Intralot Integrated Lottery Systems and Services — Improved growth in Q224

Intralot (ASE: INLOT)

Last close As at 20/11/2024

EUR0.87

0.00 (0.00%)

Market capitalisation

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Research: Consumer

Intralot Integrated Lottery Systems and Services — Improved growth in Q224

Intralot reported better year-on-year growth in revenue and EBITDA in Q224 than Q124, although foreign currency headwinds – notably from Argentina and Turkey – continued to dampen reported growth rates. Post period end, Intralot signed three-year contract extensions in the Netherlands and Ireland, highlighting the strength of its offering. In addition to retaining clients, the company is proactive in attempting to win a number of new contracts in North America and Australia.

Russell Pointon

Written by

Russell Pointon

Director of Content, Consumer and Media

Consumer

Intralot share piece

Intralot

Improved growth in Q224

Q224 results

Travel and leisure

16 September 2024

Price

€1.11

Market cap

€671m

Net debt (€m) at 30 June 2024 (excluding IFRS 16 liabilities)

362.2

Shares in issue

604.1m

Free float

45.5%

Code

INLOT

Primary exchange

ASE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

1.8

(0.2)

77.1

Rel (local)

1.2

3.0

57.0

52-week high/low

€1.29

€0.56

Business description

Intralot Integrated Lottery Systems and Services is a leading global supplier of integrated systems and services for the worldwide gaming, lottery, sports betting and digital gaming industries.

Next events

Q324 results

November 2024

FY24 results

March 2025

Analysts

Russell Pointon

+44 (0)20 3077 5700

Milo Bussell

+44 (0)20 3077 5700

Intralot is a research client of Edison Investment Research Limited

Intralot reported better year-on-year growth in revenue and EBITDA in Q224 than Q124, although foreign currency headwinds – notably from Argentina and Turkey – continued to dampen reported growth rates. Post period end, Intralot signed three-year contract extensions in the Netherlands and Ireland, highlighting the strength of its offering. In addition to retaining clients, the company is proactive in attempting to win a number of new contracts in North America and Australia.

Year end

GGR*
(€m)

EBITDA** (€m)

PBT**
(€m)

EPS**
(€)

EV/EBITDA
(x)

P/E
(x)

12/22

343.9

122.9

16.3

(0.01)

8.1

N/A

12/23

348.6

129.5

26.1

0.01

7.6

166.5

12/24e

352.2

132.1

37.4

0.02

7.5

66.3

12/25e

365.8

142.6

51.8

0.03

6.9

34.2

Note: *GGR, gross gaming revenue. **EBITDA, PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Q224 better than Q124

On a reported basis, revenue increased by c 3% y-o-y in Q224 and EBITDA increased by 1%, a good step-up versus Q124’s declines of c 5% and c 11%, respectively. The currencies of most countries in which Intralot operates depreciated versus the euro in Q224, beyond the quantified negative impact from the Argentine peso in the period, suggesting good underlying growth of c 6%. From a profitability perspective, North America and Croatia stood out on the positive side. On the negative side, marketing investment in Turkey to drive market share gains and depreciation of the Argentine currency weighed on profitability.

Marketing investment tempers profit growth

We have updated our forecasts to include the new contract wins in Ireland and the Netherlands, a more prudent forecast for profitability in Turkey and changes in foreign exchange rates. These result in low- to mid-single-digit downgrades in EBITDA for FY24–25 (see Exhibit 4). In recent months, Intralot has submitted proposals for lottery contracts in Australia, Quebec and Ontario and video lottery terminal (VLT) monitoring in Illinois. In the next few months, it is likely to submit proposals for lottery contracts in Missouri, West Canada and Maryland, and a small VLT project in Nebraska. Success in any of these contracts would naturally be helpful for forecasts.

Valuation: Attractive versus DCF-based valuation

The changes to our estimates and a lower estimated WACC of 8% versus 8.5% previously have led to an increase in our DCF-based valuation to €1.70 per share, from €1.60 per share previously, suggesting attractive upside in the absence of any new contract wins. Relative to its gaming technology peers, Intralot’s prospective EV/EBITDA multiple is broadly in line with the average multiples, but at a premium to the median multiple.

