European lottery operator Sazka Group released its 2021 interim report today, posting strong second quarter and first half of the year growth in gross gaming revenue (GGR).
Overview of Financials
Sazka Group revealed it generated €740.1 million ($873.3 million) in second-quarter consolidated GGR, up 200% on the respective quarter in the prior year. Consolidated GGR in H1 2021 amounted to €1,266.4 million ($1,494.4 million), an increase of 94% compared to Q2 2020.
Pro-rata GGR reached €601.9 million ($710.2 million) and €1,124.1 million ($1,326.4 million) in the second quarter and first six months of 2021, posting 77% and 31% growth year-over-year, respectively.
Sazka Group reported an increase of 343% in consolidated adjusted EBITDA in the second quarter at €252.7 million ($298.2 million), and 97% growth in EBITDA for the first six months of the year, €397.1 million ($468.6 million).
Measured pro-rata, adjusted EBITDA for the second quarter came at €160.9 million ($189.7 million), posting a 207% increase year-over-year, while the cumulative pro-rata adjusted EBITDA reading for the first six months was €267.0 million ($315.1 million), up 77% compared to the respective period in 2020.
Consolidated profit after tax in Q2 2021 jumped 706% year-over-year, amounting to €141.9 million ($167.4 million) and helping boost the H1 2021 consolidated profit to €177.1 million ($209.0 million), an increase by 322% compared to the respective half in 2020.
Strategic Developments
Major strategic developments that took place in the first half of the year included an increase of Sazka Group’s economic interest in Casinos Austria (CASAG) after the company acquired a 4.31% additional stake to reach 59.8% total.
Sazka also realized a 2.24% increase in direct shareholding in Greek national lottery operator OPAP through open market purchases, to prop its total holding in the operator to a 45.36% stake and a 38.33% economic interest.
The reported period also saw a major investment in Sazka Entertainment of €500 million ($590 million) in funds advised by Apollo Global Management completed.
Future Outlook
Looking into the future, Sazka noted the vast majority of its retail POS in three of the destinations it operates, the Czech Republic, Austria and Italy, remain open, while all markets register strong online sales growth from 2020 onwards.
As retail restrictions in Greece and Austria, which impacted the group’s retail segment, were gradually lifted by the end of Q2, business is now running unrestricted, and if there are no new restrictions imposed in Q3, the third quarter of 2021 will be the first with no material impact on any of the group’s businesses.
As GGR is currently around 2019 levels and Sazka’s physical retail business in Greece and Austria and international casinos operate unrestricted, an upsize on profitability and cash flow generation could be expected due to the tax prepayment in Greece and the restructuring of casinos in Austria.