Allwyn has revealed its new leadership team in preparation for taking over the UK’s National Lottery licence from February 2024.
Starting on 1 October, the team features several notable additions, including Andria Vidler, who was confirmed as the permanent replacement for interim UK CEO Robert Chvátal in July.
Chvátal will return to focus full-time on his responsibilities as Group CEO of Allwyn.
Vidler boasts a wealth of experience, having previously served as the CEO of EMI in the UK and Ireland, as well as holding leadership roles at Centaur Media, Capital Radio, Bauer Media, and the BBC.
Additional recruits
In addition to Vidler, the leadership team welcomes other new recruits: Alan Artz, who joined Allwyn as CFO earlier this summer from William Hill; Chris Lyman, who will transition from his role as CEO of Lotto New Zealand to assume the role of COO at Allwyn in October; and Mark Smith, the current group CTO at ITV, who is set to join as CTO in November.
“This is a talented team with deep experience and a strong personal commitment to delivering the very best for communities across the UK through ever greater returns to Good Causes from The National Lottery,” Chvàtal said.
The Allwyn leadership team will also include the following members: Gaby Heppner-Logan as chief assurance and participant protection officer, Lucy Buckley as chief commercial officer, Martin Novak as interim chief data officer, Sam Sheriff as chief people officer, Alastair Ruxton as chief strategy and corporate affairs officer, Harry Willits as general counsel, Jenny Blogg as operations director, Eddie Bennett as operations transformation director, and Paul Lumb as technology transformation director.
Chvàtal expressed his gratitude to the Camelot leadership team “for their sterling work over many years supporting The National Lottery”.
“The National Lottery makes a huge contribution to communities across the UK through the money it generates for Good Causes. They have a great deal to be proud of. I wish them all the very best for the future,” he added.
Allwyn was awarded the fourth National Lottery licence in September 2022 and acquired incumbent operator Camelot in February 2023.
On completion of the deal, Camelot’s then CFO Clare Swindell and commercial director Neil Brocklehurst became co-chief execs and will lead Camelot until the end of January 2024.
Brocklehurst and Swindell will be actively facilitating the transition to Vidler before their eventual departure.
Lottery giant Allwyn recorded GGR of €1.96bn in Q2 2023, up 115.3% year-on-year, following its acquisition of Camelot UK and Camelot LS.
The company, formerly known as Sazka, completed its Camelot acquisitions – consisting of the UK’s National Lottery operator and the operator of the Illinois State Lottery – in February 2023, making Q2 the first full quarter to include their results.
Excluding the impact of the acquired businesses, Allwyn’s like-for-like GGR grew by 7.6% year-on-year to €979.8m.
Of the total €1.96bn in GGR, Camelot’s operations in the UK were responsible for around half at €980.3m, up 1.2% year-on-year.
As for Allwyn’s operating regions excluding the Camelot acquisitions, Greece and Cyprus generated €498.1m in GGR, up 12.6% year-on-year.
Austria generated a further €360.3m, up 1%, while the Czech Republic brought in €121.4m amid a year-on-year increase of 9%.
Outside the metric of GGR, Allwyn LS Group (formerly known as Camelot LS) which operates the Illinois State Lottery, generated a further €47.1m in total revenue, amid a 3.9% year-on-year reduction.
That revenue is generated from private management services and therefore is not included as GGR in Allwyn’s reporting.
Similarly, the company’s operations in Italy generated additional net revenue of €116.5m, up 3.4%. In that market, Allwyn holds a 32.5% stake in local lottery operator LottoItalia.
Overall, Allwyn declared adjusted EBITDA for the quarter of €381m, up 34.6% year-on-year.
“I am happy to report that the good performance in our existing geographies was driven primarily by strong growth in digital, where we have sustained our momentum in product development and innovation,” said Allwyn CEO Robert Chvatal.
“Alongside this, we continue to evolve and digitise the customer proposition in physical retail, while during the quarter we once again saw resilience of demand for our products, even in an environment where consumer spending remains under pressure.
