Games

OPAP
Company Presentation
July 2012
1
Agenda
1.
2.
3.
4.
5.
2
History - Company Overview
Financial Overview
Strategy
Social Responsibility
Summary
The Story so far…
1958: Establishment of the Greek Organization of Football Prognostics
1959: Launch of PROPO (The Greek Football Pools Game)
1999: OPAP incorporated as a Societe Anonyme
2000: 20 years exclusive-license contract with the Hellenic State
Launch of PAME STIHIMA (sports-betting)
2001: Listed in the Athens Stock Exchange
2003: Launch of KINO
The very first coupon issued by OPAP in 1959
2011: Extension of exclusive license until 2030
Award of Video Lottery Terminals (VLT) license
3
Company Overview

The leading Greek gaming company

Presence in Cyprus

Market cap on Athens Exchange c. €1.6bn
(July 2012)

Exclusive concession recently extended
up until 2030

62% of the total Greek legal gaming
market (2011)

Largest on-line retail network in Greece

2011 revenues of €4,385.5m and EBITDA
of €734.2m
)
4

High dividend pay-out policy

Current free-float: 66%

Hellenic Republic ownership: 34%
Public offerings - Shareholder Structure
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
5,01%
29,00%
60,99%
34,00%
5,00%
Remaining Free Float
5
Silchester International Investors
Hellenic Republic
HRADF*
*Hellenic Republic holds 100% of HRAD’s share capital
The Greek gaming market is one of the most
buoyant markets in Europe
1,09%
2010
GROSS GAMING
REVENUE
(€BN AND % OF
GDP(1))
1,09%
0,92%
0,80%
0,97%
Average: 0.67%
0,92%
0,75%
0,60%
0,48%
0,41%
16,9
0,39%
0,50%
0,38%
0,32%
0,37%
1,1
1,1
12,8
10,2
9,7
9,4
2,5
2,3
2,2
1,7
1,4
In €bn
Italy
UK
312
293
Germany Spain
France
Greece Netherl. Sweden Finland
1,3
1,3
1,2
Ireland Belgium Portugal Denmark Poland
Austria
In % of
2010 GDP
289
265
248
201
2010 OFFLINE
GROSS GAMING
REVENUE PER
ADULT(2)(€)
198
189
164
142
142
131
123
128
32
Italy
Finland Ireland
Spain
Greece Sweden
UK
Denmark France Belgium Portugal Germany Austria Netherl. Poland
 Highest gross gaming revenue (along with Italy) ahead of all European countries representing 1.09% of GDP in 2010
 6th largest gaming market in the European Union
 5th highest 2010 gross gaming revenue per adult in Europe (€248)
6
Sources: H2 Gambling Capital for gross gaming yield (Italy (28/07/2011), United Kingdom (01/08/2011), France (26/07/2011), Greece (30/09/2011), other countries
(05/08/2011)), IMF World Economic Outlook (April 2011) for GDP
Notes: gross gaming revenue including offline and online (onshore and offshore) gaming
(1) Current price GDP
(2) Inhabitants over 18 years old
Greek Legal Market Revenue Overview
10.000
9.000
8.000
34.8%
32.9%
36.5%
7.000
29,9%
34.8%
6.000
29.9%
36.0%
38.0%
5.000
39.7%
4.000
38.5%
40.1%
41.3%
3.000
56.3%
56.2%
58.2%
60.4%
63,1%
52.0%
2.000
37.5%
1.000
0
62.5%
50.5%
52.3%
44.0%
41.5%
41.5%
7.5%
4.3%
8.2%
7.2%
4.0%
7.2%
7.0%
3.2%
2001
2002
2003
20.6%
9.8%
5.9%
11.4%
1999
8.0%
4.5%
8.9%
2000
Horse Racing
6.3%
6.2%
7.5%
4.7%
5.4%
4.7%
4.2%
4.1%
3.2%
3.7%
3.2%
3.7%
3.0%
3,9%
3.1%
4.2%
3.4%
2005
2006
2007
2008
2009
2010
2011
2004
Instant Lotteries
State Lotteries
OPAP
Casinos
Source: OPAP’s reported numbers (Greek operations only); H2 Gambling Capital
7
OPAP is the Undisputed Leader of the Greek
Gaming Market
2011 LEGAL GREEK GAMING MARKET (GGR)
OVERVIEW OF THE GREEK GAMING MARKET
 The Greek regulated gaming market comprises of three sectors:
Horse
2%
Casino
22%
• Lottery: OPAP and the State Lottery Division
• Casinos: includes all games played within casinos
State
Lottery
6%
• Betting: dominated by sports betting (OPAP) but also includes
domestic horserace betting (ODIE)
OPAP
70%
 Like most other European lottery markets, the Greek gaming
market is regulated and controlled by the government
Market size: €2.0bn
• Ethniko, Kratiko and Laiko, the state lottery-style games, generated
€119m of gross gaming revenue (GGR) in 2010 and represent c.
Source: H2 Gambling Capital (30/09/2011)
5% of the market
GREEK REGULATED GAMING MARKET GROSS GAMING
REVENUE EVOLUTION (€M)
• All other lottery games are operated by OPAP, yielding €1,046m of
gross gaming revenue in 2010
• Scratch games, which used to be supplied by a subsidiary of Intralot
12%
11%
8%
4%
until 2003, are missing from the current offer and are expected to be
(7%)
re-introduced
strongly dominated by Regency. It generated €484m of gross
gaming revenue with more than 50% attributed to gaming
765
753
688
797
585
610
944
777
653
(13%)
1.146
1.077
 The Greek casino market consists of 9 licensed casinos and is
(11%)
1.046
869
773
744
635
626
608
484
539
439
machines
194
 Pari-mutuel horserace betting is exclusively operated by Greek
Organization for Horseracing (ODIE)
• Generated €49m of gross gaming revenue in 2010
 Fixed odds sports betting is solely organized by OPAP, yielding
€608m of gross gaming revenue in 2010
8
200 5
133
141
57
68
64
200 6
200 7
121
127
59
52
200 8
119
49
200 9
201 0
118
46
201 1
Horse betting
OPAP Sports betting
OPAP Lottery
Casino Gaming
State lotteries
Market growth
Source: H2 Gambling Capital (30/09/2011)
OPAP’s Competitive Advantage is Based on a
Diversified Product Offering and a Widespread
Network
A WIDESPREAD NETWORK OF AGENTS
OPAP GAME OFFERING
% OF 2011
REVENUE
STIHIMA
SPORTS
GAMES
PROPO
PROPOGOAL
MONITOR
KINO
JOKER
LOTTO
NUMERICAL
GAMES
PROTO
SUPER 3
EXTRA 5
GO LUCKY
9
Source: Company

