OPAP

ASE: OPAP

Market Cap€4818m

Last Close €13.72

OPAP was founded in 1958 as the Greek national lottery and is the exclusive licensed operator of all numerical lotteries, sports betting, instant and passives, VLTs and horse racing. OPAP listed in 2001 and was fully privatised in 2013. Sazka Group has a 46.39% stake and significant board representation.

Investment summary

OPAP’s Q221 results showed a strong revenue recovery after the end of COVID-related lockdowns. Following the recent award of new online gaming licences to both OPAP and Stoiximan (fully consolidated from end FY20), management seeks to enhance its revenue opportunities by developing games that attract new players in underserved (younger and more female) demographics, whilst also increasing existing customer loyalty and engagement. The new commitment to pay an annual dividend that exceeds net profit with a minimum of €1/share (27% increase versus our prior FY21 estimate) highlights OPAP’s shareholder friendliness with respect to cash returns. Our DCF-based valuation remains at €16.6/share.

Y/E Dec	Revenue (€m)	EBITDA (€m)	PBT (€m)	EPS (fd) (c)	P/E (x)	P/CF (x)
2019A	1619.9	411.2	286.6	68.50	20.0	14.4
2020A	1129.8	263.6	133.4	32.11	42.7	20.7
2021E	1581.6	567.6	390.7	83.30	16.5	10.6
2022E	2042.2	739.4	560.6	118.52	11.6	7.7

Industry outlook

The Hellenic Gaming Commission estimates that the total legal Greek gaming market amounted to €1.6bn gross gaming revenue (GGR) in 2020, -27% y-o-y due to COVID-19, of which OPAP land-based games comprised €0.9bn GGR. Regulation of the online gaming market is in progress; HGC has granted online licences to OPAP and Stoiximan.

Last updated on 20/10/2021