Results

IGT reports billion-dollar Q4 revenue and seeks to reduce debt with €700m sale of Italian payments business

By Conor Mulheir - 1 Mar, 2022

IGT generated $1.05bn in Q4 2021 revenue, an increase of 18.6% over the prior-year period.

The majority, at $687m, came from its global lottery business, up 9.0%, while its global gaming business segment brought in most of the remainder at $321m, up 44.6%. The digital and betting segment brought in the remaining $42m amid a 27.3% rise.

From its total revenue, the business declared an operating income of $186m, almost double its $96m operating income in Q4 2020. Total adjusted EBITDA came to $387m, an increase of 31.2%.

Net income for the quarter came to $55m, compared to a $220m net loss registered in Q4 2020.

The period also saw record-level quarterly cash flow generation, with free cash flow of $326m, compared to $201m in the prior-year period.

As of 31 December 2021, the business boasted total liquidity of around $2.3bn, formed of $591m in unrestricted cash and $1.7bn in additional borrowing capacity.

The company’s Q4 figures brought full-year 2021 revenue to $4.09bn, up 31.3% on 2020’s figure.

Operating income for the full year was $902m, compared to a $107m operating loss in 2020, while adjusted EBITDA climbed by 67.3% to $1.69bn.

The business registered an overall net income of $670m in 2021, compared to an $839m net loss in 2020.

Net debt was $5.92bn at the end of the year, compared to $7.32bn in 2020, and IGT has pledged to continue working to reduce this figure.

Part of its debt reduction strategy was revealed yesterday (28 February) after the firm signed a definitive agreement to sell off its Italian proximity payments business, PostePay, in a deal worth €700m.

Proceeds from the transaction, which is expected to close during Q3 2022, will be used primarily for the continued reduction of IGT’s debt.

“Our 2021 financial results reflect the best revenue, profit, and cash flow performance in the last four years, meeting or exceeding target levels on strong performance across the portfolio,” said IGT CEO Vince Sadusky.

“We made important progress on several strategic objectives and I am excited to be leading IGT in the next chapter of its evolution. We have set aggressive but achievable multi-year goals and we have a focused strategy to maximise value for all stakeholders.”

Max Chiara, the company’s CFO, added: “Improving leverage to 3.5x a year ahead of schedule enables us to pursue a balanced capital allocation framework that supports investing for growth, continued debt reduction, and the reinstatement of capital returns through quarterly dividends and share repurchases.

“As we enter 2022, the company is in a very good place with a solid financial condition and a strong foundation for further growth.”

Looking to this year, IGT said it expects revenue of between $1bn and $1.1bn in Q1, and full-year 2022 revenue between $4.1bn and $4.3bn.

The company’s board of directors has approved a quarterly cash dividend to shareholders of €0.20 per common share.