US – IGT GTech merger creates 36 per cent rise in revenueBy Phil - 12 August 2015
International Game Technology saw revenue grow 36 per cent to $1.29bn from $945m in the second quarter of 2014, reflecting GTech’s acquisition of legacy IGT.
This was IGT’s inaugural earnings announcement since the combination of the two gambling giants was completed on April 7, 2015. On a pro forma, constant currency basis, consolidated revenue increased one per cent reflecting double-digit increases in the North American Lottery and International segments, partially offset by single-digit declines in the Italy and North America Gaming & Interactive segments. During the quarter, the company sold 10,147 gaming machines worldwide and global lottery same-store revenue excluding Italy increased seven per cent.
“The second quarter is a major milestone for our company, as we present our first set of financials in dollars, under US GAAP,” said Alberto Fornaro, CFO of IGT. “Our adjusted operating income improved from the prior year’s level on a pro forma, constant currency basis and our financial condition remains strong. We will continue to operate with our customary, disciplined cost management and are confident in achieving our synergy targets according to plans.”
“We are pleased to report for the first time as a single company,” added Marco Sala, CEO of IGT. “As anticipated, our second quarter results reflect the stable growth characteristics of our global lottery operations and a meaningful sequential improvement in our gaming operations. We have accomplished a lot in the past four months, notably organising ourselves under a single leadership team and consolidating our manufacturing footprint. There is much more ahead of us. In this year of transformation, we will continue to focus on integration to provide a solid foundation for future growth and value creation.”
One of the highlights for the quarter was international revenue which came in at $247m, 67 per cent higher than the prior year on a reported basis. On a pro forma, constant currency basis, international revenue rose 17 per cent, reflecting strong product sales for lottery terminals and gaming machines.
International lottery same-store revenue was up approximately eight per cent on continued, broad-based strength in instant tickets and robust jackpot growth in Eastern Europe. Lottery product sales increased significantly on large South African terminal and system sales.
North America Gaming & Interactive revenue was $353m compared to $28m in the second quarter of 2014. On a pro forma basis, North America Gaming & Interactive revenue declined eight per cent as higher machine sales and social gaming revenue were offset by lower participation revenue and non-machine sales.
Product sales were $116m compared to $19m in the second quarter of 2014. On a pro forma, constant currency basis, product sales were in line with the prior year, reflecting the sale of 6,218 units, supported by strong demand for new cabinets during the quarter. The increase in machine sales was partially offset by an expected decrease in intellectual property revenue.
The company’s Board of Directors initiated a quarterly cash dividend of $0.20 per ordinary share. The first cash dividend is payable on September 10.