OPAP — Online and sports drive big FY24 beat

OPAP (ASE: OPAP)

Last close As at 28/03/2025

EUR17.31

0.41 (2.43%)

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Research: Consumer

OPAP — Online and sports drive big FY24 beat

OPAP enjoyed nothing short of a stellar Q424 as evidenced by the fact FY24’s EBITDA was not only higher than management’s guidance and our estimates, which were above the guided range, but also above our prior FY25 estimate. The broad summary of the year is that management’s investment in online activities is driving customer engagement, with good growth in the number of active customers and their average spend. Despite a year of low revenue growth and a lower margin, we upgrade our FY25 and FY26 EBITDA estimates by 4%.

Russell Pointon

Written by

Russell Pointon

Director of Content, Consumer and Media

Retail

FY24 results

28 March 2025

Price €18.76
Market cap €6,465m

Net cash/(debt) at 31 December 2024

€(157.2)m

Shares in issue

358.6m
Free float 49.8%
Code OPAP
Primary exchange ATHENS
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs 2.6 13.4 18.4
52-week high/low €17.5 €13.7

Business description

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, video lottery terminals and horse racing. OPAP listed in 2001 and was fully privatised in 2013. Allwyn has a 50.2% stake and significant board representation.

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28 May 2025

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19 November 2025

Analyst

Russell Pointon
+44 (0)20 3077 5700

OPAP is a research client of Edison Investment Research Limited

Note: GGR, gross gaming revenue. EPS are normalised excluding exceptional items and share-based payments.

Year end GGR (€m) EBITDA (€m) EPS (€) DPS (€) P/E (x) Yield (%)
12/23 2,087.7 745.3 1.17 1.85 16.1 9.9
12/24 2,296.2 827.9 1.36 1.40 13.8 7.5
12/25e 2,336.4 832.0 1.38 1.38 13.6 7.3
12/26e 2,399.4 849.9 1.41 1.40 13.3 7.5

FY24 EBITDA higher than our FY25 EBITDA estimate

OPAP’s FY24 gross gaming revenue (GGR) of €2,296m and reported EBITDA of €832m were well ahead of management’s guidance, which was to be at the top end of the range from the start of FY24 (GGR of €2,150–2,200m and EBITDA of €750–770m). The company performed so well that FY24’s GGR was in line with our prior FY25 estimate, while EBITDA exceeded it. Overall online revenue growth of 30% was complemented by 3% growth in retail. OPAP’s sports betting revenue, both online and offline, was helped by a fuller sports calendar, including the UEFA European Football Championship earlier in the year, along with a fuller events calendar and more favourable win margin in Q424. Lotteries benefited from the launch of the Eurojackpot and some of the best-ever rollover jackpots for its revitalised core games.

Guiding to another year of growth

Management’s guidance for FY25 of low single-digit growth in GGR and an EBITDA margin of around 35% reflects the tough comparative from FY24, which benefited from factors that either will not repeat (eg the UEFA competition) or are unlikely to repeat (eg historic high lottery jackpots and sports betting results that were favourable to operators). Taking management’s guidance literally, low single-digit revenue growth (ie 1–3%) implies a range for FY25 GGR of €2,320–2,366m, and with a 35% margin, reported EBITDA of at least €812m. We upgrade our FY25 and FY26 revenue estimates by 2% and EBITDA estimates by 4%.

Valuation: Attractive dividend yield

OPAP’s lower guided revenue growth is below the 8% average expected for its peers (source: LSEG Data & Analytics). However, this is countered by its more attractive levels of profitability (c 30% operating margin in FY25) versus its peers (c 14% average, albeit with a wide range of 7–23%), which provides a more attractive dividend yield versus the peer average of 2.7%. Incorporating FY24’s reported results, the changes to our profit and other adjustments lead to a modest reduction in our discounted cash flow (DCF)-based valuation to €22.0 per share, from €22.4 per share previously.

Strong Q424 provides good FY24 beat versus guidance

OPAP’s Q424 results were well above what was implied in management’s prior FY24 guidance and our revised estimates. Indeed, the period was so strong that EBITDA was ahead of our prior FY25 estimate.

Online and sports betting drive Q424

OPAP demonstrated strong year-on-year revenue growth of 11.5% in Q424, which compounded Q423’s 7.5% increase. The revenue growth was driven by OPAP’s online activities, which grew by c 34% to €207m in Q424, as well by its retail Betting activities. OPAP’s online growth is stemming from increased customer engagement that is leading to good growth in the number of active online users (OPAP +4% y-o-y and Stoiximan +6%, respectively) and an implied higher spend per customer. OPAP’s total betting revenues (online and retail) demonstrated better revenue growth as the year progressed, helped by the UEFA European Football Championship and the change in format of the European football club competitions. A more favourable win ratio towards operators was also helpful in boosting Q424 revenue.

The online growth is clear in the segments, Online Betting and iGaming (online casino), which were strong at c 51% and c 45%, respectively. In addition to these segment results, OPAP enjoyed strong growth from its online activities that are reported within the other segments. For example, iLottery revenue, which is reported within Lotteries, grew by c 45% (including promotional activities) in Q424, although this remains relatively small in a group context, with GGR of €37m for the full year.

In the other segments, revenue from Lotteries grew marginally, Instant & Passives was almost flat and video lottery terminals (VLTs) declined.

