All3media International Ltd (BNJ) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Banijay Group call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Marion Heudes, Investor Relations. Madam, please go ahead.

Okay. So no, Marion doesn't want to say anything. So I'll start. Good morning, everyone, and thank you for joining us today. This is Francois Riahi, CEO of Banijay Group. We are proud to share today another exciting development for Banijay Group following our acquisition of Tipico, which we announced just a few months ago. Banijay Group and RedBird IMI have entered into a strategic partnership to combine Banijay Entertainment and Banijay Live with All3Media to create a global media and entertainment powerhouse. I'm here with Sophie Kurinckx-Leclerc, our CFO, and together, we'll walk you through the key aspects of this transformative deal and then, of course, address any questions you may have. As we presented at our Capital Markets Day a few months ago, Banijay Group is one of the very few natural consolidators in the entertainment industry. We have consistently demonstrated our ability to seize strategic opportunities and create value, most recently with the operation with Tipico. Banijay Group already enjoys leading position across all our activities. Banijay Entertainment is the world's largest independent content producer and distributor. Banijay Live is a leading producer of ceremonies and immersive live events and Banijay Gaming with the Tipico acquisition we announced in October 2025 is the largest sports betting platform in Continental Europe. The All3Media transaction represents another decisive step for the group. In a fast consolidating market, scale really matters. And with the rise of AI, ownership and control of premium IP is more strategic than ever. This transaction significantly strengthened our IP portfolio, enhances our ability to monetize our brands globally and combines complementary capabilities that will unlock new growth opportunities. In fact, this transaction kills 3 birds with a stone -- with one stone. First, it's a deal of size, scale, penetration, enlarging our English-speaking capabilities and which is very important. Two, we are partnering with a very strong partner to continue the consolidation of the industry. And three, we get some cash, which will allow us to have the financial capabilities to continue this consolidation. But if you look at the industrial rationale of the deal, it's more scale, more IP, more growth. We also see the opportunity to capture cost synergies of approximately EUR 50 million on a run rate basis within 12 months post closing. Today, I will take you through an overview of the transaction, introduce the All3Media business and explain the strategic rationale behind this bold move. Then Sophie will take you through the combined financials for this transaction. I will be back for some closing remarks before we open for questions. In addition to bringing All3Media sorry, sorry -- so let's go to the structure of the deal. We are combining Banijay Entertainment, including Banijay Live with All3Media into a unified partnership. Banijay Group and RedBird IMI will each hold 50% of the combined business, which will be called Banijay and be fully consolidated by Banijay Group. The combined entity will benefit from strong leadership with Jeff Zucker as Chairman, Marco Bassetti as CEO; and Jane Turton as Deputy CEO. I will come back later on this incredible set of talents. RedBird IMI will fully roll over its investment in All3Media into the combined entity. All in all, this joint ownership will ensure strong alignment on value creation and long-term governance, a true partnership built for sustainable growth. It is very important to understand that the reason why we are teaming up with RedBird IMI is because we share the same vision of the industry. That's why they and us, we have decided to combine our assets and to unite our strength to make it happen altogether. In addition to bringing All3Media, the RedBird is going to buy shares in Banijay -- to Banijay Group to reach the 50-50 ownership. And Banijay Group will receive an upfront cash payment of around EUR 800 million, of which EUR 625 million from the purchase of shares by RedBird IMI and a pre-closing dividend of EUR 171 million paid by Banijay Entertainment to Banijay Group. After the transaction closes, Banijay Group's leverage is expected to be around 3x on a pro forma basis at the end of 2026. This means the transaction brings us back roughly to where we were before the acquisition of Tipico. This partnership with RedBird IMI, a JV combining a very knowledgeable U.S. investment firm, which is part of the Paramount Warner deal, for example, specialized in entertainment and a powerful UAE investment vehicle in media is crucial in giving us the capacity to continue to lead the consolidation of the industry. Of course, the proposed transaction is subject to standard regulatory approval and is expected to close by the fall of 2026. So let's have a look at All3Media. All3Media is a great company that we have been aiming for several years, given its quality and also complementarity with Banijay Entertainment. It's a leading independent production and distribution company with around 2,000 employees, generating more than EUR 1 billion in revenues and over EUR 160 million of adjusted EBITDA following Banijay's standards. Around the 2/3 of its revenues come from production activities with creative units in the U.K. massively, the U.S. also very important, Germany, the Netherlands, Belgium and New Zealand. It also has a strong track record of rights retention, built on a balanced slate of long-running franchises, new launches, one-offs and mini series sold to both global streamers and linear broadcasters. In fact, exactly as for the Tipico Betclic transaction, All3Media has a very similar DNA as Banijay Entertainment. It's a diversified business well suited to the brand global content landscape. Non-scripted represents 62% of production and distribution revenues. More than 20% of production and distribution revenues come from streamers. Almost 80% of production revenues come from English language content, which is, of course, a very important element because, in fact, English-speaking content in our industry is global content. 