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US – Scientific partially offsets impact of pandemic with lottery and digital growth

By - 2 March 2021

Scientific Games said its year-over year results ‘declined as the gaming business was impacted by COVID-19 restrictions for casinos globally while Lottery, SciPlay and Digital businesses delivered growth’ with fourth quarter consolidated revenue coming in at $762m compared to $863m in the prior year period.

Net loss was $84m compared to a net loss of $37m in the prior year period due to lower revenue partially offset by lower interest expense reflecting the favorable impact of 2019 refinancing activities. For the year as a whole, consolidated revenue came in at $2.7bn compared to $3.4bn in the prior year with the company’s gaming business impacted by COVID-19 disruptions, partially offset by 25 per cent SciPlay revenue growth driven by improved player monetisation, and Digital and Lottery growth.

Barry Cottle, CEO and President of Scientific Games, said: “While 2020 certainly had unforeseen challenges, I couldn’t be more proud of our team for successfully navigating through them. The strong execution coupled with the diversity of our business enabled positive cash flow. As we start off the year, I am truly excited about the team, products, and game franchises that should enable share gains, deal wins, and opportunities to enter new genres. The executive team and our Board are working purposefully to transform our company, capitalise on the evolving industry trends and deliver outsized returns to our shareholders.”

Michael Eklund, Chief Financial Officer of Scientific Games, added: “We continued to execute, having driven cash flow improvements in the fourth quarter despite a number of COVID-19 related restrictions to our land-based business. The focus remains on disciplined cost and balance sheet management. I’m confident in the opportunities for operational and business process improvements that will drive increased cash flow conversion and deleveraging, leading to increased stakeholder value.”

SciPlay revenue increased 30 per cent and AEBITDA increased 41 per cent from the prior year driven by improved payer conversion, which outpaced industry growth.
Digital revenue increased one to $73m. In January 2021, Michigan launched online sports and iGaming with early results indicating 88 Fortunes was the top performer for a leading iGaming operator. Gaming revenue for all of the company’s business lines increased sequentially from the prior quarter. Scientific recently launched several new titles on its new Kascada cabinet and saw encouraging initial play levels. Lottery systems revenue was $18m higher primarily due to stronger international product sales whilst instant products revenue was $5m higher than the prior year driven by a higher mix of contracts under our successful Scientific Games Enhanced Partnership (SGEP) program.

Caption: The Kascada cabinet

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