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Dec 31, 2021
Light & Wonder Q4 2021 Earnings Report
Scientific Games was rebranded to Light & Wonder, and reported a strong double digit growth in consolidated revenue from continuing operations.
Key Takeaways
Scientific Games, soon to be Light & Wonder, reported a 21% increase in fourth-quarter consolidated revenue and a significant rise in consolidated AEBITDA. The company is focusing on de-leveraging, with plans to use the proceeds from the divestiture of its Lottery and Sports Betting businesses to reduce debt and repurchase shares.
Company rebranded as Light & Wonder, reflecting transformation to a cross-platform global game company.
Strong double digit growth in consolidated revenue from continuing operations, up 21% in 4th Quarter and up 27% for the Full Year.
Company expects to significantly de-lever, targeting Net Debt Leverage Ratio range of 2.5x to 3.5x.
Company provides capital allocation strategy and authorizes $750 Million Share Repurchase Program.
Light & Wonder
Light & Wonder
Light & Wonder Revenue by Segment
Revenue by Segment
SciPlay Revenue
CapyFin.com Forward Guidance
Light & Wonder is moving rapidly to execute on its vision with a singular focus to be the leading cross-platform global game company, accelerating efforts to de-lever and invest for sustainable growth.
Positive Outlook
- Progressing on Asset Divestitures, we expect the Lottery transaction to close by the end of March(2) with approximately $5 Billion in net after-tax cash proceeds; the Sports Betting transaction is on track to close in Q2(2).
- De-levering and transforming the balance sheet is a key focus, establishing a long-term net debt leverage ratio target range of 2.5x to 3.5x, rapidly moving from a debt to an equity story. We expect to be squarely in this range by the end of Q2 with the sale of Lottery and Sports Betting businesses.
- Provided Capital Allocation Strategy, taking a balanced and opportunistic approach, significantly de-levering, returning substantial capital to shareholders, while investing in key growth opportunities.
- Authorized a 3-year, $750 million share repurchase program, underscoring a clear commitment and opportunity to return significant capital to shareholders. It reflects our strengthened balance sheet, the recurring nature of our revenue, our strong cash flow generation and the tremendous value we see in our shares.
- Investing in our largest growth opportunities, both organically and inorganically, in content and digital markets to accelerate growth. Organic investments directed at R&D, capex and the launch of our new Las Vegas iGaming studio.
Challenges Ahead
- the impact of the COVID-19 pandemic and any resulting unfavorable social, political, economic and financial conditions, including the temporary and potentially recurring closure of casinos and lottery operations on a jurisdiction-by-jurisdiction basis
- risks relating to the intended sales of our Sports Betting and Lottery businesses, expected to close by the end of March 2022 for the Lottery business while the sale of the Sports Betting business is on track to be completed in the second quarter of 2022, both subject to applicable regulatory approvals and customary closing conditions (“Pending Divestitures”), including lack of assurance regarding the timing of completion of the pending and proposed transactions and related risks associated with the ongoing operations and activities of the Lottery and Sports Betting businesses, that certain deferred tax assets may not be realized relative to the anticipated tax gain from these divestitures, that the transactions will yield additional value or will not adversely impact our business, financial results, results of operations, cash flows or stock price
- our inability to successfully execute our new strategy and impending rebranding initiative
- our inability to significantly de-lever and position the Company for enhanced growth with certain net proceeds from our Pending Divestitures
- slow growth of new gaming jurisdictions, slow addition of casinos in existing jurisdictions and declines in the replacement cycle of gaming machines