Light & Wonder celebrates ‘significant achievements’ as lottery sale boosts Q1 balance sheet

Light & Wonder CEO Barry Cottle has praised the company’s operational performance in Q1, boasting double-digit revenue growth, buoyed by the ‘continued growth’ of its gaming division
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Light & Wonder CEO Barry Cottle has praised the company’s operational performance in Q1, boasting double-digit revenue growth, buoyed by the ‘continued growth’ of its gaming division. 

Publishing its Q1 financial statement, L&W also displayed the benefits of offloading its lottery business to Brookfield Business Partners, noting that it delivered $5.6bn in gross cash proceeds as it shifts its corporate aims towards becoming a ‘leader’ in the global gaming market. 

Revenues for the period ending March 31 stood at $572m, up 26% YoY, driven by continuous recovery in gaming revenues alongside the growth witnessed in igaming and ‘SciPlay’ YoY and sequentially. 

Such revenue growth ensured that the group’s net loss reduced YoY, falling from $88m to just a $67m net loss in Q1 of 2022. Further displaying improved profitability, L&W’s AEBITDA for the period stood at $202m, up 42% YoY attributed to 60% AEBITDA growth in gaming. 

Cottle commented: “We kicked off 2022 with a number of significant achievements and strong momentum across our businesses with strong revenue growth of 26% in the quarter. 

“The sale of our Lottery Business was another significant milestone as we de-lever and maximize cash, which transformed our balance sheet reducing our net debt leverage ratio from a peak of 10.5x just over 15 months ago to an adjusted net debt leverage ratio of 3.7x, or by approximately seven turns.”

Breaking down revenues per division, L&W saw a 45% increase in turnover from gaming operations up to $355m as the division showed continued signs of recovery. 

The SciPlay division grew 5% to $158m thanks to a marked increase in monthly active paying users and a higher payer conversion rate. 

Finally, igaming saw a turnover increase of 2% YoY boosted by acquisitions made back in 2021. Despite this, AEBITDA from the division remained flat due to ‘investments supporting ongoing growth’.

A key strategic investment earmarked by L&W was ‘R&D, capex, the launch and investment in our new Las Vegas igaming studio’, followed by its expansion into the live dealer market.

Connie James, the firm’s CFO, added: “The performance during the quarter is reflective of the enthusiasm and energy felt throughout Light & Wonder as we entered 2022 with strong momentum across all our businesses, generating double-digit top and bottom-line growth. I also want to congratulate the team on the successful close of the Lottery Business sale and refinancing transactions. 

“Collectively, these transactions significantly change the complexion of our balance sheet, substantially reduce our outstanding debt, and meaningfully strengthen our credit profile.”

“With our strengthened balance sheet we are actively executing on our capital allocation priorities, including $140m return on capital through the repurchase of our shares just since the beginning of March.”

Concluding its update to shareholders, L&W detailed that it will host an investor day in New York City on May 17 to offer further updates on its strategy and ‘progress on key initiatives’.

Cottle remarked: “We are delivering on our promises to create great content cross-platform while expanding in high-growth digital markets and enabling a seamless player experience. With a reconstituted balance sheet, sustainable double-digit growth and strong cash generation, we now have the ability to significantly enhance shareholder value through a disciplined approach to capital allocation.

“With the right assets, at the right time and with the right talent, Light & Wonder is fostering a high-performance culture with all the pieces in place to deliver on our vision. We are very excited about the next phase of our journey and look forward to discussing our key strategies and the path to drive shareholder value at our upcoming investor day on May 17th.”