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INTERNATIONAL GAME TECHNOLOGY PLC REPORTS SECOND QUARTER 2022 RESULTS

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  • Revenue of $1.02 billion, down 2% as reported and up 3% at constant currency, led by 23% growth in Global Gaming
  • Operating income of $228 million; operating income margin of 22% at high end of outlook on substantial increase in Global Gaming profitability and resilience in Global Lottery margin
  • Adjusted EBITDA of $409 million, in line with prior year’s record level at constant currency as Global Gaming performance offsets Lottery discrete benefits in the prior year; 40% adjusted EBITDA margin remains among the highest in Company history
  • Recognized a non-operating expense of $150 million representing the probable loss associated with legal proceedings related to Double Down Interactive LLC and its social gaming business sold in 2017
  • Diluted EPS from continuing operations of $(0.02); Adjusted diluted EPS from continuing operations of $0.57, up 78% from the prior year
  • Compelling shareholder returns with $135 million deployed for cash dividends and share repurchases year-to-date
  • Tightening full-year 2022 revenue outlook to reflect currency movements and perimeter impact from previously announced divestiture; reconfirming operating income margin outlook as fundamentals remain strong

 

International Game Technology PLC reported financial results for the second quarter ended June 30, 2022. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the results; access details are provided below.

“Strong customer and player demand for IGT’s products and solutions drove some of our strongest profit results ever in the second quarter and first half of the year,” said Vince Sadusky, CEO of IGT. “Our business profile is supported by significant recurring revenue streams backed by long-term contracts and resilient end markets, providing a solid foundation on which to grow. We are laser focused on executing our strategic objectives and creating compelling value for our stakeholders.”

“Our first half results set us firmly on the path to achieving our 2022 financial targets,” said Max Chiara, CFO of IGT. “Rigor on costs and incremental revenue opportunities allow us to maintain our full-year operating income margin outlook despite unfavorable currency movements and macroeconomic challenges. At the same time, we are returning significant capital to shareholders via dividends and share repurchases.”

Overview of Consolidated Second Quarter 2022 Results

Quarter Ended

Y/Y
Change
(%)

Constant
Currency
Change
(%)

All amounts from continuing operations

June 30,

2022

2021

($ in millions)

GAAP Financials:

Revenue

 Global Lottery 

648

725

(11) %

(4) %

 Global Gaming

330

274

21 %

23 %

 Digital & Betting

43

42

1 %

4 %

Total revenue

1,021

1,041

(2) %

3 %

Operating income (loss)

Global Lottery

230

300

(23) %

(16) %

Global Gaming

57

1

NM

NM

Digital & Betting

8

9

(11) %

(10) %

Corporate support expense

(29)

(26)

(11) %

(26) %

Other(1)

(39)

(40)

3 %

2 %

Total operating income

228

244

(7) %

1 %

Operating income margin

22 %

23 %

Net cash provided by operating activities

196

249

(21) %

Cash and cash equivalents

673

639

5 %

Earnings per share – diluted

$(0.02)

$(0.48)

96 %

Non-GAAP Financial Measures:

Adjusted EBITDA

Global Lottery

330

414

(20) %

(13) %

Global Gaming

87

35

145 %

150 %

Digital & Betting

12

13

(7) %

(6) %

Corporate support expense

(20)

(21)

4 %

(14) %

Total Adjusted EBITDA

409

442

(7) %

(1) %

Adjusted EBITDA margin

40 %

4 %

Adjusted earnings per share – diluted

$0.57

$0.32

78 %

Free cash flow

117

176

(34) %

Net debt

5,722

6,312

(9) %

(1) Primarily includes purchase price amortization

Note: Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this
news release

Key Highlights:

