European Internet Guidebook - Key Developments and Standouts from the Week

Research evidence excerpt

European Internet Guidebook - Key Developments and Standouts from the Week

modestly light with weaker cash flow and further slippage to two CFC timelines. Following the results, management reiterated that cost saves and tighter working capital should drive a 2H cash flow inflection, targeting

underlying breakeven in Q4 and group cash flow breakeven in FY27, with deferred capex providing some near-term mitigation (HERE). Overall, the UK SMID subsector traded up +1%, driven by ATG (+7%) and FUTR (+4%).

eCommerce & Others - We updated our Prosus/Naspers SOTP post the Tencent (covered by JPM Analyst Alex Yao) 2Q26 preview, where our analyst expects limited revenue surprise risk, with the key debate shifting to

profit divergence as AI opex dilutes underlying improvement (adj. operating profit growth likely slowing to mid-single digits YoY). Prosus/Naspers traded at c.38%/c.41% discounts to NAV, with near-term catalysts still largely

driven by Tencent, while re-rating potential hinges on iFood margin normalisation and progress on JET’s return-to-growth plan, which could gradually narrow the NAV discounts (HERE). Overall, the subsector was broadly flat

over the last week, with Prosus (-2%), offsetting CTS Eventim (+1%).

Online Advertising - We published our Q2 preview on JCDecaux, where we remain bullish on improving demand signals and ongoing margin progress, supported by solid Europe trading, better-than-expected Middle East

trends and incremental World Cup revenue (HERE). Overall, we anticipate a solid performance in the quarter with the company likely to over-achieve guidance for c.3% organic growth. Overall, the subsector traded up 4% last

week, with JCDecaux trading up 5% and Stroer trading up 3%.