62 Kifissou Avenue, Peristeri Tel.: Fax: Q Interim Management Statements Conference Call

Transcription

1 62 Kifissou Avenue, Peristeri Tel.: Fax: Q Interim Management Statements Conference Call Tuesday 31 st May 2016, 16:00 (GR Time) Conductors: Kamil Ziegler, Chairman & CEO Michal Houst, CFO, Executive Director Conference Call Conducted by Chorus Call Hellas CHORUS CALL HELLAS PROVIDER OF TELECONFERENCING SERVICES TEL: FAX: Web:

2 OPERATOR: Good afternoon ladies and gentlemen, this is the Chorus Call Conference Operator. Welcome and thank you for joining the OPAP Q Interim Management Statements conference call. Please note that a PDF presentation for the Results is now available on OPAP s website under the section for Investor Relations. At this time I would like to turn the conference over to Kamil Ziegler, Chairman & CEO & Michal Houst, CFO & Executive Director and the Management team, Mr. Ziegler, please go ahead. ZIEGLER K: Thank you very much. Good afternoon, ladies and gentlemen. Welcome to OPAP s First Quarter Update Conference Call. Starting with a short reference that is beyond scope of the usual results commentary, I hope that all of you appreciate that despite not being any more mandatory, OPAP maintained in the first quarter high reporting standards providing investors with the same level of information and data like before. We believe that this is in line with OPAP s long term commitment, to focus on investors needs and promptly respond to their requests. In line with these requests and following the best corporate governance, practices and suggestions, the Board of our Company decided to split the roles of the Chairman and the CEO, and as such selected Mr. Damian Cope as OPAP s new 1

3 CEO, effective from July 1 st Damian has a successful background of hands-on experience in the gaming industry and as such, I firmly believe that his know-how will very much assist OPAP in further achieving its goals and in further huge development. On my side, I would like to welcome Damian as essential part of our team and looking forward that our co-operation will be up to the highest standards, working for benefit of the Company and shareholders of our Company. Just to inform you, Damian is already present with us today. Jumping to our performance overview, the macro picture in Greece during first quarter did not change materially versus the previous quarters. Overall, the economic slowdown persisted for yet another quarter with real GDP contracted by 1.4% on a year-over-year basis in the first quarter, and retail sales dropping by 4.2% during the first two months of this year. At the same time, one should not neglect that the measures voted earlier in April, will further weaken materially the domestic economic activity. We think the disposable income and private consumption are likely to take the heaviest hit, as the measures focus mostly on significant increase of the on direct taxes across the board and on pension system reform which is heavily based on either public spending cuts or additional contributions from individuals. You may remember that as stated in our previous conference call as well, we believe that this environment does not allow for big optimism when it comes to our 2

4 revenue figures in The same trend was depicted in our figures for first quarter Gross gaming revenue dropped by 4.4% while NGR decreased by 2.5%. However, adjusted for 35% GGR contribution while at as of January the 1 st the NGR declined by a higher 11.5%. On the expenses side, we managed once more to efficiently control costs, leading to a flat EBITDA performance on year-over-year basis at amount 93 million shaping at the same time a higher EBITDA margin of 27.3% versus 26.2% in the same period of last year. Nevertheless, again EBITDA adjusted for the GGR contribution increase dropped by 15.4%. Further down the profitability line, the picture remained the same with net profit dropping by 9%, but on an adjusted to the GGR uplift basis, that led to a significant 26% drop to a level 42.8 million. Balance sheet wise, our cash position remained exceptionally strong reaching 343 million owing to once more robust the free cash flow generation and low working capital mix. You may recall that one quarter ago we decided to distribute a dividend in amount We noted at that time the decision was taken after carefully balancing between the present and the future of the Company and that we would like to be ready for any event. Following recent developments, we are now in a position to proceed with an additional distribution of 0.57 which based on yesterday s closing price leads to a standalone yield of roughly 8%. 3

5 As for individual segment s performance, numerical games managed to increase by 2.4% being the period s clear outperformer.. On the one hand unfavourable jackpots rollover in Joker led the game to experience a year-overyear decline. However, KINO managed to more than counterbalance the drop. Specifically, the KINO Bonus initiative launched in fourth quarter 2015 continued to perform well leading overall KINO to growth on year-overyear basis. We believe that this trend will continue in the short term although KINO is closely related to the private consumption and as such, the aforementioned governmental taxation measures can obviously affect its performance. With regards to sport betting, the segment s GGR dropped by 14% owing in the most part to STIHIMA. Although it is true that in terms of like-for-like NGR, that means after adjusting for GGR increased contribution, the game has performed better versus GGR on the back of reducing trading opportunities and it is also beyond any doubt that the game has been under pressure for the last couple of months. We are currently working on options to rejuvenate the game both on retail and online basis and aim to be in the position to share more with you on our plans during the next quarterly call. As for the third segment of our business, namely instant and passives, it also declined by 8.7% for the period. We have stated in the past that this segment has been hit most severely by capital controls and the strength is still persisting. As for the future, we have no evident signs that 4

6 the trend is going to be reversed in the short term, but nevertheless, we continue with our planning related to POS optimization and the new ticket series launch and also further improvement of operational efficiency in this area. Setting aside our games performance, I would like to turn to the taxation front. As you may remember, in late year 2015, it was in the first quarter, the Greek government voted upon the imposition of a levy in our games portfolio. Following several months of uncertainty, the Greek government decided then to replace the levy with an increased GGR contribution of 5 percentage points which now settles at 35%. Although the evolution of the levy was a justified move, the new rate is amongst the highest in Europe, while arguably it is the highest when considering that it relates to the full spectrum of products offered. Just as a reminder, in taxes OPAP paid 650 million in year 2015 alone, while it had contributed almost 2 billion in the past three years and as you will understand, the once more increased contribution is an additional burden that will cost several thousands of millions. Note that all independent providers estimates on the market size take into account almost double figures versus the ones declared by the Greek Gaming Commission and as such, we will take the discrepancy as an important indication of the tax evasion size. With regards to our actions post the GGR contribution increase as mentioned previously, Quarter was yet another quarter of material expenses containment. 5

7 Excluding the variable parts of agents commission and GGR contribution and levies, our total operating expenses were reduced by a sizable 6.9% mostly stemming from savings in marketing expenses. Linking that with the GGR contribution hike, we are now assessing our options with regards to what could be done in order to contain the impact on our figures. At the same time, I ll remind you that during 2015, we concluded successfully most, if not all, of the cost containment envisaged when we took over the management of the Company. At the first glace, we have already touched upon the most of the potential savings we could think of, but that said, I can reassure you that we will take all necessary measures so as to mitigate at least partially the negative impact without at the same time hurting our business. AS for the VLTs, I once again feel that there is a must say that there is not much that we could say when it comes to tangible development related to what OPAP has consistently been looking for. That is the operations commencement based on the rules and conditions that are in line with international standards and what OPAP has paid for the license. On the contrary, the regulation is still the same. At the same time, we had to once again repeat our thesis that we will launch the project should the regulation change according to the best industry practices and we are still committed under the scenario to deliver to the Hellenic Republic the much desired revenues, at the same time, ensuring proper control and players protection. 6

8 Summing up, we are proud for our reported set of numbers in the circumstances in the first quarter And we think that under a fair and stable environment, OPAP will continue to be a leader in the corporate world in Greece and a role model for its actions when it comes to the societal support and responsibility. At the same time, we want to ensure our shareholders that we will take all appropriate actions so as to promptly adapt to recently imposed challenges and also to do all actions to properly defend all rights of our Company. With this final comment, I have now concluded my opening statement and we are now ready for your questions. As always, thank you very much for your patience and attention. Q&A OPERATOR: The first question comes from the line of Mr. Kourtesis Iakovos from Piraeus Securities. Please go ahead. KOURTESIS I: Yes, good afternoon, gentlemen, a number of questions really. First of all, I was wondering following the distribution of retained earnings this year, if you would consider additional distribution of retained earnings in the following years even if this means that you would have further raise your debt? Second has to do with CAPEX needs, where do you seek out your CAPEX needs funding for the current fiscal year? And if you will you would think that following the recent developments for the regulation of 7

9 or the expected developments for the regulation of the online you will have if you think that you will have to pay for one of the licenses issued by the Greek government here during the following months? In terms of management change if you could further elaborate a little bit further on the recent split in the role of CEO and Chairman and the recent appointment you had? On VLTs, from a legal perspective, do you think that there is a deadline according to which the project should become operational by year-end and do you still keep the same number of machines in your warehouses, I think you ve mentioned the number of 8,000 to 9,000. If you could further elaborate on STIHIMA and the recent trends we ve seen as to what would be any specific rejuvenation actions ahead of year 2016? And further elaborate a little bit further on cost cutting initiatives to mitigate the negative impact from the GGR tax, where do you see there is room for additional cost cutting initiatives? And why payroll expenses were that much increased during this quarter? That will be from my side. Thank you. HOUST M: Hi, thank you for the questions. Look, I will answer some of the questions and then Kamil will answer the rest. Now, the first question is about retained earnings and the distribution in the following years. I think, we don t think about anything like that yet, we said and we reiterate all the time that we would distribute the bulk of the cash flow after all the investment necessary for the Company. And we don t have anything in our minds yet, so we cannot comment whether there could be any further distribution or not. 8

10 With regards to the other question about the CAPEX needs, we indicated too that the full year CAPEX spend is about 50 million but it includes VLT, so it really depends whether we would start with the VLTs or not. If we would not start then the CAPEX needs are quite limited, up to 10 million and probably even less, and if we would start the VLT spend, we talk about 25 million probably up to the end of the year. And the last question that I would answer was about the cost cutting and the payroll increase. So we already said that we are more or less done with the cost cutting which means that we would we are still looking inlet s say being as efficient as possible but we don t see any big let s say cost cutting initiatives coming. And with regards to payroll, probably you have seen that we increased the number of the people significantly, so this is let s say this is driven by the increased number of the people as well by consolidation of the payroll in to the costs. And for sure, with the new business line of horse races as well. ZIEGLER K: Okay. I will try to answer some of the questions, regulation for online and the payment for license. Definitely, we don t expect to pay any penny for such license because OPAP already paid paramount amount for all licenses which we are now using and OPAP never get any gift in the form of not paying anything to operate on the market in the let s call it grey zone. It means OPAP 9

11 will not pay, we don t expect to pay because it was already paid and let s call me bloody money. And on the other side, I still want to repeat what is the position of OPAP. Position of OPAP is that OPAP paid this money for the exclusive right and we don t have reason to change this many times repeated opinion and position of OPAP. As such it must be clear and this is also fully in line with all steps and all declarations which we did up to this moment. Related to VLTs, VLTs, yes, I can confirm that we still have this number of machines in our warehouses. There was no decrease for any single one machine because as we said we are still committed to start this project when it is economically reasonable. And once we can have the reasonable achievement to start to produce revenues for mainly Hellenic Republic because the participation of the Greek State is bigger than the participation of OPAP, but of course to generate the revenues for OPAP and shareholders of OPAP. Further elaboration about the CEO or Chairman, please, this is something which we indicated also in the our Annual Report for 2014, 2015 when we commented that s because of let s call it some extraordinary period of the restructuring of the Company that we are keeping this position in hands, let s call it in one person, but then we also indicated that once let s call it this period is there or it s over, somehow that we will follow up the best practices of the corporate 10

12 governance code here and to split these positions. This is something what is happening. I must personally say that the old agenda to relate it to the complex management of such complex Company in the current circumstances like OPAP is, needs the enforcement of the management, needs to get somebody with a huge experience in the business to operate or to manage the business of our Company. And to be also focused more on the development of the Company. And this is the reason why we agreed and the Board approved in the denomination of the Damian to be the CEO. And as we also declared that we will fully cooperate, we will have the clear split of roles because I will continue as the Executive Chairman of the Board. That is the and I am very much looking forward because I consider this is a very, very strong enforcement of the capacities of our team. This is everything that somehow wanted to address. KOURTESIS I: Okay. If I may ask about VLTs from a legal perspective, do you still think that you will you are enforced to commence the project by year-end? Because the last change in regulatory framework took place on June 2015 and I think I am not quite sure but if you could further elaborate I think that one and a half year after this, you should commence with the project although at the moment the regulatory framework does not seem sufficient for you, could you further elaborate on this? ZIEGLER K: I don t want please anyhow to elaborate because it could be just the speculation. As is already known, we are 11

13 unfortunately on the arbitration process with the Hellenic Republic where we are trying to convince and that s what happened was something which is contradictory to our rights. Of course, I just want to stress we are here and actually you could see our results and also our profile, we are here to do business, we are here not to lead the legal disputes and so on, it means our strong preference is to do business. KOURTESIS I: Thank you very much. OPERATOR: The next question comes from the line of Draziotis Stamatios of Eurobank Equities. Please go ahead. DRAZIOTIS S: Yes, hi, there and thank you very much for taking my questions, just a couple of follow-ups and a question regarding agent commissions. Let me first start with the follow-up on VLTs, just wondering have you actually initiated negotiations recently with the Finance Ministry representatives on the VLT issue after the player tax issue got sorted out? And if you have discussed with the Ministry, do you have any sort of indication as to you know, what the state s intentions on the matter might be i.e. you know, whether they might be keen to reconsider the regulatory framework or whether they are you know, happy to continue ignoring VLTs as a source of tax revenue? And actually related to the regulatory framework, as far as I understand, the term of the Gambling Commission Chairman expires in a few weeks, just wondering what happens next, does the position remain vacant and if it 12

14 does, would this create problems from a regulatory perspective that might affect your business, for example, you know, getting approvals for your marketing campaigns et cetera? So that was my first and rather a long question. Second one would be a follow-up on the dividend. I am just wondering could you just tell us what exactly triggered your decision for you know, for such a high dividend proposal, was it the resolution of the player tax situation or may be the imminent staff level agreement between Greece and its creditors which will hopefully restore investor confidence or may be both, and I am just wondering how we should actually treat this distribution exactly, is it a special dividend or should we see this as an early interim dividend, which depends on the 2016 performance? And my third question would be on the agent commissions, are there any news as to when there might be an agreement on a new commission structure and maybe this also relates to your STIHIMA rejuvenation actions. Will this new commission structure will be part of a new regulation that will have to be published at some point in the coming weeks and months and does it actually depend on the gambling commission ratifying the agreement between you and the agents? Thank you. ZIEGLER K: Okay. I will, Stamatios, I will start with the question related to the VLT projects. Definitely, I don t want to say that we should negotiate or not. I just want to say that there is the clear position of the Company related to VLT project, and we are always ready for any reasonable 13

15 negotiations. So that we expressed our position already some time ago, and we are really, really ready for any let s call it reasonable negotiation, because we are sharing as it is known, the view or your view that there are some money being on the pave, on the door, on the streets, for the stakeholders and this money should be taken, that s it, and we are ready for that. Then question related to Chairman of the Hellenic Gaming Committee, definitely this is not question for us, because we don t decide about this position. We are the partners of Hellenic Gaming Committee or the regulated subject, let s say, and this is we are waiting, and we are in the waiting models like the others because also that s known to us that the term is 19 th of June and currently still not known what will happen. I don t want to speculate what happen if there is nobody as the Chairman of the Hellenic Gaming Committee, it depends on that how the committee should work and it s something that is very untested water for anybody. Then related to about dividend that Michal will explain. You just mentioned that s if it is one reason is that potentially when the deal is done with creditors that there should be some restoration of investor confidence. I'm very convinced that if for example, the big investment, like VLT is de-blocked and a reasonable solution is found that should be interesting and very positive signal to the investors and can increase the investor confidence, it s just my personal comment. 14

16 HOUST M: Yes. Thanks, so with regards to the dividend. I think we indicated in the let s say in the annual conference call that we are in the position unfortunate position that we cannot evaluate what is our cash flow and cash position because of, let s say, ongoing negotiations and we haven t at that point of time we haven t known you know, how it could evolve. So in this situation after, let s say, the resolution through 35% increase of the GGR tax, I think we are in quite clear understanding what is our cash flow, and what would be our cash flow in the future. So given the fact that we have, let s say, on the mother company almost 250 million cash on the balance sheet, we decided to distribute 180 million out of this cash to the shareholders, which is in line with what we were saying the past that there could be eventual distribution. For sure, this is special dividend, for sure this is not something that we should take into account going forward that it would it should be repeated you know, in some very regular manner, and whether this is rather interim dividend you know, somehow guessing or forecasting the outcome of that year and just pushing the cash flow upfront. I think some portion of it could be taken could be understood as interim dividend. Yes, our half year results were very close, so almost, so part of this you can consider as interim. DRAZIOTIS S: That s very helpful. Thank you. And just to remind you, the last question about agents commissions, sorry about the many sub parts in the question. So, I was just 15

17 wondering whether there is any news as to when we might have an agreement on a new commission structure, is this something that you are still working with the agents about it. ZIEGLER K.: Yes, we are still working and discussing with our agents, there is one hard fact, and the hard fact is that s increase of GGR tax, and this is something, which is quite good that OPAP cannot adjust alone. And this is some factor which is somehow now put on the table and we renegotiate all these. DRAZIOTIS S: That s very clear. Thank you. OPERATOR: The next question comes from the line of Mr. Lewis Vaughan from Morgan Stanley. Please go ahead. LEWIS V: Hi, good afternoon. Just on the duty increase, can you explain why it s 14.2 million, if we take an extra 5% on Greek revenues, it looks like it should be more like 16.5 million, so just what the difference is and why the duty increase is a relatively modest impact? And secondly, related to that, I think there is some sort of clause in the original Emma Delta agreement that says that, Emma Delta should be reimbursed any increase in GGR rate. Can you just comment on that, and whether you will be or Emma Delta will be looking to recoup those funds? And then thirdly, just a follow-up on the comments on STIHIMA; can you just explain why you think the revenues have been so weak, has the market been down that much or do you think 16

18 you are losing market share to online operators or that sort of grey market or black market operators? Thanks. HOUST M: Okay related to Emma Delta, definitely we cannot anyhow answer, this is related to Emma Delta and not related to us, the management of OPAP. So this is this issue that regards to the first question, just apologize me, because I'm not in a position now to evaluate a very small number. So maybe if you can call us after the call today; and we will basically try to find out the answer and we can discuss it offline. ZIEGLER K: Yes, and STIHIMA, I saw, this is the mix, definitely we must be aware of the fact that there could be some portion of the business taken by, let s call it, the grey operators. And of course, that s the part of the whole issue. Could be also related to our changed policy which we mentioned especially in the when you look at the revenue side, that we are trying to block the trading opportunities which Relatively are very often to us, which is also reflected in the better payout ratio, and partially it can be also clearly counted initially slower or lower spendings of our customers. Because what we can see is for example, the number of slips is the same like last year or slightly higher than last year, but the average number of the slip is lower, which is by the way the fact, which we can see also in the scratches, for example, when the number of sold scratches is the same or very similar one like last year, but let s call it average price per sold scratches is lower. 17

19 LEWIS V: And if I can just follow-up on online, can you give us roughly what your online revenues are in the period. And then, are you in a position to launch games, casino games and poker as and when you are alert? Thanks. ZIEGLER K: I will start with casino and poker not because this is exactly the case, which is telling about the situation in Greece; because poker and live casino games, this is the licenses which were not give to anybody. It means, that if anybody here in Greece is operating these games is doing illegally. And if the Greek state wants to, for example, to sell these licenses then there is the OPAP with the right of first refusal and that OPAP should be asked if OPAP is interested to do it. It means that we cannot do it, because we act legally, and we are not offering the games for which we don t have licenses. It means that, if you can see anybody operating here or offering here in Greece the poker online, then question could be on which license somebody is doing this. LEWIS V: Okay. And then, roughly what revenues you are generating from online sports? ZIEGLER K: Roughly, 2.5% of STIHIMA, of the whole STIHIMA revenues. LEWIS V: Great. Thank you. ZIEGLER K: Pleasure. OPERATOR: The next question comes from the line of Mr. Chorafas Angelos from Alpha Finance. Please go ahead. 18

20 CHORAFAS A: Hello, good afternoon. I actually have a quick question about your balance sheet structure. Actually I m wondering if you have in mind any targeted leverage in the years to come, either in terms of net debt to EBITDA or net debt to equity. Thank you. HOUST M: Yes, hi. No, we don t have any targeted leverage as basically our policies would we said that basically we distribute the bulk of the free cash flow after the investment. But, we don t have any targeted leverage at this moment in our minds. And we think with the unstable situation in Greece, you know, it s little bit tricky to have something in our mind, let s say as long-term structure. CHORAFAS A: Okay, so no specific number? Okay, thank you. OPERATOR: The next question is from line of Mr. Birbos Dimitris from IBG. Please go ahead. BIRBOS D: Yes, hi, gentlemen, thank you for taking my questions. My first question relates to the performance of the sports betting game, it was minus 11% in the fourth quarter 2015, minus 14% in the first quarter of So I am wondering is your let s say prediction for the of the course of the year if we should expect a double-digit decline in the revenues of sports betting given that we will have all the new austerity measures, plus the increased competition from online operators. So this is my first question. The second question relates to the OPEX reductions in the first quarter, so I am wondering if this is a recurring reduction 19

21 that we should expect something like 6 million per quarter, another reduction. And I m talking not for the agent commission, for the other OPEX. And my last question has to do with an update about the horse race game, if you could provide what was the GGR in the first quarter of And also if it was included in your sports betting revenues or I don t know in the lottery, I don t know if in any other category? Thank you. HOUST M: Hi, with regards to the sport betting, I think I have already answered and with regards let s say forward-looking statement, we don t give forward-looking statement. So we you know, and which is one thing and the second thing is in current situation, we are still not in the position to understand what would be the impact of all the taxation increases and measures on let s say the disposable income of our clients and of the population. So we are still working on it. So we cannot really give you a proper answer because we are waiting for to answer ourselves first. So it s really such a big change of the framework of taxation, framework in Greece that it s not easy and it s very, very tricky to understand the impact on the disposal incomes. The second question was.? BIRBOS D: On OPEX, if the reduction is recurring? HOUST M: With regards to the OPEX, of more or less there was no one-offs, so you should consider this as more or less recurring picture of the OPEX, including let s say the increase of the payroll costs, because we, as I already mentioned, are several hundreds of people compared to the 20

22 one year ago. So this is definitely reflected already in the number. With regards to the horse racing, they are part of the sports betting, but we do not disclose this level of details. So forgive us. ZIEGLER K: Let s I would say that this is still so marginal one that this is somewhere about behind comma in the whole picture and we hope that it s we are doing everything to, of course, improve the whole situation, which we can see some increasing trends there. But that s still in the whole amount it is a marginal amount. HOUST M: But, if you wish to look, it s more or less on the level of what it was you know, at the time. BIRBOS D: Yes. May I ask something more in relation to EBITDA and the impact of the new GGR tax increase by 5%? You have mentioned in an interview that the estimate of the impact will be about 70 million to 75 million. So I understand that the GGR on the Group level will be lower this year. So I m wondering if consensus estimate of EBITDA of 300 million for 2016 can be achievable. As it is now, we should also expect from extra cost cutting efforts to accomplish that because it seems that if we exclude the GGR tax, the additional impact, we will stand compared to last year to around 300 million and with the expected decline in the GGR, we have to go below that level. So I m wondering if you can provide some flavor on that, if the consensus for EBITDA 300 million or even more for this year can be 21

23 achievable and this will need some extra cost cutting as you have mentioned before? Thank you. ZIEGLER K: Yes. Let s say again, what we want to say that this is our policy and many times repeated we don t want anyhow provide a forward-looking statement. I mean just I don t want to say what could be potentially the EBITDA at the end of the year especially then starting first of July we will be co-responsible with Damien for this. But what I really want to confirm is, and we mentioned that we are thinking now, and not just thinking, we are very seriously preparing our analysis for the additional cost cutting at least to partially offset this whole issue. And also there are some other initiatives, which we are now considering at least partially to offset the whole issue. What we should we fully aware is, that if we take now any measure or if we now decide about any measure that s effectiveness [or a reflection of such measure in the Rio results will come later where unfortunately that s the increase of GGR tax with back dated validity starting first of January. It means that then in any case, on the let s call it comparable basis we are not able to come with the measures which could somehow significantly set off this impact. BIRBOS D: Okay. Thanks a lot. OPERATOR: The next question comes from the line of Mr. Draziotis Stamatis of Eurobank Equities. Please go ahead. 22

24 DRAZIOTIS S: Yes, hi, again. Just a quick follow-up, has your business being burdened with VLT-related costs in Q1, please? HOUST M: Yes. Unfortunately, yes, because we are keeping still some of I mean, we are keeping basically the venues, we are keeping some unfortunately, some let s say these suppliers, and covering their costs, otherwise they would need to get rid your let s say some of the staff that is very specific for the projects. We are keeping some of the staffing for that irrespective of the fact that we are trying to use the people in different areas, but basically it s little bit inefficient it s little bit inefficient to keep them and we keep them only for the project. So definitely we are impacted and we think that roughly its 5 million in the first quarter. DRAZIOTIS S: That s excellent, thank you. OPERATOR: We have a follow-up question from Mr. Birbos Dimitris from IBG. Please go ahead. BIRBOS D: Yes, hi. Just a quick follow-up question regarding the trends of the second quarter of 2016, if you could provide some flavor, if you have seen the same trend like those in the first quarter or have seen some improvement? Thank you. ZIEGLER K: Definitely, we were lucky and we had the series of the jackpots in Jokers. So, that s DIMITRIS B: Okay. 23

25 ZIEGLER K: We could see till the middle of May, some of the results on the other side, and last year exactly after the second half of May, we started to have the series of jackpots. So that currently we are but the real part of the end of the we will see how this will look, KINO is still somehow resilient results and the other games there is no significant deviances. DIMITRIS B: Okay. Thank you very much. OPERATOR: There are no more questions registered at this time. You may now proceed with your closing statements. ZIEGLER K: Okay. Thank you very much. So, ladies and gentlemen, once again thank you for your patience, attention during this call and also for your questions. I hope that we were able to provide to you the basic guidance about the results in the first quarter. And also, that we were able to answer your questions and provide let s call it guidance of what is happening with the Company and around the Company at this moment. So everything that we wanted say and also I hope that addressing what you wanted to be answered with one exception, which is this detailed figure which we will do at the follow-up, then I hope that we did it. So thank you very much. We are looking-forward to be in contact with you and of course, then and to be then again here together in the conference call for the second quarter where actually we can look-forward into two changes. One of them is that 24

26 this will be provided by the Damian Cope, as the new CEO. And the second one is we hope that our conference call will be done from the new headquarter of OPAP where we are currently starting, started to move. So its with nice wishes from the sunny Athens, nice afternoon, thank you very much, and goodbye. 25