OPAP — A record quarter; continued high dividends

OPAP (ASE: OPAP)

Last close As at 18/04/2024

EUR16.15

0.06 (0.37%)

Market capitalisation

EUR5,977m

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Research: Consumer

OPAP — A record quarter; continued high dividends

OPAP’s FY18 results were in line with our forecasts, with gross gaming revenue (GGR) growth of 6.3% to €1.55bn and a 22.9% EBITDA margin. The recently installed video lottery terminals (VLTs) contributed €208.7m to GGR (vs €57.6m in FY17) and new Kino features led to a strong Q418 within the core Lottery division. OPAP’s investment phase is nearing completion, cost containment is in place and the business model is highly cash generative. The €0.70 FY18 dividend was over 100% of free cash flow and notably higher than our 90% estimate. This was an encouraging set of results and our core OPAP forecasts are broadly unchanged. OPAP trades at 14.6x P/E and 8.2x EV/EBITDA, with an 8.4% dividend yield for FY19e.

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Consumer

OPAP

A record quarter; continued high dividends

FY18 results

Travel & leisure

29 March 2019

Price

€9.03

Market cap

€2,872m

Net debt (€m) at FY18

459.0

Shares in issue

318m

Free float

67%

Code

OPAP

Primary exchange

ASE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

0.3

17.7

(5.9)

Rel (local)

(0.5)

(0.4)

4.2

52-week high/low

€10.0

€7.6

Business description

OPAP was founded in 1958 as the Greek national lottery and it is the exclusive licensed operator of all numerical lotteries (seven games), sports betting (four games) and horse racing in Greece. OPAP listed in 2001 and was fully privatised in 2013. Sazka Group has a 23.7% stake and significant board representation.

Next events

Q119 results

May 2019

Analysts

Victoria Pease

+44 (0)20 3077 5740

Richard Williamson

+44 (0)20 3077 5700

OPAP is a research client of Edison Investment Research Limited

OPAP’s FY18 results were in line with our forecasts, with gross gaming revenue (GGR) growth of 6.3% to €1.55bn and a 22.9% EBITDA margin. The recently installed video lottery terminals (VLTs) contributed €208.7m to GGR (vs €57.6m in FY17) and new Kino features led to a strong Q418 within the core Lottery division. OPAP’s investment phase is nearing completion, cost containment is in place and the business model is highly cash generative. The €0.70 FY18 dividend was over 100% of free cash flow and notably higher than our 90% estimate. This was an encouraging set of results and our core OPAP forecasts are broadly unchanged. OPAP trades at 14.6x P/E and 8.2x EV/EBITDA, with an 8.4% dividend yield for FY19e.

Year end

GGR
(€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/17

1,455.5

197.5

0.42

1.10

21.3

12.2

12/18

1,547.0

234.9

0.52

0.70

17.4

7.8

12/19e

1,704.2

283.2

0.62

0.75

14.6

8.4

12/20e

1,867.2

324.2

0.70

0.86

12.9

9.6

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

VLTs drive revenues, core lottery up 3.7% in Q418

FY18 GGR increased by 6.3% to €1,547.0m and EBITDA was €353.6m, (vs our estimates of €1,557.6m and €350.9m). Growth was driven by a 263% increase in VLT GGR, which was partially offset by a 4% decline in Betting and a 5% decline in the core Lottery business. Importantly Q418 showed a 3.7% uptick in Lottery, largely due to better Joker revenues and new Kino side features. We expect 10% GGR growth in FY19, with stable Lottery GGR, boosted by a 45% increase in VLT GGR, as well as a six-month contribution from Stoiximan. Please see our initiation report for a full discussion of these divisions.

Paying out the bulk of free cash flow as dividends

OPAP reported FY18 net debt of €459.0m vs €436.2m in FY17. This includes the first €50m payment for a stake in Stoiximan (online gaming) and equates to 1.3x net debt/EBITDA, which is comfortably within the company’s long-term targets. OPAP has historically paid the bulk (or more) of free cash flow (FCF) as dividends and the FY18 total dividend of €0.7 per share is over 100% of FCF. This compares to our more conservative forecast of a 90% payout ratio for FY19 and FY20. Our core OPAP forecasts remain broadly unchanged.

