Public
INTRALOT Group
ANNUAL FINANCIAL REPORT
(based on the Article 4 of L.3556/2007)
FOR THE PERIOD ENDED December 31, 2022
ACCORDING TO
INTERNATIONAL FINANCIAL REPORTING STANDARDS
(IFRS)
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
2
Contents
Representation of the Members of the Board of Directors
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4
REPORT OF THE BOARD OF DIRECTORS-INTRALOT GROUP
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5
Explanatory Report on Article 4 par. 7 & 8 of L. 3556/2007
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77
CORPORATE GOVERNANCE STATEMENT
..................................................................................................................................................
81
Independent Auditor’s Report
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118
ANNUAL FINANCIAL STATEMENTS
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124
INCOME STATEMENT OF THE GROUP / COMPANY FOR THE YEAR 2022
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124
STATEMENT OF COMPREHENSIVE INCOME OF THE GROUP / COMPANY FOR THE YEAR 2022
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125
INCOME STATEMENT OF THE GROUP / COMPANY FOR THE 4
th
QUARTER OF 2022
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126
STATEMENT OF COMPREHENSIVE INCOME OF THE GROUP / COMPANY FOR THE 4th QUARTER OF 2022
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127
STATEMENT OF FINANCIAL POSITION OF THE GROUP/COMPANY
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128
STATEMENT OF CHANGES IN EQUITY OF THE GROUP
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129
STATEMENT OF CHANGES IN EQUITY OF THE COMPANY
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130
CASH FLOW STATEMENT OF THE GROUP/COMPANY
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131
1. GENERAL INFORMATION
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132
2. NOTES TO ANNUAL FINANCIAL STATEMENTS
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132
2.1.1
Basis of preparation of the Financial Statements
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132
2.1.2 Statement of compliance
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133
2.1.3 Financial Statements
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133
2.1.5 Basis of Consolidation
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136
2.1.6 Business combination and goodwill
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137
2.1.7 Foreign Currency Translation
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139
2.1.8 Tangible assets
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140
2.1.9 Borrowing costs
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141
2.1.10 Investment properties
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141
2.1.11 Intangible assets
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141
2.1.12 Financial instruments
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143
2.1.13 Inventories
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150
2.1.14 Trade and other short-term receivables
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150
2.1.15 Cash and Cash Equivalents
...........................................................................................................................................................
150
2.1.16 Long Term Liabilities
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150
2.1.17 Provisions and Contingent Liabilities
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150
2.1.18 Leases
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151
2.1.19 Share capital – Treasury shares
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152
2.1.20 Share Based Payments
...................................................................................................................................................................
152
2.1.21 Staff Retirement Indemnities
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152
2.1.22 State Insurance Programs
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153
2.1.23 Revenue recognition
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153
2.1.24 Taxes
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155
2.1.25 Government grants
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156
2.1.26 Earnings per share
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156
2.1.27 EBITDA & EBIT
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156
2.1.28 Significant accounting judgments, estimates and assumptions
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157
2.2 INFORMATION PER SEGMENT
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161
2.3 OTHER OPERATING INCOME
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164
2.4 STAFF COSTS
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164
2.5 DEPRECIATION AND AMORTIZATION
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165
2.6 EXPENSES BY NATURE
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165
2.7 INCOME / (EXPENSES) FROM PARTICIPATIONS AND INVESTMENTS
.................................................................................
166
2.8 GAIN/(LOSSES) FROM ASSETS DISPOSAL, IMPAIRMENT LOSS & WRITE-OFF OF ASSETS
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166
2.9 OTHER OPERATING EXPENSES
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166
2.10 INTEREST AND SIMILAR EXPENSES / INTEREST AND SIMILAR INCOME
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167
2.11 EXCHANGE DIFFERENCES
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167
2.12
CURRENT & DEFERRED INCOME TAX
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167
2.13 EARNINGS / (LOSSES) PER SHARE
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170
2.14 TANGIBLE FIXED ASSETS
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171
2.15 INVESTMENT PROPERTIES
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175
2.16 INTANGIBLE ASSETS
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176
2.17 INVESTMENT IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
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182
2.18 OTHER FINANCIAL ASSETS
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183
2.19 OTHER LONG-TERM RECEIVABLES
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183
2.20 TRADE AND OTHER SHORT-TERM RECEIVABLES
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184
2.21 INVENTORIES
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186
2.22 CASH AND CASH EQUIVALENTS
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186
2.23 SHARE CAPITAL, TREASURY SHARES AND RESERVES
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187
2.24 DIVIDENDS
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192
2.25 DEBT …………………………………………………………………………………………………………………………………………………………………..…
192
2.26 STAFF RETIREMENT INDEMNITIES
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198
2.27 SHARED BASED BENEFITS
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200
2.28 OTHER LONG-TERM LIABILITIES
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200
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
3
2.29 TRADE AND OTHER CURRENT LIABILITES
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200
2.30 FINANCIAL ASSETS AND LIABILITIES
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200
2.31 SUPPLEMENTARY INFORMATION
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207
A. BUSINESS COMBINATION AND METHOD OF CONSOLIDATION
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207
III. Acquisitions
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209
IV. New Companies of the Group
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209
V. Changes in ownership percentage / Consolidation method change
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209
VI. Subsidiaries’ Share Capital Increase
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209
VII. Strike off - Disposal of Group Companies
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209
VIII. Discontinued Operations
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209
IX. Companies merge
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212
X. Material partly owned subsidiaries
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212
XI. Investments in companies consolidated with the equity method
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217
B. REAL LIENS
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219
C. PROVISIONS
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220
D. PERSONNEL EMPLOYED
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220
E. RELATED PARTY DISCLOSURES
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220
2.32 CONTINGENT LIABILITIES, ASSETS AND COMMITMENTS
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222
A. LITIGATION CASES
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222
B. FISCAL YEARS UNAUDITED BY THE TAX AUTHORITIES
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227
Ι
) COMPANY AND SUBSIDIARIES
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227
ΙΙ) ASSOCIATE COMPANIES & JOINT VENTURES
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229
C. COMMITMENTS
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229
I) Guarantees
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229
II) Other commitments
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229
2.33 FINANCIAL RISK MANAGEMENT
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230
2.34 APPLICATION OF IAS 29 “FINANCIAL REPORTING IN HYPERINFLATIONARY ECONOMIES”
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233
2.35 COMPARABLES
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234
2.36 SIGNIFICANT FLUCTUATIONS, RECLASSIFICATIONS & REVERSALS
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235
2.37 MACROECONOMIC ENVIRONMENT
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237
2.38 SUBSEQUENT EVENTS
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237
REPORT ON THE USE OF THE FUNDS RAISED FROM THE SHARE CAPITAL INCREASE WITH CASH PAYMENT
UNTIL 31.12.2022
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239
Report on factual findings from the agreed-upon procedures on the Report of Use of Funds Raised
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241
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
4
Representation of the Members of the Board of Directors
(according to article 4 par. 2 of L.3556/2007)
The
1.
Sokratis P. Kokkalis, Chairman of the Board of Directors and Group CEO
2.
Chrysostomos D. Sfatos, Member of the Board of Directors and Deputy Group CEO
3. Ioannis K. Tsoumas, Member of the Board of Directors
CERTIFY THAT
As far as we know:
a. The enclosed financial statements of the company “INTRALOT S.A” for the year 1 January 2022 to
31 December 2022, drawn up in accordance with the applicable accounting standards, reflect in true
manner the assets and liabilities, equity and results of the Company and the companies included in
the consolidated financial statements taken as a total.
b. The attached Board of Directors’ annual report truly presents the course, the performance and the
position of the Company and the companies included in the consolidated financial statements taken
as a total, including the description of the most important risks and uncertainties they are facing.
c. The attached Financial Statements are those approved by the Board of Directors of “INTRALOT
S.A.” on April 11, 2023 and have been published to the electronic address
.
Peania, April 11,2023
The designees
Sokratis P. Kokkalis
Chairman of the Board of
Directors and Group CEO
Chrysostomos D. Sfatos
Member of the Board and
Deputy Group CEO
Ioannis K. Tsoumas
Member of the Board
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
5
REPORT OF THE BOARD OF DIRECTORS-INTRALOT GROUP
TO THE ANNUAL GENERAL ASSEMBLY OF THE SHAREHOLDERS FOR THE FISCAL YEAR
1/1/2022-31/12/2022
Dear Shareholders,
In the past year, INTRALOT has focused on measures aimed at stabilizing its existing operations and
successfully implementing new projects that were initiated in 2021, such as the project with the
Croatian Lottery. In addition, the cost reduction program, mainly at headquarters level, which has
been carefully planned and monitored over the last three years, delivered the desired benefits that
were incorporated in the strategic plan relating to the improvement of the Group’s operating
profitability.
In line with its commitment to expand its activities in the US sports betting market, INTRALOT,
through its subsidiary, INTRALOT, Inc., has signed a five-year contract with the Ohio Lottery to
implement its INTRALOT Orion Sportsbook solution. In particular, INTRALOT is already utilizing the
current lottery equipment and infrastructure to facilitate the sports betting journey for retailers and
customers throughout the state of Ohio.
In terms of contract renewals, in 2022 INTRALOT extended its existing contract with La Marocaine
Des Jeux et des Sports (MDJS) for one additional year, with the contract now expiring at the end of
2023, while the contract with Magnum Corporation Sdn BhD was extended for two additional years,
contract now expiring in June 2024. In addition, INTRALOT, Inc., has signed a 5-year extension of
its contract with the Wyoming Lottery Corporation whereby the Company will continue to provide its
lottery operating system and services for the operation of the Wyoming Lottery Corporation through
to August 2029. Finally, INTRALOT’s cooperation with OPAP S.A. in the field of numerical lottery
products and services was extended for an additional year until the end of July 2025 with the
possibility of further extension of such cooperation for one (1) additional year.
In terms of the Group’s financial position, following the balance sheet optimization completed in
2021, 2022 could be characterized as a period of intense efforts to further optimize the capital
structure and create value for all shareholders, in line with the commitments of the Company's
Management. To this end, the Share Capital Increase of approximately €129 million by payment in
cash and with pre-emption rights in favor of the existing shareholders of the Company was
successfully planned and executed in July. As part of this process, a new strategic investor joined
the Group’s shareholder base. Standard General Management, LLC, through its wholly owned
subsidiary, CQ Holding Company Inc., now renamed CQ Lottery LLC, has acquired 32,90% of the
total voting rights of INTRALOT SA for a consideration of approximately €71 million. As an established
player in the US market, the participation of the new investor provides a strong foundation for
leveraging new opportunities in the US and the global markets to which the Group has access.
Focusing mainly on the US market, the Group has strengthened its presence by using a large portion
of the Share Capital Increase to buy back from the minority shareholders the percentage offered to
the 2024 Noteholders through the Debt-to-Equity offering completed in 2021, thus acquiring control
of 100% of the shares of INTRALOT, Inc., and, consequently, full control of the cash flow of the
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
6
subsidiary. In addition, INTRALOT, Inc. entered into a Credit Agreement with KeyBank National
Association Inc., as Administrative Agent and Issuing Lender, and a syndicate of US financial
institutions for a 3-year Term Loan of $230.000.000 plus a committed Revolving Credit Facility (RCF)
of $50.000.000, the proceeds of which were used for the full repayment of the PIK Toggle 2025
Notes, which were subsequently cancelled. In addition to the repayment of the 2025 Notes, the
Revolving Credit Facility provides the Company with flexibility to meet its liquidity needs.
We are committed to continuing to focus on these pillars, ensuring that at the core of our mission is
to better serve the evolving needs of players and lottery organizations through the provision of state-
of-the-art products and services, and that our core values of business ethics, transparency, integrity
and responsible gaming continue to guide our efforts to achieve sustainable and responsible growth.
Looking ahead, we would like to thank all our stakeholders for their trust in our Group and reassure
them of our unwavering commitment to implementing our growth strategy and to focusing on the
further improvement of the Group’s operational efficiency.
Finally, the successful completion of the capital restructuring process in 2022 has already
strengthened INTRALOT’s capital profile and the Company shall undertake further initiatives in this
direction in 2023.
Regarding the financial results of INTRALOT Group for 2022, on a continuing-basis, revenue
presented a decrease of 5,1%, with Group turnover amounting to €392,8 million, compared to
€414,0 million in 2021. Operating performance as measured via our earnings before interest, tax,
depreciation and amortization (EBITDA), amounted to €122,9 million, exhibiting an increase of
11,3%, as the organic growth boosted by the full contribution of our new contract in Croatia, the
return of our operations in Australia to pre COVID-19 levels and the continued cost containment
initiatives at HQ perimeter managed to fully absorb the impact from the license expiration in Malta
on early July 2022. EBITDA increase was also affected by the positive FX impact of currency
movements across many key markets (mainly USA and Australia). On top of the above, our earnings
before taxes (EBT) decreased to €29,8 million from €37,1 million in 2021 mainly impacted by a one-
off gain from the successful optimization of our capital structure amounted to €88,5 million that
concluded within 3Q21. As regards to the parent company results, turnover decreased by 16,3% to
€36,7 million in 2022, while earnings after tax amounted to €-18,6 million, from €27,8 million in
2021, impacted mainly by the non-cash gain following the balance sheet optimization transaction
that concluded within 3Q21.
In 2022, group Operating Cash-flow from total operations posted a decrease and stood at €96,3
million, versus €107,6 million in 2021. The decrease of €11,3m is mainly impacted by the unfavorable
working capital movement due to timing and the negative variance from tax payments, attributed to
the income tax return received on behalf of the parent company the prior year.
Net Debt, as of December 31st, 2022, stood at €490,5m, decreased by €6,7m compared to December
31st, 2021. Recent restructuring actions along with delivery of healthy cash flows resulted in the
improvement of net debt position and leverage ratios (Net Debt / EBITDA at 4,0x in FY22 vs. 4,5x in
FY21.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
7
WHO WE ARE
Company Profile
INTRALOT, a public listed company, has been established in 1992 and is active in 39 regulated
jurisdictions with €0,4 billion turnover and a global workforce of approximately 1.707 employees in
2022. Being a technology-driven corporation, the Company serves as a private partner for the public
sector enabling lottery and gaming operators to establish a responsible gaming environment and
contribute to good causes for their local communities.
Based on its strategic approach “Driving Lottery Digital Transformation with flexible, reliable, secure
solutions and systems”, INTRALOT is committed to modernize Lotteries by delivering innovative
lottery and sports betting solutions, shaping the future of gaming. The company focuses in developing
next-generation products based on players’ omnichannel experience, the trends of the worldwide
gaming ecosystem, and the efficiency of the operators to provide engaging responsible entertainment
for their players.
As a member of the UN Global Compact, INTRALOT is a global corporate citizen committed to UNGC
Ten Principles and continuous sustainable development. In addition, being awarded with the WLA
Responsible Gaming Framework Certificate, the Company is an active proponent of the principles of
responsible gaming.
The Company maintains the highest industry certifications on quality and safety management
systems. It is the first vendor in the gaming sector certified in 2008 with the WLA SCS:2016 (Security
Control Standard) and it has been certified according to ISO 27001:2013 for its Information Security
Management Systems. Both certifications cover INTRALOT Headquarters and 23 additional
subsidiaries’ operations around the world. Furthermore, INTRALOT has been certified according to
ISO 9001:2015 (Quality Management Systems), ISO 14001:2015 (Environmental Management
Systems), ISO 20000:2018 (IT Service Management Systems), ISO 29993:2017 (Learning Services
Outside Formal Education) and ISO 37001:2016 (Anti-Bribery Management Systems).
INTRALOT collaborates with many external stakeholders among them the major international
industry associations. Each entity is a valued partner that supports the Company’s efforts to
contribute decisively to the future developments of the gaming market. Specifically, INTRALOT is an
Associate Member of the World Lottery Association, an Associate Member of the European Lotteries,
a Level I partner of the North American Association of State & Provincial Lotteries (NASPL), an
Associate Member and Gold Sponsor of the Asia Pacific Lottery Association (APLA), an Associate
Member and Silver Sponsor of the Gaming Standards Association.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
8
Recent Company Developments
Projects / Significant Events
On March 17, 2022 INTRALOT announced the extension of its current contract of INTRALOT Maroc,
a subsidiary of the INTRALOT Group acting as games operator in Morocco, with La Marocaine Des
Jeux et des Sports (MDJS), a state lottery offering sports betting and other games of chance in
Morocco, for one additional year; the contract is now due to expire on 31.12.2023.
On April 5, 2022 INTRALOT announced the extension of its current contract, with Magnum
Corporation Sdn BhD, a gaming operator pioneer in Malaysia, for another two (2) years; the contract
is now due to expire on 30.06.2024. The current agreement concerns the support of INTRALOT’s
core operating system LOTOS™ O/S including the games software, the On-line Gaming System, and
its new generation terminals Photon.
On April 6, 2022 INTRALOT announced that its U.S. subsidiary, INTRALOT, Inc., has signed a 5-year
extension of its contract with the Wyoming Lottery Corporation. INTRALOT, Inc. will continue to
provide its lottery operating system and services for the operation of the Wyoming Lottery through
August of 2029.
On September 6, 2022 INTRALOT announced the extension of cooperation with OPAP S.A., the
leading Greek gaming operator, for one additional year, from 31st of July 2024 to 31st of July 2025
with the possibility of further extension of such for one (1) additional year, in the field of numerical
lottery products and services.
On September 23, 2022 INTRALOT, following its announcements dated July 30, 2021 and August 3,
2021 and the notifications relating to the Group’s material pending litigations, announced that the
complaints filed against INTRALOT Group companies before the New York courts (US District Court
for the Southern District of New York) relating to alleged breaches of terms of the indenture
agreement governing the notes maturing in 2024, as well as New York legislation have been
withdrawn. Specifically, the plaintiffs (funds holding Notes due in 2024 and UMB Bank, N.A., as
successor trustee of the Notes due 2024) voluntarily dismissed without prejudice the above cases on
September 19, 2022.
On December 20, 2022 INTRALOT announced that its U.S. subsidiary, “INTRALOT, Inc.”, has signed
a five-year contract with the Ohio Lottery to implement its INTRALOT Orion Sportsbook solution.
Specifically, INTRALOT will utilize current lottery equipment and infrastructure to facilitate the sports
betting journey for retailers and customers throughout the state of Ohio. The project went live in
January 2023 in about 1.000 retail locations. “INTRALOT, Inc.” has received a provisional license
through the Ohio Casino Control Commission to operate this contract and expects the final five-year
license to be issued shortly.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
9
Organizational Changes
On March 3, 2022, INTRALOT notified that on March 1, 2022 «ALPHACHOICE SERVICES LIMITED»
which is 100% controlled by the Société Anonyme company «Κ
-GENERAL INVESTMENTS AND
SYSTEMS SINGLE MEMBER HOLDINGS SOCIÉTÉ ANONYME» (distinctive title “K-SYSTEMS”), sole
shareholder of which is Mr. Sokratis P. Kokkalis, acquired 7.323.920 common registered shares of
INTRALOT, with voting rights. Following that, the percentage of the direct voting rights of the
company “ALPHACHOICE SERVICES LIMITED” on INTRALOT’s shares amounts to 25,695% of the
total voting rights of the company (i.e. 39.123.920 voting rights)
against a previous percentage
20,885%
of the total voting rights of the company (i.e. 31.800.000
voting rights), while the
percentage of the indirect voting rights of Mr. Sokratis P. Kokkalis on INTRALOT’s shares amounts to
25,695% of the total voting rights of the company (i.e. 39.123.920 indirect voting rights)
against a
previous percentage 20,885%
of the total voting rights of the company (i.e. 31.800.000 indirect
voting rights).
Also, on March 3, 2022 INTRALOT notified that the 7.323.920 Company’s common registered shares,
with voting rights, which were acquired by “ALPHACHOICE SERVICES LTD”, legal entity which is
affiliated with and controlled by Mr. Sokratis P. Kokkalis, Chairman of the Board of Directors and CEO
of INTRALOT, were acquired with a total value of 3.442.242,40 Euro.
On April 26, 2022 INTRALOT with its invitation convened an Extraordinary General Meeting of
Shareholders dated May 17, 2022, with the following issues: The cancellation of the Company's own
shares, the codification of the Company's Articles of Association, as well as a decision to increase its
share capital.
On May 13, 2022 INTRALOT notified that the legal entity “ALPHACHOICE SERVICES LTD” which is
affiliated with and controlled by Mr. Sokratis P. Kokkalis, Chairman of the Board of Directors and CEO
of INTRALOT, on May 11, 2022 acquired over the counter 2.500.799 Company’s common registered
shares, with voting rights, in the context of an increase in its share capital with a contribution of the
above shares (contribution in kind).
On May 16, 2022 INTRALOT notified that the legal entity INTRACOM HOLDINGS which is affiliated
with Mr. Sokratis P. Kokkalis, Chairman of the Board of Directors and CEO of INTRALOT, on May 11,
2022 transferred over-the-counter 2.060.799 Company’s common registered shares, with voting
rights, to the legal entity «ALPHACHOICE SERVICES LTD», in the context of INTRACOM HOLDINGS’
participation in the increase of share capital of «ALPHACHOICE SERVICES LTD» with a contribution
of the above shares (contribution in kind).
