International Game Technology Plc IGT Q4 2023 Earnings Call Transcript The Motley Fool

International Game Technology Plc (IGT) Q4 2023 Earnings Call Transcript

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NYSE: IGT

International Game Technology Plc

Market price Change of today Stamp on the arrow Current value August 26, 2024 15:13 (Eastern Time in the United States) Current price

The phase of the phase at the end of December 31, 2023 is an excuse.

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International Game Technology PLC (IGT 0, 59 %) Revenue 4th quarter 2023 call December 2024, 8:00 am

Prepared Remarks:

operator

Hello, welcome to the briefing session on the International Game Technology PLC on the 23rd quarter of the 23rd and 2023th terms. All parts are muted to prevent external noise. After the lecture, we will hold a Q & A session. [Operator instructions] Turn the call to Jim Harley, Senior Vice President of Investor Relations.

Please continue.

Jim Harley-Investor Relations Senior Vice President

Thank you to everyone who participated in the 4th quarter of IGT and the ful l-year telephone conference. After the prepared greeting, Vince and Max will answer your questions. In this lecture, we will make some descriptions on future outlooks in accordance with the Federal Securities Law. The description of the future outlook does not mean a warranty, and our actual achievements may be very different from what has been explicitly or implicitly shown in the description of the future outlook.

The main risks and uncertainty, which can cause our achievements from the current expectations, are detailed in the company's latest financial reports and documents submitted to the US Securities and Exchange Commission. This signal describes some no n-GAAP standards. Supplementary information about these no n-GAAP indicators, including adjustments with comparable GAAP indicators, is described in the documents submitted to our press release, slides attached to this web broadcast, and the Securities and Exchange Commission. All of these can be viewed on our Investor Relations Website. Here, connect Vince Sada Sky.

Vince Sada Sk y-President Executive Officer

Thank you, Jim. Our fourth quarter operating profit increased by 11%, improving our operating margin by 160 basis points while ensuring significant free currency flows. This has enabled us to achieve our economic targets for fiscal year 2023. In fact, the increases in our Mass Lotto, Mass Gaming and Play Digital divisions have enabled us to achieve record results with operating profit of 1 billion, EBITDA of 1. 8 billion and EBITDA margin of 41. 3%.

As a result, we have seen a significant increase in exchange funds during this period, allowing us to cover record exchange methods with more than 1 billion in operations and allowing the company's clear debt to the entire situation to reach its lowest value. This is an impressive set of achievements that confirms that we are fully aligned with our long-term strategic and economic goals. I would like to express my gratitude to the entire IGT team for their efforts in achieving these goals. We have a civilization based on responsibility, cooperation and attraction.

These values are not only considered the main reason for our turmoil, but also make IGT a great space to work in. So I would like to thank all of my IGT colleagues around the world. In addition, IGT was recently recognized as a Top Employer in the United States, Italy, and Canada by the Top Employer Institute, a grassroots certification company that certifies the benefits and conditions that employers offer to their employees. I would like to take some time to look at the operating indicators of each section, starting with Mass Lotto.

In fiscal year 2023, the company maintained its leading position through a combination of organic growth, package expansions, and contract renewals. This is evidenced by the 7% increase in rescues in the fourth quarter and a further 6% increase for the full year, even excluding the implementation of a paid offer in Italy. This is an impressive characteristic for a company of this size. Single-store sales increased by just over 2% this year, which is comparable to the increase in the lottery division, where the specific figures were low to moderate.

Of particular note is the nearly 7% increase in store sales in Italy. Lotto and Scratch in Italy are among the largest and most successful games in the world. The strong increase in sales in Italy heading into 2023 reflects IGT's ability to understand player behavior, develop new and beautiful games, manage a wide distribution network, and formalize day-to-day operations. The increase in store sales in North America and other parts of the world, while smaller in tangible terms, was achieved against the backdrop of an accelerating increase in recent years.

iLottery's revenue continues to grow very rapidly, more than 40% by 2023, driven by organic growth in existing markets. This year, we strengthened our contract portfolio by renewing century-old contracts in some of the largest jurisdictions, such as California, and key markets, such as Kentucky and Virginia. We also added some new business. We signed a new facility management contract in Connecticut and launched instant and passive gaming in Minas Gerais, Brazil.

