OPAP hails “healthy” Q3 despite revenue decline

Group sales for the three months to September 30 were €481 million (£418. 5 million/$524. 4 million), 3. 6% below OPAP's results for the same period last year.

Karas said that a tough third quarter year-on-year comparison led to OPAP's lower profits. However, he highlighted several key developments that support its long-term growth plans.

One of these was the continued growth in Opaponline. gr's new online lottery proposition. He also noted the impact of revamping OPAP's lottery-based games and the success of repositioning the lotto as a pension game.

Karas said these achievements, combined with other developments in the third quarter, would drive year-on-year growth in financial year 2023.

"OPAP delivered a healthy performance in the third quarter, driven by the continued growth of our online business, despite challenging year-on-year results and headwinds to the top line. "During the quarter, we continued to focus on the implementation of our strategic priorities, further enhancing our product portfolio and strengthening our online business.

"Within this framework, our new lottery proposal, Opaponline. gr, continued to record double-digit growth rates. We focused on the renewal of our lottery-based games. The recent repositioning of Lotto as an annuity game was welcomed by customers and agents and delivered encouraging initial results.

"As we approach the end of the year, we are confident that our resilient business model will continue to deliver strong returns for our shareholders, while delivering on our commitments to sustainability and social responsibility.

Lottery and betting declines push revenue down in Q3

In terms of the breakdown of OPAP's performance in the third quarter, lotteries remained the main source of total gaming revenue at €166 million. However, this was mainly due to an unfavourable Tzoker jackpot rollover cycle and the slowdown in 2022. This was down 8. 0% year-on-year, due to the company's strong performance in 2019.

Betting revenues also fell 7. 8% to €144 million. OPAP attributes this to a reduced event calendar and customer-friendly sports performance. However, OPAP also noted a promising expansion of the customer base, helped by foot traffic in its stores.

Other positive news came from the video lottery terminal (VLT) business, where sales rose 2. 3% to €82. 9 million. OPAP said the segment continued to show an upward trend in revenues.

Online casino revenues also increased 13. 4% to €62. 5 million. This was due to higher player engagement levels, combined with the cross-play possibilities for sports betting players.

However, instant and passive income fell 1. 7 % to € 25. 6 million, mainly due to the decrease in scratch games.

Expansion efforts lead to spending hike at OPAP

Looking at costs, the cos t-related costs related to game revenue fell below the same period of the previous year. However, operating costs increased by 44. 4 % to € 114. 6 million. According to OPAP, this is due to the increase in spending to support retail and online expansion efforts.

The depreciation expenses reached 33. 4 million euros, and the pure finance costs reached 3. 7 million euros. As a result, the tax before tax was reduced by 30. 9 % yea r-o n-year to € 18. 3 million.

OPAP paid 21 million euros in the third quarter, so net income was 87. 1 million euros, down 28. 3%from 2022. EBITDA also fell 26. 4 % to € 26. 4 % to € 145. 4 million in the same period of the previous year.

Year-to-date figures make for more positive reading

Regarding how the third quarter had a total achievement, the sales for nine months until September 30 were 1. 51 billion euros. This increased 7. 8 % from the same period in 2022.

Lottery revenue increased by 3. 3 % to 532. 4 million euros, and betting income increased to 4. 9 % to 464. 6 million euros. VLT income increased by 10. 4 % to € 248. 3 million, and online casino income increased 26. 4 % to 175. 5 million euros. Instant and passive income are 85. 7 million euros (up 12. 7 % yea r-o n-year).

Looking at the expenditure, the cost of gaming income increased by 10. 1 % to 420. 5 million euros, and operating costs increased to 299 million euros to € 19. 0 %. However, depreciation costs were slightly reduced to 98. 2 million euros, and pure financial expenses reached 8. 8 million euros.

Increased profits offset the increase in expenditures and raised 9. 0 % to 412. 9 million euros, increasing 9. 0 % of tax. Corporate tax payments were € 21. 7 million, and net income was € 315. 8 million, an increase of 9. 4%from 2022.

However, according to OPAP, EBITDA for nine months fell 2. 5 % to 5199 million euros.

OPAP faces heavy Hellenic Gaming Commission fine

A few weeks after the end of the third quarter, OPAP was hit by the Helenic Gaming Committee for 24. 5 million euros. According to regulatory authorities, this was associated with the fact that OPAP violated the Greek elements and abused the market in the market.

