Intralot S.A. Integrated Lottery Systems and Services (INLOT) Q2 2024 earnings summary

Executive summary

• Maintained stable performance in H1 2024, mitigating FX challenges in Argentina and offsetting the absence of a major U.S. jackpot with strong marketing-driven growth in Turkey and continued expansion in developed markets like Canada.

• Renewed key contracts in the Netherlands and Ireland for three years, supporting ongoing business stability.

• Pursued multiple commercial opportunities in North America and Australia, with several RFPs submitted and more expected in H2 2024.

• Deployed advanced lottery engine LotosX and migrated BCLC’s lottery system to a cloud-based ecosystem.

• Maintained key financial indicators and stable leverage despite seasonality and FX headwinds.

Financial highlights

• Revenue for 1H24 was €173.6m, down 0.9% year-over-year, mainly due to a €10.3m FX impact in Argentina; Q2 revenue up 3.1% year-over-year.

• Gross profit increased 4.2% to €65.6m, with margin up 1.9pps to 37.8%.

• EBITDA declined 5.3% to €59.5m, margin at 34.3%; net income after tax and minority interests rose 4.4% to €4.6m.

• Free cash flow for H1 was €22.4m; operating cash flow at €45.0m; CAPEX at €11.7m, mainly for US projects and Turkey license renewal.

• Adjusted net debt as of June 30, 2024, was €338.2m, down €142.3m year-over-year; net leverage ratio at 2.7x.

Outlook and guidance

• Cautiously optimistic for H2 2024, expecting a major U.S. jackpot and stronger performance in Turkey and Argentina due to seasonality.

• Focus on technology deployment and ecosystem development, leveraging improved financial position for growth in North America and Australia.

• Anticipates positive news from RFPs in North America and Australia before year-end, with additional opportunities in Missouri, Nebraska, Western Canada, and Maryland.

• Marketing spend in Turkey expected to normalize, with readiness to adjust if market conditions change.