Intralot S.A. Integrated Lottery Systems and Services (INLOT) Q3 2024 earnings summary

Executive summary

• Revenue for the nine months ended September 30, 2024, was €263.5m, down 5.9% year-over-year, mainly due to FX in Argentina and the absence of large US jackpots, though sequential improvement was seen in Q3.

• EBITDA reached €91.5m, a 9.4% decrease year-over-year, with margin at 34.7%; net income after tax and minority interest was €6.5m, down 28.2%.

• Profitability and leverage metrics remained within targets, with adjusted net debt at €326.2m and leverage ratio at 2.7x, improved from 3.4x in 9M23.

• Organic growth in Turkey and Argentina, new contract wins in Australia and Canada, and ongoing global tenders support future outlook.

• Management continues to focus on contract renewals, global tenders, and maintaining profitability and leverage targets.

Financial highlights

• Gross profit for 9M24 was €99.5m, down 7.2% year-over-year, with gross margin at 37.8%.

• Operating cash flow for 9M24 was €81.6m; free cash flow reached €39.5m.

• CAPEX increased to €24.7m, mainly for US projects and Turkey license renewal.

• Net interest payments were €28.4m; gross debt decreased to €433.6m.

• EBT dropped 67.1% to €10.6m, mainly due to lower EBITDA, higher D&A, and increased interest expenses.

Outlook and guidance

• Sequential improvement is expected to continue in Q4, with performance hinging on the occurrence of a major US jackpot.

• Management expects to maintain profitability and leverage within targeted range, focusing on contract renewals and new project bids.