NEWS RELEASE GTECH ANNOUNCES 2013 FOURTH … Q4 Earnings release final.pdfNEWS RELEASE GTECH...

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NEWS RELEASE

GTECH ANNOUNCES 2013 FOURTH QUARTER AND FULL YEAR RESULTS

Consolidated Financial and Business Highlights

New organization in place, significant wins, and strong pipeline; €50 million in expected annual cost savings from reorganization

Levered free cash flow of €326 million, up 8% over 2012

Proposed cash dividend of €0.75 per share, up 2 euro cents over 2012

Interest in Italian Scratch & Win to grow from 51.5% to 64% through

buyout of UniCredit stake

GTECH 2013 Fourth Quarter and Full Year Results Comparison

Consolidated Income Statement (€/M)

4Q 2013 4Q 2012 % change Full Year

2013 Full Year

2012 % change

Revenues 773.1 812.5 (4.8) 3,062.8 3,075.7 (0.4)

EBITDA 244.6 245.8 (0.5) 1,036.7 1,031.8 0.5

Operating Income 103.8 126.1 (17.7) 559.1 583.1 (4.1)

Net Income Attributable to Owners

1.3 62.8 -- 175.4 233.1 (24.8)

Diluted Earnings Per Share 0.01 0.36 -- 1.01 1.35 (25.2)

EBITDA is principally comprised of operating income plus depreciation, amortization, and impairment. EBITDA is considered an alternative performance measure that is not a defined measure under International Financial Reporting Standards ("IFRS") and may not take into account the recognition, measurement and presentation requirements associated with IFRS. We believe that EBITDA assists in explaining trends in our operating performance, provides useful information about our ability to incur and service indebtedness and is a commonly used measure of performance by securities analysts and investors in the gaming industry. EBITDA should not be considered as an alternative to operating income as an indicator of our performance or to cash flows as a measure of our liquidity. As we define it, EBITDA may not be comparable to other similarly titled measures used by other companies.

ROME (ITALY) – PROVIDENCE, RHODE ISLAND (US), March 13, 2014 – GTECH S.p.A.’s Board of

Directors, chaired by Mr. Lorenzo Pellicioli, today reviewed both the fourth quarter and full year

consolidated results, and approved the financial statements for the year ended December 31,

2013. The Board will propose to the Annual Shareholders’ Meeting a cash dividend of €0.75 per

share, with an ex-dividend date of May 19, 2014, payable on May 22, 2014.

“During 2013, GTECH met or exceeded its key performance objectives and made significant

gains in strategic growth segments while successfully executing a major reorganization,” said

Marco Sala, CEO of GTECH S.p.A. "For the coming year, we expect to sustain our momentum

as we build on these achievements. We continue to advance our interactive capabilities, notably

in the mobile gaming space, to address some of the fastest growing areas of the market. We are

also well positioned to secure new international operator opportunities."

“We generated full-year significant levered free cash flow of €326 million, up 8% over 2012,” said Alberto Fornaro, CFO of GTECH S.p.A. “Our Net Financial Position improved to €2.51

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billion compared to €2.55 billion. Over the next two years we expect to achieve approximately

€50 million of annual recurring cost savings, through a number of initiatives that we have

identified and started to implement.”

Fourth Quarter Consolidated Results

Consolidated Revenues were €773 million compared to €813 million in the fourth quarter of

2012. At constant currency, revenues would have been €790 million. Total Service Revenues

were in line with the prior year level at €722 million. Product sales were €51 million versus €90

million in the same period last year when the Company recorded significant machine gaming

product sales in Canada.

EBITDA, at €245 million, was in line with the 2012 fourth quarter level.

Operating Income was €104 million, versus €126 million in the fourth quarter of 2012,

principally due to lower product sales and €15 million in restructuring charges related to the

2013 group-wide reorganization.

During the quarter, the Company reached an agreement to resolve three tax matters in Italy

resulting in a one-time settlement of €34.7 million, of which €6.3 million had previously been

provisioned by the Company.

Net Income attributable to the owners was €1 million, compared to €63 million in the 2012

fourth quarter, due principally to the lower level of operating income and the one-time tax

settlement.

Diluted Earnings-Per-Share (EPS) was €0.01, compared to €0.36 in the fourth quarter of last

year.

Capital Expenditures in the quarter were €73 million.

Net Financial Position (NFP) in the quarter improved by €86 million.

Fourth Quarter Segment Comparison

Americas

Revenues in the Americas segment were €238 million versus €242 million in 2012. At constant

currency, Americas’ revenues would have been €252 million. Service revenues were €209

million, up €23 million compared to the prior year. The higher revenues were driven by an

increase in same store revenues of €7 million along with higher service revenues from lottery

management agreements in Illinois, Indiana, and New Jersey. Same store revenue growth was

principally driven by the Mega Millions game, which had the second largest jackpot in history at

$648 million in December 2013, the introduction of Powerball in California, higher instant-ticket

sales, principally in California where they were driven by the introduction of a $20 price point

ticket, and higher revenues in Latin America. Product sales were €29 million in the quarter

compared to €54 million last year, when the Company recorded significant product sales in

Canada. EBITDA in the Americas segment was €57 million in the quarter compared to €60 million

in the prior year.