Income statement: Better momentum in Q224

Intralot enjoyed better momentum in its Q224 results from the revenue line down to the EBITDA line versus the prior quarter, albeit a slightly easier comparative from the prior year than Q124.

Group revenue grew by c 3% y-o-y to €88.5m (following the c 5% decline in Q124), GGR increased by c 4% to €83.6m (vs a 2% decline in Q124), gross profit increased by c 8% to €32.7m (vs 1% growth in Q124) and EBITDA increased by 1% to €29.4m (vs an 11% decline in Q124). These took H124 revenue to a marginal decline of c 1% and an EBITDA decline of c 5%. The c 15% y-o-y decline in operating income to €11.4m in Q224 includes a higher depreciation and amortisation charge due to timing effects from hyperinflation in Turkey.

Exhibit 1: Summary income statement

€m

Q123

Q223

H123

Q124

Q224

H124

Revenue

89.5

85.8

175.3

85.1

88.5

173.6

Growth y-o-y

(8.4%)

(20.0%)

(14.4%)

(4.8%)

3.1%

(0.9%)

– Technology & Support Services

61.4

62.1

123.5

60.4

61.2

121.7

Growth y-o-y

11.4%

(1.2%)

4.7%

(1.6%)

(1.4%)

(1.5%)

– Management Contracts

16.9

12.9

29.8

18.3

19.0

37.3

Growth y-o-y

54.2%

19.2%

36.7%

8.8%

47.1%

25.4%

– Licensed Operations

11.2

10.8

22.0

6.4

8.2

14.6

Growth y-o-y

(64.5%)

(67.8%)

(66.2%)

(43.2%)

(23.6%)

(33.6%)

Gross gaming revenue (GGR)

83.4

80.2

163.6

81.7

83.6

165.3

Growth y-o-y

4.5%

(9.6%)

(2.9%)

(2.0%)

4.2%

1.1%

Gross profit

32.5

30.4

62.9

32.9

32.7

65.6

Gross margin on GGR

39.0%

37.9%

38.5%

40.3%

39.1%

39.7%

Growth y-o-y%

29.3%

(2.4%)

11.8%

1.0%

7.6%

4.2%

EBITDA

33.7

29.1

62.8

30.1

29.4

59.5

Growth y-o-y

29.2%

0.4%

14.0%

(10.7%)

1.0%

(5.3%)

Margin on revenue

37.7%

33.9%

35.8%

35.4%

33.2%

34.3%

Margin on GGR

40.5%

36.3%

38.4%

36.9%

35.2%

36.0%

Operating income

17.6

13.3

30.9

11.7

11.4

23.0

Growth y-o-y

102.6%

39.5%

69.6%

(33.8%)

(14.6%)

(25.6%)

Margin on revenue

19.7%

15.5%

17.7%

13.7%

12.8%

13.3%

Margin on GGR

21.1%

16.6%

18.9%

14.3%

13.6%

13.9%

Source: Intralot accounts, Edison Investment Research

From a revenue perspective, management highlighted a specific drag of c 3.4% in Q224 (€10.7m in H124 after €6.7m in Q124) from the depreciation of the Argentine peso versus the euro (ARS977/€ at end H124 vs ARS280/€ at end H123). Eliminating this negative suggests Intralot’s revenue grew by c 6% on an underlying basis. While management identifies only the negative impact from the depreciation of the Argentine currency, we highlight that the majority of the currencies of the other countries in which Intralot operates were also weaker versus the euro in Q224 than Q223. For example, the Turkish lira depreciated against the euro by c 20% in Q224. Only the Moroccan dirham and US dollar appreciated versus the euro in Q224, by relatively small percentages. On an underlying basis, Intralot performed well in the markets with the most severe currency depreciation, with local currency revenue growth of c 131% in Argentina and 108% in Turkey and market share gains in the latter. For H124 as a whole, all countries in which Intralot operates, except Morocco, saw their currencies depreciate versus the euro.

For the individual types of contracts or revenue streams that Intralot reports, there were quite different trends, which naturally reflect the results of the varying countries in which Intralot operates.