We also signed a contract for the iLottery platform in Connecticut and plan to launch lottery games later this year. Lottery profitability improved in 2023, with operating margins increasing 100 basis points to 36%. Lotteries are a resilient sector with large, steadily growing and recession-resistant characteristics. Recovery accelerated during the pandemic, and our 2023 results show that we are successfully sustaining higher-value games and significantly improving profitability.

Operating margins increased 600 basis points compared to pre-pandemic levels. In fact, we expect the industry to grow more at a normal pace, with certain metrics low or average, focusing on a higher revenue base, especially due to organic growth and increased use of lotteries in the United States. In Brazil, for example, almost all states want to launch lottery games. Now let's move on to games.

The focused execution of key product and business strategies is driving the strong growth of the Global Gaming Division. This is particularly evident in the revenue trend, where operating profit increased by 17% in the fourth quarter and by approximately 30% for the full year. The 9% increase in revenue compared to the same period last year reflects the strength of several key indicators. Shipments of gaming equipment in 2023 increased 7% year-on-year to more than 35, 000 units, and the average selling price also reached an all-time high.

The growth in revenue was driven by a double-digit increase in the number of casino and slot machines due to replacement demand. In addition, we continue to release new high-performance titles, with two models of "Magic Treasures" making it into the top 10. In addition, three of the top 10 new mechanical reel games are ranked in. PeakCurve 49, DiamondRS and PeakSlant 32 remain the best cabinets in North America in their respective categories.

This reflects strong expansion of premium units in the U. S. and Canada, as well as significant growth in Latin America. Premium units led the way in the U. S. and Canada, where installations grew for the sixth consecutive quarter, and in the rest of the world, where they grew for the ninth consecutive quarter.

Premium growth was driven by the continued success of Prosperity Link and accelerated by the launch of Mystery of the Lamp, which was recently named the most successful new premium game at the EKG Slot Awards. In 2024, we have a number of new games planned for sale and rental, including the highly anticipated Whitney Houston slot launching this spring on IGT's new slot, SkyRise. The PlayDigital division had another record year for both revenue and profit. Revenue increased 9% due to double-digit GGR growth at iCasino across all regions.

Operating profit increased by more than 30% and margins increased by 500 basis points, highlighting the strong leverage inherent in the business. iCasino's strong total revenue growth is a direct result of new games and creative solutions aimed at delivering an enriching player experience. In the current absence of regulation in new markets, particularly in the United States, innovation is an essential driver of growth. Our most successful games leverage IGT's unique capabilities.

Wheel of Fortune Triple Gold Spin is the first and only omnichannel game with a jackpot in the United States, inspired by the hugely successful PowerBucks franchise in Canada. These games are considered an effective player recruitment tool. These games attract players across platforms with their massive wins combined with jackpot liquidity across terrestrial, mobile and online formats.

In addition, our buyers are actively using games designed for their applications, which adapt IGT's key IP technology to specific buyers. Examples include Cleopatra Fort Knox and Blackjack at Fanduel Casino and Caesars Cleopatra at Caesars Palace online casino. We have also started to introduce original tools to recruit users and specialists. These tools are provided to buyers to obtain player information in real time and improve player performance.

We have seen great results for our first-time users and look forward to a wider range of use. In 2023, in the field of sports betting, we opened bazaars in four new jurisdictions, installed 20 retail points in casinos, three mobile terminals in facilities and three mobile terminals on state-owned land, bringing the total to 26 terminals. We also took the opportunity to broadcast sporting events directly on PeakBartop and Crystalflex terminals, and adopted the performance of sports percentage. PlayDigital's growth depends on new gambling legislation, which has been slower than expected.

For example, it seems that in 2024. In relation to the data, we are focusing on increasing costs to catch up with the operating margin expectations. In fact, we are pleased that this year was a success. The IGT team has done its job very well.

This is reflected in the dynamics that we have seen in all sections. Our monitoring for 2024, which Max will explain later, reflects a host of organic rises in the business with a place. A little while ago, we announced that we would be integrating our giant gaming and PlayDigital businesses with the existing businesses of Every. This conclusion was adopted as a result of a strategic review to increase the prices of our bags.

IGT shareholders will own 100% of a global pure-play lottery business with predictable growth and sustainability, and 54% of a fast-growing gaming, digital and fintech business. We believe that the creation of two stronger, more focused businesses, each with a quality team and simplified business model, will enable each to better serve customers and create significant value for shareholders. This will allow for more focused business and capital allocation strategies, optimized capital structures for different business models, and greater flexibility in executing organic and inorganic growth strategies. It will also allow investors to better assess the intrinsic value of the individual companies.

