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OPAP | First thoughts: no surprises, EBITDA flattish yoy

Q3 in line, EBITDA flattish as tough comps were counterbalanced by another exceptional performance from Joker – Q3 results came broadly as we expected, with revenue and EBITDA growth slowing to 6.6%/0.5% (+4.7%/+4.3% in Q2) due to a demanding comparison base following the Euro-driven sportsbook boost last year. Joker once again stood out, adding €12m yoy thanks to jackpot rollovers, accounting for roughly 2.1% of quarterly group growth and effectively cushioning the drag from other segments. Other numerical games were also up c5% by our math (with footfall clearly helped by Joker), while betting declined -1% (-2% in Q2). Online casino (+14%) and VLTs (+6%) remained solid contributors. By channel, retail turnover rose 8% on stronger footfall, while online slowed down to +4% (+9.5% in Q2). Top-line growth was diluted by a c8% increase in non-variable opex, thus leading to little-changed EBITDA yoy (€214m, in sync with our number). Net profit advanced +6% yoy to €128m (EEe €130m), aided by the absence of last year’s HL impairment. Management messaging is confident suggesting the 9M performance “assures the delivery of FY outlook”, but without providing a specific datapoint. We believe our FY25e of €844m EBITDA is well underpinned (implies -9% in Q4), with clear upside risk.

… but results carry limited read-across given the pending corporate action – The Q3 print, while solid, is unlikely to dominate the narrative as attention remains fixed on the proposed merger with Allwyn, which continues to overshadow near-term fundamentals and drive sentiment around the stock. The shares have slipped below €18, reflecting concerns around the valuation implied for Allwyn’s non-OPAP assets and the ongoing rotation within the shareholder base following the announcement. On our numbers, at c€17, the shares already discount most of the higher Equity Risk Premium (ERP) that investors are likely to attach to the combined entity, should the deal proceed. As such, below €17, we see the risk-reward profile starting to turn more constructive, at least in the run-up to the EGM.

The path from here – Shareholders will vote on the deal in late Dec/early Jan. We remind that dissenting shareholders retain a cash-exit right at €19.04, though the deal will proceed only if fewer than 5% of OPAP’s total share capital opts for cash — a threshold that could, in our view, allow some pragmatic flexibility if required. Should more than this threshold be tendered, the transaction will fall through, no cash will be paid, and the story will revert to its prior form, albeit with a less harmonious alignment between the main shareholder and minority investors implying a likely higher ERP attached to the stock than before.

Valuation – Our PT remains based on stand-alone OPAP (DCF-based valuation of concessions, at 7.3% WACC) pending clarity on deal completion. Our PT implies a 2026e EV/EBITDA of 8.3x, modest premium vs history justified by the better FCF generation until 2030.