“We continued to deliver strong margins and solid free cashflow generation, with only a limited impact of inflation on our cost base, reflecting our favourable cost structure, with our largest cost categories being directly linked to revenue, and our focus on cost and capital efficiency,” Chvatal concluded.
Allwyn’s revenue grew by 80.2% year-on-year to €1.65bn in Q1 2023 as organic growth in its core business was bolstered by the recent acquisitions of Camelot UK and Camelot Lottery Solutions.
Camelot UK and Camelot LS are the current operators of the UK National Lottery and Illinois Lottery, respectively, which Allwyn acquired in February and March this year.
The acquisitions were made ahead of Allwyn’s takeover of the UK’s fourth National Lottery licence, set to take place from February 2024.
Financial breakdown
Of the total €1.65bn in reported revenue for Q1, around €1.59bn was considered to be gross gaming revenue (GGR).
Adjusted EBITDA for the quarter was €346.7m, up 28.5%, generating adjusted free cash flow for the business of €322.2m, up 28.4%.
Excluding Allwyn’s acquisitions of the Camelot businesses, Q1 revenue was €1.07bn, giving the firm an organic year-on-year growth rate of around 17%.
Adjusted EBITDA excluding the acquisitions was €325.2m, up 20% year-on-year.
The company’s organic growth was driven by continued resilience in consumer demand for its products, it said, as well as further progress in digital channels and ongoing product and technology innovation.
As for the additional revenue provided by its acquired businesses, it is worth noting that Camelot revenues were only added to Allwyn’s results following completion of the acquisitions, which took place part-way through Q1.
On a pro-forma basis, calculated as though the businesses had been owned by Allwyn throughout the entire reporting period, total revenue would have come in 176% ahead year-on-year, at €2bn.
Management commentary
“I am pleased to report that Allwyn had a strong start to the year, reflecting our ongoing focus on driving organic growth as well as continued progress in our inorganic growth strategy, with the results of the first quarter including the contribution from a total of seven lottery markets,” commented Allwyn CEO Robert Chvátal.
He pointed out that the firm’s Camelot acquisitions had given it exposure in the UK and US markets for the first time during the quarter.
“The strong performance in our existing geographies was driven by further progress in digital channels and our continued focus on the customer proposition in physical retail,” he added, “as well as some impact from Covid-19 on last year’s numbers.
“We once again saw the resilience of demand for our products, even in an environment where consumer spending remains under pressure.”
Allwyn said that despite general consumer sentiment being “impacted by inflationary pressures” in recent months, the business saw only a limited impact.
That was due to the low price point of its product, low average spend per customer and large number of regular players, it explained.
The performance allowed Allwyn to undertake new financing activities following the end of the quarter, including the issuance of €665m and $700m long-dated bonds in a single transaction.
That financing represented its first US-dollar bond issuance, it said, which will further diversify the company’s sources of funding, while significantly extending its debt maturities and simplifying its capital structure.
The UK’s next National Lottery operator Allwyn has been given the go-ahead to acquire incumbent operator Camelot and has made changes to Camelot’s leadership team, including the appointment of new co-CEOs.
Allwyn has received regulatory approval from the UK Gambling Commission to take over Camelot from its parent company, the Ontario Teachers’ Pension Plan, for an undisclosed price.
Previously, media outlets have estimated the transaction to be around £100m.
The agreement covers all of Camelot’s UK operations, which are currently run out of Watford, including the right to operate the National Lottery competition until February 2024.
Allwyn will assume control at that time. It was awarded the fourth National Lottery licence in September 2022 following a tender process, albeit after Camelot dropped its appeal against the decision.
New co-CEOs
On completion of the deal, Camelot’s current CFO Clare Swindell and commercial director Neil Brocklehurst (both pictured) will become co-chief execs and will lead Camelot until the end of January 2024.
Swindell joined Camelot in 2017 as CFO and was appointed to the board in September 2019.
Before joining Camelot, she was group CFO at marketing company dunnhumby and held several senior finance roles at Tesco, including as CFO for Tesco.com.
