MFE-Mediaforeurope N.V. ($MFEB)

Good evening, ladies and gentlemen, and welcome to the Full Year 2025 Results Presentation of MFE-Mediaforeurope Group. The presentation today will be hosted by our Group CFO, Simone Sole; and by Matteo Cardani, Chief Marketing Officer of MFE Advertising. Let me hand over immediately to Matteo. Matteo, please go ahead.

Thanks, Sara. Good evening, everybody. So let's start with an initial chart highlighting the pillars of our commercial strategy. So what we are presenting today is how we are building a European total audience and total monetization platform. Leveraging our leadership in linear broadcasting, we are expanding our audience potential into comprehensive total video, total reach platform. Combining the strength of owned and operated media with the opportunities offered by third parties and strategic business partnership. We start from our established presence in the 5 plus 1 countries. We are extending advertising opportunities to additional European markets through partnership. So you will appreciate today that our business model is a unique combination of multinational and multi-local designed to generate value initiatives in different areas. And our ambition is to offer advertisers and agencies a compelling communication alternative opportunity in the prisoner's dilemma between global platforms and national champions. So as we commented in past presentation, we offer an unrivaled reach scale. We are a leading media group operating across a cluster of countries with a combined population of 200 million people, of which 190 million are reachable through our media portfolio with advertising. To start from, let's say, our core business, our legacy business, so our linear audience share. We should remind the fact that at any given minute across our 3 core markets, there are 22 million individuals any minute viewing television. And we consistently capture around 25% share of linear TV viewing. And this delivers a daily reach of approximately 73 million viewers any day, 123 million people any week and 155 million people any month. So this strong audience positioning directly translates into commercial leadership. So across markets where the TV advertising industry is worth more than EUR 8.5 billion, we achieve a combined advertising market share of 45%. So confirming our role as a key partner for advertisers. At the same time, we are successfully accelerating transformation. Our digital KPIs are growing at a double-digit rate. On the basis of more than 70 million unique monthly browsers, registered users are growing plus 15% year-on-year and time spent is growing plus 20%, reaching more than 2 billion hours a year. So here in this chart, we comment our, let's say, positive monetization leverage because we have a strong monetization profile. Any hour on digital video, delivers a revenue per hour index that is 169 compared to linear. So any additional digital hour or any hour that is moving from linear to digital is delivering a higher revenue and higher profitability. So what we are offering clients and advertisers is a single platform that's starting from a base of 8 million individuals reached every average minute every day of the year, we enable advertisers across linear TV and cross media and digital to achieve reliable certified audience reach over the day, a week or a month of the magnitude that you can appreciate in the graph in this chart. The valuable thing is that this is consistently delivered across the 3 regions. So we are implementing linear reach with extended reach, maximizing campaign effectiveness and reaching an average threshold of 90%, 95% of reach in any country. And in this context, it is worth reminding the fact that we are able to deliver superior reach results compared to global platforms with a net monthly average of 96% across all countries and with important competitive edge compared to the directly video competitors. At the core of our offer model is the strength and relevance of our premium editorial content, which continues to attract large audiences and support both our leadership in linear television, but also our ongoing digital growth. Content strategy is a key driver of our selling proposition. In this chart, we have our top 10 flagship programs, what we call crown jewels, and they are performing well in the total video ecosystem, and you can appreciate the fact that they are generating a natural audience transformation and transition from linear TV to digital on-demand. With regard to scripted content, 50% of audience and more than 30% of audience for unscripted are already digital native audiences. Just to deep dive on that, in this chart, we have a powerful example of the rich capability of our crown jewels in the 3 regions. So here, you have 3 programs, entertainment programs in Italy, Spain and Germany. And you can appreciate if you were an advertiser in any minute, any episode, any season running on any multi-screen environment, the amount of reach we are able to deliver. And this powerful combination of cross-media reach combined with premium quality content is a key benefit attracting more and more advertisers in a virtuous cycle where the performance is driven by the increasing strength of our cross-selling model. A growing share of our clients in the 3 regions is investing more and more across multiple platforms with our cross-media system. And then the final chart and then for this first part of my presentation is our new business perimeter in terms of net advertising