Noticeable violations include Article 2 of the Act 3959/2011. This defines the protection of free competition in Greece. The law prohibits companies from abuse "dominant status" in the domestic market. OPAP used to be an exclusive status in the Greek market.

Article 2 is also prohibited to restrict unreasonable settings and restrict technical equipment distribution. An unfair transaction with others and agreement on a contract on the condition of accepting supplementary obligations also conflicts with this law.

OPAP was also allegedly violated in Article 1. This means that all companies trading in Greece should not fix their purchase prices, limit their investment opportunities, or unjustly apply conditions to transactions.

HGC also ruled that OPAP violated Article 101 and 102 of the European Function Treaty (TFEU). These are the same requirements as Article 1 and 2 of the Law 3959/2011.

OPAP, on the other hand, said that the decision to impose a fine was incorrect. The reason is that the decision is based on the core business in the gaming market. Instead, OPAP stated that it was based on the service provided by the agency.

OPAP further added to the decision, "I do not strongly agree."

Earnings call: OPAP S.A. reports robust Q1 2024, eyes on Euro event

Greek lottery and sports betting operating company OPAP S. A. (OPAP. AT) reported that the starting in 2024 was strong, especially online's business performance, and a successful dra w-bace game portfolio was renewed. At a telephone conference on the first quarter of the Financial Results, Yang Crow's Chief Executive Officer (CEO) introduced that the growth rate in the online market had reached 25 % and exceeded the industry average of 9 to 10 %.

Pavel Mucha CFO said that it would increase in the second quarter of the second quarter due to the Euro Sports event, but would decrease in the second half. Despite inflation pressure, there is no significant impact on operating costs. Management is confident in achieving the outlook in 2024.

Key Takeaways

• OPAP S. A.'s online section has grown significantly by 25 %, exceeding the market growth rate.
• The company is preparing for an increase in marketing costs associated with the Euro event in the second quarter, but is expected to decrease in the third and fourth quarters.
• Inflation pressure has been pointed out, but it is not a major concern about operating costs at present.
• The I Lotry division showed a positive growth and contributed to the company's strong performance.
• The CEO, CEO, and the CEO of Pavel Mucha (CFO), have been confident in achieving the upcoming guidance in the 2024 period.

Company Outlook

• The company has a good start for 2024 and is confident in achieving the ful l-year guidance.
• The royalty is expected to grow in the first half of the singl e-digit, and in the first quarter has already confirmed solid performance.
• The main sporting events, especially the Euro event, are expected to increase gaming activities and contribute to the company's finances positively.

Bearish Highlights

• The influence of the Euro event is unclear, but the expected value is still high.
• Inflation pressure is observed, and this trend may affect operating costs in the future.

Bullish Highlights

• The online and the I-Lotto department is growing powerfully.
• Planning to renew the category of scratch cards, and continuous investment in retail and online experiences are expected to promote future growth.
• The achievements in the first quarter are as expected, and we can be confident for the rest of the year.

Misses

• At the financial statements, no financial mistakes were reported.

Q&A Highlights

• The Q & A session featured topics on labor costs, i n-house shares, trading for the second quarter, licensing, and betting performance.
• The company provided a sense of security and details on each of the questions asked, strengthening the overall positive outlook in 2024.

In summary, OPAP S. A. achieved a strong performance in the first quarter of 2024, the online business grew significantly, and the outlook for the coming Euro event was bright. The company's leaders are confident in achieving their goals this year, and are investing in improving both retail and online customer experiences. Despite some concerns, OPAP S. A.'s financial soundness seems to be solid because we look forward to using major summer sporting events.

InvestingPro Insights

It is worth paying attention to the performance of other companies in the gaming betting industry, based on the fact that OPAP S. A. had a strong start for 2024. GOFPY, a company in this sector, has some interesting contrasts and similarities that can provide additional contexts to OPAP's performance and strategy.

GOFPY hints by investment professionals emphasize high shareholder yields and impressive gross profit margins, indicating the value of the company's value and reduction. Analysts also expect OPAP S. A.'s positive prospects to be the sales growth this year. In addition, GOFPY has been paying dividends for 24 consecutive years, and has been evaluated as a proof of the company's financial stability and commitment to shareholders. < SPAN> inflation pressure is observed, and this trend may affect operating costs in the future.

