Clean, Cheap, Cash-Generative Compounder; Reiterate Overweight & 10 Questions For Management

Research evidence excerpt

Clean, Cheap, Cash-Generative Compounder; Reiterate Overweight & 10 Questions For Management

IdeaMtournament in Q3, and does management still underwrite the mid-to-high-teens

market growth rate?

5. Is 57-58% now the sustainable Online EBITDA-margin base? Online margin

reached 58% in Q2, compared with 57.5% in Q1, 55.4% in FY25 and 54.7% in Q2

2025. Management indicated that its previous mid-50% framework probably no

longer holds and that the re-based cost structure is sustainable over the medium

term, although it is not assuming further margin improvement. Can management

bridge the increase between business and product mix, promotional discipline, the

Serbia restructuring, operating leverage and any quarterly items? What margin

downside should be allowed for if competitive investment increases?

6. How much upside remains in SKS365/PWO (Planetwin), and over what

timeframe? Following the migration onto Lottomatica's proprietary platform,

PWO's sports performance recovered above pre-migration levels and the brand is

now running roughly double its prior EBITDA, against an €87m synergy target. On

the call, sports share was cited at +0.2pp versus pre-migration, but iGaming still has

~0.5pp of share left to recover. What is the runway on that residual iGaming

recovery?

7. What are the structural growth drivers in Sports Franchise? Standalone Q2

bets increased by c.7%, while revenue grew 3% and EBITDA was broadly flat. How

much of the underlying growth is coming from the market, PWO share gains, shop

and network productivity, product improvements or omnichannel acquisition?

Management’s medium-term view is for ~8% growth across total sports: what does

that imply specifically for Sports Franchise in Q3 and Q4, and should its margin