Valuation: 8.4% FY19e dividend yield

OPAP’s shares trade at 14.6x P/E and 8.2x EV/EBITDA for FY19e, which is towards the top of the peer group, but its 8.4% FY19e dividend yield is very attractive. Our DCF remains unchanged at €10.0/share (16.2x FY19 P/E), with the €1.8bn pre-paid tax asset potentially worth an additional €2/share. Top-line growth has historically been linked to Greek GDP and further upside could come from faster than expected GDP growth (the IMF projects 2.4% in 2019).

A stable core business, with high cash flow

Results summary

Gross gaming revenues: Increased by 6.3%, driven by 263% growth in VLTs

FY18 GGR increased 6.3% to €1,547.0m vs our estimate of €1,557.6m, with GGR in Q418 up by 7.6% to €440.7m. For the full year, weakness in traditional games (Lottery, Betting, Scratch) was more than offset by the growth in new products such as VLTs. Importantly, the core Lottery business returned to 3.7% growth in Q418, due to the Joker jackpot and a positive contribution from new Kino features.

Strengthening the network with new, larger stores

During FY18, the number of OPAP stores in Greece declined from 4,367 to 3,910, with 505 new stores constructed during the year, partially offsetting store closures that resulted from renegotiations with agents. Overall, the average store size increased by 20% and average agent commissions grew by 5.4% in FY18.

EBITDA and EPS: Cost containment in place, in line with estimates

EBITDA increased from €306.5m in FY17 to €353.6m in FY18 and was in line with our estimate of €350.9m, with improvement driven by effective cost containment measures. We note that the technology transformation is now complete and headcount is approaching target levels, suggesting stable fixed costs going forward (excluding the impact of consolidating Stoiximan from H219). Adjusted EPS of €0.52 was also in line with our forecast and excludes a one-off €17.5m goodwill impairment of Neurosoft.

Dividends: Paying out the ‘bulk’ of free cash flow

OPAP’s dividend policy is to pay out the ‘bulk’ of FCF as dividends and the company has announced a final dividend of €0.6 per share, bringing the total to €0.70 for FY18. This equates to over 100% of FY18 FCF and compares to our estimate of a 90% payout.

Forecasts: Core OPAP broadly unchanged

Management has stated that it is well placed to deliver another positive year in FY19 and we are leaving our core OPAP forecasts broadly unchanged. Note that we have lowered our Stoiximan revenue forecasts after further conversations with management, which has the impact of reducing headline revenues by 2.5% in FY19 and 3.9% in FY20. Within the core OPAP revenue mix, a slightly lower Betting forecast is offset by stability in Instants and Passives as well as in the core Lottery business. As we discuss in our initiation report, our forecasts assume that the Stoiximan acquisition (which is still pending regulatory approval) is fully consolidated from H219 onwards. We note that the Stoiximan forecasts are clearly subject to change depending on completion date.

Exhibit 1: Estimate changes

Revenue (GGR) (€m)

EBITDA (€m)

Adjusted EPS (€)

Old

New

% chg.

Old

New

% chg.

Old

New

% chg.

2018

1,557.6

1,547.0

(0.7)

350.9

353.6

(0.8)

0.52

0.52

0.0

2019e

1,748.5

1,704.2

(2.5)

407.8

407.8

0.0

0.63

0.62

(1.5)

2020e

1,944.5

1,867.2

(3.9)

459.8

451.6

(1.8)

0.73

0.70

(4.1)

Source: OPAP accounts, Edison Investment Research. Note: For 2018 ‘old’ figures are Edison estimates and ‘new’ actual.

Lottery (50.4% of GGR): 3.7% increase in Q418

Lottery GGR decreased by 4.7% to €779.9m in FY18 (vs our estimate of €785.3m). The decline is largely due to VLT substitution as well as the negative impact of shop closures. But encouragingly, Q418 increased by 3.7%, which was due to a favourable Joker jackpot, as well as a positive impact from the new Kino features introduced in the quarter.

Looking ahead, the introduction of online products (Joker was launched in March 2019, Lotto should follow later in FY19, and Kino is subject to regulatory approval) should help to mitigate the retail decline and we forecast broadly stable revenues in this division in FY19 and FY20.

