene.”

OVERVIEW OFRESULTS

REVENUES

o   Reported consolidated revenues increased by 2.2% in 4Q15 compared to same period a year ago driven by the performance in Italy, Jamaica, Bulgaria, Argentina which were partially offset by the performance in Greece, Australia, USA and Brazil.

o   Revenueson a yearly basis grew by 3.3%, to €1,914.9m from €1,853.2m in the FY14 period, representing an increase of €61.7m.

o   The increase derives from: +103.3m in South America, mainly due to the strong performance of Jamaica, Argentina and Peru, +13.6m in West Europe mainly due to the increased revenues in Italy, +9.4m in East Europe mainly due to Bulgaria and Turkey, +6.6m in North America, +2.4m in Africa, and -73.5m in Australasia due to the sale of the Victorian license in February 2015 and the softer sales in Azerbaijan.

o   Adjusting full year performance on a continuing basis, excluding discontinued business (OPAP, Romania and Victoria), revenues were increased by 4.2%.

o   Sports Betting is the largest contributor to our top line, comprising 47.2% of our revenues (+0.6% vs. FY14), followed by numerical games contributing 31.3% to Group turnover (+8.9% vs. FY14). VLTs/AWPs represented 11.1% of Group turnover (+10.6% vs. FY14), followed by Technology contracts with 7.6% (-4.1% vs. FY14) and Racing with 2.8% (-11.3% vs. FY14).

WAGERS HANDLED

o   During the FY15 period INTRALOT systems handled €24.4 bn. of wagers worldwide, increased by 12.2% y-o-y. South America increased by 30.0%, North America increased by 27.3%, Asia increased by 18.2%, Africa increased by 15.3%, East Europe increased by 8.1% and West Europe decreased by 5.1%.

GROSS MARGIN / OPERATING INCOME / OPEX

o   The Gross profit margin developed at 13.7% in FY15 from 14.6% last year, mainly affected by an increase of the payout and loss of profits from discontinued business.

o   In FY15 other operating income totaled €24.9m compared to €18.6m in FY14, posting an increase of 33.9%. The major driver of this increase was the growth in instant ticket services of our US operations.

o   Total operating expenses increased by 3.4% to €207.5m as a result of the expansion of our business in US and the increased investment in selling and marketing to further grow revenues primarily in Turkey.

EBITDA

o   EBITDA developed to €45.3m in 4Q15, an increase of 3.5% compared to 4Q14 and by 8.0% on a like for like basis.

o   Yearly EBITDA was shaped at €177.2m from €175.4m in FY14 (+1.0%) and by 13.6% on a like for like basis.

EBT / NIATMI

o   EBT in 4Q15 was shaped at €7.8m compared to €9.3m in 4Q14. On a like for like basis, EBT was shaped at €6.7m, from €2.9m in 4Q14 (+133.5%).

o   Yearly EBT decreased to €25.7m from €36.5m in FY14, negatively affected by an increase in depreciation of €10.9m and an increase in FX of €6.9m, partially counterbalanced by a Net Interest expense improvement of €7.7m. On a like for like basis, yearly EBT was shaped at €18.8m, from €-1.0m in FY14.

o   NIATMI for the period was shaped at a negative €14.7m compared to €-17.5m in 4Q14. On a like for like basis, NIATMI was shaped at €-20.4m, from €-23.0m in 4Q14.

o   Yearly NIATMI was shaped at a negative €65.1m compared to €-49.5m in FY14, further affected by a €2.2m increase in taxes. On a like for like basis, yearly NIATMI was shaped at €-73.9m, from €-79.2m in FY14.

FX Variance

o   All in all, Foreign Exchange Variation though it had a positive effect on Revenues (mainly due to USD performance) it had adversely affected financial performance i.e. 7.4m at NIATMI.

CASH-FLOW

o   Operating Cash-flow excluding the impact of WC (-42.0m in 2015 and -0.6m in 2014) and cash taxes (-28.2m in 2015 and -29.0m in 2014) was 184.0m in FY 2015, practically unchanged vs. 2014.  

o   Net Capexin FY15 accumulated to €68.7m, compared to €67.0m in FY14. Major Capex items in FY15 include investments in our US new business of €13.6m, product development costs of €11.7m and R&D of €18.9m.

o   Net Debt as at 31 December 2015 developed at €477.6m, increased by €96.2m compared to 31 December 2014 (€381.4m). As at that date the book value of bonds purchased by the Group were €48.0m vs €6.4m as at 31 December 2014. Net debt marginally dropped in 4Q15, due to the significantly improved cash flow generation compared to the previous quarter.

ANALYSIS PER BUSINESS SEGMENTS

o   Revenues from Operation contracts (licenses) increased by 4.9% due to higher sales mainly in Jamaica, Italy (Gaming machines), Argentina (Salta operations) and Peru, counterbalancing the decrease in sales in Azerbaijan, lower sales in Victoria, Australia after the sale of the license in February 2015 and the effect of the World Cup in 1H14.

o   Sales from Management contracts posted a decrease of 5.0% mainly driven by the impact of the relative Romanian contract.

o   Revenues from HW sales and facilities management decreased by 2.7% due to the impact of the Opap and the relative Romanian contracts.

INTRALOT PARENT COMPANY RESULTS

o   Revenues  for the period decreased by 10.7%, to €76.6m.

o   EBITDAincreased to €45.7m from €20.1m in FY14 (+127.8%).

o   Earnings After Taxes (EAT)decreased to €-3.6m from €-11.0m in FY14.

 

About INTRALOT

INTRALOT, a public listed company established in 1992, is a leading gaming solutions supplier and operator active in 57 regulated jurisdictions around the globe. With €1.91 billion turnover and a global workforce of approximately 5,100 employees in 2015, INTRALOT is an innovation – driven corporation focusing its product development on the customer experience. The company is uniquely positioned to offer to lottery and gaming organizations across geographies market-tested solutions and retail operational expertise. Through the use of a dynamic and omni-channel approach, INTRALOT offers an integrated portfolio of best-in-class gaming systems and product solutions & services addressing all gaming verticals (Lottery, Betting, Interactive, VLT). Players can enjoy a seamless and personalized experience through exciting games and premium content across multiple delivery channels, both retail and interactive.

 

For more info: Ms. Dimitra Tzimou, Corporate Relations Manager, Phone: +30-210 6156000, Fax: +30-210 6106800, email: tzimou@intralot.com- www.intralot.com