European Leisure and Travel: Leisure and Travel weekly. Key investor questions and newsflow

Research evidence excerpt

European Leisure and Travel: Leisure and Travel weekly. Key investor questions and newsflow

stock and these cristian.nedelcu@ubs.com

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results further underscore this strength. Stepping back, Cirsa is trading on an

~11% FY26 FCF yield (before M&A spend) and 5.6% (including M&A spend), we think

this is undemanding for a company offering solid earnings growth with highly consistent

delivery, in addition to a strong balance sheet and a track record on value-accretive

capital allocation (link).

Lottomatica (Buy). Lottomatica reported 2Q26 results on 28 July with Q2 in line on

revenues but ahead on EBITDA driven by online strength (link). We believe the results

reinforced the company's attractive compounding characteristics: healthy top line

growth supported by structural drivers, ongoing margin expansion, improving cash

conversion, meaningful shareholder returns and a strong balance sheet. Following the

print, we continue to have good visibility on FY27 eFCF generation of >€480m, implying

an >9% FY27 eFCF yield. If we were to identify the weaker aspects of the print, we

would highlight that the Q2 results have led us to increase our assumptions for cash

exceptionals and M&A related outflows, resulting in a reduction to our FY26 FCF

forecasts, albeit with FY27 and beyond revised modestly higher. In addition, online bet

growth slowed to +9% YoY in Q2 from +15% YoY in Q1 despite the benefit of the

world cup. That said, the company was clear that world cup trading was fully in line with

expectations and reiterated its FY26 revenue guidance. We would also note that H2

online growth should benefit from lapping the PWO migration period, which we view as

providing relatively soft operational comparatives (link).

Evolution AB (Sell).