During the quarter, GTECH signed contracts to provide lottery technology and services to the

Colorado Lottery and additional VLTs to the Oregon Lottery.

International

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Revenues from the International segment were €85 million, versus €103 million in the prior year

when GTECH recorded a peak in product deliveries in France, Lithuania and other countries.

Revenues were also impacted by lower EuroMillions jackpot activity and foreign exchange.

EBITDA in the International segment was €23 million in the quarter compared to €21 million in

the prior year.

GTECH recently launched 65 interactive games for Norsk Tipping in Norway, the largest launch of

its kind in Norsk Tipping’s history. The Company was also selected by OPAP as its strategic

partner for OPAP’s expansion into online betting in Greece.

Italy

Revenues from the Italy segment were €450 million, compared to €467 million in the fourth

quarter of 2012. Higher total core wagers and lower sports betting payouts partially offset the

reduction in revenues from gaming machines.

Lotto wagers for the quarter were up 3.2% to €1.68 billion, compared to €1.63 billion in 2012,

driven by higher wagers from 10eLotto, partially offset by lower late numbers. Instant-ticket

wagers were €2.41 billion compared to €2.44 billion last year. Early results from the re-launch of

the Miliardario ticket-family are encouraging.

Machine gaming revenues were €151 million versus €170 million in the previous year, mainly

due to the impact of the VLT tax increase to 5% from 4% last year.

Revenues from sports betting were in line with last year at €44 million.

EBITDA was stable at €172 million. The positive Lotteries performance and the favorable impact

of cost reduction actions taken during the year offset the full impact of higher VLT taxation.

Full Year Consolidated Results

For the full year 2013, Revenues were €3.06 billion, compared to €3.08 billion in 2012. At

constant currency, revenues would have been €3.11 billion. Service revenues were €2.78 billion

versus €2.82 billion in 2012. Product sales were up 10% to €279 million driven by a higher

portion of the Canadian replacement cycle taking place in 2013 compared to the prior year.

Americas Lottery same store revenues grew 3.1% to €518 million, benefiting from multistate

jackpot activity, as well as continuous growth of instant ticket sales principally in Texas,

California and North Carolina.

Despite unfavorable jackpot activity, International Lottery same store revenues were up slightly

to €109 million when compared to 2012, driven by continued strong performance in the Czech

Republic.

Lotto wagers in Italy were up 2% to €6.33 billion compared to €6.22 billion in 2012. 10eLotto

wagers totaled €2.97 billion, up over 6% versus the prior year. Lotto late number wagers grew

21% to €654 million, compared to €540 million in 2012. Instant-ticket wagers were €9.57 billion,

compared to €9.73 billion in the previous year. Machine Gaming wagers were €11 billion versus

€12 billion in 2012.

EBITDA was up approximately 1% to €1.04 billion. Excluding the €30 million one-time machine

gaming settlement in Italy in 2013, EBITDA was €1.07 billion compared to €1.03 billion in 2012.

Operating Income of €559 million was approximately 4% ahead of the 2012 level when taking

into consideration the machine gaming settlement and restructuring costs related to the 2013 group-wide reorganization.

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The Company’s effective income tax rate was 46.8% compared to 37.4% in the prior year.

Absent the tax settlement announced in December 2013, the Company’s effective tax rate was

39.8% in 2013.

Net income attributable to the owners was €175 million, compared to €233 million in the full

year 2012.

Diluted Earnings-Per-Share (EPS) was €1.01, compared to €1.35 in 2012. Pro-forma EPS

was €1.59, in line with 2012 pro-forma EPS of €1.59.

Cash from Operations was €696 million, compared to €763 million in the prior year. Cash from

operations, adjusted for the one-time tax and machine gaming settlements in Italy, was in line

with 2012.

Capital Expenditures were €359 million. Of that amount, €92 million was used for the up-front

payment under the 15-year services agreement with the New Jersey Lottery. This was partially

funded by a €62 million equity contribution from other Northstar New Jersey joint venture

members. Net of such equity contribution, Capital Expenditures totaled €297 million.

Levered free cash flow reached €326 million in 2013, up 8% from €303 million in 2012.

The Board will propose a dividend distribution of approximately €131 million, or 40% of 2013

levered free cash flow, consistent with the Company’s dividend policy.

At December 31, 2013, Consolidated Shareholders’ Equity totaled €2.60 billion. GTECH had a

Net Financial Position (NFP) within the guidance range at €2.51 billion, compared to €2.55

billion as of December 31, 2012.

Full-Year Stand-Alone Results

GTECH’s stand-alone Net Income in 2013 was €34 million compared to €38 million in 2012. Total

Equity and Liabilities in 2013 were €5.55 billion versus €5.55 billion in 2012. Cash and Cash

Equivalents at the end of 2013 were €159 million compared to €315 million in 2012.

2014 Guidance and 2014-2015 Synergies Plan

The Board of Directors reviewed a guidance update for 2014 which is provided below.

