GIG: OPAP continued reporting solid year-on-year growth in the first nine month of 2019. How will you sustain these growth rates?
Cope: The publication of OPAP’s financial results for the first nine months of 2019 coincided with the three-year anniversary since we launched our 2020 vision of becoming a world-class gaming entertainment company. The growth achieved demonstrates our ability to generate strong results, while promoting initiatives that genuinely reshape OPAP’s identity.
Overall, OPAP’s nine-month gross gaming revenue (GGR) rose 6% year-on-year, amounting to €1.173 billion euros. Moreover, EBITDA came in at €300.3 million, increased 22.8% on a yearly basis, while net profit was up 33.6% to €140.6 million.
Our performance affirms the continuation of the positive trends we saw in the last couple of years, thanks to the implementation of several significant projects and the gradual maturity of our investments. For example, the solid growth of our GGR was led notably by Video-Lottery Terminals (VLTs), a resilient lottery performance, and the improvement of our sports-betting product. This makes us confident that we will achieve our targets for the full financial year.
At the same time, we have achieved significant progress across our eight strategic priorities, which touch every aspect of our organisation from customer centricity to the modernisation of our retail network. Looking forward, we are focusing on five key themes: entertainment, online, new ventures, information, and high performance. We believe we can deliver even more entertaining experiences to our customers across all channels – and especially online which we see as a significant opportunity.
Beyond gaming, we are also pursuing the development of relevant new products and services, with a focus on TORA, our financial services business. We will also maintain focus on high performance across every element of the business, and our ability to responsibly understand, analyse, and respond to increasing amounts of customer data will be a key part of this process.
GIG: A key part of OPAP’s growth has been the introduction of new products. What can we expect from your games in the future?
Cope: Developing a world-class product portfolio is one of our strategic priorities within our 2020 Vision. Our goal is to offer our customers a broad range of attractive products, which will deliver a comprehensive gaming experience.
In the past few years, we have introduced a series of new products – such as Virtual Sports, VLTs and Self-Service Betting Terminals (SSBTs) – which have an increasing contribution to OPAP’s growth. In particular, Play Games, our young VLT business which started in January 2017, is posting encouraging results, with GGR of nearly €213 million in the first nine months of 2019.
Overall, I firmly believe that offering a wide range of new and upgraded products has benefited both OPAP and its retail partners, who have seen their average commission grow too. In the future, we will keep looking into improvements and additions to our portfolio and we will also focus on making our offering even more entertaining for our customers.
GIG: As part of its growth plans, OPAP is developing its online presence and has announced a strategic investment in Stoiximan Group. What can we expect from OPAP in this area going forward?
Cope: The growing online market is a significant opportunity for OPAP. We have a dual strategy in place, focusing both on OPAP’s online platforms and our investment in Stoiximan Group.
As regards OPAP’s own sports-betting platform, Pamestoixima.gr, we have reported growth in active customers and revenue, even though it remains a small part of our business. In addition, within the first half of 2019, we launched JOKER online – the most popular numerical lottery in Greece and OPAP’s game with the highest brand awareness among different customer audiences. This launch has generated considerable interest and a notable jump in our active player base. It is also encouraging that we have a meaningful number of players who played both sports betting and JOKER online. Looking forward, we believe that the strength of the OPAP brand and the development of attractive online products will also appeal to our loyal offline customer base.
As far as the investment in Stoiximan is concerned, it is aligned with OPAP’s strategic priorities and is already paying off at a group level since the company continues to report impressive growth. This allows us to further pursue our dual strategy for the online market.
GIG: Currently, OPAP is positioned among the largest listed gaming companies internationally. Where do you see the company positioned in coming years? What are the challenges ahead for OPAP?
Cope: At OPAP we have a clear strategy and a clear picture of how we want to be positioned in the coming years. This is summed up through our 2020 Vision, which is to establish OPAP as a world-class gaming entertainment company. In football terms, I would say that our aspiration is not just being the top team in the Greek Superleague, but a leading player in the Champions League. This means we want to be considered a benchmark internationally and to be able to measure up ourselves against the best companies in the world.
