Edison Investment Research - Codere S.A. (CDR) Codere - Diversifying outside Argentina

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Edison Investment Research

Richard Williamson

Codere - Diversifying outside Argentina

Growth from Mexico and Spain, combined with ongoing operational efficiencies, continues to offset pressure from the Argentine division (23% of Q219 revenues). Codere is maintaining FY19 EBITDA guidance with positive net cash flow for the year. The net debt/LTM EBITDA ratio is 2.7x and the company is successfully navigating the Argentina uncertainty. We maintain our underlying EBITDA forecast for FY19, although we are lowering our FY20 EBITDA estimate by 7.1% to â‚¬368.4m as we now expect Argentina to continue contracting next year. The stock is very illiquid and trades at 4.1x EV/EBITDA for FY19e, which is at a deep discount to peers.

19/09/2019 8 EN

Underlying

Codere S.A.

Codere is a Spanish multinational group engaged in the private gaming industry. Its core business is managing gaming machines, bingo halls, betting locations, casinos and racetracks. It operates in eight countries across Europe and Latin America.

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ES0119256032 Madrid Stock Exchange Spain

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Richard Williamson

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