(€/M) 2013A 2014E

Revenues 3,063 3,150 – 3,250

EBITDA 1,037 1,060 – 1,100

Operating income 559 550 – 590

Capital Expenditures

of which maintenance

359

169

350 - 380

235 - 250

Net Financial Position 2,507 2,470 – 2,530

Average USD/EUR 1.34 1.30

GTECH also started implementing a new synergies plan which is expected to generate €50 million in annual cost savings between 2014 and 2015 on a recurring basis. The plan envisages a

number of actions in three main areas: sourcing, manufacturing and supply chain; technology;

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and footprint. In order to achieve this target, GTECH is expected to incur approximately €35

million - €40 million in restructuring costs, €21 million of which was incurred in 2013.

Other Information

The Board of Directors also resolved to exercise, during the first half of 2014, its call option to

buy-back from Unicredit its entire 12.5% interest in the instant ticket concession in Italy, for a

total cash consideration of €72 million, using GTECH’s available financial resources. In late 2010,

Unicredit had made an indirect equity investment in the Scratch & Win concession in Italy,

managed by Lotterie Nazionali. Further to such buyout of Unicredit’s interest, GTECH will

increase its direct and indirect ownership of Lotterie Nazionali from 51.5% to 64%. The Board of Directors also convened the Annual Shareholders’ Meeting for May 8 and 9, 2014, respectively on first and second call, to approve the stand-alone financial statements for the year

ended December 31, 2013, the proposed dividend payment, the Company’s compensation policy with

two new stock-based incentive plans for selected Company employees, and a new share buy-back plan, as well as to appoint the Board of Directors, the Board of Statutory Auditors, and the audit firm, whose mandates are due to expire at such Meeting. The above-mentioned stock-based incentive plans reserved for GTECH S.p.A. and/or its subsidiaries’ employees, pursuant to article 114-bis of the Consolidated Financial Act, consist of the 2014-2020

stock option plan and the 2014-2018 share allocation plan. The plans are focused on medium to long term strategic targets and link the compensation of the beneficiaries to value creation for shareholders, while encouraging loyalty and retention. Pursuant to Italian Stock Exchange recommendations, vesting of the plans shall be subject to achievement of 3-years consolidated EBITDA targets. Among the beneficiaries, the CEO and other Executives with Strategic Responsibilities shall retain a part of the stock received/arising from the exercise of options for a further 3 years.

The above-mentioned share buy-back plan, if approved by the Annual Shareholders’ meeting, would renew the authorization to the Board of Directors for the acquisition and disposal of ordinary shares of

the Company that expired in November 2013. The authorization would be renewed to purchase, in bulk or in several stages, on a revolving basis, the maximum number of ordinary shares permitted by the law, i.e. an interest not exceeding 20 percent of the Company’s share capital. The treasury shares would be purchased to stabilize the share price and the trading performances, to serve extraordinary

transactions, if any, and stock based incentive plans, as well as to offer shareholders an additional way to monetize their investment. The authorization to purchase treasury shares is proposed for the maximum period of time permitted by the law, i.e. 18 months from the date of the Shareholders’ Meeting, while disposal of treasury shares would be permitted with no time limit. The shares must be purchased subject to the price conditions specified in article 5, paragraph 1, of European Commission Regulation (EC) 2273/2003 of 22 December 2003. The disposal of shares, and in particular the sale,

shall not be carried out at a price lower by more than 10% of the benchmark recorded price on Italian Stock Exchange, in the trading session prior to each transaction. Exceptions to the above thresholds are provided by the plan in specified events. As at the date hereof neither the Company nor its subsidiaries hold treasury shares nor does the Board of Directors currently intend to immediately execute the buy-back plan in light of, among other things, quantitative constraints set forth in the Company’s existing financing agreements, trading trends of the Company’s stock, and the Company’s

focus on debt reduction.

For further information on the stock-based incentive plans, please refer to the memoranda available at the Company’s registered office and on GTECH's website, www.gtech.com, under the Governance

section - Documents and reports -Shareholders’ Meeting, May 8 and 9, 2014, where the remaining documentation related to the items on the agenda of the Shareholders’ Meeting will be made available to the public in accordance with applicable laws and regulations.

Related news releases: December 24, 2013; November 8 and 5, 2013; October 15, 2013; December 14, 2010; and November 15, 2010

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Declaration

The manager responsible for preparing GTECH’s financial reports, Alberto Fornaro, declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the document results, books, and accounting records.

GTECH S.p.A. is a leading commercial operator and provider of technology in the regulated worldwide gaming markets, delivering best-in-class products and services, with a commitment to the highest levels of integrity, responsibility, and

shareholder value creation. The Company is listed on the Milan Stock Exchange under the trading symbol “GTK” and is majority owned by De Agostini S.p.A. In

2013, GTECH had €3.1 billion in revenues and 8,600 employees in approximately 60 countries. For more information, please visit www.gtech.com.