As regards the challenges, the long-lasting crisis has definitely affected the macroeconomic environment and consequently private consumption, a key economic indicator for our industry. On our part, we are pleased that OPAP has managed to deliver good growth within a difficult environment and we are confident in our ability to sustain strong results. On a positive note, the Greek economy has reported modest growth in the past few quarters and there are also signs that the economic climate is getting better. Therefore, we are also optimistic that our performance will benefit from the economic recovery.
Moreover, the size of the illegal gambling market in Greece is simply enormous. This situation is damaging for the state and all stakeholders involved in the gaming sector. Tackling the illegal market requires time and effort, but the authorities’ steps in recent months are in the right direction. At OPAP, we are committed to supporting the state and the Hellenic Gaming Commission in this area.
At the same time, a new environment is created for the online gaming market in Greece, following recent legislation ratified by the Hellenic Parliament. For many years, the online market remained largely unregulated, damaging the interests of the Greek market and OPAP. We now look forward to the establishment of a level playing field for all players in this market.
GIG: OPAP ranks among the best workplaces in Greece, based on survey results. What is it that makes OPAP a good workplace?
Cope: The role of people is critical to the company’s success. Developing our people is one of OPAP’s strategic priorities. In this framework, we aspire to develop a high-performing team, by attracting highly qualified professionals and new talents, developing our people personally and professionally, offering a best-in-class workplace, and creating stronger ties between the company and our people.
The Best Workplaces award we received by Great Places to Work Hellas, for two successive years, is an important recognition of our commitment to building a modern and dynamic working environment. It also verifies that our strategy to form a single culture across the organisation, based on specific core values (fun, dynamic, passionate, fair) is well on track.
Finally, we are proud of the fact that OPAP is considered an employer of choice, as the company offers career opportunities and a unique working experience, both through its dynamic personnel selection program and through the internship program it implements for young graduates, which is one of the largest in Greece.
GIG: OPAP is a major contributor to the Greek economy, as well as one of the largest social contributors in the country. How do you envisage OPAP’s social role going forward?
Cope: Our commitment to our communities stands at the highest level. We recognise that we must play a positive social role, addressing stakeholders’ expectations and even going the extra mile. This approach is guiding all of our corporate citizenship activities.
Our Responsible Gaming framework reflects the highest international standards, consisting of activities that aim to ensure responsible and sustainable growth. As a result, OPAP and Hellenic Lotteries were recently awarded with the top certification (Level 4) of the World Lotteries Association for their Responsible Gaming strategy and focus on continuous improvement.
At the same time, OPAP’s Corporate Responsibility program, which focuses on the pillars of health, sport, and employment, and which stands beside Greece’s youth, is considered a benchmark for corporate citizenship in the country.
Our ambitious project to fully renovate Greece’s two largest children’s hospitals has now delivered 24 renovation works, covering 64% of the two hospitals. Additionally, the OPAP Forward programme has aided 50 small and midsized enterprises to grow their turnover by 22%, as well as create 1,301 direct and 8,532 indirect jobs. Finally, our innovative OPAP Sports Academies programme supports 178 amateur football and basketball academies and 18,000 young athletes across Greece, investing in the future of Greek sport.
GIG: In 2017, OPAP led the way by raising €200 million through a corporate bond that was very well received by investors. Given the improving economic conditions in the country, do you think more companies will try to raise capital on the Athens Exchange?
Cope: I believe that macroeconomic conditions have been steadily improving in the last couple of years in Greece. We also see that there is growing optimism surrounding the economy, and it is also positive that there are ongoing talks about new investment in a host of sectors. Therefore, it is reasonable for various companies to be considering ways to raise capital to promote their business initiatives.
As regards OPAP’s five-year bond, we were obviously satisfied as it was oversubscribed, despite the difficult conditions in the capital market at the time. Besides, the issuance’s success reflected the trust and confidence of institutional and private investors in OPAP’s vision, strategic priorities, and business plans. Investors had a very clear picture of where we would invest the funds raised and of the value that would be generated for OPAP, its business partners and stakeholders.
Therefore, it’s a combination of factors that made the issue the success it was. I believe that companies considering raising funds this way, should take all of these things into account, because they are the indicators markets examine too when measuring investment options.