1/3 of All3Media's revenues is generated by distribution and digital business, including Little Dot Studios, which I will come back to it, a multi-platform digital powerhouse and creator engine. Let's take a closer look at the strategic rationale. The rationale for this deal is clear. It's -- of course, it will generate cost synergies, and that's a very important element, but it will unlock growth opportunities, and I will detail these 2 elements. On the growth side, first, the combined group delivers unmatched operating scale, over 170 creative labels across 25 countries, distribution in 250 territories and the deepest IP library in the industry with 20,000 hours produced annually and 260,000-plus hours of [indiscernible] of contents. This scale, which is crucial in our industry today, is anchored in strong IP ownership, which is even more crucial, providing a unique reservoir of premium rights controlled content with long-term monetization potential. With production capabilities across 25 territories and a global distribution platform led by Banijay Rights recently recognized as Distributor of the Year, once again, we operate a fully integrated growth engine. We can systematically originate, circulate and relaunch formats across our footprint, maximizing life cycle value and increasing franchise step. If you want an example of how this scale works and especially in the context of this deal, flagship formats such as the traders, which is an All3Media format can move with time from being produced today in 6 territories by All3Media to potentially leveraging our full 25 territory production network once combined, significantly expanding global rollouts, recurring revenues and right value. This combination of IP, production scale and distribution power positions the group to fully exploit its catalog, accelerate franchise expansion and drive structurally higher monetization over time. The second element, which comes with scale is the positioning with global streaming platform. As you know, it's one of our strategic direction to increase our penetration within platforms even if we are already the largest provider of platform. This will be strengthened by the transaction because of the highly complementary quality of the assets. Banijay Entertainment scale and established position with global streaming platforms will be combined with All3Media's premium English language catalog. So following completion, Banijay will not only be the #1 provider to global streaming platforms, which is already is, but also is the largest English-speaking production studios outside the U.S. This materially enhances our ability to generate global hits and secure multi-territory commissions. Beyond strengthening our positioning with global streaming platform, this partnership materially accelerates our expansion into high-growth digital creator and live ecosystems. All3Media has interesting capabilities in the digital space with Little Dot Studios that will be able -- available to leverage on the combined library and distribution. Today, Little Dot Studios works with All3Media's catalog, also external catalog, but we will bring Banijay Entertainment catalog, which is very, very large. On the live is the other way around. Banijay is ahead of All3Media with our live capabilities, and we will be able to leverage on All3Media catalog and IP. So first, if I say a few words about Little Dot Studio. Little Dot Studio is a prominent digital player with 11 billion-plus organic monthly views and over 930 million subscribers across YouTube, TikTok, Meta, Roku and other major platforms, Little Dot brings strong audience reach, data expertise and deep integration within the creator economy to a scale that we don't have today in Banijay Entertainment. Combined with Banijay Entertainment's global production footprint and Banijay Rights leadership in scaling fast channels and building global social brands such as Mr. Bean, alongside proven talent management expertise with creators such as Jimmy Carr, the most subscribed U.K. Comedian on YouTube, we operate a fully integrated digital monetization platform. Enhanced by AI-enabled analytics and optimization tools, this ecosystem strengthens catalog exploitation, improves audience targeting and unlocks scalable recurring and data-driven digital revenue streams. If I move to the live experience of the field, as you know, Banijay Live transforms flagship IP into immersive monetizable experiences beyond the screen. With strong in-house creative and production expertise, we unlock incremental event-driven revenues while strengthening direct audience connection and franchise longevity. In fact, we are not only a TV producer or a content producer, but we are also an IP owner, which is able to monetize and exploit IP outside of the TV world in live and digital. As you know, Banijay has always been -- and that's the next slide, has always been about talent. And our new strategic partnership continues this focus. I am very delighted that Jeff Zucker, CEO of RedBird IMI, will serve as Chairman of the Board of the combined entity. He brings senior strategic oversight, immense media experience, especially in the U.S., which is, of course, a continent that we know well, but we don't know as well as he does and a platform level vision that aligns operational execution with long-term value creation. Marco Bassetti will be CEO of the combined company. Marco, as you know, has been CEO of Banijay Entertainment for the past 13 years, and he has a long track record of driving organic growth and successful M&A in digital -- in global content markets. Marco, and that's a very important point in this transaction, has also already led major integration with great success. The last and not the least one being when Banijay bought Endemol in 2020, which was twice as big as Banijay at the time and which was done in a highlight. Jane Turton, current CEO of All3Media with extensive experience in the broadcasting and production sector will serve as Deputy CEO. Marco and Jane know each other for a long time. They have a mutual respect, and they are very happy to work together in this consolidator of the industry. We have established a clear governance structure with aligned incentives, fast decision-making and a strong balance between creative leadership and financial discipline. The combined group will also be a creative powerhouse and able to draw highly complementary creative ecosystems built on long-standing relationships with top-tier writers, show runners, directors and on-screen talent across and geographies. You can see some names in the world. I won't do the name dropping. In summary, this combination combines proven leadership with true creative firepower. Moving to cost synergies. So I hope you see how this transaction is going to allow us to have more growth in the future and commercial synergies and capabilities is at the heart of this transaction. But of course, it comes also with cost synergies. We expect to deliver approximately EUR 50 million of cost savings with a full run rate expected to be achieved within 12 months post closing. I think our proven track record of successful integration and especially the one of Marco, who will be leading the business, gives us confidence we are able to implement them in a short time frame. These synergies are broadly split into 3 areas: first, increased coordination across distribution and sales, eliminating duplication and improving commercial efficiency; second, the optimization of central and support functions; and third, a more integrated approach to procurement and shared services. It's exactly the same as what we did with Endemol. These are structural savings that will deliver an immediate and direct EBITDA margin improvement, stronger free cash flow generation and scalable long-term value creation. Let me hand over now to Sophie to take you through the combined financials.

