Lottomatica Group S.p.A. (LTMC) Earnings Call Transcript & Summary

Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the Lottomatica Group's Full Year 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Mirko Senesi, Head of Investor Relations of Lottomatica. Please go ahead, sir.

Thanks, operator, and good morning to everyone. Welcome to Lottomatica full year results presentation. I'm here today with our CEO, Guglielmo Angelozzi; and our CFO, Laurence Van Lancker. Now the floor directly to Guglielmo for the presentation. Guglielmo, please?

Thank you, Mirko. Good morning to everybody. We start from Page 3 of the deck. Very happy to share with you that we had another very solid print for 2025. EBITDA growth 21% year-on-year and adjusted net profit 45%. We have returned a significant amount of capital to our shareholders, underpinned by our solid cash flow generation and our balance sheet capacity, EUR 375 million or EUR 1.6 per share divided between dividends and buyback. The net leverage is at 2.4x, in line with 2024 because we use them well within our financial policy as we've used, as I said, our cash flow generation, balance sheet capacity to -- for the buyback. Without the buyback, this would have been at 2x, so at the very low end of the financial policy. Page #4, what are the key milestones that we've achieved in 2025. The PWO integration, first of all, it's been successfully completed. We've implemented shy of EUR 90 million synergies, 34% more than what originally announced. The full rate will be in effect in 2026. And PWO has gone back to growth after reaching, as we said, the lowest peak at the end of the migration. Very good on the market shares also. We gained 1.2 points as a group, including historical brands and PWO, which you will see is more than 50% of the shares lost by the tail, and we reached 31.3% in Q4 2024, and we think there is more room to go in 2026. The process for the renewal of the new online concession has been completed, new concession are active since November 13. There's a few more important steps. So the certification of the new systems and the go-live of the new full -- the new regulation on compliance, which is expected to happen in the summer of '26, but everything is on track. We optimized our cost of debt with a successful refinancing in April. More than 50% of our debt was refinanced at the time with EUR 24 million per annum in savings in interest costs. And now we stand at 5.3% total cost of debt, which is 240 bps lower than IPO. Also in terms of governance, as since June, we are 100% float. We've entered the FTSE MIB in September. Liquidity including all sources is now above EUR 50 million per day, so 15x more than the IPO level. And also the independence of the Board has been strengthened. And today, with the new members that have joined after the exit of Apollo, we have 73% of independent directors and have appointed a Lead Independent Director in July. So let's go at Page #4 of the presentation. This is focused on the market shares. On the left, you can find the legacy brands. The graph -- legacy brands means basically everything except PWO, the Planetwin brand. The graph starts in 2022 because that is the year when we acquired the last asset, which is the last asset before PWO, which is Betflag. So you can see there's been a constant growth of market share in the -- on the historical brands, on the legacy brands and shy of 2 points also this year. As we had commented in the past on the right graph, you can see the trend line for PWO. So 7.1% at the acquisition, 7.1% at the start of the migration. Lowest value at the end of the migration as it is usual and it's already happened in the past, 6% and then relaunch progressing well, 6.3% at the end of -- for Q4 2025. So overall, a very good performance, notwithstanding the factoring in the pressure on market share on PWO because of the migration. Let's go to look at some of the competitive dynamics closer. We are at Page #5 of the deck. So as you can see from the graph on the left, this is the market share of the so-called tail operators, the smaller operators, they were at 16.6% in 2023, and lost a bit of market share, less than 1 point in '24. That's pretty natural trend. But then they lose 2.1 points in 2025 with an acceleration in the last quarter of the year. And as I commented before, we take 1, 2 points, which means basically more than 50% of the loss of basically more than the fair share, which would have been 30%, around 30%. We are on Page 6 of the presentation. I've commented on EBITDA growth, and this goes along with a significant adjusted net profit growth through the years. You can see that on the left -- the graph on the left. We have more than doubled in the last 4 years, the adjusted net profit and which has grown also in the last year, '24 to '25 of 45%. But even more important than these are the drivers behind this growth that you can find on the right graph of the page. 3/4 of the growth has come from organic growth and optimization projects. So organic growth, meaning the baseline growth of the EBITDA, EUR 86 million, then you have EBITDA revenues and -- then you have EUR 20 million of the -- coming from the optimization of the financing structure and EUR 48 million coming from the projects that we've executed on extracting synergies from the M&A. Only EUR 53 million. So 1/4 comes from EBITDA that actually we've paid for. So the accretion is very not only relevant, but it's also very healthy in its composition. Page #7 of the deck, let's get to the guidance for 2026. We guide towards revenues of EUR 2.390 billion to EUR 2.460 billion for 2026. EBITDA will be in the range of EUR 940 million to EUR 980 million. And CapEx are in line with basically the previous -- pretty much in line with the previous year. So recurring CapEx between EUR 85 million and EUR 90 million and concession CapEx coming from the mathematics of the concession schemes at EUR 78 million per year. In terms of capital returns, the dividend proposal is just basically follows -- strictly follows our dividend policy, 30% of adjusted net profit, which is EUR 0.44 per share or EUR 111 million. And we are going to ask the Board is requesting an authorization to the AGM to buy back an additional 12.5% of the share capital in the next 18 months, which at the current prices correspond to circa EUR 700 million in the period 2026, '27, including the shares that we will have bought by the date of the AGM with the share buyback, which is currently in progress. So with this, I leave the floor to Laurence. Laurence, please?