On the more positive side, growth in US sports betting and market share gains in Turkey (highlighted above) offset the anticipated lower contribution from the renewed contract in Morocco and drove the 47% y-o-y increase in Management Contracts (MC) revenue in Q224. Management has been actively targeting market share gains in Turkey with a significant investment in marketing to grow market share, which has driven strong revenue growth, as highlighted above, but has negatively affected its EBITDA margin (see Exhibit 2).

On the more negative side, Technology & Support Services (TSS) revenue declined at a similar rate to Q124 and Licensed Operations declined but at a lower rate than Q124. In both cases, the significant depreciation of the Argentine peso versus the euro was the prime cause of the revenue decline. Outside of this currency depreciation, TSS saw good growth in Oceania.

Exhibit 2 summarises the financial results for Intralot’s most important countries for the most recent six-month periods. In aggregate, these represented c 88% of group GGR and just over 100% of group EBITDA in H124. The main standouts on the positive side were higher profitability in North America, as costs were managed in the absence of jackpots, and Croatia. The main contributors to the c 5% (ie €3.3m) decline in group EBITDA in H124 versus H123 were the depreciation of the Argentine peso (€2.4m), marketing investment in Turkey to drive market share gains (€1.6m) and a lower contribution from Morocco. With respect to the outlook, management is optimistic about a strong second half of the year in Turkey and Argentina given the typical seasonality of the businesses and the market share gains made in Turkey in H124.

Exhibit 2: Intralot’s main geographies

€m

H123

H223

FY23

H124

North America:

GGR

80.9

83.3

164.2

80.4

Growth y-o-y

7.4%

(5.4%)

0.5%

(0.6%)

EBITDA

34.2

35.5

69.7

34.8

Margin

42.3%

42.6%

42.4%

43.3%

Turkey:

GGR

19.8

31.0

50.8

33.1

Growth y-o-y

65.0%

76.1%

71.6%

67.2%

EBITDA

10.5

10.1

20.6

8.9

Margin

53.0%

32.6%

40.6%

26.9%

Oceania:

GGR

12.3

12.6

24.9

12.7

Growth y-o-y

1.7%

(3.1%)

(0.8%)

3.3%

EBITDA

8.9

9.0

17.9

9.1

Margin

72.4%

71.4%

71.9%

71.7%

Croatia:

GGR

4.2

11.1

15.3

8.1

Growth y-o-y

16.7%

44.2%

35.4%

92.9%

EBITDA

2.1

8.8

10.9

5.5

Margin

50.0%

79.3%

71.2%

67.9%

Argentina:

GGR

18.7

4.9

23.6

11.8

Growth y-o-y

(3.5%)

(73.3%)

(39.0%)

(33.9%)

EBITDA

6.0

1.4

7.4

3.6

Margin

32.1%

28.6%

31.4%

30.5%

Source: Intralot accounts

Cash flow and balance sheet

Intralot’s free cash generation pre interest (versus GGR) was relatively stable through H124 with slightly lower profitability between Q1 and Q2 compensated for by the investment in capex.

Exhibit 3: Summary cash flow

Relative to GGR

Q123

Q223

H123

Q124

Q224

H124

Operating cash flow pre-interest

45%

16%

30%

33%

21%

27%

PBT

13%

7%

10%

7%

1%

4%

Depreciation and amortisation

19%

20%

19%

21%

21%

21%

Working capital

4%

(15%)

(5%)

(5%)

(10%)

(8%)

Tax paid

(2%)

(2%)

(2%)

(0%)

(3%)

(2%)

Investing cash flow

(7%)

(7%)

(7%)

(7%)

(8%)

(8%)

Capex

(9%)

(9%)

(9%)

(8%)

(6%)

(7%)

Minority dividends

(5%)

0%

(3%)

(7%)

(0%)

(4%)

Repayment of lease liabilities

(2%)

(1%)

(2%)

(3%)

(1%)

(2%)

Free cash flow before interest

30%

6%

18%

15%

14%

15%

Net interest

(16%)

(3%)

(10%)

(12%)

(7%)

(9%)

Net debt including leases (€m)

471.6

480.5

480.5

353.6

362.2

362.2

Net debt EBITDA (x)

3.6

3.7

2.8

2.9

Source: Intralot accounts, Edison Investment Research

In absolute terms, H124’s free cash flow of c €24m was c €5m lower than H123, mainly due to the change in profitability and higher working capital investment, which is due to investment in machines to be deployed in the US in the second half of the year. As these machines are deployed, the working capital investment will reverse.

