International Game Technology (IGT) has published its financial results for the fourth quarter and full year ended December 31, 2019. Q4 saw consolidated revenue fall 1% to $1.25bn year-on-year, while for the full-year that figure was $4.79bn, also down 1% from 2018.
According to CEO Marco Sala, the numbers are in-line with the firm’s forecasts, having “…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”.
He told investors: “In the full year, we grew global gaming product sales by more than 20% 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.”
Looking at the Q4 returns, IGT reported strong growth in global gaming and North America lottery product sales along with a higher sports betting contribution from North America and Italy. Operating income in the quarter was $81m, up from $41m in Q4 2018. Adjusted EBITDA was $436m, up 5% from the prior year period.
Full year trading saw IGT record significant growth in global gaming product sales, sports betting, and Italy commercial services. Global service revenue was, however, impacted by higher gaming machine taxes in Italy, the Illinois lottery contract conclusion, and exceptional North American jackpot activity in the prior year. Operating income was $637m, down 2%, while adjusted EBITDA of $1.71bn fell 1% year-on-year.
2019 was not a good year for IGT’s lottery business which suffered at the hands of lower jackpot activity. Revenue slowed to $279m compared to $309m in the prior-year period, while lottery service revenue fell to $222m from $255m year-on-year. Operating income was lower at $51m compared to $79m in 2018.
“2019 marked an important inflection in cash flows for IGT,” said Timothy Rishton, Interim CFO of 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.”
Investors were also given a fresh update on the outlook for 2020, with IGT projecting operating income of $740 – $790m; depreciation and amortization of $870 – $880m; and capital expenditures of $400 – $500m. The outlook, it added, does not factor any potential impact arising from the ongoing COVID-19 outbreak.