Thank you, Francois. The combination of Banijay Entertainment and All3Media creates a business with pro forma 2024 revenues of EUR 4.4 billion, EUR 3.3 billion coming from Banijay Entertainment and EUR 1.1 billion from All3Media. In terms of revenue mix, the combined entity will remain predominantly driven by production, representing 3/4 of total revenues, complemented by 17% for distribution and 8% for live events and others, which continue to gain importance as monetization levers. In terms of revenue by type of content, scripted contributes just over 1/4 of total production and distribution revenues. Geographically, and as mentioned earlier, the combination meaningfully strengthens our exposure to English-speaking markets, growing to more than 1/3 of revenues while maintaining a broad international footprint across other language and territories. Overall, the combined financial profile reflects a business with greater scale and improved diversification by revenue type, content and geography. It also enhanced adjusted EBITDA and cash generation as we shall look at on the next slide. The combined entity would have generated adjusted EBITDA of EUR 690 million in 2024, demonstrating the immediate earnings scale created by the combination. With adjusted EBITDA margins aligned at around 16% across both businesses, the combination demonstrated strong industrial compatibility with limited margin dilution risk. In terms of cash generation, the combined group delivers first close to EUR 500 million of adjusted free cash flow with an adjusted free cash flow conversion of more than 70%, demonstrating strong cash discipline at scale. Looking specifically at operating cash flow, the combined entity would generate over EUR 380 million of adjusted operating free cash flow with a conversion rate of around 55%, reflecting ongoing investment in content alongside robust cash returns. This does not take into account, of course, the cost synergies. Taken together, the P&L profile highlights a business with material earnings scale, resilient margins, strong cash conversion and a credible path to balance sheet deleveraging even before factoring any identified synergies. Let me now hand back to Francois for some concluding remarks ahead of the Q&A.