In absolute terms, the net debt position was relatively unchanged at c €362m at the end of H124 versus Q124.

Forecasts

In our revised estimates, we have taken a more prudent outlook on Intralot’s expected profitability in Turkey. We have incorporated the renewed contracts in Ireland and the Netherlands and updated for changes in exchange rates. The changes to revenue, GGR and EBITDA estimates are summarised as follows:

Exhibit 4: Changes to estimates

€m

FY24e new

FY25e new

FY24e old

FY25e old

Change FY24e

Change FY25e

Revenue

369.4

381.7

363.6

388.5

2%

(2%)

Growth y-o-y

1.5%

3.3%

(0.1%)

6.8%

Gross gaming revenue

352.2

365.8

354.0

378.9

(1%)

(3%)

Growth y-o-y

1.0%

3.9%

1.6%

7.0%

EBITDA

132.1

142.6

138.1

151.5

(4%)

(6%)

Margin

37.5%

39.0%

39.0%

40.0%

Growth y-o-y

2.0%

8.0%

6.6%

9.8%

Source: Edison Investment Research

Valuation

DCF-based valuation suggests Intralot is attractively valued

Despite the slight reduction in our estimates, a lower estimated WACC of 8% (from 8.5% previously) to reflect a lower risk-free rate (3.2%) and equity market risk premium of 7.2% (source: Damodaran) leads to our DCF-based valuation increasing to €1.70 per share from €1.60 per share previously. The sensitivity of the valuation to changes in the WACC and terminal growth rate are as follows:

Exhibit 5: DCF sensitivity (€ per share)

WACC

7.0%

7.5%

8.0%

8.5%

9.0%

Terminal growth rate

0%

1.63

1.47

1.33

1.21

1.10

1%

1.86

1.66

1.49

1.34

1.22

2%

2.18

1.92

1.70

1.52

1.36

3%

2.66

2.29

2.00

1.76

1.56

4%

3.47

2.88

2.45

2.11

1.83

Source: Edison Investment Research

Peer valuations

We typically compare Intralot’s multiples with two sets of peers: gaming technology companies, which are the most appropriate, and lottery operators. Intralot’s prospective EV/EBITDA multiples of 7.6x in FY24 and 7.1x in FY25 are broadly in line with the averages for the gaming technology companies of 7.9x and 7.1x, respectively, but at a premium to the median multiples of 5.8x and 5.3x. Its profitability is comparable with the gaming technology peers, while consensus expects higher revenue growth rates for its peers.

Exhibit 6: Peer valuations

Share price

CCY

Market value (local m)

Market value (€m)

EV
(local m)

Revenue growth (%)

EBITDA growth (%)

EBITDA margin (%)

EV/Sales
(x)

EV/EBITDA
(x)

2024e

2025e

2024e

2025e

2024e

2025e

2024e

2025e

2024e

2025e

International Game Technology

21.57

USD

4,314

3,910

9,796

1

3

8

10

38.8

41.3

2.2

2.2

5.8

5.3

Aristocrat Leisure

54.95

AUD

34,642

20,910

34,594

7

6

12

8

36.3

36.8

5.1

4.8

14.0

13.0

Evolution AB

1009.5

SEK

213,846

18,691

18,095

16

16

14

17

69.1

70.1

8.7

7.5

12.6

10.7

Gaming Innovation Group

30.8

NOK

4,197

351

420

63

18

6

29

41.4

45.2

2.9

2.5

7.0

5.5

Inspired Entertainment

8.47

USD

225

204

517

(7)

4

15

8

33.6

35.0

1.7

1.6

5.1

4.7

Kambi

120.1

SEK

3,754

328

286

3

2

2

(4)