Betting (26.3% of GGR): 11.4% decline in Q418

Betting GGR declined by 3.5% to €406.2m in FY18 (vs our €429.5m estimate), with an 11.4% decline in Q4, as a result of tough year-on-year comparisons and a maturing Virtuals business. OPAP has taken a number of measures to stabilise this division, with results expected to materialise in FY19. These include the recent relaunch of the online business as well as an increased number of self-service betting terminals (SSBTs) installed (5,370 at YE18). Management has stated that Q119 has shown positive trends, including strong margins in February. Nonetheless, there are no major competitions in 2019 and we therefore forecast a 3% revenue decline in FY19, returning to 5% growth in FY20, as the online offering begins to gain traction.

Instant & Passives (9.8% of GGR): Bouncing back in Q418

FY18 GGR in this division declined by 4.2% to €152.2m (due to weakness in Scratch) but this was encouragingly above our estimate of €141.4m, due to a 1% improvement in Q418 (after positive Christmas Scratch promotions). The company has announced some product innovations, which have helped stabilise revenues, and we forecast broadly flat GGR for FY19 and FY20.

VLTs (13.5% of GGR): On track for 25,000 machines in 2019

At FY18, OPAP operated 18,944 VLTs in 351 Play Gaming Halls and 1,915 agencies and the company has stated that it is on track to install all 25,000 VLTs by the end of FY19. The dedicated gaming halls currently contribute approximately two-thirds of VLT GGR. New initiatives include the launch of a VLT jackpot in Q219, which management hopes will counteract the ongoing competition from the illegal market.

VLT GGR increased from €57.6m in FY17 to €208.7m in FY18 (vs our €201.4m estimate). Over the course of 2018, GGR/VLT/day has been declining with the addition of new machines, although Q418 GGR/VLT/day of €47 was sequentially higher than Q318 (partly seasonal). For FY18 as a whole, GGR/VLT/day was €41, which we forecast will remain stable in the near term. Overall we continue to expect strong GGR growth (45% growth in FY19 and 15% in FY20).

Cash flow and balance sheet

The business model is very cash generative, given the franchise model, the limited working capital risk and the fact that all licence payments have been made.

Capex: the 2017–19 investment programme (technology, slot machines, SSBTs) is coming to an end. FY18 capex of 51.9m compares to a peak of €75m (excluding licence payments) in FY17 and management has guided to capex of c €30m in FY19 and 15-25m in FY20.

Net debt: FY18 net debt of 459.0m was lower than our estimate of 473.0m, largely due to a lower than forecast cash income tax payment. This equates to 1.3x net debt/EBITDA and 15.1x interest cover – comfortably within the company’s long-term targets. For FY19, our forecasts include an additional 100m debt for the Stoiximan acquisition (after a €48m net payment in December 2018) and, assuming no special dividends, the net debt level goes to €510.2m in FY19.

Dividend: management has committed to return the majority of free cash flow to shareholders and has announced a final dividend of 0.60, bringing the total to 0.70, which equates to over 100% of FCF (vs our 90% assumption). We conservatively continue to forecast a 90% payout, which equates to €0.75/share in FY19. Note that although OPAP has historically distributed special dividends, we have not assumed any further specials in our forecasts.

Exhibit 2: Divisional summary

2014

2015

2016

2017

2018

2019e

2020e

Lotteries

817.3

829.9

841.3

818.0

779.9

795.5

803.5

Sports Betting

456.3

411.9

397.2

421.1

406.2

394.1

413.8

Instant and Passives

104.1

157.9

159.1

158.9

152.2

152.1

152.0

VLTS

0.0

0.0

0.0

57.6

208.7

302.6

347.9

Stoiximan

0.0

0.0

0.0

0.0

0.0

60.0

150.0

Gross Gaming Revenues

1,377.7

1,399.7

1,397.6

1,455.5

1,547.0

1,704.2

1,867.2

GGR Contribution and other levies

(404.5)

(412.0)

(466.7)

(482.6)

(507.1)

(553.9)

(609.8)

% GGR

-29%

-29%

-33%

-33%

-33%

-33%

-33%

NGR

973.1

987.7

930.8

972.9

1,039.9

1,150.3

1,257.4

Agents Commission

(359.7)

(362.4)

(358.4)

(369.9)

(381.1)

(403.8)

(420.3)

% of NGR

-37%

-37%

-39%

-38%

-37%

-35%

-33%

Other NGR related commission

0.0

0.0

(26.3)

(38.3)

(53.0)

(65.4)

(71.8)

