Release Date: April 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Intralot SA (STU:9IL, Financial) experienced strong growth in the last quarter of 2024, primarily driven by organic growth in the US and successful sales of new solutions.
- The company signed a significant 7-year agreement with Magnum Corporation in Malaysia, with options for extensions, enhancing its international presence.
- Intralot SA (STU:9IL) successfully migrated BCLC's retail lottery system to a cloud-based platform, marking a major technological milestone.
- The company achieved a top-line improvement of 3.4% and maintained operational profitability and leverage ratios within targeted ranges.
- Intralot SA (STU:9IL) extended several major contracts, including a three-year extension with PLI in Ireland and a contract extension with Lottery West in Australia.
Negative Points
- There are delays in significant projects, such as the monitoring system in Illinois and RFPs in Missouri and Maryland, which could impact future growth.
- The company's earnings before tax decreased to $18 million in 2024 from $33.6 million in 2023, due to increased interest expenses and reorganization costs.
- Operating cash flow was reduced by €26 million, primarily due to negative working capital and outstanding receivables.
- The company faced challenges in Morocco, with lower revenue attributed to a reduced scale contract compared to the previous year.
- There was a drop in revenue and profitability in Croatia during the second half of the year, impacting overall performance.
Q & A Highlights
Q: What is the outlook for Intralot SA in the current year, considering the challenging macro environment?
A: The political environment remains challenging, but Intralot SA has experienced a conservative start to the year, primarily due to the absence of significant jackpots in the US market. The company remains focused on executing renewals and winning new business, with no significant changes to its strategy. (Respondent: Group CEO)
Q: Are there any issues with importing materials to the US for the North American business?
A: There are no issues with importing materials to the US as Intralot produces all services and machines domestically. In Canada, alternative solutions are in place to manage any potential impacts. (Respondent: Group CEO)
Q: Can you explain the strong profitability in Turkey during the second half of the year?
A: The profitability in Turkey was driven by a combination of increased market share and reduced marketing costs. The company remains optimistic about growth in Turkey's betting market. (Respondent: Group CEO)
Q: What caused the drop in revenue and profitability in Croatia during the second half of the year?
A: In Croatia, the business model includes a fixed fee plus an incremental based on year-on-year growth. The company made accruals throughout the year, spreading the impact across months. Intralot remains optimistic about growth opportunities in Croatia. (Respondent: Group CEO)
Q: Can you provide an update on the tender delays, specifically in Maryland, Missouri, and Illinois?
A: The timeline for the Maryland tender is expected to be around three months, but it is not within the company's control. Missouri and Illinois are in the final stages of evaluation, with no specific timeline available. The political environment does not significantly impact these state-level projects. (Respondent: Group CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
