6-K
Brightstar Lottery PLC (BRSL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of May 2022
Commission File Number 001-36906
INTERNATIONAL GAME TECHNOLOGY PLC
(Translation of registrant’s name into English)
66 Seymour Street, Second Floor
London, W1H 5BT
United Kingdom
(Address of principal executive offices)
| Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: | |||
|---|---|---|---|
| Form 20-F | x | Form 40-F | ¨ |
| Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): | ¨ | ||
| --- | --- | ||
| Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): | ¨ |
First Quarter 2022 Results of InternationalGame Technology PLC
On May 10, 2022, International Game Technology PLC (NYSE:IGT) (the “Company”) reported results for the quarter ended March 31, 2022.
On May 10, 2022, the Company also announced that the Board of Directors declared a quarterly cash dividend of $0.20 per share on its ordinary shares. The dividend is payable on June 7, 2022 to holders of record as of the close of business on May 24, 2022.
A copy of the news release relating to the above matters is set forth in Exhibit 99.1, which is being furnished herewith. In addition, a slide presentation relating to the results is set forth in Exhibit 99.2, which is being furnished herewith.
Other Matters
On May 5, 2022, the Board of Directors of the Company approved the appointment of Alessandro Vergottini, effective upon the conclusion of the Company’s Annual General Meeting on May 10, 2022, to replace Paolo Ceretti, as an observer under the observer agreement between the Company and De Agostini S.p.A. (“De Agostini”), previously filed as Exhibit 2.10 to the Company’s Annual Report on Form 20-F filed with the SEC on March 3, 2022 (the “ObserverAgreement”). Alessandro Vergottini is the Chief Financial Officer of De Agostini.
The Observer Agreement was entered into between De Agostini and the Company permitting De Agostini to appoint an observer to attend meetings of the Company’s Board of Directors and shareholders, and to have access to relevant materials. On May 10, 2022, Alessandro Vergottini acknowledged and agreed to his appointment by De Agostini as an observer pursuant to the terms of the Observer Agreement, due to expire following the meeting of the Company’s Board of Directors at which the financial results for the third quarter of 2023 are reviewed.
The following exhibits are furnished herewith:
2
EXHIBIT INDEX
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: May 10, 2022 | INTERNATIONAL GAME TECHNOLOGY PLC | |
|---|---|---|
| By: | /s/ Pierfrancesco Boccia | |
| Pierfrancesco Boccia | ||
| Corporate Secretary |
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Exhibit 99.1
NEWS RELEASE
INTERNATIONAL GAME TECHNOLOGY PLC REPORTS
FIRST QUARTER 2022 RESULTS
| • | Revenue up 4% compared to the prior year, or 7% at constant currency, to $1.1 billion, drivenby significantly higher Global Gaming product sales; revenue and profit aligned with historic peak levels |
|---|---|
| • | Operating income of $252 million; operating income margin of 24% exceeds outlook by 200 basispoints |
| --- | --- |
| • | Adjusted EBITDA of $433 million matches prior year's record level at constant currency; 41% adjustedEBITDA margin among the highest level in Company history |
| --- | --- |
| • | Returned a record $80 million to shareholders via cash dividend and share repurchases for second consecutivequarter |
| --- | --- |
| • | Reaffirming full-year 2022 revenue and profit outlook |
| --- | --- |
LONDON – May 10, 2022 – International Game Technology PLC (“IGT”) (NYSE:IGT) today reported financial results for the first quarter ended March 31, 2022. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the results; access details are provided below.
"The first quarter results clearly reflect the power of our portfolio," said Vince Sadusky, CEO of IGT, "The quarter's strong margin profile highlights the long-term recovery of the gaming business as well as increased levels of lottery play from pre-COVID periods. The Company's initiatives around a simplified corporate structure have resulted in strong liquidity as we continue to invest in product development and return capital to shareholders."
"This quarter marks excellent progress on the profitable growth trajectory outlined at our November 2021 Investor Day. The benefits we are realizing from continued discipline around cost and cash flow management are evident in profit margins that are among the highest in the last three years and in significantly lower interest expense," said Max Chiara, CFO of IGT. "We are on pace with our leverage target for the year and expect further improvement with the expected proceeds from the announced asset disposition."
1
Overview of Consolidated First Quarter 2022Results
| Y/Y | Constant | ||
|---|---|---|---|
| All amounts from continuing operations | Change | Currency | |
| 2021 | (%) | Change (%) | |
| ( in millions) | |||
| GAAP Financials: | |||
| Revenue | |||
| Global Lottery | 749 | (9)% | (6)% |
| Global Gaming | 228 | 42% | 43% |
| Digital & Betting | 38 | 24% | 24% |
| Total revenue | 1,015 | 4% | 7% |
| Operating income (loss) | |||
| Global Lottery | 337 | (25)% | (21)% |
| Global Gaming | (26) | NA | NA |
| Digital & Betting | 7 | 101% | 100% |
| Corporate support expense | (19) | (34)% | (43)% |
| Other(1) | (39) | 1% | 1% |
| Total operating income | 260 | (3)% | 2% |
| Operating income margin | 26% | ||
| Net cash provided by operating activities | 251 | (25)% | |
| Cash and cash equivalents | 748 | (20)% | |
| Non-GAAP Financial Measures: | |||
| Adjusted EBITDA | |||
| Global Lottery | 447 | (20)% | (17)% |
| Global Gaming | 8 | NM | NM |
| Digital & Betting | 10 | 63% | 63% |
| Corporate support expense | (16) | (27)% | (38)% |
| Total Adjusted EBITDA | 450 | (4)% | —% |
| Adjusted EBITDA margin | 44% | ||
| Free cash flow | 204 | (43)% | |
| Net debt | 7,069 | (17)% |
All values are in US Dollars.
