Third-largest Italian gaming company based on total revenue and distribution network. Limited geographic diversification. Exposure to gaming industry regulatory risk and frequent tax changes. Successful strategy of growth mainly through acquisitions, with improved product diversity following the acquisition of Intralot Italia. Good flexibility and ability to adjust cost base thanks to a favourable cost structure. Moderately leveraged capital structure without major operating lease obligations. S&P Global Ratings' adjusted-debt to EBITDA of 3.4x in 2016. Financial sponsor ownership capping the assessment at the aggressive level. Negligible free operating cash flows (FOCF) in 2016, mainly as a result of considerable working capital outflows (mostly related to nonrecurring events) and capital expenditure (capex). The stable outlook reflects our expectation that Gamenet Group will