Thank you, Sophie. This transaction positions us at the very forefront of the global content industry with strategic step change in terms of global positioning and exposure into the most attractive segments of the global content market. To just repeat a few, the combined entity will establish itself as the largest global independent content platform anchored in an enriched premium IP portfolio, the largest English-speaking production studio outside the U.S., a fully integrated multi-platform IP engine spanning streaming, digital, AI-powered monetization and live experiences. And this growth is underpinned by strong financial fundamentals with strong cash generation, a robust margin and meaningful cost synergies. We are actively driving consolidation in the entertainment industry as we announced it at our Capital Markets Day through 2 transformative transactions in just a few months, reshaping the scale of our group and strengthening our leadership. The recently announced acquisition of Tipico currently expected to close in H1 2026, increases 2024 pro forma revenues to EUR 6.4 billion. Adjusted EBITDA will increase to EUR 1.4 billion. Adding the merger with All3Media, Banijay Group revenues would reach EUR 7.4 billion also on a pro forma basis and adjusted EBITDA will increase to EUR 1.5 billion. There are some roundup in that, almost a threefold increase since 2021, our last full year before the business listed in summer 2022. We are creating a materially larger group with stronger pricing and earning power. These moves represent both a step change in scale and are accretive to profitability, building a group with increasing critical mass to be a global leader. To build on what Sophie shared earlier at Banijay Group level, let me add that post transaction, 2024 pro forma revenue would be balanced between sports betting and gaming around 41% and content production and distribution around 59%, highlighting through the diversification at the group level. On the EBITDA side, it would be slightly weighted to sports betting and gaming, reflecting the relative profitability contribution of the 2 divisions. Overall, the 2024 combined profile will deliver a 21% adjusted EBITDA margin, whilst generating EUR 1.2 billion of pro forma adjusted free cash flow, implying a conversion rate of nearly 80% and EUR 1.1 billion of adjusted operating free cash flow. In fact, we have already exceeded our targets of the Capital Markets Day in 2028. Of course, our targets were organic. But with this transaction, we are already way ahead of the figures we were targeting. I will now show you what the next steps are before we open the floor to questions. As we have just seen in the numbers, these major transactions mark a decisive new chapter for the group. With Tipico positioning us as the #1 sports betting operator in Continental Europe and All3Media strengthening our exposure to the most attractive growth segments of the global content market, we are materially reshaping our scale and profile. Together, they strongly strengthened both our positioning and our growth trajectory. We will, therefore, host a strategic update on March 26 to outline our enhanced profile, refined strategic positioning and updated midterm financial guidance. As we have already exceeded our guidance for 2028, we need to give you some new horizons. And before that, we look forward to speaking with you again tomorrow for our full year 2025 results. That's all for now. Let's open the floor for questions.

[Operator Instructions] And your first question today comes from the line of Davide Amorim from Berenberg.

[indiscernible] can you hear me?

Yes, very well, Davide.

Just 3 for me, please. First, with this transaction, could you please share the 2 implied enterprise value of Banijay Entertainment and All3Media , please? Secondly, could you elaborate a bit more on the growth profile of All3Media, Is it in line or below the level of Banijay Entertainment? It seems that their revenue in 2024 was down 10%. If you could share a bit more detail on what happened during this year for them? And lastly, Banijay Group has changed significantly over the past year, as you just explained with the acquisition of All3Media and Tipico. Do you still have the same level of priority regarding your call option on The Independents?

So regarding the enterprise value -- so your first question, regarding the enterprise value of Banijay Entertainment and -- All3, as you could see on a pro forma basis, we have an EBITDA of around EUR 700 million. We also gave you the debt. So based on the multiple in the market, we will let you do the math for sure. But it's a quite strong profile and quite a strong group that we are building altogether. Regarding the growth profile of All3, as you know, All3 is mainly based in U.K. and U.S. And we already mentioned in our previous call that the market, and this is also something we discussed for this transaction. The market is tougher with a little bit more constraint, and this is what we mentioned during our previous call and specifically in English-speaking territories. Of course, All3Media is also -- face also this kind of constraints. But what we can say is that altogether now, the profile of All3Media will be more diversified, specifically in terms of territories. And as Francois mentioned, we will be able to -- with their IP to roll over all these new IPs in our catalog all over the group and to seize growth opportunities with this new IP in our catalog. So clearly, the growth profile of All3Media well, we will not look at it independently now. They are part of our group, and we will benefit from this new IP coming from them.

Let me -- so just to add on Sophie's first answer for the transaction, we used a 10x multiple on both companies which, of course, is not our dream multiple, but given the strategic rationale of the deal, it was -- we accepted it. On the -- but of course, we believe now the multiple should be higher. On the -- your question about The Independents, no, it doesn't change the question of priority. But of course, it creates a new environment because now we have a partner also, and we need to discuss with them about it. We are currently also discussing with The Independents founders. And it hasn't changed the question. We have a call which is this year, probably Q2 or Q3, and we'll update you when the decision is made. But of course, we will look at it with our partners.