On May 17, 2022 the Extraordinary General Meeting of the Shareholders decided the cancellation of
3.724.936 own shares which had been acquired by the Company, with a respective decrease of the
Company’s share capital by the amount of €1.117.480,80 and a relevant amendment of article 5 of
the Company’s Articles of Association relating to its Share Capital. The codification of the Company’s
Articles of Association was approved, and the Board of Directors has been authorized for the rest of
the implementation of the decision and the observance of the legal formalities.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
10
On May 23, 2022 the Repeat Session of the Extraordinary General Meeting of Shareholders approved
the granting of authorization to the Board of Directors to resolve, pursuant to art. 24 para. 1(b) of
Law 4548/2018 with the required by law quorum and majority, the increase of the share capital of
the Company up to an amount not exceeding the 150% of the paid-up share capital on the date of
granting of such authorizations to the Board of Directors, namely to increase the share capital by up
to the amount of €66.841.553,25 (nominal capital) with a preemption right of the current
shareholders according to the law and the Company’s Articles of Association, with the issuance of
new common registered shares with voting rights, and to define the specific terms and time-schedule
of the share capital increase with a relevant resolution pursuant to the applicable provisions of Law
4548/2018, including, indicatively, the structure of the increase, the subscription price of the new
shares, the allocation criteria between the different categories of investors, the execution of the
necessary contracts or agreements with banks or/and other investment services companies acting
as intermediaries, organizers, coordinators or administrators and in general, to proceed with any
required or advisable action, deed or transaction for the implementation of the share capital increase,
including the relevant amendment of the Articles of Association of the Company. The aforementioned
authorization will remain in force for six (6) months as of the resolution of the General Meeting. The
Board of Directors may exercise the abovementioned powers once.
On 1st June 2022, INTRALOT notified that, after the cancellation of 3.724.936 own shares of the
Company, its share capital amounts to €44.561.035,50 divided into 148.536.785 common registered
shares, with a nominal value of €0,30 each.
On June 8, 2022 INTRALOT announced the retirement of Mr. Nikolaos Pavlakis as Group Tax &
Accounting Director, and his replacement by Mr. Vasileios Vasdaris, who is with INTRALOT since
1993.
On June 22, 2022 INTRALOT announced that, after the decision of the Board of Directors dated June
21, 2022 the Company’s share capital increase by an amount of up €66.840.064,50 with the issuance
of up to 222.800.215 new common registered voting shares, with a nominal value of €0,30 each,
with cash payment and with a pre-emption right of the existing shareholders of the Company.
On June 29, 2022 INTRALOT notified that as a cut-off date of the pre-emption right to the share
capital increase 01.07.2022 was set, the exercise period of the pre-emption right being defined as
the period from 06.07.2022-21.07.2022 and the trading period of the pre-emption right as the period
from 06.07.2022-18.07.2022.
On July 18, 2022 INTRALOT informed the investing public that Mr. Sokratis P. Kokkalis, Chairman of
the Board of Directors & CEO of the Company, on July 15, 2022 acquired 1.281 common registered
shares of INTRALOT, with voting rights, for a total value of €730,17.
On July 19, 2022 INTRALOT informed the investing public that Mr. Vasileios Vasdaris, Group Tax &
Accounting Director of INTRALOT, on July 18, 2022 acquired 10.000 common registered shares of
INTRALOT, with voting rights, for a total value of €5.650,00.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
11
On July 26, 2022 INTRALOT notified that the share capital increase of the Company was successfully
completed and fully covered, by raising funds of a total amount of €129.224.124,70 and by the issue
of 222.800.215 new, common registered with voting rights shares, with a nominal value of €0,30
each.
Also, on July 26, 2022 INTRALOT announced that the following persons who exercise managerial
duties in the Company and persons who have close ties with them, exercised the pre-emption right
for the acquisition of new shares of the Company with an offer price of €0,58 per share:
ALPHACHOICE SERVICES LTD, legal entity which is affiliated with and controlled by Mr. Kokkalis
Sokratis, , Chairman of the BoD and CEO of the Company, Mr. Antonopoulos Constantinos, Vice-
Chairman and Non-Executive member of the BoD, Mrs. Kokkali Eleni, a person affiliated with Mr.
Kokkalis Sokratis, Chairman of the BoD and CEO of the Company, Mr. Tsagalakis Michail, Capital
Markets Director & Head of Investor Relations of the Company.
On July 28, 2022 INTRALOT announced the closing of the purchase by its wholly owned Dutch
subsidiary «Intralot Global Holdings B.V.» (IGH) of 33.227.256 ordinary shares (or 33,23%) in
“Intralot US Securities B.V.” from their current holders for a price of €3,65 per share (ie.
€121.279.484,40 in total). “Intralot US Securities B.V.” holds indirectly 100% of the shares of
“Intralot, Inc.” a US (Georgia) corporation.
On July 29, 2022 INTRALOT announced that its US subsidiary, Intralot, Inc. signed on July 28, 2022
a Credit Agreement with KeyBank National Association Inc. as Administrative Agent and Issuing
Lender and a syndicate of US financial institutions for a 3-year Term Loan of $230.000.000 plus a
committed Revolving Credit Facility (RCF) of $50.000.000. The Term Loan will be payable in
consecutive quarterly installments commencing December 31, 2022 with the balance thereof payable
in full on July 27, 2025. The annual amortization rate is 5% for the first two years and 10% for the
third year, and the proceeds will be used for the immediate repayment of 100% of the $254.042.911
PIK Toggle 2025 Notes issued by Intralot, Inc. plus accrued interest up to the payment day August
8, 2022. Under the current financial metrics, the indicative expected financial benefit from the
refinancing of the PIK Toggle 2025 will be in excess of $5.000.000 per annum.
On August 1, 2022 INTRALOT announced that, after the completion of the share capital increase, its
share capital now amounts to €111.401.100, divided into 371.337.000 common registered shares,
with voting rights, with a nominal value of €0,30 each.
On August 2, 2022 INTRALOT, following a notifications received by Mr. Soohyung Kim and the
company “Acme Amalgamated Holdings, LLC” on 1.8.2022, announced that the company under the
trade name “CQ Holding Company, Inc.”, acquired 122.182.840 common registered shares of
INTRALOT and the corresponding voting rights, which represent 32,90% of INTRALOT’s total voting
rights, through its participation in INTRALOT’s share capital increase. Therefore, CQ Holding
Company, Inc. owns in total 122.182.840 common registered shares in INTRALOT, corresponding to
32,90% of the total voting rights. CQ Holding Company, Inc. is a company controlled by “Standard
General Management, LLC”, which in turn is controlled by “Acme Amalgamated Holdings, LLC”, which
is ultimately controlled by Mr. Soohyung Kim.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
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On August 3, 2022 INTRALOT (or “Issuer”), further to the notifications of the company
«ALPHACHOICE SERVICES LIMITED, of Mr. Sokratis P. Kokkalis, and of the company “K-SYSTEMS”
dated 02/08/2022 in relation to the voting rights of these entities on the shares of the Issuer, notified
that on 01/08/2022 «ALPHACHOICE SERVICES LIMITED», a company which is controlled by «Κ
-
GENERAL INVESTMENTS AND SYSTEMS
ΜΟΝΟΠΡΟΣΩΠΗ ΑΝΩΝΥΜΗ ΕΤΑΙΡΕΙΑ ΣΥΜΜΕΤΟΧΩΝ» (δ.τ.
“K-SYSTEMS”), sole shareholder of which is Mr. Sokratis P. Kokkalis, acquired 78.776.368 common
registered shares, with voting rights, issued by INTRALOT, through its participation in INTRALOT’s
share capital increase. Therefore, the percentage of the direct voting rights of the company
«ALPHACHOICE SERVICES LIMITED» on INTRALOT’s shares amounts to 32,424% of the total voting
rights of the Issuer (i.e. 120.401.087 voting rights in a total of 371.337.000 voting rights of the
Issuer), against a previous percentage 28,023% of the total voting rights of the Issuer, while the
percentage of the total voting rights of Mr. Sokratis P. Kokkalis on INTRALOT’s shares amounts to
32,424% of the total voting rights of the Issuer, of which 1.281 direct voting rights and 120.401.087
indirect voting rights in a total of 371.337.000 voting rights of the Issuer, against a previous
percentage 28,023% of the total voting rights of the Issuer, through the above controlled companies.
On August 10, 2022 further to the announcement of July 29, 2022, INTRALOT announced that on
August 8, 2022 its US subsidiary Intralot, Inc. fully redeemed the Senior Secured 2025 PIK Toggle
Notes (the Notes) utilizing proceeds from a syndicated three-year Term Loan and a Revolving Credit
Facility signed on July 28, 2022 with a syndication of US banks. As a result of the redemption, all of
the 2025 Notes have been cancelled.
Significant Events after the end of the FY22 - until the date of the Financial Statements
release
On February 15, 2023 INTRALOT S.A. announced that Mr. Nikolaos Nikolakopoulos steps down as
Member of the Board and Deputy CEO in order to become CEO of its 100% subsidiary “INTRALOT,
Inc.” in the United States.
On March 2, 2023 INTRALOT (the “Company”) - following the notifications received by Mr. Soohyung
Kim and the company “Acme Amalgamated Holdings, LLC” – announced the transfer through a
transaction of 122.182.840 common registered shares in the Company and the corresponding voting
rights which represent 32,90% of the Company’s total voting rights, from the company “The Queen
Casino & Entertainment Inc.” (former “CQ Holding Company, Inc.”) to the company under the trade
name “CQ Lottery LLC”, and therefore “The Queen Casino & Entertainment Inc.” no longer owns
shares in the Company. “CQ Lottery LLC” is a company controlled by “The Queen Casino &
Entertainment Inc.” which is a company controlled by “Standard General Management LLC”, which
in turn is controlled by “Acme Amalgamated Holdings, LLC”, which is ultimately controlled by Mr.
Soohyung Kim.
On March 21, 2023 INTRALOT announced that Mr. Fotis Konstantellos steps down as Member of the
Board and Deputy CEO. He is replaced as Member of the BoD by Mr. Konstantinos Farris who will
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
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13
also assume the position of Group Chief Technology Officer. Mr. Farris had served as CTO of
INTRALOT in the years 1997-2016.
Also, on March 21, 2023 INTRALOT announced the appointment of Mr. Richard Bateson as Chief
Commercial Officer of its 100% subsidiary “INTRALOT, Inc.” in the United States. Mr. Bateson will
be joining the US senior management team reporting directly to INTRALOT US’s CEO.
As an industry
leader, Mr. Bateson has worked as both an operator and vendor within the lottery sector. With over
20 years of lottery experience, has worked within Camelot’s group of companies in both the UK and
North America. More recently Mr. Bateson has been a consultant to various companies including
Jumbo Interactive, Teneo and Camelot UK Lotteries Ltd. As a former President of EuroMillions, he
brings an extensive knowledge of European and North American experience to his new role and will
be working with the senior management team to enhance INTRALOT's business in North America.
On April 6, 2023 INTRALOT announced that its U.S. subsidiary, “INTRALOT, Inc”, signed a 3-year
contract, including an option of three annual extensions, with British Columbia Lottery Corporation
(BCLC) for the provision of its next-generation sports betting platform INTRALOT Orion and relevant
managed services, to enable the operations and management of BCLC’s retail sportsbook.
Economic Conditions
Economies around the world are navigating through a challenging period of inflationary pressures
and rising interest rates that weigh on economic growth and create a wide range of implications on
businesses. Increased interest rates have a direct impact on the financing servicing costs of the
Intralot Group, while the outlook is that central banks will not start to ease their monetary policy
before the end of 2023.
High inflation levels are tightening financial conditions in most regions, impacting most industries.
The indirect effects on our Group’s business activities from the flagging economic growth and the
increase in operating expenses due to wage inflation pressures cannot be overlooked.
The geopolitical tension arising from the war in Ukraine with the energy crisis, the supply chain
disruptions and the rising inflation are factors that are expected to determine the economic outlook.
Although our Group does not have exposure in terms of operations or dependency on suppliers in
Ukraine and Russia, the potential risks from the reduction in the household disposable income and
the possible increase in operating expenses due to inflationary pressures cannot be overlooked.
The Management of the Company closely monitors geopolitical and economic developments and is
ready to take all the necessary measures for protecting its operations.
Business Activities
INTRALOT is a global leading supplier of integrated gaming systems and services, being well
diversified geographically and with a balanced presence in both developed and developing markets
as well as a leading market position in licensed gaming in most of the highly regulated markets in
which we operate. INTRALOT develops and delivers technology-based products and services for the
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
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worldwide gaming, lottery, sports betting, and digital gaming industries. We report our business
activities in three business divisions – Technology and support services, management contracts and
Licensed operations – representing our different contractual activities.
Value chain of gaming market
The Group, under its contracts and licenses, functions both as a Business to Consumer (“B2C”)
operator, managing frontline customer facing activities, as well as a Business to Business
(“B2B”)/Business to Government (“B2G”) operator, managing the back office and support activities
of the value chain for other “B2C” operators, which may be public and/or state owned. In practice,
INTRALOT, under its “B2B/B2G” operator hat, provides hardware and software solutions as well as
operational support services to “B2C” operators. Spanning end to end the gaming value chain offers
INTRALOT a distinctive advantage as it has helped the Group to transfer knowledge and best practices
from its “B2C” to “B2B/B2G” operations and vice versa.
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ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
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Contractual Arrangements
Typically, “B2B/B2G” and “B2C” engagements are carried out under three types of contractual
arrangements, namely
technology contracts
,
management contracts
and
licensed operations
.
The following table summarizes the principal products and services provided in each of our business
activities:
Technology and
Support
Services Contracts
Management Contracts
Licensed Operations
Description
Provision of:
• Central gaming system
• Lottery terminals
• Telecommunications
system/solutions
• Related peripheral
equipment and
software
• Implementation
services and/or
• Maintenance and
support services
• Monitoring systems for
VLT operations
Management of all the
aspects of a gaming
operation:
• Provision of technology
solutions as described
under “Technology and
Support Services
Contracts”
• Day-to-day operations
• Marketing services
• Sales network
development and
management and/or
• Risk
management/odds
setting for sports
betting games
Ownership of a license to
operate games including:
• Management of
services as described
under “Management
Contracts” and/or
• Provision of technology
solutions as described
under “Technology and
Support Services
Contracts”
Holder of
License
State or state-licensed
operator maintains the
license
State or state-licensed
operator maintains the
license
We or our associates
maintain the license,
which is acquired from a
competent local/state
government authority
Key
Geographies
United States, Greece,
Australia, New Zealand,
Canada, and Argentina
United States, Turkey
Argentina
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ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
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Other
Geographies
Croatia, Chile,
Netherlands, Ireland,
Germany, Malaysia,
Taiwan, Philippines and
Peru
Morocco
Our key geographies set forth in the table above represented 87,6% of our EBITDA in the twelve
months ended December 31, 2022.
The following group of diagrams sets forth our revenue by business activity and region for the twelve
months ended December 31, 2022:
The following view presents our percentage of revenue, revenue net of payout, and EBITDA, per
business activity, for the twelve months ended December 31, 2022:
22,7%
11,8%
7,5%
12,9%
14,7%
15,6%
64,4%
73,5%
76,8%
Revenue %
GGR %
EBITDA %
TECHNOLOGY & SUPPORT
SERVICES
MANAGEMENT CONTRACTS
LICENSED OPERATIONS
Americas;
72,6%
Europe;
17,5%
RoW;
9,9%
TECHNOLOGY & SUPPORT SERVICES
Americas;
11,3%
RoW;
88,7%
MANAGEMENT CONTRACTS
Americas;
50,8%
Europe;
49,2%
LICENSED OPERATIONS
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
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Game Categories
Our services are offered across 5 distinct gaming market products, namely:
•
Lottery Games
, include the operation and supply of technology services for numerical
and traditional lottery games, instant tickets and fast draw games.
•
IT Products and Services
, include technology and operational services to state and
state-licensed organizations.
•
Sports Betting
, includes the operation, supply of technology, bookmaking, and risk
management services.
•
Video Lottery Terminals/Amusement with Prizes Machines
, include solutions
and services for VLT monitoring, gaming venues and server-based gaming.
•
Racing
, includes technology, content, and integrated services for pari-mutuel and
fixed odds race betting on horse and dog racing events, as well as virtual games.
The following diagrams sets forth our revenue by type of game and activity for the twelve months
ended December 31, 2022:
INTRALOT Solutions, Products and Services
Product Strategy
INTRALOT develops and provides an integrated portfolio of innovative gaming technology products
and services that follows Product & Technology evolution and is affected to a great degree from the
company's R&D programs, customer feedback, marketing and general market trends in the gaming
industry. Hence, the company’s ecosystem of holistic omni-channel solutions, that focus on the
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
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players’ needs and offer advanced customer experience, has further evolved in 2022 across all the
distribution channels (retail, online, mobile) and verticals.
Responding to our customers’ challenges and needs, the Company’s product strategy is to accelerate
growth through INTRALOT’s technology and services. INTRALOT solutions play a fundamental role in
our customers’ ability to deliver products and services that boost revenues while protecting players’
and abide to regulatory requirements. INTRALOT’s product strategy allows its customers to achieve:
•
Distribution channels’ expansion and easy access to play
•
Games Portfolio enhancement and quick time to market
•
Offering a variety of marketing activities and promotions
•
Real time reporting for well informed decisions & actionable insight
•
Agile delivery & technology/product evolution
•
Operational excellence & business continuity (high availability, scalability, integrity & more)
Lottery Solution & Lotos X
INTRALOT’s Lottery Solution, currently deployed in 37 Lottery operations worldwide, is tailored to
suit the needs of regulated Lotteries globally, catering to customers’ needs across all channels and
is an all-in-one solution that fully covers the needs of managing an online and retail Lottery operation.
INTRALOT’s Lottery Solution is an omnichannel solution that can serve both retail and digital worlds
as it consists of the
Lotos X platform
, our cutting-edge lottery game platform for centralized end
to end management of all lottery products (numerical, passive or instants) including Lotos Promotions
and Lotos Instant Game Management System and of
i-Lottery,
including digital channel of website
portal and mobile application, and PAM (Player Account Management) system.
Lotos X
platform currently deployed in 4 major European Lottery operators, provides efficient
centralized end to end management of all lottery products across multiple sales channels. Lotos X
platform allows easy configuration and parametrization of any Lottery game in a simplified, wizard-
like manner, with the use of ready-to-launch, preset game templates. What distinguishes Lotos X
from all other lottery solutions currently available in the market is that allows Lotteries to change
any parameter of a lottery game at any given time on the fly and the change will immediately notify
and update all other components in the ecosystem, through orchestrator. This makes Lotos X the
most parametrical, fast and cost-efficient game and draw lifecycle management platform in the
Lottery industry.
Fully compliant and certified, INTRALOT’s Lotos X Lottery Solution is ready to run
in every regulated operation with complete responsibility and safety, according to the industry’s
highest standards.
Sports Betting Solution & INTRALOT Orion
INTRALOT’s Sports Betting Solutions, currently deployed in 12 Lottery & Sports Betting operations
worldwide are also tailored to suit the needs of regulated Lotteries and pure Sports Betting operators
globally. The solution offers among others rich risk management tools, highly automated and efficient
management of events and high frequency markets, derivatives engine that enhance efficiencies and
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ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
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reduce man effort. Our solution comes pre-integrated with all major 3
rd
party data feed providers;
therefore, the coverage is exhaustive and meets the needs of every forward-looking operator.
INTRALOT Orion
platform, INTRALOT’s latest Sports Betting Solution and currently deployed in 4
major European and US Lottery operators is designed to cater for the complete management of fixed
odds sports betting games, both at the operations level, through its extended functionalities for
setting competitions, games, odds, handicaps etc., and at the risk management and decision-making
level, through the real-time monitoring of betting transactions and risk exposures. INTRALOT’s Orion
helps our customers overcome any obstacles and limitations imposed by out-of-date architectures
and legacy systems, by providing:
•
Richer content for all channels: All known Sports, more events, all known markets including
instant markets
•
Risk Management automation through business rules configuration
•
Multiple Feed aggregation
•
Automated event management complemented by the option of manual intervention
•
Front end independence through an open API framework in order to facilitate our
omnichannel vision
INTRALOT enabling platforms and touchpoints described below provide for an end-to-end Lottery
and Sports Betting solution to our customers’ staying aligned with our commitment for Operational
Excellence, Technology Evolution, Integrity and Player Engagement.
INTRALOT Enablers – Available for both Lottery and Sports Betting Solutions
INTRALOT enablers include a set of applications for addressing additional operational aspects of our
customers, outside the two core gaming platforms.
1.
The management of content:
Canvas
Content Management System (CMS) is a powerful
platform for managing the content and UI across multiple touchpoints (websites, mobile
native apps, self-service terminals, retailer terminals, etc.) with build-in personalization and
content optimization features. Includes products of
Canvas Retailer
(POS terminal
application and backend platform) and
Canvas Signage
(content management, delivery and
playout that enrich the retail gaming experience and boost player entertainment and
engagement).
2.
The management of the retailers:
RetailerX
is an end-to-end solution designed to empower
and motivate retailers, while enabling operators to efficiently manage retail network
information, ordering, ticketing and inventory.
3.
The management of the players:
PlayerX
is
a platform managing identifiable players in both
retail and online domains, to maximize their lifetime value and reduce churn.
4.
The management of the devices:
Device Management System (DMS)
manages centrally
all retail network peripherals, while monitoring their performance and identifying any update
or upgrade needs.
