"Total revenue grew by 5% year-over-year, with strong organic growth in Austria, the Czech Republic, Greece, and Cyprus," he noted. The main drivers of this growth were Allwyn's expansion in digital channels and ongoing product innovation, including new game releases and content updates.
Adjusted EBITDA declines, with poor performance in the UK and USA
Despite the revenue growth, adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) fell by 11% year-over-year to 340 million euros, primarily due to weak performance in the UK and US markets. However, excluding the impact of the UK and Allwyn LS Group, adjusted EBITDA grew by 4%, highlighting strong performances in other regions. The UK's adjusted EBITDA dropped significantly by 92%, which Allwyn attributed to "the introduction of new incentives and profit mechanisms related to the UK National Lottery." This mechanism links company earnings to contributions to charitable causes, resulting in a reduced profit margin.
Regional performance: Austria, Czech Republic, Greece, and Cyprus
Allwyn's operations in Austria showed strong performance, with total revenue increasing by 7% to 401 million euros. However, total revenue in the Czech Republic slightly declined by 1% to 124.6 million euros. Greece and Cyprus continued to make significant contributions to the company's overall financials, with total revenue increasing by 7% to 558.2 million euros, mainly due to Allwyn's controlling stake in Greek national lottery operator OPAP. Chvatal noted that OPAP's buyback program increased Allwyn's stake to 51.45%.
Non-organic growth and strategic investments
Allwyn's strategic investments also played a role in its growth story. In June this year, the company secured a 15-year license to operate the lottery in Cyprus, further solidifying its position in the region. Additionally, Allwyn completed a 70% investment in Instant Win Gaming, expanding its digital capabilities in the online instant win games sector.
Despite challenges in the UK and US, Allwyn remains optimistic about its future. CEO Chvatal expressed confidence in the company's continued growth, stating, "We are well-prepared for the remainder of 2024 and the next chapter of our growth story."
