Company Presentation - OPAP
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Company Presentation June 2020
Agenda
History – Company Overview
Financial Overview
Strategy
Social Responsibility
Summary
© OPAP
The Story so far…
20 years exclusive-license
contract with the Hellenic Launch of Acquisition of
Launch of PROPO State KINO Hellenic lotteries
(The Greek Football
Pools Game) 12-year concession
Launch of PAME STIHIMA
1958 1999 (sports-betting) 2001 2011
Extension of exclusive
Establishment of 2000
1959 2003 license until 2030 2013
the Greek OPAP
Organization of incorporated as Listed in the
Athens Stock Award of Video
Football a Societe
Exchange Lottery Terminals (VLT)
Prognostics Anonyme
license
Transfer of 33% stake Horse Races operations Further investment in
Acquisition of
to Emma Delta commencement & launch Stoiximan group to reach
36.75% of
Hellenic Holding for of horse races mutual 84.5% in Greek & Cypriot
Stoiximan Group
€652m. betting operations and 36.75% in
Q2 2014 2017 2019 international operations
Operations
Q4 2013 Launch of
Q1 2016 commencement of VLTs
2018 Launch of
2020
Hellenic Lotteries Tzoker
products (Scratch Launch of Virtual online
& Passives) Games & SSBTs
© OPAP
3
Company Overview
The
As of 11 October 2013, Exclusive concession
OPAP is extended up until 2030 leading
Greek
gaming company
Historic
100% private
under new management high dividend
pay-out policy
Market cap on Athens Exchange Presence in
c. €2.9 bn Cyprus
(June 2020)
Largest
c. 70% retail network in Greece
of the total Greek gaming 2019
market of 2019 Gross Gaming Revenues (GGR) of
Revenue (GGR) €1,619.9m
and EBITDA of
As of 01.01.16 subject to
€412.6m
35% GGR contribution
© OPAP
4
Public offerings -
Shareholder Structure
• Largest Pan-European lottery operator
• Presence in Czech Republic, Greece & Cyprus,
Austria and Italy
* • Active in countries representing more than 24%
of EU lottery GGR
• Entrepreneurial ownership: KKCG
• Synergies with OPAP
* voting rights
Date (%) Offering price (€)
25 April 2001 5,36% Initial Public Offering (IPO) 5,5
18 July 2002 18,90% Secondary offering 8,44
14 July 2003 24,45% Secondary offering 9,44
21 July 2005 16,44% Secondary offering 24,14
11 October 2013 33,00% Public tender 6,2
© OPAP
5
The Greek Gaming Market:
A Comparative Review
• Greek Gross Gaming Revenue (GGR) as % of the GDP compares favorably vs. European peers
1,16%
1,02% 0,89%
Average: 0.62%
0,85%
2019 0,72% 0,75%
18,1
GGR (€bn and % 0,50% 0,52% 0,51% 0,47%
0,42% 0,38% 0,42% 0,40%
of GDP(1)) 0,30%
14,3
12,2
8,9
In €bn 3,1
2,4 2,2 2,0 1,9 1,9 1,7 1,6 1,5 1,4
0,2
In % of 2019 Italy Ger ma ny France Spa in Netherland s Swede n Gre ece Finland Belg ium Por tug al Ireland Austria Pon land Denmark Cyp rus
GDP
440
381
347
307 287 272 262 236 230 224 223 223 217 216 216
2019 GGR per
adult(2)(3)(€)
Finland Ireland Italy Denmark Swede n Cyp rus Sloven ia Luxembou rg Gre ece Spa in France Latvia Austria Netherland s Por tug al
The Greek gaming market is a fundamentally attractive market :
• 2019 GGR at 1.16% of GDP (highest amongst the graph’s sample)
• 2018 GGR per adult of €230
Source: H2GC, Apr. 2020. Greek data: OPAP’s reported numbers (Greek operations only), Hellenic Gaming Commission
Note: Charts include top-15 EU-27 countries for GGR and GGR/per adult respectively. Gross gaming revenue including offline and online (onshore and offshore) gaming.
(1) Current price GDP
(2) Inhabitants over 18 years old
© OPAP
6 (3) Excluding Malta
Greek Retail & Online Gaming market
GGR/GDP is gradually reaching pre crisis levels on the back of new
products’ introduction (Scratch in 2014 & VLTs in 2017) that have
attracted previously illegal spending & new leisure players.
