Playtech Revenue Declines in 2020 as Store Closures Hit B2B and B2C Segments | 2020 annual results
Playtech saw revenue drop 25.1% to € 1.08bn (£ 924.8m / $ 1.29bn) as store closures due to Covid-19 have had an impact on both the business-to-business (B2B) and business-to-consumer (B2C) of the supplier. operations.
Playtech’s revenue was almost evenly split between B2B and B2C operations, with B2B revenue falling 10.7% to 494.8 million euros and B2C revenue falling 33.8% to 596.3 million euros. 12.7 million euros were eliminated through intersectoral eliminations.
If we break down B2B revenue further, € 413.0 million comes from core business-to-business operations and € 81.9 million from Asia.
Breaking down the turnover geographically, just over half of the activity’s overall turnover comes from Italy, mainly thanks to the Snaitech brand. While business-to-business revenue in Italy was only € 25.0 million, B2C revenue, composed almost entirely of Snai’s revenue, was € 522.7 million. for a total turnover of 541.4 million euros after inter-segment eliminations.
While Snai’s revenue was down year over year, Playtech chief executive Mor Weizer said the brand has performed well considering that many of its outlets were closed for much of the year because it was the world’s market leader in the country.
“Snaitech continued to excel in Italy despite store closings in 2020,” Weizer said. “Snai has reached the first place in the Italian online and retail sports betting market and increased its overall online turnover by 58% in 2020.
“Italy continues to offer significant growth potential and Snaitech is ideally positioned to capitalize on this opportunity. “
The UK was responsible for € 150.0 million in B2B revenue and € 54.4 million in B2C revenue, mainly from the Sun Bingo brand, for a total of € 200.9 million.
The Philippines, Mexico and Malta followed with € 70.2 million, € 54.9 million and € 54.7 million, respectively, all entirely from B2B transactions. No other country brought in more than 25 million euros, with Spain, Germany, Gibraltar, Greece and Curaçao each accounting for more than 10 million euros and Norway, Finland and Poland more than 5 millions of euros.
The company paid € 824.9 million in expenses, down 22.5%. Of this total, € 369.0 million comes from B2B operations, down 11.0%. Within B2B costs, research and development decreased to 76.1 million euros, operating costs to 214.5 million euros, administrative costs to 63.2 million euros and costs sales and marketing at 15.2 million euros.
Within the B2C segment, costs amounted to € 468.5 million, down 37.0%. Snaitech’s revenue fell 42.1% to € 390.2 million, while white label revenue – including Sun Bingo’s – rose to € 47.9 million and other sports revenue B2C decreased to 30.4 million euros.
This led to a current result before interest, taxes and depreciation (EBITDA) of € 253.6 million, down 31.9%.
After employee social security charges of € 16.5 million, charitable donations and professional fees for acquisitions, Playtech’s EBITDA stood at € 222.9 million, down 33.2%.
The activity then paid € 188.1 million in depreciation and amortization charges and € 45.4 million in depreciation charges, to which are added € 63.4 million in net financial charges, but made € 22.1 million in disposals of assets. This results in a pre-tax loss of € 52.7 million. In 2019, Playtech made a profit before tax of 88.2 million euros.
After 20.4 million euros in taxes, Playtech recorded a loss of 73.0 million euros on continuing operations, after a profit of 56.5 million euros the previous year.
It recorded an additional loss of 224.3 million euros on discontinued operations – mainly from its financial trading division Finalto, which it currently plans to sell – for an overall loss of 297.4 million euros. After taking the exchange rate into account, Playtech’s loss was € 317.3 million, or 25 times the loss it suffered in 2019.
“The attitude and skills of our employees, along with the strength and diversification of our technology-driven business model have enabled us to deliver strong financial performance despite the challenging environment,” said Weizer.
The year also saw Playtech expand its operations in the United States through deals with Bet365 and MGM and the Entain BetMGM joint venture in New Jersey. These were followed by a deal with Parx Casino owner Greenwood that would see Playtech expand to more states.
“Playtech has also made significant strategic and operational progress by adding new brands, expanding existing relationships and entering new markets,” Weizer said. “We are particularly pleased with the excellent progress we have made in the US market, launching with Bet365 and Entain in 2020, and signing milestone agreements with the Greenwood companies in 2021 to license our products in Michigan, the Indiana, New Jersey and Pennsylvania. ”
Last week on March 3, Playtech announced that Brian Mattingley would take over as the new non-executive chairman, effective June 1. Mattingley is currently chairman of 888 Holdings, having served on that operator’s board since 2005. He will succeed Claire Milne, who was named interim chairman in April 2020 after Alan Jackson indicated he would not be running for re-election. not.
Yesterday, Playtech announced that it had signed a new partnership with Kindred Group, to launch its RNG casino offer through the operator’s 9 brands, including its flagship brand Unibet.