(PRESS RELEASE) -- Playtech, the leading platform, content and services provider in the online gambling industry, today announces its final results for the year ended 31 December 2022.
Summary:- Excellent FY 2022 driven by continued strength in regulated B2B markets, and Snaitech.
- Record Adjusted EBITDA of €405.6 million, up 28% vs. 2021.
- Landmark agreement signed with Hard Rock Digital in Q1 2023, accelerating the U.S. strategy and providing growth opportunities globally.
- Ahead of its B2B investor event later today, Playtech is pleased to announce a new medium term Adjusted EBITDA target for B2B of €200 – 250 million.
- Strong start to 2023 in spite of the broader macroeconomic and geopolitical uncertainty.
“2022 was a year of considerable strength for Playtech, in which we delivered record revenues and EBITDA, ahead of market expectations,” said Mor Weizer, CEO. “All parts of the business contributed to this performance, with B2B powered by Europe (ex-UK) 3 Sensitivity: Internal and the Americas, and B2C’s impressive performance underpinned by Snaitech’s continued strength in the Italian market in both retail and online.
Divisional highlights B2B Gambling:- Very strong growth within regulated markets helped to deliver total B2B revenue of €632.4 million in 2022, growing 14% (+11% at constant currency).
- B2B Adjusted EBITDA was €160.2 million compared to €139.2 million in 2021, achieved against the backdrop of the war in Ukraine where we employ over 700 colleagues (c.10% of our workforce).
- Europe ex-UK grew 31% at constant currency to €184.6 million driven primarily by Netherlands with strong contributions from Poland, Spain and Ireland.
- Americas continued to perform well with revenues of €144.7 million and 27% constant currency revenue growth. Caliente in Mexico remained a key driver of strong revenue growth while the Brazil market also performed very well in 2022 and offers significant opportunity going forward, as this market moves towards regulation.
Significant progress made executing the US strategy:- Landmark agreement signed with Hard Rock Digital in early 2023.
- Launched the IMS platform with Parx Casino & Racing and Parx Casino Shippensburg in Pennsylvania, involving a complex migration off a competitor’s platform.
- Signed several new deals including Golden Nugget, WynnBET, Resorts and 888 which are expected to go live in the coming months.
- Licenses granted in Pennsylvania and Colorado in 2022. Ohio and Maryland licenses granted in early 2023. Now licensed in nine states with further applications progressing.
- Launched with NorthStar in recently regulated Ontario, Canada in early 2022; recently announced an extension of the relationship and a strategic investment in NorthStar to ensure we are well positioned to benefit from the attractive Canadian market.
- Live Casino continued to see good revenue growth; strategically important facility opened in Peru in H1 that will help continue to drive future growth in the region.
- The higher margin SaaS offering continues to gain traction with over 100 further brands added in 2022, bringing the total to over 350.
- Asia revenue declined 18% (-21% at constant currency) due to competitive pressures and the impact of lockdowns in parts of the region in the period, while the Company incurred a bad debt provision of €15.4 million due to collection delays, recognized in H1.
“Strategically we have also continued to deliver, executing the successful sale of Finalto continuing our simplification strategy, and making great progress in North America with the launch of the IMS platform with Parx Casino in Pennsylvania and having signed several significant new deals including Golden Nugget,
WynnBET, Resorts and
888 Casino,” said Mor Weizer, CEO.
B2C Gambling:- Total B2C revenue (including Snaitech and white-label) grew 48% year on year to €983.1 million (2021: €663.7 million). Adjusted EBITDA was €245.4 million compared to €177.9 million in 2021.
- Snaitech Adjusted EBITDA grew 39% to €254.2 million (2021: €182.6 million) driven by retail sites reopening at the end of June 2021 post-pandemic.
- Snaitech’s online business performed ahead of expectations with revenue growth of +2% versus 2021, despite the reopening of retail sites. The second half saw revenue growth of +10% v H2 2021, as Playtech continues to leverage the structural shift to online. Adjusted EBITDA margins remained high at 56% in 2022 versus 59% in 2021.
- Snaitech maintained its number one position by brand across retail and online sports betting in Italy in 2022.
- HAPPYBET, now integrated into Snaitech’s operations, remained loss-making, with EBITDA of €-10.8 million (FY21: €-11.4 million) but strategic and operational measures have been taken such as upgrading HAPPYBET’s technology infrastructure.
- Sun Bingo White Label saw 5% revenue growth to €65.3 million while Adjusted EBITDA fell to €2.0 million (2021: €6.7 million). Reported EBITDA includes a €10.4 million charge in H1 to terminate an onerous contract. The termination of the agreement will positively impact the profitability of the business going forward.
Financial and corporate highlights:- Strong cash generation in 2022, with adjusted operating cashflow5 of €397 million.
- October 2023 bond partly repaid generating significant cash interest savings; additional refinancing options being considered for remaining €200 million October 2023 bond.
- Sale of Finalto for cash consideration of $228.1 million was completed in July 2022 with a profit on disposal of €15.1 million, marking a significant step in Playtech’s stated strategic objective to simplify the Group.
- Disposal of 100% of Statscore to LSports, and simultaneously acquiring a 30.89% stake in LSports, a provider of data to sportsbooks and media companies to increase our footprint in the growing sports data market. In 2023, Playtech announced an equity investment in NorthStar, the proceeds of which will be used to accelerate the growth of NorthStar’s footprint across Ontario and future regulated markets across Canada.
- Landmark agreement signed with Hard Rock Digital in early 2023. As part of the agreement, Playtech has also invested $85 million (c.€80 million) in exchange for a low single digit % minority equity ownership stake.
- Reported profit of €40.6 million (2021: €686.7 million). Prior year included a significant gain on equity call options embedded in the Company’s agreements in the Americas.
Current trading and outlook:- The macroeconomic outlook remains uncertain given geopolitical and inflationary pressures.
- Despite this, Playtech has had a strong start to 2023, driven by Snaitech and Caliente and highlighting the resilience of Playtech’s increasingly diversified portfolio.
- Playtech has announced a new medium term Adjusted EBITDA target for B2B of €200 - 250 million.
- Snaitech medium term Adjusted EBITDA guidance maintained at €300 - 350 million.
- Strength of balance sheet further improved by strong cash generation and proceeds from sale of Finalto; financial position gives flexibility for future shareholder distributions and M&A.
- Given the strong performance in 2022, and momentum within the business, the Board remains confident in Playtech’s ability to execute on growth opportunities across both B2B and B2C divisions.
“We have started the new financial year well and announced the signing of the landmark transaction with Hard Rock Digital, and in spite of the continued macro-economic and political uncertainty, remain confident in our future prospects, as well as our ability to deliver value to all our stakeholders in a sustainable and responsible way,” said Mor Weizer, CEO. “I would like to take this opportunity to thank my colleagues and partners for their continued dedication and support. In particular, I’d like to acknowledge the bravery of our colleagues in the Ukraine and praise the work of our crisis management team, who have worked tirelessly to support our Ukrainian colleagues and their families.”