^(1)^Primarily includes purchase price amortization
Note: Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this news release
2
Key Highlights:
| • | Secured three-year lottery contract extension with the Missouri Lottery; awarded multi-year instant ticket<br>contract with Lotto Baden-Württemberg in Germany |
|---|---|
| • | Executed broad patent cross-licensing agreement with Aristocrat Leisure Limited |
| --- | --- |
| • | Recently signed agreement with Atlantic Lottery Corporation to provide 1,375 CrystalDual^®^<br>27 video lottery terminals |
| --- | --- |
| • | Launched high-performing IGT PlayCasino games in West Virginia, expanding digital footprint to five U.S.<br>states, and in Ontario, as market expands to include commercial operators |
| --- | --- |
| • | Extended sports betting momentum through strategic agreements with Meruelo Gaming LLC and Kalispel Casino |
| --- | --- |
| • | Recently won "Casino Supplier of the Year" at Global Gaming Awards London and "Multi-Channel<br>Supplier of the Year" at International Gaming Awards |
| --- | --- |
| • | PeakSlant32™ cabinet, Regal Riches™ slot game, Floor Manager™ systems solution, and<br>Diversity and Inclusion achievements receive top honors at The Casino Awards 2022 |
| --- | --- |
| • | Earned "Best Place to Work for LGBTQ+ Equality" designation by Human Rights Campaign Foundation |
| --- | --- |
| • | Joined the Science Based Targets initiative (SBTi), officially pledging to set targets to reduce greenhouse<br>gas emissions |
| --- | --- |
Financial Highlights:
Consolidated revenue of $1.1 billion, up 4% as reported and 7% at constant currency, from $1.0 billion in the prior year
| • | Global Lottery revenue of $680 million compared to $749 million in the prior-year period, which<br>included $95 million in prior-year benefits from Italy gaming hall closures, higher multi-state jackpot activity, and incentive accruals<br>related to LMA agreements; 4% increase year-over-year excluding said benefits |
|---|---|
| • | Global Gaming revenue increases 42% to $325 million, driven by significantly higher product sales<br>revenue and higher active installed base units |
| --- | --- |
| • | Digital & Betting revenue up 24% to $47 million, as double-digit growth across activities<br>continues; year-over-year increase driven by market expansion, organic growth, and timing of jackpots |
| --- | --- |
Operating income of $252 million, compared to $260 million in the prior year, down 3% as reported but up 2% at constant currency
| • | Global Lottery operating income down, primarily due to about $80 million in prior-year benefits referenced<br>above |
|---|---|
| • | Increased high-margin intellectual property royalties in Global Gaming and lower jackpot accruals in Digital &<br>Betting |
| --- | --- |
| • | Disciplined cost management |
| --- | --- |
Adjusted EBITDA of $433 million, compared to $450 million in the prior-year period, matches prior year's record level at constant currency; Adjusted EBITDA margin of 41%, among the highest in Company history
Net interest expense of $76 million compared to $94 million in the prior year, driven by lower average debt balances and interest rates
Provision for income taxes of $65 million compared to $148 million in the prior year, primarily due to lower pre-tax income and a decrease in incremental valuation allowances on deferred tax assets
3
Net income of $117 million versus $138 million in the prior-year period, driven by a reduction in foreign exchange gains, partially offset by lower income taxes and cost of debt
Net debt of $5.8 billion compared to $5.9 billion at December 31, 2021; Net debt leverage of 3.5x, stable compared to December 31, 2021
Cash and Liquidity Update
| • | Total liquidity of $2.3 billion as of March 31, 2022; $600 million in unrestricted cash<br>and $1.7 billion in additional borrowing capacity |
|---|
Other Developments
The Company's Board of Directors declared a quarterly cash dividend of $0.20 per common share
| • | Ex-dividend date of May 23, 2022 |
|---|---|
| • | Record date of May 24, 2022 |
| --- | --- |
| • | Payment date of June 7, 2022 |
| --- | --- |
On April 11, 2022, the Company announced an agreement to acquire iSoftBet, a leading iGaming content provider and third-party game aggregator, for €160 million; transaction expected to close during the second quarter of 2022
In February 2022, the Company announced an agreement to sell its Italian proximity payment/commercial services business for €700 million; transaction expected to close during the third quarter of 2022
In January 2022, the Company announced several Executive and Board leadership changes including the retirement of Lorenzo Pellicioli as Chairperson of the Board of Directors, appointment of Marco Sala as Executive Chair of the Board of Directors, Vincent Sadusky as CEO and Executive Director, and Maria Pinelli and Ashley M. Hunter as members of the Board of Directors
Reaffirming Full-year Revenue and ProfitOutlook; Introducing Second Quarter 2022 Outlook
Full Year
| • | Revenue of $4.1 billion - $4.3 billion |
|---|---|
| • | Operating income margin of 20% - 22% |
| --- | --- |
| • | Cash from operations of $850 - $1,000 million |
| --- | --- |
| • | Capital expenditures of ~$400 million |
| --- | --- |
Second Quarter
| • | Revenue of $1.0 billion - $1.1 billion |
|---|---|
| • | Operating income margin of 20% - 22% |
| --- | --- |
Outlook based on EUR/USD exchange rate of 1.12; excludes impact from sale of Italian commercial services business
Earnings Conference Call and Webcast
May 10, 2022, at 8:00 a.m. EDT
To register to participate in the conference call, or to listen to the live audio webcast, please visit the "Events Calendar" on IGT’s Investor Relations website at www.IGT.com. A replay will be available on the website following the live event.
4
Comparability of Results
All figures presented in this news release are prepared under U.S. GAAP, unless noted otherwise. Adjusted figures exclude the impact of items such as purchase accounting, impairment charges, restructuring expense, foreign exchange, and certain one-time, primarily transaction-related items. Reconciliations to the most directly comparable U.S. GAAP measures are included in the tables in this news release. Constant currency changes for 2022 are calculated using the same foreign exchange rates as the corresponding 2021 period. Management uses non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate the Company’s financial performance. Management believes these non-GAAP financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of business trends. These constant currency changes and non-GAAP financial measures should however be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with U.S. GAAP. Amounts reported in millions are computed based on amounts in thousands. Certain amounts in columns and rows within tables may not foot due to rounding. Percentages and earnings per share amounts presented are calculated from the underlying unrounded amounts.
About IGT
IGT (NYSE:IGT) is a global leader in gaming. We deliver entertaining and responsible gaming experiences for players across all channels and regulated segments, from Lotteries and Gaming Machines to Sports Betting and Digital. Leveraging a wealth of compelling content, substantial investment in innovation, player insights, operational expertise, and leading-edge technology, our solutions deliver unrivaled gaming experiences that engage players and drive growth. We have a well-established local presence and relationships with governments and regulators in more than 100 countries around the world, and create value by adhering to the highest standards of service, integrity, and responsibility. IGT has approximately 10,500 employees. For more information, please visit www.IGT.com.
Cautionary Statement Regarding Forward-LookingStatements
This news release may contain forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning International Game Technology PLC and its consolidated subsidiaries (the “Company”) and other matters. These statements may discuss goals, intentions, and expectations as to future plans, trends, events, dividends, results of operations, or financial condition, or otherwise, based on current beliefs of the management of the Company as well as assumptions made by, and information currently available to, such management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “would,” “should,” “shall”, “continue,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or the negative or other variations of them. These forward-looking statements speak only as of the date on which such statements are made and are subject to various risks and uncertainties, many of which are outside the Company’s control. Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may differ materially from those predicted in the forward-looking statements and from past results, performance, or achievements. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include (but are not limited to) the factors and risks described in the Company’s annual report on Form 20-F for the financial year ended December 31, 2021 and other documents filed from time to time with the SEC, which are available on the SEC’s website at www.sec.gov and on the investor relations section of the Company’s website at www.IGT.com. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements. You should carefully consider these factors and other risks and uncertainties that affect the Company’s business. Nothing in this news release is intended, or is to be construed, as a profit forecast or to be interpreted to mean that the financial performance of International Game Technology PLC for the current or any future financial years will necessarily match or exceed the historical published financial performance of International Game Technology PLC, as applicable. All forward-looking statements contained in this news release are qualified in their entirety by this cautionary statement. All subsequent written or oral forward-looking statements attributable to International Game Technology PLC, or persons acting on its behalf, are expressly qualified in their entirety by this cautionary statement.
5
Non-GAAP Financial Measures
Management supplements the reporting of financial information, determined under GAAP, with certain non-GAAP financial information. Management believes the non-GAAP information presented provides investors with additional useful information, but it is not intended to nor should it be considered in isolation or as a substitute for the related GAAP measures. Moreover, other companies may define non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies. The Company encourages investors to review its financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
Adjusted EBITDA represents net income (loss) from continuing operations (a GAAP measure) before income taxes, interest expense, net, foreign exchange gain (loss), net, other non-operating expenses, net, depreciation, impairment losses, amortization (service revenue, purchase accounting and non-purchase accounting), restructuring expenses, stock-based compensation, litigation expense (income), and certain other non-recurring items. Other non-recurring items are infrequent in nature and are not reflective of ongoing operational activities. For the business segments, Adjusted EBITDA represents segment operating income (loss) before depreciation, amortization (service revenue, purchase accounting and non-purchase accounting), restructuring expenses, stock-based compensation, litigation expense (income) and certain other non-recurring items. Management believes that Adjusted EBITDA is useful in providing period-to-period comparisons of the results of the Company's ongoing operational performance.
