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US – IGT’s ‘year of transition’ sees a loss of 12 per cent

By - 18 March 2016

A ‘year of transition’ saw International Game Technology (IGT) post pro forma losses for the 12 months to December 31, 2015.

The slot and lottery giant posted revenues of 5.1bn, signifying a pro forma loss of 12 per cent down from the $5.8bn posted for 2014.

It recorded a strong fourth quarter though with revenues growing 44 per cent to $1,365m from $951m in the fourth quarter of 2014, reflecting GTech’s acquisition of legacy IGT. On a pro forma, constant currency basis, consolidated revenue rose five per cent. During the quarter, the company sold 11,562 gaming machines worldwide and global lottery same-store revenue, excluding Italy, increasing by six per cent. During the year, the company sold 35,159 gaming machines worldwide and global lottery same-store revenue, which again excluding Italy, meant an increase of six per cent.

The merger with GTech was completed on April 7, 2015, meaning that it was difficult to compare the reported results. Reported financial information for the fourth quarter of 2015 includes the results of operations of IGT for the entire period, while reported financial information for the fourth quarter of 2014 includes only GTECH operations. Reported financial information for the full year 2015 period includes IGT for the second, third, and fourth quarters and only GTECH operations in the first quarter, while the reported full year 2014 figures are for GTECH only. Pro forma figures represent the combined results of both companies.

Pro forma adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $1.7bn, a drop of 16 per cent year-on-year on the $2bn posted in 2014.

Marco Sala, CEO of IGT, said: “We ended a year of transformation with a strong quarter for our lottery and gaming operations, enabling us to reach the high end of our EBITDA guidance. We established IGT as the global gaming leader with a commitment to being a customer-first organization and to deliver the content, technology, and expertise that drives player demand. We are confident that we have established a solid foundation from which we can continue to lead the gaming industry and grow our business.”

“Our financial and operational discipline is evidenced in our fourth quarter and full year results,” said Alberto Fornaro, CFO of IGT. “We achieved our first-year synergy goals three months ahead of plan and have increased our total cost synergy target. Strong free cash flow resulted in a significant reduction in net debt and leverage. As we look to 2016, we are forecasting growth for our core operations, while incremental synergies are expected to mitigate certain anticipated headwinds. Our financial condition is solid, placing us in a strong position to pursue our growth objectives, continue to reduce debt, and remunerate our shareholders.”

Mr. Sala added: “Strong profitability and disciplined capital management translated into free cash flow before onetime transaction costs of over $540m in 2015. As a result, we made very good progress in reducing our debt and leverage during the year, and our financial condition is solid. Our capability to deliver this financial performance is a testimony to the dedication and focus of our teams around the world.

“There were other important milestones in 2015. Having completed a transformational acquisition, we combined the world’s number one companies in lottery and gaming equipment to create the he global leader in gaming,” he added. “Coupling that with the strong position we have in social and interactive, our broad-based coverage of gaming continuum gives us a significant competitive advantage. Geographically, nearly half of our revenues come from North America. Italy represents one-third, and the balance comes from the rest of the world. That gives us a unique perspective on emerging gaming trends and opportunities, wherever they arise.”

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