  • Recently completed acquisition of iSoftBet, a leading iGaming content provider and third-party aggregator, greatly expanding the Company’s proprietary content library and providing a world-class game aggregation platform
  • Won “Lottery Supplier of the Year” at 2022 SBC Awards North America in July
  • Introduced high-performing Money Mania wide area progressive game to commercial gaming jurisdictions following a successful launch in tribal casinos
  • Signed agreement with NUSTAR Resort & Casino to deploy IGT ADVANTAGE™ casino management system and a variety of leading games and cabinets
  • Announced expanded sports betting partnership with SuperBook® Sports to Tennessee, the fourth state where IGT’s PlaySports platform is powering the SuperBook Sports mobile betting app
  • Awarded a gold medal sustainability rating from EcoVadis, a leading sustainability rating agency
  • Recently released 2021 Sustainability Report which outlines the Company’s demonstrated environmental, social, and governance (ESG) performance

Financial Highlights:
Consolidated revenue of $1.02 billion, down 2% as reported, or up 3% at constant currency, from $1.04 billion in the prior year

  • Global Lottery revenue of $648 million compared to $725 million in the prior-year period, which included $70 million in prior-year benefits primarily from the closure of gaming halls in Italy
  • Global Gaming revenue increases 21%, or 23% at constant currency, to $330 million, driven by strong U.S. & Canada replacement unit demand, higher average selling prices, and increased installed base yields
  • Digital & Betting revenue of $43 million, stable with the prior year, as iCasino growth in the U.S. is partially offset by softness in other markets; North America sports betting market gross gaming revenue impacted by lower hold levels

Operating income of $228 million, down 7% as reported, or up 1% at constant currency, from $244 million in the prior-year period

  • Global Lottery operating income down, primarily due to about $60 million related to prior-year benefits referenced above
  • Global Gaming rises on higher revenue and profit flow through, partially offset by increased supply chain costs
  • Digital & Betting operating income of $8 million was relatively stable with the prior year

Adjusted EBITDA of $409 million matches prior year’s record level at constant currency; Adjusted EBITDA margin of 40% remains among the highest in Company history

Net interest expense of $75 million compared to $91 million in the prior year, driven by lower average debt balances and interest rates

During the second quarter, the Company recognized a pre-tax non-operating expense of $150 million ($114 million after tax) representing the probable loss associated with ongoing litigation (Benson v. Double Down Interactive LLC, No. 2:18-cv-00525 (W.D. Wash.)) and associated claims related to Double Down Interactive LLC and its social gaming business sold in 2017 by International Game Technology, a wholly-owned subsidiary of the Company

Income tax benefit of $11 million compared to a provision of $32 million in the prior year, primarily driven by recognition of the non-operating expense mentioned above and foreign exchange losses in the prior year with no tax benefit

Income from continuing operations of $34 million versus a loss from continuing operations of $39 million in the prior-year period, driven by income tax benefit, gains in foreign exchange, and lower debt retirement costs

Net loss attributable to IGT PLC of $4 million compared to net income of $306 million in the prior year due to gain on sale and income from discontinued operations in the prior-year period

Net loss from continuing operations attributable to IGT PLC per diluted share of $0.02 compared to a net loss from continuing operations attributable to IGT per diluted share of $0.48 in the prior year, on higher net income; adjusted net income per diluted share increased 78% to $0.57

Net debt of $5.7 billion compared to $5.9 billion at December 31, 2021; Net debt leverage of 3.5x was stable compared to December 31, 2021

Cash and Liquidity Update

  • Total liquidity of $2.1 billion as of June 30, 2022; $0.7 billion in unrestricted cash and $1.5 billion in additional borrowing capacity
  • Executed amendment and extension of revolving credit facilities in July 2022
    • Increased liquidity by $150 million to $1.83 billion and rebalanced EUR/USD mix to match operational exposure
    • Extended maturities to July 2027
    • Lowered interest margin and added ESG provision to allow for further potential reductions
    • Raised annual permitted restricted payments basket from $300 million to $400 million at current credit rating; potential to increase to $550 million

Other Developments
The Company’s Board of Directors declared a quarterly cash dividend of $0.20 per common share