Net debt is a non-GAAP financial measure that represents debt (a GAAP measure, calculated as long-term obligations plus short-term borrowings) minus capitalized debt issuance costs and cash and cash equivalents, including cash and cash equivalents held for sale. Cash and cash equivalents, including cash and cash equivalents classified as held for sale, are subtracted from the GAAP measure because they could be used to reduce the Company’s debt obligations. Management believes that net debt is a useful measure to monitor leverage and evaluate the balance sheet.
Net debt leverage is a non-GAAP financial measure that represents the ratio of Net debt as of a particular balance sheet date to Adjusted EBITDA for the last twelve months (“LTM”) prior to such date. Management believes that Net debt leverage is a useful measure to assess our financial strength and ability to incur incremental indebtedness when making key investment decisions.
Free cash flow is a non-GAAP financial measure that represents cash flow from operations (a GAAP measure) less capital expenditures. Management believes free cash flow is a useful measure of liquidity and an additional basis for assessing IGT’s ability to fund its activities, including debt service and distribution of earnings to shareholders.
6
Constant currency or constant FX is a non-GAAP financial measure that expresses the current financial data using the prior-year/period exchange rate (i.e., the month end exchange rates used in preparing the financial statements for the prior year). Management believes that constant currency is a useful measure to compare period-to-period results without regard to the impact of fluctuating foreign currency exchange rates.
A reconciliation of the non-GAAP measures to the corresponding amounts prepared in accordance with GAAP appears in the tables in this release. The tables provide additional information as to the items and amounts that have been excluded from the adjusted measures.
Contact:
Phil O’Shaughnessy, Global Communications, toll free in U.S./Canada +1 (844) IGT-7452; outside
U.S./Canada +1 (401) 392-7452
Francesco Luti, +39 06 5189 9184; for Italian media inquiries
James Hurley, Investor Relations, +1 (401) 392-7190
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Select Performance and KPI data: ($ in millions, unless otherwise noted)
| Sequential | ||||||
|---|---|---|---|---|---|---|
| Constant | Change as | |||||
| Y/Y Change | Currency | Reported | ||||
| GLOBAL LOTTERY | Q1'22 | Q1'21 | (%) | Change (%)^(1)^ | Q4'21 | (%) |
| Revenue | ||||||
| Service | ||||||
| Operating and facilities<br> management contracts | 599 | 695 | (14)% | (11)% | 608 | (1)% |
| Upfront license<br> fee amortization | (49) | (52) | 7% | —% | (50) | 3% |
| Operating and facilities management<br> contracts, net | 551 | 643 | (14)% | (11)% | 558 | (1)% |
| Other | 84 | 83 | 2% | 9% | 87 | (4)% |
| Total service revenue | 635 | 725 | (13)% | (9)% | 646 | (2)% |
| Product sales | 45 | 23 | 95% | 105% | 42 | 8% |
| Total revenue | 680 | 749 | (9)% | (6)% | 687 | (1)% |
| Operating income | 252 | 337 | (25)% | (21)% | 217 | 16% |
| Adjusted EBITDA^(1)^ | 356 | 447 | (20)% | (17)% | 336 | 6% |
| Global same-store sales growth (%) | ||||||
| Instant ticket & draw games | (6.7)% | 27.4% | 6.6% | |||
| Multi-jurisdiction jackpots | (40.0)% | 94.7% | 21.7% | |||
| Total | (10.3)% | 32.4% | 7.7% | |||
| North America & Rest of world<br> same-store sales growth (%) | ||||||
| Instant ticket & draw games | (3.9)% | 20.9% | 6.3% | |||
| Multi-jurisdiction jackpots | (40.0)% | 94.7% | 21.7% | |||
| Total | (9.0)% | 27.8% | 7.8% | |||
| Italy same-store sales growth (%) | ||||||
| Instant ticket & draw games | (14.5)% | 52.2% | 7.7% | |||
| ^(1)^ Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein | ||||||
| --- |
8
| Sequential | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Constant | Change as | |||||||||||
| Y/Y Change | Currency | Reported | ||||||||||
| GLOBAL GAMING | Q1'21 | (%) | Change (%)^(1)^ | Q4'21 | (%) | |||||||
| Revenue | ||||||||||||
| Service | ||||||||||||
| Terminal | 108 | 90 | 20% | 20% | 109 | (2)% | ||||||
| Systems, software, and other | 58 | 49 | 18% | 19% | 54 | 7% | ||||||
| Total service revenue | 165 | 139 | 19% | 20% | 163 | 1% | ||||||
| Product sales | ||||||||||||
| Terminal | 104 | 62 | 69% | 70% | 110 | (5)% | ||||||
| Other | 55 | 28 | 99% | 101% | 48 | 16% | ||||||
| Total product sales revenue | 160 | 90 | 78% | 80% | 158 | 1% | ||||||
| Total revenue | 325 | 228 | 42% | 43% | 321 | 1% | ||||||
| Operating income (loss) | 52 | (26) | NA | NA | 36 | 43% | ||||||
| Adjusted EBITDA(1) | 81 | 8 | NM | NM | 66 | 23% | ||||||
| Installed base units | ||||||||||||
| Casino | 47,237 | 48,230 | (2)% | 47,732 | ||||||||
| Casino - L/T lease(2) | 1,142 | 1,135 | 1% | 1,117 | ||||||||
| Total installed base units | 48,379 | 49,365 | (2)% | 48,849 | ||||||||
| Installed base units (by geography) | ||||||||||||
| US & Canada | 32,772 | 34,138 | (4)% | 33,437 | ||||||||
| Rest of world | 15,607 | 15,227 | 2% | 15,412 | ||||||||
| Total installed base units | 48,379 | 49,365 | (2)% | 48,849 | ||||||||
| Yields (by geography)(3), in absolute | ||||||||||||
| US & Canada | 39.05 | $ | 32.27 | 21% | $ | 38.95 | ||||||
| Rest of world | 5.77 | $ | 2.58 | 124% | $ | 5.39 | ||||||
| Total yields | 28.19 | $ | 22.93 | 23% | $ | 28.27 | ||||||
| Global machine units sold | ||||||||||||
| New/expansion | 328 | 884 | (63)% | (11) | ||||||||
| Replacement | 6,848 | 3,521 | 94% | 7,377 | ||||||||
| Total machine units sold | 7,176 | 4,405 | 63% | 7,366 | ||||||||
| US & Canada machine units sold | ||||||||||||
| New/expansion | 18 | 620 | (97)% | (452) | ^(4)^ | |||||||
| Replacement | 5,299 | 2,276 | 133% | 5,547 | ||||||||
| Total machine units sold | 5,317 | 2,896 | 84% | 5,095 |
All values are in US Dollars.
| ^(1)^ Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein |
|---|
| ^(2)^ Excluded from yield calculations due to treatment as sales-type leases |
| ^(3)^ Excludes Casino L/T lease units due to treatment as sales-type leases; comparability on a Y/Y basis hindered due to lower active units in the prior year |
| ^(4)^ Negative units due to reclass between New/expansion and Replacement units |
9
| Sequential | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Constant | Change as | ||||||||
| Y/Y Change | Currency | Reported | |||||||
| GLOBAL GAMING (Continued) | Q1'21 | (%) | Change (%)^(1)^ | Q4'21 | (%) | ||||
| Rest of world machine units sold | |||||||||
| New/expansion | 310 | 264 | 17% | 441 | |||||
| Replacement | 1,549 | 1,245 | 24% | 1,830 | |||||
| Total machine units sold | 1,859 | 1,509 | 23% | 2,271 | |||||
| Average Selling Price (ASP), in absolute | |||||||||
| US & Canada | 14,800 | $ | 13,900 | 6% | $ | 15,300 | |||
| Rest of world | 12,300 | $ | 13,700 | (10)% | $ | 13,400 | |||
| Total ASP | 14,200 | $ | 13,800 | 3% | $ | 14,700 | |||
| Gaming Systems Revenue | 43 | 30 | 42% | 42 |
All values are in US Dollars.
