Scientific Games Corporation’s President and CEO Barry Cottle has said he’s ‘extremely pleased’ with the progress that the company has made in the first quarter of 2021, as it reported revenue improvements in its lottery, SciPlay, and digital businesses.
In its results for the three month period ending March 31, Scientific Games declared $729m in consolidated revenues, up 1% from the $725m achieved last year during the same period.
President and CEO Barry Cottle stated: “I am extremely pleased with our progress this quarter. Despite the continued challenges, our teams’ dedication and focus enabled us to build on our gains from last year. We delivered another strong quarter, enabling us to return to growth on both the top and bottom lines.”
The company’s lottery, SciPlay and digital businesses delivered double-digit revenue growth as it drove customer engagement through its portfolio and content.
Its lottery revenue came in at $248m, a 17% increase compared to the $212m recorded in Q1 2020.
The vertical’s AEBITDA increased 53% to $119m when compared to the $78m recorded in the corresponding quarter last year. This growth, Scientific Games says, was largely driven by its US instant game sales, large Powerball and Mega Millions jackpots as well as strength in European markets.
The firm noted that its lottery instant product revenue was $26m higher than in Q1 2020 thanks to the performance of the Scientific Games Enhanced Partnership program in certain states.
Scientific Games’ digital revenue increased by 12% to $86m (Q1 2020: $77m) while the AEBITDA in the vertical grew by 26% due to record results in igaming, led by original content as well as its successful launch in Michigan and strength in Europe.
SciPlay revenue rose by 28% to $151m (Q1 2020: $118m) and the channel’s AEBITDA improved by 32% to $46m from the prior year (Q1 2020: $35m) due to sustained growth in social casino games that outpaced the market and record player conversion.
The company’s gaming revenue continued to be impacted by casino restrictions and closures, particularly in Europe, as the revenues fell from $318m in Q1 2020 to $244m due to the impact of global COVID-19 restrictions.
AEBITDA in the vertical grew 13% to $108m (Q1 2020: $96m). This growth was driven by a more favorable product mix, cost actions as well as certain credit receivable allowance and inventory charges that impacted the prior year.
The firm’s gaming operations revenue declined 5% from the prior year as casino capacity restrictions persist. North America gaming operations revenue improved on a sequential basis and it expects new cabinet launches to support growth as restrictions ease.
Cottle noted: “Our new gaming strategy and product roadmap continues to have success and our lottery, SciPlay, and digital businesses delivered strong growth in the quarter. Our results demonstrate the strength of our content and franchises, engaging players on any platform they want to play. The executive team and our Board are continuing to work together and are making great progress as we look to optimize our portfolio, deleverage our balance sheet and capitalize on key areas of growth in order to unlock value for our shareholders.”
Scientific Games recorded a net loss of $9m during Q1 2021 compared to $155m in the prior year period primarily due to gaming business segment receivable credit allowances, inventory, and goodwill impairment charges which totaled $91m in the prior year period.
Its consolidated AEBITDA was $270m compared to $200m, up 35% as compared to the prior year period, driven by double-digit AEBITDA growth across all segments.
Meanwhile, the firm’s net cash provided by operating activities was $123m compared to $120m in 2020 primarily driven by improved operating results, partially offset by an unfavorable change in working capital accounts and the timing of cash interest payments.
Scientific Games’ free cash flow increased in Q1 2021 by $25m from the prior year to $80m. Available liquidity, including SciPlay, at quarter-end was $1.3bn. Subsequent to quarter-end, the company made a $150m voluntary repayment on SGI’s revolving credit facility.
Executive Vice President and CFO Michael Eklund added: “The team has really stepped up to make meaningful progress on our key initiatives. We remain laser focused on delivering revenue and AEBITDA growth, and strengthening our balance sheet. Our continued focus on operational efficiency is enhancing our cash flows. We are executing at a high level and I could not be more excited about the path forward for Scientific Games.”