revenues. So for fiscal year '25, the reported perimeter is EUR 3.238 billion. The second part of my presentation, I will briefly touch on our, let's say, business model, how we are moving from a multi-local strength to international business model, leveraging scale, integration and creating value for our advertisers. So in the following chart, you have, let's say, the representation of what we call our business compass. So this is our starting point. So we have a very strong local relationship with clients and agencies, so the northbound part of this compass. And if you take a look at the south part of this compass, this strong relationship is coupled with our capability on local market insights and our capability of new business development. On the right-hand side, in any -- in each country, we have a very strong local AdTech and AdProduct innovation capability that we deliver on the left-hand side on our local total TV and total video competitive position as we appreciated in the first part. The interesting thing is that starting from this multi-local strength legacy, we are in the position to develop an international business model that, to some extent, is unique because we are generating 4 added value areas. If -- we are strengthening agency and client relationship from local to international relationship, and there is a strong synergy in this move. We are harmonizing and unifying our AdTech platform and our AdProduct portfolio offer. We are on the left-hand side, extending our own and operated reach with third-party partnership, both at local and international level. And last but not least, we are addressing the potential of the small and medium business long tail, and we are making it synergic with our new business -- standard new business model. So I would comment on each of the 4, let's say, angles of this business compass. So coming to our, let's say, AdTech and AdProduct synergies. We are in an advanced process of full AdTech stack convergence with a single customer data platform and a unified targeting and data activation approach. And this enables the buildup of an harmonized AdProduct portfolio that is also artificial intelligence empowered. It is harmonized, but also simplified because actually, our aim is to offer very simply 6 ad formats for 3 screens in the 3 regions, and we are building a unique total video total reach offer. The interesting thing is that this delivers additional revenue opportunities because we are strengthening local offer because we are circulating best practice across the countries. But we also are in the position to offer exclusive multi-country first option choice, both to advertisers and agencies. With a cost initiative perspective or cost efficiency perspective in this virtuous cycle, we are avoiding AdTech duplication of the investment. We are accelerating both AdTech and AdProduct innovation, and we are minimizing waste in development. When we come to the much debated potential regarding small and medium business and retail media, we have a self-service ad platform already built that is integrated with core AdTech and programmatic stack and is a fully scalable platform across core markets. It's a self-service platform, the ad manager, unlocking long tail demand. And so we are in the position to address a larger advertiser base beyond the standard clients, and we are unlocking new business opportunities also for standard sales. The interesting thing is that in the long tail of small and medium businesses, there are a lot of opportunities to develop new large clients for the future. This platform is alive and kicking and revenue-generating in Italy. We have a European rollout underway Q2, Spain, Q3, Q4, Germany. And so the interesting thing is that this year, fiscal year '26, will be the first year consolidating multi-country revenues under the small and medium business chapter. With regard to international ad sales, we do believe in local execution powered by centralized coordination. We have a consistent, let's say, double access both to national and international budgets. And we have actually a European scale to compete for central spend. So we have already enabled a direct presence in central media decisions, traditionally dominated by over-the-top and digital giants. So we are able to defend the TV centrality within integrated media plans. And we are offering simplified central buying approach. The interesting thing is that in Q1 this year, we are already fully operational. We are already getting early positive response from agencies and client headquarters. They are really interested because they are offering at the beginning, a true unique alternative opportunity in what I call the prisoner's dilemma, either you go with the global giants or you are with national champions where we are offering scale. There are central budgets already flowing in and strengthening Q1 performance. Then last but not the least, we have this, let's say, media-neutral perspective. So we want to leverage our leadership in linear broadcasting, but we are also expanding our audience potential. So we are very open to any third-party partnership. With regard to the first 3 months of the year, we have a long-term partnership with DAZN confirmed. We started a Supertennis mandate that is particularly relevant for Italy, the country of the #1 tennis player in the world. With Spain, we have a very interesting agreement with Discovery and Squirrel that will impact from H1 on. And we replicated the DAZN partnership in the DACH region, specifically