OPAP S.A. Consolidated Financial Results for the Three and Twelve Months ended December 31, 2012

 

OPAP announces FY 2012 revenues' single-digit drop coupled with Q4 profitability improvement

 

 

 

 

 

 

ATHENS, Greece – March 7, 2013 – OPAP S.A. (OPAr.AT), the leading gaming operator inGreece, announces its consolidated financial results for the twelve-month period ended December 31, 2012, prepared in accordance with International Financial Reporting Standards (IFRS).

 

Revenues down 8.9% to €3,971.6m (2011: €4,358.5m), demonstrating considerable resilience in a harsh macroeconomic environment.EBITDA down 8.2% to €673.8m (2011: €734.2m). EBITDA in Q4 reached €174.2m (2011: €185.0m) decreasing at a slower pace (5.8%) compared to the revenue decline on the back of successful risk management and on-going cost containment.Broadly flat EBITDA margin at 17.0% vs. 16.9% in 2011Distribution cost down 7.2% to €108.0m (2011: €116.3m)Net Profit down 6.0% to €505.5m (2011: €537.5m). Net profit in Q4 2012 increased by 4.3% at €133.8m due to higher net interest income and lower taxes.Earnings per share down 6.0% to €1.58 (2011: €1.68)Dividend per share at €0.57

 

 

 

1.  OVERVIEW

 

(€ 'm)

Q4 2012

Q4 2011

% Δ

2012

2011

% Δ

Revenues

1,025.5

1,162.3

(11.8)

3,971.6

4,358.5

(8.9)

GGR  (Gross Gaming Revenue)

351.7

382.6

(8.1)

1,302.1

1,413.4

(7.9)

EBITDA

174.2

185.0

(5.8)

673.8

734.2

(8.2)

Payout (%)

65.7%

67.1%

 

67.2%

67.6%

 

EBITDA margin (on revenues)

17.0%

15.9%

 

17.0%

16.9%

 

EBITDA margin (on GGR)

49.5%

48.4%

 

51.7%

51.9%

 

Net profit

133.8

128.3

4.3

505.5

537.5

(6.0)

 

OPAP's revenues for 2012 decreased by 8.9% to €3,971.6m versus €4,358.5m in 2011 due in the most part to lower Stihima sales. In Q4 2012, revenues stood at €1,025.5m down by 11.8% compared to Q4 2011.

 

EBITDA decreased by 8.2% to €673.8m in 2012 from €734.2m in 2011, due to reduced revenues partially offset by the containment of distribution expenses and lower Stihima and KINO payout.  In Q4 2012, EBITDA was down by 5.8% to €174.2m compared to €185.0m in the corresponding period of 2011, improving the 9m trend (9.0% decline) due to lower Stihima payout and further rationalization of distribution and administration expenses.

 

Net Profit in FY 2012 decreased by 6.0% to €505.5m from €537.5m in the corresponding period last year. Net Profit in Q4 2012 increased by 4.3% due to higher net interest income and lower taxes.

 

 

 

2.  FINANCIAL REVIEW

 

  Revenue per game for Q4 and FY 2012 and 2011

(€ '000)

Q4 2012

Q4 2011

Δ%

2012

2011

Δ%

STIHIMA

340,884

421,933

(19.2)

1,381,175

1,560,719

(11.5)

PROPO

4,509

5,789

(22.1)

16,015

22,189

(27.8)

PROPO-GOAL

242

386

(37.2)

1,176

1,060

11.0

MONITOR GAMES

20,707

31,952

(35.2)

92,661

137,633

(32.7)

GO LUCKY

866

3,618

(76.1)

4,711

17,293

(72.8)

TOTAL SPORTS BETTING

367,208

463,678

(20.8)

1,495,738

1,738,894

(14.0)

% total revenues

35.8

39.9

 

37.7

39.9

 

KINO

573,567

599,421

(4.3)

2,145,497

2,242,688

(4.3)

JOKER

54,483

65,588

(16.9)

208,695

231,594

(9.9)

LOTTO

14,170

13,924

1.8

56,417

67,522

(16.5)

PROTO

7,278

8,058

(9.7)

27,608

30,632

(9.9)

Super 3

6,605

8,799

(24.9)

28,020

36,232

(22.7)

Extra 5

2,217

2,852

(22.3)

9,653

10,925

(11.6)

TOTAL NUMERICAL GAMES

658,320

698,642

(5.8)

2,475,890

2,619,593

(5.5)

% total revenues

64.2

60.1

 

62.3

60.1

 

TOTAL REVENUES

1,025,528

1,162,320

(11.8)

3,971,628

4,358,487

(8.9)

Sports betting revenues decreased by 14.0% to €1,495.7m in 2012 compared to €1,738.9m in 2011, due mostly to lower Stihima sales negatively affected by the ongoing economic depression. In Q4 2012, sports betting revenues decreased by 20.8% to €367.2m, versus €463.7m in the corresponding period in 2011

 

Revenues from numerical games in 2012 decreased by 5.5% to €2,475.9m from €2,619.6m in 2011, on the back of a KINO and JOKER reduction by 4.3% and 9.9% respectively. In Q4 2012, KINO revenues declined by 4.3% at €573.6m.