The online and the I-Lotto department is growing powerfully.

Planning to renew the category of scratch cards, and continuous investment in retail and online experiences are expected to promote future growth.

Full transcript - Greek Org of Football Prognostics (GOFPY) Q1 2024:

The achievements in the first quarter are as expected, and we can be confident for the rest of the year.

At the financial statements, no financial mistakes were reported.

The Q & A session featured topics on labor costs, i n-house shares, trading for the second quarter, licensing, and betting performance.

The company provided a sense of security and details on each of the questions asked, strengthening the overall positive outlook in 2024.

In summary, OPAP S. A. achieved a strong performance in the first quarter of 2024, the online business grew significantly, and the outlook for the coming Euro event was bright. The company's leaders are confident in achieving their goals this year, and are investing in improving both retail and online customer experiences. Despite some concerns, OPAP S. A.'s financial soundness seems to be solid because we look forward to using major summer sporting events.

It is worth paying attention to the performance of other companies in the gaming betting industry, based on the fact that OPAP S. A. had a strong start for 2024. GOFPY, a company in this sector, has some interesting contrasts and similarities that can provide additional contexts to OPAP's performance and strategy.

GOFPY hints by investment professionals emphasize high shareholder yields and impressive gross profit margins, indicating the value of the company's value and reduction. Analysts also expect OPAP S. A.'s positive prospects to be the sales growth this year. In addition, GOFPY has been paying dividends for 24 consecutive years, and has been evaluated as a proof of the company's financial stability and commitment to shareholders. Inflation pressure is observed, and this trend may affect operating costs in the future.

The online and the I-Lotto department is growing powerfully.

Planning to renew the category of scratch cards, and continuous investment in retail and online experiences are expected to promote future growth.

The achievements in the first quarter are as expected, and we can be confident for the rest of the year.

At the financial results briefing, no financial mistakes were reported.

The Q & A session featured topics on labor costs, i n-house shares, trading for the second quarter, licensing, and betting performance.

The company provided a sense of security and details on each of the questions asked, strengthening the overall positive outlook in 2024.

In summary, OPAP S. A. achieved a strong performance in the first quarter of 2024, the online business grew significantly, and the outlook for the coming Euro event was bright. The company's leaders are confident in achieving their goals this year, and are investing in improving both retail and online customer experiences. Despite some concerns, OPAP S. A.'s financial soundness seems to be solid because we look forward to using major summer sporting events.

It is worth paying attention to the performance of other companies in the gaming betting industry, based on the fact that OPAP S. A. had a strong start for 2024. GOFPY, a company in this sector, has some interesting contrasts and similarities that can provide additional contexts to OPAP's performance and strategy.

GOFPY hints by investment professionals emphasize high shareholder yields and impressive gross profit margins, indicating the value of the company's value and reduction. Analysts also expect OPAP S. A.'s positive prospects to be the sales growth this year. In addition, GOFPY has been paying dividends for 24 consecutive years, and has been evaluated as a proof of the company's financial stability and commitment to shareholders.

GOFPY's prominent InvestingPro data indicators have 13. 17 PER (after adjustment) in the last 12 months as of the first quarter of 2024, suggesting a valid evaluation of profits. The gross profit margin in the same period is 59. 54%, supporting the company's efficiency of maintaining profitability. Finally, as of May 2024, the dividend yield is 19. 3%, which should be noteworthy, and will attract the interest of investors seeking income gain stocks.

Investors who are interested in games and betting may find value in comparing OPAP S. A.'s performance with these indicators and InvestingPro Tips. Https: //www. inating. com/pro/goFpy for further insights and further hints related to GOFPY. Using the coupon code Pronews24 will give you a 10%discount on annual or bilingal Pro and PRO+subscriptions. GOFPY has 11 more InvestingPro Tips, which may be useful for investing in this industry.

Operator: Everyone, thank you. It is an operator Constantino. Thank you for participating in OPAP S. A.'s telephone conference on the first quarter of 2024 and the Q & A session by the live webcast. Video presentations are distributed and can be viewed on websites for OPAP investors. All participants are only listening, and the meeting is recorded. At this point, I would like to take over the meeting to OPAP S. A. CEO's Yang Karas. < SPAN> GOFPY's prominent InvestingPro data indicators have 13. 17 PER (after adjustment) in the past 12 months as of the first quarter of 2024, suggesting a reasonable evaluation of profits. The gross profit margin in the same period is 59. 54%, supporting the company's efficiency of maintaining profitability. Finally, as of May 2024, the dividend yield is 19. 3%, which should be noteworthy, and will attract the interest of investors seeking income gain stocks.