Introduced in 2000

2011 Revenues: €1,561m

Introduced in 1959

2011 Revenues: €22m

Introduced in 1996

2011 Revenues: €1m

Introduced in 2011

2011 Revenues: €138m

Introduced in 2003

2011 Revenues: €2,243m

Introduced in 1997

2011 Revenues: €232m

Introduced in 1990

47%
% OF 2011
GROSS
PROFIT
34%
0.5%
0.9%
0.01%
0.1
%
3.2
%
1.4
%
52%
48.5
%
5.3
%
10.1
%
2011 Revenues: €68m
1.5
%
3.2
%

Introduced in 1992

2011 Revenues: €31m
0.7
%

Introduced in 2002

2011 Revenues: €36m

Introduced in 2002

2011 Revenues: €11m

Introduced in 2011

2011 Revenues: €17m
0.7
%
0.3
%
0.4
%
1%
1.1
%
0.4
%
 Network of c. 5,000 agents under license agreement
 Cyprus accounts for c.4% of revenues
0.2
%
Source: Company
Network
5000 POS
The largest commercial network in Greece
From the past to the cohesive corporate branding image of today
10
OPAP Has Proven its Capacity to Launch and
Develop New Games

OPAP has introduced Monitor Games and Go Lucky, illustrating its capacity to enhance existing games
and to launch new successful ones
Stihima is the most
popular betting
game in Greece
Introduced in 1959
Introduced in 1997
Introduced in 1990
Introduced in 1992
Introduced in 2000 Introduced in 2002
Introduced in 1996
Introduced in 2002
Introduced in 2003
Kino has been a blockbuster from
the beginning and is the most
popular game in Greece

