13 September 2019

Codere improves its profitability in the second quarter of 2019 despite the Argentine crisis

(Madrid).- Codere, a leading international company in the private gaming sector, today announced its results for the second quarter of the year, approved yesterday by its Board of Directors, and which show the improvement of its profitability thanks to the good performance of its operations in Mexico, Spain and Uruguay, and the growing contribution of the online business.

In this period, the company obtained operating income of 354.7 million euros, 5.7% less than in the same period of the previous year, due to the fall of 29.9 million euros in Argentina due to the depreciation of the peso against the euro, offset by the positive evolution in Mexico (+4.2 million euros), online activity (+3.5 million euros), Italy (+3.7 million euros) and Spain (+1, 2 million euros).
Codere has thus achieved a gross operating profit (adjusted EBITDA) of 70.3 million euros, compared to 65 million in the second quarter of 2018, with a significant increase of 2.5 points in the margin, which reaches 19, 8% Both the company's EBITDA and the adjusted EBITDA have reached their highest level since 2012.
The operating result increased by 2.0 million euros, to 36.9 million euros in the second quarter of 2019. This positive evolution reflects the operating growth in Mexico (+4.5 mm).

Operating expenses in this quarter decreased 7.8%, to 266.7 million euros, mainly as a result of the reduction in costs in Argentina, due to the devaluation of its currency, and efficiency improvements in Mexico, Spain and other markets.
The CEO of Codere, Vicente Di Loreto, explained that “these results highlight the changes made in recent months, with the implementation of the company's Transformation Plan, and confirm the profitability expectations and the solidity of the main markets of Codere, in spite of the smaller contribution of Argentina ”.

In terms of installed capacity, machine stations grew 0.8%, reaching 56,589 units. In addition, the number of game rooms remained unchanged, at 148, and the number of bars fell slightly, around 9,900.
Mexico, Spain and Uruguay consolidate.

The good performance of Mexico, Spain and Uruguay, as well as that of our online activity, has allowed the company to maintain its profitability in the second quarter of the year. In Mexico, second-quarter revenues have increased 5.3% over the same period in 2018, driven by a growth in the slot park (+ 5.5%).

In Spain, operating income in the second quarter of the year grew 1.2 million euros, 2.6% compared to the second quarter of 2018, driven by revenue growth in face-to-face sports betting and the machine business in bars ; with 19% and 5.8% more units installed, respectively.

Finally, the exposure of Argentina has been reduced, which has gone from assuming 131 million euros of the adjusted EBITDA in 2016 (almost 50% of the consolidated), to around 65 million expected in 2019 (less than 25%), while the rest of the business units have spent in this period contributing 121 million euros to approximately 220.