For further information:

Robert K. Vincent Simone Cantagallo GTECH S.p.A. GTECH S.p.A. Corporate Communications Media Communications T. (+1) 401 392 7452 T. (+39) 06 51899030

This news release and those archived are available at www.gtech.com

Financial Statements for the fourth quarter and full year 2013 follow:

http://www.gtech.com/

http://www.gtech.com/

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GTECH S.P.A. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

(thousands of euros) 2013 2012

Service revenue 722,445 722,026

Product sales 50,675 90,479

Total revenue 773,120 812,505

Raw materials, services and other costs 425,245 443,782

Personnel 150,243 150,052

Depreciation 66,463 66,360

Amortization 48,196 46,487

Impairment loss, net 8,083 6,227

Capitalization of internal construction costs - labor and overhead (28,895) (26,521)

Total costs 669,335 686,387

Operating income 103,785 126,118

Interest income 939 622

Equity income (loss) (772) 309

Other income 141 286

Other expense (4,951) (2,030)

Foreign exchange loss, net (104) (1,265)

Interest expense (41,926) (38,235)

(46,673) (40,313)

Income before income tax expense 57,112 85,805

Income tax expense 49,912 16,389

Net income 7,200 69,416

Attributable to:

Owners of the parent 1,277 62,759

Non-controlling interests 5,923 6,657

7,200 69,416

Earnings per share/ADRs

Basic - net income attributable to owners of the parent 0.01€ 0.36€

Diluted - net income attributable to owners of the parent 0.01€ 0.36€

December 31,

For the three months ended

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CONSOLIDATED INCOME STATEMENTS


Service revenue 2,783,727 2,822,279

Product sales 279,107 253,406

Total revenue 3,062,834 3,075,685

Raw materials, services and other costs 1,585,303 1,611,173

Personnel 568,266 539,346


Amortization 189,684 185,909


Capitalization of internal construction costs - labor and overhead (100,208) (100,038)

Total costs 2,503,702 2,492,538

Operating income 559,132 583,147

Interest income 3,334 2,462

Equity income (loss) (965) 1,015

Other income 1,131 3,686

Other expense (11,177) (9,729)

Foreign exchange loss, net (2,309) (1,214)

Interest expense (163,074) (155,364)

(173,060) (159,144)


Income tax expense 180,837 158,778

Net income 205,235 265,225

Attributable to:

Owners of the parent 175,434 233,136


205,235 265,225

Earnings per share/ADRs

Basic - net income attributable to owners of the parent 1.01€ 1.35€

Diluted - net income attributable to owners of the parent 1.01€ 1.35€

December 31,

For the year ended

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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Restated (a)

December 31, December 31,


ASSETS

Non-current assets

Systems, equipment and other assets related to contracts, net 899,536 946,255

Property, plant and equipment, net 76,382 84,749

Goodwill 3,095,466 3,188,753

Intangible assets, net 1,257,297 1,333,948

Investments in associates and joint ventures 26,894 10,162

Other non-current assets 48,777 27,354

Non-current financial assets 28,886 23,395

Deferred income taxes 14,000 11,030

Total non-current assets 5,447,238 5,625,646

Current assets

Inventories 146,406 164,304

Trade and other receivables, net 904,248 809,894

Other current assets 190,517 181,177

Current financial assets 12,273 8,915

Income taxes receivable 3,574 19,509

Cash and cash equivalents 419,118 455,762

Total current assets 1,676,136 1,639,561

Non-current assets classified as held for sale - 12,063

TOTAL ASSETS 7,123,374 7,277,270

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Issued capital 173,992 172,455

Share premium 1,717,261 1,703,923

Retained earnings 292,847 235,858

Other reserves 15,812 155,565

2,199,912 2,267,801


Total equity 2,603,532 2,642,265

Non-current liabilities

Long-term debt, less current portion 2,641,260 2,778,764

Deferred income taxes 134,278 138,755

Long-term provisions 17,499 45,204

Other non-current liabilities 62,098 51,059

Non-current financial liabilities 60,600 42,407

Total non-current liabilities 2,915,735 3,056,189

Current liabilities

Accounts payable 978,598 1,000,703

Short-term borrowings 851 541

Other current liabilities 361,740 355,668

Current financial liabilities 21,503 10,620

Current portion of long-term debt 214,496 181,276

Short-term provisions 1,185 1,900

Income taxes payable 25,734 28,108

Total current liabilities 1,604,107 1,578,816

TOTAL EQUITY AND LIABILITIES 7,123,374 7,277,270

(a) As adjusted to reflect the early adoption of IFRS 11 Joint Arrangements

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CONSOLIDATED STATEMENTS OF CASH FLOWS


Cash flows from operating activities


Adjustments for:


Intangibles amortization 189,774 186,001

Interest expense 163,074 155,364

Share-based payment expense 8,611 12,349


Non-cash foreign exchange loss, net 938 1,159

Interest income (3,334) (2,462)

Provisions (5,304) 9,141

Other non-cash items 15,015 7,376

Cash foreign exchange loss, net 1,372 55

Income tax paid (170,943) (193,442)

Cash flows before changes in operating assets and liabilities 845,932 855,692

Changes in operating assets and liabilities:

Inventories 14,423 (19,974)

Trade and other receivables (108,594) (143,678)

Other current assets (13,021) (71,028)

Accounts payable (45,220) 114,899

Accrued expenses 11,055 (13,836)

Deferred revenue 22,265 16,298

Advance payments from customers (29,466) 18,811

Other assets and liabilities (1,125) 6,145

Net cash flows from operating activities 696,249 763,329

Cash flows from investing activities

Purchases of systems, equipment and other assets related to contracts (183,878) (211,833)

Purchases of intangible assets (134,919) (30,336)

Investment in associate (19,800) -

Purchases of property, plant and equipment (10,370) (10,193)

Acquisition, net of cash acquired (7,345) -

Italy segment contingent consideration (324) (2,693)

