OPAP : Q4 2023 Financial Report

OPAP S.A. Annual Financial Report 2023

Table of Contents

2

I. Representation of the Members of the Board of Directors	5
II. Board of Directors' Report for the period 1.1.2023 -31.12.2023	6
1. Financial progress and performance for the year 2023	7
2. Significant events during the year 2023 and their effect on the Financial Statements	10
3. Main risks and uncertainties	17
4. Company's strategy and Group's prospects	23
5. Related Parties significant transactions	28
6. Corporate Governance Statement	30
7. Dividend policy - Distribution to the shareholders	107
8. Number and par value of shares	107
9. EU Taxonomy regulation	107
10. Other	110
11. Subsequent events	111
12. Alternative Performance Indicators (API)	113
ANNEX	115
III. Annual Financial Statements	119
Independent auditor's report	121
1. Statement of Financial Position	133
2. Income Statement	134
3. Statement of Comprehensive Income	135
4. Statement of Changes in Equity	136
4.1. Consolidated Statement of Changes in Equity	136
4.2. Separate Statement of Changes in Equity	137
5. Cash Flow Statement	138
Notes on the Financial Statements	139
1. Information about the Company and the Group	139
1.1. General information	139
1.2. Nature of operations	139
2. Basis of preparation	144
2.1. New Standards, amendments to standards and interpretations	145
2.2. Important accounting estimates and judgements	148
3. Summary of accounting policies	151
3.1. Basis of consolidation and investments in associates	151
3.2. Foreign currency translation	153
3.3. Operating segments	154
3.4. Revenue recognition	154

OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: [phone]

[Strictly Confidential]

OPAP S.A. Annual Financial Report 2023

3

3.5 GGR contribution and other levies and duties	156
3.6 Agents' commissions	156
3.7. OPAP S.A. Licence Extension 2020-2030	156
3.8. Finance income and Finance costs	157
3.9. Dividend income	157
3.10. Expenses	157
3.11. Intangible assets	157
3.12. Property, plant and equipment	159
3.13. Investment property	160
3.14. Goodwill	160
3.15. Impairment of non-financial assets	160
3.16. Leases	161
3.17. Financial assets	163
3.18. Inventories	166
3.19. Cash and cash equivalents	166
3.20. Equity	166
3.21. Current and deferred income tax	167
3.22. Provisions, contingent liabilities and contingent assets	168
3.23. Financial liabilities	168
3.24. Retirement benefits costs	169
3.25. Dividends payable	170
4. Structure of the Group	171
5. Operating segments	173
6. Intangible assets	177
7. Property, plant and equipment	181
8. Right-of-Use assets and Lease liabilities	183
9. Investment properties	185
10. Goodwill	186
11. Investments in subsidiaries	188
12. Other non-current assets	188
13. Deferred taxes - Income taxes	189
14. Inventories	193
15. Trade receivables	194
16. Other current assets	195
17. Cash and cash equivalents	196
18. Share capital and Share Premium	197
19. Reserves	198

OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: [phone]

[Strictly Confidential]

OPAP S.A. Annual Financial Report 2023

4

20.	Treasury shares	199
21.	Non-controlling interests	200
22. Borrowings	202
23. Employee benefit plans	203
24.	Other non-current liabilities	206
25. Trade payables	206
26.	Provisions	207
27.	Other current liabilities	208
28.	Dividends and Share Capital Return	209
29.	GGR contribution and other levies and duties	210
30. Agents' commission	210
31.	Other direct costs	211
32. Revenue from non-gaming activities	211
33.	Income related to the extension of the concession of the exclusive right 2020-2030	212
34.	Cost of sales related to non-gaming activities	212
35.	Payroll expenses	213
36. Marketing expenses	213
37. Other operating expenses	214
38.	Finance income / (costs)	215
39. Dividend income	216
40. Income tax expense	216
41.	Earnings per share	218
42.	Related party disclosures	219
43.	Other disclosures	222
44.	Financial instruments and financial risk factors	224
45. Audit and other fees	234
46. Subsequent events	235

OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: [phone]

[Strictly Confidential]

OPAP S.A. Annual Financial Report 2023

5

I. Representation of the Members of the Board of

Directors

(according to article 4, par. 2 of L. 3556/2007)

The members of the Board of Directors of ORGANIZATION OF FOOTBALL PROGNOSTICS S.A., the parent company (OPAP S.A. or the "Company"):

1. Kamil Ziegler, Chairman,
2. Jan Karas, Board Member and Chief Executive Officer,
3. Pavel Mucha, Board Member and Chief Financial Officer

notify and certify that as far as we know:

1. the attached Financial Statements (separate and consolidated) of the Group of OPAP S.A. and its subsidiaries (the "Group") for the period 01.01.2023 to 31.12.2023, which have been prepared in accordance with the applicable International Financial Reporting Standards, provide a true and fair view of the assets and liabilities, the equity and the results of the Group and the Company, as defined in paragraphs 3 to 6 of article 4 of the L. 3556/30.4.2007 and in compliance with authorization decisions by the Board of Directors of the Hellenic Capital Market Commission.
2. the Board of Directors' report provides a true and fair view of the financial position and the performance of the Group and the Company, including a description of the main risks and uncertainties, as defined in paragraph 3 to 6 of article 4 of the L. 3556/30.4.2007 and from authorization decisions by the Board of Directors of the Hellenic Capital Market Commission.

Athens, 12 March 2024

Chairman	Board Member and Chief	Board Member and Chief
	Executive Officer	Financial Officer

Kamil Ziegler

Jan Karas

Pavel Mucha

OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: [phone]

[Strictly Confidential]

OPAP S.A. Annual Financial Report 2023

6

1. Board of Directors' Report for the period

1.1.2023 -31.12.2023

(according to article 4 of L. 3556/2007)

This report of the Board of Directors of the Company has been published on the Company's website under the European Single Electronic Format - «ESEF», in accordance with the provisions of Law 3556/2007. In accordance with the provision of the articles 150-154 of L.4548/2018, the article 4 of Law 3556/2007, the Hellenic Capital Market Commission Decision 8/754/14.04.2016 article 2 and the Company's Articles of Association, we submit for the period 01.01.2023 to 31.12.2023 the annual Board of Directors' report, which includes the audited separate and consolidated Financial Statements, the notes to the Financial Statements and the audit report by the certified auditor.

The report describes the financial results of the Group for the period 01.01.2023 to 31.12.2023, as well as the significant events which took place in 2023 and the most significant events after the year end. The report also contains, a description of the main risks and uncertainties and the expected course and development of the Group, the corporate governance, the dividend policy, the number and the nominal value of shares and finally, the material transactions with the Company's and the Group's related parties.

OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: [phone]

[Strictly Confidential]

OPAP S.A. Annual Financial Report 2023

7

1. Financial progress and performance for the year 2023

Financial Performance

The Group's key financial figures are presented below:

	(Amounts in thousands of euro)		01.01-		01.01-		Δ %
		31.12.2023		31.12.2022
	Revenue (GGR)		2,087,710		1,938,985		7.7%
	GGR contribution and other levies and duties		(651,937)		(605,597)		(7.7%)
	Net gaming revenue (NGR)		1,435,773		1,333,388		7.7%
	Profit before interest, tax, depreciation and amortisation		730,029		735,985		(0.8%)
	(EBITDA)
	Profit before income tax		570,093		723,251		(21.2%)
	Profit for the period		414,137		596,036		(30.5%)
	Net increase/(decrease) in cash and cash equivalents

Net cash inflow from operating activities

Net cash inflow/(outflow) from investing activities Net cash outflow from financing activities

527,594

92,630

(857,323)

659,800

(53,235)

(742,493)

(20.0%)

274.0%

(15.5%)

The Company's key financial figures are presented below:
	(Amounts in thousands of euro)		01.01-		01.01-		Δ %
		31.12.2023		31.12.2022
	Revenue (GGR)		1,394,006		1,333,210		4.6%
	GGR contribution and other levies and duties		(425,167)		(405,277)		(4.9%)
	Net gaming revenue (NGR)		968,838		927,933		4.4%
	Profit before interest, tax, depreciation and amortisation		580,425		598,354		(3.0%)
	(EBITDA)
	Profit before income tax		648,334		466,112		39.1%
	Profit for the period		537,104		363,644		47.7%
	Net increase/(decrease) in cash and cash equivalents
	Net cash inflow from operating activities		463,410		520,281		(10.9%)
	Net cash inflow/(outflow) from investing activities		287,526		(164,415)		274.9%
	Net cash outflow from financing activities		(848,779)		(717,158)		(18.4%)

OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: [phone]

[Strictly Confidential]

OPAP S.A. Annual Financial Report 2023

8

In 2023, the Group and the Company achieved a strong financial performance in terms of Revenue (GGR) and Net gaming revenue (NGR), which significantly increased compared to the previous year. The increase has been recorded across all product lines, channels and geographies, reflecting the ongoing trend of the organic growth within the Group. This growth has been primarily driven by the strong results of the online and VLT operations (+18.0% and +8.2% respectively in GGR) and the constant resilience of the retail sector.

Despite the observed increase in gaming activity during the year 2023, the financial performance of both the Group and the Company has not adequately reflected this trend. This is mainly attributed to the fine of €25,152 th. imposed on OPAP S.A by the Hellenic Competition Commission. Nevertheless, it is also mentioned that the 2023 Group's financial performance, has been positively impacted by an amount of € 12,988 th. representing the net effect of the derecognition of the Markopoulo Park Right of Use and the corresponding Lease liability, following the premature (comparing with the contractual end day of the Concession Agreement) termination of the Lease Agreement of Markopoulo Racecourse. In case that the impact of the abovementioned transactions is excluded, the variation in the Group's EBITDA compared to the previous year is adjusted to +0.8%, while the variation in the Company's EBITDA is adjusted to +1.2%.

The Profit before income tax of the Company for the year 2023 is notably increased compared to 2022, primarily due to the dividend income from its subsidiaries of €182,500 th. versus €7,000 th. in the prior year, as well as the lower finance costs on the back of decreased leverage.

On the contrary, at Group level, the 2023 Profit before income tax decreased by 21.2% compared to the previous year, as a result of the gain from disposal of "Betano business", ex. KAIZEN GAMING LIMITED (business activities outside Greece and Cyprus) that was recognised in 2022 and the imposition of default interest on HELLENIC LOTTERIES S.A. of € 11,891 th., which was charged in 2023.

As far as the cash flows are concerned:

• The cash inflows from operating activities demonstrate the strong operating profitability, however they are decreased compared to the previous year, mainly due to the increased income tax payments made by both, the Group and the Company within 2023, as a result of the increased taxable income of the year 2022 compared to 2021.
• The Company's cash inflows from investing activities in the year 2023 have been strengthened by the distributions made by OPAP INVESTMENT LTD to OPAP S.A. regarding dividends of € 177,500 th. and share capital return of €
  129,000 th.. At Group level, the cash flows from investing activities have been

OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: [phone]

[Strictly Confidential]

OPAP S.A. Annual Financial Report 2023

9

affected by the proceeds from the disposal of the "Betano business", ex. KAIZEN GAMING LIMITED (business activities outside Greece and Cyprus) amounting to € 123,463 th. within 2023 versus € 74,243 th. in 2022, as well as the payments made for the acquisition of STOIXIMAN LTD amounting to € 14,063 th. within 2023 versus € 106,444 th. in 2022.

• the increase in cash outflows from financing activities for both the Group and the Company, are mainly attributed to the increased distributions to the shareholders, including dividend and share capital return, amounting in total to € 678,581 th. during the year 2023 versus € 458,998 th. during the prior year, as well as the acquisition of treasury shares in 2023 of € 31,118 th..

OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: [phone]

[Strictly Confidential]

OPAP S.A. Annual Financial Report 2023

10

2. Significant events during the year 2023 and their effect on the Financial Statements

Hellenic Competition Commission Decision no. 787/2022

By virtue of the Hellenic Competition Commission's (the "HCC") decision No. 787/2022 on complaints submitted by former agents of the Company and the civil association "Association of Professional Predictive Gaming Agents" (SEPPP), communicated to OPAP S.A. on 29.09.2023, the HCC, inter alia, imposed on OPAP S.A. a fine of € 25,152 th. for the infringements found of articles 1 of Law 3959/2011, 101 TFEU and 2 of Law 3959/2011, 102 TFEU during the period 2017 - 2021. The fine was imposed by the HCC regarding the provision of the secondary services that are offered for bill payments and prepaid telecom cards provided by OPAP S.A.'s agencies through OPAP Group's companies TORA WALLET SINGLE MEMBER S.A. and TORA DIRECT SINGLE MEMBER S.A. respectively.

It is noted that, HCC's decision no. 787/2022, which was not unanimous, is in no way related with OPAP S.A.'s core business in the gaming market, as it exclusively pertains to the aforementioned secondary services.

For its part, OPAP S.A. categorically denies the practices attributed to it and considers the above HCC's decision fully baseless, having taken a public position on the issue with its Regulatory Announcement dated 29.09.2023. In this context, OPAP S.A. has appealed against HCC's decision no. 787/2022 before the competent administrative courts. It is noted that the Company paid on 30.11.2023 to the Greek State the entire amount of the fine imposed by HCC's decision No.787/2022 (€ 25,152 th.).

London Court of International Arbitration Final Award on HELLENIC LOTTERIES S.A. Request

for Arbitration

On 12.09.2023 the London Court of International Arbitration (the "LCIA") issued its Final Award and rejected the Request for Arbitration filed by HELLENIC LOTTERIES S.A. against the Hellenic Republic and the Hellenic Republic Asset Development Fund (HRADF) - LCIA case no. 215123, seeking a declaration that HELLENIC LOTTERIES S.A. is released (wholly or partially) from its obligation to pay the Minimum Annual Fee provided in the Concession Agreement of 30.07.2013 for the years 2020, 2021 and for the period January - May 2022, due to the adverse impact of the Covid-19 related State measures on the operations of the company. Following this, HELLENIC LOTTERIES S.A. paid on 02.10.2023, with reservation to the Hellenic Republic, the disputed amount of the Minimum Annual Fee for the years 2020, 2021 and the period January-May 2022 (amounting to €70,668 th. in total).

OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: [phone]

[Strictly Confidential]