  • Ex-dividend date of August 15, 2022
  • Record date of August 16, 2022
  • Payment date of August 30, 2022

Repurchased 750,000 shares for $15 million in the second quarter at an average price of $20.48 per share; 2.2 million shares repurchased for $54 million on a year-to-date basis at an average price of $24.89 per share

The Company expects to close on the sale of its Italian proximity payments/commercial services business in mid-to-late September

Tightening Full-year Revenue Outlook for Currency Rates and Business Disposition; Introducing Third Quarter 2022 Outlook
Full Year

  • Revenue of $4.1 billion – $4.2 billion
    • Lowered high end of range by $100 million
    • Reflecting changes in currency rates and impact from sale of Italian proximity payments/commercial services business in Q3’22
  • Operating income margin of 20% – 22% remains unchanged
  • Cash from operations of $850 – $950 million
    • Lowered high end of range by $50 million
    • Primarily driven by a working capital investment in higher inventory levels to proactively manage supply chain disruptions
  • Capital expenditures of approximately $350 million, lowered by $50 million to adjust for updated timing of spending
  • Free cash flow outlook remains unchanged

Third Quarter

  • Revenue of approximately $1.0 billion – $1.1 billion
  • Operating income margin of 18% – 20% includes approximately 150 – 200 basis point impact from project-related expenses

Outlook assumptions

  • EUR/USD exchange rate of 1.00 in the second half of 2022
  • Impact from sale of Italian proximity payments/commercial services business in mid-to-late September 2022
  • Operating income margin includes approximately 150 – 200 basis point impact from project-related and restructuring expenses expected in the second half of 2022

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Clarion gaming

‘The voice of Spain’s gaming community will be at the very heart of ICE Barcelona 2026’ states Clarion Gaming’s Ewa Bakun

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ICE Barcelona has demonstrated its commitment to the Spanish industry following a highly successful engagement program at the Expo Congreso de Juego Luis Escribano in Torremolinos.

Recognised for being one of the most established and respected gatherings in the Spanish gaming calendar, the event provided a powerful platform for the ICE team to connect with industry leaders, regional representatives, and national stakeholders, as momentum builds towards the second edition of ICE Barcelona taking place January 2026.

The ICE Barcelona delegation engaged with more than a dozen of Spain’s most influential trade associations, including Asociación de Operadores de Juego de la Comunidad de Madrid, Asociación de Operadores de Asturias, Asaebin Andalucía, Ageo Galicia, Andemar Comunidad Valenciana, Anesar, Aemexa Extremadura, Club de Convergentes, CEJUEGO, Femara and Aspromareto share the exciting development plans for January’s event.

Reviewing the programme of meetings Ewa Bakun, Director of Industry Insight and Engagement at Clarion Gaming said: “Our aim in Torremolinos was clear: to listen, to connect, and to demonstrate our commitment to the Spanish industry. The conversations that we had were without exception forward-looking and constructive focussing on how we can work hand in hand with associations to shape and deliver a Spain-focused agenda at ICE 2026.”

She added: “Topics ranged from regional market opportunities to association-led content creation, as well as new ways to maximise knowledge sharing, showcase innovation, and elevate Spain’s presence on the global gaming stage.”

“A central pillar of our discussions was the La Plaza —a dedicated hub on the ICE show floor. More than simply a meeting point, La Plaza will host an industry-led programme co-curated with the Spanish associations, featuring bespoke content sessions, networking events, and collaborative initiatives that put the voice of Spain’s gaming community at the very heart of ICE Barcelona.

“We warmly invite all associations, including those we could not meet in person at the Expo Congreso, to join us on the journey to Barcelona and play a central role in shaping ICE 2026. The response from delegates to both the debut of ICE Barcelona in 2025 and the 2026 roadmap was overwhelmingly positive.

“Attendees expressed strong enthusiasm for the opportunity to showcase Spain’s strength and dynamism on a global stage, while also embracing the chance to contribute to the broader strategic conversations impacting the future of the industry.”

