What’s new? Q3 results confirmed our view that PPC should be regarded as a utility implementing a gigantic E2.3bn1 Voluntary (or Mandatory) Retirement Scheme. But instead of employees retiring, think of 2GW lignite power plants decommissioned (delayed pace due to the energy crisis) and replaced by 5GW of renewables, mainly solar, by 2026. We estimate the VRS savings at c. E500m in EBITDA terms (i.e. a payback period of c.5 years), compared to c. E900m recurring EBITDA in 2022, to be crystallized gradually.

What’s new? Jumbo announced key financial figures for Q3/9M 2022 with sales +8%/11% yoy (we knew that from the monthly trading statements), EBITDA +4.5%/+8.6% yoy and EBIT +5%/+10% yoy; EBITDA margin in Q3 at 37% (from 33% in H1 and 39% in Q3 last year). It seems ‘inventory management’ has continued successfully, which we decipher as inventory gains from price increases, supporting EBITDA margin at levels > historical average of 27%-30%.

What’s new? Q3 results confirmed there is no sign of slowing down for the strong refining earnings witnessed in 2022 (Q3: $22/bbl, 9M: $19/bbl). Difficult to predict 2023 but we are factoring in $14/bbl, i.e. lower yoy, albeit higher-than-historical refining margins ($7/bbl). Windfall/solidarity taxes do not seem enough to alter the positive picture.
Ahead of electrification, the best thing refineries could do is to re-invest these earnings to diversify their models away from refining. This is exactly what MOH is doing as per their 2030/E4bn energy transition strategy. In the meantime, valuation benefits from lower net debt and higher dividends.

What’s new? Eurobank announced it bought an additional 13.4% stake in Hellenic Bank for E70m, or 0.48x TBV 2022E, doubling its stake in the 2nd largest CY bank to 26%. The acquisition reflects HB’s current market cap of E528m. The stake was bought from Wargaming, which keeps a stake of 6.8%. Eurobank becomes HB’s biggest owner, above Demetra (21%) and Pimco (17%)…

What’s new? OPAP released Q3 results showing clean GGR/EBITDA/net income at E500m/E198m/E119m or +6%/+14%/+17% yoy with equity cash flow at E180m (annual. FCFE yield at 15% or clean 12.5%). Excluding several in shop restrictions, Q3 is the first L4L yoy post-lockdown quarter, helping us to compare yoy trends. Off-line GGR was flat yoy while on-line GGR went up by a strong +29%. Off-line fatigue is probably why OPAP decided to increase odds in retail fixed odds betting, becoming more competitive vs on-line and aiming to (hoping for) a positive net GGR result.
Forecasts: Q3 growth rates imply significant cost cutting (-8% yoy) and EBITDA margin improvement (+250bps) with the latter at a record 40% (on GGR*). Management brought FY 2022 EBITDA guidance back up to E720m (from E700m). We have fine-tuned our 2022-2025 estimates with the most notable change being FY 2022 EBITDA going up by 3% and slightly above guidance at E728m. The World Cup in Qatar could move betting GGR/EBITDA but this will depend on the actual payout.
Conclusion & Valuation: We reiterate OI and PT of E15.1. Our terminal value in 2030 is based on 1/3 market share. We have worked on valuation scenarios including a renewal of the core license beyond 2030 and up to 2040 with a 15% target IRR license cost. Valuation wise it is not clear if OPAP should renew or simply embrace an opening of the off-line market to competition. Either way, what matters the most is that OPAP will remain a key player in the offline gaming market in Greece.