OPAP — New licence boosts post-FY20 forecasts

OPAP (ASE: OPAP)

Last close As at 02/03/2024

EUR16.87

0.05 (0.30%)

Market capitalisation

EUR6,225m

More on this equity

Research: Consumer

OPAP — New licence boosts post-FY20 forecasts

OPAP’s Q320 results showed a strong sequential improvement in revenue from Q220 as trading returned towards normality, which led to an improvement in profitability and free cash flow generation. Further regional lockdowns and a second full national lockdown from November lead us to downgrade revenue forecasts for FY20 by c 15%. Most significantly, the new licence for Lotteries and Sports Betting from FY20–30 with reduced taxes on revenue, agreed in FY11, became effective in October 2020 with no reaction from the Greek government, leading to significant upgrades to our forecasts for EBITDA, free cash flow and distributions to shareholders in FY21. The resulting prospective dividend yield of 10.1% looks very attractive.

Russell Pointon

Written by

Russell Pointon

Director, Consumer

Consumer

OPAP

New licence boosts post-FY20 forecasts

Q320 results

Travel & leisure

7 December 2020

Price

€10.55

Market cap

€3,602m

€0.91/£

Net debt (€m) at 30 September 2020 post IFRS 16 (net debt pre-IFRS 16 €556m)

616

Shares in issue

341.4m

Free float

57.2%

Code

OPAP

Primary exchange

ASE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

40.8

31.5

(4.0)

Rel (local)

5.5

7.1

8.7

52-week high/low

€12.32

€5.86

Business description

OPAP was founded in 1958 as the Greek national lottery and it is the exclusive licenced operator of all numerical lotteries (seven games), sports betting (four games) and horse racing. OPAP listed in 2001 and was fully privatised in 2013. Sazka Group has a 42.8% stake and significant board representation.

Next events

FY20 results

March 2021

Analysts

Russell Pointon

+44 (0)20 3077 5700

Sara Welford

+44 (0)20 3077 5700

OPAP is a research client of Edison Investment Research Limited

OPAP’s Q320 results showed a strong sequential improvement in revenue from Q220 as trading returned towards normality, which led to an improvement in profitability and free cash flow generation. Further regional lockdowns and a second full national lockdown from November lead us to downgrade revenue forecasts for FY20 by c 15%. Most significantly, the new licence for Lotteries and Sports Betting from FY20–30 with reduced taxes on revenue, agreed in FY11, became effective in October 2020 with no reaction from the Greek government, leading to significant upgrades to our forecasts for EBITDA, free cash flow and distributions to shareholders in FY21. The resulting prospective dividend yield of 10.1% looks very attractive.

Year end

GGR*
(€m)

EBITDA**
(€m)

EPS**
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/18

1,547.0

356.6

0.53

0.70

20.1

6.6

12/19

1,619.9

411.2

0.68

1.30

15.6

12.3

12/20e

1,155.0

269.6

0.27

0.49

38.9

4.6

12/21e

1,656.0

658.5

1.04

1.07

10.1

10.1

Note: *Gross gaming revenue. **EBITDA and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Q320: Back towards normality, briefly

Q320’s gross gaming revenue (GGR) decline of 0.7% y-o-y to €391m was a significant improvement from the 53% y-o-y decline in COVID-19 affected Q220, as the estate resumed trading with social distancing rules. The ongoing control on operating costs and improved associate income from Kaizen (Stoiximan) due to its underlying strong performance and an increase in the stake owned by OPAP led to an improved company-defined EBITDA margin of 26.9% versus 26.3% in Q319. The improved profitability, good working capital control and lower investment in long-term assets led to a c 30% y-o-y improvement in free cash flow to €85m.

Forecasts: Lower taxes offset underlying downgrades

National lockdowns in November, which have been extended into December, lead us to downgrade our revenue and EBITDA forecasts for FY20 by 14.5% and 24.7% respectively before any benefit from the new licence. For FY21, the first full year of lower cash tax payments on GGR of 5%, effective from October 2020, and modestly lower underlying forecasts, given caution on the macroeconomic outlook, have resulted in EBITDA upgrades of 54.4%. The enhanced free cash from the lower cash tax payments should feed through to higher distributions to shareholders, therefore we increase our FY21 dividend forecast by 31% to €1.07/share.