In comparison, lottery peers trade at EV to EBITDA in the range of 12x to 18x, while IGT trades at just 6x, demonstrating IGT's unparalleled scale of capabilities. The new gaming company will have the same scale and growth trajectory as its peers, but this does not take into account potential revenue synergies. Peers trade at EV to EBITDA in the range of 11x to 13x. IGT offers a broad range of products globally, including Class III VLT, iGaming and casino management systems.

Everi's operations are concentrated in North America, focusing primarily on Class II gaming and extensive fintech capabilities. We believe the combination of two companies with complementary capabilities and geographic footprints will create an integrated omnichannel one-stop shop covering all aspects of the gaming ecosystem, enabling superior delivery of best-in-class, impactful solutions. We are able to create touchpoints throughout the entire gaming journey, from casinos to mobile devices. The company has a compelling recurring revenue model, with recurring revenue streams from gaming, iGaming and fintech solutions accounting for over 60% of quasi-recurring revenue.

In fact, until 2026, we anticipate that the annual average growth rate calculated with the specific amount of money will begin to increase, and after adjustment, EBITDA will increase with a higher specific growth rate. This is achieved by an organic increase by rescue of existing businesses and a significant cost of the supply chain and a real estate optimization initiative. These synergy alone worth more than $ 500 million for the integrated business. Considering that the business scale of the two companies is slightly doubled, it is possible to expect a great synergistic effect by increasing products and regional savings, and our monitoring cannot be foreseen yet.

We want to operate the company with a powerful balance sheet and a limited leverage, and to improve the change to EBITDA's cash flow after adjustment, so that we can invest in organic growth and M & Amp; A. It is important to repay debt and buy a promotion. The company consists of the highest class of both organizations, with a few decades of industry knowledge, personal connections, a proven B2B gaming and FinTech skills. The main team consists of over 20 years of experience in M & Amp; A integration. It goes without saying that you are very satisfied with the ability to create lon g-term prizes in individual lotteries and gambling businesses. "

This time I will give Max the phone.

Max Kiar a-Economic Director

Thank you, Vince. The fourth and 2023 cache performances were great, and as reported in the third quarter of financial results, we have achieved monitoring of all major cache indicators. Important implementations such as the 2021 Italian gaming and paid offers in 2022 were affected by the previous comparison, but in the full year we were able to achieve a record high. These results effectively recognize that most of our lon g-term goals have already been achieved, or that they are confident in the background of the accurate trajectory for achievement. < SPAN> In fact, we expect that the annual average growth rate calculated with the specific amount of money will begin to grow until 2026, and that EBITDA will increase with a higher specific growth rate after adjustment. This is achieved by an organic increase by rescue of existing businesses and a significant cost of the supply chain and a real estate optimization initiative. These synergy alone worth more than $ 500 million for the integrated business. Considering that the business scale of the two companies is slightly doubled, it is possible to expect a great synergistic effect by increasing products and regional savings, and our monitoring cannot be foreseen yet.

This time I will give Max the phone.

Max Kiar a-Economic Director

Thank you, Vince. The fourth and 2023 cache performances were great, and as reported in the third quarter of financial results, we have achieved monitoring of all major cache indicators. Important implementation such as Italy gaming in 2021 and paid offers in 2022 were influenced by the previous comparison, but in the full year we were able to achieve a record high. These results effectively recognize that most of our lon g-term goals have already been achieved, or that they are confident in the background of the accurate trajectory for achievement. In fact, until 2026, we anticipate that the annual average growth rate calculated with the specific amount of money will begin to increase, and after adjustment, EBITDA will increase with a higher specific growth rate. This is achieved by an organic increase by rescue of existing businesses and a significant cost of the supply chain and real estate optimization initiative. These synergy alone worth more than $ 500 million for the integrated business. Considering that the business scale of the two companies is slightly doubled, it is possible to expect a great synergistic effect by increasing products and regional savings, and our monitoring cannot be foreseen yet.

This time I will give Max the phone.

Max Kiar a-Economic Director

A summary of cash flow is provided on slide 13, with a comparison to the prior year. Fourth quarter sales increased 3% year over year to over $1. 1 billion, with Mas Loto up 7% due to strong product sales and continued growth in Italy. Operating income increased 11% to $256 million, and operating margin increased 160 basis points to 23%, reflecting improved performance across all business segments. Adjusted EBITDA increased 9% year over year to $454 million, and adjusted EBITDA margin increased 190 basis points to 40%.