Your next question today comes from the line of Annick Maas from Bernstein.

My first question is, on one of your slides, you say that one of the things that All3Media brings to you is the very good connections that it has with the established streaming platforms. Can you just elaborate a bit more on that? Does that mean they make more revenues from the streamers? Or how can you use that good connection? What does it mean really? Secondly, in the press -- in the French press, you seem to be saying that you don't roll out still looking at ITV Studios. So just in terms of time line, can we get an idea of how you are thinking about continuing to consolidate the content market? And then Sophie, could you give us a little bit more detail about where the cost synergies are coming from and how we shall like expect them from a quarterly point of view in the next quarters?

Thank you, Annick, So on your first question, of course, we are already working a lot with the streaming platform. We are the #1 provider. We have, for example, a very strong relationship with Netflix ourselves. But I would say that All3Media also has a very strong relationship with Netflix. For example, they are the ones producing Squid Games: The Challenge, which is the largest non-scripted show ever on Netflix. So I think on this front, we are strengthening our positioning to the global platform. And also, as you know, this global platform, they buy local content and sometimes they have to buy local content by law. So they buy Spanish series, Italian series, French series, et cetera. But the English-speaking series are global content. So of course, it has more value. It has more, I would say, reach for these global streamers. So the fact that we are strengthening our capabilities in English-speaking countries and especially the U.K. and the U.S. is strengthening naturally our position with global platform. On your second question, what I said to the French press was we are excluding nothing. Maybe they have been a little bit far in saying that we -- of course, it means that we are -- if we are excluding nothing, it goes also for ITV Studios as for every other studio. But I think clearly, the point is today, as we said, consolidation is the name of the game. When you look at the Warner Paramount deal, it's very easy to understand why you need to be big and global to be relevant in this sector. So we share this view with RedBird IMI. They bought All3Media to create this type of global platform. I think they realized that they could not do it starting with All3Media, which was smaller than us, smaller than ITV Studio and others. And so they -- that's why they combine their assets with ours in the strategy of building the largest and most powerful content company in the world. And today, we believe that if you look at it, we are a French company, very proud of it. But now we have U.S. and Emirates partners. And this, I would say, strengthens a lot our capacity to position as the global leader in the field. Sorry, I've been long, but Sophie, please, on the synergies.

Yes. So on the cost synergies, so as mentioned by Francois, we expect EUR 50 million run rate cost synergies. We expect them to be implemented within 12 months. And of course, as we demonstrated in the past with Zodiak and also Endemol integration, we are quite -- we have a strong track record on this. We are quite confident -- we are very confident to implement this in this time frame. Where does it come from? Well, as mentioned, well, of course, we have -- well, if we combine the 2 groups, we will have coordination to be made, for example, in distribution business. We expect also to have growth opportunities, but we also have the central and support function that we will optimize. And these are mainly -- well, these are the main sources of these cost synergies, and this is what we will implement as soon as the closing is done.

Your next question comes from the line of Silvia Cuneo from Deutsche Bank.

Congratulations on the transaction. Also a few questions from my side. The first one is given the 50-50 ownership structure between Banijay Group and RedBird IMI in the combined entity, I wanted to ask what is the long-term vision for this partnership? And are there any predefined options or mechanisms within the agreement that could foresee a change in this 50-50 structure over time? Or what is your intention to keep this as it is? Secondly, the strategic alliance with RedBird has been highlighted as a platform for further consolidation in the presentation. Could you elaborate a little bit about how this will facilitate future M&A, particularly regarding the financing contributions from both parties. So it's related to the earlier question about the 50-50 structure really. And related to that, I wanted to ask if the creation of liquidity of the stock would remain a priority when you consider future deals? And then finally, if you could provide a little bit of color on the timing and initiation of this transaction. Specifically, if you could comment about who approached to who and whether the current market backdrop in the English-speaking countries has facilitated reaching a deal?

