Company Presentation

Transcription

1 Company Presentation December 2017

2 Agenda History Company Overview Financial Overview Strategy Social Responsibility Summary

3 The Story so far 1958 Launch of PROPO (The Greek Football Pools Game) years exclusivelicense contract with the Hellenic State Launch of PAME STIHIMA (sportsbetting) 2001 Launch of KINO Establishment of the Greek Organization of Football Prognostics 1959 OPAP incorporated as a Societe Anonyme 2000 Listed in the Athens Stock Exchange Acquisition of Hellenic lotteries 12- year concession Q Launch of Hellenic Lotteries & Online Q Operations commencement of VLTs Launch of Pame Stihima Virtual Football & SSBTs 3 Extension of exclusive license until 2030 Award of Video Lottery Terminals (VLT) license 2013 Transfer of 33% stake to Emma Delta for 652m. Q Horse Races operations commencement & launch of horse races mutual betting 2017

4 Company Overview As of 11 October 2013, OPAP is Exclusive concession extended up until 2030 The leading Greek 100% private under new management Historic high dividend pay-out policy gaming company Market cap on Athens Exchange c. 3.2 bn (Nov. 2017) Presence in Cyprus 4 c. 70.2% of the total Greek gaming market of 2016 Gross Gaming Revenue (GGR) Largest retail network in Greece As of subject to 35% GGR contribution 2016 Revenues (GGR) of 1,397.6m and EBITDA of 307.5m

5 Public offerings - Shareholder Structure Emma Delta Hellenic Holdings Ltd 33,00% Date (%) Offering price ( ) 25 April ,36% Initial Public Offering (IPO) 5,5 18 July ,90% Secondary offering 8,44 14 July ,45% Secondary offering 9,44 21 July ,44% Secondary offering 24,14 11 October ,00% Public tender 6,2 Free Float 67,00% 5

6 The Greek Gaming Market: A Comparative Review Although it has been declining due to macro related factors, Greek Gross Gaming Yield as % of the GDP continues to compare favorably with many European peers 2016 gross gaming yield ( bn and % of GDP (1) ) 1,18% 19,5 0,76% 17,1 0,36% 11,1 0,45% 9,9 0,76% 8,5 0,38% 0,49% 0,75% 2,6 2,3 2,1 2,0 1,9 1,5 1,4 1,3 1,3 1,2 0,95% 1,08% 0,35% 0,78% 0,38% 0,47% 0,69% Average: 0.66% In bn Italy UK Germany France Spain NetherlandsSweden Ireland Finland Greece Belgium Portugal Austria DenmarkChech Rep In % of 2016 GDP 2016 gross gaming yield per adult (2)(3) ( ) Ireland Finland Italy UK Sweden Denmark Slovenia Luxembourg Spain Greece Netherlands France Austria Portugal Belgium The Greek gaming market is a fundamentally attractive market : 1. 10th largest gambling market in the European Union (2016 gross gaming yield of 1.89bn) in absolute value after Italy, United Kingdom, Germany, France, Spain, Netherlands, Sweden, Ireland and Finland which all benefit from higher GDP gross gaming yield per adult of 199 (10th highest in Europe) gross gaming yield representing 1.08% of GDP (2 nd highest amongst the graph s sample used to be the highest in 2010) 6 Source: H2GC Note: Charts include top-15 EU-28 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 (3) Excluding Malta and Cyprus

7 Greek Legal Market Wagers Overview The macroeconomic crisis led to a market decline of c. 39% m In the same period OPAP gained 14.9 p.p. market share % 34.8% 36.5% 34.8% 32.9% % 30.1% % 28.6% 31.4% 29.6% 28.0% 28.0% % 20.6% 41.3% 38.5% 40.1% 37.5% 41.5% 41.5% 44.0% 50.5% 52.0% 56.3% 56.2% 58.2% 60.4% 63,5% 65.0% 62.8% 65.0% 70.9% 71.1% 9.8% 8.0% 7.5% 7.2% 5.9% 11.4% 8.9% 4.5% 4.3% 8.2% 7.2% 4.0% 7.0% 6.2% 7.5% 4.7% 4.1% 3.7% 6.3% 5.4% 3.7% 4.7% 4.2% 3.2% 3.2% 3.0% 3,9% 4.4% 4.4% 2.5% 1.9% 1.4% 1,1% 1.1% Horse Racing Instant Lotteries Passive Lotteries OPAP Casinos 7 Source: OPAP s reported numbers (Greek operations only); H2 Gambling Capital Note: since 2014 Instant and passive lotteries wagers and since 2016 Horse racing wagers are included in OPAP s numbers

