Playtech’s Robust B2B Operations Fuel 33% Earnings Growth

Playtech unveiled its complete financial report for the year 2022, showcasing robust expansion in its B2B and Snaitech operations, propelling a 33% surge in earnings to €1.6 billion, in comparison to €1.21 billion in 2021.

Playtech’s yearly financial document: Robust B2B operations fuel 33% earnings growth
Building upon this revenue, Playtech documented a further 28% increase in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to €4.056 billion in 2022, from €3.171 billion in 2021. Though the firm reported adjusted net profit of €1.605 billion, a 26% rise from the €1.276 billion declared in 2021, its actual profit experienced a 94% decline from €6.867 billion to €40.6 million.

The provider attributed this primarily to unrealized gains on derivative financial assets in 2021, which diminished in value in 2022. The company’s asset value decreased by €5.832 billion, accounting for the bulk of the profit decline.

Despite this, the company still celebrated the record results, with CEO Mor Weizer (pictured) crediting the combined efforts of all business units.

“2022 was a successful year for Playtech, with us achieving record revenue and EBITDA, surpassing market expectations,” he stated.

Playtechs robust performance was driven by all its operational units, with B2B being propelled by Europe (excluding the United Kingdom) and the Americas, while B2C witnessed strong outcomes due to Snaitech’s sustained robust performance in the Italian retail and online marketplaces.

Throughout the year, Playtechs B2B division experienced “very strong” growth in regulated markets, with the division’s total income increasing by 14% to €632.4 million. The firm reported adjusted EBITDA of €160.2 million, compared to €139.2 million in the same period the previous year.

It is notable that this growth occurred against the backdrop of the ongoing conflict in Ukraine, where Playtech has over 700 employees, representing about 10% of the company’s total workforce.

“I want to express gratitude to our Ukrainian colleagues for their courage and commend the efforts of our crisis management team, who have been tirelessly supporting our Ukrainian colleagues and their families,” said Weize.

Geographically, income in Europe (excluding the United Kingdom) grew by 31% at constant currency rates to €184.6 million, driven primarily by the Netherlands, the company stated, with “significant contributions from Poland, Spain and Ireland.”

Across the Atlantic, Playtechs Americas B2B business also saw robust growth, with income reaching €144.7 million, up 27% from 2021.

The Isle of Man-based vendor indicated that the outcome was driven by Caliente in Mexico, in addition to continued advancement in the Brazilian marketplace.

Playtech also emphasized “substantial progress” in the execution of its US strategy, referencing a number of partnership contracts declared over the past year.

Weizer stated: “From a strategic standpoint, we have continued to make headway, successfully selling Finalto, continuing to simplify the strategy, and making significant inroads in North America, including the launch of the IMS platform in collaboration with Parx Casino in Pennsylvania, and signing several important new agreements, including Golden Nugget, WynnBet, Resorts and 888.”

He added: “We have started the new financial year well, announcing the signing of a landmark agreement with Hard Rock Digital, and despite ongoing economic and political uncertainty, we remain optimistic about the future, and our capacity to generate value for all stakeholders in a sustainable and responsible manner.”

The organization also reported robust cash flow in 2022, with adjusted operating cash flow reaching €397 million.

In terms of Playtech’s B2C business, Snaitech’s revenue grew by 54%, from €584.7 million to €899.8 million. This reflects the recovery of the business after the near complete closure of its retail network in the first half of 2021 due to the COVID-19 pandemic.

Cost Increases
B2B costs rose by 14% in 2022, reaching €472.2 million, compared to €415 million in 2021.

The firm declared that its earnings were €1 million in comparison to the same period in the previous year. This comprises a 12% rise in the organization’s research and development expenditures to €87.5 million, a 23% rise in general and administrative expenses to €82.6 million, a 16.8% rise in Playtech’s sales and marketing expenditures to €16.8 million, and most importantly, an 11% rise in operational costs to €285.2 million.

Simultaneously, Playtech reports its business-to-consumer costs by subsidiary rather than by business activity. Snaitech’s costs also rose by 61%, from €182.6 million to €254.2 million, again driven by the company’s reopened retail business in 2022. Its Sun Bingo costs increased by 15% to €63.3 million, while HappyBet costs rose by 4% to €30.9 million, with revenue of €20.1 million.

“This robust performance is credited to strong demand for Playtech’s business-to-business market, especially in the regulated segment, which grew 14% year-over-year to €632.4 million,” stated Neil Shah, director of investment research firm Edison Group.

“Furthermore, the company’s business-to-consumer segment, including Italian sports betting and gaming company Snaitech, observed a substantial revenue increase of 48% to €983.1 million,” he remarked. “Overall, these outcomes demonstrate Playtech’s flourishing momentum and represent a positive start to the year.”

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