Valuation: FY21 prospective yield of 10.1%

The share price has responded very positively to greater clarity on future reduced cash tax payments on GGR. On our significantly upgraded forecasts for FY21, OPAP’s EV/EBITDA multiple falls to 6.0x from 15.4x for FY20. The enhanced dividend distribution in FY21 leads to a prospective dividend yield of 10.1%.

Q320 results summary: Towards normality, temporarily

OPAP’s Q320 results showed a marked improvement sequentially versus the prior quarter as trading returned towards normality, albeit too briefly as further COVID-19 induced travel restrictions were introduced in parts of Greece during the summer. Good cost control and good momentum in associate performance led to an improved EBITDA margin and a further improvement in free cash flow generation. The second national lockdown, in November, leads to a downgrade in expectations for the year.

The revenue (gross gaming revenue or GGR) performance of -0.7% y-o-y was mixed by category, but ongoing strong cost control led to a higher EBITDA of €105.0m versus €103.5m in Q319, and an improved margin, 26.9% versus 26.3%. Management believes this is a very credible performance relative to other consumer-facing businesses in Greece. The EBITDA earned in Q320 of €105m was marginally greater than the €102.5m that OPAP generated in the first six months. The company’s definition of EBITDA includes associate income (+€7.1m in Q320) and one-off items (-€0.4m in Q320), which we typically include below EBITDA.

Exhibit 1: OPAP’s summary financials

€m

Q119

Q219

H119

Q319

9M19

Q120

Q220

H120

Q320

9M20

Lotteries

191.7

187.7

379.3

197.4

576.7

154.5

103.0

257.5

179.1

436.6

Growth y-o-y

1.6%

2.7%

2.1%

4.1%

2.8%

(19.4%)

(45.1%)

(32.1%)

(9.3%)

(24.3%)

Sports Betting

101.7

90.1

191.9

91.9

283.7

88.0

40.4

128.4

104.6

233.1

Growth y-o-y

(5.3%)

(5.1%)

(5.2%)

(5.7%)

(5.4%)

(13.5%)

(55.1%)

(33.1%)

13.9%

(17.9%)

Instants & Passives

33.7

34.8

68.5

31.6

100.1

19.2

14.4

33.6

27.1

60.7

Growth y-o-y

(10.8%)

(4.3%)

(7.6%)

1.8%

(4.8%)

(43.0%)

(58.7%)

(51.0%)

(14.1%)

(39.3%)

VLTs

68.9

70.9

139.9

72.8

212.7

66.6

21.8

88.4

80.1

168.5

Growth y-o-y

58.9%

54.2%

56.5%

43.2%

51.7%

(3.4%)

(69.3%)

(36.8%)

10.0%

(20.8%)

Gross gaming revenue (GGR)

396.0

383.6

779.6

393.6

1,173.2

328.3

179.6

507.9

391.0

898.9

Growth y-o-y

5.0%

6.5%

5.7%

6.7%

6.0%

(17.1%)

(53.2%)

(34.8%)

(0.7%)

(23.4%)

Net gaming revenue (NGR)

266.8

258.8

525.6

265.1

790.7

217.4

117.9

335.2

259.6

594.8

Growth y-o-y

5.4%

6.8%

6.1%

7.1%

0.0%

(18.5%)

(54.4%)

(36.2%)

(2.1%)

(24.8%)

Gross profit

153.9

150.1

304.0

152.5

456.5

122.4

68.8

191.1

147.1

338.2

Gross margin

38.9%

39.1%

39.0%

38.8%

38.9%

37.3%

38.3%

37.6%

37.6%

37.6%

Payroll

(19.7)

(22.7)

(42.4)

(19.7)

(62.1)

(19.8)

(20.1)

(39.9)

(19.8)

(59.7)

As % of GGR

5.0%

5.9%

5.4%

5.0%

5.3%

6.0%

11.2%

7.9%

5.1%

6.6%

Marketing

(14.8)

(16.5)

(31.4)

(12.9)

(44.2)

(12.6)

(10.8)

(23.4)

