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Others

International Game Technology PLC reports fourth quarter and full year 2018 results

Friday 08 de March 2019 / 13:10

2 minutos de lectura

(London).- International Game Technology PLC (today reported financial results for the fourth quarter and full year ended December 31, 2018. Today, at 8:00 a.m. EST, management will host a conference call and webcast to present the fourth quarter and full year results; access details are provided below.

International Game Technology PLC reports fourth quarter and full year 2018 results

  • 2018 full year net loss of $21 million includes $120 million of non-cash impairment charges;

  • 2018 Adjusted EBITDA of $1,737 million within expected range when normalized for FX

  • Fourth quarter net loss of $102 million reflects non-cash impairment charges; Adjusted EBITDA of $416 million on strong global Lottery performance and North America gaming machine unit shipments

  • Net debt of $7,761 million; final installment of Scratch & Win license fee paid in fourth quarter

  • Cash dividend declared of $0.20 per ordinary share


"Our 2018 results are in line with the improved outlook we provided in October. The year was characterized by strong global Lottery performance, resilience in Italy, and progress in North America Gaming," said Marco Sala, CEO of IGT. "We've established solid foundations to build on – securing large, long-term Lottery contracts in key markets and executing a full refresh of our gaming machine cabinet and content portfolio. These efforts will translate into improved free cash flow beginning in 2019."


"We achieved 4% Adjusted EBITDA growth on stable revenue at constant currency and scope in 2018," said Alberto Fornaro, CFO of IGT. "We managed our net debt effectively, while making large upfront payments for a key Lottery license in Italy, investing in long-term North America Lottery contracts, and returning capital to shareholders through dividends. Our outlook for 2019 Adjusted EBITDA of $1.70-$1.76 billion assumes underlying growth for our core Lottery and Gaming businesses."  


Overview of Consolidated Fourth Quarter and Full Year 2018 Results





































































































































































 

Quarter Ended
December 31,



Y/Y
Change



Constant
Currency
Change 


 

2018(1)



2017



(%)



(%)



(In $ millions, unless otherwise noted)


       

Revenue



1,266



1,346



-6%



-4%



Operating income



41



194



-79%



-76%



Net income/(loss) per diluted share



($0.50)



$0.39



NM


 

Net debt



7,761



7,319



6%


 

Adjusted EBITDA



416



452



-8%



-6%



Adjusted operating income



218



268



-19%



-17%



Adjusted net income per diluted share



$0.24



$0.02



NM


 
         
         
         
 

Year Ended
December 31, 



Y/Y
Change



Constant
Currency
Change 


 

2018(1)



2017



(%)



(%)



(In $ millions, unless otherwise noted)


       

Revenue



4,831



4,939



-2%



-3%



Operating income



647



(51)



NM


 

Net income per diluted share



($0.10)



($5.26)



NM


 

Net debt



7,761



7,319



6%


 

Adjusted EBITDA



1,737



1,676



4%



2%



Adjusted operating income



990



1,028



-4%



-6%



Adjusted net income per diluted share



$0.98



$0.86



14%


 


















 

Note: Adjusted EBITDA, Adjusted operating income, and Adjusted net income per diluted share are non-GAAP financial measures. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this news release.


 

(1) On January 1, 2018, IGT adopted ASU 2014-09 (Topic 606), Revenue from Contracts with Customers ("ASC 606"). This negatively impacted Revenue in the fourth quarter by $14 million and positively impacted Adjusted EBITDA by $8 million. For the full year, Revenue was negatively impacted by $65 million and Adjusted EBITDA was positively impacted by $15 million. Comparative schedules summarizing the impact on the fourth quarter and full year ended December 31, 2018 Consolidated Statements of Operations are included later in this release.  




Overview of Consolidated Fourth Quarter 2018 Results


Consolidated revenue of $1,266 million, down 4% at constant currency



  • Stable Gaming and Lottery revenue

  • Decline driven by Sports Betting dynamics in the prior year, including exceptionally low payout percentage in Italy and large International product sales

  • $14 million negative impact from ASC 606


Adjusted EBITDA of $416 million, down 6% at constant currency



  • Lower revenue

  • Increased SG&A due to timing differences of certain expense accruals between years


Adjusted operating income was $218 million, a decline of 17% at constant currency



  • Higher depreciation associated with recent Lottery contract wins and extensions, upgrading of Gaming installed base