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| Sequential | ||||||
|---|---|---|---|---|---|---|
| Constant | Change as | |||||
| Y/Y Change | Currency | Reported | ||||
| DIGITAL & BETTING | Q1'22 | Q1'21 | (%) | Change (%)^(1)^ | Q4'21 | (%) |
| Revenue | ||||||
| Service | 47 | 37 | 27% | 27% | 41 | 14% |
| Product sales | — | 1 | (72)% | (71)% | 1 | (51)% |
| Total revenue | 47 | 38 | 24% | 24% | 42 | 13% |
| Operating income | 13 | 7 | 101% | 100% | 5 | 167% |
| Adjusted EBITDA^(1)^ | 17 | 10 | 63% | 63% | 9 | 89% |
| CONSOLIDATED | ||||||
| Revenue (by geography) | ||||||
| US & Canada | 598 | 542 | 10% | 10% | 591 | 1% |
| Italy | 298 | 348 | (14)% | (8)% | 305 | (2)% |
| Rest of world | 155 | 124 | 25% | 31% | 154 | 1% |
| Total revenue | 1,051 | 1,015 | 4% | 7% | 1,050 | —% |
| ^(1)^ Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein | ||||||
| --- |
11
| International Game Technology PLC | |
|---|---|
| Consolidated Statements of Operations | |
| ( in millions and shares in thousands, except per share amounts) | |
| Unaudited | |
| 2021 | |
| Service revenue | 901 |
| Product sales | 114 |
| Total revenue | 1,015 |
| Cost of services | 441 |
| Cost of product sales | 73 |
| Selling, general and administrative | 186 |
| Research and development | 55 |
| Total operating expenses | 755 |
| Operating income | 260 |
| Interest expense, net | 94 |
| Foreign exchange gain, net | (145) |
| Other (income) expense, net | 25 |
| Total non-operating expenses (income) | (27) |
| Income from continuing operations before provision for income taxes | 287 |
| Provision for income taxes | 148 |
| Income from continuing operations | 138 |
| Income from discontinued operations, net of tax | 11 |
| Net income | 149 |
| Less: Net income attributable to non-controlling interests from continuing operations | 59 |
| Less: Net loss attributable to non-controlling interests from discontinued operations | (2) |
| Net income attributable to IGT PLC | 92 |
| Net income from continuing operations attributable to IGT PLC per common share - basic | 0.39 |
| Net income from continuing operations attributable to IGT PLC per common share - diluted | 0.38 |
| Net income attributable to IGT PLC per common share - basic | 0.45 |
| Net income attributable to IGT PLC per common share - diluted | 0.44 |
| Weighted-average shares - basic | 204,857 |
| Weighted-average shares - diluted | 206,504 |
All values are in US Dollars.
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| International Game Technology PLC | |
|---|---|
| Consolidated Balance Sheets | |
| ( in millions) | |
| Unaudited | |
| December 31, | |
| 2021 | |
| Assets | |
| Current assets: | |
| Cash and cash equivalents | 591 |
| Restricted cash and cash equivalents | 218 |
| Trade and other receivables, net | 903 |
| Inventories | 183 |
| Other current assets | 589 |
| Assets held for sale | 4 |
| Total current assets | 2,487 |
| Systems, equipment and other assets related to contracts, net | 937 |
| Property, plant and equipment, net | 119 |
| Operating lease right-of-use assets | 283 |
| Goodwill | 4,656 |
| Intangible assets, net | 1,413 |
| Other non-current assets | 1,429 |
| Total non-current assets | 8,836 |
| Total assets | 11,322 |
| Liabilities and shareholders' equity | |
| Current liabilities: | |
| Accounts payable | 1,035 |
| Short term borrowings | 52 |
| Other current liabilities | 828 |
| Liabilities held for sale | — |
| Total current liabilities | 1,914 |
| Long-term debt, less current portion | 6,477 |
| Deferred income taxes | 368 |
| Operating lease liabilities | 269 |
| Other non-current liabilities | 323 |
| Total non-current liabilities | 7,437 |
| Total liabilities | 9,351 |
| Commitments and contingencies | |
| IGT PLC’s shareholders’ equity | 1,282 |
| Non-controlling interests | 689 |
| Shareholders’ equity | 1,971 |
| Total liabilities and shareholders’ equity | 11,322 |
All values are in US Dollars.
13
| International Game Technology PLC | |
|---|---|
| Consolidated Statements of Cash Flows | |
| ( in millions) | |
| Unaudited | |
| 2021 | |
| Cash flows from operating activities | |
| Net income | 149 |
| Less: Income from discontinued operations, net of tax | 11 |
| Adjustments to reconcile net income from continuing operations to net cash provided by operating activities from continuing operations: | |
| Depreciation | 82 |
| Amortization of upfront license fees | 55 |
| Amortization | 49 |
| Stock-based compensation | 4 |
| Deferred income taxes | 100 |
| Debt issuance cost amortization | 6 |
| Loss on extinguishment of debt | 24 |
| Foreign exchange gain, net | (145) |
| Other non-cash items, net | — |
| Changes in operating assets and liabilities: | |
| Trade and other receivables | (86) |
| Inventories | 4 |
| Accounts payable | 115 |
| Other assets and liabilities | (95) |
| Net cash provided by operating activities from continuing operations | 251 |
| Net cash used in operating activities from discontinued operations | (36) |
| Net cash provided by operating activities | 215 |
| Cash flows from investing activities | |
| Capital expenditures | (48) |
| Proceeds from sale of assets | 6 |
| Other | — |
| Net cash used in investing activities from continuing operations | (42) |
| Net cash used in investing activities from discontinued operations | (10) |
| Net cash used in investing activities | (51) |
| Cash flows from financing activities | |
| Net repayments of short-term borrowings | — |
| Net proceeds from Revolving Credit Facilities | 432 |
| Net receipts from financial liabilities | 9 |
| Principal payments on long-term debt | (1,387) |
| Payments in connection with the extinguishment of debt | (22) |
| Payments of debt issuance costs | (6) |
| Proceeds from long-term debt | 750 |
| Repurchases of common stock | — |
| Dividends paid | — |
| Dividends paid - non-controlling interests | (69) |
| Return of capital - non-controlling interests | (11) |
| Capital increase - non-controlling interests | 10 |
| Other | (5) |
| Net cash used in financing activities | (301) |
| Net decrease in cash and cash equivalents and restricted cash and cash equivalents | (137) |
| Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents | (36) |
| Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period | 1,129 |
| Cash and cash equivalents and restricted cash and cash equivalents at the end of the period | 956 |
| Less: Cash and cash equivalents included within assets held for sale | — |
| Less: Restricted cash and cash equivalents included within assets held for sale | — |
| Less: Cash and cash equivalents and restricted cash and cash equivalents of discontinued operations | 24 |
| Cash and cash equivalents and restricted cash and cash equivalents at the end of the period of continuing operations | 932 |
| Supplemental Cash Flow Information | |
| Interest paid | 166 |
| Income taxes paid | 4 |
All values are in US Dollars.
