MILANO — Lottomatica warms up the engines and prepares for the landing in Piazza Affari scheduled for the first days of May, with a valuation that, including debts, fluctuates between 4.4 and 4.8 billion euros. And that tending could make it land in the main list.
The company is controlled 95% by the Apollo fund, and 5% by the current management. The team led by CEO William Angelozzi it will not sell shares in an IPO, it will not receive a placement bonus, but it will have stock options and incentives linked to results, which promise to grow in the coming years. Already 2023, according to the group, should close with revenues increasing between 1,570 and 1,670 million (from 1,395 in 2022) and a gross margin between 550 and 570 million (from 460 in 2022).
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With these numbers, the group receives a valuation that fluctuates between 4.4 and 4.8 billion (including debts), which is at a strong discount compared to listed rivals, such as Entain and Flutter Entertainment which deal respectively at 10 and 19 times the EBITDA divided by the expected enterprise value in 2023. Italy, the first country in Europe in terms of betting volume
Italy, first in Europe for betting volume
Equity, who is the company’s advisor in the IPO, points out that the management has already shown that they know how to make and manage acquisitions, given that the grossto 62 million in 2015, to 497 million at the end of 2022, also taking into account thanks to the newly acquired BetFlag (purchased at the end of November for 360 million). The group is also the leader in Italy, which in turn is the queen of betting in Europe.
In 2022 in Italyaccording to Prisma spa, 20.3 billion bets were collected (of which 13.7 billion in games where Lottomatica operates), against 17.2 billion in England, 13.7 billion in France, 13.4 billion in Germany and 10.4 billion in Spain. From 2005 to today, the value of bets in Italy has tripled, despite the economic cycles and the pandemic. In 2022, stake volumes were still 3% higher than in 2019 and are estimated to grow by an average of 3% per year in the coming years.
After the IPO, less debt, more coupons and acquisitions
Lottomatica will do better than the market: according to Mediobanca, another IPO advisor, the group’s revenues will rise by 7% per year between now and 2027, thanks to its leadership in online betting (which will increase by 13% per year). Online games, in addition to growing more, generate more margins, because they have low management costs: in 2023 at least 270 million mol will of Lottomatica will come from the web. Another advantage of the freshman is that of knowing how to convert margins into cash flows, however there are defects the high debt (1.57 billion expected at the end of 2023), which should rreduced thanks to the 425 million capital increase for the IPO (of which 250 will go to repay a debt to Apollo). With fewer debts, and a leverage that at the end of 2023 should be reduced to 2.5 times the EBITDA, the company will be able to pay dividends (at least 30% of the profit each year) and make acquisitions.
Mediobanca estimates that Lottomatica by 2027 it will pay 450 million coupons and can do new acquisitions for 0.8 -1.2 billion. In this regard, the group does not even exclude evaluating operations abroad, if capable of creating value.