Interest expense was $108 million compared to $114 million in the prior-year quarter 


Provision for income taxes was $30 million compared to a benefit of $83 million in the prior-year period



  • One-time, non-cash benefit of $104 million related to U.S. tax reform in the prior year


Net loss attributable to IGT was $102 million in the quarter; Adjusted net income attributable to IGT was $48 million



  • Includes non-cash, non-tax-deductible impairment charge of $119 million, reducing the carrying value of the International segment


    • Underlying International growth outlook unchanged

    • Charge has no impact on the Company's operations, cash flow, ability to service debt, compliance with financial covenants, or underlying liquidity



Net loss per diluted share of $0.50; Adjusted net income per diluted share of $0.24


Overview of Consolidated Full Year 2018 Results


Consolidated revenue was $4,831 million, stable at constant currency and scope



  • Constant scope adjusts for the sale of Double Down Interactive, LLC in June 2017

  • Underlying improvement in North America for both Gaming and Lottery

  • Broad-based strength in Italy

  • Lower International revenue

  • $73 million negative impact from reclass of jackpot expense to contra-revenue item under ASC 606


Adjusted EBITDA of $1,737 million, up 4% at constant currency and scope  



  • Stable revenue

  • Optimization of R&D


Adjusted operating income was $990 million, a decline of 3% at constant currency and scope



  • Higher depreciation associated with recent Lottery contract wins and extensions, upgrading of Gaming installed base


Capital Expenditures of $533 million compared to $698 million in the prior year


Cash from operations was $30 million for the full year



  • Includes $878 million (gross) upfront payments for the Italy Scratch & Win license


Cash and cash equivalents were $251 million as of December 31, 2018, compared to $1,057 million as of December 31, 2017


Net debt was $7,761 million as of December 31, 2018, compared to $7,319 million as of December 31, 2017



  • Increase driven by Italy Scratch & Win upfront license payments


Operating Segment Review


North America Gaming & Interactive

















































































































































































































Select Financial Data


   

Constant


 

Key Performance Indicators


   

%



Period Ended December 31



Q4 '18



Q4 '17



FX


 

Period Ended December 31



Q4'18



Q4'17



Change 



Gaming


 

Total Revenue



273



281



-1%


 

Installed base (end of period)


     
 

Gaming Services



147



167



-12%


 

    Casino



23,108



22,807



1.3%


   

Terminal 



101



118



-14%


         
   

Social (DDI)



0



0



0%


 

Machine units shipped


     
   

Other



46



49



-5%


 

   New/Expansion



247



805



-69.3%


 

Product Sales



126



113



13%


 

   Replacement 



6,485



4,490



44.4%


   

Terminal 



96



72



34%


 

   Total machines shipped



6,732



5,295



27.1%


   

Other



30



41



-26%


         
                       

Other


 

Total Revenue



2



0



NM


         
 

Service Revenue



2



0



NM


         
                       

Total


 

Revenue



275



281



-1%


         
 

Operating Income



51



69



-27%


         


Revenue down slightly to $275 million compared to $281 million in the prior-year quarter



  • Up $9 million, or 3%, after adjusting for $15 million jackpot expense reclass (ASC 606)

  • Product sales revenue up 11% to $126 million


    • 27% increase in Gaming machine units shipped and higher average selling prices

    • Decline in Other product sales primarily driven by higher intellectual property revenue in the prior year


  • Gaming service revenue of $147 million compared to $167 million in the prior year


    • Terminal service revenue stable after adjusting for jackpot expense reclass

    • Installed base increased 301 units on strength of new games and cabinets

    • Yields lower on shift in jurisdictional and machine mix



Operating income of $51 million compared to $69 million in the prior-year quarter



  • Increased depreciation expense

  • Contribution from high-margin intellectual property revenue in the prior year


North America Lottery






















































































































































































































































Select Financial Data


   

Constant


 

Key Performance Indicators


   

%



Period Ended December 31



Q4 '18



Q4 '17



FX


 

Period Ended December 31



Q4'18



Q4'17



Change 



Gaming


 

Total Revenue



40



42



-3%


 

Installed base (end of period)


     
 

Gaming Services



40



38



8%


 

    VLT - Government Sponsored



14,939



15,294



-2.3%


   

Terminal 



25



24



2%


         
   

Other



16



13



18%


 

Lottery same-store revenue growth


     
 

Product Sales



0



4



NM


 