 

 

 

 Cost of Sales for Q4 and FY 2012 and 2011

(€ '000)

Q4 2012

Q4 2011

Δ%

2012

2011

Δ%

Prize payouts to lottery and betting winners

673,824

779,693

(13.6)

2,669,518

2,945,073

(9.4)

Agents' commissions

86,207

97,456

(11.5)

333,462

365,685

(8.8)

Other cost of sales

50,758

50,688

0.1

195,634

197,177

(0.8)

Total cost of sales

810,789

927,837

(12.6)

3,198,614

3,507,935

(8.8)

 

Total cost of sales in FY 2012 reached €3,198.6m from €3,507.9m in 2011, down by 8.8% in line with revenues' decline.

 

In particular, Stihima payout in 2012 declined to 68.9% compared to 69.4% in the corresponding period in 2011, while in Q4 2012 it stood at 63.7% versus 67.6% in Q4 2011.  FY 2012 payout of KINO stood at 69.2% versus 69.8% in 2011, while in Q4 2012 it stood at 69.6% versus 70.2% in Q4 2011.

 

 

 Distribution costs for Q4 and FY 2012 and 2011

(€ '000)

Q4 2012

Q4 2011

Δ%

2012

2011

Δ%

Advertisement

5,902

4,359

35.4

13,456

20,226

(33.5)

Donations-Grants

8,858

13,976

(36.6)

17,542

27,733

(36.7)

Sponsorship

21,891

19,445

12.5

70,242

61,184

14.8

Subtotal

36,651

37,780

3.0

101,240

109,143

(7.2)

Remaining distribution cost

1,792

1,869

(4.5)

6,728

7,134

(5.8)

Total

38,443

39,649

(3.1)

107,968

116,277

(7.2)

 

Total distribution costs in 2012 declined by 7.2% to €108.0m, down from €116.3m last year, reflecting cost savings initiatives. 

 

 

Administrative costs for Q4 and FY 2012 and 2011

(€ '000)

Q4 2012

Q4 2011

Δ%

2012

2011

Δ%

Total

9.535

15,589

(38,9)

32.174

36,795

(12,6)

 

Administrative expenses in 2012 reached €32.2m compared to €36.8m in2011. InQ4 2012, administrative expenses stood at €9.5m down by 38.9% compared to Q4 2011.

 

 

 

Cash Flows for FY 2012 and 2011

(€' .000)

2012

2011

Δ%

Cash Flow from Operating Activities

564,732

456,701

23.7

Cash Flow from Investing Activities

(117,163)

(839,483)

-

Cash Flow from Financing Activities

(275,881)

(78,812)

-

 

Cash Flow from Operating Activities

Cash flow from operating activities in 2012 substantially increased by 23.7%, amounting to €564.7m from €456.7m in the corresponding period in 2011, primarily due to lower taxation payments that offset lower EBITDA.

 

Cash Flow from Investing Activities

Cash flow from investing activities in 2012 decreased by €722m compared to 2011 due to the acquisition in 2011 of both the VLTs license as well as the concession extension until 2030.

 

Cash Flow from Financing Activities

Cash flow from financing activities amounted to an outflow of €275.9m versus €78.8m in 2011, mainly reflecting the 2011 dividend distribution and the payment of the first tranche of the bond loan, compared to an inflow stemming from debt raised in 2011.

 

 

 

3.  MAIN DEVELOPMENTS

 

Dividend Payment

On March 7th 2012, the Board of Directors of OPAP resolved upon proposing to the AGM, the distribution of a €0.57 gross dividend for the fiscal year 2012. Subject to AGM (June 14th 2012) approval, the ex-dividend date will take place on Thursday, June 20th 2013. Dividend payment to the entitled shareholders commences on Monday, July 1st 2013.

 

State - Scratch Lottery

OPAP led Consortium, announced its provisional selection as the successful bidder for the acquisition of the 12-year concession regarding the exclusive rights to the management of the Hellenic Lotteries inGreece. The Consortium offered an upfront payment of €190m which was accepted by the Hellenic Republic Assets Development Fund (HRADF). The decision of HRADF is subject to various regulatory approvals, including parliamentary approval.

 

Management Presentation 2013-2022

OPAP released on 22.02.2013 a company presentation that was prepared for the purpose of providing information to preselected investors within the framework of the bidding in process for the sale of 33% of shares of OPAP by HRDAF.

 

Extraordinary General Meeting (EGM)

In accordance with the resolution of OPAP's Board of Directors meeting, shareholders are invited to an Extraordinary General Meeting on March 26th,2013 in order to discuss and decide both upon the approval of the draft agreement between OPAP and INTRALOT, as well as the replacement of the Board of Directors' and the Audit Committee members.

 

 

Taxation

From 01.01.2013 until 12.10.2020, theHellenicRepublic's share has been determined as 30% of the gross gaming revenues (GGR) that arise from the games of chance that OPAP conducts according to the contract dated 15.12.2000 between theHellenicRepublicand OPAP as is applicable.

Also from 01.01.2013, regardless of the amount won, players' winnings resulting from OPAP's games of chance are now subject to a tax rate of ten percent (10%) depending on how the game is conducted, either through each game coupon or at the end of each gaming session. However, according to the bill submitted to Greek parliament (yet subject to ratification), after the 18th of March 2013, the above winnings will be subject to taxation as follows: After the deduction of the first untaxed one hundred (100) euros, winnings between one hundred up to five hundred (500) euros will be subject to a tax of fifteen per cent (15%). Then a taxation rate of twenty per cent (20%) will apply to winnings of five hundred euros and one cent (500.01) and above.

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