Thank you, Guglielmo. Moving on to Page 9. You can see on the left-hand side, our revenue growth has been plus 12% on a reported basis. And on the right-hand side, EBITDA has grown by 21% with Q4 growing double digit on a normalized basis. So in 2025, we closed the year at EUR 156 million of EBITDA with a 38% margin, which has grown from 35% in 2024, thanks to the higher margin of online that grows at a faster pace than the other 2 segments and the realization of synergies. Moving on to Page 10. So in line with previous quarters here, we can see that the online has continued to be the main growth engine of growth. So with revenues up 22% and EBITDA up 26%. Sports franchise has also grown very nicely, both in terms of revenues, up 14%. And in terms of EBITDA, plus 31%, thanks also to the favorable payout that we've experienced in the year. So very favorable in H1, less favorable in H2. Gaming Franchise has been broadly flat, plus 1% revenues with EBITDA plus 3%. Page 11, when you look at the -- on our left-hand side, the CapEx, you can see the recurring CapEx are broadly stable. They're slightly lower than what we see in 2024, which is a testament to the scalability of our model. Look at concession CapEx, the EUR 113 million versus EUR 63 million the previous year. This is predominantly due to the upfront payment of the online CapEx for the tender of the new online concession that we paid in November 2025. Growth CapEx and one-off CapEx, they are predominantly related to integration with EUR 24 million paid throughout the year, which we will not see in 2026 and then carryover from bolt-ons that we had guided at the beginning of the year in -- for the activities carried out in 2024. Finally, if you look at the right-hand side, you can see the operating cash flow growth of plus 18%, and this is also including the increase in concession CapEx. If we didn't include the upfront payment for the online concession CapEx, we would have had a growth of 24%. Page 12, you can see the path from net debt from the 30th of September '25 to the 31st of December 2025. In addition to adjusted EBITDA, you have a net negative effect of net working capital as is typical given the seasonality of the business. Taxes paid of EUR 48 million. This is what we've paid the second installment for the taxes for the 2025 period that we paid end of October. CapEx of EUR 96 million. That includes also the payment of the concession CapEx also for the EUR 35 million of online. Financial expenses and leases of EUR 51 million, and then you have EUR 236 million of buyback that we actually implemented in the fourth quarter. That brings us to a total net financial debt at the end of the year of EUR 2.1 billion, which equates to a net leverage of 2.4. Had we not done the buyback this year, we would have had, as Guglielmo mentioned earlier, a net leverage of 2 turns. So we continue to remain within our financial policy of 2 to 2.5 turns of leverage. With that, we can conclude.

We can open up to the Q&A, operator. Thank you.

[Operator Instructions] The first question is from Clark Lampen of BTIG.

