Financial Highlights:
- Revenues growing to €2.40 billion - €2.50 billion by 2010, with an expected annual average growth rate on 2007 actual figures of 13% to 15%. Revenues for 2008 expected to be in the range of €1.95 billion - €2.05 billion.
- EBITDA growing to €900 million - €935 million by 2010, with an expected average annual growth rate on 2007 actual figures in the range of 9% to 10%. EBITDA for 2008 estimated to be in the range of €750 million - €765 million.
- Earnings per share (EPS) growing to €1.45 - €1.55 by 2010. EPS for 2008 expected to be in the range of €0.75 - €0.85.
- Operating Income growing to €600 million - €650 million by 2010, with an expected average annual growth rate on 2007 actual figures in the range of 14% to 17%. Operating Income for 2008 estimated to be in the range of €420 million - €435 million.
- Un-levered Free Cash Flow (before acquisitions) growing to €550 million - €600 million by 2010 from €220 million - €250 million in 2008.
Financial Goals:
- Drive revenue growth through geographic and product expansion
- Maintain robust EBITDA margins
- Maintain investment grade credit rating
- Continue to return cash to shareholders
ROME (ITALY), April 07, 2008 – Lottomatica S.p.A. today will announce Lottomatica Group's 2008 - 2010 strategic plan in London during a meeting addressing the financial community. Chairman and CEO Lorenzo Pellicioli, Managing Director of Lottomatica, Marco Sala, GTECH President and CEO Jaymin Patel, and Group CFO Stefano Bortoli will lead the presentation which is being followed by a series of meetings with the investment community commencing in London and Milan.
LOTTOMATICA GROUP STRATEGY
"It is our goal for the Lottomatica Group to be the leading commercial operator and provider of technology in the regulated worldwide gaming markets. We’ll achieve this by delivering best-in-class products and services, with a steadfast commitment to the highest levels of integrity, responsibility, and shareholder value creation,” said Chairman and CEO Lorenzo Pellicioli. “Over the next three years, we will maintain our global leadership position in the public gaming markets. The key to our success is that we have a worldwide footprint that affords us access to opportunities. We understand the preferences and behaviors of gaming customers and we are able to manage and deploy best in class technology solutions. Finally, we have the scale to effectively compete and invest in new opportunities for growth.”
Managing Director of Lottomatica, Marco Sala commented, “The Italian Gaming market is healthy and growing and our objective will be to maintain our leadership position. In the lotteries segment, we plan to continue our Scratch & Win growth. We will further develop Sports Betting benefiting from expected market growth through our existing network and brand strength. In the Gaming Machines segment we intend to play a leading role in the market consolidation process. We will also pursue any European opportunity to leverage our expertise as operator.”
GTECH President and CEO Jaymin B. Patel said, "Our strategy is simple and direct. We will drive same store sales by employing best practices to tap into the significant potential of our existing customer base. And, we will grow into new markets and expand into new delivery channels through a combination of acquisitions and product innovation. As evidenced by the recent acquisitions of Atronic, an international gaming machine manufacturer for the commercial gaming market, and our expect acquisition of St Minver and Boss Media, companies concentrating on betting and interactive gaming, GTECH is well positioned to maintain its leadership in the public gaming markets, expand in the commercial gaming market and become a key provider in the quickly-growing sports betting and interactive markets.”
Lottomatica Group's strategy is to address the gaming markets through four basic segments: Traditional and Instant Lottery; Gaming Solutions; Sports Betting; and Interactive. GTECH’s activities are focused on the “business to business” category primarily as a technology solutions provider and Lottomatica on the “business to consumer” category primarily as a gaming operator.
KEY FINANCIAL GUIDANCE
Overall, in 2008, revenues are expected to be in the range of €1.95 billion to €2.05 billion. In 2010, revenues are expected to grow to approximately €2.40 billion to €2.5 billion. The Compound Annual Growth Rate (CAGR) for the three-year plan is expected to be in the range of 13% to 15% versus FY’07 actual figures.
EBITDA for 2008 is expected to be in the range of €750 million to €765 million, growing to €900 million to €935 million by 2010, with a CAGR of 9% to 10% over the three-year period versus FY’07 actual figures.
Earnings per share as reported for 2008 are expected in the range of €0.75 to €0.85, growing to €1.45 to €1.55 by 2010.
2008 Operating Income is estimated in the range of €420 million to €435 million, growing to €600 million to €650 million by 2010, with a CAGR of 15% to 18% versus FY’07 actual figures.
A competitive dividend policy is included in the three-year plan with an expected dividend distribution of €125 million in 2008 and €150 million in 2010.
Lottomatica Group will also maintain a healthy financial position. Un-levered Free Cash Flow (before acquisitions) will be in the range of €550 million - €600 million by 2010. By 2010, the Net Debt/EBITDA Ratio will be 2.5x, or 1.75x if adjusted for the hybrid bond.
It is expected that Lottomatica Group will maintain its investment grade credit rating, as well as preserving an efficient and competitive capital structure. The Company will also maintain sufficient financial flexibility to pursue growth, take a disciplined approach to capital allocation, and deploy free cash flow for growth investments in the existing business while repaying debt, as scheduled, and distribute dividends.
The Strategic Plan presentation will be available via live webcast at www.gruppolottomatica.it at 11:00 GMT (12:00 CET) on Monday April 7, 2008.
Notes to Editors:
Lottomatica is one of the world's largest commercial lottery operators and a market leader in the Italian gaming industry. GTECH is a leading gaming technology and services company, providing innovative technology, creative content, and superior service delivery. GTECH and Lottomatica together create a fully integrated lottery operator and gaming technology solutions provider - a combined company with worldwide scale, considerable financial strength, and industry-leading customer solutions. Lottomatica is majority owned by De Agostini, which belongs to a century-old publishing, media, and financial services group. Lottomatica is publicly traded on the Italian Stock Exchange (LTO), and in 2007, had approximately €1.7 billion in revenues and 5,900 employees in over 45 countries when combined with GTECH.
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