(11.6)

(35.0)

As % of GGR

3.7%

4.3%

4.0%

3.3%

3.8%

3.8%

6.0%

4.6%

3.0%

3.9%

Other operating expenses

(24.8)

(32.5)

(57.2)

(26.0)

(83.2)

(25.2)

(28.8)

(53.9)

(25.9)

(79.8)

As % of GGR

6.3%

8.5%

7.3%

6.6%

7.1%

7.7%

16.0%

10.6%

6.6%

8.9%

Total operating expenses

(59.3)

(71.7)

(131.0)

(58.5)

(189.6)

(57.6)

(59.7)

(117.3)

(57.3)

(174.6)

As % of GGR

15.0%

18.7%

16.8%

14.9%

16.2%

17.5%

33.2%

23.1%

14.7%

19.4%

EBITDA

113.0

88.4

201.4

103.5

304.9

86.4

16.2

102.5

105.0

207.6

Margin

28.5%

23.0%

25.8%

26.3%

26.0%

26.3%

9.0%

20.2%

26.9%

23.1%

Source: OPAP accounts

Cost control and associate income boost profitability

Q320 GGR declined by 0.7% y-o-y as two sources of revenue, Sports Betting and Video Lottery Terminals (VLTs), grew year-on-year while two others, Lotteries and Instants & Passives, declined, which is a notable reversal in fortunes from Q220 when all four sources declined due to COVID-19. Sports Betting revenue increased by 13.9% due to the resumption of sports fixtures, albeit the start of some football seasons was delayed so is likely to have affected the seasonality of the financial quarters. VLTs’ continued strong performance flows through from the ongoing rollout and maturing of new machines as the number of active customers increased with a higher spend. Lotteries and Instants & Passives continued to be negatively affected by social distancing and restrictions on movement of consumers, respectively.

The lower revenue was more than offset by management’s strong focus on costs. Marketing spend fell by 9.7% y-o-y, given the partial restrictions on trading during the period and focusing of resource on developing online growth. Other operating expenses declined marginally by 0.3% given the persistent focus on costs in a more difficult environment. On a like-for-like basis, ie excluding one-off items (impairment of financial assets), total operating costs fell by 14% y-o-y.

Kaizen Gaming’s (Stoiximan) contribution, reported as associate income, increased to €7.1m during Q320, greater than the €6.4m reported in H120. This reflected a sequential improvement in trading as lockdowns eased as well as an increase in OPAP’s stake. Kaizen’s GGR increased sequentially by 44% to €89m as the average monthly customer base increased by 40%. During Q3, OPAP completed the acquisition of a 51% direct stake in the Greek & Cypriot business, taking the stake to 69%, as expected, and post the period end the stake was increased further to 84.49%. We continue to consolidate Kaizen for Q420, but recognise the uncertainty as to when it may be fully consolidated, which depends on regulatory approval.

Strong cash flow generation continues

OPAP’s free cash flow generation relative to net gaming revenue (NGR) improved for the second consecutive quarter, which is impressive given the year-on-year revenue declines experienced in both periods. Its free cash flow increased by 30% y-o-y to €85.0m in Q320, against the year-on-year decline in NGR of 2%. The strong growth in free cash flow in the period brings the cumulative 9M20 free cash flow (€153.2m) decline to 15% versus the NGR decline of 25%.

The most important driver to the improved free cash flow generation was an improvement in operating cash flow, which grew by 25% y-o-y to €88.6m due to the higher group profitability including dividends received and a net inflow of working capital. Modest declines in capex and investment in intangibles further improved OPAP’s free cash flow generation.

The period end cash position of €543m compares with €628m at the interim stage as the strong free cash flow generation funded the additional investment in Kaizen of €92m, dividend payments of €44m and the net repayment of borrowings of €48m, leading to an increase in the net debt position post IFRS 16 of €615m (note our definition of net debt differs to the company’s definition of net debt of €605m, which includes long- and short-term investments of €10m).

Following the period end, OPAP repaid €250m of borrowings that had maturities in FY21, while raising €200m (gross) of new borrowings at an interest rate of 2.1% with maturities of seven years.