% of NGR

0%

0%

-3%

-4%

-5%

-6%

-6%

Lottery

375.3

380.7

345.7

337.7

330.3

337.6

341.8

Sports Betting

193.3

176.5

147.1

155.2

159.2

157.1

165.2

Instant and Passives

46.7

69.5

54.7

54.8

51.5

51.4

51.6

VLTs

0.0

0.0

0.0

18.4

66.2

97.4

112.0

Other

(1.8)

(1.4)

(1.4)

(1.4)

(1.4)

(1.4)

(1.4)

Stoiximan

0.0

0.0

0.0

0.0

0.0

39.0

96.0

Gross profit from gaming operations

613.5

625.3

546.2

564.7

605.9

681.2

765.3

Total gross profit

613.5

625.3

570.1

592.6

642.7

719.8

805.8

Payroll

(58.6)

(46.1)

(56.2)

(63.8)

(76.1)

(79.9)

(91.8)

% NGR

-6%

-5%

-6%

-7%

-7%

-7%

-7%

Marketing

(78.9)

(69.5)

(65.9)

(67.4)

(65.8)

(79.0)

(90.9)

% of NGR

-8%

-7%

-7%

-7%

-6%

-7%

-7%

Other operating expenses

(129.5)

(132.7)

(140.4)

(155.0)

(147.2)

(153.1)

(171.5)

% NGR

-13%

-13%

-15%

-16%

-14%

-13%

-14%

EBITDA

346.5

377.1

307.5

306.5

353.6

407.8

451.6

EBITDA margin

25%

27%

22%

21%

23%

24%

24%

Source: OPAP, Edison Investment Research

Exhibit 3: Financial summary

€m

2014

2015

2016

2017

2018

2019e

2020e

31-December

ISA

ISA

ISA

ISA

ISA

ISA

ISA

INCOME STATEMENT

GGR

 

 

1,377.7

1,399.7

1,397.6

1,455.5

1,547.0

1,704.2

1,867.2

NGR

 

 

973.1

987.7

930.8

972.9

1,039.9

1,150.3

1,257.4

Cost of Sales

(764.2)

(774.3)

(827.5)

(862.9)

(904.3)

(984.5)

(1,061.4)

Gross Profit

613.5

625.3

570.1

592.6

642.7

719.8

805.8

EBITDA

 

 

346.5

377.1

307.5

306.5

353.6

407.8

451.6

Normalised operating profit

 

 

289.6

318.1

252.4

218.8

258.4

304.9

347.0

Impairments

7.5

(14.1)

0.0

(2.7)

(17.5)

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Share-based payments

(0.9)

(1.2)

(3.1)

(1.5)

(1.6)

(1.6)

(1.6)

Reported operating profit

296.2

302.8

249.3

214.6

239.3

303.3

345.5

Net Interest

1.6

(4.7)

(13.3)

(21.1)

(23.5)

(21.7)

(22.8)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

7.8

1.5

1.0

(0.3)

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

299.0

314.9

240.0

197.5

234.9

283.2

324.2

Profit Before Tax (reported)

 

 

305.6

299.6

236.9

193.2

215.9

281.7

322.7

Reported tax

(106.4)

(89.7)

(64.1)

(61.6)

(70.6)

(81.7)

(93.6)

Profit After Tax (norm)

212.3

223.6

170.4

140.2

166.8

201.1

230.2

Profit After Tax (reported)

199.2

209.9

172.9

131.6

145.3

200.0

229.1

Minority interests

(4.2)

0.8

(2.6)

(5.4)

(2.0)

(4.8)

(7.3)

Discontinued operations

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

208.1

224.4

167.8

134.8

164.8

196.3

222.9

Net income (reported)

195.0

210.7

170.2

126.2

143.3

195.2

221.8

Basic average number of shares outstanding (m)

319

319

319

318

318

318

318

EPS - basic normalised (€)

 

 

0.65

0.70

0.53

0.42

0.52

0.62

0.70

EPS - diluted normalised (€)

 

 

0.65

0.70

0.53

0.42

0.52

0.62

0.70

EPS - basic reported (€)

 

 

0.61

0.66

0.53

0.40

0.45

0.61

0.70

Dividend (€)

0.70

0.40

1.29

1.10

0.70

0.75

0.86

Revenue growth (%)

1.6

(-0.2)

4.1

6.3

10.2

9.6

Gross Margin (%)

44.5

44.7

40.8

40.7

41.5

42.2

43.2

EBITDA Margin (%)