I have 2 questions, if I may. The first is on the share capture discussion that we had, and you guys laid out very helpfully on Slides 3 to 5. I'm curious, when I strip out the PWO contribution, it looks like you guys took about 43% of the long-tail share that was available. Could you help us understand how much of that growth was a function of Totosi relative to deals? And now that we've had a few months to better understand the landscape, should we view this as sort of a sustainable rate of share capture on a go-forward basis? Second question that I have is on shareholder buybacks and M&A in relation to one another. You typically talked about those as sort of competing for the same excess cash supply. Should we interpret today's decision to allocate more capital towards repurchase as a signal that maybe throughout the concession process and following U.K. tax adjustments that there's perhaps been less opportunity than you would have expected so far and the priority is shifting to buybacks? Or is that still sort of to be determined at this point?

Yes, Clark, this is Guglielmo. On the first question, well, the only thing in terms of, say, nonorganic that you have in the growth of the market share, let's say, in Q4 is the Sportbet contribution. So you can -- roughly, it's like half and half. That is the picture. Not sure why you get to 43% because the -- compared to the beginning of the year, the contribution of PWO is actually negative. So I'm not sure on the legacy brands, the increase is -- or what is that, 1.8 points because you had a decrease on Planet. So the total share that we take, including PWO is 1.2 points over 2.1, which is more than 50%. But maybe I got it wrong, so please correct me if I'm wrong. But to the core of your -- to the key point of your question, you have only Sportbet there, so it's kind of half and half. And the other important part is this a trend. Yes, we think it's a trend because we think there is -- of course, there is more to come on the say, bolt-ons or this type of deals with minority with part to control, which we've explained last time. But also there is a possibility of continuing organic growth. The environment is pretty constructive under this point of view. Now we don't take -- as you know, we don't take a commitment on the market share because it's always very hard to guide on that, how the organic -- the market share will go. But to give you a tendency, so a flavor of the competitive environment, we think that there will be more pressure on tail operators in general, and we are very well positioned to continue to capture market share.

Maybe on the second point, Clark, so the -- for the buyback, listen, the rationale -- I mean, we've increased the size of the buyback to 12.5% of the share capital because our cash flow generation is accelerating. We're delevering quite fast. And so we -- the natural -- so it comes natural for us if you look at our cash flow generation profile that the buyback follows suit. And we're basically following the same, let's say, capital allocation framework that we've been saying for some time. So the excess cash goes to buybacks and which competes with M&A. As we've said also, the bar is pretty high. I wouldn't read any signal in that other than the fact that we continue to follow exactly the same approach as we've done historically. Now the only thing to read in this, I think, is the increase is just a function of the acceleration of our cash flow generation and deleverage.

That's very helpful. I appreciate the comments. Certainly no corrections to offer on our end. I think we just bucketed the PWO sequential share capture in the wrong place.

The next question is from Estelle Weingrod of JPMorgan.

I got a first question also on capital allocation. I mean in the context of M&A opportunities out there. I wanted to ask if Evoke Italy was an option and if you were looking at it, if it would make sense to you? And a second question on the retail concession. Is there any progress you've seen or heard of on the government discussions with the regions on finding a potential agreement?

Estelle, I think I'll answer the first question. We won't comment on specific names. I think the -- as you know, we monitor all potential targets within the framework that we've mentioned, which is across Europe. And of course, that includes Italy as well. But we're not going to comment on specific names.

Yes, Estelle. This is Guglielmo. So on the retail concession, the government is still working on the decree. As I commented a few times before, it's a very solid and constructive setup. So it is still on the -- the ball is still on the government's court in order to come up with and approve a proposal that then will have to be discussed in the so-called conferencicata, which is the joint conference of the regions and the government. So we stand pretty much in the same place as the last time we spoke, except there's been more work done in refining the decree on the government side, really working on the details and things and talking to the industry, the association, it's really very much about that, but nothing more than that, I would say.

The next question is from Ed Young, Morgan Stanley.

Two for me as well, please. First of all, on the World Cup, obviously, it's a revenue and an EBITDA opportunity, but it's also an opportunity to engage players and grow actives. How have you treated the potential of Italy being successful in the March play in tournament or not and within your guidance? And could you perhaps give some color of the level of engagement you'd expect for Lottomatica if Italy were or weren't to make the tournament, how vital is that? Or what's the kind of level of difference? And how is that treated in the guidance? And then second of all, on the buyback, I guess, chiming in on Clark's comment. Could you perhaps give a little bit of color on the cadence of what we should expect for buybacks, how we should perhaps think about what you might do in '26 and '27 within your leverage framework?