Stihima & KINO introduction lead to
growth>GDP Lack of innovation New games
3.000 1,18%
1,12%
1,12% 1,14%1,16%
2.500 1,10%1,14% 1,10%1,12%
1,07% 1,05%1,06%
0,97%0,94%0,99% 1,00%0,97%0,96%
0,93%
2.000 0,87%
1.500
1.000 OPAP OPAP
market market
share share
500 62,6% 69,4%
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
OPAP Instant & Passives Horse Racing Casinos Online GGR/GDP
During the macro turbulence, the market declined by
c. 38% while OPAP gained significant market share
Source: OPAP’s reported numbers (Greek operations only); H2 Gambling Capital, Hellenic Gaming Commission Reports
Note: since 2014 Instant and passive lotteries and since 2016 Horse racing are being operated by OPAP © OPAP
7
Significant exclusive concessions secured
through heavy investments in the past years
More than 50 years of exclusive concessions backlog already paid for
Total upfront cost of license
Oct May Jun Jan Jan Oct May Jan Oct Jan Jan
(100% already paid by
OPAP) 2000 2014 2014 2016 2017 2020 2026 2027 2030 2035 2036
€323mn Concession Agreement (20 years)
Lottery &
Betting
Concession Extension Agreement (10
€375mn
years)
License fee to be negotiated Right of first refusal for any other game to be
on a case by case basis licensed by the Hellenic Gaming Commission
VLTs
€560mn 2011 VLT License (18 years)
Instant &
Passives
€127mn(1) 2013 State Lotteries Concession Agreement (12 years)
Racing
Horse
€40.5mn 2016 Horse Racing Concession Agreement (20 years)
Exclusive Right for online offering of OPAP’s exclusive lottery games
Online
Included in upfront
payments for legacy
licenses Exclusive offering of onshore
online sports betting
(1): Total consideration of €190mn paid by consortium including OPAP, Scientific Games and Intralot, of which €127mn was paid by OPAP for its 67% stake.
© OPAP
8 Current OPAP’s stake at 83.5%
Network
The largest commercial network in Greece with its modernization well on track
FY’19
figures
Gaming
Halls
4,406
OPAP
Stores
POS*
in Greece
& Cyprus
Gas stations Post Bank Bank Bank
Petrol Bank
stations
*as of 31.12.2019.
New & upgraded Opap Stores Average store size increase
constructed since 2018 since 2015 Hellenic Lotteries products are distributed
through additional 9,469 POS & Street
Vendors
9 c.1,460 +23% © OPAP
OPAP’s Greek Revenue (GGR) Breakdown
GDP CAGR: -6.3% GDP CAGR: +0.9%
€m
OPAP CAGR: -9.2% OPAP CAGR: +4.4%
2.000
1.800
VLTs
1.600
1.400
1.200 Instant & Passives
1.000 Sports betting
800
600
400
200
Lotteries
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Before Privatization After
© OPAP
10Games Product Matrix
GGR breakdown
VLTs
20%
18%
Instant 19%
& Passives 19%
6% 9% 49%
8% 9%
50% 47%
Mutual Fixed Odds
48%
24%
23%
25%
27%
Lottery
Betting
Q2’19
Q3’19
Q4’19
Q1’20
Propo- Virtual
Stihima Joker Lotto Propo Proto Super 3 Extra 5 Kino Scratch Laiko Ethniko VLTs
Goal Games
2017: 39% of NGR* GH: 36% of
Agent 2018: 37% of NGR* NGR
8% 12% 12%
Commission 2019-2021: 35%+1% of NGR* as bonus. Agencies:
2019 adjustment is conditional upon achieving 6% average NGR* growth vs. 2016 of wagers
25% of NGR
Three Ten Two
Frequency of Twice Twice Twice Once a Every 5 Every 5 Once a 18 draws
Daily times draws draws On going On going
play weekly weekly weekly week minutes minutes week annually
weekly daily daily
© OPAP
11 * NGR: GGR - GGR contributionFinancials
It’s all about
numbers
© OPAP
12Financial Overview
Revenue (GGR) EBITDA & EBITDA margin on GGR
2.000 CAGR: +4.8%
CAGR: +10.9%
1.500 23,2%
400 25,2% 27,0% 22,9%
1.000 22,0% 21,1%
1.547 1.620 18,2%
1.378 1.400 1.398 1.456
1.220
500 200 377 413
347 308 307 354
222
0
13 14 15 16 17 18 19 0
13 14 15 16 17 18 19
Strong top-line performance & incremental growth driven by: • Revenue increase & cost optimization brought in material l-f-l
EBITDA growth post the privatization.
• Introduction of Scratch & passives in 2014
• GGR contribution increased in 2016 to 35% from 30% previously.
