Intralot names Nikolakopoulos as new CEO after mixed Q1

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Nikolakopoulos becomes CEO of Intralot with immediate effect. He will also sit on the board with 11 other members including chairman Sokratis Kokkalis and vice-chair Constantinos Antonopoulos.

Intralot announced the appointment during its ordinary general meeting, which took place ahead of publishing its Q1 results. The meeting also established a new audit committee of three independent non-executive members: Adamantini Lazari, Dionysia Xirokosta and Georgios Karamichalis.

Turning attention to financial performance in Q1, the three months to 31 March proved a mixed period for Intralot. Revenue fell 4.8% year-on-year to €85.1m (£72.5m/$92.8m) but net profit from continuing operations was higher.

Offering a brief summary of the quarter, chairman Kokkalis said the results confirm Intralot’s “stable” course. He also referenced certain refinancing that he said will support the group in the longer term.

“During Q1, the group completed the refinancing of 2024 bonds through the issuance of a bond traded on the Athens Stock Exchange and a syndicated loan with five Greek banks, on more favourable terms than those in the international markets,” Kokkalis said.

“At the same time, the results confirm the stable course of the company and consolidation of key financial indicators at the desired levels. The company also continues to pursue several important projects in North America, Australia and Brazil.”

Why was revenue down in Q1?

Taking a closer look at the Q1 results, Intralot highlighted several reasons for the decline in revenue.

Primarily, this was the result of lower revenue from licensed B2C operations in Argentina, led by unfavourable foreign currency translation following the peso devaluation in late 2023. As such, revenue here was down €4.8m, or 43.2%. However, current year data shows a 132.2% increase.

Intralot also posted a 1.6% drop in revenue from technology and support services contracts across B2B and B2G. This, it says, is again mainly due to negative foreign currency translation in Argentina. 

In contrast, in local currency, US activity remained at the same level year-on-year despite the unfavourable timing of jackpot occurrences, the impact of which was counterbalanced by strong growth in ilottery sales

There was, however, better news in terms of management contracts, with revenue rising by 8.8%. Intralot said this was driven by local market growth and market share gain in Turkey, despite the headwinds in Turkish lira.

Intralot did note that its Turkish performance was in part offset by lower recorded revenue in Morocco. This is due to a contract renewal which has a smaller contract value due to its limited scope.

Of all Q1 revenue, 92.5% came from B2B and B2G activities, with the other 7.5% being B2C. As for game type, lottery games generated 56.5% of total revenue, sports betting 22.4%, video lottery terminals 12.2% and IT products and services the other 8.9%. 

As for geographic performance, the Americas remained Intralot’s core market with €50.6m in revenue. This, however, is 13.1% less than in the previous year. Europe revenue was also down 6.7% to €14.6m, although revenue in other regions was up 21.5% to €23.3m. 

Net profit improves despite higher spending at Intralot

Turning to costs, operating expenses in Q1 increased by 18.6% to €26.9m. Intralot put this down to higher marketing spend in Turkey to support market share uptake in the country.

Depreciation and amortisation costs were also up 8.5% to €17.5m but Intralot was able to reduce interest and related costs and other financial expenses. As such, it was left with a pre-tax profit of €5.4m, down 50.7% from the previous year.

Intralot paid €400,000 in tax which, after also accounting for minority interest, means it was able to post a net profit of €3.9m. This is 25.1% ahead of Q1 in 2023.

However, it was not so positive news for EBITDA, with this dropping 10.7% year-on-year to €30.1m. This comes with a reduced margin of 35.4% on revenue.

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