The revenue growth fed through to even better profit growth, with reported EBITDA increasing by c 17% versus Q423, or 21% on a like-for-like basis to give a reported EBITDA margin of 37.8% (vs 36.2% in Q423). The improved profitability flowed from a higher gross margin on gaming operations, as well as leveraging the operating costs. While the ratio of net gaming revenue (NGR) to GGR declined modestly to 68.4% from 68.7% in Q423, a lower relative spend on agents and other commissions (helped by the increasing contribution of online activities) bolstered the overall gross margin. Below gross profit from gaming operations, total operating expenses, (ie payroll, marketing and other costs) were broadly flat in absolute terms, which meant they declined by 2pp relative to GGR from Q423 to Q424. Relative to GGR, payroll increased, which was more than offset by declines in marketing and other operating expenses. Staff costs increased on a relative basis due to a competitive job market placing upward pressure on salaries and higher variable compensation to reflect OPAP’s strong performance for the year.

FY24 better revenue growth with good cost control

Moving onto the full year, total revenue growth of 10% to €2,296m was mainly due to 30% growth in online revenue, along with c 3% growth from retail.

Lotteries saw a good step up in revenue growth to c 6% versus FY23’s c 3%, with good growth in retail (+c 4%) and online (+c 71%). The segment’s growth has been reinvigorated generally by the Q223 launch of OPAP’s iLottery offering and the March 2024 launch of Eurojackpot. Growth was helped in FY24 by the largest-ever GigaTzoker jackpot, which was won in January 2025. Instant & Passives had a challenging year with revenue declining by 9%, and VLT revenue was flat versus FY23.

Having improved in recent years, there was a marginal drift down in the ratio of NGR to GGR to 68.4% in FY24, from 68.8% in FY23, due to the increasing contribution of OPAP’s online activities as well as the declining contribution from Instant & Passives. The two online segments are subject to higher effective rates of GGR levies and duties, equivalent to c 34% of GGR in FY24, versus 30% for the other segments. Instant & Passives are liable to a minimum GGR levy of €50m, which represents a greater relative cost to the segment (as the segment’s GGR declined by 9% in FY24) and therefore to the group.

The changing business mix helped to drive the increase in the gross profit margin from gaming to 42.2%, from 40.8% in FY23, again helped by the increasing contribution of online revenue.

Relative to GGR, operating expenses were in line with FY23. Payroll expenses on a relative basis were broadly flat and marketing increased marginally (from 5.9% of GGR in FY23 to 6.2% in FY24), which was offset by a reduction in other operating expenses (to 7.8% from 8.1% in FY23). The c 16% y-o-y growth in marketing reflects greater growth in spend on sponsorships versus advertising, which increased by c 10%, roughly in line with revenue growth.

On a reported basis, OPAP’s EPS increased by c 20% to €1.343. Therefore, the total declared dividend of €1.40 represented a payout ratio of just over 100%. The dividend policy remains to payout the bulk of net income as dividends and to have a net dividend of at least €1 per share. In our estimates we assume a 100% payout ratio.

Cash flow and balance sheet

OPAP’s improved profitability in FY24 versus FY23 flowed through to better free cash generation in absolute terms and relative to GGR.

In absolute terms, free cash flow (operating cash flow after interest, net investment in tangibles and intangibles and repayment of lease liabilities) of €663m was much higher than FY23’s €489m. The free cash flow funded dividends of €439m, share repurchases of €119m and a share capital return of c €90m. The €119m share repurchase completes the €150m share repurchase that was commenced towards the end of FY23. Management is likely to seek approval for a further buyback given its strong balance sheet.

At the end of FY24, OPAP’s cash and gross debt positions were relatively unchanged versus the end of FY23, resulting in a low net debt/EBITDA ratio of 0.19x.

Guidance and new estimates

OPAP’s strong performance in FY24, which we reiterate was ahead of our prior FY25 estimate, includes a number of one-off benefits that are unlikely to be repeated in FY25 and, therefore, provide a tough comparative for growth. These include the strong performance in sports betting (helped by the UEFA European Championship, changes to European club football competitions and the more favourable win in favour of OPAP) and the high level of jackpots in Lotteries as well as annualising against the launch of Eurojackpot.

Management guides to low single-digit GGR growth and an EBITDA margin of around 35%, lower than FY24’s reported margin of 36.2%, but comparable to FY23’s 35%. Taking management’s guidance literally, 1–3% GGR growth implies GGR for FY25 of €2,320–2,366m and EBITDA of at least €812m, with a margin of 35%.

The combination of low single-digit GGR growth and a lower EBITDA margin implies limited growth in absolute EBITDA in FY25 versus FY24. Broadly, in FY25 we assume a stable gross margin from gaming operations, helped by a greater contribution from online activities, lower absolute non-gaming income, and stable operating costs relative to GGR to give a reported EBITDA margin of 35.6%. The above gives a 4% upgrade to our FY25 EBITDA.

Management indicated that capex will increase to €30–45m in each of FY25 and FY26 as gaming machines in stores and other supporting technology are upgraded.

Valuation

DCF-based valuation supportive of good upside

Incorporating FY24’s reported results, the changes to our profit and capex estimates lead to a modest reduction in our DCF-based valuation to €22.0 per share, from €22.4 per share previously.

Peer valuation: Lower growth but more profitable and higher dividend yield

Although OPAP is a listed gaming business, it is quite different to its peers in that they do not have exclusive licences, mostly do not have exposure to lotteries and usually have a higher percentage of online revenue.

We consider La Francaise des Jeux to be OPAP’s closest peer, given its exposure to lotteries and scratch cards. While OPAP offers lower projected revenue growth than its peers, it is more profitable and offers a more attractive dividend yield.

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