8 OPAP is the Undisputed Leader of the Greek Gaming Market OVERVIEW OF THE GREEK GAMING MARKET 2016 GREEK GAMING MARKET (GGR) The Greek regulated gaming market comprises of three sectors: Lottery: OPAP and the Passive Lottery Division Casinos: includes all games played within casinos Betting: dominated by sports betting (OPAP) but also includes domestic horserace betting (OPAP since Jan. 2016) Horse racing International e- gam ing operators 16% OPAP Numerical Games Like most other European lottery markets, the Greek gaming market is regulated and controlled by the Hellenic Gaming Commission Ethniko, Kratiko and Laiko, the passive lottery-style games, represent c. 3.5% of the market Scratch games, were successfully re-introduced in May 2014 by an OPAP led consortium, generating. Casinos 0,5% 14% 41% The Greek casino market consists of 9 licensed casinos, generating 14% of the total market s gross gaming revenue, Instant & Passives 9% dominated by Parnitha, Thessaloniki and Loutraki Pari-mutuel horserace betting since January 2016 is being OPAP Sports Betting 20% operated by OPAP S.A. following the acquisition of a relevant 20- year license for a total consideration of 40.5m Fixed odds sports betting is solely organized by OPAP, yielding 382m of gross gaming revenue in Market size: 1.89bn 8 Source: OPAP s reported numbers ; H2 Gambling Capital

9 Online Horse Racing Instant & Passives VLTs Legacy Games 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 (100% already paid by OPAP) Oct 2000 May 2014 Jun 2014 Jan 2016 Jan 2017 Oct 2020 May 2026 Jan 2027 Oct 2030 Jan Jan mn Concession Agreement (20 years) 375mn License fee to be negotiated on a case by case basis Right of first refusal for any other game to be licensed by the Hellenic Gaming Commission Concession Extension Agreement (10 years) 560mn 2011 VLT License (18 years) + Right to renew 127mn (1) 2013 State Lotteries Concession Agreement (12 years) 40.5mn 2016 Horse Racing Concession Agreement (20 years) Included in upfront payments for legacy licenses Exclusive Right for online offering of OPAP s exclusive lottery games 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

10 OPAP s Competitive Advantage is Based on a Diversified Product Offering and a Widespread Network OPAP GAME OFFERING % OF 2016 REVENUE (GGR) A WIDESPREAD NETWORK OF AGENTS STIHIMA Introduced in 2000 SPORTS BETTING PROPO PROPO- GOAL Introduced in 1959 Introduced in % MONITOR Introduced in 2011 KINO Introduced in 2003 JOKER Introduced in 1997 LOTTO Introduced in 1990 LOTTERIES PROTO SUPER 3 Introduced in 1992 Introduced in % EXTRA 5 Introduced in 2002 Source: Company GO LUCKY Introduced in 2011 INSTANT & PASSIVES SCRATCH LAIKO Introduced in 2014 Introduced in % Cyprus accounts for c.5% of revenues ETHNIKO Introduced in Source: Company

11 Network The largest commercial network in Greece 4,727 POS* Petrol stations Post Gas stations Bank Bank Bank Bank Telecoms 11 From the past to the cohesive corporate branding image of today * Greece & Cyprus network as of Hellenic Lotteries products are distributed through additional 7,191 POS & Street Vendors

12 OPAP s Greek Revenue (GGR) Breakdown m Instant & Passives Sports betting Lotteries Lotteries Sports betting Instant & Passives 12

13 Games Product Matrix Stihima Joker Lotto Propo Proto Super 3 Extra 5 Propo- Goal Kino Monitor Games Scratch Laiko Ethniko Agent Commission 2017: 39% of NGR* 2018: 37% of NGR* : 35%+1% of NGR* as bonus adjustment is conditional upon achieving 6% average NGR* growth vs % 12% 12% of wagers 13 Frequency of play Daily Twice weekly Twice weekly Three times weekly Twice weekly * NGR mentioned in this case is defined as GGR minus GGR contribution Ten draws daily Two draws daily Once a week 180 draws daily On going Daily On going Daily Once a week 18 draws annually