OPAP can rely on its network of c. 5,000 agents to further extend its offer range with new products such as
Bingo, Super 4, online versions of existing games and Video Lotteries Terminals (VLTs)

OPAP has developed a strong portfolio of games in Greece and Cyprus and currently offers a wide range
of gaming products from traditional lottery to sports betting (fixed odds / mutual)
11
OPAP’s Revenue Breakdown
€m
6.000
5.000
4.000
ProPo-Goal
3.000
Lotto
Joker
2.000
Proto
ProPo (Toto)
Stihima
1.000
0
1995
1996
PROPO
12
1997
LOTTO
1998
PROTO
1999
2000
PROPOGOAL
2001
2002
JOKER
2003
STIHIMA
2004
SUPER 3
2005
2006
EXTRA 5
2007
KINO
2008
2009
2010
2011
MONITOR GAMES & GO LUCKY
Games Overview
Game
Stihima
Joker
Lotto
Propo
Proto
Super 3
Extra 5
Propo-Goal
Kino
Type of Game
Sports
Numerical
Numerical
Sports
Numerical
Numerical
Numerical
Sports
Numerical
Numerical
Sports
Fixed / Mutual
Fixedodds
Mutual
Mutual
Mutual
Mutual
Fixedodds
Fixedodds
Mutual
Fixedodds
Fixedodds
Fixedodds
2011
Revenues
€1,560.7m
€231.6m
€67.5m
€22.2m
€30.6m
€36.2m
€10.9m
€1.1m
€2,242.7m
€17.3
€137.6
2011
Gross Profit
€289.4m
€85.9m
€27.2m
€8.0m
€8.5m
€9.7m
€3.2m
€0.3m
€412.4m
1.4
12.2
OPAP
Share of
Revenues (1)
22%
41.2%
46.3%
40.1%
36.6%
32.7%
32.3%
40.6%
22.0%
~14% (2)
~14% (2)
Year of
Introduction
2000
1997
1990
1959
1992
2002
2002
1996
2003
2011
2011
Agent
Commission
8%
12%
12%
12%
12%
8%
12%
12%
8%
8%
8%
Frequency of
play
Daily
Twice
weekly
Twice
weekly
Three
times
weekly
Twice
weekly
Three
draws
daily
One draw
daily
Once a week
132 draws
daily
On going Daily
On
going Daily
(1)
(2)
13
Sales minus the pay out ratio minus the agents’ commission ratio
Sales minus the pay out ratio minus the agents’ commission ratio minus Intralot’s commission
Go Lucky Monitor
Games
Betting Games
Games Product Matrix
Skill
ProPo (Toto)
Stihima
ProPo-Goal
Fixed
Odds
Mutual
Number Games
Lotto
14
Proto
Joker
Chance
Diversified distribution network
Games
Agencies
Gaming Halls
Internet








Street Vendors

Bingo















VLTs
Instant Tickets
State Lottery
15




Financials
It’s all about
numbers
16
OPAP Has Historically Delivered an Outstanding
Financial Performance
COMMENTS
OPAP FINANCIAL OVERVIEW
In €m
Revenues
Growth
2003 2004 2005 2006 2007 2008 2009 2010 2011
2,282 3,177 3,695 4,633 5,066 5,520 5,441 5,140 4,359
n.a. 39.2% 16.3% 25.4% 9.3% 9.0% (1.4%) (5.5%) (15.2)
GGR *
Growth
969
n.a.
EBITDA
Margin
(% of rev.)
Margin
(% of GW)
Net Debt /
(Cash)
473
1,242 1,338 1,562 1,597 1,852 1,781 1,654 1,413
28.2% 7.7% 16.7% 2.2% 16.0% (3.8%) (7.1%) (14.5)
659
714
738
860
1,057
967
911
734
20.7% 20.7% 19.3% 15.9% 17.0% 19.2% 17.8% 17.7% 16.9%
48.8% 53.0% 53.3% 47.2% 53.9% 57.1% 54.3% 55.1% 51.9%
(211)
(377)
(412)
(384)
(493)
(706)
(700)
(657)
97
* Gross Gaming Revenue
Source: Company reports
53,0%
53,3%
47,2%
53,9%
57,1%
54,3%
1
2.282
3.177
3.695
4.633
55,1% 51,9%
5.520
5.441
5.140
 2007: Stihima risk management operation was taken in-house
 2005-2008: Development of betting portfolio events through
introduction of new features in Stihima and increase of Kino
daily playing hours
 Overall performance affected by decrease in Kino revenues
while Stihima is affected by cyclicality of major football events
every 2 years
2
5.066
 2003: Introduction of Kino

