International Game Technology’s third quarter results continued to ‘reflect the continued, global impact of the COVID-19 pandemic, but at a lower level compared to the second quarter’ with lottery revenue up three per cent but gaming down 31 per cent.
Robust player demand drove IGT’s highest global lottery same-store sales growth and Adjusted EBITDA in seven quarters with lottery revenue coming in at $570m, driven by double-digit growth in North America same-store sales. Global gaming revenue on the other hand came in at $412m, down 31 per cent on pandemic-related closures and restrictions. IGT reported ‘positive sequential trends as casinos re-open and installed base is gradually reactivated.’
But there were some positives which saw shares jump up by 13 per cent following the publication of the financials, namely the ‘sharp, sequential improvement in global gaming revenue and profit following acute impact of the pandemic in the second quarter’ and a 41 per cent increase in the company’s digital & betting revenue.
Marco Sala, CEO of IGT, said: “The resilience of our portfolio, particularly in lottery, and benefits from our swift cost reduction initiatives are on full display in our third quarter results. Strong player demand and a host of compelling new games, systems, and digital solutions led to a sharp, sequential improvement in our most important markets. We continue to monitor the evolution and impact of the pandemic around the world. With a simplified organisation firmly in place, we are creating a leaner, stronger IGT.”
“Robust cash flow generation during the quarter and year-to-date periods have enabled us to improve our liquidity and reduce net debt,” said Max Chiara, CFO of IGT. “We are on track to achieve our 2020 temporary cost-reduction targets and have identified a number of initiatives that will enable us to deliver over $200m of structural savings over the next two years. As a result, the improvement in our profitability should support our continued focus on reducing debt.”
IGT delivered $220m in positive free cash flow in the quarter; generated $610m in cash from operations and $384m in free cash flow year-to-date. Deals completed in the quarter included a two-year contract extension with New York Lottery, and seven-year contracts with Poland and Nebraska Lotteries following competitive bid processes. It launched a full-service, in-house US sports betting trading team in the third quarter, established new partnerships with Boyd Gaming and the National Basketball Association (NBA) and launched a Resort Wallet cashless solution at Resorts World Catskills.