Italian gaming and lottery operator Lottomatica has reported a 4 percent year-on-year revenue rise to 440.1 million in Q1 2024. This revenue was generated on the back of 1.01 billion in total Gross Gaming Revenue (GGR) during the quarter, marking a modest 1 percent increase compared to the same period in 2023. The company now holds a 21.6 percent share of the Italian online gambling market.
However, the companys adjusted EBITDA for the quarter stood at 149.5 million, reflecting a 4 percent decrease from Q1 2023. This drop came about as the operators adjusted EBITDA margin fell to 34 percent, down from 36.9 percent in the same period of 2023. Despite this, Lottomatica reported that Q1 2024 revenue grew 11 percent compared to Q1 2023 at a normalised payout rate, driven by the overall increase in productivity of the network.
The normalised payout calculates Lottomaticas Q1 earnings on the premise of a sports betting payout rate of 79.7 percent in retail locations and 86.4 percent from betting online. This method of calculation provides a more accurate representation of the companys earnings, taking into account the variability in payout rates.
The online segment of Lottomaticas business surpassed expectations, with revenue increasing 21 percent year-on-year to 150.4 million in Q1 2024. However, the sports franchise segment reported a 15 percent year-on-year decrease to 94.4 million due to unfavourable payouts in the first quarter. Despite this, Lottomaticas gaming franchise generated a 4 percent year-on-year revenue increase to 195.3 million.
In terms of volume, the online sector also surpassed expectations, experiencing annual growth of 36 percent as total bets reached 5.06 billion. This is a significant achievement, considering that Lottomatica recorded 8.73 billion in total betting volume for the quarter, marking a 20 percent increase compared to the previous year.
Lottomatica Group CEO Guglielmo Angelozzi stated, In the first quarter of 2024 we have continued our path of organic growth, also supported by solid market tailwinds, with revenues and EBITDA achieving double digit growth year-on-year (at normalised payout). This statement reflects the companys successful growth strategy and its ability to leverage market trends to its advantage.
Lottomatica acquired SK365 last month
The company completed the acquisition of SKS365 in April 2024. This acquisition is expected to contribute significantly to the companys performance in the coming months. The company now predicts revenue for full-year 2024 to come in between 2.02 billion and 2.07 billion, with adjusted EBITDA of between 680 million and 700 million. This forecast includes eight months of contribution from SKS365, with estimated full-year adjusted EBITDA for the business of approximately 80 million.
Lottomaticas Q1 2024 performance presents a mixed picture. While the company has managed to achieve revenue growth and expand its market share, the dip in EBITDA and the decrease in the sports franchise segments revenue are areas of concern. However, the successful acquisition of SKS365 and the strong performance of the online segment provide a positive outlook for the future.