14
| International Game Technology PLC | |
|---|---|
| Net Debt | |
| ( in millions) | |
| Unaudited | |
| December 31, | |
| 2021 | |
| 5.350% Senior Secured U.S. Dollar Notes due October 2023 | 61 |
| 3.500% Senior Secured Euro Notes due July 2024 | 564 |
| 6.500% Senior Secured U.S. Dollar Notes due February 2025 | 1,093 |
| 4.125% Senior Secured U.S. Dollar Notes due April 2026 | 744 |
| 3.500% Senior Secured Euro Notes due June 2026 | 844 |
| 6.250% Senior Secured U.S. Dollar Notes due January 2027 | 745 |
| 2.375% Senior Secured Euro Notes due April 2028 | 562 |
| 5.250% Senior Secured U.S. Dollar Notes due January 2029 | 744 |
| Senior Secured Notes | 5,357 |
| Euro Term Loan Facilities due January 2027 | 1,121 |
| U.S. Dollar Revolving Credit Facility A due July 2024 | — |
| Long-term debt, less current portion | 6,477 |
| Short-term borrowings | 52 |
| Total debt | 6,529 |
| Less: Cash and cash equivalents | 591 |
| Less: Cash and cash equivalents included within assets held for sale | — |
| Less: Debt issuance costs, net - Revolving Credit Facilities due July 2024 | 17 |
| Net debt | 5,922 |
| Note: Net debt is a non-GAAP financial measure |
All values are in US Dollars.
15
| International Game Technology PLC | |||||
|---|---|---|---|---|---|
| Reconciliation of Non-GAAP Financial Measures | |||||
| ( in millions) | |||||
| Unaudited | |||||
| Business | |||||
| Global | Digital & | Segment | Corporate | Total IGT | |
| Gaming | Betting | Total | and Other | PLC | |
| Income from continuing operations | 117 | ||||
| Provision for income taxes | 65 | ||||
| Interest expense, net | 76 | ||||
| Foreign exchange gain, net | (3) | ||||
| Other non-operating income, net | (3) | ||||
| Operating income (loss) | 52 | 13 | 316 | (64) | 252 |
| Depreciation | 27 | 4 | 75 | — | 74 |
| Amortization - service revenue (1) | — | — | 51 | — | 51 |
| Amortization - non-purchase accounting | 2 | — | 9 | 1 | 9 |
| Amortization - purchase accounting | — | — | — | 38 | 38 |
| Stock-based compensation | 2 | — | 4 | 6 | 10 |
| Adjusted EBITDA | 81 | 17 | 454 | (21) | 433 |
| Cash flows from operating activities - continuing operations | 189 | ||||
| Capital expenditures | (73) | ||||
| Free Cash Flow | 115 | ||||
| (1) Includes amortization of upfront license fees |
All values are in US Dollars.
16
| International Game Technology PLC | |||||
|---|---|---|---|---|---|
| Reconciliation of Non-GAAP Financial Measures | |||||
| ( in millions) | |||||
| Unaudited | |||||
| Business | |||||
| Global | Digital & | Segment | Corporate | Total IGT | |
| Gaming | Betting | Total | and Other | PLC | |
| Income from continuing operations | 138 | ||||
| Provision for income taxes | 148 | ||||
| Interest expense, net | 94 | ||||
| Foreign exchange gain, net | (145) | ||||
| Other non-operating expense, net | 25 | ||||
| Operating income (loss) | (26) | 7 | 318 | (58) | 260 |
| Depreciation | 32 | 4 | 83 | (1) | 82 |
| Amortization - service revenue (1) | — | — | 55 | — | 55 |
| Amortization - non-purchase accounting | 1 | — | 9 | 1 | 10 |
| Amortization - purchase accounting | — | — | — | 39 | 39 |
| Stock-based compensation | 1 | — | 2 | 2 | 4 |
| Adjusted EBITDA | 8 | 10 | 466 | (16) | 450 |
| Cash flows from operating activities - continuing operations | 251 | ||||
| Capital expenditures | (48) | ||||
| Free Cash Flow | 204 |
All values are in US Dollars.
^(1)^ Includes amortization of upfront license fees
17
Exhibit 99.2
| Period ended March 31, 2022 |
|---|
| 2<br>Cautionary Statement Regarding Forward-Looking Statements<br>This news release may contain forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning International Game Technology PLC and its consolidated subsidiaries (the<br> “Company”) and other matters. These statements may discuss goals, intentions, and expectations as to future plans, trends, events, dividends, results of operations, or financial condition, or otherwise, based on current beliefs of the<br>management of the Company as well as assumptions made by, and information currently available to, such management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,”<br> “would,” “should,” “shall”, “continue,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or the negative or other variations of them. These forward-looking statements<br>speak only as of the date on which such statements are made and are subject to various risks and uncertainties, many of which are outside the Company’s control. Should one or more of these risks or uncertainties materialize, or<br>should any of the underlying assumptions prove incorrect, actual results may differ materially from those predicted in the forward-looking statements and from past results, performance, or achievements. Therefore, you should not<br>place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include (but are not limited to) the factors and risks described in the Company’s annual<br>report on Form 20-F for the financial year ended December 31, 2021 and other documents filed from time to time with the SEC, which are available on the SEC’s website at www.sec.gov and on the investor relations section of the<br>Company’s website at www.IGT.com. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements. You should carefully consider these factors and other risks and<br>uncertainties that affect the Company’s business. Nothing in this news release is intended, or is to be construed, as a profit forecast or to be interpreted to mean that the financial performance of International Game Technology PLC<br>for the current or any future financial years will necessarily match or exceed the historical published financial performance of International Game Technology PLC, as applicable. All forward-looking statements contained in this news<br>release are qualified in their entirety by this cautionary statement. All subsequent written or oral forward-looking statements attributable to International Game Technology PLC, or persons acting on its behalf, are expressly qualified in<br>their entirety by this cautionary statement.<br>Comparability of Results<br>All figures presented in this release are prepared under U.S. GAAP, unless otherwise noted.<br>Non-GAAP Financial Measures<br>Management supplements the reporting of financial information, determined under GAAP, with certain non-GAAP financial information. Management believes the non-GAAP information presented provides investors with additional<br>useful information, but it is not intended to nor should it be considered in isolation or as a substitute for the related GAAP measures. Moreover, other companies may define non-GAAP measures differently, which limits the usefulness<br>of these measures for comparisons with such other companies. The Company encourages investors to review its financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.<br>Non-GAAP Financial Measures are identified with an asterisk (*) upon their first use in the presentation. Definitions of non-GAAP measures are included below.