North American slot sales, now Aristocrat’s biggest earning segment, helped drive the Australian slot giant to record revenues of $4.4bn for the year ended September 30 2019.
Overall revenue increased 14.8 per cent in constant currency and 22.7 per cent. Operating cash flow exceeded $1bn, amidst a period of significant investment in new hardware to support expansion.
Aristocrat Chief Executive Officer and Managing Director, Trevor Croker, said: “Aristocrat delivered another year of high-quality profit growth in fiscal 2019, further extending our track record of share taking and organic momentum, driven by strong investment in talent, product portfolios and marketing across our Land-based and Digital businesses.”
“Sustained operating performance drove strong free cash flow generation, which was in turn invested to fund further growth, pay progressive dividend increases and provide significant balance sheet optionality for the future.”
“Throughout the year, Aristocrat strived to meet the evolving needs of customers and players by investing in our product portfolios and expanding into attractive new segments and genres. As we’ve built scale, we’ve also evolved our operating model and increased coordination and sharing of best practices within our Land-based and digital operations globally.”
“We also made significant strides in bedding down recent digital acquisitions, leveraging critical skillsets and establishing a diversified portfolio approach, analogous to our proven Land-based growth strategy. The successful global launch and scaling of RAID: Shadow Legends, our first entry into the CRPG genre, contributed to our performance and generated valuable insights we will apply to future game launches and genre entry strategies,” Mr Croker added.
A large and increasing majority of Aristocrat’s profit generation comes from the US. In response to this significant shift, Aristocrat implemented changes in its group structure on November 19 2019 that are expected to lead to reductions in both cash tax paid and accounting tax expense but will not impact the amount of Australian tax the business pays, which has averaged over $120m per year for the past three years, as disclosed in Aristocrat’s Voluntary Tax Transparency Code Report.
In land-based Aristocrat is anticipating further incremental gains in attractive North American adjacencies.
Mr Croker said: “We expect to maintain market-leading share positions across key for sale segments globally and we expect continued expansion across our total gaming operations installed base, leveraging our broadening portfolio, while maintaining market-leading average fee per day performance across the overall combined installed base. In digital, we anticipate further growth in digital bookings supported by scaling of recently released new games. User acquisition spend will continue to be allocated dynamically based on game performance and is expected to remain between 25 per cent to 28 per cent of overall digital revenues.”
“We expect the changes in our group structure to start to generate non-Australian cash tax savings which will further enhance the group’s ability to invest to sustain our growth momentum and create value for shareholders,” he added.