Release Date: September 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Strong online growth contributing to almost 30% of the group's revenues, a new record.
- High EBITDA margin of around 35%, supporting confidence in 2024 guidance.
- 15-year exclusive concession agreement with the Republic of Cyprus for lottery games.
- Eurojackpot and other new game features driving significant growth in the games portfolio.
- Robust cash position with EUR450 million, enabling a EUR0.60 per share interim dividend distribution.
Negative Points
- VLTs decreased by 1.2%, affected by cautious consumer environment amid inflationary pressures.
- Instant and passives slipped by 16.6%, maintaining only 5% weight on total GGR.
- Increased marketing expenses by 30.43% due to major summer events, impacting overall OpEx.
- Payroll expenses increased by 10% year on year, reflecting wage increases and higher headcount.
- Net profit decreased by 0.8% on a recurring basis, adjusted for one-off finance income.
Q & A Highlights
Q: You mentioned strong online growth in the second half. Have you been gaining market share?
A: Euro 2024 significantly influenced our performance in June, July, and August, with many actives staying with us and playing across other verticals, especially casino. We observed strong performance with good payout and margins. We will need to wait for AGC official numbers to confirm market share gains.
Q: What is the expected productivity level for VLTs given current limitations?
A: We see further opportunities for growth, especially with the renewal of our estate and enhancing the overall experience in play stores. Customers spend more per machine in play stores compared to OPAP stores due to dedicated venues and different opening hours.
Q: What sort of normalized growth should we expect for VLTs going forward?
A: Mid-single digits would be high; we expect 1% to 2% growth to be a success, depending on various circumstances and regulatory framework.
Q: Has inflationary pressure on disposable income impacted other segments besides VLTs?
A: There is a correlation between disposable income and entertainment spending. We have seen small declines in the entertainment wallet, but OPAP's share is slightly increasing. Occasional players' activity has been impacted across multiple gaming verticals.
Q: Could you quantify the performance of Eurojackpot in H1?
A: Eurojackpot and Tzoker drove a 40% revenue growth in draw-based games. Eurojackpot generated low teens of millions in GGR in Q2.
Q: What are your thoughts on the dynamics for retail lotteries?
A: Retail lotteries remain of customer interest. We continue to innovate and evolve our offerings, such as enhancing KINO and introducing NBA live feed virtual games. Successful de-anonymization of the customer base is key for future relevance.
Q: Could you provide insights into the new concession agreement with Cyprus?
A: The new agreement allows us to continue offering the same portfolio of games. We are in alignment with Cypriot authorities to explore new opportunities, but it's too early to comment on specifics.
Q: How do you expect marketing expenses to evolve for the rest of the year?
A: Marketing expenses will normalize in the second half. We front-loaded expenses in Q1 and Q2 for Eurojackpot launch and Euro 2024. Expect normal levels in Q3 and Q4.
Q: Does your 2024 outlook include the target to distribute the bulk of net income as dividends?
A: Yes, our dividend policy remains in place. We are committed to distributing all our net profit.
Q: Are you in negotiations with the Greek government regarding the renewal of the Hellenic Lotteries license?
A: The license is set to expire in April 2026. We are ready for discussions and expect the process to begin soon.
Q: Could we have some color on KINO performance quarter-to-date?
A: Q3 performance is similar to Q2. We remain optimistic about our year-end guidance. Specific comments on KINO will be provided in the next call.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