Adjusted earnings per promotion increased 40% to $0. 56, driven by significantly higher operating income. For the full year, earnings were $4. 3 billion, up 2% excluding paid offer sales in Italy and up 7%, driven by mid-to-top weighted growth in all business segments. Operating income increased 9% to $1. 0 billion, a record, driven by higher same-store sales from Mass Lotto in Italy, lower supply chain costs and improved R& D processes in the Mass Gaming business, and higher operating leverage in Play Digital. Operating margin increased 140 basis points to 23%.

Full-year adjusted EBITDA was $1. 8 billion, and adjusted EBITDA margin was 41%, which continues to be considered the best indicator in the company's context. Earnings per promotion were $0. 77 as reported and over $2 as adjusted, up 2% year over year due to higher operating income, partially offset by lower taxes. Now let's look at the results for the three segments. The giant lottery posted fourth-quarter profits up 7% to $681 million driven by strong product sales and increased same-store sales in Italy.

Global same-store sales declined 3%, reflecting the impact of strong multi-tier jackpot sales in the U. S. last year, fueled by a record $2 billion Powerball jackpot won on Nov. 7, 2022. Italian same-store sales increased 3%, driven primarily by flash ticket games such as lottery games.

Customer demand for IGT's innovative products, driven by strong sales of GameTouch 28 self-service terminals in Michigan and Ontario and the resale of its central iLottery system in Poland, helped fourth-quarter product profits increase 94% year over year.

Operating income in the fourth quarter increased by 10%to $ 238 million. The operating profit margin increased by 110 basis points to 35 %, which was due to the development of functions in Italy and increased sales of products with high profit margins despite the decrease in jackpot benefits. In the full year, the profit was 2. 5 billion yen, down 2 % yea r-o n-year, but it increased by 6 %, except for the resale of paid offer businesses in Italy. Operating income was 913 million, and the paid offer business in Italy contributed 34 million in the previous year, but it was the same as the previous year.

The operating profit margin rose 100 basis points to 36 %. In the fourth quarter, the mass game revenue was $ 390 million, and the jackpot cost associated abnormally soaring that the frequency of jackpots was higher than usual in the expanded modern gaming market, but slightly exceeded the previous year. Ta. Increased rescue and IP commissions due to terminal sales were offset by the decrease in system sales. The number of shipments was about 9. The replacement sales of Casinotaminal continued to increase, increasing 6 % yea r-o n-year.

The global ASP was $ 15. 900, and the North American ASP increased 4 % to $ 16. 300, which confirmed the mixe d-related momentum expected in the third quarter. The sales volume was more than 53. 900 units, increasing significantly in several regions. In the fourth quarter, business momentum accelerated, and the cumulative shipments in the United States and Canada continued to increase the latest games at multiple levels, increasing 1 % of the previous quarter and 6 % yea r-o n-year. The cumulative shipments in other areas, which have actually reflected the growing demand for hig h-quality games in Central and South American and some European countries, increased by 4 % of the previous quarter and 14 % yea r-o n-year.

Operating income in the fourth quarter increased by 17 % to $ 80 million, and operating margin was 21 %, an increase in 290 basic points. This is because the drop in the supply chain cost and the improvement of the R & amp; amp; D process were partially offset by the rising jackpot costs rising. In the full year, profits increased by 9 % to 1. 6 billion due to the cumulative rise in major performance indicators. Operating income increased by 29%to $ 313 million, and operating margin was 20%to an increase of 320 basic points. PlayDigital's profits in the fourth quarter were 59 million, decreasing by 10 % last year (65 million). This is because the jackpot fee was not very good, in addition to the benefits of the jackpot fee last year, the drop in sports betting charges in Road Island and the retention rate.

iGaming GGR remained strong, growing across all regions including double-digit growth in the US, while sports betting GGR was in line with last year's levels. Operating income increased to $17 million and operating margin increased 360 basis points to 29%, primarily driven by disciplined cost management and lower variable compensation expenses. As the pace of new legislation is expected to slow next year, proactively managing our cost structure remains a priority for 2024.

