OPAP- Optima: 4Q/FY23e Preview | Strong finish of the year (Σύσταση Αγορά – τιμή στόχος 19,30 ευρώ)

4Q/FY23e Preview | Strong finish of the year; will marginally lose EBITDA guidance due to the imposed fine form HGC; we expect and additional EUR 1.00 DPS

4Q23/FY23 forecasts | OPAP is set to announce its 4Q/FY23 Results today after market close, with a conference call scheduled for the following day. We expect a strong 4Q24 with all product categories in a positive trajectory y-o-y, except almost flat Instant and Passives and with Betting and Online casino driving the positive momentum with close to double digit growth y-o-y.

• In this context we forecast quarterly revenues (GGR) of EUR 571m (vs. EUR 540.9m in 4Q22), EBITDA of EUR 189.8m (vs. EUR 202.7 in 4Q22) and net profit of EUR 88.1m vs. EUR 306.5m in 4Q22. We remind that in FY22 OPAP sold Betano that added extra profits of EUR 181.3m while in FY23 net profit was burdened by a fine of EUR 24.6m imposed by Hellenic Competition Commission.

On the OPEX side, variable costs (GGR contribution, agents’ fees, direct costs) are seen sharping at EUR 348.8 accounting for c 61% (-250bps y-o-y) of total GGR while fixed costs (personnel, marketing and other) are estimated at EUR 104m (- 8.2% y-o-y; 18.2% of total GGR).

• We note that we have assumed an income of EUR 61.7m, resulting from the 10-year lottery/betting license, as well as other operating income costs (net) from non-gaming operations of EUR 10.4m in the 4Q24.

For FY23 we forecast GGR to reach EUR 2077.6m up by 7.1% y-o-y vs. EUR 1939m in FY22, EBIΤDA at EUR 709.3 down 3.6% y-o-y vs. EUR 736m in FY22 while we forecast net profit to reach EUR 420.1m down by 29.1% vs. EUR 592.3m in FY22. In our view, OPAP is set to continue on its generous pay out policy, distributing the bulk of its EPS, with a more balanced interim/final distribution split.

• That said, we expect OPAP to declare a final FY23e dividend of EUR 1.00/share with the Q423e earnings announcement (DY: 5.9%, ex-date: 29 April), on top of the EUR 1.00/share interim dividend distributed in 4Q23.

Analysis per segments | Per product category, we see sports betting GGR (retail & online) at EUR 175.7m up by 9.2% y-o-y, out of which c. EUR 137m is the total on-line contribution (+12% y-o-y), while in yearly basis we see the category up 6.1% at EUR 640.4m. vs. EUR 603.8m in FY22.

• Lottery revenues are estimated to reach EUR 197.9m in 4Q23 (up 2% y-o-y) and EUR 730.3m for FY23 (up by 2.9% y-o-y), while VLTs is seen at EUR 97.2m 2.1% in 4Q23 up 4.1% y-o-y and up by 8.5% y-o-y to EUR 345.5 in FY23, assuming a net daily drop of EUR 41 per machine.

In respect to Instant & Passives we expect a slightly weaker segmental performance in 4Q23 with GGR at EUR 31.4m down by 1.4% y-o-y while for FY23 we forecast GGR of EUR 117.1m up by 8.5% y-o-y on easy comps for the first half.

• Finaly, the On-line Casino GGR is seen at EUR 68.8 up by 13.3% y-o-y in 4Q23 and up by 22.4% in FY23 reaching EUR 244.3m and continuing to be the hero product of OPAP with double digit growth.

4Q/FY23 Group Key P&L Estimates

Source: the Company, Optima bank research

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