Sazka’s New Move Czechs Covid

Czech Republic-based Sazka group, one of the biggest lottery and gaming operators in Europe, is reporting a back-to-the-future Q3 thanks to Covid-19 lockdown easing, the canny acquisition of a controlling interest in Casinos Austria, increased online action and what its boss describes as institutional resilience.

Biggest impact on the firm’s financial quarter, ending September 30, was the full incorporation of Casinos Austria as a trading vertical, which boosted Sazka’s gross gaming revenue (GGR) by 66 per cent to €769m (£702m/US$935m).

Sazka increased its stake in Casinos Austria to a controlling 55.48 per cent in June this year.

Without the Austrian input Sazka’s Q3 GGR would have measured €465m (£425m/US$565m), a fraction over the same quarter in 2019.

“All of our businesses traded well in Q3 as lockdown measures were eased and online sales remained high,” said Sazka Chief Executive Robert Chvatal.

“The swift return to normalised trading in the markets and channels that were more affected by restrictions in H1 demonstrates the resilient underlying demand for our products as well as the agility of our teams across the regions.

Sazka’s solid sales recovery was common to all its European operations in Greece and Italy. As with most other gaming prime movers, the firm enjoyed continued growth on its digital platforms.

But although the Czech company reported a 37 per cent increase in Q3 EBITA, year-on-year, to €197m (£180m/US$240m), consolidated profits fell 33 per cent to €48m (£44m/US$58m) because of acquisition and restructuring costs — €54m (£49.3m/US$65.7m) alone, for example, to fully absorb Casinos Austria.

Looking ahead, the tightening of Covid-19 restrictions across Europe will undoubtedly again impact Sazka’s Q4 performance.

“With our resilient business and strong management team having coped well with the situation earlier in the year, we are well placed to manage the business through the current restrictions,” said Sazka boss Chvatal.

“Our diverse geographic exposure, game portfolio and sales channel mix with a strong and growing online are key advantages in this environment.”

“I am confident in our ability to manage any further challenges and emerge with an even more resilient business that is well-positioned for growth.

It’s a clarion call well met by New York-based venture capitalists the Apollo Group.

This November they handed Sazka a €500m (£457m/US$608m) war chest to fund future mergers and acquisitions.

How’s that for a vote of confidence.