Thank you, Silvia. On the 50-50 ownership, it was really a strong request from RedBird IMI as they really have a strategic view on the sector and they really want to be a partner and not just an investor in this building. So yes, we have built a long-term partnership. And there's nothing in the documentation, which would go in the sense of a short-term exit for RedBird IMI. I think they are really considering it as a long-term partnership. Yes, this strategic alliance is very important for consolidation because, in fact, we often had questions when we were saying we want to consolidate the content industry, which were, how are you going to do that because you already have a lot of debt. So what is your capability to really do transformative M&A. I think this transaction is a demonstration that, yes, we can. And in fact, because, first, we are teaming up with a strong partner with deep pockets, deep capabilities connected to the world. And also, we get back some cash in this transaction, which gives us some financial flexibility to continue the consolidation, not only on the content side, but potentially on other part of the entertainment industry, including, of course, sports betting and gaming. So that's why this transaction is a clear transformation even if All3Media is -- it's not like Tipico and [ Netflix, ] which were the same size, and we are doubling the size. Of course, All3Media is smaller today than Banijay Entertainment. But it's complementary and it's opening up new avenues to position ourselves. It improves dramatically our positioning given this alliance. Third -- your third question, of course, the liquidity of the stock remains a priority, and we are not very happy where it is today for sure. And clearly, we -- as I said earlier, we are inviting you to an update on our Capital Markets Day at the end of the month and hopefully, to open up the possibility to increase the liquidity of our stock, which is for us the key priority. And I believe that these 2 transformative deals should bring attention and more interest in what we are doing because I think we clearly demonstrated our capability to be a very significant company in the entertainment space. Finally, on your question, I think in 2022, RedBird IMI and us were competing to get All3Media. They won. We were disappointed, but it was not as if a direct competitor was buying All3Media. So we thought right away that there could be a way to get it or to make it happen later. And we have from the next day started to exchange with RedBird IMI on the opportunity to combine our businesses because we have synergies, both commercial and cost, which they hadn't just then. So in fact, it has not been just -- it's not a deal which was triggered by results, market. It was a very structural deal. Now they have talked to other people. We have talked to other people, sometimes the same. we didn't achieve a consolidation on other studios. So finally, it was natural that we come together and say, okay, we want the same thing. We try to do it with other partners. Let's do it together. We are going to succeed because we want the same thing. And that's how it happened. It has been more than 1 year of discussion. And we believe that, yes, you have some market movements and on the English-speaking countries, but look at the valuation of Warner. And why is Warner valuing so much? Because in our industry, IP, scale and global position are very, very important, and that's what we are strengthening with...

And the next question comes from the line of Conor O'Shea from Kepler Cheuvreux.

A few questions from my side as well. Firstly, Francois, just to come back on the mechanism for the calculation of the cash injection from RedBird to get to 50%. I think you mentioned 10x multiples, I guess, that EBITDA. But just trying to work out how that reconciles with the proportion of contribution to combined EBITDA from All3, which I think is below 25%. So paying EUR 800 million to get up to 15% seems to imply a lower EBITDA multiple for Banijay Entertainment as part. If you could just explain a little bit more around that, that would be helpful. Secondly, maybe for Sophie on the debt ratios of around 3x. So just to clarify, is that a proportionate EBITDA, so excluding the 50% minority in Banijay Entertainment? Or is that before excluding the minority? And then the last question, just on the cost synergies, EUR 50 million within 12 months. Would you expect more after that? Or is that -- is it all going to be achieved more or less straight away?

Thank you Conor, on your first question, I'm not going to open the door of the [indiscernible] of the transaction. But on what you say, I think we bring also more debt. So they bring a smaller EBITDA than we do, but we also bring more debt and more leverage. So at the end of the day, that's what it leads to. And of course, you have some discussion on adjustments, et cetera. But I think the main answer to your question is about the proportion of debt on the 2 companies. On the second question, I'll leave it to Sophie.

So on the debt ratios, we are around 3x. It's 100% of the net debt, 100% of the EBITDA. If we would have to exclude the minority interest, this ratio would be better, but we present the leverage with our reported figures. On the synergies, the EUR 50 million is what we expect to implement within 12 months. EUR 50 million is the cost synergies. And clearly, in the future, we will see growth opportunities. We didn't give any figures because for now, it's quite difficult to approximate. But clearly, we have strong growth opportunities that will be delivered from the closing, but of course, over the life of the group.

And of course, at the end of the month, we have the update on the figures. So it will be an opportunity to give you the guidance -- midterm guidance on our figures for the next years, including All3Media...

Understood. And just a quick question on the pro forma net debt at the Banijay Entertainment level, so shared with the minority. Can you give us a sense of how much that would be compared with Banijay Group?

It would be around 4x.

4x.

We will now go to the next question. And the question comes from the line of Anna Patrice from Berenberg.