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ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
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Customer Touchpoints (Operator, Retailer and Player) – Available for both Lottery and
Sports Betting Solutions
INTRALOT is constantly enhancing its Retail and Digital Transformation proposition for its customers
by introducing retail concepts, digital workflows and player journeys that will also accommodate the
new post COVID-19 challenge. To provide a unique player experience and trust, INTRALOT continues
looking into new technologies and ways to connect with the players like AI, IoT, AR, VR, Big Data
analysis etc. and we continue the incorporation of such features in our product portfolio roadmap.
INTRALOT is a 'one-stop-shop' for any organization looking to expand in the Lottery or Sports Betting
business, either in the retail or online space. The most popular touchpoints INTRALOT provides
solutions for are:
•
Retailer terminals
: A wide range of bespoke terminals used by the retailer/clerk in any
type of retail store (e.g., shop-in-shop, in-lane, dedicated store).
•
Self-Service Terminals and Vending Machines
: A wide range of player terminals that
deliver a thrilling gaming experience by dispensing actual products (scratch tickets, betslips
& playslips) either in-store or in semi-attended spaces.
•
Portal websites and mobile applications
: Digital channels for playslip preparation and
real-money gaming.
Retailer terminals (used by the retailer/clerk, for any type of retail store)
INTRALOT’s terminals for the retailer, combine robust technology for serving the advanced needs of
the retail channel, with innovative industrial design, and enhanced ergonomics and usability.
PhotonX,
is INTRALOT’S latest retail flagship terminal, awarded as Lottery Product of the Year 2020
that revolutionizes lottery and betting retail operations. PhotonX inherits INTRALOT’s patented and
field-proven camera technology for flawless playslip reading and maintenance-free operation. In the
category of all-in-one terminal, INTRALOT’s is present with
Proton,
compact and camera-based
lottery terminal that offers the benefits of the digital reading technology in a minimum retail footprint.
Genion
is a multi-functional solution that can serve as, among other things, a game validation and
payment terminal and an online and scratch ticket checker.
Vending Machines
INTRALOT offers different flavors of Vending Machines with both digital touchscreen monitors or
traditional button case, to cater for different Lottery operators’ needs. Our vending machines offer
different instant ticket capacity options varying between 12, 25, 30 and 40 ticket bins, leading the
lottery industry, being always the first to introduce the largest ticket capacity machine in the market.
DREAMTOUCH
family and
WINSTATION
vending machines are carefully designed in several
shapes, with different footprint and height, to best fit retailers need per trade type (i.e.: large
supermarkets, small grocery stores, bars, tobacco stores, gas stations etc.). Featuring player touch
screens for game selection, ticket checking and validation mechanisms of printed or digital (mobile
screen) playslips, video advertising screens, payment methods including cashless and contactless
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
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payment, modular player participation methods, security features and age verification, INTRALOT’S
Vending Machines consists one of our core product segments.
Self-Service Terminals
The Self-Service terminals come in a wide range of options and can be combined with the right
frontend and backend platforms as well as peripherals (play slip scanner, bar code reader, high speed
thermal printer, smart-card reader, bill validator, coin acceptor and cashless payment device) to best
serve the distinct needs of each player and retailer.
MPNG
is the most successful Multi-Purpose Self-
Service Terminal with a compact and ergonomically design and minimal footprint mainly famous in
US. Its autonomous functionality and multiple integrated participation methods allow it to act as an
advanced stand-alone play point that minimizes counter queues, increasing customer satisfaction.
Services
Our offered services cover the whole spectrum of the day-to-day operational activities of lottery
organizations and are categorized into the following areas:
•
IT Professional Services
•
Technical Support
•
Game Operations
•
Sports Betting – Managed Trading Services
•
Sales & Marketing Services
GDPR compliance
INTRALOT has established personal data protection as a strategic priority towards ensuring player,
customer, employee, partner, and shareholder trust. INTRALOT's Data Protection Framework
addresses the requirements of the EU General Data Protection Regulation (GDPR). The Framework
combines organizational, procedural, and technical controls for serving the rights of data subjects in
a multidimensional manner, considering internal and external stakeholders. To achieve that,
INTRALOT has combined Privacy Good Practices, its Enterprise Risk Management Framework for
managing related risk and for conducting Data Privacy Impact Assessments, as well as its Cyber and
Information Security Frameworks. The later focus on the identification of Information Security needs,
Data Protection as well as Incident detection, response, and recovery, customized to the
requirements of GDPR. Privacy by design has traditionally been a core element of INTRALOT products
and services, while the data subject remains at the epicenter, being served with transparency and
respect.
Demonstrating its commitment to systematically protect personal data within its Information Security
Management System, INTRALOT implements specific rules and controls in the following areas:
•
Organizational controls (e.g., a Data Privacy Officer in all Group companies with over 250
employees).
•
Risk assessment and data identification (e.g., risk assessment of products and operations).
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
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•
Technical controls (e.g., maintain encrypted backup of personal data).
•
Operational controls (e.g., strictly prohibit transfer of personal data outside a jurisdiction,
unless written authorized by the Group Legal Counsel and the Group Information Security
Officer).
•
Contractual controls (e.g., data processing according to a contract or other legal act).
Research & Development
INTRALOT’s R&D general objective is the constant improvement and further development of its
gaming systems, services and products, and the introduction of innovation in company divisions,
Group members and customers. In this effort INTRALOT consistently invests a substantial amount of
dedicated and non-dedicated resources in R&D programs, which foster emerging technologies and
promote innovation in the gaming market.
INTRALOT’s rich history of technology advancement and innovation has brought international
recognition in the gaming market. Our R&D programs and the harmonious collaboration with third
party vendors as well as innovative products and solutions considerably contribute to the
advancement of the gaming industry.
Apart from in-house R&D, INTRALOT is cooperating with leading educational institutions and
Technology Vendors and has established Development Centers in the US and Greece.
As of December 2022, INTRALOT holds 191 granted patents, while there are 6 additional active
patent applications pending in various stages. Our most recent patents include methods and systems
for enabling personalized game betting and lottery playing, new game types as well as the design of
various types of terminals (i.e., multi-purpose new generation terminal, full self-service terminal,
vending machine, retailer next generation terminal).
BUSINESS REVIEW
Industry Overview & Market Drivers
Global gaming market
Overview
The gaming industry comprises of lottery games, casinos, sports betting, bingo, horse racing, gaming
machines and online gaming. According to H2GC, revenue net of payout (“GGR”), which constitutes
gross turnover in respect of gaming activities less the amount paid out to players as winnings but
including bonuses, is estimated to have grown to €437,7 billion in 2022, from €388,7 billion in 2017,
representing a CAGR of +2,4%.
Overall, 2022 is the first year after the COVID-19 pandemic when most regions and game verticals
have continued their upward trend in performance, now in higher levels when compared to 2019,
with the total gaming market estimated to have grown significantly by +16,9% in 2022. The game
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
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category that marked the highest y-o-y growth rate in 2022 was Gaming machines and Sports Betting
at +24,5% (€71,5 billion) and +21,0% (€64,9 billion) respectively.
In terms of growth, according to H2GC, the Global gaming market is estimated to grow at a high
rate of +6,1% CAGR 2022p-2027e.
Online market trends
Online gambling, via desktop, mobile and iTV, has reached a penetration of approximately 23,3% of
the total projected 2022 Global GGR (€102,1 billion) and is estimated to reach 30,0% by 2027
(€176,6 billion) following a CAGR 2022p-2027e of +11,6%.
Source: H2 Gambling Capital, Global Summary Feb ’23. Data for Fiscal Years 2022-2027 are
estimated by H2G
C.
The contribution of mobile gaming to total Online GGR is estimated at 44,4% (€45,4 billion) for 2022
and is estimated to reach 53,1% (€93,8 billion) of total estimated Online GGR for 2027, showing an
increasing annual growth rate in GGR of +15,6%.
Online Betting is the strongest product of the total online GGR and accounts for 53,7% (€54,8 billion);
followed by Casino (27,9%) and State Lotteries (12,0%). Casino, State Lotteries and Betting are the
products with the expected highest potential for growth with +14,4%, +13,5% and +10,3% CAGR
in 2022p-2027e respectively.
Betting, that contributes the highest share of 61,2% (€27,8 billion) in total mobile estimated GGR in
2022, is expected to grow at a rate of +14,1% CAGR 2022p-2027e. On the other hand, Lotteries
with a share of 10,2% (€4,6 billion) are expected to grow with a high pace, that of +18,4% CAGR
2022p-2027e.
The projection for 2022 shows that Europe holds the leading position in the global Online GGR, with
a share of 44,0% (€44,9 billion). Though the sharp growth rates of expansion are expected by North
America, which is the third top contributor to global GGR (17,7%) and has the potential to drive the
online market due to expectations that various ongoing legal changes will continue taking place in
the current legal framework across U.S. in both Sports Betting and Lotteries.
Gaming market trends by product
Our addressable market includes lottery games, sports betting, horse racing, gaming machines,
interactive gaming, and other activities, such as bingo. Casinos (incl. Native American gaming) are
excluded.
Total Global GGR
(€bn)
2017
2018
2019
2020
2021
2022p
2023p
2024p
2025p
2026p
2027p
CAGR
22-27
Land-based
343,0 357,9 359,3
258,2
283,0 335,6 372,8
380,6 390,5 401,2 411,9
4,2%
Online
45,7
51,8
59,1
73,6
91,5 102,1 113,4
130,0 147,7 162,1 176,6
11,6%
Global Total
388,7 409,7 418,4 331,8 374,5 437,7 486,3
510,6 538,2 563,2 588,5
6,1%
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
24
For the following 5 years, the game verticals that are estimated to bring the highest growth are
Sports Betting and Casino with +9,1% and +8,4% CAGR 2022p-2027e respectively. Lottery games
that represent the most traditional segment and have historically attracted the largest number of
players were projected to have contributed to 28,3% of the total estimated gaming market in 2022
(€123,8 billion) and for the following 5 years, according to H2GC, are estimated to grow at CAGR for
the period 2022p-2027e of +4,0%, with the most notable performer in terms of CAGR being the U.S.
Lottery, with +5,1% CAGR, and more specifically with +27,3% in Online Lottery, due to the offering
of the games Online by even more state Lotteries.
Gaming market trends by region
From a regional perspective, the top contributor to global GGR, North America, is estimated to keep-
up with the global growing trend with CAGR 2022p-2027e of +6,1% due to the growing trend of the
U.S. gaming market at +5,7% CAGR. More specifically, the new offering of U.S. Sports Betting in
both channels is estimated to follow a CAGR of 2022p-2027e of +17,3%, while the Online offering
esp. in Casino, Poker, and Lottery products a CAGR of at 30,4%, 29,7% and 27,3% respectively.
Source: H2 Gambling Capital, Global Summary Feb ’23. Data for Fiscal Years 2022-2027 are
estimated by H2G
C.
Our Strategies
Deliver best-in-class technology solutions and maintain leadership in technology
innovation
The most important element of our sustainable growth strategy is to maintain our industry leadership
in technology and innovation. This core strategy of INTRALOT emanates from the fact that lottery
and gaming is a technology and supply driven industry and thus technology innovation drives growth.
In this sense, we strive to develop leading technology solutions for lottery, sports betting, iLottery
and gaming machine monitoring, through investing in R&D activities that foster innovation and focus
on early adoption of industry shaping trends.
Some examples of our R&D program results is the next-generation of our gaming platforms and
products, specifically the LotosX platform ecosystem, the INTRALOT Orion, our new omni-channel
sports betting platform, the PhotonX lottery terminal, and most recently our natively omni-channel
iLottery solutions which offer a wide range of engaging interactive lottery games and feature
personalized player experiences through powerful data analytics. Our current R&D focus is on
United States
GGR (€bn)
2017
2018
2019
2020
2021
2022p
2023E
2024E
2025E
2026E
2027E
CAGR
22-27
Horserace
2,1
2,1
2,3
1,8
2,5
2,7
2,7
2,8
2,9
3,0
3,0
2,7%
Sports Betting
1,0
1,2
1,6
2,0
5,0
7,6
9,8
11,6
13,0
14,6
17,0
17,3%
Casino
62,8
65,4
67,5
54,0
66,2
81,3
81,5
88,4
96,9 101,0 105,3
5,3%
Gaming Machines
9,4
10,0
10,2
8,6
10,6
12,8
12,8
12,9
13,3
13,8
14,3
2,3%
Bingo
2,4
2,5
2,6
2,0
2,7
3,0
3,2
3,3
3,4
3,5
3,7
3,8%
Lotteries
24,6
26,1
28,2
27,2
31,8
33,7
36,0
37,5
39,3
41,2
43,3
5,1%
Global Total
102,4 107,3 112,4
95,6 118,9 141,1 145,9
156,5 168,7 177,1 186,6
5,7%
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
25
expanding our iLottery offering, to provide more personalized player experiences and deliver
engaging iLottery content across player segments.
Our R&D efforts have resulted in numerous industry awards and distinctions as well as multiple
technology patents certifying our innovation capability. We are confident that our technology
continues to lead the market as our next generation solutions are already receiving significant market
traction, with contract extensions and new contracts in Europe, North America and beyond.
For more details, refer to Intralot website, section “INTRALOT Solutions, Products and Services \
Research & Development” (
).
Expand our footprint in strategic markets & maintain portfolio diversification
The second element of our strategy is to maintain and expand our contract base with our main focus
being the US market, the current epicenter of industry developments with sports betting and iLottery
regulation evolving across States, while our business development efforts underpin our strategic shift
from emerging markets to mature markets, like North America and Europe.
Since the overturning of PASPA, we have developed appropriate plans to increase our sports betting
footprint in the US, in partnership with our strategic State Lottery clients, and in this sense our
legislative priority is to promote lottery-run sports betting across States. Our current US Lottery
footprint provides us a path to 10 States and the District of Columbia, with a vast addressable
population, and it is our strategic intent to leverage this unique opportunity to create sustainable
value. We believe that the Sports Betting contracts concluded in recent years with State lotteries a
momentum which continued in 2022 with the Ohio State Lottery sports betting contract provide us
with the perfect platform to deliver on this strategic objective.
Our existing Sports Betting operations
in US continue to perform consistently, which proves that our strategy is bearing fruit.
Moreover, in order to maintain the diversification of our contract base in the rest of the world, we
remain vigilant for other opportunities worldwide which we will pursue through partnerships with
trusted local partners, in order to benefit from their leverage and understanding of the local market
dynamics. This approach also provides for sharing financial and operational risks, reducing capital
expenditures, and improving access to local funding and for these reasons we are deliberate and
strategic in the selection of our partners in all such ventures.
Currently our business is well-diversified across the three core business activities of technology and
support services, management contracts and licensed operations. We currently have operations in
39 jurisdictions with 52 active contracts.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
26
EBITDA by Geography in the twelve months
ended December 31, 2022
(1)
(1) Chart figures are presented rounded and countries with negative EBITDA have been excluded
from the presentation.
In the twelve months ended December 31, 2022, our total positive EBITDA (excluding countries with
negative EBITDA) reached €152,0 million. Additionally, in the twelve months ended December 31,
2022, Greek entities represented only 3,7% (2,0% from clients based in Greece) of our revenue.
Furthermore, we benefit from the growing share of contracts in developed markets in our portfolio,
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
27
where we benefit from stable recurring revenue through long-term contracts. We believe that our
concentration on mature and resilient markets allows us to mitigate risks that are specific to certain
markets and regions as well as the cyclical nature of the sports gaming industry. Moreover, we
benefit from strong contract diversity including: 50 technology and support services contracts, which
comprised 73,5% of our revenue net of payout during the twelve months ended December 31, 2022;
two (2) management contracts, which comprised 14,7% of our revenue net of payout during the
same period; and two (2) licenses, which comprised 11,8% of our revenue net of payout during the
same period.
Value creation driven by increased cash flow generation, margin expansion and
improving longer-term revenue visibility
A key component of our sustainable growth strategy is to improve our cash flow trajectory through
the strategic and proactive management of our long-term contracts. We selectively seek to maintain
and enter long-term contracts, that match our stringent profitability and cash generation targets.
These contracts are often for higher margin business activities, such as providing expanded facilities
management or managed services.
We continuously evaluate the profitability of our existing contracts and have selectively disengaged
less profitable contracts. We also aim to enhance revenue visibility and expected cash flow by
entering long-term contracts providing recurring revenue stream stability.
For the year ended December 31, 2022, we estimate that approximately 45,0% (excluding extension
options) of the adjusted revenue for the period was generated through multi-year contracts or
renewable licenses that are available to us until 2027 (although actual revenue that may be
generated in the future from those contracts may increase or decrease). If we take into consideration
the extension options of our contracts, revenue visibility increases to approximately 58,0% until
2027. Adjusted revenue for the revenue visibility estimation, refer to FY22 revenue adjusted for the
contribution of contract discontinuations and one-off revenue recognitions within 2022.
Disciplined capital allocation aimed to optimize our capital structure
By prolonging our existing contract base in strategic markets and by pursuing opportunities and
entering new markets through local partnerships, we aim to reduce our capital expenditures, increase
our operational margins, and obtain access to local financing with more favorable terms.
In addition, following the increased CAPEX requirements of previous years for new contracts
implementation, we seek to maintain a modest financial and growth investment policy focused on
strong liquidity. In addition, we intend to have a disciplined capital expenditure policy with regards
to undertaking projects that meet our investment-return criteria.
Unwavering Commitment to Responsible Gaming, Social responsibility & Integrity
For us, responsible gaming, social responsibility, and integrity is not merely a strategy. These
principles are weaved into the company fabric, and we promote them throughout our global
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
28
operations in any type of engagement. This unwavering commitment, which has been adopted since
the company foundation, is essential for building trust with State Lotteries and competent Authorities
and in turn for renewing our existing contracts and winning new ones with lottery and gaming
organizations in the State-sponsored gaming sphere. Our State Lottery customers and their
Regulators require us to conduct our business with all due integrity and to provide our games securely
and responsibly, and we deliver on these expectations by keeping responsible gaming and player
protection front and center of our thinking.
Financial Review
Financial Highlights
1
On an organic level, the Group’s performance was boosted by the full contribution of our new contract
in Croatia, the return of our operations in Australia to pre COVID-19 levels and the continued cost
containment initiatives at HQ perimeter, fully offsetting the impact from the license expiration in
Malta on early July 2022. EBITDA increase was also affected by the positive FX impact of currency
movements across many key markets (mainly USA and Australia), posting a 11,3% year over year
increase and reaching €122,9 million, from €110,4 million in 2021.
Financial Data
2
(in € million)
FY 2022
FY 2021
%
Change
Revenue (Sale Proceeds)
392,8
414,0
-5,1%
Licensed Operations
89,3
133,1
-32,9%
Management Contracts
50,5
47,5
6,5%
Technology and Support Services
252,9
233,5
8,3%
GGR
343,9
335,3
2,6%
Gross Profit
127,7
113,8
12,2%
Gross Profit Margin (%)
32,5%
27,5%
+ 5,0pps
Operating Expenses
3
(99,8)
(96,0)
3,9%
EBITDA
4
122,9
110,4
11,3%
EBITDA Margin on Sales (%)
31,3%
26,7%
+ 4,6pps
EBITDA Margin on GGR (%)
35,7%
32,9%
+ 2,8pps
D&A
(70,1)
(71,0)
-1,4%
EBT (Profit/(loss) before tax from continuing operations)
29,8
37,1
-19,8%
EBT Margin (%)
7,6%
9,0%
- 1,4pps
NIATMI (Profit/(loss) after tax attributable to the equity
holders of the parent company)
11,9
17,5
-31,9%
1
For additional information on the Group’s performance, please also consult the Management Discussion and
Analysis Report published on our website.
2
The activities of Group subsidiaries in Poland (Totolotek S.A.), Brazil (Intralot do Brazil Ltda), Peru (Intralot de
Peru SAC) and Taiwan (Goreward) are presented as discontinued operations pursuant to IFRS 5 (note
2.31.A.VIII
).
3
Operating Expenses line presented excludes the capital structure optimization expenses.
4
The Group defines “EBITDA” as “Operating Profit/(Loss) before tax” adjusted for the figures “Profit/(loss) from
equity method consolidations”, “Profit / (loss) to net monetary position”, “Exchange Differences”, “Interest and
related income”, “Interest and similar expenses”, “Income/(expenses) from participations and investments”,
“Write-off and impairment loss of assets”, “Gain/(loss) from assets disposal”, “Reorganization costs” and
“Assets depreciation and amortization”.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
29
Revenue, GGR, EBITDA, EBT and NIATMI
Reported consolidated revenue posted a decrease compared to FY21, leading to a total revenue for
the twelve-month period ended December 31, 2022, of €392,8 million (-5,1%).
•
Lottery Games was the largest contributor to our top line, comprising 63,8% of our revenue,
followed by Sports Betting, contributing 14,6%, to Group turnover. VLTs accounted for
12,0% and Technology contracts represented 9,3% of Group turnover, while Racing
constituted 0,3% of total revenue for FY22.
Reported consolidated revenue for the twelve-month period is lower by €-21,2 million year over year.
The main factors that drove top line performance per Business Activity are:
•
€-43,7 million (-32,9%) from our Licensed Operations (B2C) activity line, with the decrease
attributed to lower revenue in Malta (€-51,5 million or -54,0% y-o-y; license expiration early
July 2022), in part offset by higher revenue in Argentina (€+7,7 million or +20,5% y-o-y;
driven by local market growth).
