Lottomatica Group SpA: Q2 wrap: Quality growth supporting margin expansion

Research evidence excerpt

Lottomatica Group SpA: Q2 wrap: Quality growth supporting margin expansion

Global Research

29 July 2026ab

Lottomatica Group SpA Equities

ItalyQ2 wrap: Quality growth supporting margin

expansion Recreational Products & Services

12-month rating Buy

12m price target €33.00Reiterate Buy following Q2 results

LTMC's Q2 print was better than we anticipated, with strength in the online segment

driving upside to group EBITDA. We believe the results reinforced the company's Price (28 Jul 2026) €24.76

attractive compounding characteristics: healthy top line growth supported by structural RIC: LTMC.MI BBG: LTMC IM

drivers, ongoing margin expansion, improving cash conversion, meaningful shareholder

returns and a strong balance sheet. Following the print, we continue to have good Trading data and key metrics

visibility on FY27 eFCF generation of >€480m, implying an >9% FY27 eFCF yield. If we 52-wk range €27.77-19.20

were to identify the weaker aspects of the print, we would highlight that the Q2 results Market cap. €6.23b/US$7.10b

have led us to increase our assumptions for cash exceptionals and M&A related Shares o/s 252m (ORD)

outflows, resulting in a reduction to our FY26 FCF forecasts, albeit with FY27 and Free float 69%

beyond revised modestly higher. In addition, online bet growth slowed to +9% YoY in Avg. daily volume ('000) 750

Q2 from +15% YoY in Q1 despite the benefit of the world cup. That said, the company Avg. daily value (m) €19.3

was clear that world cup trading was fully in line with expectations and reiterated its Common s/h equity (12/26E) €0.25b

FY26 revenue guidance. We would also note that H2 online growth should benefit from P/BV (12/26E) 22.6x

lapping the PWO migration period, which we view as providing relatively soft Net debt to EBITDA (12/26E) 2.2x