Okay. So on the World Cup, I would say that it doesn't really move the needle as much. I mean, as you say, it's a very -- it's an important period for us to acquire customers. It's a very important one. But I mean, the guidance already includes the outcome whether Italy is in the World Cup or not, and it doesn't really move the needle as much. On the pace and the cadence of the buyback, we will -- I mean, we will continue to do the buyback basically at the same pace that we've been doing so far. I think if you run the numbers and you look at where we stay at constant leverage, say we'll probably do a bit more next year and a bit less this year. But we'll see as we move along. I mean, as you know, we give the mandate to a bank who carried -- who executes the buyback and then we may or may not adjust the pace as we go along. But we don't make those adjustments often, frankly. As you know, we've made one last year in November through an acceleration. But I mean, our plan is, all other things being equal, that we will carry out the full -- up to the full amount for '26 and '27.

The next question is from Ben Shelley, UBS.

I've got 2. One, I guess the implied EBITDA margin guide is quite a bit ahead of consensus. Can you elaborate on the underlying drivers supporting that margin outlook, especially in online? And my second question is about the consolidation opportunity. Do you think the technical testing to be completed in the summer of 2026 can offer more market share opportunity?

I'll take the first one. If you look at the margin -- the implied margin expansion for '26, it's predominantly driven by mix. It's online growing significantly faster than the other segments. And given the margins of -- we're seeing margins, if you look at the margins for the year, 2025, they're in the mid-50s, if you assume a similar margin for '26, you get to an implied margin that is -- for the year that is higher that you get to around the 39% if you look at the midpoint. So the online is the main driver. Of course, you also have some effect of synergies that are coming in because whilst we've completed everything we had to do for the integration of PWO, there is still a run rate effect that you haven't seen all in 2025. We've got another EUR 24 million of synergy, a run rate effect in 2026 that flows through the P&L.

Ben, so on the consolidation related to the Phase 2 of the concessions. So the, call it, technical testing and full compliance. A part of the activities will be carried out by May 13 as originally planned. Another part will most likely be postponed. There's still probably a question mark of whether it's, I don't know, it's August, September because of just technical reasons. So -- but it really doesn't move the needle. It doesn't change the fact that this is clearly another opportunity to make this market more robust, easy to manage, clear to understand. And so of course, whenever you have this kind of transitions, it may happen that well-equipped operators are in a better position like we are. So can this be an opportunity? Yes, the more we go towards the final model, the better it is. So this will happen. Some things will happen in May. Some things will be most likely pushed. I don't know, still to be decided whether it's November or around that. But short answer, yes.

The next question is from Fabio Pavan, Mediobanca.

The first one is if you can help us in building up expectation for cash flow generation in '26. So we will have EUR 100 million higher EBITDA, but also optimization in interest cost, cash costs. And my question is, we should still assume some bolt-on acquisition for this year or not? And the second question is on product evolution, my view is that clearly, your market share gain is also driven by your tech platform and your ability to launch new products. So I was wondering if you can share with us some update on this.

Yes. I'll take the first one on cash flows, yes, so the -- it's a bit more than EUR 100 million of EBITDA if you take the midpoint. From a CapEx perspective, the recurring CapEx are not moving very much because they are driven by the size of our retail footprint and then -- and it includes also technology spend in there that is very scalable. And those don't really -- those costs don't really increase. So the CapEx level really stays the same at the recurring level. Concession CapEx is pretty much -- is known with EUR 78 million. So that will not move. So with that, really, the drop through is pretty material. Then if you -- once you look at what -- sorry, the interest costs are on a run rate basis, I think you know that we are running at around EUR 105 million of pretax interest costs per annum. Add to that another EUR 15 million between RCF and guarantees, you get to EUR 120 million. That's not moving. So it's the same as it's lower than last year. And then, of course, we've got taxes. I mean, leases are around EUR 29 million per annum. So there's not -- there are no really -- again, it's a pretty scalable business now that we're seeing and online is accelerating. So it really -- all the incremental EBITDA really drops down through cash net of taxes. And in terms of bolt-ons, I think this is -- so when we look at the levered free cash flow generation, so our framework has been 30% of the adjusted net profit goes to dividends. That's pretty easy to model. And then the rest is basically bolt-ons and buybacks. And on the size of the bolt-ons, we'll look at this. We're working on the pipeline. It's definitely been at lower levels than what we've seen in 2024. We don't guide on that because it really depends on how we execute on that pipeline when maintaining price discipline. And then the rest is predominantly -- the rest is buybacks. So 2026 is, as I think as a number of you have pointed out, it's an inflection point in terms of cash flow generation as we've seen that also in the graph that Guglielmo showed earlier, showing the adjusted net profit evolution over time. And 2026, we'll see fewer extraordinaries given that also we've completed the integration of PWO. So a big chunk of extraordinaries basically will disappear.