25.2

26.9

22.0

21.1

22.9

23.9

24.2

Normalised Operating Margin

21.0

22.7

18.1

15.0

16.7

17.9

18.6

BALANCE SHEET

Fixed Assets

 

 

1,343.4

1,318.9

1,330.3

1,356.5

1,368.7

1,444.2

1,358.1

Intangible Assets

1,284.2

1,237.2

1,231.0

1,218.5

1,157.2

1,207.5

1,131.2

Tangible Assets

44.2

56.2

67.6

109.3

111.5

136.7

126.9

Investments & other

15.0

25.5

31.7

28.7

100.0

100.0

100.0

Current Assets

 

 

409.4

389.9

437.4

440.4

381.2

435.0

504.7

Stocks

3.0

4.2

12.5

7.9

10.7

10.7

10.7

Debtors

92.3

55.2

80.6

127.8

137.4

142.4

147.4

Cash & cash equivalents

297.4

301.7

273.5

246.1

191.5

240.2

304.9

Other

16.7

28.8

70.8

58.5

41.7

41.7

41.7

Current Liabilities

 

 

(457.9)

(325.0)

(390.2)

(482.0)

(295.0)

(285.0)

(275.0)

Creditors

(170.4)

(127.1)

(149.3)

(173.9)

(176.7)

(166.7)

(156.7)

Tax and social security

(178.2)

(129.9)

(55.5)

(89.8)

(73.1)

(73.1)

(73.1)

Short term borrowings

(0.0)

(32.1)

(118.7)

(169.2)

(0.2)

(0.2)

(0.2)

Other

(109.3)

(35.9)

(66.7)

(49.2)

(45.0)

(45.0)

(45.0)

Long Term Liabilities

 

 

(59.8)

(181.0)

(305.3)

(556.7)

(695.4)

(795.4)

(795.4)

Long term borrowings

0.0

(115.0)

(263.0)

(513.1)

(650.3)

(750.3)

(750.3)

Other long term liabilities

(59.8)

(66.0)

(42.3)

(43.6)

(45.1)

(45.1)

(45.1)

Net Assets

 

 

1,235.1

1,202.8

1,072.2

758.2

759.5

798.8

792.4

Minority interests

(67.4)

(41.0)

(37.0)

(43.4)

(36.8)

(38.0)

(42.0)

Shareholders' equity

 

 

1,167.7

1,161.8

1,035.3

714.8

722.8

760.8

750.4

CASH FLOW

Op Cash Flow before WC and tax

347.4

378.3

310.7

308.0

355.2

409.4

453.2

Working capital

7.0

(41.0)

(71.9)

(9.2)

(25.0)

(15.0)

(15.0)

Exceptional & other

1.0

9.1

(12.4)

(0.4)

1.1

0.0

0.0

Tax

(68.8)

(142.5)

(116.9)

(31.4)

(51.7)

(71.7)

(83.6)

Net operating cash flow

 

 

286.6

203.9

109.4

266.9

279.6

322.7

354.6

Capex

(18.6)

(39.6)

(42.9)

(96.3)

(51.9)

(30.0)

(20.0)

Acquisitions/disposals

(18.6)

(0.8)

(0.0)

(31.5)

(47.9)

(94.9)

0.0

Net interest

1.6

(4.2)

(11.9)

(19.6)

(24.6)

(21.7)

(22.8)

Equity financing

(8.3)

(24.2)

(11.9)

(1.8)

(5.5)

0.0

0.0

Dividends

(79.8)

(277.3)

(292.8)

(446.1)

(154.0)

(222.6)

(239.9)

Other

48.1

(0.7)

(12.7)

0.3

(18.6)

(4.8)

(7.3)

Net Cash Flow

211.0

(142.9)

(262.8)

(328.0)

(22.8)

(51.3)

64.7

Opening net debt/(cash)

 

 

(86.4)

(297.4)

(154.5)

108.3

436.2

459.0

510.2

FX

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other non-cash movements

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(297.4)

(154.5)

108.3

436.2

459.0

510.2

445.6

Source: OPAP, Edison Investment Research

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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.

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Copyright: Copyright 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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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

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

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 (nor will such persons be able to purchase shares in the placing).

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

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. 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

1,185 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

1,185 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 Edison analyst 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 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). 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

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

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 (nor will such persons be able to purchase shares in the placing).

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

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. 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

1,185 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

1,185 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

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