14 Diversified distribution network Games Agencies Gaming Halls Internet Street Vendors & Third Party POS (VLTs) (Scratch) Passive Lotteries 14

15 Financials It s all about numbers 15

16 Financial Performance OPAP FINANCIAL OVERVIEW In m Wagers 3,177 3,695 4,633 5,066 5,520 5,441 5,140 4,359 3,972 3,711 4,259 4,257 4,230 Growth% 39.2% 16.3% 25.4% 9.3% 9.0% (1.4%) (5.5%) (15.2) (8.9) (6.6) 14.8 (0.0) (0.6) Revenue (GGR)* 1,242 1,338 1,562 1,597 1,852 1,781 1,654 1,413 1,302 1,220 1,378 1,400 1,398 Growth % (3.8) (7.1) (14.5) (7.9) (6.3) (0.2) EBITDA , Margin (% of GGR) Net Debt / (Cash) (377) (412) (384) (493) (706) (700) (657) 97 (117) (77) (297) (155) (108) COMMENTS 1 OPAP has recorded strong top line growth since 2003, mainly driven by: 2003: Introduction of Kino 2007: Stihima risk management operation was taken in-house : Development of betting portfolio events through introduction of new features in Stihima and increase of Kino daily playing hours Source: Company reports * Gross Gaming Revenue 2014: Introduction of Scratch and passive lotteries WAGERS AND MARGIN EVOLUTION SINCE Recent performance has been impacted by the adverse economic environment: 53% 53% 47% 54% 57% 54% 55% 52% 52% 1 18% 25% 26,9% 22% 2 4 Overall performance affected by satisfactory Kino performance, launch of Instant & Passives in 2014, while Stihima is affected by cyclicality of major football events every 2 years 4,633 5,066 5,520 5,441 5,140 4,359 3,177 3,695 3,972 4,259 4,257 3,711 4,230 3 January 2013: a 30% GGR contribution is introduced January 2016: GGR contribution increased at 35% Wagers (in m) EBITDA Margin (as % of GGR) 16 Source: Company reports

17 Financial Overview Revenue (GGR) ( m) EBITDA ( m) '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 ' '01 '02 '03 '04 '05 '06 07 '08 '09 '10 ' * EBIT ( m) Net Profit ( m) '01 '02 '03 '04 '05 '06 07 '08 '09 '10 ' * '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 ' * *: First year of 30% GGR contribution implementation Since 2016 GGR contribution at 35%

18 Financial Results 9M 2017 (1/2) Department Stores +0,8% New investments delivering strong Q3 performance Food/Tobacco -2,8% Retail Sales (excl. fuels) 8M ,3% Pharmaceuticals +1,9% Greek GDP 6M % Furniture & Household Equipment +5,0% 3,500 3,000 2,500 2,000 1,500 1, Wagers( m) +5.6% 3,044 3,214 9M M Gross Gaming Revenue ( m) +4.8% M M EBITDA* ( m) Net Profit* ( m) -4.1% -10.5% M M M M 2017 * Recurring figures excluding one-off items

19 Financial Results 9M 2017 (2/2) Reported figures Recurring figures* EBITDA ( m) EBITDA margin on GGR Net Profit ( m) Net Profit margin on GGR 3,2%* 19 * Recurring figures excluding one-off items

20 Dividend Policy Avg. 16 years dividend yield: 10% 2,50 2,00 1,50 1,00 0,93 0,94 1,03 Total dividend paid since listing 17.7 vs. IPO price of 5.5 1,14 1,40 1,10 0,96 Additional distribution of retained earning 0.70 per share, pending approval by the EGM scheduled for ,57 0,50 0,00 0,40 0,43 0,43 0,80 0,50 0,55 0,48 0,55 0,60 0,65 0,58 0,72 0,60 0,57 0,23 0,17 0,27 0,30 0,25 0,20 0,17 0,12 0, Dividend per share ( ) ,70 0, ,10 Dividend payout (%) ,5 241,4 20 Interim Dividend ( ) Remaining Dividend ( ) Special Dividend ( )

