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OPAP | First thoughts: Q2 in line, with more confidence for FY25 but interim dividend will likely disappoint somewhat

Q2 in line with c4-5% growth yoy, DPS €0.50 (EEe €0.60) – Q2’25 has settled broadly in sync with our expectations, with revenue and EBITDA growth decelerating to 5%/4% from c8% in Q2, owing to tough comps. With Joker having risen €18m yoy thanks to the jackpot rollovers (accounting for c2.4% group quarterly growth alone), we estimate other numerical games were -6% (cannibalized by Joker). Betting also turned negative at -2% from +13% in Q1 (tough comps), but this was more than offset by online casino (+24%) and VLTs (+8%). Across channels, retail was +2.7%, while online increased 9.5% (vs +20% in Q1). Top line growth coupled with c6% increase in non-variable costs drove a 4% increase in net profit to €110m (EEe €111m). Mgt has proposed an interim DPS of €0.50, down vs €0.60 last year. This is more of a phasing issue we reckon, as mgt looks to build firepower for the Stoiximan minorities buy-out and the potential license renewal for HL. Despite the c7% growth in revenues/EBITDA delivered in H1, mgt has not updated the guidance (calling for LSD top line growth in FY25), but the messaging does seem more confident. As flagged in our last note, given the record Joker jackpot in August, Q3 is already tracking €24m higher yoy for Joker. With this in mind, we believe OPAP ought to deliver EBITDA >€840m (>2% growth) despite the tough comps in H2.

Can the 2025 strength carry forward? Partly, we think… – The 2024–25 outperformance rests on two pillars: Joker & betting. Joker has clearly moved to a higher base after its late-2023 revamp, as the higher column price has reduced the number of tickets played, thus making jackpot rollovers easier to build. That said, given the unusually long rollover streaks of 2025, Joker revenues are likely to step down in 2026. We nevertheless expect them to settle above pre-revamp levels, implying Joker will sustain a structurally higher run-rate but still leave OPAP facing a >€20m earnings gap vs the 2025 peak. By contrast, the revamped Champions League format for sportsbetting looks genuinely structural. More fixtures and a stretched calendar have reshaped betting behaviour, driving sustained 2-digit growth and a clear re-rating of the vertical. As such, we expect OTC betting to be flat in 2025 (due to the Euro 2024 comp) before growing c2% annually thereafter.

Bottom line: 2025 to set another record, 2026 EBITDA growth likely marginal – With Joker’s windfall set to fade in 2026, the equity story will increasingly hinge on whether OPAP can compound growth through structural drivers—betting and digital expansion. Our numbers pencil in little-changed group revenues in 2026-27 (core retail flat, online +9%/+6% respectively) filtering through to EBITDA growth near 1% in both years. This should help underpin 4%/2% EPS growth and a dividend near €1.5 per share (8% yield).

Valuation – Our PT (SOTP of OPAP’s concessions at 7.3% WACC) implies a 2025 EV/EBITDA of c8.6x, modest premium vs history justified by the better FCF generation until 2030. Despite the c8% yield, we see the stock as fully valued, unless one uses too aggressive valuation assumptions, e.g. 1) licence renewal cost for the core concession at