During the year, we achieved record levels of revenue and operating income. Revenue increased 9% to $228 million, driven by iGaming growth across all regions. Strong operating leverage drove operating income up 32% to $65 million, while OI margin increased 490 basis points to 29%. Record operating results and a 58% cash conversion ratio led to cash flow from operations exceeding $1 billion, the highest in the company's history.

Free cash flow exceeded expectations at approximately $620 million, driven by capital expenditures and deferred royalties of approximately $420 million. Adjusted free cash flow exceeded $800 million.

Over the past two years, the company has had a balanced capital allocation, broadly following what was announced at its Investor Day in November 2021. In 2023, the company distributed $160 million to shareholders in the form of cash dividends, and after using up approximately half of the $300 million program, $145 million remains under the current share repurchase authorization.

Total liquidity remains strong at €1. 8 billion at year-end, including additional borrowings of €1. 2 billion. Over the past three years, the Group has gradually strengthened its credit profile, significantly reducing debt by over $2 billion and improving its net debt ratio from 3. 5x to a record low of 2. 9x. This puts the Group within its targeted leverage range of 2. 5x to 3. 5x and in an excellent position with no significant debt maturities in the near future. The improved credit profile is also reflected in the ratings received by the rating agencies earlier this year: Moody's upgraded the Bank's rating from Ba1 to Ba2 (stable outlook) and Fitch assigned an issuer rating of BB+ (stable outlook) and an investment rating of BBB.

Apart from this, the IGT company split and merger were announced last week, and S & amp; amp; p and Fitch set the IGT rating to "positive". Let's announce the monitoring results of 2024. In order to make this year's basic business expectations easier, we are shifting from things that conspiracy ends in early 2025. This is because if the conspiracy ends in 2024, it is necessary to make a difficult accounting adjustment for monitoring.

Questions & Answers:

operator

Our monitoring has 23 to 24 % of operating profit margins, except for the distribution of assets and overcrowded costs we believe that we can take into account the basic characteristics of the company. In fact, 200 base is actually higher than 2023. According to the business project, this monitoring is the best energy of the jackpot observed in 2023, so the number of lottery sales at the same store as one worldwide changed or slightly decreased by the annual calculation. It means not. However, there are occasional large jackpots, the conditions are unpredictable, and as a result, we do not expect our monitoring. If the effects of the jackpot are eliminated, the sales scale of a single store in different jurisdictions will increase in a low specific quantity due to the integration of the game value significantly increased.

The new sector gives a simple group of components features 2, which was presented earlier, without configuring our political people. We will continue to give us what the CPE and the degree of discord of rescue are, as a result, we are waiting for the small effects of this configuration. In fact, in this case, we are waiting for games and digital profits to grow to the highest specific speed.

This is due to the continued growth in game industry shipments, volumes, and ASPs, as well as the rise of existing digital technology markets now that the pace of new legislation has slowed. Operating margins are expected to improve by 250-400bps due to our focus on KPIs, continued supply chain improvements, and focus on cost discipline, bringing us one step closer to our long-term incentive target of 28-30%. In terms of exchange flows, we expect the exchange method from operations to actually be at least 1 billion yen, including the impact of expenses related to asset distribution and resale. Serious costs in the range of 5 billion include an increase of 75 million over 2023 related to recent contract wins and long-term contract renewals in our large lottery advertising.

Max Kiar a-Economic Director

The combination of IGT Global Gaming and PlayDigital with Everi's existing business will create a bargain player with the scale, diversity, currency generation and growth opportunities to rival other gaming companies. At this point, we would like to outline the key financial features of the spin-off and merger transaction, as well as the remaining steps required to complete the transaction. Following the closing of the transaction, the newly formed joint gaming company will raise 3. 7 billion, which will be used to refinance a 2. 6 billion spread in favor of IGT PLC and Everi's existing debt. IGT PLC plans to use the funds raised through the spread to repay 2 billion in existing debt and to raise up to 400 million in foreign currency related to this transaction.

This debt reduction is expected to reduce Remainco PLC's contingent debt leverage to approximately 2. 5x immediately following closing, further strengthening the Company's balance. At this point, I would like to address the tax nature of the transaction, which several have pointed out. Many of RMT's transactions in the U. S. have been in the form of non-cable distributions followed by mergers of non-core businesses.

Because IGT PLC is tax-exempt, we expect the tax exposure from this transaction to be immaterial, at most $100 million, or less than $0. 50 per IGT company. Another key benefit of a taxable transaction is that it provides maximum flexibility for strategic initiatives such as M& A, and provides a broader range of stock returns for both companies from day one. The transaction is also taxable to IGT shareholders. Additional information on this matter will be included in our Report 20-F, which will be filed with the SEC later today.