Fabio, on the product, you're perfectly right. That is one of the key drivers of the growth of the market share. And of course, that goes with the technology. What I can say is that we have a very healthy pipeline, especially on the part of the -- what we call the Lottomatica Core. So the martech infrastructure that you have above the gaming platforms, which allows to optimize the digital marketing and all its aspects to improve the risk management, all the things that are in Lottomatica Core are a key component of -- key differentiating component and a key part of our road map. Just a note of -- small note, the technical certification of the systems at a certain point will require for the entire market a slowdown of the new products launched on the market because basically, you need to somehow freeze the product while it's been certified. So that's in the first part of the -- in the first half, ideally if the dates are confirmed. But that's for the entire market. But as an overall, in 2026, the road map is, on the product side, is really strong. And again, I think we put some focus in the past earnings call and the presentation of the Lottomatica Core. That is a key area because you always think that you work on the product, of course, you get new games for casino, you present them better, you improve the user experience, you present new bets. Then it's super important how you deliver that to your clients, to which clients you deliver them, how efficient and what's the level of efficacy of your digital marketing activities. So that's really a component which will become more and more important in the future. So that's the picture.

The next question is from Chiara Pampurini, Intermonte.

You already gave us some information on how the consolidation process is progressing. You've taken the stake in Sportbet. If I may ask, could you give us some color on how this is going on and if you're closing similar deals? And also on Totosi, if you're seeing an increase in your market share?

Yes. You want to go? You go. Okay. Sorry.

Yes. I mean if you look at sort of the Sportbet, we've taken a 20% stake. As you know, we have a positive control over the period of the -- to get to 100% throughout the concession period. So that's how the deal structure works. We've taken a minority, and we're very happy that the shareholders are staying in to continue to drive the business in a complementary way with ours. Are there any other deals like this? Yes, we look at them. We're in discussion for other potential deals. And as soon as we'll close them, we'll announce them. I think in terms of Totosi, there's nothing really major to report. I think the market share has proven to be quite stable over the past few months. So there's nothing to report on that side.

The next question is from Andrew Tam, Rothschild & Co Redburn.

Just a quick clarification question on Slide -- Page 4, just on the market share. I know you said you haven't -- you don't guide to the market share per se. But I guess the question is just in terms of the legacy brands, the current, I guess, annual trajectory of the market share gains, would you say in 2026, are there reasons for that to continue? Or do you believe that not to be the case given the new online concession model? And then just in terms of PWO, is the target there to recapture that 1 percentage point of share loss pre the migration? And is there -- are there any strategies or initiatives in play at the moment to recapture that?

Yes. Andrew, this is Guglielmo. So of course, we don't guide. But yes, the short answer is, yes, we do believe that the legacy brands have still room to grow also in 2026. On the specific point of PWO, what's our target. The target is to recover the entire 1%. So that's pretty much as it happened at the time for the Lottomatica/Better brand when we did the acquisition of the assets from IGT. And it's pretty much the same strategy, so refined through time. So when we finish, it's already in execution when we finished the migration with the new product in place, we started reactivation campaigns of customers who had disappeared or reduced the frequency or amount because of the noise of the migration with specific campaigns. Then we've extended the reactivation campaigns to customers that we had in the database and that had not been playing for a long time even before the migration to try to recover share also from that side because we could go and present to them a new product, which we believe was better than the previous one. And so that's another important campaign. So that's basically if you move aside the better quality of the product and of the offer in terms of what are the tools, you basically run dedicated campaign to these key clusters. So customers who have stopped playing during the migration, customers who have decreased frequency during the migration, customers who have decreased spend during the migrations and customers who were lost before the migration, but can be contacted again on the basis of a better offer. Then, of course, there are tons of ways to get there. Not getting to the details, but you use all the digital marketing levers to get there. But that's basically the principle. And it started basically at the end of the migration that we'll continue.