Brocklehurst has worked for Camelot in a variety of senior roles for 15 years and became commercial director in 2018.
His lottery experience includes working in the UK, Ireland and North America within Camelot Global, including as interim managing director.
Camelot’s current chairman Sir Hugh Robertson and CEO Nigel Railton will step down from the board.
Sir Keith Mills is expected to be appointed as the new chair at closing of the transaction, subject to regulatory approvals.
Mills, who is regarded as the mastermind behind London’s successful 2012 Olympics bid, also led Allwyn’s winning bid for the UK National Lottery licence.
Gambling Commission approval
Allwyn, meanwhile, welcomed the news that the Gambling Commission had cleared the company’s acquisition of Camelot UK, although the acquisition remains subject to certain regulatory conditions.
Allwyn said its ownership of Camelot would produce greater clarity and certainty for the future of the National Lottery, as well as for the good causes it funds and for the employees of both firms.
Last week, Allwyn CEO Robert Chvátal was made interim CEO of Allwyn UK upon the departure of David Craven, who had led the team that won the bid to replace Camelot as the UK National Lottery’s next operator.
Chvátal commented: “Acquiring Camelot will help ensure a smooth transition from the third to the fourth licence, while bringing together the collective expertise and technical know-how of two highly experienced lottery operators.
“We are thrilled to welcome Camelot into the Allwyn family. We are united by our common passion: to protect and improve the National Lottery, and the good causes it supports,” he added.
The news of the UKGC approval and leadership changes come after Allwyn also announced the purchase of the American-based Camelot Lottery Solutions division of companies from the Ontario Teachers’ Pension Plan Board in December.
Camelot success
Meanwhile, Camelot reported record-breaking revenue of £4.06bn for the first half of the 2022/23 financial year (April 1 to September 24, 2022).
The 2.6% increase over the same period in 2021 marked the first time sales exceeded £4bn during the first half of a financial year.
These sales helped the lottery operator increase its contributions to good causes by 8.1% to £956.5m, the largest amount ever donated during the first half of any financial year.
Allwyn performance
Elsewhere, Allwyn recorded a strong 11% increase in gross gaming revenue (GGR) to €958.6m for Q3 2022, which was the company’s best quarter to date.
The company’s adjusted EBITDA also rose by 10% to €319.9m, resulting in a margin of 54%.
Despite the impressive financial results, Allwyn did not proceed with its planned SPAC listing in the US with Cohn Robbins Holdings Corp due to concerns over a potential economic recession.
European lottery operator Allwyn is set to acquire the Camelot Lottery Solutions (Camelot LS) group of companies from the Ontario Teachers’ Pension Plan Board.
Allwyn, soon to be holder of the UK’s fourth National Lottery licence, agreed to buy the incumbent operator Camelot’s UK operations in November, in a deal intended to help facilitate a smooth handover of the licence.
Now, the operator has revealed further plans to acquire Camelot LS – an affiliate of Camelot’s UK business headquartered in Chicago, which operates the Illinois Lottery and is partnered with the Arkansas Scholarship Lottery to enhance its lottery operations.
The business includes a technology arm that provides products and services to lotteries and their players throughout Europe and North America.
Allwyn confirmed that no changes are planned to the Camelot LS Group leadership team in connection with the transaction, and that the firm’s existing leadership will gain access to Allwyn’s lottery knowhow as a result of the deal.
Terms of the acquisition were not disclosed, but Allwyn said it expects to complete the transaction during Q1 2023.
Allwyn CEO Robert Chvátal added: “We have always viewed the US market as an important part of Allwyn’s future growth story, and the acquisition of Camelot LS Group is the right step. “
“We remain committed to serving our customers, engaging players and growing lottery revenue to benefit the communities they serve,” said Camelot LS Group CEO Wayne Pickup.
“As the private manager of the Illinois Lottery, we work closely with the Department of Lottery to drive responsible and sustainable growth to maximise revenue for the State of Illinois.
“Combining the resources, expertise, and talent of Allwyn and Camelot LS Group will only strengthen the results we help the State of Illinois and all our customers achieve.”