Investors who are interested in games and betting may find value in comparing OPAP S. A.'s performance with these indicators and InvestingPro Tips. Https: //www. inating. com/pro/goFpy for further insights and further hints related to GOFPY. Using the coupon code Pronews24 will give you a 10%discount on annual or bilingal Pro and PRO+subscriptions. GOFPY has 11 more InvestingPro Tips, which may be useful for investing in this industry.

Operator: Everyone, thank you. It is an operator Constantino. Thank you for participating in OPAP S. A.'s telephone conference on the first quarter of 2024 and the Q & A session by the live webcast. Video presentations are distributed and can be viewed on websites for OPAP investors. All participants are only listening, and the meeting is recorded. At this point, I would like to take over the meeting to OPAP S. A. CEO's Yang Karas. GOFPY's prominent InvestingPro data indicators have 13. 17 PER (after adjustment) in the last 12 months as of the first quarter of 2024, suggesting a valid evaluation of profits. The gross profit margin in the same period is 59. 54%, supporting the company's efficiency of maintaining profitability. Finally, as of May 2024, the dividend yield is 19. 3%, which should be noteworthy, and will attract the interest of investors seeking income gain stocks.

Investors who are interested in games and betting may find value in comparing OPAP S. A.'s performance with these indicators and InvestingPro Tips. Https: //www. inating. com/pro/goFpy for further insights and further hints related to GOFPY. Using the coupon code Pronews24 will give you a 10%discount on annual or bilingal Pro and PRO+subscriptions. GOFPY has 11 more InvestingPro Tips, which may be useful for investing in this industry.

Operator: Everyone, we have been waiting. It is an operator Constantino. Thank you for participating in OPAP S. A.'s telephone conference on the first quarter of 2024 and the Q & A session by the live webcast. Video presentations are distributed and can be viewed on websites for OPAP investors. All participants are only listening, and the meeting is recorded. At this point, I would like to take over the meeting to OPAP S. A. CEO's Yang Karas.

Yang Crow: Thank you very much, Constantino. Welcome to a telecommodement meeting for the first quarter of 2024. The achievements in the first quarter are generally as expected and are satisfied. More details, online continued to grow and greatly contributed to GGR, while retail has further solidified its position. The renewal of the dra w-based game portfolio has progressed, with the initial results that show the solid growth of the GGR, which is mainly the release of the Euro Jackpot, and the new lots and the new TZOKER are also welcomed by players. In addition to these developments, the increasingly motivation of gaming by major sporting events held in the summer gives you confidence in achieving the outlook in 2024. By the way, I think that you enjoyed watching today's video, so I would like to move on to a question and answer session. Constantino, please,

Operator: The first question is from the Euro Bank Equity Dradio Tis Stamatios. please.

DRAZIOTIS STAMATIOS (hereinafter Stamatios): Yes, Hello, Yang. Thank you for answering my question. Let me ask some questions. First, about expenses. In the press release, you stated that marketing costs are ahead of product release and renewal of games. Also, how much do you think the marketing cost for the full year will be compared to the previous year? Also, please let us know if you have the opportunity to take off the inflation pressure, what kind of inflation you are facing, or if you have the opportunity to offset inflation pressure. This is the first question about expenses. And the second is a question about online. At least, at least based on gambling commission data, it seems that your company has increased digital sales by 15 % this term, compared to about 9 % of the online market. This also indicates an increase in share. According to your data, is this really the case? Also, can you give a little comment on the competition status in a wide range of online space? thank you very much. < SPAN> Yang Crow: Thank you, Constino. Welcome to a telecommodement meeting for the first quarter of 2024. The achievements in the first quarter are generally as expected and are satisfied. More details, online continued to grow and greatly contributed to GGR, while retail has further solidified its position. The renewal of the dra w-based game portfolio has progressed, with the initial results that show the solid growth of the GGR, which is mainly the release of the Euro Jackpot, and the new lots and the new TZOKER are also welcomed by players. In addition to these developments, the increasingly motivation of gaming by major sporting events held in the summer gives you confidence in achieving the outlook in 2024. By the way, I think that you enjoyed watching today's video, so I would like to move on to a question and answer session. Constantino, please,

Operator: The first question is from the Euro Bank Equity Dradio Tis Stamatios. please.