•
€+19,5 million (+8,3%) from our Technology and Support Services (B2B/ B2G) activity line,
with the increase attributed to US operations (€+8,9 million; positively affected by the EUR
depreciation), Croatia (€+5,8 million; driven by the full contribution of our new contract in
late April 2021), Australia (€+5,7 million; triggered by the return from COVID-19 related
slowdown) and a negative impact in other jurisdictions (€-0,9 million; due to services related
sales).
•
€+3,1 million (+6,5%) from our Management (B2B / B2G) contracts activity line, with the
increase driven by Bilyoner in Turkey (€+1,7 million; due to the online market growth),
Morocco (€+0,9 million; led by market growth) and US Sports Betting in Montana and
Washington D.C. (€+0,4 million).
Gross Gaming Revenue (GGR)
from continuing operations posted an increase of 2,6% (€+8,6
million to €343,9 million) year over year, driven by:
•
the increase in the non-payout related GGR (€+23,9 million vs. FY21), following the improved
performance across most key regions, followed by
•
the decrease in the payout related GGR (€-15,3 million vs. FY21), arising mainly from the
lower sales in Malta (-35,2% y-o-y on wagers from Licensed Operations
5
). FY22 Average
Payout Ratio
6
was lower by 2,6pps vs. LY (58,7% vs. 61,3%), significantly affected by the
weighted contribution from our operations in Malta.
5
Licensed Operations Revenue also include a small portion of non-Payout related revenue, i.e. value-added
services, which totalled €6,1m and €4,7m for FY22 and FY21 respectively.
6
Payout ratio calculation excludes the IFRS 15 impact for payments to customers.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
30
Payout
(in € million)
FY 2022
FY 2021
Sale Proceeds from Licensed Operations related to payout
83,2
128,3
Payout
48,9
78,7
Payout (%)
58,7%
61,3%
Total
Operating Expenses
ended higher by €3,7 million (or +3,9%) in FY22 (€99,8 million vs.
€96,0 million), mainly impacted by the negative FX movements, offsetting the cost savings at HQ
perimeter.
Other Operating Income
from continuing operations ended at €24,9 million, presenting an
increase of 15,2% y-o-y (or €+3,3 million), driven by higher equipment lease income in the USA.
EBITDA
7
amounted to €122,9 million in FY22, posting an increase of 11,3% (or €+12,4 million)
compared to FY21. This growth was driven by the improved operating performance across most
markets and the continuous cost containment initiatives.
On a yearly basis,
EBITDA margin on sales
improved to 31,3% (+4,6pps from 26,7% in FY21)
following the improved margins.
Earnings before Tax
in FY22 amounted to €29,8m largely driven by the significant EBITDA
contribution, the lower interest expenses, and the gains on net monetary position, while D&A
remained at the same levels with the prior year. Compared to FY21, Earnings before Tax posted a
decrease of €7,3m, mainly due to the balance sheet optimization transactions one-off impact in the
prior year.
NIATMI
(
Net Income After Tax and Minority Interest
) from continuing operations in FY22 concluded
at €6,3 million, compared to €26,6 million in FY21. NIATMI from total operations in FY22 amounted
to €11,9 million (lower by €5,6 million vs. a year ago). The positive variance of €5,6 million between
continued and total operations is a result of our participation disposal in Taiwan.
7
Analysis in the EBITDA section excludes Depreciation & Amortization, and expenditures related to capital
structure optimization.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
31
Cash Flow & Net Debt
Statement of Financial
Position/Cash Flows
(in € million)
FY 2022
FY 2021
Total Assets
617,1
607,6
Total Equity
-87,7
-115,5
Cash & Cash Equivalents
102,4
107,3
Partnerships
8
19,5
9,7
All other Operating Entities (with
revenue contracts) &
Headquarters
82,8
97,7
Net Debt
490,5
497,2
FY 2022
FY 2021
Operating Cash Flows
96,3
107,6
Net Capital Expenditure
-26,5
-22,9
Operating Cash-flow
in FY22 amounted to €96,3m, decreased by €11,3m, compared to FY21,
mainly impacted by the unfavorable working capital movement due to timing and the negative
variance from tax payments, attributed to the income tax return received on behalf of the parent
company the prior year.
Net Capex
in FY22 was €26,5m, higher by €3,6m compared to FY21, with US projects consuming
most of the CAPEX needs.
Net Debt
, as of December 31st, 2022, stood at €490,5m, decreased by €6,7m compared to
December 31st, 2021. Recent restructuring actions along with delivery of healthy cash flows resulted
in the improvement of net debt position and leverage ratios (Net Debt / EBITDA at 4,0x in FY22 vs.
4,5x in FY21).
Cash and cash equivalents
at the end of FY22 shaped at €102,4 million, decreased by €5,0 million
vs. FY21.
The Group’s financial covenant with respect to Net Debt to EBITDA (Leverage ratio) is:
Financial Covenants
FY 2022
Leverage ratio
4,00
8
Refers to stakes in Turkey (Bilyoner & Inteltek) and Argentina
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
32
Our Key Gaming Markets Performance
9
United States and Canada
In the United States, we provide technology and support services to state lotteries through our
subsidiary Intralot Inc., which was established in December 2001. We are one of the only three
vendors who hold contracts with the state lotteries for the supply of online gaming systems, retailer
communication networks, and point of sale equipment, such as terminals and vending machines. We
became the first non-U.S. company to win a tender for the supply of lottery systems, when we won
a contract to supply the Nebraska state lottery in 2003. Intralot Tech, a 100% subsidiary of Intralot
Inc., was established in 2019 as USA’s development hub in Greece and complements its existing
central functions in Atlanta and Mason.
In the continental US, we currently operate 11 contracts in 11 states, holding contracts for the supply
and operation of online lottery gaming systems in Illinois, Ohio, Louisiana, Arkansas, New Hampshire,
Idaho, Wyoming, Montana, New Mexico and Washington, D.C. We also hold a contract for the
provision of central monitoring services for more than 29.000 Coin Operated Amusement Machines
in Georgia. In Ohio, in addition to providing the central systems, terminals, equipment, vending
machines and retailer network communications, we also provide central monitoring services for seven
racinos operating video lottery terminals (VLTs). Furthermore, in May 2019 INTRALOT entered in the
Canadian market through a new contract with the British Columbia Lottery Corporation, which
operates lottery on behalf of the Government of British Columbia, for the provision of software,
hardware, and support services.
2020 marked the year when INTRALOT broke ground in the newly regulated and prominent US Sports
Betting market. In early May, “Sports Bet Montana” in Montana of USA was launched. INTRALOT
deployed in Montana its new INTRALOT Orion sports betting platform to enable the Montana Lottery’s
sports wagering self-service terminals and mobile sports wagering offering. In addition, INTRALOT
provides to the Montana Lottery a complete suite of services, such as Managed Trading and Marketing
Services (MTMS) and Customer Support (CS). Then, in early June 2022, the Digital Sports Betting
solution in Washington, DC, was also launched. INTRALOT, as part of its current contract with the
DC Lottery, deployed its new INTRALOT Orion sports betting platform to enable the GambetDC mobile
and desktop sports betting offering. Finally, on December 20th, 2022, INTRALOT signed a five-year
contract with the Ohio Lottery to implement its INTRALOT Orion Sportsbook solution. The project
went live in January 2023.
We have a strong track record in renewing and extending our contracts in the US, thus securing a
long-term presence in the country. More specifically, in July 2018, Intralot announced a five-year
extension to its current gaming systems contract with the New Hampshire Lottery Commission,
through June 2025. In addition, in November 2018, we renewed our contract with the New Mexico
9
Financial figures refer to the subsidiaries’ contribution to the Group and exclude non-operating entities in each
of the countries presented.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
33
Lottery for 2 more years, up to November 2025. In October 2020, a contract extension was signed
through 2029 to continue Intralot Inc.’s six-year partnership with the Georgia Lottery Corporation,
providing advanced services for the operation of its COAM (Coin Operated Amusement Machines)
project. One more development as per contracts extension was realized in June 2021, with the
renewal of the existing contract with the Ohio Lottery Commission until June 2023. Furthermore, in
late 2021, Intralot Inc. renewed the current contract with the Wyoming Lottery until August 2029.
Additionally, in late March 2022, Intralot Inc. extended the existing contract with the Montana Lottery
up to March 2026.
In 2022, our sales in the United States reached €163,4 million, posting an increase of 6,0%, over
the prior year, when our revenue amounted to €154,1 million. Sales were positively affected by the
EURUSD movement (-11.0% versus a year ago – in average terms). In local currency, current year
results posted a -5.7% y-o-y decrease mainly due to lower merchandise sales. Revenue of the United
States and Canada for the twelve months ended December 31, 2022 represented 41,6% of the
Group’s total revenue.
Key Consolidated Financial Figures
FY 2022
FY 2021
Δ%
(in € million)
Revenue
163,4
154,1
6,0%
GGR
163,4
154,1
6,0%
EBITDA
73,9
74,5
-0,8%
CAPEX (Paid)
18,0
13,1
37,2%
Key Standalone Balance Sheet Figures
FY 2022
FY 2021
Intralot Inc
(in € million)
Assets
250,9
265,9
Liabilities
246,4
263,1
Cash – Cash Equivalents
23,6
45,2
DC09 LLC
(in € million)
Assets
8,1
10,1
Liabilities
16,8
17,6
Cash – Cash Equivalents
1,5
2,8
Intralot Tech
(in € million)
Assets
1,4
0,6
Liabilities
0,7
0,2
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
34
Cash – Cash Equivalents
0,1
0,1
Greece
In Greece, we provide technology support and support services for the operation of private gaming
and the lottery through Intralot S.A., our parent company. Originally incorporated in Athens in 1992,
we won our first domestic contract in 1993. We currently operate three contracts in Greece.
As the center of our Global operations, Greece is also home to our betting-trading center that controls
our global fixed odds betting activity, and significant research and development programs
(Technology Hub), as well as our corporate Headquarters which supports the wider INTRALOT
ecosystem, employing approx. 400 employees at the end of December 31
st
, 2022. As such,
Headquarters expenses serve the different projects of INTRALOT S.A, including among others the
Greek projects, but most of the effort is distributed towards servicing and supporting the pipeline of
won and upcoming contracts, as well as supporting INTRALOT’s subsidiaries and R&D efforts.
Our relationship with Greek Organization of Football Prognostics S.A. (OPAP) began in 1999. On July
31
st
, 2018, the old OPAP contract ended, and the two parties continue their cooperation under a new
contract, specifically in the field of numerical lotteries games, resulting in a smaller contract value
due to the limited scope. The new contract is a 3-year contract that also includes an option for OPAP
to renew for an additional two years. On January 14
th
, 2021, INTRALOT announced the extension of
its partnership with OPAP. More specifically, OPAP exercised its two-year extension option of the
contract with INTRALOT for the continuation of the collaboration of the two companies in the field of
numerical lotteries and services from August 2021 to July 2023.
Furthermore, on December 2, 2021,
we extended our current contract with OPAP for an additional year, up to 31
st
of July 2024.
Additionally, in July 2022, the existing contract with OPAP was further extended until 31
st
of July
2025 with a one-year extension option. These extensions allow INTRALOT to continue providing its
state-of-the-art Lottery Solution, that incorporates its novel core platform “LotosX”, launched with
great success in 2019, along with several other components and high-quality services.
In the first half of 2021, INTRALOT sold its 20% stake in Intralot de Peru SAC for a cash consideration
of USD21 million to Nexus Group, along with a three-year extension of its current contract with
Intralot de Peru SAC through 2024, related to the provision of gaming technology and support
services. The net cash consideration, after taxes and transaction expenses, amounted to USD16,2
million.
Revenue from Greek operations in 2022 was €14,5 million, compared to €13,4 million in the
respective period of the prior year, accounting for 3,7% of the Group’s total revenue in the twelve
months ended December 31, 2022.
Key Consolidated Financial Figures
FY 2022
FY 2021
Δ%
(in € million)
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
35
Revenue
14,5
13,4
7,9%
GGR
14,5
13,4
7,9%
EBITDA
-18,3
-28,1
34,9%
CAPEX (Paid)
2,8
1,9
46,1%
Key Standalone Balance Sheet Figures
FY 2022
FY 2021
INTRALOT SA
(in € million)
Assets
470,0
344,5
Liabilities
322,0
306,9
Cash – Cash Equivalents
6,1
8,3
Intralot Services SA
(in € million)
Assets
0,0
0,3
Liabilities
0,0
0,0
Cash – Cash Equivalents
0,0
0,0
Betting Company SA
(in € million)
Assets
8,1
6,3
Liabilities
3,9
2,4
Cash – Cash Equivalents
0,7
0,4
Intralot Interactive
(in € million)
Assets
0,0
0,1
Liabilities
0,0
0,1
Cash – Cash Equivalents
0,0
0,1
Argentina
In Argentina, we provide technology support and support services mainly for the operation of lottery
games and sports betting in 10 out of the 23 jurisdictions in the country, and we are the lottery
operator for the Province of Salta. We entered the market when we acquired a majority stake
(50,01%) in our subsidiary Tecno Accion in 2007. We facilitate approximately 7.400 terminals
throughout Argentina and operate approximately 800 terminals in Salta.
Through Tecno Accion, we offer integrated technology solutions for lottery organizations, such as
portable terminals, provide gaming software and trade management systems and communication
consultancy. In Salta, we act as the sole lottery operator in the province, with 12 numerical games.
Our partners in Tecno Accion are HAPSA, the operator of horse racing (and CASINO HAPSA) in Buenos
Aires, and the Inverclub, which manages casinos.
Our revenue from the Argentina facility management business in 2022 reached €18,7 million, versus
€16,7 million in 2021. The lottery operator business generated sales of €45,4 million in 2022,
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
36
compared to €37,7 million in 2021, posting an increase of +20,5%, mainly impacted by local market
growth. Our total revenue in Argentina for 2022 was €64,1 million compared to €54,3 million during
the same period last year. Argentina' s revenue in the twelve months ended December 31, 2022
represented 16,3% of INTRALOT Group’s total revenue.
Key Consolidated Financial Figures
10
FY 2022
FY 2021
Δ%
(in € million)
Revenue
64,1
54,3
18,0%
GGR
40,3
34,5
16,7%
EBITDA
14,9
13,3
11,6%
CAPEX (Paid)
2,4
1,0
149,7%
Key Standalone Balance Sheet Figures
FY 2022
FY 2021
Tecno Accion SA
(in € million)
Assets
13,1
12,2
Liabilities
5,4
4,3
Cash – Cash Equivalents
0,8
1,2
TecnoAccion Salta SA
(in € million)
Assets
5,0
4,7
Liabilities
2,3
2,2
Cash – Cash Equivalents
0,8
2,3
Oceania
We originally entered the Australian market in 2006, where we currently provide technology and
support services in two jurisdictions through our wholly owned subsidiaries Intralot Australia Pty Ltd
and Intralot Gaming Services Pty Ltd.
In Victoria, IGS supplies a remote monitoring system to control over 26.000 gaming machines under
a 15-year contract signed in September 2011 with the State of Victoria. Our monitoring system is
designed to ensure the accurate and uninterrupted monitoring of gaming machine transactions,
single and multiple venue linked jackpot arrangements, and the capture of data and information with
respect to gaming machines for regulatory, taxation, research, and related purposes. In addition,
conformance with the statewide precommitment system (PCS) has been in place since December
2015 and has increased the monitoring of revenue substantially. IGS will operate the precommitment
scheme up to the end of the monitoring license referred above, which expires in August 2027.
10
Argentina figures have been restated based on IAS 29 (Financial Reporting in Hyperinflationary Economies)
as to reflect current purchasing power.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
37
In Western Australia, we provide the information technology and systems support for the Lotteries
Commission of Western Australia (Lotterywest), to enable Lotterywest’s retail and online gaming
sales, through our wholly owned subsidiary Intralot Australia Pty Ltd. Since 2014, we have provided
support services for Lotterywest in its Retail Transformation Program (RTP) and secured an extension
of our ongoing contract till 2026.
In New Zealand, we provide technology and support services through our wholly owned subsidiary
Intralot New Zealand Ltd Operations, which was first awarded the government contract in 2005. To
the government we provide an electronic monitoring system to link approximately 14.479 electronic
gaming machines (EGMs) in more than 1.025 locations. The electronic monitoring system is designed
to guarantee the integrity of games and limit opportunities for fraud. Our contract was extended in
2016 up to 2022, while in 2020 was further extended up to 2025 with a one-year extension option.
Additionally, in 2010 we were awarded the development and operation of an Integrated Gambling
Platform responsible for electronic licensing with the contract ended in February 2021.
Revenue for 2022 from our Oceania operations has increased by +32,3%, amounting to €25,1
million, versus €18,9 million in 2021. The increase in Oceania’s revenue is mainly reflect the return
of operations to pre COVID-19 levels. Revenue from our Oceania operations in the twelve months
ended December 31, 2022, represented 6,4% of INTRALOT Group’s total revenue.
Key Consolidated Financial Figures
FY 2022
FY 2021
Δ%
(in € million)
Revenue
25,1
18,9
32,3%
GGR
25,1
18,9
32,3%
EBITDA
18,1
12,6
43,4%
CAPEX (Paid)
1,4
1,0
40,6%
Key Standalone Balance Sheet Figures
FY 2022
FY 2021
Intralot Gaming Services Pty Ltd (IGS)
(in € million)
Assets
14,5
12,3
Liabilities
9,5
7,3
Cash – Cash Equivalents
3,9
2,1
Intralot Australia PTY Ltd
(in € million)
Assets
6,8
6,5
Liabilities
1,1
0,9
Cash – Cash Equivalents
0,8
0,7
Intralot New Zealand Ltd
(in € million)
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
38
Assets
2,7
2,0
Liabilities
0,8
0,9
Cash – Cash Equivalents
1,5
0,8
Turkey
In Turkey, we currently own approximately 50,01% of Bilyoner, one of the leading online distributors
of sports betting games in Turkey. Bilyoner, along with five other online providers, distributes the
games of Spor Toto. Bilyoner was established in 2003 and had approximately 4,5 million registered
players as of December 31
st
, 2022. Bilyoner’s license agreement was renewed and is valid till
December 2029.
Bilyoner’s revenue increased to €29,6 million in 2022, from €27,8 million over the same period last
year, favored by the continued growth of the online market. In FY22, the local Sports Betting market
expanded 1,7 times y-o-y, with the online segment representing close to 87,0% of the market at the
end of 2022.
Bilyoner’s operations were adversely affected by the local currency devaluation (31,1%
Euro appreciation versus a year ago). In Turkish Lira terms, Bilyoner’s revenue showcased a
+101,9% increase versus 2021 (in Euro terms Bilyoner’s revenue increase by +6,3%). Bilyoner’s
revenue represented 7,5% of INTRALOT Group’s total revenue for the twelve months ended
December 31, 2022.
Key Consolidated Financial Figures
11
FY 2022
FY 2021
Δ%
(in € million)
Revenue
29,6
27,8
6,3%
GGR
29,6
27,8
6,3%
EBITDA
14,0
12,7
10,2%
CAPEX (Paid)
0,2
1,9
-88,2%
Key Standalone Balance Sheet Figures
FY 2022
FY 2021
Bilyoner AS
(in € million)
Assets
71,9
44,5
Liabilities
43,4
40,5
Cash – Cash Equivalents
17,9
6,2
Croatia
We entered the Croatian Market in 2009, when INTRALOT SA and
the State
Lottery HRVATSKA
LUTRIJA D.O.O signed a contract for the supply and maintenance of the i-System interactive gaming
platform and internet games, as well as another contract for the supply and maintenance of e-
Instants games.
11
Turkish figures have been restated based on IAS 29 (Financial Reporting in Hyperinflationary Economies) as
to reflect current purchasing power.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
39
In January 2016, INTRALOT SA passed the contract to Intralot Adriatic, with 100% of the shares held
by INTRALOT SA. Since then, Intralot Adriatic has been into a partnership with the State Lottery
HRVATSKA LUTRIJA D.O.O, for the joint management of the interactive casino business on a shared-
profit basis in Croatia.
On September 2018, following a competitive process, Intralot Adriatic was awarded a 10-year
contract for the supply of new central system, the LOTOS 10 ecosystem for digital, retail and other
distribution channels, gaming terminals as well as related services such as implementation, system
operations, games selection and planning, retailers and players support, repair lab, maintenance and
support services.
Currently, we operate in the verticals of Numerical and Instant games, Betting and Online Casino.
The existing contract is in effect from late April 2021 and will last for 10 years with a two-year
extension option.
In 2022, Intralot Adriatic generated revenue of €11,3 million, while in 2021 the respective revenue
amounted to €5,5 million. The improved performance is attributed to the full contribution of our new
contract that went live in late April 2021. Our total revenue from Croatia for the twelve months ended
December 31, 2022, consisted 2,9% of our Group’s total revenue.
Key Consolidated Financial Figures
FY 2022
FY 2021
Δ%
(in € million)
Revenue
11,3
5,5
105,8%
GGR
11,3
5,5
105,8%
EBITDA
7,0
0,6
1059,0%
CAPEX (Paid)
0,5
1,2
-59,7%
Key Standalone Balance Sheet Figures
FY 2022
FY 2021
Intralot Adriatic d.o.o
(in € million)
Assets
22,2
16,9
Liabilities
19,9
16,3
Cash – Cash Equivalents
2,4
0,3
Looking Ahead
The lottery, sports betting and VLT monitoring industries operated by INTRALOT, following the ease
of the COVID-19 pandemic measures in 2021, have gradually returned to their pre-pandemic
performance and growth trajectories. Today, these industries are presenting significant growth
opportunities, mainly enabled by the value that has been unlocked by new technologies and the wide
adoption of online services, which were significantly promoted during the pandemic, ensuring
centralized control and promoting responsible gaming, as well as the transparency, security and
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
40
integrity of the gaming experience. Digital technology evolution, in combination with regulatory
initiatives towards market liberalization and the regulation of previously restricted forms of gaming,
as well as the changes in player demographics and their spending habits and the digital adoption as
influenced by new technologies, all set the pace of accelerated change.