• Introduction of VLTs and Virtuals in 2017 Adjusted 2018 Ebitda would stand at €408m
• Growth persisted in 2019 as well
Total Opex (Gaming operations only) Net Profit
400
200
300
200
100 195 211 202
274 258 254 274 268 255 170
100 235 141 143
126
0
13 14 15 16 17 18 19 0
13 14 15 16 17 18 19
• Total Opex (gaming operations) reduced despite the
commencement of several material projects (Hellenic Lotteries,
Horse Racing, VLTs & virtual games)
Amount in €m © OPAP
13Financial Results Q1 2020 (1/2)
Department Solid pre-lockdown performance & gradual recovery
Stores post reopening
-21.7%
Greek GDP
Retail Sales
Supermarkets (excl. fuels) Pharmaceuticals
Q1 2020
+16.6% FY 2019 +12.5%
+0.7% -1.2%
Furniture &
Household
Equipment
-11,9%
Gross Gaming Revenue (€m) EBITDA (€m) Net Profit (€m)
-17.1% -23.6% -37.8%
150 70
500
60
400 50
100
300 40
30 57
200 396
328 50 113
20
86 36
100
10
0 0
Q1'19 Q1'20 0
Q1'19 Q1'20 © OPAP
14 Q1'19 Q1'20Financial Results Q1 2020 (2/2)
Q1 EBITDA (€m)
-23,6%
-15,6%
28,5%
25,8% 26,3%
113
102
86
EBITDA
margin on GGR Q1 2019 Q1 2019* Q1 2020
*Excl. one-off items
Q1 Net Profit (€m)
14,4%
-37,8%
70 -28,6%
12,6% 14,0%
60 10,8% 12,0%
50
10,0%
40 8,0%
30 57 6,0%
50
20 36 4,0%
Net Profit 10 2,0%
margin on GGR 0 0,0%
Q1 2019 Q1 2019* Q1 2020
© OPAP
15 * Excl. one-off itemsBalance Sheet
Net Debt position (€m)
459 556
436 409
108
-77 -155
-296
1.046 848
513
650
263
165 115 119 169 130
1 32
-242 -297 -302 -274 -246 -191
-422
-644
2013 2014 2015 2016 2017 2018 2019 Q1 2020
Short-term Debt Long-term Debt Cash Net Debt/(Cash)
Prudent leverage & solid balance sheet structure
• Average cost of lending: Fixed c.3,0%
• 1,4x Net Debt /LTM EBITDA
• 8,2x Interest Coverage
© OPAP
16Dividend Policy
Both longer & short term history demonstrate consistent & rewarding shareholders returns
Dividend per share (€)
1
0,57
Average dividend yield since
the IPO (‘01-’19) 9%
0,70
1,00
0,50
0,60 0,60
2
0,23 0,30 *
0,25 0,30 Average dividend payout
0,20 0,17 0,12 0,10 0,10
since listing 104%
2013 2014 2015 2016 2017 2018 2019 2020
Dividend per
0.25 0,70 0,40 1.29 1,10 0,70 0,30
share 3
Dividend
59.6 112.4 60,5 241,4 277,0 155,2 47,2 Committed to distribute the
payout (%)
bulk of FCF post investments
Interim Dividend Remaining Dividend Special Dividend
* Pending AGM approval
© OPAP
17OPAP Strategy
To establish OPAP as a world class gaming entertainment company
“ OPAP’s Q1 2020 was a double faced quarter; on the one hand we
managed to demonstrate sizeable growth stemming mostly from VLTs
and betting up to March 13th, while from March 14th onwards our
retail estate was closed down leading to a severe decline of the Group’s
revenues. Nonetheless, we reported an overall solid set of results by
putting promptly into effect our business continuity plan, achieving
• Embedding Customer Obsession
material cost savings and enhancing liquidity.
• Investing In Our Network During this exceptional period, our focus and preparatory work related
• Developing Our People to online, started paying off; we delivered strong customer growth,
while significantly improving our online product offering through the
• Building a World-class Portfolio of Products & Services launch of virtual and casino games. At the same time, we reached an
• Leveraging the latest Digital & Technology Capabilities agreement to acquire an additional stake in Stoiximan’s Greek &
Cypriot business, aiming to reach an effective 84.49% holding.
• Committing to Our Communities
OPAP stores and Hellenic Lotteries’ street vendors resumed operations
• Expanding the Power of Our Brand on May 11th, while the VLTs PLAY network restarted on June 8th under
material restrictions and precautions as our agents’ and customers’
• Rebuilding healthy relationships with the State, Regulator and other bodies
safety always comes first.
M, I would like to extend my appreciation to our network for both their
swift adaptation to the new norm and working conditions as well as for
their strong will to resume their business leading to an impressive 99%
reactivation rate right from the very first day of reopening. I am
”
confident that our agents’ and employees’ hard work, positive spirit
and commitment will drive once more OPAP’s business forward.