33.6

31.6

1.6

1.6

4.7

5.0

Light & Wonder

105.94

USD

9,399

8,519

12,949

11

7

25

11

38.5

39.6

4.0

3.7

10.5

9.5

Play AGS

11.29

USD

454

412

947

9

4

27

5

45.0

45.5

2.4

2.3

5.4

5.1

Playtech

645

GBP

1,995

2,363

2,580

4

4

14

7

25.6

26.4

1.5

1.4

5.7

5.3

Average – gaming technology

12

7

14

10

40.2

41.3

3.3

3.1

7.9

7.1

Median – gaming technology

7

4

14

8

38.5

39.6

2.4

2.3

5.8

5.3

La Francaise des Jeux

38.3

EUR

7,127

7,127

6,763

9

4

9

6

24.6

25.0

2.4

2.3

9.6

9.0

Lottomatica Group

11.34

EUR

2,853

2,853

4,797

20

17

17

17

36.0

36.0

2.5

2.1

6.8

5.8

OPAP

15.98

EUR

5,940

5,940

6,168

5

4

6

4

35.1

35.1

2.8

2.7

8.0

7.7

Zeal Networks

33

EUR

742

742

701

30

17

28

30

27.8

31.0

4.6

4.0

16.6

12.8

Average – lottery operators

16

10

15

14

30.9

31.8

3.1

2.8

10.3

8.8

Median – lottery operators

15

10

13

12

31.5

33.0

2.6

2.5

8.8

8.4

Intralot

1.14

EUR

689

689

1,008

1

4

2

8

37.5

39.0

2.9

2.8

7.6

7.1

Source: LSEG Data & Analytics, Edison Investment Research. Note: Priced at 9 September 2024.

Exhibit 7: Financial summary

€m

2019

2020

2021

2022

2023

2024e

2025e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

GGR

 

 

409.2

292.9

335.3

343.9

348.6

352.2

365.8

Costs

(314.6)

(226.7)

(224.9)

(221.1)

(219.1)

(220.1)

(223.2)

EBITDA

 

 

94.5

66.2

110.4

122.9

129.5

132.1

142.6

Operating profit (before amort. and excepts.)

 

11.9

(2.3)

39.4

52.8

61.6

65.9

72.8

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

(6.8)

(6.8)

(17.2)

(1.2)

0.0

(1.3)

0.0

Share-based payments

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Reported operating profit

5.1

(9.1)

22.2

51.6

61.6

64.6

72.8

Net Interest

(48.0)

(48.4)

(13.6)

(36.7)

(35.7)

(28.5)

(21.0)

JVS and associates

(17.5)

(1.5)

0.2

0.3

0.2

0.0

0.0

Exceptionals

(10.2)

(35.1)

28.2

14.6

7.4

0.0

0.0

Profit Before Tax (norm)

 

 

(53.6)

(52.2)

26.0

16.3

26.1

37.4

51.8

Profit Before Tax (reported)

 

 

(70.6)

(94.1)

37.1

29.8

33.6

34.8

51.8

Reported tax

(19.2)

(7.2)

(4.4)

(10.8)

(19.7)

(15.5)

(20.5)

Profit After Tax (norm)

(68.2)

(56.2)

23.0

10.4

10.8

20.8

31.3

Profit After Tax (reported)

(89.8)

(101.3)

32.7

19.0

13.8

19.3

31.3

Minority interests

(22.1)

(3.1)

(6.0)

(12.6)

(8.0)

(10.6)

(11.7)

Discontinued operations

7.7

(1.8)

(9.2)

5.6

0.0

0.0

0.0

Net income (normalised)

(90.3)

(59.4)

16.9

(2.2)

2.8

10.1

19.6

Net income (reported)

(104.2)

(106.3)

17.5

11.9

5.8

8.7

19.6

Average Number of Shares Outstanding (m)

147.8

147.8

148.3

249.5

416.0

604.1

604.1

EPS – normalised (c)

 

 

(61.10)

(40.19)

11.42

(0.89)

0.67

1.67

3.25

EPS – normalised fully diluted (c)

 

 

(61.10)

(40.19)

11.42

(0.89)

0.67

1.67

3.25

EPS – basic reported (€)

 

 

(0.71)

(0.72)

