Intralot – Equity proposition

Consumer

Intralot – Equity proposition

Introduction to Intralot

Intralot is a leading gaming technology and services provider with 52 live contracts across 39 countries. Listed on the Athens Stock Exchange, Intralot has a market capitalisation of €593m.

Intralot has an integrated offering covering lottery, betting, interactive gaming and ancillary services. This enables Intralot to service clients across the gaming ecosystem, from government authorities to private operators, as well as operating its own gaming licence. With proprietary technology powering activities and driving innovation, Intralot is well-positioned to capitalise on the major growth opportunities in regulated gaming markets globally.

Five key strengths

There are five key strengths underpinning the Intralot investment case.
  • First, Intralot enjoys long-term contracts, typically up to 10 years although many contracts are extended further, with a current weighted average term of 15 years. This provides revenue visibility and supports strategic planning and the management of profitability and cash flow.
  • Second, Intralot has built geographic diversification across 39 countries, with 52 live contracts. This mitigates reliance on any single market.
  • Third, since 2008, Intralot has delivered an impressive 89% contract renewal rate, demonstrating the stickiness of its customer relationships and the strength of its solutions. High barriers to entry, such as regulation and the cost to build platforms, and switching costs help secure contract renewals over the long term. Intralot’s next-generation technology provides flexible, scalable and secure software for retail and online environments. These enable best-of-breed strategies, fast configuration of new content and cloud-ready technologies for clients.
  • Fourth, Intralot is focused on regulated gaming markets globally, which provide clarity to the gaming operators on market structure and the rules of engagement with retail customers. The global gaming markets are estimated to grow at a 4.5% revenue CAGR over 2022 to 2028. There are opportunities in the US as 12 state lottery contracts (that are not currently clients of Intralot) open for bidding over the next three years. These could provide a meaningful boost to Intralot’s growth, if successful in the bidding. Furthermore, the opening of more US states as they regulate could provide a tailwind for Intralot’s services.
  • Finally, Intralot has undergone an operational restructuring, delivering substantially improved profitability. Over the past three years, EBITDA has shown double-digit growth while margins have expanded from 12.2% in 2019 to an expected 36% in 2023, demonstrating the success of strategic initiatives.

Summary

In summary, with its integrated offering, global footprint, long-term contracts, next-generation technology, growth exposure and improved margins, Intralot represents a compelling investment case in the regulated global gaming industry.

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