The post ‘The voice of Spain’s gaming community will be at the very heart of ICE Barcelona 2026’ states Clarion Gaming’s Ewa Bakun appeared first on European Gaming Industry News.

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Compliance Updates

Former Playtech Director of Internal Audit & Risk Joins eGaming Integrity

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eGaming Integrity is delighted to announce the appointment of Robert Penfold as Head of Internal Audit, further strengthening the firm’s ability to support Isle of Man licence holders in responding to increasing regulatory scrutiny and upholding the island’s reputation for integrity.

Robert brings with him more than two decades of high-level experience in governance, risk, audit, and compliance across global gaming and financial services organisations. Most notably, Robert spent over eight years as Director of Internal Audit & Risk at Playtech plc, the world’s largest online gaming software and services supplier listed on the London Stock Exchange. In this role, he was a member of Playtech’s Audit, Risk and Governance Committees, overseeing global audit programmes and supporting the business in meeting complex regulatory requirements across multiple jurisdictions.

Robert has also held senior positions at bwin.party digital entertainment plc, where he led global risk management across regulated markets including Spain, Denmark, Italy, Belgium, France, and Gibraltar. More recently, he was engaged as Governance, Risk & Compliance Manager at the Isle of Man Government’s Attorney General Chambers, where he implemented new risk frameworks and data governance processes across multiple divisions.

Emma Shilling, Director at eGaming Integrity, commented: “This is a landmark appointment for us. Robert’s depth of experience, particularly his years at the helm of audit and risk at Playtech, represents a real step change for eGaming Integrity and our clients. His appointment evidences our commitment to providing heavyweight, board-level expertise to Isle of Man licence holders at a time when regulatory scrutiny has never been higher.”

Robert Penfold added: “I’m thrilled to be joining eGaming Integrity at such a pivotal time for the sector. I’ve spent much of my career working to ensure organisations not only meet regulatory requirements but build strong, resilient frameworks that protect their businesses and customers. I look forward to working with Emma and the team to help our clients strengthen their compliance and governance cultures.”

Robert’s appointment adds further depth to eGaming Integrity’s team of industry experts and former regulators, reinforcing its position as the Isle of Man’s leading provider of mock audits, remediation, and internal audit services for the island’s eGaming licence holders.

The post Former Playtech Director of Internal Audit & Risk Joins eGaming Integrity appeared first on European Gaming Industry News.

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Anastasia Rimskaya Chief Account Officer at Aviatrix

Aviatrix live with Wildz following Wildz Group integration

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Innovative crash game Aviatrix has integrated with leading operator Wildz Group, in a partnership that sees it launch with flagship casino Wildz and a selection of other, high-performing brands.

The launch is made possible via a Relax Gaming integration, giving Wildz Group players access to Aviatrix’s award-winning gameplay. In addition to Wildz, the title is now available at Spinz, Caxino, Tuplaus, Chipz and Wheelz.

Anastasia Rimskaya, Chief Account Officer at Aviatrix, said: “Wildz Group has built an outstanding reputation for delivering player-first entertainment, and we’re delighted that Aviatrix is joining that journey. We’re certain Aviatrix’s unique take on the crash genre will engage the full Wildz Group network, and we’d like to thank Relax Gaming for a swift and seamless integration.”

Jani Koskinen, Chief Marketing Officer at Wildz Group, said: “We’re always looking to add content that brings something new to our players, and Aviatrix fits the bill perfectly. Its blend of innovation and engagement is a great match for our casinos, and we’re excited to roll it out across our portfolio following a successful launch at Wildz.”

Since its debut a little over two years ago, Aviatrix has rapidly grown in popularity, thanks to a relentless focus on innovation and a commitment to keeping gameplay exciting for an expanding global audience.

The post Aviatrix live with Wildz following Wildz Group integration appeared first on European Gaming Industry News.

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