<br>Adjusted EBITDA represents net income (loss) from continuing operations (a GAAP measure) before income taxes, interest expense, net, foreign exchange gain (loss), net, other non-operating expenses, net, depreciation, impairment<br>losses, amortization (service revenue, purchase accounting and non-purchase accounting), restructuring expenses, stock-based compensation, litigation expense (income), and certain other non-recurring items. Other non-recurring<br>items are infrequent in nature and are not reflective of ongoing operational activities. For the business segments, Adjusted EBITDA represents segment operating income (loss) before depreciation, amortization (service revenue,<br>purchase accounting and non-purchase accounting), restructuring expenses, stock-based compensation, litigation expense (income) and certain other non-recurring items. Management believes that Adjusted EBITDA is useful in<br>providing period-to-period comparisons of the results of the Company's ongoing operational performance.<br>Net debt is a non-GAAP financial measure that represents debt (a GAAP measure, calculated as long-term obligations plus short-term borrowings) minus capitalized debt issuance costs and cash and cash equivalents, including cash<br>and cash equivalents held for sale. Cash and cash equivalents, including cash and cash equivalents classified as held for sale, are subtracted from the GAAP measure because they could be used to reduce the Company’s debt<br>obligations. Management believes that net debt is a useful measure to monitor leverage and evaluate the balance sheet.<br>Net debt leverage is a non-GAAP financial measure that represents the ratio of Net debt as of a particular balance sheet date to Adjusted EBITDA for the last twelve months (“LTM”) prior to such date. Management believes that Net<br>debt leverage is a useful measure to assess our financial strength and ability to incur incremental indebtedness when making key investment decisions.<br>Free cash flow is a non-GAAP financial measure that represents cash flow from operations (a GAAP measure) less capital expenditures. Management believes free cash flow is a useful measure of liquidity and an additional basis for<br>assessing IGT’s ability to fund its activities, including debt service and distribution of earnings to shareholders.<br>Constant currency or constant FX is a non-GAAP financial measure that expresses the current financial data using the prior-year/period exchange rate (i.e., the month end exchange rates used in preparing the financial statements for<br>the prior year). Management believes that constant currency is a useful measure to compare period-to-period results without regard to the impact of fluctuating foreign currency exchange rates.<br>A reconciliation of the non-GAAP measures to the corresponding amounts prepared in accordance with GAAP appears in the tables in this release. The tables provide additional information as to the items and amounts that have been<br>excluded from the adjusted measures. |
| --- |
| Strategy to Grow, Innovate, Optimize Delivering Results<br>4<br>OPTIMIZE<br>GROW<br>INNOVATE<br>Q1’22 revenue up 4%; 7% at constant FX*<br>Above outlook for 2022–2025 mid-single digit revenue CAGR<br>24% operating income margin exceeds expectations<br>Lottery operating income margin of 37% above 2025 target<br>Adjusted EBITDA* matches prior year’s record levels at<br>constant FX<br>41% Adjusted EBITDA margin among the highest level in Company<br>history<br>$80M returned to shareholders via dividends and share<br>repurchases<br>Second consecutive quarter of record returns<br>*Non-GAAP measure; see disclaimer on page 2 and reconciliations to the most directly comparable GAAP measures in Appendix for further details |
| --- |
| Innovation Fueling Stronger, Multi-year Lottery Growth<br>at Highly Compelling Margins<br>Q1’22 results confirm long-term, mid-single digit<br>growth outlook<br>Instant ticket same-store sales grew at 7% CAGR from Q1’19 – Q1’22<br>Distinctive draw game innovation with Cash Pop™<br>Proprietary game now live with seven U.S. lotteries<br>Transformational Infinity Instants™ technology<br>gaining traction<br>Patented technique significantly enhances product value and player<br>experience<br>North America iLottery sales up over 40%<br>Investment in talent increases frequency of new game launches<br>5 |
| --- |
| Robust Gaming Growth Fueled by<br>Compelling New Hardware and Games<br>6<br>40+% revenue growth propelled by higher unit<br>shipments, average selling prices, IP royalties, and<br>active units<br>Accelerating momentum for Peak series cabinets<br>PeakSlant32 -#1 multi-screen slant cabinet (1)<br>PeakSlant49 -#1 portrait slant cabinet(1)<br>PeakBartop -#2 video poker cabinet(1); second only to IGT’s<br>CrystalSlant™ poker cabinet<br>Focus on multi-level progressives paying off<br>Money Mania, Prosperity Link, Wolf Run Eclipse™ among top titles<br>Several recent industry accolades<br> “Casino Supplier of the Year” at Global Gaming Awards London<br> “Multi-Channel Supplier of the Year” at International Gaming Awards<br>Several top prizes at The Casino Awards 2022<br>(1) Per April 2022 Eilers & Krejcik Gaming research |
| --- |
| Double-digit revenue growth fueled by strong U.S.<br>iGaming and Sports Betting trends<br>Successful iGaming new market launches<br>West Virginia, Ontario commercial operators<br>iSoftBet will more than double PlayDigital proprietary<br>content library and provide world-class third-party game<br>aggregation platform<br>Complementary scale to existing business, enhances market access,<br>and expands global reach<br>Digital & Betting Growth Propelled by New Markets & Customers;<br>Announced iSoftBet Acquisition Advances Key Strategic Initiatives<br>7 |
| --- |
| Good Citizenship is in Our DNA<br>Commitment to the Science Based Targets initiative<br>Issued formal Human Rights Policy Statement<br>Perfect score on the Human Rights Campaign<br>Foundation’s 2022 Corporate Equality Index<br>Earned “Best Place to Work for LGBTQ+ Equality” designation<br>Named “Best Diversity and Inclusion Employer” at<br>The Casino Awards 2022<br>Awarded World Lottery Association Security Control<br>Standard 2020 Level 2 Certification<br>Recognizing IGT’s industry-leading risk management and processes<br>8 |
| --- |
| Q1’22 Reflects Power of Portfolio and Path to Long-Term Goals<br>9<br>Strong Q1’22 results provide confidence in delivering<br>on full-year outlook<br>Margins highlight leaner operating costs and efficiencies<br>Underlying momentum in core businesses supports<br>long-term outlook<br>2022-2025 targets: mid-single digit revenue CAGR, mid-teens<br>operating income CAGR<br>Investing in key strategic initiatives<br>Organically and with selective M&A<br>Solid financial condition enabling enhanced<br>capital returns |
| --- |
| Period ended March 31, 2022 |
| --- |