INTRALOT has all the resources and foundations for a successful course and expects to reap the
benefits of its strategy to invest in digital transformation technologies. Leveraging our leading
position in the provision of Lottery and Sports Betting technology and services, held for two decades,
INTRALOT is intensifying its strategic focus in order to capitalize on the new value created in recent
years by strengthening its online portfolio and increasing demand in the iLottery sector from state
Lotteries in the US and the rest of the world. Technology will be the key enabler towards business
innovation. Our technology is not only highly innovative, but it is also easily scalable, interoperable,
and extensible. Seamless omni-channel player experiences, cost optimization, fast time-to-market,
market reactiveness and all other drivers of increased sales and profitability can be improved by
using our technology as an enabler.
In this context, INTRALOT’s organizational structure evolves with the aim of enhancing its delivery
capabilities and creating a customer-centric service delivery organization, backed by a strong finance
division and an extrovert commercial arm.
Through 2023 we look forward to further engagements to implement projects with our new Lotos X
and INTRALOT ORION platforms, monitoring systems and industry-leading terminal solutions, and to
benefit from the industry appeal of our latest digital solutions powered by our enhanced online
capabilities.
In the US lottery market, which has become a key part of our future growth strategy, we intend to
leverage our position and the strengths of our strategic subsidiary, INTRALOT Inc.
To this end, we
strongly pursue to implement and operate sports betting for our Lottery customers and beyond, and
our performance in Washington DC and Montana proves our capability to successfully operate sports
betting in the growing US Sports betting market, as sports betting legislation advances in more
States where we currently operate and the post-COVID-19 Lottery market shows strong signs of
positive structural change due to new player behaviors and preferences.
The recent launch of the
new Sports Betting project in Ohio, USA further demonstrates INTRALOT's ability to implement and
operate similar projects in challenging markets. In addition, significant growth prospects are
presented in the US VLT monitoring market, which INTRALOT will carefully evaluate in the future by
leveraging its experience in successfully managing two such important projects in Georgia and Ohio,
USA. Finally, the Group's Management will selectively evaluate projects that may offer growth
opportunities in other markets outside the US in its areas of activity, as it has already demonstrated
its ability to respond successfully to the implementation of such projects by leveraging the network
of partnerships it owns or is developing around the world.
A primary enabler of sustainable growth is the further improvement of our capital structure in a way
that will be consistent with our strategy to create long-term value for all stakeholders of the company.
We remain focused on our mission to best address the needs of our customers with state-of-the-art
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
41
products and services, especially in the promising times post COVID-19 pandemic era, and to
generate new free cash flows that will further strengthen INTRALOT's position and will lay the
foundation for its active and dynamic presence in the future based on the new industry trends.
NON-FINANCIAL INFORMATION
INTRODUCTION
The non-financial report covers INTRALOT S.A. and INTRALOT Inc’s. performance (also referred to
as the “INTRALOT” or the “Company”) for the fiscal year that ended on December 31
st
, 2022. This
year, INTRALOT is presenting both qualitative and quantitative information at the Company level.
Cases where data is not available will be highlighted accordingly. This report focuses on specific
topics detailed in Circular 62784/2017 "Non-Financial Information Report" and adheres to the
requirements set forth by Law 4403/2016, Law 4308/2014, and the EU Taxonomy Regulation
2020/852. The report's content pertains to significant environmental, social, and governance
matters:
•
Environmental matters
•
Social and Employee matters
•
Respect for human rights
•
Anti-corruption and anti-bribery matters
•
Supply chain matters
INTRALOT aims to provide stakeholders with a clear understanding of the Company's non-financial
performance, as well as its social and environmental impact. Additionally, the Company has provided
a brief outline of its business model to comply with applicable laws and regulations. The Company
has conducted a materiality analysis, in accordance with the Global Reporting Initiative (GRI
Standards 2021), in collaboration with its internal and external stakeholders. The purpose of this
analysis is to identify the key sustainability issues that are significant to INTRALOT in terms of their
economic, environmental, or social impact, or that affect stakeholder beliefs and decisions regarding
the Company's sustainability performance. These issues are referred to as "material topics." Further
information regarding the material topics identified by INTRALOT will be provided in the Company's
2022 Sustainable Development Report and Communication on Progress (CoP), which is expected to
be published in May 2023.
BUSINESS MODEL
INTRALOT
INTRALOT is a publicly listed company that was established in 1992. As a technology-driven
corporation, INTRALOT is uniquely positioned to offer flexible, reliable, and secure gaming products
and services to lottery and gaming organizations.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
42
Vision
Shaping the future of gaming
Transforming field experience from gaming operations into intelligent solutions that meet customer
needs in the digital era and create value for all stakeholders in sustainable ways.
Mission
•
To deliver innovation driven by experience.
•
To modernize licensed lotteries in today’s digital world and supply them with entertaining
gaming options, exciting omnichannel content, integrated best-in-class technology solutions,
flexible futureproof platforms and added-value services.
•
To operate lotteries in a secure, reliable and transparent manner, by consistently providing
engaging player experiences across all verticals.
As a major actor in the licensed gaming industry, INTRALOT provides integrated gaming systems
and services to customers worldwide. It holds a strong market position in the highly regulated
markets where it operates and is present in 39 jurisdictions around the world. The Company’s lottery
products and services are preferred by several lottery and betting operators worldwide. INTRALOT
creates innovative and customized hardware and software solutions, and provides gaming services
that support lottery, iLottery, betting, Video Lottery Terminals, and racing. The Sustainable
Development Report 2022 of INTRALOT, which is scheduled for release in May 2023, will provide
additional details about the Company's presence and actions.
Risk Management
INTRALOT has adopted a thorough risk management approach which is based on the ERM (Enterprise
Risk Management) Framework, COSO (Committee of Sponsoring Organizations) principles and ISACA
(Information Systems Audit and Control Association) guidelines. ERM at INTRALOT takes a
comprehensive approach to recognizing, evaluating, and controlling risks associated with achieving
its business goals. It also conducts systematic risk assessment and prepares risk mitigation actions
at least once per year. The Company's risk management policy seeks to mitigate the adverse effects
on both its financial performance and broader operational strategy resulting from financial market
uncertainties and fluctuations in costs and sales.
Significant Risks
Source
Impact
Policies and Practices
Financial Risks
Credit risk
Not significant
•
Pursue wide dispersion of customers
•
Set credit limits through signed contracts
•
Set limits on credit exposure to any
financial institution
•
Adopt an internal rating system on credit
rating evaluation
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
43
Liquidity risk
Significant
•
Develop policies to manage and monitor
liquidity to meet obligations
•
Set a system to monitor and constantly
optimize operating and investing costs
Foreign Exchange risk
Significant
•
Achieve
diversification
of
currency
portfolio
Interest rate risk
Not significant
•
Have a balanced portfolio of loans with
fixed and floating borrowing rates
High leverage risk
Moderate
/
Significant
•
Set specific consolidated fixed charge
coverage and senior leverage ratio
Operating Risks
Winners’
payouts
in
sports
betting
(Depends
on
the
outcome of the events)
Moderate
•
Establish a betting center in Greece to
control global fixed odds betting activity
and payout policy in real-time
Gaming sector and economic
activity
Moderate
•
Diversify portfolio through international
expansion
•
Reduce dependency on the performance
of individual markets and economies
Gaming Taxation
Moderate
•
Monitor and evaluate changes in taxation
Regulatory risk
Significant
•
Rely on government licenses
•
Monitor
changes
in
the
regulatory
environment
Technological changes
Significant
•
Properly respond to technological changes
•
Timely develop or license innovative and
appealing cost-effective products
•
Invest in R&D to develop innovative
products
Emerging markets risk
Significant
•
Monitor
social,
political,
legal,
and
economic conditions in countries of
operations
Competition
and
margin
squeeze
Significant
•
Aim to renew long-term contracts
Environmental Risk
Moderate
•
Identify best practices and implement
environmentally friendlier initiatives
•
Reduce waste and improve recycling rates
•
Reduce use of physical resources (e.g.,
paper, ink).
•
Measure the environmental impact
Risk of COVID-
19 Pandemic
(Depends
on
its
duration,
government restrictions in key
jurisdictions and the current and
subsequent
economic
disruption)
Not Significant
•
Closely
monitor
the
developments
regarding the pandemic
•
Follow the gu
idance from local health
authorities
•
Observe
requirements
and
actions
implemented by local governments
•
Implement emergency plans to reduce
potential adverse effects on employees
and operations
Sustainability Strategy
Corporate Responsibility Framework
INTRALOT's Sustainability strategy (pillars and commitments) focuses on five key areas shaped in
Corporate Responsibility Framework: namely
Economic Sustainability, Responsible Gaming,
Societal Support, Governance and Compliance, Employee Wellbeing
. The Company is
dedicated to following the most effective sustainability practices and regularly evaluating its progress.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
44
INTRALOT aims to ensure that it operates in a manner both ethical and compliant with regulations,
while also prioritizing the wellbeing of its employees. Responsible Gaming is a critical aspect of the
Company's sustainability strategy, as INTRALOT seeks to ensure that its gaming products are safe
and do not contribute to addiction or other negative outcomes. Additionally, the Company is
committed to minimizing its environmental impact through various sustainability initiatives and
reducing its carbon footprint. Finally, INTRALOT aims to contribute to the greater good of society by
supporting local communities and promoting social responsibility through various corporate social
responsibility (CSR) programs. By focusing on these key areas, INTRALOT aims to create sustainable
long-term value for all its stakeholders while also fulfilling its commitment to social and
environmental responsibility. The Company's actions will be further elaborated in the Sustainable
Development Report, which is set to be published in May 2023. The report will provide information
on the Company's sustainable practices and initiatives covering topics as corporate governance,
employee relations, Responsible Gaming, and community engagement among others.
Corporate Responsibility Governance
The CEO, who also acts as the Chairman of the Board, bears the ultimate responsibility for Corporate
Responsibility and Sustainability Strategy within the organization. Yet the Board meetings at present
do not involve any discussions on matters related to Corporate Responsibility. Being a socially
responsible Company, INTRALOT aims to incorporate sustainable development and corporate
responsibility topics into the Board of Directors' agenda in 2023. The Deputy CEOs within the
Company hold the responsibility of demonstrating leadership and dedication to the principles of
Corporate Responsibility. The Corporate Affairs Director is accountable for the oversight of planning,
execution, and assessment of the Corporate Responsibility, as well as coordinating and assessing the
Responsible Gaming initiatives of the Company. Company principles are managed at an operational
level by the Corporate Affairs Department, whereas the Corporate Affairs Director collaborates with
the Directors of Operations, as well as other Divisions within the Company to promote the
implementation of corporate responsibility practices.
Stakeholder Engagement
To achieve our sustainability goals, operate efficiently and responsibly and mitigate risks, it is
essential to engage with internal and external stakeholders. As a Company, INTRALOT identifies
those interested groups that are affected by the Company's activities and, in turn, those that directly
or indirectly affect the Company. The Company works to reinforce and broaden its stakeholder
engagement process with the goal of cultivating trust-based relationships and improving
transparency. The types of channels and the frequency and engagement methods will be presented
in the Sustainable Development Report of INTRALOT in May 2023.
Stakeholder Groups
•
Customers
•
Business Partners
•
Suppliers
•
Retailers
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
45
•
Players
•
NGOs
•
Industry Associations
•
Employees
•
Shareholders
•
Investors
•
Media
•
Community
•
Regulatory
•
States
GOVERNANCE ISSUES
Governance
INTRALOT is committed to the most updated principles of Corporate Governance, in accordance with
the applicable Greek legislation and international best practices. The Company has voluntarily
adopted the Hellenic Corporate Governance Code 2021 and incorporated its principles in its Corporate
Governance Code. Our Corporate Governance policy reflects our commitment to ethical and
responsible decision making by our top management and directors, to ensure our organization’s
sustainable growth and the long-term welfare of shareholders and stakeholders. The Board of
Directors and its established committees follow these principles to oversee the Company's
operations, along with its subsidiaries and joint ventures across regions. The Board of Directors has
also established committees with supervisory and advisory authorities. For further details, refer to
the Corporate Governance Statement in the following chapters of Annual Report.
Code of Corporate Governance
INTRALOT believes that proper corporate governance creates the framework for increased
transparency and reduced cases of corruption or bribery.
The Company abides by a set of regulations
consisting of controls, rules, and procedures, which are structured into three layers. Additionally, the
Greek legislation, the 2004 publication of the OECD corporate governance, and the Hellenic
Federation of Enterprises (SEV) Code of Corporate Governance for Listed Companies are also
considered of significant importance. In addition, the widely accepted principles of corporate
governance as applied by countries of the European Union are followed by the Company. In total,
adherence to these rules brings about greater transparency for the Company’s operations, clarity for
stakeholders, and a more lucid image of the Company for shareholders.
Data Privacy
INTRALOT prioritizes the protection of personal data and considers it a crucial issue for its responsible
operation. To ensure the protection of personal data, the Company has established a policy and
implemented an Information Security Management System that is certified according to the ISO/IEC
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
46
27001 international standard. This demonstrates the Company's commitment to safeguarding
personal data and implementing the necessary controls and procedures to maintain the
confidentiality, integrity, and availability of information assets. The Privacy Data Protection Policy
establishes various principles, rules, procedural and technical controls. The Policy serves as the
foundation for the Company's Data Protection Framework, which encompasses Privacy Good
Practices, Enterprise Risk Management Framework, Data Privacy Impact Assessments, Cyber and
Information Security Frameworks. This framework helps the Company identify Information Security
needs, uphold Data Protection and define incident detection, response, and recovery processes to
respect and protect data subjects' rights in multiple dimensions. The Data Protection Framework
complies with the EU General Data Protection Regulation (GDPR), which serves as the minimum
Privacy Standard for the entire Company. All of INTRALOT's products and projects undergo strict
adherence to the Privacy and Security Controls from their design phase (Privacy by Design).
Additionally, INTRALOT implements a specific process for all employees to report any violation of
personal information to the highest corporate level (C-level) promptly.
Anti-Corruption & Anti-Bribery
Policies & Due Diligence
INTRALOT is diligent in identifying any potential risks of corruption or bribery within its operations.
The Company has incorporated responsible internal operational principles and implemented internal
policies, rules, and regulations to govern its daily operations.
The Group complies with regulations in all countries of operation, but also takes heed to identify
dormant and potential risks relating to corruption.
Internal Regulation Charter
The Internal Regulation Charter has been prepared in accordance with the Greek Law and is in
compliance with the provisions of Article 14 of Law 4706/2020 on corporate governance. It aims to
establish a framework for the Company's organization and operation that ensures compliance with
legal and regulatory requirements, transparency, and efficiency in decision-making by corporate
bodies. The Internal Regulation is communicated to the employees of the Company through the
internal communications network, whereas, those accountable for adhering to the Charter include
the Board of Directors, Management Executives (Group CEO, Group Deputy CEO, Executive Vice-
Chairman, Group Chiefs, Vice Presidents, Groups Directors, Directors, and Heads of Departments),
employees with an employment agreement and partners who offer their services under a contract
for service provision, paid mandate, or project contract.
Internal Regulation
Charter
Code of Conduct
Anti-money
Laundering Policy
Anti-Corruption
Policy
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
47
The Internal Regulation sets out guidelines for the Company's organizational structure, the functions
of the units and the committees, as well as the duties of their directors and their direct reports. It
also covers the reporting procedures of the Internal Control System, the process for hiring top
management and evaluation performance processes. Additionally, the Charter regulates:
•
The process of compliance applying to people exercising managerial duties, as defined in
number 25 of par. 1 of article 3 of Regulation (EU) 596/2014, and of people who have close
ties with them, according to the definition of par. 14 of article 2 of Law 4706/2020, which
include the obligations deriving from the provisions of article 19 of Regulation (EU) 596/2014.
•
The process of notifying the existence of dependent relations, according to article 9 of Law
4706/2020, of the independent non-executive members of the Board of Directors and of the
people who have close ties with them.
•
The process of compliance with the obligations arising from articles 99 to 101 of law
4548/2018, regarding transactions with related parties.
•
The policies and procedures that prevent and resolve cases of conflict of interest.
•
The policies and procedures for the compliance of the Company with the legislative and
regulatory provisions that govern its organization and operation, as well as its activities.
•
The established procedure for the management of privileged information and the disclosure
of accurate information to the public, in accordance with the provisions of Regulation (EU)
596/2014.
•
The policy and procedure for conducting periodical evaluations of the Internal Audit System,
in particular, towards the adequacy and effectiveness of the financial information provided,
on an individual and consolidated basis. Also, ensures the risk management and regulatory
compliance, according to the recognized standards of evaluation and internal control, as well
as the implementation of the provisions on corporate governance of this law. This evaluation
is carried out by people who have sufficient relevant professional experience and who do not
have dependency relationships according to par. 1 of article 9 of Law 4706/2020.
•
The training policy of the members of the board of directors, the top management team, as
well as the other executives of the Company, especially those involved control, risk
management, regulatory compliance, and information systems functions.
Code of Conduct
The Company's Code of Ethics and Conduct serves as a guiding reference for all employees and
associates, including third parties. It establishes a framework of principles and values that should
govern their professional behavior, reflecting the Company's fundamental principles, corporate
culture, business ethics, and ethical commitments. The Code places emphasis on combating
corruption and bribery issues. INTRALOT ensures that all its employees receive comprehensive
training on the Code of Conduct through various channels, including e-Learning platforms, email
communication, and induction training programs. The Code is regularly reinforced through employee
briefings and remains an integral part of all employee contracts, irrespective of their job designation
or level.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
48
The Company emphasizes on the importance of complying with the Code and mandates that all
employees and managers follow it without exception. Additionally, all employees are required to
report any instances of Code violations, conflicts of interest, or legal violations, either anonymously
or by disclosing their identity to the Human Resources Department through telephone or email.
INTRALOT takes all reports seriously and ensures the confidentiality of the reporting employee. The
Company investigates all potential breaches of the Code thoroughly. In the case of a conflict of
interest, employees must report it to their supervisor or Director, who will discuss it with them and
take appropriate action.
Anti-Corruption policy
The Company values honesty and integrity in its management practices and business transactions,
while it aims to uphold its positive reputation. Therefore, the Company is committed to preventing
and combatting corruption in all its forms by adhering to anti-corruption laws in all of the regions
where it operates. This includes complying with the Greek National Strategic Plan Against Corruption
(NSPAC), as well as the U.S. Foreign Corrupt Practices Act (FCPA), the U.K. Bribery Act (UKBA), and
other anti-bribery laws in order to avoid violations and proactively identify and address potential
issues in a timely manner.
INTRALOT has developed and adopted an Anti-Corruption policy at a Company level which is
mandatory for all employees highlighting the Company’s principles on corruption, procurement and
bidding, merger and acquisition transactions, gifts and entertainment, and political contributions.
Employees are encouraged to report any suspicion of bribery or corruption to the Company's Legal
Department or the Head of the Business Unit, by providing their name or choosing to remain
anonymous. The Human Resources Department and the Internal Audit Unit are available to receive
respective reports. Furthermore, the Company has received an ISO 37001 certification for its Anti-
Bribery Management System, which includes measures to prevent, detect, and address bribery, as
well as ensure transparency in transactions. The certification for the ISO 37001 gives our
stakeholders confidence that the organization has implemented effective measures to continually
improve in combatting bribery issues. This makes INTRALOT one of the few externally certified
companies in the gaming industry worldwide. Additionally, INTRALOT has signed a Memorandum of
Understanding and joined the Business Integrity Forum, which is an initiative launched by
Transparency International - Greece network.
Additional to its policy, the Company following the best anti-corruption has incorporated in all supplier
agreements anti-corruption contractual clauses to ensure the adherence to the relevant legislation.
However, such clauses are not present in contracts with customers as they are either state lotteries
or privately licensed companies. In this context, INTRALOT continuously endeavors to collect the
necessary evidence, prior to any settlement of business relationship and according to the legislative
framework, to be able to determine whether a future partner fits its culture and operates ethically
and in compliance with applicable regulations. Therefore, the Company conducts a thorough
corruption risk assessment by performing due diligence on its business partners, including agents,
consultants, suppliers, intermediaries, consortium or joint venture partners, contractors or major
sub-contractors, and distributors before engaging in any business relationship. If due diligence
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
49
findings are not satisfactory, the Company refrains from any business activity. The due diligence
processes are established also during mergers and acquisitions, and before the finalization of relevant
transactions. Being consistent to its anti-corruption principles, the Company follows a standardized
internal auditing procedure, performed annually to assess its business units for relevant risks and
monitor high risk areas.
Anti-Money Laundering Guidelines
In order to ensure that its global operations are not being used for money laundering purposes, the
Company has formulated a comprehensive set of guidelines that incorporate the essential elements
of its anti-money laundering framework. The framework contains a set of measures and guidelines
that provide advice on implementing these principles effectively. By adhering to these guidelines,
the Company can minimize the risk of its products being unwittingly used for money laundering and
thus maintain its reputation, credibility, and stability within the gaming and lotteries community
worldwide. It is mandatory for all employees to comply with the anti-money laundering guidelines,
as it is a Company policy.