Got it. And just a follow-up on -- you mentioned the comment capturing more than 50% of the share losses from the tails. Do you expect that to continue into 2026 in terms of more of the same or even potentially for that to accelerate?

Again, it's hard to get into detail because otherwise, we would be guiding. But we gave a total size of the opportunity from the states, which can be 7% to 10%, saying that we had already captured, signed 2 points. And of course, you would aspire to do at least the fair share of that total pool at the end of the game, at least the fair share. We started better than that because we did more than the fair share, more than 50%. But that's the framework. And then that's the data points. Then, of course, any other information would be a guidance.

The next question is from Pravin Gondhale of Barclays.

Firstly, on online sports. So previously, you talked about both retail and online combined GGR in sports growing at sort of sustainable high single digit. But online has been a bit softer in 2025. Could you please talk about what are -- are you taking any sort of additional steps to drive that online growth in sports? And then secondly, on Sportbet, you suggested that there are similar sort of deals in your M&A pipeline there. Could you talk about the size and potential valuation levels of those deals?

Okay. I'll take it. Listen, I think -- so if you look at the data in January for online sports, we've actually seen very good growth, not only in terms of GGR, but also in terms of handle. So if you look at the -- I mean, we've -- I think the handle has grown roughly about 14%. We're talking about -- if you look at our numbers that are disclosed if you look at the market shares and at the GGR level, it's grown 15%. So it's been -- it's a pretty healthy market, and we're continuing to see this trend even at a handle level. So I think this reflects the fact -- and at the same time, sorry, retail, on the retail side, the sports retail business is growing faster than we had expected. So both at a handle level and at the GGR level. So on a combined basis, we're double digit in January, both at a handle level as well at the GGR level. So this just gives you also the comfort that it continues to remain a very healthy market, a very healthy segment. And we're continuing to see this also even after January. So it is definitely continuing to be a market that will continue to remain volatile by nature, if you look at the GGR because you have volatility of results and you have different schedules of games that are being played between the peers that you compare. And as we've mentioned several times, if you look at the monthly GGR on a combined basis, it shows you that there's a very clear trend line for the sports business across both channels. And then the difference between the 2, as we mentioned earlier, iSports historically had grown faster. Last year, it wasn't the case. At the beginning of this year, it looks like iSports is growing faster as the previous years. As we had said from a contribution margin perspective, when GGR moves from one channel to the other, it doesn't really make much of a difference. It's very -- the contribution margin at iSports is very similar. So it is -- we continue to believe that these are the right assumptions that we have a growth of around 7% to 8% at a combined level for sports. And then the relative growth, naturally iSports grew a little bit higher. As we've seen this year, actually, iSports has been growing double digit. So in that sense, we confirm our thesis on this segment. In terms of size, when we talk about Sportbet, we're talking about similar sizes, meaning they're small. Just to answer very shortly the question, very -- the small businesses, they're sub-1% market share. So they're small businesses and the valuation is definitely highly accretive to our business.

This is really helpful. And congratulations on the results.

The next question is from Domenico Ghilotti, Equita.

A few questions. First of all, on the buyback, should we assume that you -- so how is the approach if there is a retail tender? So I'm trying to understand if this will affect your -- the pace of the buyback? And second, I have a question -- well, on 2025 numbers. So if I look back at your original guidance, you ended something like EUR 100 million lower in terms of sales. So I'm trying to understand what has been performing differently compared to your initial expectation while EBITDA has been back in line? And third, on the 2026 guidance, if you can give us some sense of the trend that you are expecting on gaming franchise and maybe even Sport Franchise. So I'm trying to understand if growth is coming only from online.