DRAZIOTIS STAMATIOS (hereinafter Stamatios): Yes, Hello, Yang. Thank you for answering my question. Let me ask some questions. First, about expenses. In the press release, you stated that marketing costs are ahead of product release and renewal of games. Also, how much do you think the marketing cost for the full year will be compared to the previous year? Also, please let us know if you have the opportunity to take off the inflation pressure, what kind of inflation you are facing, or if you have the opportunity to offset inflation pressure. This is the first question about expenses. And the second is a question about online. At least, at least based on gambling commission data, it seems that your company has increased digital sales by 15 % this term, compared to about 9 % of the online market. This also indicates an increase in share. According to your data, is this really the case? Also, can you give a little comment on the competition status in a wide range of online space? thank you very much. Yang Crow: Thank you very much, Constantino. Welcome to a telecommodement meeting for the first quarter of 2024. The achievements in the first quarter are generally as expected and are satisfied. More details, online continued to grow and greatly contributed to GGR, while retail has further solidified its position. The renewal of the dra w-based game portfolio has progressed, with the initial results that show the solid growth of the GGR, which is mainly the release of the Euro Jackpot, and the new lots and the new TZOKER are also welcomed by players. In addition to these developments, the increasingly motivation of gaming by major sporting events held in the summer gives you confidence in achieving the outlook in 2024. By the way, I think that you enjoyed watching today's video, so I would like to move on to a question and answer session. Constantino, please,

Operator: The first question is from the Euro Bank Equity Dradio Tis Stamatios. please.

DRAZIOTIS STAMATIOS (hereinafter Stamatios): Yes, Hello, Yang. Thank you for answering my question. Let me ask some questions. First, about expenses. In the press release, you stated that marketing costs are ahead of product release and renewal of games. Also, how much do you think the marketing cost for the full year will be compared to the previous year? Also, please let us know if you have the opportunity to take off the inflation pressure, what kind of inflation you are facing, or if you have the opportunity to offset inflation pressure. This is the first question about expenses. And the second is a question about online. At least, at least based on gambling commission data, it seems that your company has increased digital sales by 15 % this term, compared to about 9 % of the online market. This also indicates an increase in share. According to your data, is this really the case? Also, can you give a little comment on the competition status in a wide range of online space? thank you very much.

Pavel Mucha: Hello. I'll start by asking two questions. In the first quarter, marketing expenses were slightly brought forward due to the Lotto and Tzoker revamp and the launch of EuroJackpot. In the second quarter, marketing expenses will be even higher compared to the first quarter. Because we have a very important event, the Euro. The Euro is one of the highlights of the year and it always brings a lot of new players, both in retail and online. So we want to make sure we seize this opportunity. And we intend to increase our spending both in retail and online. In the third and fourth quarters, marketing expenses are expected to be lower year-on-year compared to the first and second quarters. And, related to the second question, because we have very high demand due to inflation and media, as well as constantly increasing competition. Overall, in the full year 2024, we will see a slight increase in marketing expenses compared to the full year 2023. Now, to your second question about inflation, Of course, there was a lot of inflationary pressure, especially in 2022 and 2023. But we have been negotiating very hard with our vendors on many important contracts. But we have been negotiating very hard with our vendors on many important contracts. There is some impact of inflation on our cost base, but it is not dramatic. It is not the main driver of the increase in operating expenses. So I would say inflationary pressure is not the main driver of the increase in operating expenses.

Jan Karas: Thank you. We continue to see good momentum in the entire non-exclusive market, not just in the first quarter, but also in the second quarter. The market data that GCU published is obviously for the non-exclusive market. There we see the market evolving in line with the numbers. You showed 9%, 10% growth, while OPAP Group has grown by about 25%. In that sense we are outperforming the market. As for iLottery, it is an equally important online business for us, which we serve exclusively. The year-on-year figures are not on a par because we introduced KINO online in April last year. So, in the last 12 months we have significantly strengthened and expanded our entire proposition. But if you look at the vertical integration of iLotto, it is certainly the right growth. Our ambition continues to grow further in this category.

Draziotis Stamatios: Great. Thank you.