IGT Monitors Coronavirus Impact But Expects Continued Momentum

International Game Technology is “monitoring the impact of coronavirus outbreak,” as the company reports modest full-year sales, operating income and adjusted EBITDA declines in its most recent financial report.

Publishing a Q4 and FY report, revenue for the former dropped one percent to $1.25bn, led by strong growth in global gaming and North America lottery product sales, higher sports betting contributions from Italy and North America, and lower service revenue from reduced North American multi-state jackpot operation and effect of Italy gaming machine taxes.

Operating income for the period nearly doubled to $81 m (2018: $41 m), owing to decreased loss of goodwill, favourable product sales mix and lower bad debt expenses.

Adjusted EBITDA rose by five percent year-on-year from $416 m to $436 m, driven primarily by higher profit contributions from North America Gaming and the North America Lottery, Digital, International and Italy divisions with lower jackpot participation.

Operating revenue and adjusted EBITDA both decreased one percent to $4.79bn (2018: $4.83bn), $637 m (2018: $647 m) and $1.71bn (2018: $1.73bn), respectively, on a full-year basis.

With respect to the former significant growth in global gaming product sales, sports betting and Italy commercial services, the foreign service revenue affected by higher gaming machine taxes in Italy, Illinois lottery contract conclusion and extraordinary North American jackpot operation in the previous year was offset.

Marco Sala, CEO of IGT noted: “We achieved the high end of our profit and cash flow expectations for 2019, led by strong results for our North America Gaming and Italy segments.

“In the full year, we grew global gaming product sales by more than 20 per cent thanks to higher unit shipments and the success of our new games. Global lottery same-store revenue also rose.

“We are closely monitoring the impact of the Coronavirus outbreak. Apart from this, solid operational performance across products and regions should support continued momentum in 2020.”

IGT also offered a full-year outlook for 2020, saying that it does not “does not factor any potential COVID-19” impact,” the company anticipates operating income of $740 million – $790 million, depreciation and amortisation of $870 million – $880 million and capital expenditures of $400 million – $500 million.

Timothy Rishton, Interim CFO of IGT, of the company’s latest financial performance, said: “2019 marked an important inflection in cash flows for IGT. Having generated $1.1bn in cash from operations, we invested in the business, paid down debt, and returned capital to shareholders. We enter 2020 in strong financial condition.”