Licence extension 2020–30

Following the period end, ie on 13 October 2020, the 10-year extension of OPAP’s exclusive right to run specific numeric and sports betting games became effective, as discussed in our initiation note. There had been some uncertainty about whether the Greek government would seek to amend the terms of the licence, but to date there has been no reaction from the government.

As part of its negotiations to extend the lottery and sports betting concession from 2020 to 2030 in 2011, OPAP negotiated a contract in which part of the consideration paid back in 2011 corresponded to prepayment of GGR contribution over the decade. Specifically, based on the agreement, in the income statement OPAP will record the nominal 30% gaming tax as a deduction from GGR (versus 35% previously). However, it is only liable to pay a lower 5% tax on GGR in return for the consideration of €375m paid in 2011, of which €300m corresponded to a GGR tax prepayment, while any difference that arises will be settled at the end of the period. The €300m paid in 2011 has a future value (in 2030 terms when the settlement will take place) of €1.83bn. OPAP implemented the contract in October 2020 and will now pay GGR of 5% on ‘legacy’ revenues, ie Lotteries and Sports Betting, which is very beneficial to reported EBITDA and cash flow. On an annual basis, the company will accrue on the balance sheet for settlement in 2030, via a non-cash adjustment to operating cash flow, for any potential tax liability that arises in any financial year. The potential tax liability is, broadly, the difference between what is paid (5%) in the year and what should have been paid (30%) after allowing for the prepayment.

For illustrative purposes, on a theoretical €1bn of GGR for Lotteries and Sports Betting in FY21, the accounting entries are as shown in Exhibit 2. Note our new FY21 forecast for GGR for Sports Betting and Lotteries is €1.044bn, and is therefore relatively close to the example below.

Exhibit 2: Accounting for new licence

€m

GGR (A)

1,000

Unchanged

Gaming tax that should be paid (30% of A) (B)

(300)

Previous gaming tax rate was 35%

Net gaming revenue (NGR) (A-B)

700

€50m benefit due to lower gaming tax

'Other income' (C)

183

A new accounting entry that recognises one-tenth of the value of the prepayment (€1.83bn) in EBITDA

'Other income' (D)

50

A new accounting entry to counter the higher income tax on the above income, which should be tax free

Benefit to EBITDA (C+D)

233

Total benefit to EBITDA

265

After NGR-related expenses

Amortisation

(21)

Incremental amortisation for new licence (€375m/10 = €37.5m) versus prior licence (€16m)

Benefit to PBT

244

Corporation tax (24%)

(59)

Benefit to PAT

185

Gaming tax that should be paid (30%)

300

Gaming tax paid in year (5% of A)

(50)

Prepayment (C)

(183)

'Other income' (D)

(50)

Accrued liability

17

Source: OPAP

Outlook and forecasts: Large upgrades for FY21

Similar to many other countries, the Greek government announced a further nationwide lockdown in response to the resurgence of COVID-19 infections, leading to a temporary suspension of most of OPAP’s businesses (except online and certain street vendors) from 7 November until 30 November 2020. Further, the Cypriot government announced restrictions that led to suspension of c 40% of OPAP’s operations in the country (in Limassol and Pafos) from 12 November until 30 November 2020. Management has estimated the financial impact during Q420 of this second lockdown, including the partial closures in the north of Greece in October, at lost revenue (GGR) of €113–120m and lost EBITDA of €45–50m. This is consistent with the guidance in April during the first lockdown (€130–140m per month or c €35m per week). The lost revenue and EBITDA are equivalent to c 9% and c 16% of our prior forecasts at the middle of the indicated ranges.

Subsequent to the announcement of OPAP’s Q320 results, the Greek government announced the national lockdown would be extended by one week to 7 December, and then again by a further week to 14 December. We therefore assume two further weeks of national lockdown in our FY20 forecasts. December is typically a more important month in the fourth quarter from a financial perspective, therefore we assume a slightly higher €40m per week of lost revenue in December.

Management believes that the company is better placed to deal with the second national lockdown than the first lockdown in Q220, given sports events are more likely to continue; there are more Tzoker (lotteries) draws per week; the online business has 19% more customers; the equity stake in the faster-growing Kaizen Gaming has increased further to 84.5% (from 36.75% at the end of Q220); and the company’s liquidity has improved.