Commenting on the Q1 2020 financial
results, OPAP’s acting CEO, Mr. Jan
Karas, noted that: © OPAP
18Video Lottery Terminals (VLTs)
License Agreement
• Fully paid 18 years exclusive license of
€560m for the operation of 25,000 VLTs
• VLTs will add a “growth engine” to OPAP’s
performance potential and is expected to be
amongst the most significant contributors to
OPAP’s EBITDA in the long-term
• HR to receive 30%-35% of GGR in the form of
royalties
• Max. allowed number of VLTs per venue: 50 in Gaming
Halls and 15 in existing OPAP agencies
• Full deployment of 25k VLTs since end of 2019
© OPAP
19Video Lottery Terminals (VLTs)
Rollout completed as planned and on schedule – focus now on optimisation
Performance overview Customers Overview
440,2 480,4
288,3
148,5 115,8 131,3
27,8 74,77
FY '17 FY '18 FY '19 Q1 '20
Active Players / monthly avg. ('000)
Registered base ('000)
Age Group 70% 30%
Rollout complete: All 25,000 installed and certified
19% 26%
by regulator Above 45yrs (Male)
Record customers: Registered base 480k, monthly Below 45yrs (Male)
11%
actives >130k Above 45yrs (Female)
Expanded Product Portfolio: Increased number of Below 45yrs (Female)
new VLT games 44%
© OPAP
20Video Lottery Terminals (VLTs)
Delivering a truly entertaining gaming experience
Operational Highlights (Q1 ‘20)
Avg. spending per visit Communication
Opt-in rate
28€ 75%VLTs enhancement
Introduce new play games & features Engage with promo events
From
39 to… 97 unique
Play games
Launch of VLT Jackpot Xmas Ladies Party
campaign night night
across all machines
Match of Lucky
the day Pizza
draws night
Different stores formats & more typologies Promotional activities & CRM initiatives
1 Low budget 2 Standard store
store with up to with 30-50 VLT’s
25 VLT’s
4
3
Flagship store Block with OPAP
with differentiated store and Gaming
design Hall
© OPAP
22Leveraging on on-line gaming
market development
Parallel & district strategies to capitalize on this growing online market trend
On-line segment is the most fast Stoiximan Group Investment
growing part of Greek gaming market
Transaction’s perimeter
3.6% Online CAGR: 14,0%
19.4% Acquisition of a 36.75%
stake in the mother
1 company of Stoiximan Concluded
Group, TCB Holdings Ltd,
Phase
for a consideration of €50m
Acquisition of additional
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
stake to reach 84.5% and • pending final
X% Share of on-line market Land-based On-line 2 sole control of Stoiximan approval from
Group’s Greek and Cypriot competent
OPAP Online operations. authorities
Net consideration:
• Pame Stoixima, Joker & recently €163.4m, plus net cash
virtuals and casino games
already available online • The leading online operator in Greece (c.49% market share, 2019) and
amongst market leaders in Cyprus and Romania.
• 90k Q1’20 monthly avg. active customers,
€38m Group 194k
with international evidence pointing out to €242.7m Q1’20
higher penetration in the future FY’19 GGR €44m GR/CY active players/
• Significant opportunity to leverage OPAP’s
(after deducting bonuses) FY’19 Ebitda monthly avg.
strong brand name Q1’20: Total GGR +63% y-o-y, Casino outperformance: +91% y-o-y
© OPAP
23Social Responsibility
The largest social contributor in Greece measured in overall expenditure and variety of actions
Promoting trust strategic framework
COMMUNITY
TRUST
Health Sports Sensitive
Employment
Groups
WORK MARKET ENVIRON-
PLACE PLACE MENT
Employee Responsible Environmental
Engagement Gaming Footprint
Level 4 (highest) Certificate in Responsible Gaming by the
World Lottery Association
“OPAP S.A. is a member of the World Lotteries Association (WLA) and the European Lotteries (EL) as well as the Global Lottery
Monitoring Systems (GLMS), independent unions composed of state or state-licensed lottery companies.
© OPAP
24OPAP in Summary
Sole Concessions Sales Network Significant Cash Flows
• A 50+year exclusive • Largest retail network in • Bulk of FCF (excl. any
concessions backlog with the Greece investment) will continue to be
earliest expiration in 2026 distributed as dividends
• Significant growth coming • Ongoing focus on cost • Possesses significant
from the ongoing VLTs roll- efficiencies demonstrating expertise, local know-how and
out, online & rejuvenation of tangible results & delivering knowledge of the gaming
current products additional savings industry
Strong Fundamentals Ongoing cost control Solid Management Team
© OPAP
25Contacts
Nikos Polymenakos George Vitorakis
Investor Relations Director Business Development &
Strategic Analysis Director
polymenakos@opap.gr vitorakis@opap.gr
Tel : +30 210 5798929 Tel : +30 210 5798976
© OPAP
26Notes
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27Notes
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