Cash proceeds related to impairment recovery 3,807 4,455

Interest received 7,307 5,101

Other 3,951 (5,798)

Net cash flows used in investing activities (341,571) (251,297)

Cash flows from financing activities

Interest paid (143,390) (184,479)

Dividends paid (125,920) (122,220)

Principal payments on long-term debt (102,810) (320,423)

Return of capital - non-controlling interest (40,087) (42,562)

Dividends paid - non-controlling interest (34,062) (32,116)

Repayments of short-term borrowings (170) (15,218)

Proceeds from exercise of stock options 15,746 121

Capital increase - non-controlling interest 71,973 -

Cash paid on interest rate swaps - (15,901)

Proceeds from issuance of long-term debt - 501,618

Other (19,733) (12,356)

Net cash flows used in financing activities (378,453) (243,536)

Net increase (decrease) in cash and cash equivalents (23,775) 268,496

Effect of exchange rate changes on cash (12,869) (2,838)

Cash and cash equivalents at the beginning of the year 455,762 190,675

Cash and cash equivalents at the end of the year 419,118 456,333

December 31,

For the year ended

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KEY FINANCIAL INDICATOR COMPARISONS

2013 2012 € %

Revenue 773,120 812,505 (39,385) (4.8)

EBITDA 244,612 245,846 (1,234) (0.5)

Operating income 103,785 126,118 (22,333) (17.7)

Net income attributable to owners of the parent 1,277 62,759 (61,482) (98.0)

Diluted earnings per share 0.01 0.36 (0.35) (97.2)

EBITDA


Depreciation 66,463 66,360 103 0.2

Amortization 48,196 46,487 1,709 3.7

Restructuring costs 15,104 202 14,902 >200.0

Impairment loss, net 8,083 6,227 1,856 29.8

Other 2,981 452 2,529 >200.0

244,612 245,846 (1,234) (0.5)

ChangeDecember 31,


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KEY FINANCIAL INDICATOR COMPARISONS

2013 2012 € %

Revenue 3,062,834 3,075,685 (12,851) (0.4)

EBITDA 1,036,709 1,031,841 4,868 0.5


Net income attributable to owners of the parent 175,434 233,136 (57,702) (24.8)

Diluted earnings per share 1.01 1.35 (0.34) (25.2)

EBITDA


Depreciation 254,599 249,921 4,678 1.9

Amortization 189,684 185,909 3,775 2.0

Restructuring costs 20,544 811 19,733 >200.0

Impairment loss, net 6,058 6,227 (169) (2.7)

Other 6,692 5,826 866 14.9

1,036,709 1,031,841 4,868 0.5

2013 2012 (a) € %

Net financial position 2,507,319 2,548,931 (41,612) (1.6)

ChangeDecember 31,

For the year ended

December 31, Change

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CONSOLIDATED REVENUE BREAKDOWN

(thousands of euros) 2013 2012 € %

Operating Segments

Americas 238,392 241,785 (3,393) (1.4)

International 84,492 103,215 (18,723) (18.1)

Italy 450,104 467,367 (17,263) (3.7)

772,988 812,367 (39,379) (4.8)

Purchase accounting 132 138 (6) (4.3)

773,120 812,505 (39,385) (4.8)


December 31, Change


Operating Segments

Americas 994,085 872,429 121,656 13.9

International 331,117 386,969 (55,852) (14.4)

Italy 1,737,090 1,815,931 (78,841) (4.3)

3,062,292 3,075,329 (13,037) (0.4)

Purchase accounting 542 356 186 52.2

3,062,834 3,075,685 (12,851) (0.4)

For the year ended

December 31, Change

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GTECH S.P.A. AND SUBSIDIARIES AMERICAS SEGMENT


Lottery 163,479 153,980 9,499 6.2

Machine Gaming 35,919 64,048 (28,129) (43.9)

Lottery Management Services 30,642 16,079 14,563 90.6

All Other 8,352 7,678 674 8.8 Total revenue 238,392 241,785 (3,393) (1.4)

Service revenue 209,313 186,756 22,557 12.1

Product sales 29,079 55,029 (25,950) (47.2) Total revenue 238,392 241,785 (3,393) (1.4)


December 31, Change

Lottery Same-Store Revenues 131,503 124,491 7,012 5.6

Wins 4,139 - 4,139 -

Gaming & Other 53,871 46,186 7,685 16.6


Foreign Exchange Impact (12,026) - (12,026) -

Total Service Revenue 209,313 186,756 22,557 12.1


Lottery 640,028 625,508 14,520 2.3

Machine Gaming 232,545 152,414 80,131 52.6


All Other 29,989 28,281 1,708 6.0 Total revenue 994,085 872,429 121,656 13.9

Service revenue 800,959 755,727 45,232 6.0

Product sales 193,126 116,702 76,424 65.5 Total revenue 994,085 872,429 121,656 13.9

For the year ended

December 31, Change

Lottery Same-Store Revenues 518,063 502,447 15,616 3.1

Wins 10,444 - 10,444 -

Gaming & Other 207,264 187,054 20,210 10.8



Total Service Revenue 800,959 755,727 45,232 6.0

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GTECH S.P.A. AND SUBSIDIARIES INTERNATIONAL SEGMENT


Lottery 51,873 58,737 (6,864) (11.7)

