Sazka Group hails return to pre-Covid business levels in record Q3 results

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Lottery giant Sazka Group has reported a 14.0% year-on-year increase in GGR to €876.2m in its Q3 2021 financial results. 

Net gaming revenue (NGR) for the quarter increased by 18.7%, to €541.0m, with the business recording €285.1m in adjusted EBITDA, up 40.0%.

This gave Sazka an adjusted EBITDA margin of 53%, up from 45% in the same period last year.

Profit after tax for Q3 came to €151.5m, a significant improvement over Q3 2020’s €52.1m.

The results bring Sazka’s GGR for the first nine months of 2021 to €2.14bn, up from €1.42bn for the same period in 2020.

NGR for the first three quarters totalled €1.27bn, up from €884.6m, while adjusted EBITDA came to €682.3m at a margin of 54%. This was compared to €399.2m in EBITDA during the same period last year on a margin of 45%.

Profit after tax for the first nine months totalled €324.9m, another leap from the €94.1m recorded in the same period last year.

Sazka said the growth was driven by a combination of inorganic and organic growth, including the business’ acquisition of Greek online operator Stoiximan, in which Sazka increased its stake to 84.48% in November 2020.

Organic growth channels for the business included numerical lotteries and instant lotteries sales online, as well as growth in its land-based offerings owing to the removal of restrictions relating to the Covid-19 pandemic in markets such as Austria and Greece.

In addition, Sazka said it had seen improved profitability in the Austrian market due to the successful realisation of a restructuring plan for its Austrian Lotteries business, which is on track to deliver annual cost savings of €45m from 2022.

Strong momentum in the Czech market saw GGR and EBITDA increase by 29% and 23% respectively in the jurisdiction.

In Greece and Cyprus, the removal of restrictions relating to the pandemic saw Sazka’s business return to pre-Covid levels, with GGR up 20% and adjusted EBITDA up as much as 60%.

Meanwhile, revenues and operating EBITDA in Italy were both up by 7%, thanks to the continued operation of Sazka’s physical retail network.

During the quarter, Sazka increased its direct shareholding in OPAP by 1.23% and by an additional 0.53% after the reporting period, bringing its current total shareholding to 47.04%.

Following the end of the quarter, Sazka has submitted its proposal to operate the fourth UK National Lottery concession, while OPAP repaid a €300m loan and signed a new €200m loan with a term of five and a half years, in addition to a €100m revolving credit facility.

In November, Hellenic Lotteries also repaid a €50m loan, and signed a new €40m loan and €10m revolving credit facility. Casinos Austria also repaid an €18.7m retail bond.

“I am delighted to report that Sazka Group delivered yet another strong performance in Q3,” said Group CEO Robert Chvatal. 

“Our GGR increased by 14% year on year and our Adjusted EBITDA increased by 40% with a  margin of 53%, an 8% improvement year on year.

“As a result, both our GGR and our EBITDA reached record levels in the quarter, significantly above pre-Covid levels.

“The third quarter was the first quarter in 2021 when all our businesses operated without material Covid-19 related restrictions. Our physical retail businesses in Greece and Cyprus and casinos in Austria and internationally, which were adversely impacted by restrictions in H1, demonstrated a very rapid recovery, in line with our expectations.”

While Chvatal acknowledged the introduction of new restrictions relating to increasing cases of Covid-19 in several of Sazka’s key jurisdictions, he said the restrictions are softer than in previous periods and that the business remains optimistic about Q4.

After Q3, Sazka announced that its parent company, Sazka Entertainment, is rebranding as Allwyn, which Chvatal said would “create a unified and global brand that will support our continued international expansion.

“Allwyn will retain the iconic local brands that are cherished by both its consumers and employees and have been a key factor driving the strong organic growth of the company,” he concluded.

About the author

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Conor Mulheir

Conor entered the gaming industry in 2018 producing high-level live event content for audiences in London, Amsterdam and São Paulo. From 2020, he went on to report news and commission exclusive content for various gaming media brands before joining iGaming NEXT as editor in January 2022.

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