Allwyn reports 14% revenue jump in Q3 as Covid-19 relaxations spur growth

Allwyn has reported a 14% year-on-year (YoY) increase in its consolidated gross gaming revenue for Q3 2021, increasing to €876.2m (£744.6m) The former Sazka Group business, which rebranded earlier this month, cited a combination of inorganic growth arising from the acquisition of Stoiximan, organic growth across its online brands and a “strong recovery” following the removal of Covid-19 restrictions in Austria and Greece. Releasing its financial results for the period, Allwyn revealed a 40% YoY increase in its adjusted EBITDA, which rose to €285.1m in Q3. In addition, Allwyn reported consolidated free cash flow of €275.5m in the quarter.

Allwyn attributed the positive YoY growth to the relaxation of Covid-19 restrictions during the quarter, with Q3 marking the first financial period since Q4 2019 with no material COVID impact on its business. Allwyn’s GGR and EBITDA generated from Austria increased by 2% and 17% respectively on Q3 2020, thanks in part to “run-rate costs saving” arising from a restructuring plan that has delivered savings and is on track to deliver annual cost savings of €45m from 2022. In addition, an upturn in Allwyn’s revenue generated from the online business in its native Czech Republic to more than 40% of GGR was also provided as a factor. Czech GGR increased by 29% and adjusted EBITDA increased by 23% compared with Q3 2020, thanks to “strong momentum” in lottery and igaming. In Greece and Cyprus, GGR increased 20% from Q3 2020 and adjusted EBITDA grew by 60% YoY due to the twin impacts of the Stoiximan acquisition and a decision to prepay Greek gaming taxes. Italian retail business revenue and operating EBITDA both grew by 7% YoY when compared to Q3 2020. Reflecting on how relaxations impacted Allwyn’s revenues during Q3, group CEO Robert Chvatal hailed the firm’s strong performance. “The third quarter was the first quarter in 2021 when all our businesses operated without material COVID-19 related restrictions. “Our physical retail businesses in Greece and Cyprus and casinos in Austria and internationally, which were adversely impacted by restrictions in H1, demonstrated a very rapid recovery, in line with our expectations. Chvatal also highlighted the impact of the restructuring programme which aided the group’s Austrian operational growth in Q3, but sounded a cautious note regarding the impact of post period restriction implementations rising from the Omicron variant. “While governments have introduced some new restrictions after the end of the period, these are much more limited than in previous periods and have in the case of Austria already been relaxed again,” Chvatal continued. “We remain optimistic about the outlook for Q4, supported by strong trading in most of our businesses and in the online channel. “We have also continued our solid progress on our strategic objectives, including rapid expansion of our online business, digitalisation of physical retail, and submission of our proposal to operate the fourth UK National Lottery concession. “Overall, I am very pleased with Sazka Group’s continuing strong performance in Q3 2021 and I look forward with confidence and excitement to a great fourth quarter and 2022 as our strong trading momentum persists and we continue to make progress on our strategic objectives,” Chvatal concluded.