Outcome of Policies & Performance Indicators
12
2022
Governance
Non-executive BoD members (%)
55,6
Independent non-executive BoD members (%)
44,4
Anti-Corruption Employee Training
Employees briefed on the Code of Conduct (%)
100
Employees trained on the Code of Conduct (number)
44
13
Employees trained on anti-corruption and anti-bribery issues (%)
30
14
Employees attending the annual Information Security awareness program (number)
210
15
Compliance
Corruption incidents (number)
0
Bribery incidents related to employees (number)
0
Value of contributions made to politicians and political parties (€)
0
Violation cases concerning the Code of Conduct (number)
0
Supply Chain
Policies & Due Diligence
Responsible procurement is a major focus area for INTRALOT. The Company depends on various
sources for its operations, including suppliers who provide the Company with materials, equipment,
services, and expertise essential for its functioning. Moreover, the Company relies on inputs from
regulatory authorities and states who create policies and regulations for the local gaming market. As
12
2022 data refer to INTRALOT S.A. and INTRALOT Inc. except where it is mentioned otherwise.
13
Data refer to INTRALOT S.A. only
14
Data refer to INTRALOT S.A. only
15
Data refer to INTRALOT S.A. only
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
50
a licensed gaming operator, INTRALOT operates in multiple countries globally and distributes its
products directly to consumers through its sales networks. The Company ensures its collaboration
with responsible and ethical suppliers, who remain compliant with laws and regulations through the
Procurement policy. This policy is a mandatory framework for all procurement activities, globally.
According to the relevant provisions of Code of Conduct, all purchase agreements have to be
documented and clearly state the services or products provided, the unit price, the method and terms
of payment as well as the applicable rate or fee, while the amount of payment has to be
commensurate with the products or services. Despite its global operations, the Company continues
to support and prioritize local suppliers, when possible. INTRALOT assesses its suppliers’ financial
and technical performance and monitors products and services’ providers, evaluating the following
criteria:
1.
Quality of deliverables
2.
Infrastructure deployment according to the project plan
3.
Testing
4.
System performance
5.
Incidents recorded by the Global Service Desk
Moreover, the Company implements a due diligence process on suppliers’ financial data, while there
is no separate process to identify suppliers with actual or potential negative environmental, labor
practices as well as human rights or social impacts.
Outcome of Policies & Performance Indicators
2022
16
Suppliers
188
ENVIRONMENTAL ISSUES
Policies & Due Diligence
Environmental Management
INTRALOT acknowledges the significance of protecting the environment and monitors its
environmental performance. To demonstrate its commitment to environmental management and
protection, the Company has implemented a series of mitigation actions. The Company is committed
to minimize its environmental impact and promote responsible resource management. The
Company’s environmental commitments can be found in its Code of Conduct. It is expected that
employees make an effort to preserve resources, limit waste and emissions by practicing recycling
and other methods of conserving energy according to internal procedures. Furthermore, the
Company is able to reduce its environmental and energy footprint and improve its environmental
16
2022 data refer to INTRALOT S.A. only
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
51
performance by implementing a comprehensive Environmental Management System, ISO
14001:2015 that records the impact of its activities and enables timely measures to be taken.
A procedure for monitoring environmental legislation has been established to ensure adherence to
applicable national and international laws and regulations. As part of Company’s Risk Management
Assessment, regular environmental impact assessments are conducted to methodically identify and
evaluate the environmental impact of the Company's activities, taking into account both the severity
and likelihood of such impact. In this respect the Company has assigned an Environmental Risk
Officer to supervise environmental risks, recommend changes to the EMS, and ensure proper
comprehension and execution.
Energy and Emissions
Even though INTRALOT does not have an established long-term strategy for emissions reduction, it
undertakes various activities to decrease energy consumption and CO2 emissions. The Company
monitors fuel usage from leased vehicles with the use of fuel cards, and utilizes energy-efficient LED
lamps and photoelectric cells to minimize energy use. Additionally, a Building Management System
(BMS) has been installed, allowing proactive actions for automatic shutdown when necessary.
INTRALOT regularly measures and reports its greenhouse gas emissions and is working towards more
environmentally friendly IT solutions by increasing its use of virtualized environments and cloud
solutions for IT and development services. This approach replaces stand-alone and physical servers,
resulting in energy savings and reduced carbon dioxide emissions.
Waste and Materials
INTRALOT has implemented several sustainability measures to reduce its environmental impact. It
complies with the Restriction of Hazardous Substances Directive and the Waste Electrical and
Electronic Equipment Directive, by using central printers and controlling the printing volume to
reduce paper usage. Additionally, to the initiatives in responsible management of resources,
INTRALOT has replaced plastic cups with glass cups to reduce waste. Recycling bins are available for
various materials, i.e., paper, aluminum cans, plastic cans and bottles, batteries and light bulbs while
all liquid waste is directed to public waste networks. INTRALOT uses environmentally friendly
refrigerants and does not use hazardous cleaning materials or critical raw materials. Also, it raises
employee awareness through internal communication means, i.e., email, corporate intranet portal,
posters and implements internal awareness campaigns to reduce energy consumption and waste.
Water management
INTRALOT recognizes the importance of water scarcity and the increased demand for water and
monitors closely its water usage on its premises. The Company relies solely on public water supply
networks and utility companies to minimize any impact on other water sources. INTRALOT safely
disposes all liquid waste through the public waste network and avoids using any hazardous cleaning
materials. Although the Company does not currently recycle or reuse water in its operations, it has
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
52
implemented measures to address any potential water supply failures or leaks. Moreover, there have
been no incidents of water discharges or significant spills of chemicals, fuels, or any other materials.
Outcome of Policies & Performance Indicators
17
Materials, Waste and Effluents
2022
Paper consumption (paper purchased for all purposes, including office and
commercial use) (kg)
18
5.146
Toners consumption (units)
155
Wood consumption (kg)
4.000
Plastic consumption (kg)
300
Recycled or FSC certified paper used (kg)
0
Waste (including hazardous waste) transported abroad for treatment (kg)
0
Paper recycled (kg)
5.667
Toners recycled (kg)
0
Plastic recycled (kg)
300
Batteries recycled (kg)
15
Electrical and electronic equipment (WEEE) recycled (kg)
5.130
Metals recycled (kg)
585
Packaging pieces recycled (units)
19.000
Light bulbs recycled (kg)
55,6
Significant spills (e.g., chemicals, fuels) (number)
0
Effluent discharge
containing pollutant substances (e.g., hazardous waste,
nitrates) (m
3
)
0
Operational sites owned, leased, managed in, or adjacent to, protected and/or
high biodiversity value areas (number)
0
Water Management (m
3
)
2022
Water consumption (m3)
5.373
Energy consumption within the organizations
2022
Heating Fuel (GJ)
1.498.000
Diesel Fuel (GJ)
7.623,91
Gasoline Fuel (GJ)
70,70
Electricity (GJ)
2.231,11
Total energy consumption (GJ)
1.638,85
Total Direct energy consumption (GJ)
1.198
Total Indirect energy consumption (GJ)
5.392,80
17
2022 data refer to INTRALOT S.A. only as INTRALOT Inc.’s data at the reporting time were not available.
18
For each sheet of paper we used the following calculation; 4.826 gr per sheet (80g/sq m).
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
53
Electricity consumption to total energy consumption (%)
10.461
GHG Emissions (Scope 1, Scope 2, Scope 3 (air travel))
19
2022
Stationary Combustion (tCO2eq)
166,93
Mobile Combustion (tCO2eq)
197,33
Direct (Scope 1) GHG emissions (tCO2eq)
364,26
Energy indirect (Scope 2) GHG emissions (tCO2eq)
903,35
Total Scope 1 and Scope 2 (tCO2eq)
1.267,61
Air travel CO2 emissions from air miles
(tCO2eq)
75.163
LABOR AND SOCIAL ISSUES
Labor Issues
Policies & Due Diligence
Employee Code of Conduct
INTRALOT is committed to complying with the appropriate employment laws included within its Code
of Conduct. In accordance with the Presidential Decree 156/1994, all newly hired employees are
informed about their contract terms – something that is controlled by private law and drawn up upon
their recruitment.
Labor Rights
Employees are always treated with respect irrespective of whether they participate in employee
unions. It is noteworthy that 100% of INTRALOT employees are covered by the National Collective
Labor Agreement; also, all employees are notified for any operational changes, as INTRALOT abides
by the relevant legislation for minimum notice periods for operational changes.
INTRALOT respects collective bargaining agreements and safeguards the right of employees to
participate in working unions. It is the Company’s commitment to ensure the freedom of association
for its employees and their willingness to participate in labor actions, i.e., protests.
INTRALOT’s commitment to comply with the appropriate employment laws has been included within
its Code of Conduct. All newly hired employees are informed about their contract’s essential terms
in accordance with the provisions of the Presidential Decree 156/1994, which is governed by private
law and drawn up immediately upon their recruitment. Furthermore, the Company promptly resolves
employee matters in a mutually beneficial way, regardless of their participation in employee unions.
19
For the calculation of the GHG emissions, the following methodologies, tools and the emission factors are
used: GHG Protocol Stationary_combustion_tool_(Version4-1), GHG Protocol Transport_Tool_v2_6, NATIONAL
INVENTORY REPORT OF GREECE FOR GREENHOUSE AND OTHER GASES FOR THE YEARS 1990-2019.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
54
Wellbeing
INTRALOT continuously endeavors to promote a health work-environment of which work-life balance
is a vital element. As such, the Company promotes working hours according to legislation, both daily
and weekly and in accordance with their employment contract. Also, INTRALOT abides by the
standard overtime and additional remuneration for overtime, as described in regulation. The board
has oversight of overtimes and is in charge of approving or disapproving them. The Company adheres
to regulation when it comes to paid and unpaid leaves these may include normal leave, maternity
leave, and other reasons of absence. Such absences may also include work from home situations
where the employee may work remotely, at a maximum of four times per month.
Compensation and Benefits
According to the Compensation and benefits policy, all employees including part-time and temporary
employees have a defined salary level and benefits. This policy regulates the former as well as
providing performance-related remuneration to executive members, based on their job description,
accountability, responsibility that comes with their position, academic background, competencies,
professional experience, and performance. The latter is highly relevant to corporate strategy and the
achievement of corporate objectives.
Diversity and Equal Opportunities
Given the nature of the Company's operations, its staff is predominantly male. Nonetheless, the
Company has a firmly established policy to boost the participation of women in its firms across all
employment tiers. To achieve this objective, one measure is to document and track the distribution
of women by geographical area of operation, age, and job position. The ultimate goal is to increase
the proportion of female employees as a percentage of the overall workforce.
Training and Development
The Company strives to integrate employee training at all levels. Upon recruitment, employees are
oriented towards the gaming industry and INTRALOT. It is also important for the Company to train
employees in Responsible Gaming principles, which as noted earlier form a cornerstone for the
Company. In a similar course of action, INTRALOT has established a corporate induction program
which is also to be followed in conjunction with the Induction handbook which is available in the
corporate intranet portal. In higher levels, the Company is poised with extending the executives’
educational background, by offering specialized trainings to familiarize them with cross-departmental
processes and operations.
The Training policy comes in parallel with the annual training plan, as part of the annual performance
evaluation. This essentially means that managers are responsible of identifying the development
needs of each employee, setting novel goals for their development, and in a sense creating a more
nuanced individual development plan for each employee. It has to be noted that this plan is
constantly updated, and employee performance recorded. This allows for a big-picture theorization
of all employees’ individual development plans, which in turns calls for role-based training programs
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
55
that include development programs for managerial positions or specific technical skills training for
technical roles. All of the above are in close relevance to INTRALOT’s strategic direction, past training
needs, as well as market trends and best practices.
Health and Safety
INTRALOT is committed to complying with all relevant health and safety laws. As such, the Company
has introduced health and safety principles according to the provisions of the Code of Conduct, in a
way that enables the Company to protect its employees and ensure a safe working-environment. All
employees are obligated to comply with the policy and their relevant work-position obligations.
INTRALOT periodically conducts working environment risk assessments to identify, manage, control
and minimize or eliminate potential health and safety risks. For this reason, the Company has
assigned a building coordinator for each facility, who regularly evaluates workplace conditions,
usually in regard to infrastructure. INTRALOT also employs an external prevention agency that
evaluates workplaces and offers advice for preventive or corrective measures.
In 2022, INTRALOT managed to retain:
•
No employees with high incidence or risk of disease associated with their work within the
Company.
•
No cases of occupational disease within the Company.
•
No accidents or injuries.
•
No employee loss.
•
No relevant fines or sanctions imposed by the respective authorities.
Performance Management System
INTRALOT has established a thorough monitoring procedure to record employee performance. This
includes a systematic approach of identifying employee strengths, areas for improvement, and in
turn improving overall performance. As has been evident in multiple degrees within this report, the
performance management system is directly relevant to multiple cases of employee management,
training, or occupational health and safety. In risk management, the system is important in
minimizing the Company’s exposure to performance-related risks, which include employees not
attaining their full potential, or employees being managed in a non-optimal way. INTRALOT has
established a systematic dialogue with its employees to minimize such a risk, either in the form of
intranet portal, e-mail announcements, open-door policies, or HR communication with employees.
This pattern of holistic communication creates a framework of increased feedback, better chances
for review, and in extension, a wider pattern of risk reduction.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
56
Outcome of Policies & Performance Indicators
20
2022
21
Men
Women
Top
10%
employees by
compensation
Top
90%
employees by
compensation
Total training hours
3.706
1.781
360
5.127
Average training hours
per employee
12,1
11,8
8
12,5
Number
of
employees
trained
304
150
45
409
2022
Men
Women
Total
Number
of
new
employee hires
184
83
267
Ratio of new employee
hires
23,77%
24,56%
24,01%
Number of voluntary
employees exits
150
77
227
Employee
voluntary
turnover
19,38%
22,78%
20,41%
Number
of
forced
employee exits
39
9
48
Employee involuntary
turnover rate (%)
5,04%
2,66%
4,32%
Total
number
of
turnover
188
89
277
Total
employee
turnover rate (%)
24,29%
26,33%
24,91%
Health and Safety
2022
Work-related injuries
Number of fatalities as a result of work-related injury
0
Rate of fatalities as a result of work-related injury
0
Number of high-consequence work related injuries (excluding fatalities)
0
Rate of high-consequence work-related injuries (IR) (excluding fatalities)
0
Number of recordable work-related injury
0
Rate of recordable work-related injuries
0
Work-related illnesses
Number of fatalities as a result of work-related ill health
0
The number of cases of recordable work-related ill health
0
20
2022 data refer to INTRALOT S.A. and INTRALOT Inc.
21
Data refer to INTRALOT S.A. only and 2022 data refer to INTRALOT S.A. only as INTRALOT Inc.’s employee
training data at the reporting time are not available.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
57
Respect of Human Rights
Policies & Due Diligence
INTRALOT has established a firm approach towards safeguarding human rights. By adhering to the
needs of the United Nations and the legislation of the International Labor Organization (ILO), the
Company responds to the need for increased attention towards human rights. Based on the principles
imposed by these two organizations, INTRALOT has established its Code of Conduct as well as its
employment guide to fully integrate safeguarding of human rights within its operations Further, the
Internal Regulation Charter and Recruitment and Selection policy guarantees the imposition of such
core values, which employees are to follow with strict adherence. Equally important is the fact that
the Company has signed the United Nations Global Compact since 2009, which delineates its
commitments to refrain from activities that violate human rights, such as discrimination, harassment,
and any kind of violence.
The Company recognizes that human rights are to be safeguarded continuously, and strenuously.
However, it is a fact that human rights localize in multiple places within the Company’s operations,
and in turn have to be considered on all occasions. This means that risk management for human
rights ought to be integrated in all risk management procedures, and all sources of risk. Therefore,
INTRALOT utilizes its commitment to safeguard such rights and always ponders on them within its
operations.
Grievance mechanisms are set in place, which allows employees to seek justice for any harassments
they have suffered, or any instances of discrimination they may have been a victim of. It is worth
mentioning that the Company follows a meritocratic approach, which in turn means that INTRALOT
passionately believes that each employee is to be evaluated on their work-related merit, and not on
any other non-work-related trait. It is noteworthy that the Company does not tolerate any form of
retaliation from employees, which means that discontented employees are free to use the grievance
mechanism without fear for retribution.
Equal employment
Although INTRALOT has not formally implemented a diversity-related policy, it should be noted that
the Company is fully committed to its role as a haven for anti-discrimination, diversity, and equity.
According to the Code of Conduct employees are compelled to follow the Company’s driving values,
which bring about an environment of mutual respect and inclusiveness. Employees are assessed
based on their qualifications, skill, and performance, and are in no cases assessed by any other traits.
INTRALOT believes that each person’s inherent traits are sacred, and in no way related to their job-
performance. Therefore, the Company safeguards all employees for their traits of sexual preference,
sex, religion, ethnicity, or nationality, and commits to making an impact in that front.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
58
Outcome of Policies & Performance Indicators
22
Diversity and Equal Opportunities
2022
Percentage of female employees
30%
Difference between the average base salary of full-
time men
employees compared to full-time women employees (%)
12,325%
Society
Policies & Due Diligence
Local communities and shared value
For INTRALOT, local communities pose a continuous challenge to the Company’s strategy and
business model. Local communities are a central facet of the Company’s activities, as such activities
are based on people and infrastructure. Local communities are always taken into consideration when
designating policies and strategies; it is the Company’s aim to provide for its neighboring
communities and in simple terms – give back to the community. INTRALOT has implemented a series
of initiatives to support its surrounding communities and in turn disseminating the value it receives
into outputs for society.
As an international organization, INTRALOT contemplates on its surrounding
national and local communities, and thus implements various initiatives to support them. “INTRALOT
– We Care a Lot” is a program that includes multiple activities and investments that bring back profits
to the community. At the same time INTRALOT takes into consideration the underprivileged people
within these groups, hence providing support for underprivileged children nationwide through
initiatives – in collaboration with NGOs and foundations.
In extension to that, INTRALOT is also vigilant to provide volunteering opportunities and employment
programs to national and local communities. Regarding the latter, the Company supports local
entrepreneurship by offering opportunities for young people to network with universities and
companies. INTRALOT has fused its business model with its ongoing volunteering opportunities and
sports events. This in turn means that the Company recognizes that such activities return value to
the community on a continual basis, and thus pose a significant aspect of the Company’s due
diligence process to give back to the community.
Safety of products and services
INTRALOT places significant emphasis on ensuring the safety of its products and services and
considers it a crucial component of its due diligence process. In 2021, the Company went through
an extensive independent assessment of its Responsible Gaming practices and products by a WLA
approved assessor, which resulted in the renewal of its Certificate of Alignment with World Lottery
Association (WLA) Responsible Gaming Framework for Associate members until 2024. This evaluation
covers all corporate functions related to game integrity and corporate conduct, and it acknowledges
INTRALOT's dedication and endeavors to establish a secure and supportive gaming environment,
22
2022 refer to INTRALOT S.A., and INTRALOT Inc.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,
2022
59
preventing underage, illegal, problem gambling, or any other potential harm to society. The Company
as an Associate Member of WLA accords with the program of the Responsible Gaming Framework
and has the duty to:
•
Ensure that their products and services support the WLA Members' objective to ensure that
the interests of players and vulnerable groups in the WLA Members' jurisdictions are
protected.
•
Understand the needs and requirements of WLA Member's Responsible Gaming Program.
•
Ensure that relevant laws, regulations and responsibilities are met.
•
Develop appropriate practices taking into account relevant information and research.
•
Develop a better understanding of the social impact of gaming.
•
Drive the implementation of Responsible Gaming practices in all aspects of their own
activities and promote the implementation of RG practices for WLA members’ activities.
•
Provide the WLA Members with accurate and balanced information to enable informed choices
to be made about their gaming activities.
•
Continuously improve, and publicly report on their Responsible Gaming programs.
•
Continuously engage with their external stakeholders on all aspects of Responsible Gaming
that are relevant to their own operations and those of the WLA Members they supply to.
INTRALOT takes advantage of its due diligence mechanism to also grasp its full responsibility towards
people, and in conjunction to the services it offers. This means that the Company recognizes that
betting products have to be both safe and responsible, and that they must duly be a major part of
the due diligence mechanism. At the same time the Company is aware that protection of online
games has to be a top priority.
That said, INTRALOT strives to develop and distribute products that serve Responsible Gaming
principles. Products and services are not to create any dependency, and the platforms in which they
are practiced are to be both safe and protective of players. Players have the option of receiving
further support in terms of fair gaming experience: they can be prevented from excessive gaming
through various self-exclusion options, they can set their gaming budgets in a strict manner, or they
can be reminded for their excessive time in the gaming platform. Also, it has to be noted that
INTRALOT multicasts several suggestions or messages to truly promote the essence of Responsible
Gaming. INTRALOT places product safety at the top of its risk management process. INTRALOT also
utilizes the INTRALOT Responsible Gaming Designer tool (iRGD). This tool was produced in
collaboration with Athens Information Technology (AIT) and several independent scientists. Its aim
is to conduct social impact assessments per game, channel, or territory and as the name indicates,
assess the social impact of games based on their:
•
Structural characteristics: features that ensure the initiation, expansion, and maintenance of
playing over time.
•
Situational characteristics: features related to the gaming environment (e.g., retailer store,
internet, or mobile channel).