   Instants & draw games


   

5.0%


               

   Multistate Jackpots


   

143.1%



Lottery


 

Total Revenue



268



262



2%


 

   Total lottery same-store revenue growth


 

21.3%


 

Lottery Services



255



232



10%


         
   

FMC



193



165



17%


         
   

LMA



29



36



-19%


         
   

Other Services



33



32



5%


         
 

Product Sales



13



30



-56%


         
   

Terminal 



0



2



NM


         
   

Systems/Other



13



28



-53%


         
                       

Total


 

Revenue



309



304



2%


         
 

Operating Income



79



66



21%


         


Revenue increased 2% to $309 million



  • Lottery service revenue up 10% to $255 million


    • Significant increase in Multistate Jackpots driven by $1.5 billion Mega Millions jackpot

    • 5.0% same-store revenue growth for instant tickets and draw-based games

    • Lower LMA revenue (reimbursable expenses)


  • Lottery product sales of $13 million compared to $30 million in prior year


    • Prior year benefitted from higher lottery terminal sales and a large Canadian VLT central system sale



Operating income increased 21% to $79 million



  • Significant profit flow-through on robust same-store revenue growth

  • Partly offset by higher depreciation related to recent contract wins and extensions


International









































































































































































































































































































Select Financial Data


   

Constant


 

Key Performance Indicators


   

%



Period Ended December 31



Q4 '18



Q4 '17



FX


 

Period Ended December 31



Q4'18



Q4'17



Change 



Gaming


 

Total Revenue



127



149



-11%


 

Installed base (end of period)


     
 

Gaming Services



34



55



-33%


 

    Casino



10,636



12,818



-17.0%


   

Terminal 



13



13



16%


 

    VLT - Government Sponsored



4,269



2,725



56.7%


   

Other



21



42



-48%


 

   Total installed base



14,905



15,543



-4.1%


 

Product Sales



94



94



2%


         
   

Terminal 



64



73



-11%


 

Machine units shipped


     
   

Other



30



21



47%


 

   New/Expansion



528



544



-2.9%


               

   Replacement 



4,730



5,021



-5.8%



Lottery


 

Total Revenue



76



99



-20%


 

   Total machines shipped



5,258



5,565



-5.5%


 

Lottery Services



72



80



-8%


         
   

FMC



56



55



7%


 

Lottery same-store revenue growth


     
   

Other Services



16



25



-38%


 

   Instants & draw games


   

4.1%


 

Product Sales



4



19



-75%


 

   Multistate Jackpots


   

8.6%


   

Systems/Other



4



19



-75%


 

   Total lottery same-store revenue growth


 

4.4%


                       

Other


 

Total Revenue



18



32



-41%


         
 

Service Revenue



17



20



-4%


         
 

Product Sales



0



12



NM


         
                       

Total


 

Revenue



221



280



-18%


         
 

Operating Income



28



72



-57%


         


Revenue of $221 million compared to $280 million in the prior-year period



  • Comparisons reflect significant contract-specific milestones achieved in prior year

  • Lottery service revenue of $72 million compared to $80 million in the prior year


    • Same-store revenue growth of 4.4% driven by instant tickets, draw-based games, and jackpot games

    • Prior-year benefit from contract milestone-driven revenue


  • Lottery product sales reflect higher software sales in the prior year

  • Gaming service revenue of $34 million compared to $55 million in the prior year


    • Prior-year benefit from contract milestone-driven revenue

    • Installed base decline includes 1,484-unit conversion sale, partly offset by an increase in Greece VLTs

    • Jackpot expense reclass of $2 million


  • Gaming product sales revenue stable at $94 million


    • Terminal revenue impacted by lower unit shipments to Latin America and Europe

    • Other product sales increased on higher software sales



Operating income of $28 million compared to $72 million in the prior-year period



  • Lower revenue with less favorable mix

  • Increased SG&A due to timing differences of certain expense accruals between years


Italy



























































































































































































































































































































































































































Select Financial Data


   

Constant


 

Key Performance Indicators


   

%



Period Ended December 31



Q4 '18



Q4 '17



FX


 

Period Ended December 31



Q4'18



Q4'17



Change 



Gaming


 

Total Revenue



192



193



4%


 

(In € millions, except machines)


     
 

Gaming Services



191



192



4%


 

Lottery


     
   

Terminal 



174



176



3%


 