Allwyn CEO Robert Chvátal added: “We have always viewed the US market as an important part of Allwyn’s future growth story, and the acquisition of Camelot LS Group is the right step.
“Allwyn’s goal is building better lotteries, and helping them raise more for good causes, through innovation, technology, efficiency and safety in our quest for enhanced player engagement.
“Both Allwyn and Camelot share a passion about the lottery business, delivering value to our customers, and growing lottery returns to communities.”
Topline numbers
The UK’s next National Lottery operator Allwyn has posted an 11% year-on-year increase in gross gaming revenue (GGR) to €958.6m for Q3 2022 – the firm’s best quarterly results to date.
Adjusted EBITDA for the period increased by 10% to €319.9m, resulting in an EBITDA margin of 54%.
News nugget
Allwyn primarily attributed the result to organic growth as driven by the online channel. For example, in the Czech Republic, online contributed 46% of total GGR, compared with 39% in Q3 2021.
Moreover, Allwyn’s Austrian business generated strong year-on-year growth, with GGR climbing from €309.1m in Q3 2021 to €349.1m in Q3 2022. GGR in Italy, meanwhile, decreased from €562m in Q3 2021 to €511.7m in Q3 2022.
The company also highlighted its operational resilience in the face of economic shocks.
While inflation and rising energy prices were affecting consumer sentiment in many markets, this has had a limited impact on demand for its products, Allwyn said.
Allwyn stressed it had noted similar revenue resilience during previous periods of weaker general consumer sentiment – for example the early period of the Covid-19 pandemic, the Greek crisis, and the global financial crisis – when demand for its products remained resilient, especially in comparison with other economic sectors.
In addition, Allwyn’s third quarter was shaped strategically by its successful bid to become the next operator of the UK’s National Lottery. The UK is set to become the sixth market that Allwyn operates in.
Earlier in November, Allwyn agreed to acquire current lottery operator Camelot and secured €1.6bn in funds having reached a senior facilities agreement with a syndicated group of international banks in November.
Allwyn has pledged to use the proceeds to refinance existing indebtedness but also to finance up-front costs in connection with becoming the UK National Lottery operator.
Allwyn said its strong operational performance and strategic progress in Q3 would provide a supportive background for the financing, which, according to CEO Robert Chvatal, positions the company “well for the next chapters” of its growth story.
Best quote
Allwyn CEO Robert Chvatal: “We note that general consumer sentiment has been impacted by inflationary pressures and the war in Ukraine. However, our business saw only a limited impact due to the low price point of our products and low average spend per customer, as well as our large number of regular players.”
Trading update and outlook
Allwyn said its business had continued to perform and develop well despite weaker consumer sentiment as winter approaches.
The operator stressed that its Q3 performance was broadly in line with its expectations for the year, whereby stronger performance in some products and geographies offset a somewhat weaker performance in others.
The UK’s National Lottery operator Camelot reported sales of £4.06bn for the first six months of its 2022/23 financial year (1 April to 24 September 2022).
The figure, 2.6% ahead of the prior-comparative period, represents a new milestone for the operator – which is now set to be acquired by Allwyn ahead of the handing over of the National Lottery licence in 2024 – marking the first time sales have exceeded £4bn during the first half of the year.
Those sales helped the lottery operator – which distributes a large proportion of its proceeds to charity – increase its contributions to good causes by 8.1% to £956.5m, the largest amount ever donated during H1 of any financial year.
That brought the total generated for good causes by the National Lottery since its inception in 1994 to £47bn.
Online sales made up 45.2% of all sales during H1 at £1.84bn, up 13% year-on-year. Mobile sales made up £1.37bn of that figure, after experiencing growth of 19%.
Retail sales took a corresponding dive during the period, however, dropping by 4.7% to £2.23bn.
“Thanks to the commitment and professionalism of everyone at Camelot – and all of our hard work over the last few years – this record half-year performance confirms that we have a very healthy and successful National Lottery that continues to benefit the whole of the UK,” said Camelot CEO Nigel Railton.