Machine Gaming 18,999 24,723 (5,724) (23.2)

All Other 13,620 19,755 (6,135) (31.1) Total revenue 84,492 103,215 (18,723) (18.1)

Service revenue 63,425 69,361 (5,936) (8.6)



December 31, Change

Lottery Same Store Revenue 28,567 29,673 (1,106) (3.7)

Gaming & Other 36,722 39,688 (2,966) (7.5)


Total Service Revenue 63,425 69,361 (5,936) (8.6)


Lottery 195,966 235,966 (40,000) (17.0)

Machine Gaming 85,961 87,412 (1,451) (1.7)

All Other 49,190 63,591 (14,401) (22.6) Total revenue 331,117 386,969 (55,852) (14.4)

Service revenue 247,980 258,914 (10,934) (4.2)


For the year ended

December 31, Change

Lottery Same Store Revenue 109,375 109,230 145 0.1

Gaming & Other 143,633 149,684 (6,051) (4.0)


Total Service Revenue 247,980 258,914 (10,934) (4.2)

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GTECH S.P.A. AND SUBSIDIARIES ITALY SEGMENT


Lotto 103,555 101,999 1,556 1.5

Instant tickets 96,090 96,266 (176) (0.2)

Lottery 199,645 198,265 1,380 0.7

Machine Gaming 151,142 170,214 (19,072) (11.2)

Sports Betting 44,440 45,331 (891) (2.0)

Commercial Services 34,961 33,139 1,822 5.5

Interactive Games 19,916 20,418 (502) (2.5) Total revenue 450,104 467,367 (17,263) (3.7)


December 31, Change


Lotto 407,612 401,840 5,772 1.4

Instant tickets 377,434 382,274 (4,840) (1.3)

Lottery 785,046 784,114 932 0.1

Machine Gaming 583,718 673,567 (89,849) (13.3)

Sports Betting 158,739 139,849 18,890 13.5

Commercial Services 132,111 131,122 989 0.8

Interactive Games 77,476 87,279 (9,803) (11.2) Total revenue 1,737,090 1,815,931 (78,841) (4.3)

For the year ended

December 31, Change

of 27


2013 2012 Wagers %

Lotto (millions of euros)

Core wagers 1,477.7 1,403.9 73.8 5.3

Wagers for late numbers 200.2 222.5 (22.3) (10.0) 1,677.9 1,626.4 51.5 3.2

Instant Tickets

Total sales (in millions) € 2,408.6 € 2,439.9 (€ 31.3) (1.3)

Total tickets sold (in millions) 483.3 513.3 (30.0) (5.8)

Average price point € 4.98 € 4.75 € 0.23 4.8

Machine Gaming (millions of euros)

VLT wagers 1,578.8 1,953.4 (374.6) (19.2)

AWP wagers 1,192.2 1,165.6 26.6 2.3

Total wagers 2,771.0 3,119.0 (348.0) (11.2)

(Installed at the end of December)

VLTs installed 10,596 10,535 61 0.6

AWP machines installed 70,203 65,345 4,858 7.4

Total machines installed 80,799 75,880 4,919 6.5

Sports Betting (millions of euros)

Fixed odds sports betting and other wagers 233.8 253.7 (19.9) (7.8)

Interactive Games (millions of euros)

Interactive game wagers 525.4 501.5 23.9 4.8


December 31, Change

of 27


2013 2012 Wagers %

Lotto (millions of euros)

Core wagers 5,678.5 5,680.9 (2.4) (0.0)

Wagers for late numbers 654.2 540.3 113.9 21.1 6,332.7 6,221.2 111.5 1.8

Instant Tickets

Total sales (in millions) € 9,573.8 € 9,729.0 (€ 155.2) (1.6)

Total tickets sold (in millions) 1,970.8 2,098.2 (127.4) (6.1)

Average price point € 4.86 € 4.64 € 0.22 4.7

Machine Gaming (millions of euros)

VLT wagers 6,458.5 7,654.9 (1,196.4) (15.6)

AWP wagers 4,532.4 4,483.3 49.1 1.1

Total wagers 10,990.9 12,138.2 (1,147.3) (9.5)

(Installed at the end of December)

VLTs installed 10,596 10,535 61 0.6

AWP machines installed 70,203 65,345 4,858 7.4

Total machines installed 80,799 75,880 4,919 6.5

Sports Betting (millions of euros)

Fixed odds sports betting and other wagers 778.5 885.3 (106.8) (12.1)

Interactive Games (millions of euros)

Interactive game wagers 1,990.9 2,134.7 (143.8) (6.7)

For the year ended

December 31, Change

of 27

GTECH S.P.A. AND SUBSIDIARIES NET FINANCIAL POSITION

(thousands of euros) 2013 2012 (a) Change

Cash at bank 416,787 455,386 (38,599)

Cash on hand 2,331 376 1,955

Cash and cash equivalents 419,118 455,762 (36,644)

