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| Statement |
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| To speak specifically about the industry, Chad, '23, of course was another record year for the gaming industry, coming off of an incredible 2022 |
| Operating income rose 29% to $313 million and operating income margin expanded 320 basis points to 20% |
| In fact, the growth across our Global Lottery, Global Gaming and PlayDigital segments contributed to record breaking achievements of $1 billion in operating income, $1.8 billion of EBITDA, and a 41.3% EBITDA margin |
| We think the creation of two more focused companies better positions them to service customers and create significant value for stakeholders |
| It's an impressive set of accomplishments that confirms we are on track with our long-term strategic and financial goals across the portfolio |
| We truly believe the recent decision to spin-off our Global Gaming and PlayDigital businesses emerge and with Everi's existing operations creates a really exciting opportunity to unlock the full value of our portfolio |
| As you've heard, 2023 was a good strong year with growth across our Global Lottery, Gaming and PlayDigital segments |
| And we think the combination has really strong operating and financial merit |
| In the last three years, we have progressively strengthened our credit profile with significant debt reduction of over $2.2 billion and net debt leverage improving 3.5 turns to a record low 2.9 times |
| We maintained our leadership position in 2023 through a combination of organic growth, portfolio expansion and contract extensions |
| As we've said in the past, this is really an opportunity to create a podium position player with great scale, great product diversification, great cash flow, all on par with our competition |
| These are impressive numbers for a business of this scale |
| This improved credit profile was also reflected in credit rating actions taken early in the year by rating agencies, with Moody's upgrading our rating to Ba1 from Ba2 with a stable outlook and Fitch assigning an issuer rating of BB+ with a stable outlook and an investment grade senior debt rating of BBB- |
| Italy same-store sales increase of nearly 7%, which is especially noteworthy |
| Operating income margin is forecasted to improve 250 basis points to 400 basis points on the back of the favorable KPI trends, continued improvement in supply chain and focus on cost discipline, moving us one-notch closer to our long term target of 28% to 30% |
| Italy's strong momentum during 2023 reflects IGT's expertise in understanding player behavior, developing compelling new games, managing a broad distribution network and officially conducting day-to-day operations |
| The low-single digit same-store sales increase in North America and the rest of the world, was achieved on top of accelerated growth in the last few years |
| iLottery sales continue to expand at a fast cliff up over 40% in 2023, mostly driven by organic growth in existing markets |
| And we're going to have a really impressive global studio and creative footprint, which is really the key to continuing to generate top performing games |
| We are very excited about the significant value creation potential of separating IGT into two standalone pure play companies |
| Lottery profitability improved in 2023 with operating margin expanding 100 basis points to 36% |
| So I think that was really exciting |
| Growth accelerated during the pandemic, and our 2023 results confirm that we are successfully maintaining these higher play levels with significantly improved margins |
| Operating margins are up 600 basis points from their pre-pandemic level |
| We expect the industry to expand at more customary low-to-mid single-digit rate off this higher sales base, fueled by organic growth and growing our lottery adoption, especially in the U.S |
| The focused execution of key product and operational strategies is fueling strong growth for our Global Gaming segment |
| This is especially evident in profit performance with Q4 operating income up 17% and full year operating income up approximately 30% |
| 9% revenue growth for the year reflects broad based strengths across several key performance indicators |
| We shipped over 35,000 gaming machines in 2023, up 7% from the prior year, and achieved record average selling prices |
| Unit growth was fueled by a double-digit increase in Casino units led by replacement demand |
| Statement |
|---|
| Gaming and digital revenue is likely to be lower than the prior year on a return to more normal seasonality in unit shipments against pent-up demand in the prior year period |
| Global same-store sales declined 3% reflecting the impact of strong U.S |
| In North America and the rest of the world, sales are down high single, low double-digits |
| Global Lottery same-store sales are expected to be down year-over-year as same-store sales growth in Italy is offset by tough North American jackpot comps |
| And then in Australia and New Zealand, the macro environment continues to be challenging, but it's growing |
| In 2024, the industry is calling for a slowdown in unit sales and probably about the same similar increase in install base |
| The estimate in the industry was slot GGR was up somewhere around 2% and when you think about the started the year, the concern around recessionary pressures and concern around disposable income for consumers |
| Eastern Europe has been hurt by kind of the socio political situations taking place there and some other specific challenges like a Romanian tax and regulatory challenges |
| Operating income margin is expected to be between 20% to 21%, which includes a 300 basis point negative impact from $130 million in pre-closing separation and divestiture costs related to the planned spin and merger transaction |
| PlayDigital growth is dependent on new iGaming legislation, which has been slower than expected |
| And so we think we'll probably on a same-store basis be down low-to-single digits in North America and in the rest of the world |
| At the moment though there are some macro related weaknesses in places like Argentina and the new import restrictions imposed by the Mexican government, now that impacts all suppliers, and we hope that gets resolved, throughout the course of the year |
| PlayDigital generated $59 million in revenue in the fourth quarter, down 10% from $65 million in the prior year, due to a benefit related to jackpot expense in the prior year and lower sports betting volume and unfavorable hold rates in Rhode Island |
| We certainly went into 2022 with a lot of pent-up demand as a result of not being able to deliver product because of our supply chain lead times |
| We start off the year, as you've heard our casino customers discuss, and the research that's been published, the January trends are softer, question, how much of that is potentially weather |
| So overall, I'd say the start of the year is definitely slower than last year |
| The negative impact of that will moderate |
| For the full year, revenue of $2.5 billion was 2% lower year-over-year, but increased 6% excluding the Italy commercial service business sales |
| Not really sure, of course |
| In 2023, in the fourth quarter, yes, we saw instance and draw were down slightly, about 1% from the prior year, and -- but again made up for by pretty strong multi-state jackpots |
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