Lotto wagers



2,089



1,951



7.1%


   

Other



18



16



12%


 

   10eLotto



1,495



1,386



7.8%


 

Product Sales



0



0



0%


 

   Core



468



508



-7.9%


               

   Late Numbers



78



57



37.0%



Lottery


 

Total Revenue



202



198



6%


 

   MillionDAY



49



-



NM


 

Lottery Services



202



198



6%


         
   

FMC



248



246



5%


 

Scratch & Win Wagers



2,383



2,344



1.7%


   

Other Services



(46)



(48)



0%


         
 

Product Sales



0



0



0%


 

Italy lottery revenue growth


   

6.0%


                       

Other


 

Total Revenue



68



90



-22%


 

Gaming


     
 

Service Revenue



68



90



-22%


 

Installed base (end of period)


     
 

Product Sales



0



0



0%


 

   VLT - Operator (B2C)



10,991



10,985



0.1%


               

   VLT - Supplier (B2B)



8,058



8,592



-6.2%



Total


 

Revenue



462



481



0%


 

   AWP



42,928



56,590



-24.1%


 

Operating Income



118



115



7%


 

   Total Installed Base



61,977



76,167



-18.6%


                       
               

Wagers


     
               

   VLT - Operator (B2C)



1,564



1,428



9.5%


               

   AWP



997



1,032



-3.4%


               

   Interactive Wagers (Gaming)



492



461



6.8%


                       
               

Other


     
               

   Sports Betting Wagers (1)



273



271



0.6%


               

   Sports Betting Payout (%) (1)



84.2%



76.2%



8.0 pp


                       
               

(1)Includes Virtual Wagers and Pools & Horses


 


Revenue of $462 million compared to $481 million in the prior year, stable at constant currency



  • Lottery service revenue up 6% at constant currency


    • Lotto wagers rose 7.1% on continued strength in 10eLotto and contribution from MillionDAY

    • Scratch & Win wagers rose 1.7% on relaunch of Multiplier tickets


  • Gaming service revenue up 4% at constant currency


    • Strong improvement in machine productivity

    • Increase in wagers helped mitigate state-mandated reductions in AWP units, incremental taxes, and certain regional restrictions


  • Sports Betting wagers stable, payout of 84.2% reflects a more normalized level


Operating income increased 7% at constant currency to $118 million



  • Broad-based wager growth with strong profit flow-through, especially for Lotteries

  • Partly offset by higher Sports Betting payout and increased taxes on gaming machines


Other Developments


The Company's Board of Directors declared a quarterly cash dividend of $0.20 per ordinary share



  • Record date of March 21, 2019

  • Payment date of April 4, 2019


Outlook



  • 2019 Adjusted EBITDA $1.70 - $1.76 billion

  • Capital expenditures of $450 - $550 million

  • Assumes a EUR/USD exchange rate of 1.15


 

Categoría:Others

Tags: IGT, International Game Technology,

País: United Kingdom

Event

GAT EXPO CARTAGENA DE INDIAS 2024

09 de April 2024

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(Cartagena de Indias, SoloAzar Exclusive).- Ms. Silviya Marinova, Director of EGT Colombia, granted an interview to SoloAzar about the performance of the firm at the latest edition of GAT Expo Cartagena. She spoke about the highlights of the tradeshow, the latest innovations showcased including the Phoenix slot cabinet and the all-in-one betting platform X-Nave. She also remarked the importance of their presence in the iGaming Colombian market.

Wednesday 22 May 2024 / 12:00

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(Cartagena de Indias, Exclusive SoloAzar) - Meet Ester Tarres, the visionary behind Casino Garage, a world leader in refurbishing second-hand slot machines since its creation in 2006. With a team of professionals, Casino Garage has become synonymous with excellence. In this article, Ester tells us about her presence at the GAT Expo, held from 9 to 11 April.

Tuesday 07 May 2024 / 12:00

Responsible Gaming, Regulation and Certification in Latin America and the Caribbean

(Cartagena de Indias, Exclusive SoloAzar). - Karen Sierra-Hughes, Vice President for Latin America, the Caribbean and Spain at GLI (Gaming Laboratories International), led the GLI Corporate Conference: Technology and Sustainable Gaming. With her extensive experience as a gaming regulatory consultant in the region, Karen offered key perspectives on how technology can drive sustainability in the gaming industry.

Tuesday 07 May 2024 / 12:00

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