Current financial receivables 12,273 8,915 3,358

Facilities 125,901 105,267 20,634

Capital Securities 46,406 46,406 -

2010 Notes (due 2018) 24,549 24,549 -

2012 Notes (due 2020) 14,408 1,223 13,185

2009 Notes (due 2016) 2,926 2,926 -

Short-term borrowings 851 541 310

Other 21,809 11,525 10,284

Current financial debt 236,850 192,437 44,413

Net current financial cash (194,541) (272,240) 77,699

2009 Notes (due 2016) 756,558 759,616 (3,058)

Capital Securities 743,803 741,148 2,655

2010 Notes (due 2018) 496,128 495,307 821

2012 Notes (due 2020) 492,851 491,842 1,009

Facilities 150,446 288,922 (138,476)

Other 62,074 44,336 17,738

Non current financial debt 2,701,860 2,821,171 (119,311)

Net financial position 2,507,319 2,548,931 (41,612)

(a) As adjusted to reflect the early adoption of IFRS 11 Joint Arrangements

December 31,

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GTECH S.P.A. AND SUBSIDIARIES DEBT


Long-term debt, less current portion

2009 Notes (due 2016) 756,558 759,616

Capital Securities 743,803 741,148

2010 Notes (due 2018) 496,128 495,307

2012 Notes (due 2020) 492,851 491,842

Facilities 150,446 288,922

Other 1,474 1,929

2,641,260 2,778,764

Short-term borrowings

Short-term borrowings 851 541

851 541

Current portion of long-term debt

Facilities 125,901 105,267

Capital Securities 46,406 46,406

2010 Notes (due 2018) 24,549 24,549

2012 Notes (due 2020) 14,408 1,223

2009 Notes (due 2016) 2,926 2,926

Other 306 905

214,496 181,276

Total debt 2,856,607 2,960,581

December 31,

of 27

GTECH S.P.A. AND SUBSIDIARIES INTEREST EXPENSE


Capital Securities (16,133) (16,133)

2009 Notes (due 2016) (9,374) (9,497)

2010 Notes (due 2018) (6,928) (6,918)

2012 Notes (due 2020) (4,631) (1,292)

Facilities (2,889) (3,395)

Other (1,971) (1,000)

(41,926) (38,235)

December 31,



Capital Securities (64,531) (64,319)

2009 Notes (due 2016) (37,395) (38,634)

2010 Notes (due 2018) (27,696) (27,652)

2012 Notes (due 2020) (18,509) (1,292)

Facilities (11,360) (16,703)

Other (3,583) (6,764)

(163,074) (155,364)

December 31,

For the year ended

of 27

GTECH S.P.A. AND SUBSIDIARIES OPERATING SEGMENT INFORMATION

(thousands of euros) 2013 2012 2013 2012

Operating Segments

Americas 238,392 241,785 994,085 872,429

International 84,492 103,215 331,117 386,969

Italy 450,104 467,367 1,737,090 1,815,931

772,988 812,367 3,062,292 3,075,329

Purchase accounting 132 138 542 356

773,120 812,505 3,062,834 3,075,685


Operating Segments

Americas 20,469 23,690 121,992 88,589

International 10,257 10,119 50,827 55,673

Italy 114,568 120,567 499,661 541,552

145,294 154,376 672,480 685,814

Corporate support (27,383) (12,973) (56,065) (41,184)

Purchase accounting (14,126) (15,285) (57,283) (61,483)

103,785 126,118 559,132 583,147



Third-party revenue

For the twelve months ended

Operating income

For the three months ended For the twelve months ended


of 27

GTECH S.P.A. AND SUBSIDIARIES OPERATING SEGMENT INFORMATION


Operating Segments

Americas 33,800 36,159 136,566 133,980

International 4,907 5,885 18,885 19,988

Italy 21,304 18,278 75,395 71,714

60,011 60,322 230,846 225,682

Corporate support 4,864 4,024 16,321 15,314

Purchase accounting 1,588 2,014 7,432 8,925 66,463 66,360 254,599 249,921


Operating Segments

Americas 1,452 - 1,452 -

International 1 (349) 3 822

Italy 36,558 34,313 139,977 132,288

38,011 33,964 141,432 133,110

Corporate support 97 190 406 944



Operating Segments

Americas - - - -

International 5,470 5,145 3,445 5,145

Italy - - - -

5,470 5,145 3,445 5,145

Corporate support - - - -


December 31,

Impairment loss, net


December 31,

Amortization


For the twelve months ended

December 31,

December 31,

Depreciation



of 27

GTECH S.P.A. AND SUBSIDIARIES GEOGRAPHIC INFORMATION


Total Revenue

Italy 1,752,545 1,839,384

United States 719,918 667,172

Canada 117,860 52,585

United Kingdom 66,448 87,837

Colombia 42,062 47,387

Other 364,001 381,320

3,062,834 3,075,685

For the year ended December 31,


Non-Current Assets

United States 3,298,051 3,421,419

Italy 1,784,834 1,834,803

Sweden 80,533 91,406

United Kingdom 60,177 55,608

Other 153,863 177,823

5,377,458 5,581,059

December 31,

of 27

- GTECH S.p.A. –

December 31,

2013

December 31,

2012

INCOME STATEMENTS

(Euro)