My line was not very well. So maybe I repeat some questions that I missed before. The question on All3Media. Apparently, it is highly indebted. And if I look at the report -- annual report on the company's house, it was loss-making. So is there anything that is changing? How do you want to attack the debt -- because otherwise, it's going to be dilutive for you on the earnings side? And also regarding the structure going forward, if you decide to do more acquisitions on the Banijay Entertainment, does it mean that you need to have the approval of the All3Media or how there will be the alignment on the future strategy?

I'll take the second question, I'll give the first to Sophie. Yes, of course, they are partners. So after a certain -- for a deal of a certain size, we would need to agree on the M&A acquisition. That's why I really underline strongly that we share the same vision of the industry, and we have exchanged extensively with RedBird IMI on what we could do together, and we are really aligned. So that's why we are very excited, I think, on both sides about this partnership. But of course, to do a large acquisition moving forward, we will need to agree both Banijay Group and RedBird IMI on the way to do.

And for your first question, if we take the 2024 figures, and we combine them together, what we can see is that we are deleveraging the group with the combination of these 2 groups. So maybe I missed something in your question. But in fact, if we take Banijay on a stand-alone basis, we were more around EUR 4.5 billion, EUR 4.4 billion. And if we combined the 2 groups, we are more around 4x. So clearly, this is not -- well, this is a deleveraging that we expect from this combination.

Sorry. So if we go through the P&L below the EBITDA, probably what was not clear for me. Maybe we can start with EBITDA. So you're talking about EBITDA of All3Media at around 15% margin. When I look at the company's house annual report, the EBITDA margin there is much lower. So probably you're adjusting for something. I'm not sure for what because there, they're talking about EBITDA of roughly GBP 100 million. And then if I look further down on All3Media, they have quite significant debt and hence, very high interest expenses. So they are loss-making on the net income level. So my question would be, if when you are taking over, if there's something going on with the debt, if it's going to be reduced or what kind of debt are you taking over into this group, into the combined group? And then another question also on the CapEx side. Are there any things on the OpEx or CapEx side? Are there any acceleration in the CapEx to make the group more digital, i.e., to increase efficiency on the production side and make it with the AI kind of more efficient.

Sorry, I missed the part of your first question. So what -- sorry, what we explained during this call is that from this combination. First, on the debt, we expect the deleveraging. Secondly, we expect to deliver strong cost synergies within 12 months. And then we expect to seize high growth opportunities. So even if in the past, this group, All3Media was loss-making, together -- altogether, we will be stronger. As I told you, we will deliver these cost synergies. And clearly, we expect to have a very strong growth profile and cash generation, as we mentioned, around 70% and deleveraging progressively the group so that we -- well, to have the same kind of profitability profile than today.

And on your AI question, of course, it's a very important one. And one which is at the heart of the deal also. Today, it's fair to say that AI is a reality for us, especially in the post production, in the cost optimization, and we will start to see really a real benefit on this front with AI. But I think what is really important for the future is that with AI, the most important element is intellectual property because, in fact, AI lowers the barriers to entry to make videos. But so it gives new avenues of monetization of IP. And so the IP is even more valuable. And I think that's how I see the valuation of the Warner deal, and it's all about IP, which are very valuable with AI. And a very important element also with AI that we have already mentioned, but which explains why scale is important is the usage of AI to create videos from our library. Today, we have before the deal, I think, 240,000 hours of content, and maybe we are exploiting 5% or 10% of it in terms of monetization. Why? Because it's very complex to find what we have in the catalog and to exploit all the monetization avenues. With AI, tomorrow, it's not ready yet, but we have been working on it for the past 12 to 18 months. We will be able to -- with a prompt to say to our catalog, okay, create a 2-minute format with the best recipes of MasterChef globally on burger. And it will be creating it instantly at no cost and very efficiently. So -- this will allow us to monetize more our catalog through digital channels, YouTube and social network. And of course, this, it's an investment. It's a complex tool. And we can do it because we have the scale. And with All3Media joining us, we have even a bigger scale, and we're also able to use their catalog in this. And that's how AI is going to increase our capacity to monetize our IPs and our catalog. I hope it answers your question.

Can we just go back to the question on the EBITDA because you're talking about adjusted EBITDA for All3Media at EUR 160 million, while, once again, at the company's [ house, ] the EBITDA is lower. So I would like to understand what are the adjustments of the EBITDA or if there's something I'm missing?

In fact, the EUR 160 million is under Banijay definition. And we provided, I think, a bridge or if not, we will catch up.