0.12

0.05

0.01

0.01

0.03

Dividend (€)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

BALANCE SHEET

Fixed Assets

 

 

459.0

371.7

376.5

381.0

332.5

315.3

299.5

Intangible Assets

242.9

202.0

204.3

208.6

182.3

170.2

159.1

Tangible Assets

168.7

134.3

123.2

113.8

91.6

86.5

81.7

Investments & other

47.4

35.4

49.0

58.6

58.6

58.6

58.6

Current Assets

 

 

338.5

277.1

231.1

236.1

256.2

271.9

288.5

Stocks

35.6

25.7

18.7

23.9

24.4

24.6

25.6

Debtors

131.7

151.4

105.0

109.8

119.9

121.2

125.9

Cash & cash equivalents

171.1

100.0

107.3

102.4

111.9

126.1

137.1

Other

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Current Liabilities

 

 

(135.7)

(370.4)

(115.9)

(105.7)

(320.7)

(320.9)

(321.8)

Creditors

(91.8)

(89.5)

(89.2)

(78.3)

(61.5)

(61.7)

(62.6)

Tax and social security

(3.1)

(3.4)

(5.6)

(0.8)

(3.9)

(3.9)

(3.9)

Short term borrowings and leases

(37.9)

(274.9)

(16.5)

(22.5)

(251.9)

(251.9)

(251.9)

Other

(2.9)

(2.6)

(4.6)

(4.2)

(3.4)

(3.4)

(3.4)

Long-Term Liabilities

 

 

(754.9)

(497.6)

(607.1)

(599.1)

(225.9)

(215.4)

(195.7)

Long-term borrowings and leases

(727.4)

(476.2)

(588.0)

(570.4)

(193.2)

(175.0)

(149.2)

Other long-term liabilities

(27.6)

(21.5)

(19.2)

(28.8)

(32.7)

(40.4)

(46.5)

Net Assets

 

 

(93.2)

(219.1)

(115.5)

(87.7)

42.1

50.8

70.4

Minority interests

0.2

3.7

8.0

20.2

17.8

17.8

17.8

Shareholders' equity

 

 

(93.0)

(215.4)

(107.5)

(67.5)

59.9

68.6

88.3

CASH FLOW

Operating Cash Flow

19.8

(27.1)

100.4

105.4

101.5

101.0

121.6

Working capital

(12.1)

(8.1)

(12.3)

(16.7)

(11.2)

(1.2)

(4.8)

Exceptional & other

67.9

87.4

15.6

19.8

29.5

28.5

21.0

Tax

(14.3)

(14.5)

3.8

(12.2)

(7.2)

(7.8)

(14.3)

Net operating cash flow

 

 

61.3

37.7

107.6

96.3

112.5

120.6

123.5

Capex

(55.0)

(35.9)

(22.9)

(26.5)

(29.7)

(45.0)

(50.0)

Acquisitions/disposals

98.4

(3.5)

10.3

(125.1)

(2.2)

0.0

0.0

Net interest

(44.0)

(43.8)

(54.4)

(38.5)

(35.1)

(26.5)

(19.0)

Equity financing

(10.6)

0.0

0.1

128.9

130.1

0.0

0.0

Dividends

(41.7)

(8.5)

(6.5)

(3.7)

(4.5)

(10.6)

(11.7)

Other

(1.7)

(11.9)

(23.1)

(32.6)

(148.5)

(24.3)

(31.8)

Net Cash Flow

6.8

(65.8)

11.1

(1.3)

22.5

14.2

11.0

Opening net debt/(cash) including leases

 

615.3

594.1

651.1

497.2

490.5

333.2

300.8

FX

1.9

(5.3)

(3.8)

(3.7)

(12.9)

0.0

0.0

Other non-cash movements

(29.8)

128.1

(161.3)

(1.8)

(166.8)

(46.6)

(47.8)

Closing net debt/(cash)

 

 

594.1

651.1

497.2

490.5

333.2

300.8

264.0

Source: Intralot accounts, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Intralot and prepared and issued by Edison, in consideration of a fee payable by Intralot. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Intralot and prepared and issued by Edison, in consideration of a fee payable by Intralot. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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