Camelot chairman Sir Hugh Robertson: “With just over a year to run until the start of the next licence period, I am confident that The National Lottery has never been in better shape.”
“These fantastic results also demonstrate our ability to adapt quickly and decisively to fast-changing and challenging economic conditions, while maintaining our longstanding reputation for selling tickets in a socially responsible way – attributes that have helped to keep The National Lottery in excellent health at such an important time for the UK.”
Camelot chairman Sir Hugh Robertson added: “In this hugely testing economic period, I am proud that my team’s remarkable performance builds on previous years of record ticket sales and returns to good causes – and extends our track record of delivering for people across the UK.
“With just over a year to run until the start of the next licence period, I am confident that The National Lottery has never been in better shape.”
Since the reporting period, Camelot has been bought by incoming National Lottery operator Allwyn, in a deal intended to ““help facilitate a smooth transition” when the lottery licence is handed over in 2024.
Allwyn will acquire Camelot from current owner the Ontario Teachers’ Pension Plan for an undisclosed fee. Earlier media reports estimated the deal to be in the region of £100m.
The acquisition, which is still subject to regulatory approvals, is anticipated to close in Q1 2023.
The deal will also put an end to a legal dispute that started in March when the Gambling Commission awarded Czech-based Allwyn the licence to operate the UK’s National Lottery from February 2024, ending Camelot’s 28-year tenure as the competition’s provider.
Incoming UK National Lottery operator Allwyn is in “advanced discussions” to acquire the UK operations of the competition’s current operator, Camelot.
After Sky News broke the story on Saturday (29 October), the operators confirmed in a joint statement that Allwyn is engaged in advanced discussions with Camelot owner, the Ontario Teachers’ Pension Plan, “which may lead to it purchasing Camelot’s UK operations”.
The operators added that any agreement that may be reached would be subject to regulatory approvals.
“Our shared objective is to reach an agreement which would best serve the interests of the many stakeholders of The National Lottery, in particular the good causes it supports as well as the employees of Camelot and Allwyn UK,” the firms concluded.
According to Sky News, the deal would be worth around £100m, and an agreement could be reached in the coming weeks.
Allwyn: “Our shared objective is to reach an agreement which would best serve the interests of the many stakeholders of The National Lottery, in particular the good causes it supports as well as the employees of Camelot and Allwyn UK.”
If completed, the deal would give Allwyn access to Camelot UK’s earnings one year before it surrenders control of the National Lottery in 2024.
The potential agreement would also trigger the withdrawal of an outstanding legal challenge issued by Camelot against the Gambling Commission’s tender process, in which both Camelot and IGT are seeking damages of up to £600m.
Allwyn was selected to take over the fourth National Lottery licence in March this year, before Camelot launched a High Court appeal against the Gambling Commission in April, insisting the regulator was “badly wrong” in its decision.
The appeal against the awarding of the licence was dropped in September, but Camelot revealed it would continue to pursue compensation from the regulator in a separate claim.
Should Allwyn proceed with the purchase of Camelot’s UK business, those legal proceedings are likely to be dropped, while it would also help to ensure full cooperation between Camelot and Allwyn in the period leading up to the licence transition.
Allwyn has hired two high-flying business execs to support the company’s transition plan as it prepares to take over the UK’s National Lottery.
Sharon Doherty, chief people and places officer at Lloyds Banking Group, and Victoria McKenzie-Gould, corporate affairs director at Marks & Spencer, have both been appointed as non-executive directors with immediate effect.
Doherty boasts extensive experience across leading technology and telecommunication organisations, including Finastra, Vodafone and Heathrow Airport.
At Vodafone, Doherty worked as HR director for the firm’s 30,000-strong technology division and led a people-focused digital transformation strategy as it scaled across 20 countries.
“I believe there’s so much potential to create a bigger, better, safer and more appealing National Lottery by embracing the power of digital,” said Doherty.