I think the main difference is about distribution advances that are not accounted the same way by All3 and Banijay.

[Operator Instructions] we will now take all the question was just withdrawn. I will now hand the call over for webcast questions.

Let's move to the webcast question. I think that we already answered a lot of the questions we have. Maybe a few of the questions. First, hello, it's a change of control or refinancing expected...

So under -- well, for Banijay Entertainment on a stand-alone basis, there is no change of control. So there is -- we don't have to refinance this debt at the closing. Regarding All3Media, there is a change of control clause, but we secured a financing for this part. And we could, at some point, refinance the total debt, but this is not obligation, and this is something we will contemplate later on.

The next question is, will All3Media be included in the restricted group governing the bonds issued out of Banijay Entertainment SA?

All3Media will be included and will be below Banijay Entertainment and will be included in the restricted group of Banijay Entertainment.

And how will you finance the EUR 171 million dividend to be paid by Banijay Entertainment to the group? And will the term loans at All3Media refinancing market, do you expect the leverage target? But I think that on the latest one, we already answered.

Yes, for sure. So regarding the EUR 171 million dividend, we secured a financing that -- on which we could draw if needed. And on the -- regarding the term loan at All3Media, I already answered in the previous question. Are there any other questions?

We have some more phone questions, if you would like to take them.

Okay.

Your next question on the phone lines comes from Hannah Francesca Waddilove from Oaktree Capital Management.

Firstly, could you just elaborate a bit more on the EUR 170 million dividend and the third-party financing you've secured to backstop the change of control? Could you just explain because obviously, the term loan at All3Media is larger than that size. So keen to understand that bullet point a bit more, if possible. And then my second question is just around the kind of pro forma cash flow for the combined entity, specifically your guidance on CapEx, earn-outs and working capital. I think when I last spoke to you earlier in 2025, you had CapEx intensity guided at 2% of revenues. On an LTM basis, I think we're closer to 3% to 4%. That's for Banijay Entertainment. But just if you're able to give any cash flow guidance on a pro forma combined entity basis, that would be very helpful for those 3 items.

Sorry, I didn't understand properly your question on the debt. What I mentioned is that we secured a financing to finance the dividend part of EUR 171 million. And we also have secured financing to secure the debt, the refinancing of All3Media. So maybe I missed something, but this is what I mentioned. On the -- well, on the perspective and on the -- what we expect in the future from the combined group in terms of pro forma cash flow. As we mentioned, we will give you a strategic update by the end of this month. And clearly, we will give you some guidance on these different topics and KPIs.

Okay. Is there any chance you're able to disclose the LTM cash flows for earnout?

You mean...

On a combined...

[indiscernible] '25 result...

Or earlier if -- obviously, we don't have full year '25 results.

Maybe we can do a follow-up on this specific question.

Okay. Just -- I mean, it alludes to the earlier question around the differences in EBITDA definitions, specifically at All3Media, but that's fine to follow up.

We have one further phone question, and the question comes from the line of Anna Patrice from Berenberg.

And one more question. My understanding is that the financing you do under your Banijay Gaming and Banijay Entertainment business units. So the money that you will receive, the cash money that you will receive from All3Media, they go directly to Banijay Group as on the holding level, right? So what are the intentions to use those money for? And is it to finance The Independent stake?

Yes. Thank you. So yes, the money will be at the holding level. We will give some views on how we intend to use it. As I mentioned, it's firepower for M&A. Of course, we also have some -- it includes the call to exercise on Tipico. And then [Audio Gap]. Sorry, our line was cut. But if there are no more questions, maybe one last question, and then we end the session.

Sir, would you like me to open Anna's line again because I think her question was cut off when your line disconnected. Let me just open Anna's line again. One moment, please.

No, it was answered. I asked how the proceeds will be and the answer was that we will provide more details and will be used will be used financially -- it will used be partially for the Tipico and will be used for the M&A. And we'll have more details at the end of March, right?

Yes, yes, sure. And also that, yes, it gives us the capability to do the independent, but the decision is not made yet, and we want to discuss it with our new partners.

There are no further phone questions. I will hand the call back to you, Francois.

Thank you. Thank you for attending our call, and we are very excited about this transaction as we were excited by the Tipico transaction. We are excited by this year 2026, which is a year where we are changing our scale, and we are demonstrating that our strategy is in action, and we'll come back to that with details and figures at the end of March. Thank you.

Thank you. Bye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.