Okay. I can take this. Listen, the buyback will continue for as long as we continue to remain within our financial policy. We're quite mindful of that. So to the extent there will be a tender, we will look at the numbers, see whether -- see how the leverage is impacted and we'll act accordingly. I mean it's pretty much a function of that. The -- from our guidance in '25, if you compare it to the original guidance, I think as we mentioned in the third quarter results, it's pretty much the result of PWO sort of being integrated earlier. So we realized the synergies earlier at the cost level, and therefore, we had the impact at the revenue level earlier during the year. So throughout the year, we've seen a higher -- or more of an unfavorable impact on revenues, but a more favorable impact at the cost level, thanks to the, let's say, acceleration of the implementation of the synergies. For 2026, I'd say online is really more of the same. We've been already -- I think it's been quite a number of quarters, we've been sort of seeing exactly the same trends. Online will continue to remain the growth engine. And retail, if you look at sports, sports retail, we continue to see there mid-single-digit growth. We've seen better so far since the beginning of this year, but obviously, you have to factor in the volatility of the results, but it's been exceeding the expectations there. And for gaming retail, it depends on the level of bolt-ons that we will see throughout the course of this year. Because if you don't do any bolt-ons, it's a business that will naturally decline sort of low to mid-single digits.

The next question is from Andrea Bonfa of Banca Akros.

Most of my questions have been answered. So if I may, just a further clarification on the -- let's say, on your guidance, let's say, framework, if it's possible for you to specifically comment on the potential -- on the expectation, on the growth rate expectation for gaming, is that high teens, mid-teens or low teens? And the second one is a clarification in your press release, you mentioned EUR 300 million of buyback and your NFP buildup, you mentioned EUR 236 million. If you can just comment on that.

Sure. I'll answer the second question first. No, we've done EUR 300 million in 2025. The numbers you're referring to is what we've done in Q3 -- Q4, sorry. So in Q4, we've done EUR 236 million. So the balance was done since we started the -- it was done in Q3. As you know, we started towards the end of June. And so the remaining part was done before, was done in Q3. So that gives us -- we've done all in all, EUR 300 million of buybacks in 2025. In terms of guidance, so if we think about the guidance, so we will continue to see sort of online growth in the teens. And iGaming, it is -- what we've seen in January and February so far, we've grown at 19%. I mean the market has grown 19%. We've grown a bit faster than that. We expect to see here anywhere between mid- to high teens of growth in this segment. Hopefully, that helps frame it.

Congratulations for the results and the guidance.

The last question is from Richard Stuber, Deutsche Bank.

Most of my questions have been already asked. And just one final one, a more general one on AI, if that's okay. Presumably, you use it across most of your businesses. Could you say where it has been most impactful? And so is gaming content now sort of generally quicker and easier to make?

Yes. Richard, this is Guglielmo. I'll take this one. Look, the impact of AI, I would say, is -- when you look at the business, then it has impacts on many other aspects of the company. It's mainly on the online business for the moment being. It doesn't matter whether it's sports or it's iGaming or it's digital marketing in general. Then of course, you have impact also on logistics. You have impacts on a bunch of internal processes. You have impact on customer care, which are across the businesses. You will have impact in the future on the production of games, I believe, also for the retail gaming machines. But when you look at the core impact in terms of revenue potential, today, you see that on all the segments of the online business. And spanning from risk management. So the agents that manage the risk basically to communication, production of communication campaigns to affiliate management to content proposition on the casino. So there's really a ton of things. Then you specifically asked about one point, which is will AI make the production of games, I assume you're referring to iGaming, so to casino basically, easier. Of course, yes, which is not our part of business. We are -- it's a small part because we have some studios inside, mostly we buy from outside providers, which we believe is a very good thing because if you -- that's a very competitive environment. We have more than 100 providers giving us thousands of games. If these providers are able to design and launch new games, which are better in a sense, more effective and at a cheaper cost, then it's just good news for us and for the market because you can have access basically at better content at cheaper price, given the fact that this is a very competitive environment. So for that specific use, the answer is yes, and it's very good use for the ecosystem in general. But really, the use of AI is not really limited to that. It really, as I mentioned to you, some cases, some use cases, spans from every single angle of the company. We haven't really done an exercise or shared an exercise of showing what's been the impact of what we've done so far because we're approaching this with a clear road map in mind, but from use cases, which are coming bottom up. So what can be done is spread as knowledge throughout the company, the architecture allowing for that is there. But then everybody would ask for a specific use case. And if it makes sense, then it's developed. Otherwise, if it doesn't make sense, the investment case, it's not developed, but it's really already a very wide penetration across the board.

I think we are done with the Q&A, operator, so we can close the call. Thank you.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.