More M&A on the horizon for Lottomatica after H1 growth

Italian gambling operator Lottomatica has repeated its desire to pursue new M&A opportunities to support and drive further growth after the operator reported year-on-year increases in revenue, earnings and net profit for the first half.

Revenue in the six months to 30 June amounted to €1.12 billion ($1.29 billion). This was 13% higher than in the same period last year, Lottomatica reported.

With higher revenue driving increased adjusted EBITDA and net profit, Chairman and CEO Guglielmo Angelozzi said the operator is now seeking more growth in H2 and beyond. This, he said, could be supported by new M&A, though did not go into specifics as to where opportunities may lie.

“We have started our buyback programme, which will continue to compete with M&A and other capital allocation opportunities, with a view to maximise shareholder returns,” he said.

M&A: an ongoing growth plan for Lottomatica

This is not the first time Lottomatica has noted M&A as being a part of its growth strategy. In Q1,  Angelozzi spoke about “interesting opportunities” for the business.

It was the €639 million acquisition of SKS365 in April last year that has helped to drive growth over the past year. Now referred to as PWO by Lottomatica, integration is due to complete by the end of the year.

“We have completed the migration of PWO onto our proprietary tech platform thereby positioning Planetwin to fully leverage our capabilities to capture market growth,” Angelozzi said.

The business, controlled by private equity giant Apollo Global before its April 2023 IPO, was built through M&A. Apollo acquired the Lottomatica business from IGT in 2021, then further consolidated its Italian operations with a €310 million deal for BetFlag in 2022. These deals have established Lottomatica as Italian gambling’s market leader with a 30.5% share online.

Online leads the way in H1

Breaking down the H1 figures, online was again the primary source of revenue, generating a total of €463 million. This was 37% up on the same period last year, of which only Q2 included SKS365.

Sports betting franchise revenue, from betting shops, also increased by 31% year-on-year to €279 million during H1. Again, this was mainly due to the SKS365 acquisition and favourable sport betting payouts. This growth came despite tough comparatives with H1 2024 including the early stages of the Euro 2024 football tournament.

Lottomatica processed 21.8 billion bets over the course of the six months, a rise of 21%. Online bets jumped 34% to 14.4 billion and sports bets climbed 17% to 2.0 billion, though gaming wagers slipped 2% to 5.4 billion.

There was also an increase in gaming hall revenue, which increased 2% to €386 million for the half. Growth in this sector came primarily in Q2, with Q1 revenue from gaming flat year-on-year.

In terms of adjusted EBITDA, the group’s total for the six-month period was €422 million, a rise of 33%. Sports betting saw the largest increase at 60% to €81 million, though online led the way with €251 million, up 41%. Gaming adjusted EBITDA also crept up 2% to €90 million.

Net profit soars 215% to €65 million

Turning towards the bottom line, costs were higher across the board, with the exception of financial expenses. However, such was the impact of revenue growth that pre-tax profit almost doubled from €56 million to €108 million.

Lottomatica paid €40 million in tax, meaning a net profit of €68 million, up 191% year-on-year.

Even after excluding some €3 million in net profit from non-controlling interests, net profit attributable to Lottomatica rocketed 215% to €64.8 million for the half.

Following the H1 announcement Lottomatica has confirmed its guidance for the 2025 financial year. Revenue will fall in the range of €2.32 to €2.37 billion, with adjusted EBITDA between €840 and €870.6 million.

Apollo has also fully exited the business as of 19 June this year.

Shares in the Italian gaming operator were down 1.06% at €24.36 in Milan at the time of writing, though shares have risen 115.77% over the past 12 months.