Press Release
(Pursuant to Art. 114 par. 5 of Legislative Decree 58/1998)
SNAITECH IS BACK IN PROFIT INTERIM RESULTS AS OF 30 SEPTEMBER 2017
Net profit of € 4.8 million in the first nine months, EBITDA of € 85.9 million Strong growth of Online wagers in the first nine months up to € 1,144 mln (+30.1%)Main consolidated economic and financial data
v Total wagers of € 7.7 billion in the first nine months of 2017
v Revenues of € 639.9 million, down by 3.4% compared to the first nine months of 2016
v 3Q EBITDA of € 30.2 million, up by € 0.3 million compared to the 3Q 2016 (up by € 2.4 million net PREU increase on Gaming Machines)
v EBITDA of € 85.9 million, down by 12% compared to the first nine months of 2016, mainly due to Sports betting payout and PREU increase on Gaming Machines
v Net Profit of € 4.8 million compared to a loss of € 7.5 million in the first nine months of 2016
v Net Financial Position of € 456.2 million, improved by € 25 million from 31 December 2016
Milan, 13 November 2017 - Snaitech S.p.A.'s Board of directors duly held today in Milan approved the interim report of the Group as of 30 September 2017, with revenues of Euro 639.3 million, an EBITDA of Euro 85.9 million, an EBIT of Euro 42.3 million and Net Consolidated Profit of Euro 4.8 million.
The following table shows the key performance indicators of the Condensed Consolidated Financial Statements:
Key consolidated First nine months | Change | Third Quarter | Change |
performance indicators of of | |||
Figures in thousand/Euro 2017 2016 | € % | 2017 2016 | € % |
Revenues | 639,286 | 662,091 | (22,805) | (3.4) | 201,603 | 219,674 | (18,071) | (8.2) |
EBITDA | 85,931 | 97,627 | (11,696) | (12.0) | 30,238 | 29,905 | 333 | 1.1 |
EBITDA Adj | 90,095 | 102,873 | (12,778) | (12.4) | 31,618 | 32,402 | (784) | (2.4) |
EBIT | 42,278 | 49,243 | (6,965) | (14.1) | 15,329 | 12,942 | 2,387 | 18.4 |
Profit/(loss) before tax | 11,463 | 6,573 | 4,890 | 74.4 | 5,016 | (1,256) | 6,272 | >100 |
Net profit (loss) | 4,830 | (7,537) | 12,367 | >100 | 2,796 | (7,141) | 9,937 | >100 |
Diluted profit /(loss) per share | 0.03 | (0.04) | 0.07 | >100 | 0.01 | (0.04) | 0,05 | >100 |
The EBITDA corresponds to the "Earnings Before Interest, Tax, Depreciation and Amortisation" indicated in the comprehensive income statement, adjusted for non-recurring costs and revenues and costs related to any bank guarantees and cost of personnel related to share-based remuneration (IRFS 2 charges). The EBITDA Adj corresponds to the EBITDA adjusted to take into account any expense related to bad or doubtful debts. The EBIT refers to "Earnings before interest and taxes" indicated in the statement of comprehensive income. EBITDA, EBITDA Adj and EBIT are considered alternative performance indicators, but are not measures defined on the basis of International Financial Reporting Standards ("IFRS"). Therefore, they must not be considered separately or as a replacement of other items of financial statement drafted according to the IFRS standards. These indicators must rather be used to supplement the results calculated according to IFRS in order to allow a better understanding of the operating performance of the Group. We believe that EBITDA, EBITDA Adj and EBIT may be helpful indicators to explain changes in operating performance and may provide useful information on the company's ability to manage indebtedness. They are also widely used by analysts and investors in the gaming sector as performance indicators. EBITDA, EBITDA Adj and EBIT must not be considered as an alternative to cash flows to measure liquidity. As defined, EBITDA, EBITDA Adj and EBIT may not be comparable with the same indicators used by other companies.