| Q1’22 Revenue and Profit Aligned with Historic Peak Levels;<br>Operating Income Margin Exceeds Expectations<br>11<br>Revenue<br>$1,051M<br>In line with outlook<br>Operating<br>Income<br>$252M<br>Adjusted<br>EBITDA<br>$433M<br>Cash From<br>Operations<br>$189M<br>Net Debt*<br>$5,832M<br>vs. $5,922M at<br>12/31/21<br>Operating<br>Income<br>Margin<br>24%<br>200 basis points above<br>high end of outlook<br>2025 target 26% - 29%<br>Adjusted<br>EBITDA<br>Margin*<br>41%<br>Among highest<br>quarterly level in<br>Company history<br>Free Cash<br>Flow*<br>$115M<br>Net Debt<br>Leverage*<br>3.5x<br>Stable vs. 12/31/21<br>Up 4% vs PY<br>Up 7% at<br>constant FX<br>*Non-GAAP measure; see disclaimer on page 2 and reconciliations to the most directly comparable GAAP measures in Appendix for further details |
| --- |
| Q1’22: Revenue Growth Driven by Double-Digit Increases<br>in Global Gaming and Digital & Betting Segments<br>12<br>Note: EUR/USD FX daily average: 1.12 in Q1'22, 1.21 in Q1’21<br>(1) PY benefits include Italy gaming hall closures, higher multi-state jackpot activity, and incentive accruals related to LMA agreements<br>749 707 680<br>228<br>(42) 99<br>9<br>327<br>(30)<br>325<br>38<br>47 47<br>Q1'21 Global<br>Lottery<br>Global<br>Gaming<br>Digital &<br>Betting<br>Excluding<br>FX<br>FX Q1'22<br>Digital & Betting<br>Global Gaming<br>Global Lottery<br>1,081 1,051<br>Consolidated Revenue 1st Quarter Highlights<br>78% increase in Global<br>Gaming product sales<br>Digital & Betting up 24%<br>Global Lottery up 4%<br>excluding PY benefits(1)<br>1,015 |
| --- |
| Global Lottery: Sustained Strong Player Demand;<br>Highly Resilient Profit Profile<br>13<br>Revenue<br>$680M<br>OI Margin<br>37%<br>2025 target 33% - 36%<br>Operating<br>Income<br>$252M<br>As expected, global SSS down 10% Y/Y<br>Higher play levels resulting in multi-year,<br>mid-single digit global SSS CAGR from 2019<br>Product sales revenue nearly doubles Y/Y<br>Operating income and OI margins reach third highest<br>quarterly levels in last 3+ years |
| --- |
| Global Gaming: Demand for Innovative Products, Continued Market<br>Recovery Drive Significant Increases in Revenue and Profit<br>14<br>Up 42% vs PY<br>Revenue<br>$325M<br>Operating<br>Income<br>$52M<br>Up from ($26M)<br>in PY<br>OI<br>Margin<br>16%<br>vs. (11%) in PY<br>2025 target 28% - 30%<br>Shipped over 7,100 units, up 63% Y/Y; ASP rises to<br>$14,200 from $13,800<br>Highest Q1 unit shipments in Company history<br>Executed multi-year patent portfolio licensing<br>agreement<br>Global installed base down 2% Y/Y to 48,379 units;<br>Active units increase to 92% vs 52% in PY<br>Operating income margin highest in two years,<br>exceeds FY’19 level, reflecting benefit of OPtiMa<br>cost saving program and high-margin IP royalties |
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| Digital & Betting: High-Growth Profile on Display as<br>Revenue and Profit Continue Upward Trajectory<br>15<br>Revenue<br>$47M<br>Record level;<br>up 24% vs PY<br>Record level;<br>up 101% vs PY<br>Operating<br>Income<br>$13M<br>~55% of revenue growth from new markets<br>and organic growth; ~45% related to lower<br>jackpot expense<br>Market expansion in Connecticut, strong<br>performance in Michigan drive increased<br>iGaming results<br>Sports betting growth propelled by new<br>customers/jurisdictions, strong performance<br>in Rhode Island<br>Operating income more than doubles Y/Y<br>OI<br>Margin<br>28%<br>Record level;<br>up 11 points vs PY<br>2025 target 30+% |
| --- |
| 28%<br>16%<br>15%<br>41%<br>Delivered Solid Cash Flows<br>16<br>$189M<br>Cash from<br>Operations<br>$115M<br>Free<br>Cash Flow<br>Cash Flows Capital Allocation<br>Share Repurchases<br>Dividends to Shareholders<br>Minority Payments, net<br>Capital Expenditures |
| --- |
| Manageable Debt Maturity Profile;<br>Leverage Remains at Low End of 2022 Target<br>17<br>40 222 222 222 444 61<br>555<br>1,100<br>1,583<br>750<br>555 750<br>1,716<br>2022 2023 2024 2025 2026 2027 2028 2029<br>$5,922 $5,832<br>2021 Q1'22<br>82% Fixed<br>Variable<br>Bank Debt<br>Bonds<br>Undrawn RCF<br>Total liquidity of $2.3B; $0.6B in unrestricted<br>cash, $1.7B in additional borrowing capacity<br>Net debt leverage of 3.5x; 2022 target range of<br>3.5x – 4.0x<br>Credit ratings at pre-pandemic levels of<br>BB+ and Ba2<br>Proceeds from sale of Italy commercial services<br>business expected in Q3’22<br>Purchase of iSoftBet expected to close<br>in Q2’22<br>Note: Amounts in $millions unless otherwise noted<br>Debt Maturity Profile<br>Debt Composition Net Debt and Leverage*<br>18%<br>3.5x 3.5x |
| --- |
| Outlook Assumptions<br>Revenue<br>Operating Income<br>Margin<br>Cash from Operations<br>~$4.1B - ~$4.3B<br>20% - 22%<br>$850M - $1,000M<br>Capital Expenditures ~$400M<br>Note: EUR/USD FX @ 1.12; Outlook excludes impact from sale of Italian commercial services business<br>Reaffirming FY’22 Revenue and Profit Outlook;<br>Introducing Q2’22 Outlook<br>18<br>Revenue<br>Operating Income<br>Margin<br>~$1.0B - ~$1.1B<br>20% - 22%<br>FY’22 Outlook<br>Q2’22 Outlook<br>Mid-single digit Global Lottery SSS CAGR from 2019; lower<br>revenue Y/Y due to benefit from specific items in H1’21<br>Global Gaming benefits from strong sales funnel with supply<br>chain being key variable<br>Digital & Betting top-line revenue continues to grow at<br>double-digit rate; making investments to fund future growth<br>and strategic optionality<br>Current headwinds due to Omicron restrictions, supply chain<br>constraints, and cost inflation addressed with benefits from<br>incremental product sales, financial rigor on costs, and lower<br>D&A<br>FX remaining a headwind for P&L but a tailwind for Net Debt |
| --- |
| On Track to Deliver on Near & Medium-Term Commitments<br>19<br>Revenue up 4%, 7% at<br>constant fx<br>Operating income<br>margin exceeds<br>expectations<br>Revenue and profit<br>aligned with historic<br>peak levels<br>Paid ~$40M in<br>dividends in Q1’22<br>Repurchased 1.4M<br>shares for ~$40M in<br>Q1’22; $27.24 average<br>price per share<br>Returning Capital<br>to Shareholders<br>Delivered Solid<br>Q1’22 Results<br>Manageable debt<br>maturity schedule<br>Leverage at low end<br>of 2022 target<br>Executing on<br>Strategic<br>Transactions<br>Improved Capital<br>Structure<br>Sale of Italy commercial<br>services; net proceeds<br>to pay down debt<br>Investing in<br>high-growth Digital &<br>Betting segment with<br>purchase of iSoftBet |
| --- |
| $ in millions except otherwise noted<br>Q1'22 Select Performance and KPI Data<br>22<br>GLOBAL LOTTERY Q1'22 Q1'21 Y/Y Change (%)<br>Constant<br>Currency<br>Change (%) Q4'21<br>Sequential<br>Change as<br>Reported (%)<br>Revenue<br>Service<br>Operating and facilities management contracts 599 695 (14)% (11)% 608 (1)%<br>Upfront license fee amortization (49) (52) 7% —%(50) 3%<br>Operating and facilities management contracts, net 551 643 (14)% (11)% 558 (1)%<br>Other 84 83 2% 9% 87 (4)%<br>Total service revenue 635 725 (13)% (9)% 646 (2)%<br>Product sales 45 23 95% 105% 42 8%<br>Total revenue 680 749 (9)% (6)% 687 (1)%<br>Operating income 252 337 (25)% (21)% 217 16%<br>Adjusted EBITDA 356 447 (20)% (17)% 336 6%<br>Q1'22 Constant<br>Currency Change<br>(%)<br>Q1'21 Constant<br>Currency Change<br>(%)<br>Q4'21 Constant<br>Currency Change<br>(%)<br>Global same-store sales growth (%)<br>Instant ticket & draw games (6.7)% 27.4% 6.6%<br>Multi-jurisdiction jackpots (40.0)% 94.7% 21.7%<br>Total (10.3)% 32.4% 7.7%<br>North America & Rest of world same-store sales growth (%)<br>Instant ticket & draw games (3.9)% 20.9% 6.3%<br>Multi-jurisdiction jackpots (40.0)% 94.7% 21.7%<br>Total (9.0)% 27.8% 7.8%<br>Italy same-store sales growth (%)<br>Instant ticket & draw games (14.5)% 52.2% 7.7% |
