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SAZKA Group H1 and Q2 2021 Results and Update on Current Trading

September 18, 2021 | Financial

CZECH REPUBLIC (September 9, 2021) –SAZKA Group a.s. (“SAZKA Group” or the “Company”, and, together with its subsidiaries, joint ventures and associates, the “Group” or “we”) announces its financial results for the six months to 30 June 2021 and provides an update on recent developments and current trading.

 Q2 2021 financial highlights

  • Consolidated Gross gaming revenue (“GGR”) increased by 200% year-on-year to €740.1 million.
  • Consolidated Adjusted EBITDA increased by 343% year-on-year to €252.7 million.
  • Consolidated profit after tax increased by 706% year-on-year to €141.9 million.

H1 2021 financial highlights

  • Consolidated GGR increased by 94% year-on-year to €1,266.4 million.
  • Consolidated Adjusted EBITDA increased by 97% year-on-year to €397.1 million.
  • Consolidated profit after tax increased by 322% year-on-year to €177.1 million.

Q2 2021 pro-rata financial highlights

  • Pro-rata GGR increased by 77% year-on-year to €601.9 million.
  • Pro-rata Adjusted EBITDA increased by 207% year-on-year to €160.9 million.

H1 2021 pro-rata financial highlights

  • Pro-rata GGR increased by 31% year-on-year to €1,124.1 million.
  • Pro-rata Adjusted EBITDA increased by 77% year-on-year to €267.0 million

Pro-rata LTM H1 2021 highlights (pre-IFRS basis)1

  • Pro-rata LTM Adjusted EBITDA was €463 million (on a pre-IFRS 16 basis).
  • Pro-rata net debt/ Adjusted EBITDA was 3.1x and Pro-rata priority net debt / Adjusted  EBITDA was -0.3x as at 30 June 2021 (before giving effect to expected cost savings from the  restructuring of the Austrian casinos).

Key strategic initiatives

  • In January 2021, the Group acquired a 4.31% shareholding in CASAG, resulting in an economic interest of 59.80%.
  • In March 2021, funds advised by Apollo completed their investment of €500 million in SAZKA Entertainment, the immediate parent of the Company.
  • During the first half of 2021 the Group increased its direct shareholding in OPAP by 2.24% through open market purchases, as a result of which the Group’s shareholding increased to 45.36% and its economic interest to 38.33%.

Trading update

  • The vast majority of the physical retail POS of our businesses in the Czech Republic, Austria and Italy have remain open and continued to sell our products throughout 2021.
  • Online sales, which increased significantly during 2020, have continued to grow strongly in all our markets.
  • COVID-19 restrictions which impacted our physical retail network in Greece and our casinos in Austria and internationally in Q1 were gradually lifted during Q2 and by the end of Q2 all our businesses operated without major restrictions.
  • Assuming no new restrictions, Q3 will be first quarter since Q4 2019 with no material COVID impact on any of our businesses.
  • Austrian Lotteries and our businesses in the Czech Republic and Italy continue to trade well.
  • Greece physical retail, Austrian and international casinos are now operating with no material restrictions
    – In each case, GGR is around 2019 levels, similar but slightly better than the recovery in Q3 2019 when most restrictions were also lifted
    – These businesses are also expected to see a substantial positive impact on profitability and cashflow generation from the GGR tax prepayment in Greece and restructuring of the Austrian casinos

Robert Chvatal, SAZKA Group CEO, commented:

“I am pleased to report that SAZKA Group delivered a robust performance in Q2. Our GGR increased by 41% and our Adjusted EBITDA increased by 75% with a margin of 56%, a 5 percent point improvement from Q1.

The second quarter of 2021 has yet again showed that we are well positioned thanks to our diverse range of products, sales channels and geographical exposure, our rapidly expanding online business, our high margins and the strong cash flow generation of our business.

In the Czech Republic, the share of our online business increased again to 39% of GGR in Q2 and Stoiximan in Greece – which is a fully online business- had another impressive quarter delivering €90.2m of GGR, an increase of 99% year on year.

Although the Q2 performance of our Greece land-based business and the Austrian and international Casinos continues to reflect the impact of COVID-19, restrictions have eased during the quarter and I am pleased to report that performance after reopening quickly returned to pre-covid levels. In all these businesses, performance since reopening in Q2 has been very encouraging, with revenues recovering faster than during the reopening in Q3 2020 and now at above 2019 levels.

We have also continued our solid progress on our strategic objectives. We have now largely executed the major restructuring of the Austrian casinos and are on track to deliver the projected annual savings of €45 million, future-proofing the casinos to deliver a flexible, resilient, and profitable business. Taken together with the strong performance of Austrian Lotteries we are very pleased with the improved performance of our Austrian business since we acquired control in June 2020. We are also pleased to have been able to continue to increase our interest in OPAP.

Overall, I am very pleased with SAZKA Group’s continuing strong performance in Q2 2021. I look forward to a great year as our strong trading momentum persists, our impacted businesses in Greece and Austria return to normal conditions, and we continue to make progress on our strategic objectives.

See the full report: H1 2021 SAZKA Group report.

SOURCE: SAZKA Group.

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