The business performance of the Snaitech Group in the first nine months of 2017 was characterized by the following key events:
Total wagers of Euro 7,678 million with strong performance of the Online business both in the Sports Betting segment (+37.5%) and Online Games segment (+27.5%);
Integration with Cogemat Group successfully completed with the achievement of significant efficiencies at operational level for the whole Snaitech Group;
Progression with the plan to outsource the point of sales owned by SNAI Rete Italia ("SRI");
Beginning of rejuvenation program of SNAI points of sales through the implementation of Smart Technology®.
Wagers breakdown by business
Table below shows wagers for the first nine months of the year of 2017 compared to the same period last year.
Figures in million/Euro
2017
2016
%
Sports Betting
537
528
1.6%
Horse Betting
139
158
-12.2%
Virtual Events
189
212
-10.7%
Retail Betting
865
898
-3.7%
AWPs
2,718
2,920
-6.9%
VLTs
2,561
2,626
-2.5%
Gaming Machines
5,280
5,547
-4.8%
Online Betting
310
225
37.5%
Games
834
654
27.5%
Online
1,144
879
30.1%
TOTAL CONCESSIONS
7,288
7,324
-0.5%
Betting provider
326
354
-7.9%
Paymat
64
87
-26.6%
SNAITECH GROUP
7,678
7,765
-1.1%
SNAITECH First nine months of Changes
In the first nine months of 2017, the Group wagers settled at Euro 7.7 billion, down by 1.1%, compared to Euro 7.8 billion recorded in the first nine months of 2016.
The following section provides with comments on the performance of each business unit. Market shares of Snaitech are based on publicly available industry data.
Retail Betting business
Snaitech retail network for Sports Betting is widespread across the entire country and, as of September 30, 2017 it accounts for 1,607 point of sales (700 shops and 907 corners). Snaitech consolidates its market leadership in the Retail Betting with a market share of 19.2% and more specifically in the three following segments: 17.4% share in Sports Betting, 38.7% in Horserace Betting and 17.8% in Virtual Events.
In the Sports Betting segment, Snaitech wagers grew by 1.6% up to Euro 537 million from Euro 528 million in the first nine months of 2016, due to the improvement of products offering and the rationalization of distribution network.
In the first nine months of 2017, fixed odds Sports Betting recorded a payout of 84% versus 82% in the first nine months of 2016.
Horserace Betting and Virtual Events collected lower wagers compared to the first nine months of 2016 and were respectively Euro 139 million (down by 12,2%) and Euro 189 million (down by 10,7%). It must be highlighted the trend reversal for the Virtual Events in the third quarter, as they growth 1% compared the same period of 2016.
Gaming Machines business
In the Gaming Machines segment, Snaitech is the second largest player with a market share of 14.5%. At the end of September 2017, the Group has 59,732 AWP rights deployed in 14,972 points of sales spread across the country as well as 10,378 rights for VLT, of which 9,924 are currently installed in 1,240 point of sales.
Wagers of the whole business decreased by 4.8%, compared to the first nine months of 2016, moving from Euro 5,547 million to Euro 5,280 million. This result was mainly due to tighter local regulations on distance from sensible premises and opening hours as well as to the lower AWP payout occurred in 2016 (from 74% to 70%). In the first nine months of 2017, VLTs collected wagers for Euro 2,561 million (down by 2,5% compared to the first nine months of 2016) and AWPs collected wagers for Euro 2,718 million (down by 6,9% compared to the first half of 2016). Finally, due to the gradual depletion of the payout effect, in the third quarter AWP wager stabilized and were almost in line with the same level of last year.
Online business
In the Online business, which includes Online Betting and Online Games (Bingo, Cash and Tournament Skill Games, Casino Games and Slot), the Group saw an increase of wagers by 30.1%, up to Euro 1,144 million compared to Euro 879 million collected in the first nine months of 2016.
The drivers of such growth, both in the Online Sports Betting (+37,5%) and the Online Games (+27,5%), were mainly related to the augmentation of products offering and the cross-selling initiatives implemented on retail channel. Notwithstanding a growing competitive pressure, the market share settled at 6.2%.
In the first nine months of 2017, the payout level of the Online Sports Betting was on average equal to 88.1% compared to 86.4% in the first nine months of 2016.