The changes to our forecasts, which reflect the lost revenue from the second national lockdown above and the accounting changes for the new licence, classified as ‘Other income’ by us until we see how this will be categorised by the company, are below.

Exhibit 3: Summary of forecast changes

€m

FY20e new

FY21e new

FY20e old

FY21e old

FY20 change

FY21 change

Revenue (GGR)

1,155.0

1,656.0

1,351.1

1,729.2

(14.5%)

(4.2%)

Growth y-o-y

(28.7%)

43.4%

(16.6%)

28.0%

EBITDA (pre-other income)

227.7

423.3

302.2

426.5

(24.7%)

(0.7%)

Margin

19.7%

25.6%

22.4%

24.7%

'Other income'

42.0

235.2

EBITDA (post other income)

269.6

658.5

302.2

426.5

(10.8%)

54.4%

Margin

23.3%

39.8%

22.4%

24.7%

DPS (€)

0.49

1.07

1.48

0.78

(67.0%)

37.0%

Source: OPAP accounts, Edison Investment Research

Our revenue forecast for FY20 reduces by c €196m to €1,155m, in line with the middle of management’s guidance for the effect of the lockdown in November (€115m) plus our estimate of two further weeks in December (€80m). Our FY20 forecast for EBITDA before ‘other income’ from the new licence falls by c €75m or c 25%, again in line with management’s guidance plus our estimate for the extended lockdown into December.

FY21 is the first full financial year for the new licence. We estimate that ‘other income’ adds €235m to EBITDA and, along with c 1% lower underlying EBITDA forecasts from more cautious revenue growth assumptions and lower tax on Lotteries and Sports Betting revenue (30% versus 35% previously), leads us to increase our EBITDA (post other income) estimate by c 54% to c €659m.

Our new dividend forecast for FY21 increases by 37% to €1.07/share, as we continue to assume the majority (ie 90%) of ‘underlying’ free cash flow, ie before the lower (5%) tax payments on GGR, is distributed, and in addition, assume 50% of the enhanced free cash flow from the lower tax payments is distributed.

Valuation: Attractive FY21 dividend yield of 10.1%

The share price has responded well to greater clarity with respect to the reduced taxes on Lotteries and Sports Betting revenues. On our significantly increased forecasts for FY21, OPAP’s EV/EBITDA multiple is 6.0x and the enhanced forecast yield of 10.1% looks very attractive.

Exhibit 4: Financial summary

€m

2018

2019

2020e

2021e

31-December

ISA

ISA

ISA

ISA

INCOME STATEMENT

Revenue

 

 

1,547.0

1,619.9

1,155.0

1,656.0

NGR

 

 

1,039.9

1,086.2

777.9

1,148.7

Cost of Sales

(912.0)

(946.9)

(652.0)

(892.9)

Gross Profit

635.0

673.0

503.0

763.1

Other Income

42.0

235.2

EBITDA

 

 

356.6

411.2

269.6

658.5

Operating Profit (before amort. and except.)

 

 

261.4

305.2

143.4

514.3

Impairments

(17.5)

(8.7)

(11.5)

0.0

Exceptionals

(3.0)

(7.1)

(7.5)

0.0

Share-based payments

(1.6)

(1.6)

(1.2)

(1.2)

Reported operating profit

239.3

287.8

123.2

513.1

Net Interest

(23.5)

(27.1)

(33.0)

(29.0)

Joint ventures & associates (post tax)

0.1

8.5

13.4

4.0

Profit Before Tax (norm)

 

 

238.0

286.6

123.8

489.3

Profit Before Tax (reported)

 

 

215.9

269.2

103.7

488.1

Reported tax

(70.6)

(67.1)

(32.2)

(127.2)

Profit After Tax (norm)

169.0

215.2

91.6

362.1

Profit After Tax (reported)

145.3

202.1

71.5

360.9

Minority interests

(2.0)

0.3

(1.4)

(6.3)

Net income (normalised)

167.0

215.5

90.3

355.8

Net income (reported)

143.3

202.4

70.1

354.6

Average Number of Shares Outstanding (m)