2 Recent performance has been impacted by the adverse
economic environment:
REVENUES AND MARGIN EVOLUTION SINCE 2003
48,8%
1 OPAP has recorded strong top line growth since 2003,

mainly driven by:
4.358
 Sustained profitability margins
3 March 2011: Introduction of Monitor and Go Lucky

games
2003
2004
2005
Revenues (in €m)
Source: Company reports
17
2006
2007
2008
2009
2010
EBITDA Margin (as % of GW)
2011
Financial Overview
Revenue (€m) 2001 - 11
EBITDA (€m) 2001 - 11
6.000
1.000
5.000
800
4.000
600
3.000
400
2.000
200
1.000
0
0
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'01
'11
EBIT (€m) 2001 - 11
'02
'03
'04
'05
'06
07
'08
'09
'10
Adjusted Net Profit (€m) 2001 - 11
1.000
800
800
600
600
400
400
200
200
0
0
'01
18
'02
'03
'04
'05
'06
07
'08
'09
'10
'11
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'11
Financial Results Q1 2012
Resilient demand in a harsh economic environment
Department
Stores
-16,9%
Food Sector
-8,4%
Retail Sales
Q1 2012
-11,6%
Pharmaceuticals
-7,5%
Furniture &
Household
Equipment
-18,6%
Wagers (€m)
(5.0%)
19
OPAP
EBITDA (€m)
(13.9%)
Net Profit (€m)
(20.9%)
Dividend Policy
2,50
Remaining Dividend (€)
Interim Dividend (€)
2,20
2,00
1,48
1,50
1,00
0,60
0,50
0,00
0,67
0,73
0,40
0,43
0,17
0,27
0,30
'01
'02
'03
0,43
1,58
1,54
1,42
1,40
1,03
1,10
1,14
0,93
0,94
0,55
0,48
0,55
0,60
'04
'05
'06
'07
0,96
0,72
0,80
0,65
0,58
0,72
'08
'09
'10
'11
17,2%
Dividend Yield (%)
18,0%
11,9%
15,0%
10,6%
12,0%
7,3%
6,6%
9,0%
6,0%
1,75
1,74
5,4%
11,4%
8,3%
3,0%
6,4%
6,3%
4,9%
0,0%
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
Dividend Payout (%)
103,7%
99,1%
79,4%
'01
20
98,9%
93,4%
98,8%
96,3%
97,1%
85,3%
94,0%
42,9%
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
OPAP Strategy
 Leverage OPAP’s expertise and experience to become a Pan-European leader in gaming
•
Utilize strong cash position to capitalize on development opportunities
 Continue to invest in OPAP’s brand to drive market share
 Strengthen existing network by increasing content and gaming options across agencies
 Optimise OPAP’s cost base and improve operational efficiencies
 Continuous improvement of OPAP’s existing product portfolio
21
Land-Based Concession Extension Agreement
A unique opportunity for OPAP to support its leading position in Greece and strengthen visibility
pertaining shareholder value up to 2030
Concession extension fee incorporates prepayment of gross win royalties as well as the license cost for
the concession period
OPAP’S POSITIONING
 Extension of the current concession contract (ending in 2020) on lotteries and sports betting from 12.10.2020 to 12.10.2030, for the
exclusive benefit of OPAP
 Exclusive operation of current games (incl. Super 4 and Bingo Lotto), by any technological means (1)
OPAP to maintain its leading position in the Greek market
TRANSACTION ECONOMICS
 €375m payable following signing of the concession extension agreement and OPAP’s EGM approval
 5% royalties on gross win will be additionally paid on a yearly basis between 12.10.2020 and 12.10.2030
 Fair and equitable value sharing with the HR
EXPECTED RETURNS
 Concession extension fee paid in line with market expectations
 Expected payback period of approximately 5 years
(1) Excluding on-line sports betting
22
Video Lottery Terminals (VLTs) License Agreement
VLT license adds a “growth engine” to OPAP’s performance potential
The status of a “sole license owner” enhances performance optimization across the full spectrum of
games offered by OPAP
TRANSACTION SCOPE
 One License for 35,000 VLTs:
• 16,500 will be directly operated by OPAP within 12 months
• 18,500 will be operated by sub-contractors within 24 months
–
OPAP will receive an upfront payment as well as royalties
–
In case of unsuccessful subcontracting process for part or all the 18,500 VLTs, OPAP will have the right to operate the remaining VLTs
 OPAP to control pricing policy
• Identical pricing for all VLTs
 License also includes on-line Random Number Generator (“RNG”) Games
 The duration of the license is set at 10+1 years from the license issue.
 Based on the law, HR to receive 30% of gross win in the form of royalties
TRANSACTION ECONOMICS FOR THE 35,000 VLTs
 €474m payable upon signing of the license
 €86m payable in two years
EXPECTED RETURNS
 Highest contributor to OPAP’s EBITDA in the long-term
 Expected to be EPS accretive from the first year of full deployment of the 16,500 machines
23
OPAP will be the Sole License Holder of the 35,000
VLTs in Greece
Before YE 2011
2012
2013
 First instalment
of €474m for a
license for 35,000
VLTs paid by
OPAP to Greek
State
 RFP for the selection
of technology
providers
 Tender for the
subcontractors
 Installation of
VLTs on Central
Server for
16,500 VLTs
2012
Before YE2013
 Second instalment
of €86m paid by
OPAP
MANUFACTURERS
HR
Hellenic Republic
SUBCONTRACTORS
24
 35,000 VLTs under
operations
2014
2013
Grant 1 License for 35,000 VLTs
Purchase 1 License for 35,000 VLTs
2014
Scratch Tickets - State Lottery
OPAP’s led consortium is bidding for a 12-year exclusive license for the
scratch and state lottery tickets.
Lottomatica
Scientific Games
OPAP
Network Diversification
Games Portfolio Enhancement
New Customer base
Intralot
The Tender process is expected to conclude by year end.
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
preventing participation of minors.
 OPAP transforms business profit into
social dividends, through an extensive
Corporate Social responsibility (CSR)
program.
 OPAP achieved significant recognition
and awards by a number of
independent agencies & bodies.
 POS exclusive to gaming activities.
 European
Responsible
Gaming
Standards and Sports betting Code
of Conduct have been adopted and
OPAP will be certified by year end.
 Excessive gaming hotline support.
“OPAP is a member of European Lotteries (EL) and World Lotteries Association (WLA), independent unions composed of state or
state-licensed lottery companies. In 2010, EL’s members generated €22.4 billion for the public benefit”.
Source: EL
26
Social responsibility
Social Dividend
€2,8bn 2009 - 2011
Contribution to the
Greek Economy
Social Contribution
€76m
€1,2bn
Taxes
Donations
€213m
€81m
Sponsorships
27
Advertising
€361m
€849m
Licenses’
acquisition
Dividend to the
Hellenic
Republic
“OPAP is a member of European Lotteries (EL) and World Lotteries Association (WLA), independent unions composed of state or
state-licensed lottery companies. In 2010, EL’s members generated €22.4 billion for the public benefit”.
Source: EL
OPAP in Summary
 Sole Concession until 2030
Permits OPAP to enjoy the growth of the Greek Gaming Market
 Sales Network
Largest retail network in Greece
 Significant Cash Flows
Secure & stable Dividend efficiency and effective Investment Policy
 Strong Fundamentals
Favourable Market Dynamics, Credibility and Growth
 Solid Management Team
Possesses Experience, Knowledge, and proven successful introduction of new games
 Sizeable Growth Opportunities
Well positioned to capitalize on the Hellenic lotteries, VLTs and online opportunities, due to strength
of brand and market expertise
28
29