•
Responsible Gaming characteristics: features that may impact player gaming patterns (i.e.,
financial or time-related limits).
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As a result of the Company’s practices, in 2022 there were no complaints concerning security and
reliability of its games.
Outcome of Policies & Performance Indicators
23
Social Value Distributed
2022
Society Support
Societal support activities (number)
8
Value of societal support activities (€)
10.118
Blood units collected (number)
63
Sharing Value
Shared value generated (Greece and USA)
215,551
Innovation and Research
Company R&D investments (million €)
2,5
Approved patents and designs worldwide (number)
191
Responsible gaming
2022
Briefings and Trainings
Participation in Stakeholder engagement activities and events on Responsible Gaming
issues (number)
54
Employees trained on Responsible Gaming practices (%)
28
Duration of employee trainings on Responsible Gaming issues (hours)
125
Customer employees participating in Responsible Gaming training programs
(number)
0
Compliance
Product recalls (number)
0
Users whose information has been used for secondary purposes (i.e., purposes
besides the original one for which they were collected) (number)
0
Unique requests for user information (including user content and non-content data)
from government or law enforcement agencies (number)
0
Unique users whose information was requested by government or law enforcement
agencies (number)
0
Government and law enforcement requests that resulted in disclosure to the
requesting party (%)
0
Complaints or grievances concerning breaches of customer privacy and losses of
customer data (number)
0
Fines imposed regarding breaches of customer privacy or losses of customer data
(number)
0
Non-monetary sanctions imposed regarding breaches of customer privacy or losses
of customer data (number)
0
Fines imposed regarding marketing, advertising and promotion activities and product
or service information (e.g., product labeling) (number)
0
23
2022 Societal Support data refer to INTRALOT S.A., while Sharing Value and Innovation and Research refer to
INTRALOT S.A., and INTRALOT Inc.
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Non-monetary sanctions imposed regarding marketing, advertising and promotion
activities and product or service information (e.g., product labeling) (number)
0
EU Taxonomy Disclosures
Introduction to the Regulation (EU) 2020/852
The Taxonomy Regulation (Regulation (EU) 2020/852), specifically Article 8, is a crucial aspect of
the European Commission's plan to direct investments towards a more sustainable economy, which
aligns with the EU's carbon neutrality goals by 2050. This regulation provides a system for
determining the environmental sustainability of activities and imposes reporting requirements.
Additionally, the EU has published the Climate Delegated Act, which supplements the Taxonomy
Regulation by establishing technical screening criteria for the first two environmental objectives:
climate change mitigation and climate change adaptation. The Climate Delegated Act identifies which
activities are eligible under the Taxonomy Regulation for these objectives.
Although the Taxonomy Regulation is intricate and continues to be refined, INTRALOT has assessed
its 2022 reporting period activities in line with the Taxonomy Regulation criteria, utilizing the
guidance and market insight that are currently available. It is important to note that this information
may be modified as the Taxonomy Regulation and related market practices evolve, and as we
undergo our scheduled alignment process in 2023.
Application of the Taxonomy Regulation to INTRALOT
INTRALOT Group is a gaming solutions supplier and operator, providing future-proof solutions to
licensed operators around the world. As part of the business model, the Group develops, maintains
and operates software services, including advanced technology, consultation and support in all
aspects of the lottery, betting and gaming industry’s daily operational functions.
The information included in the 2022 EU Taxonomy Disclosures report is based on the combined data
collected from INTRALOT SA and INTRALOT Inc. As a result, for the purpose of this report, both
entities will be referred to as INTRALOT. This disclosure covers both eligible and non-eligible
activities, as well as aligned and non-aligned ones, for the reporting period ending on 31 December
2022.
INTRALOT’s primary potentially eligible activity under the EU Taxonomy Regulation is
8.2. Computer
programming
,
consultancy and related activities
, which includes the following activities:
Providing expertise in the field of information technologies, including
writing, modifying, testing
and supporting software
; planning and designing computer systems that integrate computer
hardware, software and communication technologies; on-
site management and operation of
clients’ computer systems or data processing facilities; and other professional and technical
computer-related activities.
The specific activity can substantially contribute to the following environmental objective:
Climate
Change Adaptation
.
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To significantly contribute to climate change adaptation, an economic activity should aim to mitigate
the adverse impacts of current or anticipated future climate risks on either itself, people, nature, or
assets. The European Commission's Frequently Asked Questions (FAQs) on the Disclosures Delegated
Act, released in December, offer additional guidance on how to achieve this objective and outline two
relevant types of activities, that can equally have a meaningful impact:
Adapted activities
Enabling activities
Those
economic
activities
that
have
become
resilient
to
climate
change
by
adapting themselves to
all
material
climate
related risks.
Those activities that can enable others to make a significant contribution to
one of the six environmental objectives referred to in Article 9 of the
Taxonomy Regulation by providing adaptation solutions. It's essential to note
that an activity can only be considered enabling if it's explicitly stated in the
activity’s description.
After careful consideration, we have concluded that our activity belongs to the ‘adapted activities’.
The turnover generated from products and services related to an adapted activity cannot be
recognized for Taxonomy-eligibility, since once the activity has been made climate-resilient, the
turnover corresponding to that activity should no longer count as eligible. Capital expenditure
(CapEx) and operating expenditure (OpEx) related to our activity, 8.2.- Computer programming,
consultancy and related activities, can only count towards eligibility if a climate risk and vulnerability
assessment has been conducted, and an expenditure plan has been established to implement
adaptation solutions that mitigate the activity's most significant physical climate risks.
INTRALOT recognizes the significance of comprehending risks, including those related to climate
change. Hence, we conduct a yearly review of the risks that could have a direct impact on our
business and carry out a vulnerability analysis to identify the most crucial ones. The EU Taxonomy
Regulation has laid out a demanding process that demonstrates how an economic activity can
genuinely become resilient. As a result, we have set goals for the future and intend to fully comply
with the guidelines to showcase our adaptation efforts.
During this reporting period, we are unable to provide evidence of eligibility for CapEx and OpEx
related to our primary economic activity. However, we have concentrated our evaluation on expenses
for the output of other activities that meet the criteria for Taxonomy eligibility. This means that the
activities listed below qualify as the acquisition of a product or service that comes from Taxonomy-
eligible activities, other than our primary one.
Information on assessment of compliance with the Regulation (EU) 2020/852
INTRALOT has identified five eligible activities contributing to
Climate Change Mitigation
, as
derived from its Capital and Operational expenses
:
•
6.5. Transport by motorbikes, passenger cars and commercial vehicles,
•
6.6. Freight transport services by road,
•
7.3 Installation, maintenance and repair of energy efficiency equipment,
INTRALOT Group
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•
7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings
(and parking spaces attached to buildings),
•
7.7. Acquisition and ownership of buildings.
As we do not currently have sufficient data from our value chain, we are unable to claim alignment
for our eligible activities. As a result, the alignment percentages for this year's EU Taxonomy
assessment will be zero. We are committed to working with our suppliers in the coming years to
obtain the necessary information for the alignment assessment.
Avoiding double counting
Thanks to the diligent structure of our financial statements and the granular tagging of the CapEx
and OpEx accounts, INTRALOT can confidently confirm that double counting was avoided during the
EU Taxonomy compliance exercise.
Accounting Policy
The consolidated financial statements of INTRALOT Group have been prepared for the financial year
ended 31 December 2022 in accordance with the International Financial Reporting Standards (IFRS).
The following sections showcase information related to CapEx and OpEx of two of its subsidiaries:
INTRALOT S.A. and INTRALOT Inc., which were introduced earlier in this part of the report.
For the calculation of the eligibility KPIs we followed the approach as described below:
We examined our capital expenditure categories and included in the numerator, only the expenses
that are directly linked to the purchase of the output of the eligible activities, as listed above. In the
denominator we included the total capital expenses of INTRALOT.
We followed a similar approach for the calculation of the numerator of the eligible OpEx KPI as we
did for CapEx. Regarding the denominator, we carefully reviewed all OpEx categories of INTRALOT
and only included the ones that aligned with the guidelines specified in the Regulation, resulting in
the following cost categories:
•
Repair and Maintenance of software, hardware, buildings, furniture and cars
•
Operating leases for corporate vehicles, premises and other machinery
•
Day-to-day servicing of IT spare parts
Finally, given the restrictions previously mentioned, there is
no eligible turnover
for this year’s EU
Taxonomy assessment.
Eligible OpEx
=
Operating
expenses
related
to
the
purchase
of
the
output
of
eligible
activities
Operating
expenses
related
to
research
and
development
,
repair
and
maintenance
,
short
term
leases
,
Building
renovation
measures
and
Day−to−day
servicing
of
assets
of
property
,
plant
and
equipment
Eligible CapEx
=
Capital
expenses
related
to
the
purchase
of
the
output
of
eligible
activities
Total
capital
expenses
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In the table below, we present a summary of the results of the EU Taxonomy assessment.
Eligibility
Alignment
Turnover
0%
0%
CapEx
0,65%
0%
OpEx
12%
0%
For detailed results, please refer to the tables below.
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Tables of EU Taxonomy KPIs
Proportion of
Turnover
from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2022: INTRALOT did not have any eligible
activities related to Turnover for the financial year 2022.
Proportion of
CapEx
from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2022
(in millions of euros)
Substantial contribution criteria
DNSH criteria ('Does Not
Significantly Harm')
INTRALOT Economic activities
Code
Absolute CapEx
Proportion of CapEx
Climate change mitigation
Climate change adaptation
Water and marine resources
Circular economy
Pollution
Biodiversity and ecosystems
Climate change mitigation
Climate change adaptation
Water and marine resources
Circular economy
Pollution
Biodiversity and ecosystems
Minimum safeguards
Taxonomy
aligned
proportion
of CapEx
year 2022
Taxonomy
aligned
proportion
of CapEx
year 2021
Category
(enabling
activity)
Category
(transitional
activity)
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities
(Taxonomy aligned)
Installation, maintenance and repair of energy efficiency
equipment
7,3
0
0%
0%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
Installation, maintenance and repair of charging stations
for electric vehicles in buildings (and parking spaces
attached to buildings)
7,4
0
0%
0%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
Acquisition and ownership of buildings
7,7
0
0%
0%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
CapEx of environmentally sustainable activities
(Taxonomy aligned)
(A.1)
0
0%
0%
0%
0%
0%
0%
0%
0%
A.2 Taxonomy Eligible but not environmentally sustainable activities
(not Taxonomy aligned activities)
Installation, maintenance and repair of energy efficiency
equipment
7,3
0,004
0,014%
0,014%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
Installation, maintenance and repair of charging stations
for electric vehicles in buildings (and parking spaces
attached to buildings)
7,4
0,003
0,011%
0,011%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
Acquisition and ownership of buildings
7,7
0,173
0,619%
0,619%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
CapEx of Taxonomy eligible but not
environmentally sustainable activities
(not Taxonomy aligned activities)
(A.2)
0,180
0,645%
0,645%
0%
0%
0%
0%
0%
0%
Total (A.1 + A.2)
0,180
0,645%
0,645%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy non-eligible activities (B)
27,726
99,356%
Total (A + B)
27,906
100%
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Proportion of
OpEx
from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2022
(in millions of euros)
Substantial contribution criteria
DNSH criteria ('Does Not
Significantly Harm')
INTRALOT Economic activities
Code
Absolute OpEx
Proportion of OpEx
Climate change mitigation
Climate change adaptation
Water and marine resources
Circular economy
Pollution
Biodiversity and ecosystem
Climate change mitigation
Climate change adaptation
Water and marine resources
Circular economy
Pollution
Biodiversity and ecosystems
Minimum safeguards
Taxonomy
aligned
proportion
of OpEx
year 2022
Taxonomy
aligned
proportion
of OpEx
year 2021
Category
(enabling
activity)
Category
(transitional
activity)
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities
(Taxonomy aligned)
Transport by motorbikes, passenger cars and commercial
vehicles
6,5
0
0%
0%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
Freight transport services by road
6,6
0
0%
0%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
Acquisition and ownership of buildings
7,7
0
0%
0%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
OpEx of environmentally sustainable activities
(Taxonomy aligned)
(A.1)
0
0%
0%
0%
0%
0%
0%
0%
0%
A.2 Taxonomy Eligible but not environmentally sustainable activities
(not Taxonomy aligned activities)
Transport by motorbikes, passenger cars and commercial
vehicles
6,5
0,160
1,045%
1,045%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
Freight transport services by road
6,6
0,003
0,022%
0,022%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
Acquisition and ownership of buildings
7,7
1,685
10,993%
10,993%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
OpEx of Taxonomy eligible but not
environmentally sustainable activities
(not Taxonomy aligned activities)
(A.2)
1,848
12,060%
12,060%
0%
0%
0%
0%
0%
0%
Total (A.1 + A.2)
1,848
12,060%
12,060%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
0%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy non-eligible activities (B)
13,480
87,940%
Total (A + B)
15,328
100%
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Public
HUMAN RESOURCES
Our Best Asset
The Human Resources of a Company is acknowledged as its most important asset, providing it with competitive
advantage, thus, the policies pursued and the initiatives undertaken by INTRALOT and its subsidiaries abroad,
aim at effectively attracting, enhancing, motivating and retaining talent. The continuous efforts and
contribution of all INTRALOT employees, as well as their unceasing trust and support of its shareholders,
remain a key factor in the advancement of the Company’s competitiveness and further growth. The Company
undertakes to provide its employees with a working environment that will constantly develop their capabilities
and enhance their performance through reward and recognition schemes, always in accordance with the
principles that govern the Group.
From an HR perspective, 2022 has been a year of getting back to normal after the end of the COVID-19
pandemic. Therefore, the employees gradually started to come back, in order to perform their services from
the company premises, following a hybrid work model. Nevertheless, the health and safety of our people
remained our top priority and we have fully complied with all relevant measures imposed by governments.
At Headquarters, the total turnover rate was at the range of 16,3%, while the people who joined reached
9,9% of the total personnel base. For the selection of human resources, high recruitment standards and
processes have been followed.
In terms of enriching our practices for the better operation of the company, two new policies were adopted,
namely the "Policy for the Prevention and Combatting of Violence and Harassment at Work", as well as the
"Whistleblowing Policy", while our Internal Regulation has been updated respectively.
Performance Appraisal Management
The Performance Appraisal Management system has been operating in the parent company and in most
subsidiaries for the past 5 years. An integrated and detailed goal setting process is set at the beginning of the
year, followed by a review of these goals and a meeting between the employee and the supervisor in the
middle of the year (to make any necessary adjustments on plans and/or minor changes of goals) and it is
concluded at the beginning of the following year with the performance appraisal of the year passed.
From an innovation point of view, INTRALOT is moving from a traditional performance appraisal scheme to a
more modern, dynamic and flexible model, thus improving productivity and offering opportunity for regular
meet ups and alignment between the employee and his/her supervisor.
Training and Development
In 2022, our efforts were focused on internal promotions and training. 8,8% of our people were promoted,
while 2 rose to Top Management level.
In terms of Training, great emphasis was placed on specialized training through e-learning platforms, in
partnership with Microsoft - a skills development program involving more than 400 employees. Also, trainings
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Public
were implemented for the induction of the newcomers, the leadership skills development and the development
of technical skills through platforms, such as Pluralsight and Udemy, by creating individualized training
programs. In addition, throughout the year, the following programs were designed and implemented via our
corporate e-learning platform: the security and compliance training program, the responsible game, the anti-
bribery policy and the performance management system of our people. Specifically, at Headquarters level,
668 training programs were carried out (19 instructor-led training sessions and 649 e-learning self-paced)
with 1.179 participations, reaching a total of 4. 687 training hours.
Activities
The company, in the context of strengthening its Employer Branding, participated in the most important events
for attracting new talented people in the field of technology, such as: Developers Days (Digital), O
π
e\n
conference 2022, Career Mentoring Sessions at College Link, AUEB Career Fair 2022, Voxxed Days Athens,
TEDxNTUA and i-MBA Career Fair 2022.
Furthermore, a series of healthcare benefits were offered in the past year, such as the proactive healthcare
check-up, the annual flu vaccination and two blood donation initiatives, to serve the needs of INTRALOT’s
blood bank. Additionally, further initiatives took place in order to inform our people about wellness, the
integrated recycling program and the environmental practices in the office.
Last but not least, during the last four months of the year while the measures and restrictions for COVID-19
were relaxed, we had the opportunity - in the parent company - to participate with our people in sports events
such as: the 2022 Athens Marathon, the Race for the Cure and our basketball team in the 2022-2023
Championship of the Commercial League. Moreover, we were able to bond again through our internal corporate
events: the Top Performers Ceremony, the Get Together Breakfast, the Ice Cream Day, the BBQ Summer
Lunch, the Christmas Kids Party for our workforce’s children and our Christmas Party.
RISKS AND UNCERTAINTIES
Enterprise Risk Management
The Enterprise Risk Management (ERM) Framework documents the good practices adopted by the INTRALOT
Group in order to identify, assess and manage risks related to the achievement of its business objectives.
INTRALOT ERM targets at the assurance of stakeholder and shareholder trust through the appropriate and
continuous balancing of risk and value.
INTRALOT ERM follows a holistic approach for taking into account all parameters that drive the execution of
INTRALOT Group Strategy, including INTRALOT’s financial health, operations, people, technology, compliance,
products and reputation.
ERM provides the means to continuously monitor risk, align it with the changing internal and external
parameters and manage it according to the defined corporate risk appetite.
The Enterprise Risk Management (ERM) Framework is designed according to the specifications of COSO
(Committee of Sponsorship Organizations of the Treadway Commission) and ISACA (COBIT for RISK). It is a
holistic strategic framework taking into account risks related to the business objectives of INTRALOT GROUP.
The framework incorporates the following components:
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1. Objective setting: Objectives are clearly defined in order to be used as a reference point for the identification
of risks. A process is in place for setting objectives that align with INTRALOT’s mission and are consistent with
the corporate risk appetite.
2. Risk assessment: Risks are analyzed in relation to the objectives and by determining the likelihood of and
impact from the realization of an adverse event.
3. Risk response: Management selects risk responses – avoiding, accepting, reducing, or sharing risk –
developing a set of actions to align risks with the entity's risk tolerances and risk appetite.
4. Event identification: Internal and external events affecting the achievement of INTRALOT objectives are
identified.
5. Internal environment: The internal environment sets the basis for how risk is viewed and addressed by
people, including risk management philosophy and risk appetite, integrity and ethical values, and the
environment in which they operate.
6. Control activities: Policies, procedures, strategies and action plans in general are established and
implemented to help ensure the risk responses are effectively carried out.
7. Information and communication: Relevant information is identified, captured, and communicated in a form
and time frame that enable people to carry out their responsibilities.
8. Monitoring: Risk is monitored, and modifications made as necessary. Monitoring is accomplished through
ongoing management activities, separate evaluations, or both.
Description of significant risks and uncertainties
FINANCIAL RISKS
The Group's international activities create several financial risks in the Group's operation, due to constant
changes in the global financial environment. The Group beyond the traditional risks of liquidity risk and credit
risk also faces market risk. The most significant of these risks are currency risk and interest rate risk. The risk
management program is a dynamic process that is constantly evolving and adapted according to market
conditions and aims to minimize potential negative impact on financial results. The basic risk management
policies are set by the Group Management. The risk management policy is implemented by the Treasury
Department of the Group which operates under specific guidelines approved by management.
Credit risk
The Group does not have significant credit risk concentration because of the wide dispersion of its customers
and the fact that credit limits are set through signed contracts. The maximum exposure of credit risk amounts
to the aggregate values presented in the financial position. In order to minimize the potential credit risk
exposure arising from cash and cash equivalents, the Group sets limits regarding the amount of credit
exposure to any financial institution. Moreover, in order to secure its transactions even more, the Group
adopted an internal rating system, regarding credit rating evaluation, using the relevant financial indices.
Liquidity risk
Prudent liquidity management means maintaining adequate liquidity, funding ability through approved credit
limits, and ability to repay liabilities. The Group has established specific policies to manage and monitor its
liquidity in order to continuously have sufficient cash and liquid non-core assets that can meet its obligations.
In addition, the Group has set up a system of monitoring and constant optimization of its operating and
investing costs in the framework of its liquidity management policies.
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Further analysis of the maturity of the financial liabilities of the Group is provided in note
2.33
of the annual
financial statements.
Market Risk
1) Foreign Exchange risk
Fluctuations in exchange rates can have significant effects on the Group’s currency positions. Group
transactions are carried out in more than one currency and therefore there is a high exposure in foreign
exchange rate fluctuations against the euro, which is the main underlying economic currency. On the other
hand, the Group’s activity abroad also helps to create an advantage in foreign exchange risk management,
due to the diversification in the currency portfolio. This kind of risk mainly results from commercial transactions
in foreign currency as well as investments in foreign entities. For managing this type of risk, the Group enters
into derivative financial instruments with various financial institutions, such as foreign currency hedging for
receipts of foreign currency dividends by abroad subsidiaries. The Group’s policy regarding the foreign
exchange risk concerns not only the parent company but also the Group’s subsidiaries.
Further analysis of the sensitivity analysis on foreign exchange variations and currency hedging derivatives is
provided in note
2.33
of the annual financial statements.
