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 twelve months to 31 December 2021 and provides an update on recent developments and current trading.
FY 2021 financial highlights
Q4 2021 financial highlights
FY 2021 pro rata financial highlights
Q4 2021 Pro rata financial highlights
Key strategic initiatives
Rebranding of parent company
In December 2021, SAZKA Entertainment AG, the parent company of SAZKA Group a.s., rebranded to Allwyn. The Allwyn brand will support our long-term global growth ambition.
Trading update and outlook
Our business has made a solid start into 2022 despite weaker general consumer sentiment
COVID-19 related restrictions that were re-introduced in Q4 2021 in Greece, Austria and Italy have continued into Q1 and in some cases Q2 2022. The impact of these restrictions was significantly less than during previous waves of COVID-19, as demonstrated by our strong performance in Q4 2021. Most of these restrictions have been lifted or are expected to be lifted shortly.
War in Ukraine
We have not been materially impacted by the war in Ukraine. We do not have any operations in Ukraine, Russia or Belarus and our suppliers have not experienced any material disruptions.
Current inflation and rising energy prices have a limited impact on our cost structure with our largest cost categories linked to revenue (e.g. gaming taxes, agent’s commissions) and energy accounting for a small proportion of our costs.
The above mentioned macroeconomic and political uncertainties have had some impact on consumer sentiment in general in the countries where we operate, in particular from the middle of Q1.
However, we believe that – similar to previous periods of economic disruption – the impact on consumer demand for our products will be limited due to the low price point of our products and low average spend, as well as our large number of regular players.
Robert Chvatal, SAZKA Group CEO, commented:
I am pleased to report that SAZKA Group has delivered another very strong performance in another volatile year. Our consolidated Gross gaming revenue increased by 51% and our consolidated Adjusted EBITDA margin reached above 50%. Our geographical and distribution channel diversifications are two of our many strengths that have contributed to our strong performance this year. The online segment and certain geographies, in particular the Czech Republic and Italy, also performed exceptionally well, helping to offset weaker trading caused by COVID-19 related restrictions which impacted the physical retail channel in Greece and Austria. If we look at the year by quarter, the first quarter of 2021 was impacted by COVID-19 related closures of physical retail in Greece and casinos in Austria. However, the rest of the business was largely unaffected, with lotteries across geographies performing very well. Most of Q2 was still impacted by the closures in Greece and Austria, but all material restrictions were lifted by the end of the quarter. Q3 was the first quarter in 2021 that was unaffected by material COVID-19 related restrictions, which allowed us to record excellent financial performance with highest GGR ever and significantly exceed pre-pandemic trading performance. Importantly, our online sales continued to grow despite all physical retail channels being open. Q4 was another strong quarter across geographies despite a three-week closure of casinos in Austria and some re-introduced COVID-19 related restrictions in Greece and Austria. 2021 has once again shown that we are well positioned to successfully face extreme and unexpected circumstances and our business model is exceptionally resilient. We benefit in particular from our diverse range of products, sales channels and geographical exposure, our favourable cost structure, the strong cash flow generation of our business and our strong liquidity and access to multiple sources of capital. We also have a wealth of knowledge and expertise within the organisation, and the agility and resilience of our team meant that we were well placed to deal with and recover strongly from the pandemic. We are confident that these same strengths position us well for future growth. I am particularly pleased with the continuing success of our online and digital-only offerings. The changes in consumer behaviour as a result of COVID-19 have allowed us to develop our product offering and increase our online user base faster than would have otherwise been the case, with significant increases in registrations and active users as well as several exciting product launches. Importantly, we have maintained this strong momentum as restrictions have eased and all our physical retail channels have reopened. The best example of this success is in our Czech business, which delivered 38% of its GGR online in 2021, compared with 31% in 2020 and 19% in 2019. We will continue to invest in our digital platforms to drive long-term benefits. In 2021, we also achieved important strategic milestones which position us to further grow our business. We completed Apollo’s investment in SAZKA Entertainment AG (parent company of SAZKA Group) which represented a vote of confidence in our platform and strategy for future growth from one of the world’s leading investors in gaming. As part of our growth strategy, we submitted a successful bid to operate the UK National Lottery, which will provide us the opportunity to further geographically diversify and operate one of the largest lotteries in Europe. In order to support our long-term global growth ambitions, we launched a rebranding initiative with SAZKA Entertainment AG, the parent company of SAZKA Group a.s., being rebranded to Allwyn. In our existing markets, we continued to increase our shareholdings in businesses which we own less than 100% of. In Austria we acquired an additional 4.31% stake in CASAG and have finalized the vast majority of the ReFIT restructuring plan expecting to deliver around €45 million of annual cost savings from 2022 onwards. In Greece, we continued to increase our interest in OPAP which we believe offers exceptional value. Overall, I am very pleased with SAZKA Group’s strong performance and strategic progress in 2021. I am proud of the resilience, agility and innovation our businesses have shown. I would like to thank the entire SAZKA Group team for their hard work and perseverance, and for seizing opportunities to progress our strategic priorities.