Allwyn, the new UK National Lottery licensee, announced an impressive forecast for its gross gaming revenue (GGR) in the first quarter of 2024. The company anticipates GGR to reach as high as €2.05 billion for the period ending 31 March 2024, significantly surpassing the Q1 2023 figure by nearly $500 million. This optimistic projection follows Allwyn’s acquisition of Camelot, the previous UK National Lottery operator, in March 2023, which took effect officially on 1 February 2024.
The acquisition of Camelot has been a pivotal move for Allwyn, driving a remarkable 97.5% increase in GGR throughout 2023, culminating in a total of €7.87 billion. This surge underscores Allwyn’s strategic focus on organic growth and expansion within the gaming market. In addition to the substantial UK contribution, Allwyn has demonstrated strong GGR momentum across various international markets, reflecting the company’s robust performance and operational strategy.
In Austria, Allwyn’s GGR showed year-on-year improvement in the first quarter, propelled by a robust performance in igaming. Meanwhile, in the Czech Republic, GGR exhibited a double-digit percentage growth on a constant foreign exchange (FX) basis. This growth was driven by advances across all major product categories, although FX headwinds moderated the reported growth to a mid-single-digit percentage. In the UK, GGR remained stable year-on-year on a constant FX and comparable presentation basis, with Numerical Lotteries performing particularly well.
Despite the impressive revenue projections, Allwyn’s earnings growth faced constraints due to increased marketing expenditures. The company expects adjusted EBITDA to be between €355 million and €365 million when its preliminary unaudited financial results are released on 7 June. This represents a slight increase from the €346.7 million reported in 2023. The growth in adjusted EBITDA was bolstered by a significant rise in contributions from equity method investees but was partially offset by elevated marketing costs for new product launches and increased personnel expenses.
Capital expenditures (CAPEX) also rose notably in Q1 2024, amounting to €45 million—€20.5 million higher than the previous year. This increase was primarily due to higher investments in the UK, aligning with Allwyn’s plans to transform the UK National Lottery. CAPEX for other segments remained flat, highlighting the strategic focus on the UK market.
Allwyn’s CEO, Robert Chvatal, expressed confidence in the company’s position and outlook for 2024. He stated, “2024 has started well, with trading broadly in line with our expectations. This reflects good operational and financial performance and our ongoing focus on the delivery of our growth strategies.” Chvatal emphasized that Allwyn has successfully initiated the next 10-year license period for the UK National Lottery and continues to make progress in adjusted EBITDA, positioning the company well for future growth.
In a strategic move to expand its digital footprint, Allwyn entered into an agreement to acquire a 70% stake in online content developer Instant Win Gaming (IWG) during Q1. IWG, known for supplying online instant win games to over 25 national and state lotteries worldwide, boasts a portfolio of more than 250 titles. For the year ending 30 April 2023, IWG reported £18.2 million (€21.3 million) in EBITDA.
Additionally, Allwyn International announced the launch of a $450 million Term Loan B offering by Allwyn Entertainment Financing. The proceeds from this offering will be used to fully redeem the €400 million outstanding principal amount under the Floating Rate Notes due 2028, issued by Allwyn Entertainment Financing (UK) plc. The funds will cover associated costs, fees, and general corporate purposes, with a significant portion expected to be swapped to floating rate EUR.