| --- |
| $ in millions except otherwise noted<br>(1) Excluded from yield calculations due to treatment as sales-type leases<br>Q1'22 Select Performance and KPI Data<br>23<br>GLOBAL GAMING Q1'22 Q1'21 Y/Y Change (%)<br>Constant<br>Currency<br>Change (%) Q4'21<br>Sequential<br>Change as<br>Reported (%)<br>Revenue<br>Service<br>Terminal 108 90 20% 20% 109 (2)%<br>Systems, software, and other 58 49 18% 19% 54 7%<br>Total service revenue 165 139 19% 20% 163 1%<br>Product sales<br>Terminal 104 62 69% 70% 110 (5)%<br>Other 55 28 99% 101% 48 16%<br>Total product sales revenue 160 90 78% 80% 158 1%<br>Total revenue 325 228 42% 43% 321 1%<br>Operating income (loss) 52 (26) NA NA 36 43%<br>Adjusted EBITDA 81 8 NM NM 66 23%<br>Installed base units<br>Casino 47,237 48,230 (2)% 47,732<br>Casino - L/T lease (1) 1,142 1,135 1% 1,117<br>Total installed base units 48,379 49,365 (2)% 48,849<br>Installed base units (by geography)<br>US & Canada 32,772 34,138 (4)% 33,437<br>Rest of world 15,607 15,227 2% 15,412<br>Total installed base units 48,379 49,365 (2)% 48,849 |
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| $ in millions except otherwise noted<br>(1) Excludes Casino L/T lease units due to treatment as sales-type leases; comparability on a Y/Y basis hindered due to lower active units in the prior year<br>(2) Negative units due to reclass between New/expansion and Replacement units<br>Q1'22 Select Performance and KPI Data<br>24<br>GLOBAL GAMING (Continued) Q1'22 Q1'21 Y/Y Change (%) Q4'21<br>Yields (by geography)(1), in absolute $<br>US & Canada $39.05 $32.27 21% $38.95<br>Rest of world $5.77 $2.58 124% $5.39<br>Total yields $28.19 $22.93 23% $28.27<br>Global machine units sold<br>New/expansion 328 884 (63)% (11)<br>Replacement 6,848 3,521 94% 7,377<br>Total machine units sold 7,176 4,405 63% 7,366<br>US & Canada machine units sold<br>New/expansion 18 620 (97)% (452)(2)<br>Replacement 5,299 2,276 133% 5,547<br>Total machine units sold 5,317 2,896 84% 5,095<br>Rest of world machine units sold<br>New/expansion 310 264 17% 441<br>Replacement 1,549 1,245 24% 1,830<br>Total machine units sold 1,859 1,509 23% 2,271<br>Average Selling Price (ASP), in absolute $<br>US & Canada $14,800 $13,900 6% $15,300<br>Rest of world $12,300 $13,700 (10)% $13,400<br>Total ASP $14,200 $13,800 3% $14,700<br>Gaming Systems Revenue 43 30 42% 42 |
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| $ in millions except otherwise noted<br>Q1'22 Select Performance and KPI Data<br>25<br>DIGITAL & BETTING Q1'22 Q1'21 Y/Y Change (%)<br>Constant<br>Currency<br>Change (%) Q4'21<br>Sequential<br>Change as<br>Reported (%)<br>Revenue<br>Service 47 37 27% 27% 41 14%<br>Product sales — 1 (72)% (71)% 1 (51)%<br>Total revenue 47 38 24% 24% 42 13%<br>Operating income 13 7 101% 100% 5 167%<br>Adjusted EBITDA 17 10 63% 63% 9 89%<br>CONSOLIDATED<br>Revenue (by geography)<br>US & Canada 598 542 10% 10% 591 1%<br>Italy 298 348 (14)% (8)% 305 (2)%<br>Rest of world 155 124 25% 31% 154 1%<br>Total revenue 1,051 1,015 4% 7% 1,050 —% |
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| Q1'22 Summarized Income Statement<br>26<br>For the three months ended<br>March 31,<br>2022 2021<br>Y/Y Change<br>(%)<br>Constant<br>Currency<br>Change (%)<br>Service revenue 846 901 (6)% (3)%<br>Product sales 205 114 80% 83%<br>Total revenue 1,051 1,015 4% 7%<br>Total operating expenses 799 755 6% 8%<br>Operating income 252 260 (3)% 2%<br>Interest expense, net 76 94<br>Foreign exchange gain, net (3) (145)<br>Other (income) expense, net (3) 25<br>Total non-operating expenses (income) 70 (27)<br>Income from continuing operations before provision for income taxes 182 287<br>Provision for income taxes 65 148<br>Income from continuing operations 117 138<br>Income from discontinued operations, net of tax — 11<br>Net income 117 149<br>Net income attributable to IGT PLC per common share - basic $0.39 $0.45<br>$ in millions except per share amounts |
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| Summarized Cash Flow Statement<br>27<br>For the three months ended<br>March 31,<br>2022 2021<br>Net cash provided by operating activities 189 251<br>Capital expenditures (73) (48)<br>Free cash flow 115 204<br>Net cash used by discontinued operations —(46)<br>Debt proceeds/(repayments), net 21 (206)<br>Repurchases of common stock (39) —<br>Shareholder dividends paid (41) —<br>Other - Net (61) (89)<br>Other Investing/Financing Activities (119) (341)<br>Net Cash Flow (4) (137)<br>Effect of Exchange Rates/Other (13) (36)<br>Net Change in Cash and Restricted Cash (17) (173)<br>$ in millions; all amounts presented reflect continuing operations unless otherwise noted |
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| 28<br>For the three months ended March 31, 2022<br>Global<br>Lottery<br>Global<br>Gaming<br>Digital &<br>Betting<br>Business<br>Segment Total<br>Corporate and<br>Other<br>Total IGT<br>PLC<br>Income from continuing operations 117<br>Provision for income taxes 65<br>Interest expense, net 76<br>Foreign exchange gain, net (3)<br>Other non-operating income, net (3)<br>Operating income (loss) 252 52 13 316 (64) 252<br>Depreciation 44 27 4 75 — 74<br>Amortization - service revenue (1) 51 —— 51 — 51<br>Amortization - non-purchase accounting 7 2 — 9 1 9<br>Amortization - purchase accounting ———— 38 38<br>Stock-based compensation 2 2 — 4 6 10<br>Adjusted EBITDA 356 81 17 454 (21) 433<br>Cash flows from operating activities - continuing operations 189<br>Capital expenditures (73)<br>Free Cash Flow 115<br>Reconciliations of Non-GAAP Measures - Q1'22<br>$ in millions; all amounts presented reflect continuing operations<br>(1) Includes amortization of upfront license fees |
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| 29<br>For the three months ended March 31, 2021<br>Global<br>Lottery<br>Global<br>Gaming<br>Digital &<br>Betting<br>Business<br>Segment Total<br>Corporate and<br>Other<br>Total IGT<br>PLC<br>Income from continuing operations 138<br>Provision for income taxes 148<br>Interest expense, net 94<br>Foreign exchange gain, net (145)<br>Other non-operating expense, net 25<br>Operating income (loss) 337 (26) 7 318 (58) 260<br>Depreciation 47 32 4 83 (1) 82<br>Amortization - service revenue (1) 55 —— 55 — 55<br>Amortization - non-purchase accounting 8 1 — 9 1 10<br>Amortization - purchase accounting ———— 39 39<br>Stock-based compensation 1 1 — 2 2 4<br>Adjusted EBITDA 447 8 10 466 (16) 450<br>Cash flows from operating activities - continuing operations 251<br>Capital expenditures (48)<br>Free Cash Flow 204<br>Reconciliations of Non-GAAP Measures - Q1'21<br>$ in millions; all amounts presented reflect continuing operations<br>(1) Includes amortization of upfront license fees |
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