Revenues
Total Group revenues decreased by 3.4%, down to Euro 639.37 million from Euro 662.1 million recorded in the first nine months of 2016. The causes of such decrease may be identified in the higher payout of Sports Betting and the increase of PREU tax rate on Gaming Machines (effective from April 2017), partially offset by the increase of wagers from Online Betting and Online Games as well as by the positive impact of lower AWP payout on revenues.
The following table presents a breakdown of revenues by business unit, in order to provide a better comprehension of the business dynamics occurred in the first nine months of 2017.
First nine months of Changes
2017 2016 %
Figures in million/Euro
SNAITECH
Retail Betting
115.7
135.0
-14.3%
Gaming Machines
465.9
478.0
-2.5%
Online
43.9
37.4
17.4%
Horse tracks management
6.8
7.4
-8.2%
Others
16.2
19.1
-15.0%
ICE (Intercompany eliminations)
(9.2)
(14.8)
-38.2%
SNAITECH GROUP
639.3
662.1
-3.4%
Margins, results and NFP
Group EBITDA in the first nine months of 2017 totalled Euro 85.9 million, down by 12% from the same period last year.
Such result was mainly due to the following unfavourable events:
Unfavourable payout of Sports Betting;
Performance of VLTs and Virtual Events;
The increase of PREU tax rate on Gaming Machines.
Such unfavourable events were partially offset by the solid performance of the Online business as well as by the achievement of significant synergies and efficiencies at operational level following the merger with Cogemat group and the outsourcing of points of sales of SNAI Rete Italia.
In the first nine months of 2017, Snaitech Group started several actions to recover profitability and partially offset the negative impact of the recent PREU tax increase:
Launched a new project of VLT network integration and optimisation (in June);
Started the reduction of payout level on VLTs;
Finalized the deployment of new functions for on Virtual Games platform as well as started the procedure to certify the second gaming platform.
The following tables set forth a comparison of key items of the Income statements and the calculation of EBITDA.
Figures in million/Euro | |||
SNAITECH - Consolidated Statement of Comprehensive Income | 9M 2017 | 9M 2016 | Changes % |
Total Revenues | 639.3 | 662.1 | -3.4% |
Operating Costs | (558.8) | (571.0) | -2.1% |
Earnings before interest, tax, depreciation and amortisation (Gross EBITDA) | 80.4 | 91.1 | -11.7% |
Amortisation and depreciation | (37.0) | (41.6) | -11.2% |
Other expenses related to provisions | (1.2) | (0.2) | >100% |
Earning before interest and tax (EBIT) | 42.3 | 49.2 | -14.1% |
Financial income and costs | (30.8) | (42.7) | -27.8% |
Profit (loss) before tax | 11.5 | 6.6 | 74.4% |
Tax | (6.6) | (14.1) | -53.0% |
Profit (loss) for the period | 4.8 | (7.5) | >100% |
Figures in thousand/Euro | |||
SNAITECH Group - EBITDA bridge | 9M 2017 | 9M 2016 | Changes % |
Earnings before interest and tax | 42.3 | 49.2 | -14.1% |
+ Amortisation and depreciation | 37.0 | 41.6 | -11.2% |
+ Other expenses related to provisions | 1.2 | 0.2 | >100% |
Gross EBITDA | 80.4 | 91.1 | -11.7% |
+ Commissions on bank guarantees | 4.8 | 4.0 | 19.4% |
+ Share-based remuneration (IFRS 2 charges) | 0.1 | 0.0 | - |
+ Non recurring costs (revenues) | 0.6 | 2.5 | -77.9% |
EBITDA | 85.9 | 97.6 | -12.0% |
SNAITECH S.p.A. published this content on 13 November 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 13 November 2017 12:08:02 UTC.
Original documenthttp://snaitech.it/sites/devsnai/files/pr_-_13_november_2017_-_snaitech_results_as_of_30_sept_2017.pdf
Public permalinkhttp://www.publicnow.com/view/27526962BDB7C20F5DFF95B62B74EACFE21D887B