Intralot Results 2018 : Too little - too late?
Intralot announced earlier this week the full-year 2018 results which have added more pressure both internally in the company ranks and also to the market share at the Greek Stock Exchange.(-8,35 % on 16th , -1,7 % on 17th , -6.25% today , see graph above)
Intralot records a -6.4% decline in group revenues to €870 million (FY2017: €930m), as all their core business segments are suffering :Licensed Operations (-3.5%), Game Management (-9%) and Technology Contracts (-12%).
Let us not forget that Intralot earnings would be impacted by severe FX declines against the € recorded across its Argentine and Turkish units, resulting in a 23% EBITDA decline to €116 million (FY2017: €151m).
Last but not least we need to consider the impact of the loss of IDDAA contract in Turkey for 2019(after Aug 2019 to be precise) and the sale of Totolotek( Poland) along with a number of important territories that will have a major impact to the company in 2019(e.g Morocco).
In my eyes the factor that can be a game changer for Intralot will be to enter the B2C Arena.Now that Intralot has invested money and time to build technology and infrastructure , Intralot has to showcase that they have the pedigree and stamina to run successfully B2C operations.
It is fundamental that the President and CEO , Sokratis Kokkalis , has ensured both the analysts and the market with the following statement : “The reported revenue and earnings contraction during 2018 points to the need for a wide reorganization of our production and operational capabilities towards significant cost reductions and operational efficiencies. This is why we recently conducted a management reshuffle in order to design and implement a new cost-reduction plan through better synergies between divisions and between headquarters and subsidiaries. I am personally committed and focused on our mission to best address the needs of our clients and to improve the cash flow generation of our business through a combination of new business and organic growth opportunities, coupled with cost optimisation, while continuing divestment from non-core assets when market conditions are favourable.”
He will need all the team of Intralot behind him to share the cause and meaning of the above statement and , as always , timing is essential!All above reorganization , reshuffling , and operational efficiencies need to take place maximum by the end of Q2 ,in the following 2-3months, otherwise i fear it will be too little - too late .
Definitely a very interesting and challenging 2019 for Intralot both at home and away...