We have outlined the key steps to rapidly implement the business integration with Everi and are excited by the prospect of creating two independent global clean businesses that will have significant costs for stakeholders. We are finalizing our prepared deliverables on this. Operator, any questions please?

Operator

Vince Sada Sk y-President Executive Officer

Barry Jonas - Truist Securities - Analyst

Good morning. I would like to start with the game. Could you please give us a little more detail on the path and key factors to achieve the target indicator OI of 25%, 20% to 30%? And how many of them can be transferred to the Every business of the new company? What are the inherent synergies and what can be assets? Thank you.

Max Kiar a-CFO

Do you expect the margin of 24 years to increase from 250 to 400? and. This is actually an upper limit, half the lower limit of the 2025 target. So one year later, you have to get on the same track again. Thus, we are consistently and logically toward the goal. The tailwind to achieve this goal mainly reflects the success of games such as Prosperity Links and Mystery of the Lamp, especially the 2024 new game, led by Whitney Houston. It is because our installation base has achieved a positive momentum.

Vince Sada Sk y-President Executive Officer

operator

This is Roger Roger PRIMA. Next, I would like to comment on the lottery expansion process in Italy.

Is there any news about the time? Also, what kind of position do you think you are in your current position? thank you.

Vince Sada Sk y-CEO

Yes, definitely. In Italy, there was news that the Finance Committee recently submitted an online gambling rules. From this, it was found that a bid was started. The conditions include nine years of renewable concessions and at least 1 billion euros. < SPAN> Max Kiar a-CFO

Vince Sada Sk y-President Executive Officer

This is the first point that affects positive growth of profit margins. Finally, the second point is that international sales are expected to grow, which is parallel with the steady expansion of the installed installed base. Remember that the number of installations in the international market in 2023 increased by 14 %. Finally, the momentum of supply chain cost reductions can be expected to continue, and it will be a positive to expand the margin in 2024.

Barry Jona s-Trueist Securitie s-Analyst

This is Roger Roger PRIMA. Next, I would like to comment on the lottery expansion process in Italy.

Is there any news about the time? Also, what kind of position do you think you are in your current position? thank you.

Vince Sada Sk y-CEO

Of course. Hello, Barry. This is Max. This year ended at 20%.

Barry Jona s-Trueist Securitie s-Analyst

This is Roger Roger PRIMA. Next, I would like to comment on the lottery expansion process in Italy.

Is there any news about the time? Also, what kind of position do you think you are in your current position? thank you.

Vince Sada Sk y-CEO

Is there any news about the time? Also, what kind of position do you think you are in your current position? thank you.

In this way, in consideration of the announced content, we are preparing for regulatory authorities to mark a large amount of funds, such as the tremendous applicants, in our opinions. I believe that we have set the best bar for stakeholders. And, of course, the applicant shows his strategy, guarantees it to Italian authorities to achieve its intentions, and ensures the appropriate profitability of such important promises. You will have to prove your ability to realize. It is clear that we have managed lotteries for 30 years, and we are happy to be able to continue making lotteries. The process is long.

Max Kiar a-Economic Director

Barry Jona s-Trueist Securitie s-Analyst

wonderful. Thank you for this paint and celebrate a good quarter and a year.

Vince Sadashik i-Major executive officers

Is there any news about the time? Also, what kind of position do you think you are in your current position? thank you.

Next is a question from Macquerley's Baynon child. Your number is not closed yet.

operator

good morning. thank you. It was a good quarter. I would like to hear about Vince, Max, and the regression in January, which I heard from many operating partners and influenced the business in January.

Is the lottery the same? And, in fact, is the more important thing that has become more alternative and constant in both games and lottery business due to the extended bad weather on weekends? thank you very much.

Vince Sadashik i-Major executive officers < SPAN> In this way, in consideration of what was announced, we, as in the past, in our opinions, in our opinions, a limited number of applicants trained. I believe that we are ready to mark a large amount of money and have set the best bars for stakeholders. And, of course, the applicant shows his strategy, guarantees it to Italian authorities to achieve its intentions, and ensures the appropriate profitability of such important promises. You will have to prove your ability to realize. It is clear that we have managed lotteries for 30 years, and we are happy to be able to continue making lotteries. The process is long.