Revenues 402,784,250 396,217,644

Other revenues 141,272,612 121,815,447

Total revenues 544,056,862 518,033,091

Capitalization of Internal Construction - Labour

(2,838,993) -

Raw material, services and other costs 202,334,199 203,438,180

Personnel costs 116,982,985 111,522,057

Depreciations and amortizations 30,115,598 19,002,972

Credit writedown 60,000 -

Total costs 346,653,789 333,963,209

Operating income 197,403,073 184,069,882

Dividends

42,389,813

13,945,218

Enhancing participation at Equity

659,213

905,407

Interest incomes and other incomes

22,390,877

15,486,745

Interest expenses and other expenses

(165,656,314)

(149,435,639)

Foreign exchange gains (loss)

(110,631)

(94,475)

(100,327,042)

(119,192,744)

Financial assets value adjustments

-

(4,663)

Gross income 97,076,031 64,872,475

Income taxes

(62,737,362)

(26,637,197)

Net income 34,338,669 38,235,278

Attributable to:

Owners of the parent 20,257,754 22,766,049

Non-controlling interests 14,080,915 15,469,229

34,338,669 38,235,278

Earning per share/ADRs

Basic - net income attributable to owners of the parent € 1.01 € 1.35

Diluted - net income attributable to owners of the parent € 1.01 € 1.35

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GTECH S.p.A.

December 31,

2013

December 31,

2012

STATEMENT OF EQUITY AND FINANCIAL POSITION

(Euros)

ASSETS

Not current assets

System, equipment and other assets related to contracts, net 80,093,228 51,845,355

Goodwill 622,896,606 622,896,606

Intangible assets, net 20,798,964 14,743,284

Investments in associates and other companies 3,739,732,808 3,772,557,121

Equity investments 632,120 772,907

Other non-current assets 601,051,527 525,678,473

Total non current assets 5,065,205,253 4,988,493,746

Current assets

Inventories 2,395,411 1,534,109

Trade and other receivables 116,516,118 106,236,594

Current financial assets 193,730,664 124,344,864

Other current assets 10,240,815 11,753,815

Cash and cash equivalents 158,558,735 315,018,214

Total current assets 481,441,743 558,887,596

TOTAL ASSETS 5,546,646,996 5,547,381,342

LIABILITIES

Equity

Share capital 173,992,168 172,454,507

Legal Reserve 34,490,901 34,428,159

Share premium reserve 1,717,261,380 1,703,922,911

Other reserves 75,585,504 66,214,884

Profit (loss) carried forward 27,198,202 114,945,610

Profit (loss) for the period 34,338,669 38,235,278

Total equity 2,062,866,824 2,130,201,349

Not current liabilities

Long term debt, less current portion 2,586,794,131 2,568,270,128

Staff severance fund (TFR fund) 6,143,612 5,558,106

Deferred tax liability 89,737,796 68,166,291

Long term provisions 169,979 20,205,517

Total non current liabilities 2,682,845,518 2,662,200,042

Current liabilities

Trade and other payables 154,017,944 140,308,521

Short term borrowings 519,473,753 507,635,998

Current portion of long term debt 88,289,701 75,104,758

Other current liabilities 35,709,962 30,716,518

Income tax payables 3,443,294 1,214,156

Total current liabilities 800,934,654 754,979,951

TOTAL EQUITY AND LIABILITIES 5,546,646,996 5,547,381,342

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GTECH S.p.A.

CASH FLOW STATEMENT

(Euros)

For the year ended December 31,

2013 2012

Net cash flows from operating activities 168,946,220 187,259,757

Cash flows from investing activities

Dividends collected from reserves 45,695,516 50,862,854

Dividends collected from net income 43,189,813 14,082,718

Unpaid purchases 19,251,113 10,126,861

Proceeds from sale of assets 266,836 138,429

Guarantees 150,301 (2,664,079)

Venture capital investment (793,552) (796,046)

Reserve payments to Related Parties (4,100,000) (17,134,337)

Purchases last exercises, paid in the current exercise (8,225,246) (5,664,000)

Purchases of intangible assets (14,400,467) (11,645,498)

Purchases of fixed assets (20,989,646) (18,332,034)

Net cash flow from investing activities 60,044,668 18,974,868

Cash flows from financing activities

Related party receivables (129,250,047) (73,096,754)

Dividends paid (125,919,946) (122,219,966)

Interests paid on Capital Securities (61,875,000) (61,875,000)

Interests paid on Euro Bond 750 (due 2016) (40,312,500) (40,312,500)

Interests paid on Euro Bond 500 (due 2018) (26,875,000) (31,440,000)

Related party liabilities (8,932,104) (27,382,138)

Financial lease paid (6,519,916) -

Interests paid on Euro Bond 500 (due 2020) (4,315,000) -

Revolver Facility commissions (1,282,828) (1,149,967)

Other interests paid (827,061) (12,507,121)

Interests on financial leases (681,600) -

Interests paid on Revolver Facility (29,500) (963,413)

2012 Notes (due 2020) - 492,945,307

Interests paid on Mandatory - (31,821,000)

Bank liabilities 703,298 -

Interests on receivables 789,978 134,418

Swap option collected 4,131,529 3,078,618

Stock options 15,745,330 121,177

Net cash flow from (used in) financing activities (385,450,367) 93,511,661

Net increase (decrease) in cash and cash equivalents (156,459,479) 299,746,286

Cash and cash equivalents at the beginning of the year 315,018,214 15,271,928

Cash and cash equivalents at the end of the year 158,558,735 315,018,214

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