IGT reduces synergies estimate after GTECH deal

IGT reduces synergies estimate after GTECH deal

Wednesday, August 12, 2015 Totally Gaming
Marco Sala was pleased by progress since the takeover

International Game Technology (IGT) chief executive Marco Sala says the company’s focus is on integration after it announced an 18 per cent reduction in the amount it expects to save in synergies following its merger with GTECH earlier this year.

In reporting record quarterly revenues but a heavy year-on-year drop in operating income for the three months to June 30, the gaming services provider said that it expects to save $230m (€205.7m) by April 2018 compared to the $280m previously estimated.

The combined entity – formed by GTECH’s $6.4bn takeover of IGT that was completed in April – saw revenues of $1.3bn during Q2, which was up 36 per cent on the same period last year, but debt-related interest expenses of $122m meant that operating income was down 32 per cent at $116m.

“As anticipated, our second quarter results reflect the stable growth characteristics of our global lottery operations and a meaningful sequential improvement in our gaming operations,” Sala said.

“We have accomplished a lot in the past four months, notably organising ourselves under a single leadership team and consolidating our manufacturing footprint.

“There is much more ahead of us; in this year of transformation, we will continue to focus on integration to provide a solid foundation for future growth and value creation.”

The $280m figure was mentioned when the takeover announcement was made last summer, was then repeated on completion in April and Sala was still backing that amount as recently as May.

IGT's revenue for the North America Lottery segment was $270m in the quarter, 24 per cent higher than the prior year on a reported basis and 14 per cent greater on a pro forma basis. International revenue was $247m, 67 per cent higher than the prior year on a reported basis. On a pro forma, constant currency basis, international revenue rose 17 per cent, which IGT said reflected strong product sales for lottery terminals and gaming machines.

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