McKenzie-Gould, meanwhile, was a former special adviser to Prime Minister Tony Blair and has since worked in corporate affairs leadership for consumer brands such as Tesco and Britvic.
She has described the lottery as a “national treasure” and will be tasked with ensuring that Allwyn meets its regulatory, player protection and ethical responsibilities while working closely alongside the compliance team.
Allwyn chair Justin King: “We are committed to building a diverse board who oversee and hold the business to account every day, while helping in a practical way meet all the challenges that a project of this size entails.”
“My immediate focus will be on supporting the implementation of Allwyn’s detailed transition plan allowing us, in turn, to ensure the customer is firmly at the heart of the lottery and able to enjoy an exciting and safe experience when we hit the ground running in February 2024,” said McKenzie-Gould.
Both women were recruited after a “rigorous” recruitment process conducted by Audeliss Executive Search, a firm that specialises in identifying diverse leaders.
Allwyn chairman Justin King said: “We are delighted to welcome Victoria and Sharon to Allwyn’s team of sector leading experts who are implementing a forensically detailed and winning proposal through the transition to the fourth National Lottery licence.
“We are committed to building a diverse board who oversee and hold the business to account every day, while helping in a practical way meet all the challenges that a project of this size entails.
“Today’s appointments continue the forward momentum needed to put in place a more accessible National Lottery that is bigger, better and safer for all,” he added.
Allwyn is confident it can double charitable cash for good causes by growing lottery sales significantly when it takes charge of the lottery contract from Camelot in 2024.
Allwyn will no longer go public in the US after the company and its SPAC partner Cohn Robbins Holdings Corp agreed to terminate the previously proposed business combination.
Global lottery operator Allwyn was scheduled to list on the New York Nasdaq in 2023 but the deal will no longer proceed due to market volatility and concerns over a recession.
The two parties jointly decided not to proceed despite the fact investors offered almost $700m to back the business combination since it was first announced.
“Allwyn, Europe’s largest lottery operator, received strong indications of support during recent meetings with investors, but the marketing period coincided with significant market volatility amid a backdrop of concerns about the prospects of inflation, interest rates and recession,” the company said in a statement released over the weekend.
Allwyn CEO Robert Chvátal: “Due to the prolonged and increasing market volatility, we and Cohn Robbins have decided not to proceed with the proposed business combination.”
Allwyn has recently won the contract to become the new operator of the UK’s National Lottery competition. The operator has also powered lotteries in its domestic market of the Czech Republic, as well as Italy, Austria, Greece and Cyprus.
“Allwyn was encouraged by the feedback from many leading investors, demonstrating the attractiveness of our business to the investment community,” said Allwyn CEO Robert Chvátal.
“However, due to the prolonged and increasing market volatility, we and Cohn Robbins have decided not to proceed with the proposed business combination.
“We are grateful to the firm’s founders, Gary Cohn and Cliff Robbins, for their support over the past year and hope to work with them again in the future.
“As demonstrated by our recent results, Allwyn is a highly cash-generative business with a strong financial and operational platform to pursue its organic and inorganic growth strategy and to invest in new opportunities.
“These include the National Lottery in the UK, where we are set to become the operator in 2024. We continue to pursue sustainable and profitable growth and remain excited about the many opportunities we see in the lottery business in Continental Europe, the UK, the United States and elsewhere,” he added.
Cohn Robbins Holdings Corp (CRHC) was founded and listed in New York in 2020 by US financial supremos Cohn and Robbins.
Cohn is vice chairman of IBM and has more than 30 years of financial services experience, having also served as assistant to the President of the United States for Economic Policy.
Robbins has more than 35 years of investment management experience, including as founder and CEO of Blue Harbour Group from 2004 to 2020.
CRHC’s board of directors will consider in due course the SPAC’s next steps, including whether to seek an alternative business combination. On 7 September 2022, CRHC shareholders approved an initial extension of CRHC’s expiration date to 11 December 2022.
The deal is not the first to fall victim to a worsening capital markets environment. In August, Playtech decided not to go ahead with its plan to publicly list Caliplay due to the rising cost of capital.