Codere Online Luxembourg, S.A. Q2 FY2024 earnings call

• Second quarter saw €54 million in net gaming revenue, 13% above Q2 2023. Casino segment contribution at record high of 59%.
• Adjusted EBITDA was positive €1.3 million in Q2, nearly €6 million better than Q2 2023. Mexican business outperformed, Spain also grew.
• Board changes: 3 new board members joined, Gonzaga Higuero succeeded Pat Ramsey as Chairman.

Consolidated Net Gaming Revenue grew by 39% to €54 million. Mexican business saw 57% growth to €28 million, while Spain's net gaming revenue increased 25% to nearly €22 million. The casino segment contributed a record high of 59% of total net gaming revenue. Average monthly spend per customer was €225 (20% increase) and average monthly active customers rose 16%. There were 73,000 first-time depositors with an average CPA of €236.

• Net gaming revenue outlook revised to €205 million to €215 million (lower end increased by €10M, upper end by €5M), implying 22% growth vs 2023.
• Adjusted EBITDA range set at €2.5 million to €7.5 million for the year, leaving room for investment opportunities.

• Mexican peso devaluation could affect revenue trajectory.
• Potential regulatory reform in Mexico, though formal regulation seen as potentially beneficial.
• Increasing competition in Mexico with new international competitors entering the market.

Q: Thoughts on margin expansion algorithm and future margins?

A: Early to give long-term expectations. Mexico has higher gaming tax vs Spain. Underlying unit economics healthy, but competitive landscape in Mexico is tough.

Q: Impact of Mexican presidential transition on regulation?

A: Speculative, but formal regulation seen as beneficial for local operator Codere.

Q: CAC increase and Mexico competitiveness A: CAC higher due to targeting casino-first customers, media prices increasing, but LTV higher and more stable.

Q: Guidance for second half, marketing spend, M&A A: Cautious due to Mexican peso devaluation risk. EBITDA has flexibility for opportunities. Monitoring M&A, but not short-term priority.

Q: Market share in Mexico, product innovation, cash flow A: Market share low double digits vs top competitor. Product has advantages like local presence. Cash flow influenced by corporate taxes and working capital management.