The government has to be created and made by financial theory, then prepares a procurement plan, and performs a fairly long legislative procedure, as we have seen in the past. And, of course, if all of these are done and a formal bidding is announced, the stakeholders will have time to organize their own evaluations and make proposals. After that, of course, all services are evaluated, and the benefits are ultimately awarded. In our estate, this work will take one to one and a half and a half.

Vince Sada Sk y-President Executive Officer

wonderful. Thank you for this paint and celebrate a good quarter and a year.

Vince Sadashik i-Major executive officers

Next is a question from Macquerley's Baynon child. Your number is not closed yet.

Max Kiar a-Economic Director

Vince Sadashik i-Major executive officers This way, in consideration of what was announced, we, as in our opinions, like a train of a limited number of applicants in our opinions. I believe that we are ready to mark a large amount of money and have set the best bar for stakeholders. And, of course, the applicant shows his strategy, guarantees it to Italian authorities to achieve its intentions, and ensures the appropriate profitability of such important promises. You will have to prove your ability to realize. It is clear that we have managed lotteries for 30 years, and we are happy to be able to continue making lotteries. The process is long.

Barry Jona s-Trueist Securitie s-Analyst

wonderful. Thank you for this paint and celebrate a good quarter and a year.

Vince Sada Sk y-President Executive Officer

operator

Next is a question from Macquerley's Baynon child. Your number is not closed yet.

operator

Vince Sadashik i-Major executive officers

Yes, start with a lottery and then go to the gambling business. I basically believe what I mentioned in 2023. From 2023 to 2024, of course, the memory of the recovery in 2023 suggests the possibility of 2024. In 2023, sales of a shop increased by more than 2 %. Of course, thanks to the power ball and the Megamilions, the number of lotteries has increased and the jackpot has expanded considerably.

In other words, the jackpot in 2022 was also strong, but 2023 was even stronger. In the fourth quarter of 2023, I noticed that the number and lottery were slightly decreased, about 1 % yea r-o n-year. However, some states still have a strong jackpot. Compared to the pandemic for several years, this is a significant increase, and the spectator mobilization was really wonderful. And this thesis was extremely correct.

Looking at the first quarter trends, it is, of course, must be divided into Italy and North America. In Italy, it continues to show a very high growth rate of an average of one digit. This is largely due to continuous technological innovation and the release of new products. In the past few years, the team, especially the team, will work hard, stimulate demand, and make fresh and most enjoyable games every day.

Max Kiar a-Economic Director

Given that the number of jackpots increased in the first quarter of last year, the negative impact of this factor seems to be smaller. In this way, we believe that the characteristics of North America and other areas will probably be reduced to one or two digits. And, as Max said, we believe that our attendance in a long opportunity output will be a low to moderate number. We actually believe that we can store this indicator, thank the technological innovation, and also expand the rank of the game. < SPAN> Yes, start with a lottery and then go to the gambling business. I basically believe what I mentioned in 2023. From 2023 to 2024, of course, the memory of the recovery in 2023 suggests the possibility of 2024. In 2023, sales of a shop increased by more than 2 %. Of course, thanks to the power ball and the Megamilions, the number of lotteries has increased and the jackpot has expanded considerably.

operator

As it is, we believe that the number of fresh launches will decrease toward the quarter, increasing the first quarter of Italy, and the fastest level. In North America and other areas in the world, the implementation is large, decreasing to the lower two digits. Of course, this is mainly based on the conditions of jackpo-lottery with some states, especially North America's powerballs and mega. We believe this return will be smaller.

Vince Sada Sk y-President Executive Officer

Also, several games from "Mystery of the Lamp" ranked in the top 15 new premium rental games. Our new franchise "Magic Treasures" made it into the top 10 new leading video games. Our "Steppers" accounted for 13 of the 25 best games. Also, fairly recent hardware that was released last year or this year took first or second place in their respective categories.

Speaking of the industry, Chad: 23 was of course a record year for the gaming industry, followed by an unimaginable 2022. Experts say that GGR for gaming machines increased by about 2%. If we remember the fuss at the beginning of the year about the recession and disposable income, none of it materialized, at least in terms of people's recreation, especially in terms of their love for this game in casinos. In fact, slot machine GGR in the fourth quarter increased by about 2%, roughly in line with expectations for the same period last year.