2) Interest rate risk
Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Group's activities are closely linked to interest rates because
of investments and long and short-term borrowings. To manage this risk category, the Group uses financial
hedging instruments in order to reduce its exposure to interest rate risk. The Group's policy on managing its
exposure to interest rate risk affects not only the parent company but also its subsidiaries for their loans
concluded in euros or local currency. The Group's exposure to the risk of changes in market interest rates relates
primarily to long-term borrowings of the Group's floating rate. The Group also manages interest rate risk by
having a balanced portfolio of loans with fixed and floating rate borrowings. On 31 December 2022, taking into
account the impact of possible financial hedging products, approximately the 63% of the Group's borrowings are
at a fixed rate (31/12/2021: 100%) with an average life of approximately 2,1 years. As a result, the impact of
interest rate fluctuations in operating results and cash flows of the Group's operating activities is small.
3) High leverage risk
INTRALOT’s ability to incur significant additional amounts of debt so as to finance its operations and expansion
depends on capital market conditions that influence the levels of new debt issues interest rates and relevant
costs. Furthermore, INTRALOT may be able to incur substantial additional debt in the future, however, under
the Senior Notes terms will be able to incur additional debt so long as on an actual basis its consolidated fixed
charge coverage ratio is at least 2,00 (31/12/2022: approximately 3,87), and will be able to incur additional
senior debt as long as on actual basis the ratio of total net debt to EBITDA (senior leverage ratio) is not more
than 3,75 (31/12/2022: approximately 3,67). Furthermore to the above, the Group can incur additional debt
from specific baskets. Additionally, the Group proceeded with the refinancing of Intralot Inc. debt with new
bank financing (Term Loan) maturing in 2025, the terms of which improve the access of the parent company
to the cash flows of the US subsidiary.
The new loan agreement signed with a consortium of six US financial
institutions also includes a revolving credit line (Revolver Facility) of $50 million, which will significantly assist
the Group's liquidity management. The new Term loans bear the US Sub-group financial covenants for incurring
additional debt with respect to the total Net Debt (senior) to EBITDA (Net Leverage ratio <4 up to 30/3/2024
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2022
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and <3,75 thereafter) and financial expenses coverage ratio (Fixed Charge Coverage ratio >1,25). Both covenant
ratios were in compliance as of 31/12/2022.
Further analysis of the Group's leverage is provided in note
2.33
of the annual financial statements.
OPERATING RISKS
Winners’ payouts in sports betting
INTRALOT is one of the largest sports betting operator worldwide. The winners’ payout in sports betting may
fluctuate in the short-term since it depends on the outcome of the events. The fluctuation of the payout may
affect the financial results and cash flows of INTRALOT since it represents a significant cost element for the
Company.
Gaming sector and economic activity
The gaming market is affected by the economic cycles since lottery products are consumer products. However,
the gaming sector is more resilient than other sectors of the economy in periods of economic crisis. Specifically,
during an economic downturn, frequent draw games (like KENO or VLTs) are most likely to present a reduction
in revenues, while lotto type games are less affected. With its international expansion, INTRALOT has achieved
significant diversification and has reduced its dependency on the performance of individual markets and
economies.
Gaming Taxation
The financial crisis has increased the budget deficits of many countries. The increase of the taxation of lottery
games constitutes sometimes an easy, but not correct in Group’s opinion, solution for the governments to
finance these deficits. Nevertheless, such measures may affect INTRALOT’s financial results.
Regulatory risk
The gaming industry is subject to extensive regulations and oversight and regulatory requirements vary from
jurisdiction to jurisdiction. Because of the broad geographical reach of INTRALOT’s operations, it is subject to
a wide range of complex gaming laws and regulations in the jurisdictions in which it is licensed or operate.
These regulations govern, for example, advertisement, payouts, taxation, cash and anti-money laundering
compliance procedures and other specific limitations, such as the number of gaming machines in a given POS
and their proximity to each other. Most jurisdictions require that INTRALOT be licensed. If a license, approval
or finding of suitability is required by a regulatory authority and INTRALOT fails to seek or does not receive
the necessary approval, license or finding of suitability, then it may be prohibited from providing its products
or services for use in the particular jurisdiction. INTRALOT relies on government licenses in order to conduct
its main business activities and termination of these licenses would have a material adverse effect on Group
revenue. Changes in regulatory environment in any particular jurisdictions may have a material adverse impact
on Group results, cash flows, business operations or prospects.
Technological changes
The gaming industry is characterized by rapidly changing technology and evolving industry standards. Many
of INTRALOT’s software and hardware products are based on proprietary technologies. INTRALOT’s
competitiveness in the future will depend on its ability to respond to technological changes and satisfy future
technology demands by developing or licensing innovative and appealing products in a timely and cost-
effective manner. INTRALOT invests significant financial resources in R&D efforts to develop innovative
products so as to compete effectively in the gaming markets.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2022
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Emerging markets risk
INTRALOT operates and offers its products and services in many countries, actively operating in rapidly
growing and emerging markets. Potential social, political, legal and economic instability in these markets, such
as the political turmoil in Turkey in 2016, may pose significant risks to the Group ability to conduct its business
and expand its activities in these markets. Although management believes its operations in Turkey have not
been affected, there can be no assurances such events will not have an impact in the future.
Competition risk and margin squeeze
Intralot operates in a highly competitive industry and its success depends on its ability to effectively compete
with numerous domestic and foreign companies. Also, Intralot is heavily dependent on its ability to renew its
long term contracts with its customers and could lose substantial revenue and profits if is unable to renew
such contracts or renew them with less favorable terms (profit margins, smaller range of services, etc.) due
to high competition during public tender process.
Environmental Sustainability
INTRALOT embodies environmental sustainability by identifying best practices and perform green initiatives that
align with its' values, in order to reduce its' environmental footprint. Paper and energy consumption are the
largest environmental impacts identified. INTRALOT is committed to reducing the amount of waste and improve
its' recycling rates. Additionally, it reduces the use of physical resources such as paper and ink by reducing
printing within the offices. INTRALOT is measuring its environmental impact in order to operate in a more
sustainable way in the future.
Other Operating Risks
•
risks posed by illegal betting (loss of market share),
•
changes in consumer preferences,
•
increased competition in the gaming industry,
•
non-renewal or termination of material contracts and licenses,
•
seasonality of sports schedules,
•
player fraud.
MATERIAL TRANSACTIONS BETWEEN THE COMPANY AND RELATED PARTIES:
The most important transactions between the Company and its related parties as per IAS 24 are presented on
the table below:
Group
Revenues
Expenses / Purchases of
assets & inventories
(total operations)
31/12/2022
31/12/2021
31/12/2022
31/12/2021
Intracom Holdings Group
14
17
2.996
4.614
Lotrich Information Co LTD
2.037
2.088
0
0
VSC
0
92
5.231
0
Other related parties
562
423
3.669
1.497
Executives and members of the board
0
0
7.680
7.605
Total
2.613
2.620
19.576
13.716
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2022
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Revenues
Expenses / Purchases of
assets & inventories
Company
31/12/2022
31/12/2021
31/12/2022
31/12/2021
Intracom Holdings Group
14
0
3.017
2.835
Lotrich Information Co LTD
2.255
2.341
0
0
Betting Company S.A
1.727
629
1.092
1.122
Intralot Finance UK LTD
2.581
10.821
17.384
23.671
Intralot Adriatic DOO
3.265
3.582
224
1.339
Intralot Gaming Services Pty Ltd
5.957
3.729
0
0
Maltco Lotteries Ltd
800
1.576
15
0
Intralot Maroc S.A.
1.623
1.208
-105
1.174
Intralot Ireland LTD
1.651
1.620
126
0
Intralot Benelux B.V.
960
3.868
0
0
Intralot International Ltd
255
3.434
0
417
Intralot Global Operations B.V.
238
4.800
1.166
3.014
Intralot Inc
3.215
8.206
0
0
Bilyoner Interaktif Hizmelter A.S.
1.716
1.945
112
65
Intralot Iberia Holdings S.A.
921
3.218
488
116
Intralot Global Holdings B.V.
879
11
0
1.430
Other related parties
1.637
2.689
622
739
Executives and members of the board
0
0
4.972
5.206
Total
29.694
53.677
29.113
41.128
The above-mentioned related party transactions include purchase of Tangible / Intangible assets (including Right
of Use assets) & inventory of amounts € 5.150 thousand (31/12/2021: € 2.241 thousand) for the Group and €
2.851 thousand (31/12/2021: € 716 thousand) for the company.
Group
Receivables
Provisions for doubtful
receivables
Payables
(total operations)
31/12/2022
31/12/2021
31/12/2022
31/12/2021
31/12/2022
31/12/2021
Intracom Holdings Group
3.427
1.348
0
0
8.965
7.697
Lotrich Information Co LTD
982
525
0
0
0
0
VSC
4.559
5.136
0
0
0
0
Inver Club SA
1.317
1.182
-2
0
0
0
Other related parties
2.973
9.093
-242
-6.097
-86
225
Executives and members
of the board
0
32
0
0
334
360
Total
13.258
17.316
-244
-6.097
9.213
8.282
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2022
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From the company income in 2022, €1.993 thousand (2021: €4.997 thousand) refer to dividends, mainly from
our subsidiary in Turkey, Bilyoner AS, and also from the associate Lotrich Information Co LTD.
The BoD and Key Management Personnel transactions and fees for the Group and the Company for the year
1/1/2022-31/12/2022 were €7,7 million and €5,0 million respectively (2021: €7,6 million and €5,2 million
respectively).
ALTERNATIVE PERFORMANCE MEASURES (“APM”)
The Group uses Alternative Performance Measurements ("APM") in decision-making regarding its financial,
operational and strategic planning as well as for the evaluation and publication of its performance. These APMs
serve to better understand the financial and operating results of the Group, its financial position and the cash
flow statement. Alternative indicators ("APM") may not be comparable with similarly titled measures presented
by other companies, should always be taken into account in conjunction with the financial results prepared in
accordance with IFRS and under no circumstances replace them.
Definitions and reconciliation of APM
In the description of the Group's performance, "Adjusted” indicators are used:
•
Net sales after winner’s payout (GGR)
•
EBITDA, and
•
Net Debt
Net Sales after winners’ payout (GGR)
The “Net Sales after winners’ payout (GGR)” are calculated by subtracting the “Pay out” from “Sale proceeds”.
The relevant calculations are illustrated below:
GROUP
1/1-31/12/2021
1/1-31/12/2020
Sale proceeds
392.791
413.998
Winners Pay out (note
2.6
)
-48.867
-78.694
Net sales after winners payout (GGR)
343.924
335.304
Company
Receivables
Provisions for doubtful
receivables
Payables
31/12/2022
31/12/2021
31/12/2022
31/12/2021
31/12/2022
31/12/2021
Intracom Holdings Group
2.707
42
0
0
3.579
3.321
Intralot International Ltd
12.825
13.452
0
0
17
420
Betting Company S.A
3.462
1.591
0
0
5.984
4.702
Intralot Global Holdings B.V.
878
11
0
0
4.142
4.142
Intralot Gaming Services PTY
1.753
811
0
0
39
36
Maltco Lotteries Ltd
38
1.464
0
0
2
0
Lotrom S.A.
1.663
1.663
0
0
12.733
12.734
Intralot Inc
2.178
439
0
0
0
0
Intralot Finance UK LTD
4.139
1.558
0
0
267.309
250.425
Lotrich Information Co LTD
982
525
0
0
0
0
Intralot Maroc S.A.
8.331
6.989
0
0
1.068
1.174
Intralot Global Operations B.V.
8.018
7.069
0
0
4.880
3.014
Intralot Adriatic DOO
9.621
8.119
0
0
12
1.350
Intralot Benelux B.V.
1.498
3.159
0
0
3
0
Bilyoner Interaktif Hizmelter AS
0
0
0
0
1.195
1.701
Other related parties
3.132
8.723
-463
-6.318
1.052
1.876
Executives and members of the
board
0
0
0
0
260
263
Total
61.225
55.615
-463
-6.318
302.275
285.158
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2022
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Net Debt
Net debt is an APM used by the management to assess the capital structure of the Group. Net debt is calculated
by adding to "Long-term debt" the "Long-term lease liabilities" the "Short-term debt" and the "Short-term lease
liabilities" and deducting from total the “Cash and cash equivalents”.
GROUP
31/12/2022
31/12/2021
Long-term loans
558.929
578.805
Long-term lease liabilities
11.424
9.179
Short-term loans
17.774
13.678
Short-term lease liabilities
4.698
2.857
Total Debt
592.825
604.519
Cash and cash equivalents
-102.366
-107.339
Net Debt
490.459
497.180
Lending of discontinued operations
0
0
Cash and cash equivalents
0
0
Net Debt (adjusted)
490.459
497.180
EBITDA from continuing operations
122.871
110.440
Leverage
3,99
4,50
EBITDA
International Financial Reporting Standards (IFRS) do not define the content of the “EBITDA” & “EBIT”. The
Group taking into account the nature of its activities, defines “EBITDA” as “Operating Profit/(Loss) before tax”
adjusted for the figures “Profit/(loss) from equity method consolidations”, “Profit/(loss) on net monetary
position”, “Exchange Differences”, “Interest and similar income”, “Interest and similar expenses”,
“Income/(expenses) from participations and investments”, “Write-off and impairment loss of assets”,
“Gain/(loss) from assets disposal”, “Reorganization costs” and “Assets depreciation and amortization”. Also, the
Group defines “EBIT” as “Operating Profit/(Loss) before tax” adjusted for the figures “Profit/(loss) from equity
method consolidations”, “Profit/(loss) on net monetary position”, “Exchange Differences”, “Interest and similar
income”, “Interest and similar expenses”, “Income/(expenses) from participations and investments” ,“Write-off
and impairment loss of assets” and “Gain/(loss) from assets disposal”.
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2022
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Reconciliation of operating profit before tax to EBIT and EBITDA
(continuing operations):
GROUP
1/1-31/12/2022
1/1-31/12/2021
Operating profit/(loss) before tax
29.765
37.101
Profit / (loss) to net monetary position
-15.380
-595
Profit / (loss) from equity method consolidations
-256
-213
Exchange Differences
430
1.165
Interest and similar income
-2.194
-47.381
Interest and similar expenses
38.911
60.942
Income/(expenses) from participations and investments
887
-45.112
Gain/(loss) from assets disposal, impairment loss and write-off of assets
-577
16.318
EBIT
51.586
22.225
Depreciation and amortization
70.063
71.046
Reorganization costs
1.223
17.170
EBITDA
122.871
110.440
From the information stated above and from the Financial Statements you are able to have a complete picture
of the Group for the year 1/1/2022 - 31/12/2022.
Peania, 11/4/2023
Sincerely,
Chairman of the Board of Directors
and Group CEO
Sokratis P. Kokkalis
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2022
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Explanatory Report on Article 4 par. 7 & 8 of L. 3556/2007
1. Share capital structure.
The share capital of the Company amounts today to one hundred eleven million four hundred one thousand
one hundred Euros (€111,401,100) divided by three hundred seventy-one million three hundred thirty seven
thousand (371,337,000) nominal shares at thirty cents (€0.30) each.
All Company shares are introduced to the Athens Stock Exchange for negotiation, in the Surveillance category,
under “Travel & Leisure / Casinos & Gambling” Sector. Company shares are common registered shares with a
voting right.
2. Restrictions on company share transfer.
Transfer of Company shares is made in accordance with the law, and the Company Statute contains no
restrictions on transfer.
3. Major direct or indirect participation pursuant to the Articles 9 to 11 of L. 3556/2007
“The Queen Casino & Entertainment Inc.”(former “CQ Holding Company, Inc.”) held 32.90% of the corporate
share capital as of 31/12/2022. On 27/02/2023 the company
“
CQ Lottery LLC
”
, duly incorporated and existing
under the laws of Delaware, acquired from “The Queen Casino & Entertainment Inc.” the entire above-
mentioned percentage (32.90%) of the corporate share capital. “CQ Lottery LLC” is a company controlled by
“The Queen Casino & Entertainment Inc.” which is a company controlled by “Standard General Management,
LLC”, which in turn is controlled by “Acme Amalgamated Holdings, LLC”, which is ultimately controlled by Mr.
Soohyung Kim.
ALPHACHOICE SERVICES LTD, held 32.424% of the corporate share capital as of 31/12/2022. ALPHACHOICE
SERVICES LTD is a company 100% controlled by the company “Κ
-GENERAL INVESTMENTS AND SYSTEMS
SINGLE MEMBER HOLDINGS SOCIÉTÉ ANONYME” (distinctive title “K-SYSTEMS”), whose sole shareholder is
Mr. Socrates Kokkalis.
All other natural or legal person / entity own no more than 5% of the corporate share capital.
4. Shareholders with special control rights (all types of shares).
Corporate shares, which confer special control rights to their holders, have not been issued.
5. Restrictions on the voting right.
The Company Statute does not provide for restrictions on the voting right.
6. Agreements between Company Shareholders.
The Company has no notion of agreements between its shareholders that may result in restrictions both on
share transfer and on the exercise of the related voting rights
7. BoD members’ appointment rules and replacement; Statute amendments.
The rules of the Company Statute concerning appointment and replacement of corporate BoD members, as
well as amendments in the Statute provisions, are conformed with Law 4548/2018.
8. BoD or BoD member responsibility for the issuance of new shares or the purchase of own shares.
Intralot BoD is responsible for issuing new shares in the following cases:
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2022
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a.
According to article 5 § 2 and 3 of the corporate Statute:
«2. Without prejudice to the provisions of par. 3 of this article, it is decided herewith that the Company's
Board of Directors is entitled upon relevant authorization of the General Meeting of the Company's
Shareholders, to make a decision by the majority of two thirds (2/3) of all its members and to increase the
Company's share capital, wholly or partly, by issuing new shares for an amount which cannot exceed three
times the amount of the share capital which was paid up on the date when such power and authority was
granted to the Board of Directors. The above decision of the General Meeting of the Company's Shareholders
is subject to publication in accordance with the provisions of article 13 of L. 4548/2018.
The above power and authority of the Board of Directors can be renewed by the General Meeting of the
Company's Shareholders for a period of time not exceeding a five-year period for each renewal, while it
becomes effective after the expiration of each five-year period.
3
.
Any decision on increase of the Company's share capital made in accordance with the provisions of par.
2 of this article constitutes a modification of the Company's Articles of Association″.
By the decision of the Extraordinary General Meeting of the Company’s Shareholders dated 23/05/2022, the
Board of Directors of the Company was granted the right to decide on the increase of the corporate share
capital by an amount not exceeding the 150% of the paid share capital, i.e. to increase it by up to
€66,841,553.25 (nominal capital). Pursuant to this, the Board of Directors at its meeting of 21/06/2022
decided to increase the corporate share capital by €66,840,064.5. The increase was completed on 26/07/2022.
The above power and authority granted by the General Meeting to the Board of Directors was valid for six (6)
months from the date of the decision of the General Meeting, i.e. until 23/11/2022 and since then the Board
of Directors has no right to decide on the increase of the corporate share capital.
b.
In the cases referred to in article 26 of the L. 4548/2018 and article 113 of L.4548/2018 in accordance
with the article 7 § 3 and 4 (grant stock option rights) last quotation of Articles of Association.
″3. In any case of increase of the Company's capital, which is not ma
de by way of contribution in kind as well
as in the case of issue of bonds convertible into shares, the shareholders of the Company at the time of issue
of the new shares have a pre-emption right as regards the acquisition of all new shares or the participation in
the bond loan, on a pro-rata basis, according to the number of shares they already own.
The pre-emption right should be exercised within the deadline set by the Company's body which decided on the
increase. Such deadline can under no circumstances be less than fourteen (14) days, without prejudice to the
provisions regarding deadline for payment of the share capital, as specified in article 20 of L.4548/2018. In
case of paragraph 2 of article 25 of L.4548/2018, the deadline set for the exercise of the pre-emption right
starts as of the date when the relevant decision of the Board of Directors was made regarding determination of
the price of disposal of the new shares. After the expiration of such deadlines, the shares which have not been
paid according to everything specified hereinabove, shall be disposed of by the Company's Board of Directors
at its discretion at a price which cannot be less than the price paid by the shareholders at the time of increase.
In the event that the Company's body which decided on the increase of the capital fails to set the deadline for
the exercise of the pre-emption right, then such deadline or any extension thereof, is set upon decision of the
Company's Board of Directors within the period of time specified in article 20 of L. 4548/2018
The invitation regarding the exercise of the pre-emption right should also specify the deadline for the exercise
of such right and is subject to publication by the Company in the Government Gazette. Without prejudice to
the provisions of paragraph 2 of article 25 of L. 4548/2018, the invitation regarding the exercise of the pre-
emption right and the notification regarding the deadline set for the exercise of the pre-emption right,
according to everything specified hereinabove, may be omitted, provided that shareholders representing the
entire share capital were present in the meeting and provided that they were notified of the deadline set for
the exercise of the pre-emption right or declared that they have decided whether they shall exercise or not
the pre-emption right. The publication of the invitation may be replaced by a registered letter, return receipt
requested.
Upon decision of the General Meeting of the Company's Shareholders made in accordance with the provisions
of paragraphs 3 and 4 of article 130 and paragraph 2 of article 132 of L. 4548/2018, the pre-emption right
specified in article 26 of L. 4548/1920, may be limited or abolished. Such decision can only be made in the
event that the Company's Board of Directors has submitted to the General Meeting of the Company's
Shareholders a written report specifying the reasons why the pre-emption right should be curtailed or abolished
INTRALOT Group
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2022
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and justifying the price which is suggested for the issue of the new shares. The decision of the General Meeting
is subject to publication. There is no case of exclusion from the pre-emption right, according to everything
specified in the previous paragrap