21 After a solid first half of the year, Q3 marked a return to meaningful growth in both revenues and profitability for OPAP. This growth was To establish OPAP as a world class gaming entertainment company primarily driven by a strong performance from our portfolio of Betting products, including SSBTs Embedding Customer Obsession and Virtuals, and an increased contribution from VLTs. Investing In Our Network Notwithstanding the increasing pressures on our Developing Our People customers disposable income, OPAP is demonstrating that it can offer a broad range of Building a World-class Portfolio of Products & Services attractive, gaming entertainment experiences. Leveraging the latest Digital & Technology Capabilities We continue to invest heavily in our products, our technology and our people in the delivery of our Committing to Our Communities 2020 Vision and further progress has been made Expanding the Power of Our Brand in each of our 8 strategic objectives. These results are already demonstrating the early benefits of Rebuilding healthy relationships with the State, Regulator and other bodies these investments and are also testament to the hard work and contributions from everyone in the OPAP team, both our employees and our agents. We have also been intensifying our efforts in the important areas of corporate and social responsibility, including further investment in responsible gaming policies and programmes, while also working closely with the authorities in the battle against illegal gaming. Looking forward, we have a particularly busy few months ahead with a number of important milestones for both our technology migrations and product rollouts, but remain confident that we will deliver on our objectives for FY17 and beyond. 21 OPAP Strategy Commenting on the Q financial results, OPAP s CEO, Mr. Damian Cope, noted that:

22 Video 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 longterm HR to receive 30%-35% of gross win in the form of royalties Max. allowed number of VLTs per venue: 50 in Gaming Halls and 15 in existing OPAP agencies Deployment deadline: December 31,

23 Video Lottery Terminals (VLTs) New Products - VLTs roll-out and performance ramp up in line with our expectations Rollout - progressing well Performance - ramp-up underway VLTs roll-out GGR / VLT / day* 47 Q3 Post holiday period 1 Installed machines almost doubled in Q3 vs Q2 23 Increased roll-out pace expected until end 2017 Over 7,000 VLTs operational in Nov ,355 1,548 3,261 machines 2 machines 3 machines 3 (1) Last week of August and full month of September (2) Machines operated in Q1. Calculation based on weighted avg. (3) Fully operational from the first week of the quarter

24 New technology providers shifting from a heritage sole vendor dependence Channel Retail Gaming Halls Digital Platform/ Application Horse Racing* Lottery VLTs Horse Racing* Lottery Sportsbook Sportsbook Content Sportsbetting (OTC, SSBTs) Pre game & Live betting, Virtuals, Horse Racing Kino, Tzoker & numeric games VLTs Sports Pre game & Live betting, Horse Racing Kino, Tzoker & numeric games Virtuals 24 *IGT provides the Horse racing pool engine Player Account Management

25 Social Responsibility Both concession extension and VLTs license have been granted on the ground of OPAP s social sustainability The largest social contributor in Greece measured in overall expenditure and variety of actions. Responsible Game: OPAP is offering entertainment and recreation while protecting underage and other vulnerable groups. POS exclusive to gaming activities. European Responsible Gaming Standards and Sports betting Code of Conduct have been adopted by OPAP. OPAP supports the Therapy Centre for Dependent Individuals (KETHEA-ALFA) for the operation of the help-line OPAP transforms its business excellence into social contribution, through an integrated Corporate Social responsibility (CSR) Strategy. OPAP achieved significant recognition and awards by a number of independent agencies & bodies. OPAP received a level 3 accreditation by the World Lottery Association (WLA) for its Responsible Gaming strategy 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. 25

26 OPAP in Summary Sole Concession until 2030 Sales Network Significant Cash Flows Permits OPAP to enjoy the growth of the Greek Gaming Market Largest retail network in Greece Secure & stable Dividends and effective Investment Policy Favourable Market Dynamics, Credibility and Growth Possesses significant expertise, local know-how and knowledge of the gaming industry Strong Fundamentals Solid Management Team 26

27 Contacts Nikos Polymenakos Investor Relations Director Tel : +30 (210) George Vitorakis Head of Strategic Research vitorakis@opap.gr Tel : +30 (210)

28 Notes 28

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