Lottomatica SpA 'BB-' Ratings Affirmed On Supportive Performance And Expected Deleveraging; Outlook Stable

Italy-based gaming operator Lottomatica SpA reported solid 2023 results. We anticipate good like-for-like performance and the integration of the SKS365 acquisition will lead to S&P Global Ratings-adjusted leverage below 4x from 2025 (including the margin loan), or below 3.5x when excluding it. In our view, the more conservative financial policy after the IPO is partially offset by a history of debt-financed acquisitions and by our expectation that the financial sponsor Apollo Global will remain the controlling shareholder in the medium term, despite its stake having declined to 57.4% following the IPO and two secondary sales. We therefore affirmed our 'BB-' long-term issuer credit rating on Lottomatica and our 'BB-' issue rating on its €1,965 million existing senior secured notes. The

...April 12, 2024 - Italy-based gaming operator Lottomatica SpA reported solid 2023 results. We anticipate good like-for-like performance and the integration of the SKS365 acquisition will lead to S&P Global Ratings-adjusted leverage below 4x from 2025 (including the margin loan), or below 3.5x when excluding it. - In our view, the more conservative financial policy after the IPO is partially offset by a history of debt-financed acquisitions and by our expectation that the financial sponsor Apollo Global will remain the controlling shareholder in the medium term, despite its stake having declined to 57.4% following the IPO and two secondary sales. - We therefore affirmed our '##-' long-term issuer credit rating on Lottomatica and our '##-' issue rating on its 1,965 million existing senior secured notes. - The stable outlook indicates that we expect Lottomatica's revenue and EBITDA to continue expanding, driven by the integration of SKS365 and the increasing share of online betting. Adjusted...

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