In January, the new year, casino buyers claim that the trend in January is soft. Could this have something to do with the weather? Of course, we literally have no idea. But in general, buyer sentiment remains pretty good, according to casino buyer reports. Obviously, playing slots is considered more profitable for casino buyers, and we expect a more normalized sales funnel to return to past levels.

Of course, we entered 2022 with a huge pent-up demand because we were unable to supply products due to supply chain delays. As a result, we can say that we are now in a normal situation. Looking at gaming markets outside the US, in EMEA, Latin America, and Australia, the EMEA market is lagging behind pre-pandemic levels.

I noticed that there is a pretty clear demarcation between Western and Eastern Europe. Western Europe has literally recovered and we are competing well in this market. Eastern Europe was hurt because of the socio-political history that formed there and some special tasks, such as tax and regulatory issues in Romania. In Latin America, the recovery is very strong and especially IGT's games are great.

The supplied base has increased quite significantly. But in real time, there are some macroeconomic difficulties in these states, like the new import restrictions introduced by the Argentine and Mexican governments, which affect all suppliers, but we believe that they will actually be resolved within the year. In Australia and New Zealand, the macroeconomic situation remains tough, but the trend is strengthening. For example, we are doing well in this market.

And in the lottery, last year was a period of pretty strong jackpots compared to the start of 2024.

Vince Sada Sk y-President Executive Officer

Great. Thank you. And according to the preposition of enchantment, that's a rudimentary clarification. If you're planning for 500 million, isn't it 500 million in year 24? Isn't there an opportunity for us to qualify that in year 24, we should be focusing on gaming and digital technology and lottery? And yet, spinco, you don't have an opportunity to help us with serious cost figures for lottery services and new contracts? Thank you.

Max Chiara - Economic Director

But in the year proper, we should increase by about 75 million yen at the expense of the lottery, which is mainly related to three transactions, of which we mentioned during the call. This is the long period of influence, as well as Kentocky and Virginia and California. These are serious investments that we are expecting to spend on these contracts in the 24th year. If you talk about the long opportunity, about maintenance compared to emergence and new contracts, this business - I'm talking about the lottery commercials - if it is eliminated by cycles, has historically been at a level of within 200 million yen in serious investments per year.

operator

Chad Beynon - Macquarie Group - Analyst

Vince Sada Sk y-President Executive Officer

Operator

[The next question is from Jeff Startial of Stifel. Your number is not yet closed.

operator

Good morning, everyone. Thank you. Vince or Max will be coming. You said that it is expected in absolute year monitoring to rise in the world game lottery sales at the level of low specific numbers as the exposure of jackpots in different states is expected.

Call participants:

Jim Harley-Investor Relations Senior Vice President

Vince Sada Sk y-President Executive Officer

Max Kiar a-Economic Director

Is there any news about the time? Also, what kind of position do you think you are in your current position? thank you.

And you can list at least six games in the past year and a half. Finally, the jackpot's announced value is based on a 3 0-year pension, which is affected by an increase in interest rates. This basically means that in order to declare a billion jackpot now, the same base sales as a few years before the interest rate had not yet risen. Nevertheless, IGT, but keep in mind that the IGT receives rewards in the form of a lottery sales, not the size of the announced jackpot.

In other words, in the most pure form, when a large jackpot is played, we can make a sublime profit. We are still organizing the lon g-term monitoring of the rise of lottery sector at a low specific number level when the effects of the jackpot are eliminated. And ultimately, if the 23rd year is associated with the 22nd year, the impact of Jackpot's financial characteristics is equivalent to $ 15 million throughout the year.

Elim Poon - Journalist, Creative Writer

Last modified: 27.08.2024

International Game Technology Plc (IGT) Q4 Earnings Call Transcript. IGT earnings call for the period ending December 31, featured-transcript-logo. International Game Technology Plc (IGT) Q4 Earnings Call Transcript. IGT earnings call for the period ending December 31, Motley Fool•2 個月前. IGT. Game Technology Plc (IGT) Q4 Earnings Call Transcript Motley Fool - Tue Mar 12, PM CDT. IGT earnings call for the period ending December 31, IGT.

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International Game Technology Plc IGT Q4 2023 Earnings Call Transcript The Motley Fool

International Game Technology Plc (IGT) Q4 2023 Earnings Call Transcript

NYSE: IGT

International Game Technology Plc

Contents:

Prepared Remarks:

Questions & Answers:

Call participants: