OPAP Holding Société Anonyme (ALWN) Earnings Call Transcript

Ladies and gentlemen, thank you for standing by. I am Gaily, your Chorus Call operator. Welcome, and thank you for joining the OPAP S.A. Conference Call and Live Webcast to present and discuss the Full Year 2020 Financial Results. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Jan Karas, CEO of OPAP S.A. Mr. Karas, you may now proceed.

Thank you very much, operator, and good afternoon and good morning to everybody. Welcome to the OPAP 2020 Investors Conference Call. As you may remember, in our last communication back in November, we were indicating that the COVID-19 reemergence was déjà vu. And although that's exactly what happened in the course of the following months, OPAP's performance is once again proving that the company has what it takes in order to emerge strong from this turbulence. In a year where our shops were fully closed for more than 4 months, we managed to generate lower, but to a significant profitability, maintain a strong balance sheet and boost our online content and performance. Without further ado, our CFO, Pavel Mucha, will now provide you with an overview of our financials and I will then update you on our business progress, but more importantly, on our Fast Forward long-term strategy, which will shape our future for the years to come. We will then answer any questions you might have.

Thank you, Jan, and good afternoon to everybody. Following a relatively normal Q3, the Q4 quickly brought in a revival of the pandemic, which led initially to local closures and later to a national lockdown as of November 7. As a result, it was no surprise that all major macro KPIs dropped further in Q4. According to our provisional data, the GDP contracted by 5.9% in Q4 fully reflecting the restrictive measures applied since November, while 2020 GDP came in better versus expectations, but still dropped heavily by 8.2%. Total consumption declined by 3.7% in Q4, driven by a private consumption drop of minus 6.9% year-on-year. Finally, leading indicators demonstrated mix signs with economic sentiment growing, albeit still from low levels, while consumer confidence retreated, reflecting the escalation of the restrictive measures. Going forward, the visibility remains limited, means an official estimate calls for a 4.8% GDP growth and the 3% private consumption increase in 2021. However, as the lookdown period gets extended, uncertainty is growing. Independent estimates come with a wide range of GDP growth between 1% and 5%, and it will be obviously determined by vaccination rates, the economics opening pace, and the government support package, which has been already revised upwards to EUR 13 billion. Going now to OPAP, the constant shift between closures and openings is distorting any potential comparison with macro data. That said, it's no secret that on the one hand, being a predominantly retail business, the imposed lockdowns have taken a heavy toll on performance, but on the other hand, it's also fair to say that when being open, our performance has been encouraging. All in all, full year '20 GGR declined by 30.3%, with Q4 down by 48.3%, with a mixed regional picture, as different measures and restrictions were applied across different areas. In that sense, on Slide 8, we are depicting how lockdowns affected our business and subsequently, our revenues throughout the year, and this is excluding any contribution from Kaizen. We defined 3 individual periods. The first one pertains to the 203 days of 2020, whereby our shops were fully opened, despite the fact that more than half of those days, they carried some sort of restrictions. Our performance on a year-on-year basis stood at a satisfying plus 1%. When it comes to partial lockdowns, this period includes 48 days, in which our realty estate was closed and 20 days of local lockdowns. Our performance for this period stood at minus 20.6%, whereas the full lockdown, which accounted for roughly 1/3 of the year, led to a minus 92.3% year-on-year drop with online being the only revenue stream. When addressing our key segment's performance on Slide 9, we would like to know that it's the first time that OPAP is incorporating reporting wise, the online casino segment, which brought in EUR 19 million in Q4. With this addition, we believe that we are now offering one of the most complete portfolios in the industry with a well-balanced mix between lottery, VLTs and betting. This all in retail and online while our reporting is also following a more precise segmentation. The Casino figure on its own is a blended outcome of both OPAP Online Casino and Kaizen Gaming, Greece, Cyprus, since we managed to consolidate the latest figures since December. Kaizen Gaming consolidation is also the main reason behind the fact that betting outperformed versus the remaining segments. In detail, betting in Q4 dropped by minus 27%, whereas the rest of our segments dropped between minus 59% to minus 67%. Because of the lockdown impact, we will not as usually analyze each segment's performance on an individual level, but Jan will make sure and is part of the presentation to refer to the key developments per segment. Going further down the profitability line, set aside the revenue drop, our GGR contribution line has been disproportionately burdened by the prudent decision to record Hellenic Lotteries increased GGR contribution, so as to meet the contractual threshold of EUR 50 million. That said, taking into account that the closure of the related network and the subdued operational activity was beyond Hellenic Lotteries' control, we have submitted a request for -- a request of arbitration to the International Court of Arbitration, asking that GGR tax is calculated based on our actual performance. With that in mind, EBITDA for the quarter dropped by reaching EUR 52.7 million versus EUR 107.6 million in Q4 2019, as the revenue related drop was partially counterbalanced by the incorporation of EUR 42.5 million from the recognition of income relating to the new GGR contribution regime, as provisioned by the concession extension contract, which was commenced in October 2020 and will last till 2030. On full year level and on a like-for-like basis, excluding one-off items, full year 2020 EBITDA dropped by 32.4% year-on-year, which we believe is a substantial achievement, given that our network was closed for more than 4 months. Note that Kaizen Gaming contributed EUR 28.1 million on our EBITDA line, with more to come this year due to its full consolidation from December 2020 onwards. Finally, net profit in Q4 2020 reached EUR 132.1 million versus EUR 61.8 million in Q4 2019 due to a one-off gain of EUR 142.7 million from the remeasurement of Kaizen Gaming previously held equity stake. We believe that the remeasurement will indicate our acquisition decision and comes naturally as a result of the company's impressive performance in the last few years. After excluding one-offs, Q4 2020, like-for-like net profit dropped by 74.3%, while as for the full year, like-for-like net profit dropped by 51.4% year-on-year. As regards to cost efficiencies, our reported OpEx line came higher year-on-year, but this is entirely due to the full consolidation of Kaizen in Q4. As seen at Slide 11, when excluding Kaizen, then our cost efficiencies have been well on track, as we were able to realize OpEx savings in each and every quarter post COVID emergence with this overall figure shaping at minus 4.1%, while on a like-for-like basis, after excluding one-off items, the drop stood at minus 12.7%. Cash flow wise and moving to Slide 13. Despite the lockdown and other restrictions, we managed to generate an operating cash flow of EUR 186 million for the year, thus providing with a tangible evidence that despite our retail operation, OPAP is able to generate cash even in the harshest of times. On the investment side, we spent EUR 79 million, mostly due to the acquisition of the additional stake in Kaizen, which, together with dividend distribution and debt repayments, shaped our cash position to EUR 507 million, and our net debt-to-EBITDA ratio a bit higher, but still very comfortable 2x. It is this financial strength that enables us to propose a full year 2020 dividend per share of EUR 0.45 in the upcoming Annual General Meeting, which we believe, given the circumstances, is a rewarding return to our shareholders. Turning to Slide 14. OPAP online has taken the pole position for the year. As evident, our strategy to enrich our portfolio very early in the initial lockdown has led to a material increase of our online activity. Our customers are at all-time highs, and that is despite the fact that the lack of retail activity is on its own taking an impact on Tzoker jackpots. In a nutshell, our average weekly online GGR during the second lockdown has well exceeded EUR 1.5 million, while as seen on Slide 15, every segment's online contribution has increased by among multiple. Reporting wise on Slide 16, organic growth, together with Stoiximan full consolidation has led to online GGR to reach 24.4% of our total revenues in Q4 2020 from just 0.7% in full year 2019 while the portfolio mix is well diversified between betting, casino and lottery. Since Q1 21 was another quarter that our retail estate remained closed for most of the days, our online, and that is both OPAP branded and Kaizen Gaming, remain the biggest contributor to our performance. Having said that I'm concluding my part on Slide 18, for every full lockdown month, the GGR impact stands at between EUR 130 million to EUR 140 million, while EBITDA impact at EUR 45 million to EUR 50 million. With that, I'm passing you back to Jan.

Thank you, Pavel. Following up on the financial part, I'd like to start right away by providing the latest updates with regards to the COVID status of our business. In a nutshell, as you can see on Slide 21, our network in Greece remains closed since November 7, with the Cypriot being open with social distancing measures in place, and starting today also with seating available, but obviously only on the outside. As such, and given the quite prolonged period of the Greek stores closure and lockdown, we took all the appropriate measures in order to support our network. We allowed for extension of payment of their financial obligations at a later stage in monthly installments. We provided the guidance, so that we make sure that they benefit from the various government stimulus measures, and we offered support for the payment of the telecom bills. On top, as our GGR contribution rate on the legacy years has since mid-October moved to 30%, our agents NGR based monetization is also enjoying a sizable benefit. Staying for a bit more on our agent network on Slide 22. I feel proud that despite of COVID, we were able to open or upgrade more than 300 stores within 2020. At the end of last year, our retail estate size was 3,849 OPAP stores in Greece and Cyprus, 1,000 of those already offering advanced audiovisual experience and another 374 play stores. I would also like to stress the growing importance of our indirect sales network, which has grown materially over the past couple of months, and we hope that it will be soon be complemented by the opening of OPAP stores. Going forward, as I will also mention in the Fast Forward strategy part of our presentation, we will continue along the same direction, aiming for providing the best gaming entertainment experience possible. We will also put a lot of efforts in simplification and automation of retail processes and introduce additional in-store content management tools for our agents to further increase easiness and flexibility of their operation. This will also be important success factors in our aim to further enhance our digital and cashless solutions footprint within the shop. Product portfolio wise on page 23, 2020 was beyond any doubt a successful year. We managed to bring forward the launch of online virtual games and casino and introduced these to our customers already during the first lockdown, thus providing with the timely and long desired enhancement of our online portfolio. Tzoker also demonstrated the growth of its base sales, driven by the addition of the third weekly draw earlier in the year and the improved performance of online. We have also enhanced our retail portfolio. We introduced Powerspin, and in Q4, we added Virtual Basket having a meaningful positive impact on our customer satisfaction as well as our revenues. We offered new payment methods in the face of PayPal in online and new digital options to our retail players, such as the retail times -- such as the real-time scores update when scanning the slip on their mobile. We are also running preparations for our new loyalty rewards scheme to be launched in Q2 that aims to increase customers' engagement through personalized offering and rewards. Lastly, we continued our successful campaigns and promos, leading to several thousands of winners when it comes to VLTs. The latter is obviously the segment that has been hit the most with the lockdown, but our early Q4 performance when gaming halls were still open, allows for confidence. Active players increased to 128,000 despite the fact that the seasonally important Christmas period was entirely lost. We launched 50 new games, now reaching a total of 111. We further optimized the machines footprint and remain committed into providing a safe and inviting environment to our players once circumstances allow. When it comes to sports on Slide 25, SSBTs offering the paperless customer journey continue to gain weight in the mix with live betting rate constantly exceeding 40% of total wagers, despite the fact that it was negatively affected by stores' early closing hours, prior to when most of the main events were happening. One of our latest additions, namely Powerspin continued path is dynamically good with its performance being 40% higher quarter-on-quarter, while Virtuals also increased their share up by 12% quarter-on-quarter establishing Virtual Sports as one of our key betting categories. When it comes to online, Slide 25, as also mentioned by Pavel, our streak of new heights continues in Q4 -- continued in Q4 with new records in terms of both GGR and active customers' growth across all verticals, resulting to more than doubling of OPAP's online market share. Product-wise, we were able to add hundreds of casino games to different providers. We increased our betting offering in terms of events and side markets. We launched a quick play and pay functionality on Tzoker, while at the same time, enhance our CRM-related activities and important promo offers. Going forward, you may remember that we shared our optimism for online in our previous earnings call, and that's exactly what we will do today, as well as we believe that our persistent focus will bear more fruits in the following months. New advanced CRM campaign management tools, additional promo capabilities for our casino product, new vendors and games, improved front ends, simplified onboarding for our customers, further improvements of our customer care, and many other initiatives will help us towards this direction. The second pillar of OPAP's group dual strategy, namely Kaizen Gaming, demonstrated numbers that exceeded our expectations with 2020, resulting to be another record year, both in terms of performance and customer base. Betting increased in 2020 by 32% despite the absence of sports content for almost 2 months during the early lockdown period, while casino more than doubled. Greek and Cypriot operations in the year 2020 accounted for almost 73% of group's CGR, while OPAP's financial benefit reached almost EUR 28 million, aided by increased stake and full consolidation of Greek and Cypriot operations since December 2020. Finally, on Slide 28. It is worth noting that throughout everything we do, we are still committed to fulfill all requirements of globally recognized corporate responsibility standards. I'm proud to share with you that this has been affirmed just a few days ago with MSCI upgrading OPAP's ESG rating to AA and us being in the top-tier of the broader international gaming universe. Just before turning to our Fast Forward strategy part, I'll briefly mention also our actions on the CSR front as 2020 was really an exceptional year. We have concluded 88% of the renovation of the 2 Pediatric Hospital in Athens, and we are keeping up. We realized several thousands of children wishes through our Wishing Ornaments program. We recruited and supported 10 new SMEs in our OPAP Forward Program. We delivered sports apparel to 1000s of deprived children across Greece and more importantly, we fully supported COVID-19 related needs by donating medical equipment and hygiene materials to reference hospitals and different municipalities. Now having concluded with the latest business update, I would like to share with you OPAP's Fast Forward strategy for the next years, a strategy that we prepare with the senior management in the past month and was approved by the Board of Directors following my appointment as CEO of OPAP at the beginning of 2021. Each one of us has lately experienced in various aspects how much our lives have changed. The pandemic still makes us face a number of challenges, but we have to move on with determination, looking at the positive side. The transition from off-line to online has been accelerated. Technology and digitalization opened new opportunities, customers look after great experiences, and their expectations evolve faster than ever. Our world evolves, and as OPAP, we need to set the tone. We need to react and accelerate fast forward in everything we do. Building strong relationships and taking into consideration all our key stakeholders from customers and agents to the Greek state, the society and the investment community, we aim to successfully create value for the whole ecosystem in a sustainable way. Our vision remains to provide world-class gaming entertainment to our customers in online and retail and our new Fast Forward strategy sets a clear direction for ensuring OPAP's long-term success with focus in 6 areas. I will now briefly summarize each one of them. First is around the customer. We always put customers at the center of our focus in everything we do, as customer-centric mindset is key to our success. This journey of our better customer understanding will contribute to the success for better gaming entertainment across all of our channels. We will achieve this by collecting the right data about our online VLTs and retail activities, creating deep customer insights reflecting these in our actions, and always measuring the impact. We aspire to deliver more of social interactions through sharing experiences with others, more fun, more content in entertainment by offering an experience that goes beyond bet placement, more of personalized content, more of digitalization through the enhancement of digital customer journeys in retail and online, while always ensuring a safe and responsible environment. The second pillar is around our brand. OPAP and the interval game brands are amongst our strongest assets. So we intend to keep them relevant to our customers and expand them into the digital world, redefining and delivering our digital brand identity. Through new and enriched experiences in our websites, apps, social media and even inside our retail stores with the new digital customer journeys. OPAP brand represents and supports our aim to offer world-class gaming entertainment across all touch points where the customer interacts. TV, online, shop, communication, PR, social networks, even in discussions among friends, OPAP brand aims to be fun and social, engaging with even more focus on customer interactions in digital and social media, rewarding, appreciating our customers loyalty and always looking for positive promotional connection. And all these in the framework of responsibility, helping customers to enjoy the fun of gaming safely. We will make sure our brand remains relevant to existing and prospective customers, further contributing to the overall growth. In this context, we envision our brand's tone of voice to be more conversational, more contextual, personalized and fun. Turning now to the third area, online, our ambition is to boost our online world presence. We want to become a top-tier online player and turn our online into a second strong pillar of our business. Our top online priorities and key levers of growth are mainly represented by enhancing product proposition, taking advantage of customer insights and CRM, and upgrading to high-performing front ends. We will then focus on the brand and communication, the operational excellence as well as continuously upgrade the entertainment element of our offering. Technology will be a key enabler by choosing the right vendors and technology set up for agile delivery and operational excellence. Also, at all times, we will cooperate with the relevant authorities on regulatory matters, ensuring eco market conditions and fair practices. When it comes to 2021 in specific, we will focus on enhancing the exclusive lottery portfolio with new content, upgrading the user experience with focus on mobile content design and experience, and further improve the essentials of sports betting, while expanding the variety of promoters. Please note that set aside OPAP branded online offering, our investment in Kaizen Gaming has grown further. We now own 84.45% in Greek and Cypriot operations operating under the Stoiximan brand as well as 36.75% of the international operations under Betano. The latest COVID-related developments of accelerated digital penetration, and Stoiximan has been a key beneficiary. Stoiximan will continue along the same path with further exploitation of gaming technology so as to maintain its leading position in both the Greek and Cypriot markets, grow in all verticals and continue to be the customer's option of choice. The fourth key area of our strategy is to maintain our strong position in retail and explore further opportunities for growth. We aim to achieve this by further evolving the local entertainment destination experience and enhancing it with the digital touch. With continuous innovation of our customer proposition with rich audiovisual gaming entertainment, new paperless and cashless customer journeys, along with unique real-life experiences such as the life events in our stores, we intend to offer our customers more reasons to come, stay, play and very importantly, have fun together. More specifically for 2021, we aim to continue to develop the network, delivering another 300 new and upgraded stores, introducing new remunerations key model for agents and their employees, new area based performance management, and also expanding the digitalization of our back office and contact center. Moving from the product and transaction centric to the insights-driven customer-centric model, our 2021 retail focus finds us introducing 3 innovative propositions aiming to elevate overall customer in-store experience. The loyalty reward scheme coming really soon. The OPAP Live Show and the new retail app with new play on device, gamification, loyalty and communication features. The fifth key area is technology, undoubtedly an important enabler to deliver better customer solutions and improve our productivity and efficiency. Our key initiatives will be in 5 areas: CRM, operational excellence, elastic and scalable infrastructure, innovation in enterprise solutions and open gaming ecosystems. We aim to make use of new technologies and innovative tools, such as artificial intelligence, automation and machine learning analytics, so as to improve the efficiency of our processes and support business and corporate decision-making. Rich player experiences and best agent experience via constant improvements of our operations, upgrades of central and store infrastructure and equipment to software-defined network technologies, and problem resolution capabilities pave the way towards our operational excellence target. Last but not least, our people continue to play a more than significant role in order to achieve our goals. There is much work we can do -- much more work we can do to transform our mindset, culture and way of work, so that we safeguard the necessary flexibility and speed for changes adaptation. We aspire to Fast Forward with the young and dynamic spirit, gain agility in our business through structure optimization, reskill and upskill our people, develop talents as well as embed the desired culture and engagement feeling throughout the company alongside leadership commitment. Throughout our strategy implementation and along with the 6 key areas of our strategy, there is a sustainable mindset. Environmental, social and governance consideration are part of our business and decision-making process, as we acknowledge their impact on our ambition to increase stakeholders' value over the long term. Corporate social responsibility and support of society consists an integral part of OPAP's DNA, positioning the company as a CSR leader in Greece and Cyprus. We are continuing supporting health, employment, sports and sensitive social group, expanding further our community trust with the new pillar, education. Additionally, responsible gaming is deeply embedded in all our commercial activities, providing fair, reliable and safe gaming experience. Developing and supporting our people, aligning our people's needs with the company's targets, and optimizing our environmental footprint concludes our sustainable approach, promoting trust and protecting our corporate reputation. With that, I have concluded the outline of our strategy for the next few years. We are working hard to implement everything that derives from the strategy, everything that will drive us to a better and bigger OPAP and create increased shareholders' value. Expanding our knowledge over our customers, maintaining our strong business in retail, alongside of becoming a top-tier online player, and providing a digital customer experiences also in our stores, will shape OPAP's bright future. Thank you for your patience and attention. With that, I'm concluding my opening statement, and I'm opening the floor for your questions.

[Operator Instructions] The first question is from the line of Draziotis, Stamatios with Eurobank Equities.

I have quite a few actually. So maybe we can start by going through the first couple and we can then continue, I guess, with a couple of more. So firstly, just on the dividend, could you maybe help us understand how you approached this dividend proposal? On the one hand, we obviously have the stores in Greece remaining closed, as you said. On the other hand, we are hoping for a reopening in the coming weeks. Also, there was really no cash burn in 2020, notwithstanding the shutdowns, vaccinations are also ramping up. So could you just maybe help us understand how you approach all these issues? And I guess, whether if indeed things return to normal soon there might be scope for you to actually top-up the DV at the AGM in June. So that was the rather long first question. And second one, quite obvious actually has to do with trading in Q1. You talked about the lockdown for the most part of the first quarter, local lockdowns as well. Could you just give us an idea of what to expect in the first quarter, please?

Okay. Thank you for the question. First question about the dividend. We had a lot of considerations and thinking about the dividend obviously, but we have a long-standing dividend policy, which is -- continues to be valid, and that is to distribute the bulk of the free cash flow, excluding investment as a dividend, so really EUR 0.45 is reflecting this long-standing dividend policy, so to distribute the bulk of the cash flow. Obviously, we were taking very cautious decision, because of the lockdown in Q1, 2021. We have the recent news from yesterday and reconfirmed by the government again today that if things go well, our stores will reopen on the 12th of April. Obviously, it's dependent on the COVID situation. This may be revised, but despite of that, we did quite a number of cash flow scenarios for 2021, and we believe EUR 0.45 even with the conservative cash flow forecast is a reasonable return for shareholders given the COVID situation, and it's according to our dividend policy. Now the second part of this question if things improve, whether we top-up anything. I really don't want to speculate at all. We have no idea. We have no idea when we will reopen, how we will be trading. So we don't think anything in this respect. It's just EUR 0.45. That's it for the moment, okay? And the second question on the Q1 trading update. Well, it's really a very difficult situation, because we had a full lockdown in January in Greece and Cyprus. Then Cyprus reopened in February with limitation. About 40% of OPAP stores were closed during the whole of February, and it was changing, different regions reopening, closing every week. This continued into the March, but ultimately, very early in March, again, the whole of Greece was closed down. And for the whole of Q1, since November 7, all the play stores were closed. They never reopen and the VLTs and OPAP stores are closed as well since 7th of November. So we have been doing very well in -- we have been doing very well in online, as Jan already explained. Obviously, we have an independent retail channel going for a little bit of scratch. And we have Cyprus doing reasonably well with the limitations, but obviously, we're missing the core part of the GGR, and that's really definitely going to impact the numbers. What I have to say that the 40% of the OPAP stores, which were opened during February and early March, they were showing this -- despite all the restrictions, COVID restrictions, they were showing really encouraging numbers that they were immediately able to pick up this and revenues like what we saw in 2020 after the reopening.

That's great. Just to confirm, you said that 40% of the stores were operating in February, correct?

Well...

Or closed?

Let me put it more precisely. It's stores generating 40% of revenues were operating. So it's not exactly numerically 40% of stores, but basically stores generating 40% of revenues.

That's very clear. And maybe a couple of more questions, if I may, please. So my other question has to do with the -- this new law, which was implemented from March regarding the taxation on player winnings, which effectively changes the basis of taxation for the players. So not directly related to you, but in any case, if you could just give us some insight as to what you expect the impact on your business to be if you have a view on that? And the last question would be if you could comment a bit on the non-gaming businesses and how their profit contribution developed versus the previous year, please?

Okay. So in terms of the new role about the player back on the winnings. It was really a surprise for the whole industry, because it was published by the government suddenly without really having wider discussion with the gaming industry, with the gaming operators. So really, it needs a lot of definition work, were on the definition and lots of analyzing, because it's a bit ambiguous in many areas. It changes the player stacks from columns to slip, but the definition of slip is totally unclear. It's subject to subjective interpretation. So we are really now trying to understand it, what is it that we need to do and then to implement this technically, it's very difficult. It's -- we have complex it environment to really implement this. And it's the same for all the players, all the gaming companies. So at the moment, we are analyzing it and trying to see how we implement it. I just remind that it should be valid from the first of July. And your question...

Okay. So it's going to be implemented, you said 1st of July, because I thought it was 1st of March. I hadn't realized that this has changed.

The law was published in December, originally was supposed to be valid from March, but it was moved to be valid from first of July. But as I say, it's a long way really to implement it, because we're still not sure what we should be implementing, okay? Then your question about non-gaming contribution. I mean this is really financial. It's a peanut, so to speak. It's not substantial. What's important though, it's important. All these non-gaming activities are important traffic builder. And it's been very good that we have this portfolio of the services, because in the COVID situation, while many people are used to pay, not via net banking, but really paying in cash at the post office or in a bank. With our wide network of 3,700 stores, really, people can go to OPAP stores and relieve the burden of the post office and of the bank. So it's very good that we are offering these services. And although they don't contribute financially significantly, it's a good traffic builder for the cross-sell also to the gaming -- to our gaming portfolio.

Next question is from the line of Chauhan Virendra with AlphaVlaue.

So I have a couple of questions. One, is the implied lockdown impact that you have in your slide, is that reflecting what is pre shutdown estate? Or is it for the current situation with a mix of the national lockdown in Greece and partial lockdown in Cyprus? So could you just clarify that for me, that would be one. And secondly, with respect to online, could you give some clarity about the technology driving Stoiximan's operations. So since this business was spun out of the former TCB group, if I can phrase it that way, who holds the technology powering the SMGC products, I mean the online product? And then I will -- have another question is that do you see -- if the technology is owned by SMGC, do you see any room for synergies between SMGC and OPAP's organic online product?

I'm sorry, can management hear us?

Yes, sorry, we are trying to -- we didn't hear very well. So we are going to figure out what -- among ourselves what the questions were. So give us one minute.

Yes, thank you.

Sorry, we were trying to -- we didn't hear very well the questions, but we believe we figured it out what the questions were. So the slide about the impact of the lockdowns. Yes, that assumes the full lockdown of the -- for the whole group, not partial lockdown or not partial opening in Cyprus. So it's just assuming the full impact of the lockdown. That's the first question. Now in terms of online, obviously, Kaizen is doing extremely well. They -- and partly because they have a good business strategy, good execution, and they got excellent platform for their players. And they are leaning to enhance it further. And in terms of the third question, definitely, we want to have a look at it. We haven't yet decided anything or agreed anything, but it's just natural that if Kaizen has such an excellent platform, of course, they are not acting. And so far, they haven't been acting as a B2B platform provider, but we definitely want to have a discussion with Kaizen, that OPAP could leverage and utilize that platform, okay?

I have just a follow-up, if I may. So wasn't really clear is whether SMGC owns their technology is -- so do they own their technology? That's one. And secondly, so on the first question with respect to the impact. So what you have on the slide is probably the worst-case impact, if that's the right way to think about it?

Yes. Kaizen is using partly own, partly some vendors, but is moving -- started to move to fully own technology. So really, I can say going forward, Kaizen is working based on the fully owned technology. If that answers your question. The second, can you please repeat that, because we couldn't really hear it at all.

Okay. On the second question was with respect to your comments on the COVID impact again. So what I understand is this is probably the worst-case impact that can happen, and not necessarily reflective of what's currently the mix that's out there.

Yes, correct. This is the vast possible impact, which pretty much happened, let's say, in January. February, March were slightly better, because part of the estate, as I mentioned, was open for the whole of February and at least part of March.

The next question is from the line of Maskara, Amit with Sephira Gem Equity.

My question has been answered. Sorry, sorry, if I may. Sorry, just 1 thing, sir, did you say on the reopening, the 12th is the date when you expect stores to be reopened based on, as you know or is it still not fully clear?

It is still not fully clear. That is the best possibility day that we see realistic, April 12.

The next question is from the line of Young, Ed with Morgan Stanley. Mr. Young, Ed from Morgan Stanley, can you hear us?