318

318

333

341

EPS - normalised (€)

 

 

0.53

0.68

0.27

1.04

EPS - normalised fully diluted (€)

 

 

0.53

0.68

0.27

1.04

EPS - basic reported (€)

 

 

0.45

0.64

0.21

1.04

Dividend (€)

0.70

1.30

0.49

1.07

Revenue growth (%)

6.3

4.7

(28.7)

43.4

Gross Margin (%)

41.0

41.5

43.6

46.1

EBITDA Margin (%)

23.1

25.4

23.3

39.8

Normalised Operating Margin

16.9

18.8

12.4

31.1

BALANCE SHEET

Fixed Assets

 

 

1,384.8

1,370.1

1,381.5

1,331.1

Intangible Assets

1,157.2

1,096.0

1,130.1

1,102.3

Tangible Assets

111.5

162.3

139.7

117.1

Investments & other

116.1

111.7

111.7

111.7

Current Assets

 

 

388.6

869.9

663.4

1,000.2

Stocks

10.7

7.0

5.0

7.1

Debtors

140.2

161.2

114.9

164.7

Cash & cash equivalents

182.0

633.8

475.6

760.4

Other

55.7

67.9

67.9

67.9

Current Liabilities

 

 

(314.0)

(326.4)

(273.6)

(330.5)

Creditors

(177.5)

(184.1)

(131.2)

(188.2)

Tax and social security

(12.8)

(1.8)

(1.8)

(1.8)

Short term borrowings

(0.2)

(13.9)

(13.9)

(13.9)

Other

(123.6)

(126.7)

(126.7)

(126.7)

Long Term Liabilities

 

 

(699.8)

(1,141.6)

(1,142.5)

(1,168.3)

Long term borrowings

(650.3)

(1,103.2)

(1,104.1)

(1,104.1)

Other long-term liabilities

(49.5)

(38.4)

(38.4)

(64.2)

Net Assets

 

 

759.5

771.9

628.9

832.5

Minority interests

(36.8)

(18.1)

(19.5)

(25.8)

Shareholders' equity

 

 

722.8

753.8

609.4

806.8

CASH FLOW

Op Cash Flow before WC and tax

358.2

412.9

270.8

659.7

Working capital

(25.0)

(16.5)

(4.6)

4.9

Exceptional & other

(1.9)

(13.8)

(8.7)

24.6

Tax

(51.7)

(78.9)

(32.2)

(127.2)

Net operating cash flow

 

 

279.7

303.6

225.4

562.0

Net interest

(24.6)

(22.3)

(33.0)

(29.0)

Capex

(52.1)

(34.7)

(15.0)

(25.0)

Acquisitions/disposals

(48.0)

(22.0)

(135.4)

(70.0)

Equity financing

(12.1)

(0.1)

0.0

0.0

Dividends

(130.7)

(168.4)

(214.5)

(157.2)

Net new borrowings

(32.3)

399.7

0.8

0.0

Other

(34.6)

(4.0)

13.4

4.0

Net Cash Flow

(54.8)

451.8

(158.3)

284.8

Opening cash

 

 

236.8

182.0

633.8

475.6

Closing cash

 

 

182.0

633.8

475.6

760.4

Closing net debt/(cash)

 

 

468.5

483.3

642.4

357.6

Source: Company accounts, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by OPAP and prepared and issued by Edison, in consideration of a fee payable by OPAP. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by OPAP and prepared and issued by Edison, in consideration of a fee payable by OPAP. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on OPAP

View All

Latest from the Consumer sector

View All Consumer content

Consumer

SATS — Lean and healthy

iStock-1304804045

Consumer

Compagnie des Alpes — New peaks

Research: TMT

EQS Group — Placing to boost compliance investment

Following the recent announcement of the purchase of Got Ethics (see our recent update note), EQS has now raised €9.1m gross through a placing of 350k new shares, being c 5% of the issued share capital, at €26 per share. The upfront payment of €10m for Got Ethics was funded via a commercial loan. This additional funding gives further flexibility to extend the group’s activities within the corporate compliance sphere, where investment is being made to bolster sales and marketing ahead of the implementation of the EU whistle-blowing directive.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free