in Austria. So having said that, this chart simply represents our, let's say, media neutral platform. So we are monetizing advertising wherever we can offer our clients and as you see, a measurable total reach audience. So starting from owned content on owned media and expanding to third-party content on owned media, owned content on third-party media and typically the third-party content on third-party media as it is shown, and I don't comment because it's quite self-explanatory in these markets where we -- you can appreciate the fact that we pursue the same multi-platform total reach strategy that for the time being is executed to [indiscernible] degrees at the local level. So final comments. So this chart represents, let's say, the vertical north to south and south to north synergy between standard clients and the new business and small, business relationship, while the following chart remarks the fact that there is an evident synergy if we can distribute a multinational unified AdProduct on an extended total reach platform. And so this is the final representation of our virtuous cycle unfolding across Europe. Materially, what does this mean? 2 final things. So from multi-local strengths to international business synergies. So this is our portfolio of owned and operated media and business partnership. I would like to spend some few more words about the partnership between MediaForEurope and Impresa in Portugal. This is a natural alliance between 2 groups that share the same vision of media and they have built over time and articulated across media portfolio. It is designed to leverage economies of scale, positioning both routes to better navigate the increasingly competitive landscape of European media promoting growth and innovation. MFE investment in Impresa will allow the parties to foster a close and collaborative partnership. Last chart, all in one. Here, you can appreciate our multi-country and multimedia unique proposition. So we ensure cross-country solution message consistency and a seamless user experience across all markets. Thanks for your attention, and I hand over to Simone.

Thank you, Matteo, and hi, everyone, and thank you for being with us today. Before presenting the group results, I would like to make a couple of preliminary remarks, if I may. Following our investment in ProSieben, the group financial profile, scale and strategic [indiscernible]. The transaction, I have to admit, has been clearly transformational for the group. It has acted as a sort of catalyst for a profound process of internal reorganization, a strong discontinuity and the structural streamline across our core markets. All these actions are aimed at preparing the new organization for the value creation path that we have recently outlined to the market. After a few months from the acquisition, I can say, and you can appreciate that from the Matteo's presentation, a new chapter for the MFE Group has started. After the successful outcome of the voluntary offer, ProSieben has been included within our consolidation perimeter line by line, starting from our fourth quarter of 2025. Alongside the change in the scope, together with our colleagues in Germany and in Spain, numerous action has been implemented to align the accounting frameworks and treatment in Italy, Spain and the DACH region. In addition, apart from the one-offs in the various regions, further adjustments have been introduced such as the different accounting treatment of the operating income and certain refinements were also required on a like-for-like perimeter, such as, for example, the alignment of the advertising revenue definition or the revision of the amortization methodologies or accounting treatment of media for equity participation. As a result, a reconciliation the old -- of the old publicly reported figures requires a careful interpretation. Without delving into necessary details today, we wanted to provide the market and our shareholders with a new homogeneous reporting baseline package that could represent the sort of day 1 of the new chapter of the MFE Group. For this reason, we have included in the appendix to this presentation, the 2025 12 months pro forma P&L and cash flow, thereby offering a more meaningful reference point for assessing the group evolution in the coming years. And this is most important, we will provide guidance based on this new information package. Now looking at the 2025 financial highlights that we recall include only the Q4 ProSieben contribution, net consolidated revenues up to EUR 4 billion, group recurring EBIT at EUR 317 million, excluding EUR 78 million of one-off, which are mainly restructuring and transaction costs. MFE did not consolidate the goodwill impairment of EUR 138 million made by ProSieben simply because we will proceed with the PPA exercise on ProSiebenSat.1 in the next month, and we consider, let's say, the business unit -- ProSieben as a single business unit in our, let's say, impairment test. Consolidated net profit picked up to EUR 301 million, about EUR 301 million. The group reported a consolidated free cash flow of EUR 498 million, showed a resilient cash generation on a like-for-like basis, EUR 290 million further boosted by ProSieben Q4 cash contribution of a little bit more than EUR 200 million. Despite the major M&A transaction, which is -- again, has been really transformational for us, the Board of Directors proposed a dividend of EUR 150 million (sic) [ EUR 154 million ] distribution, which means EUR 0.22, the highest in last 15 years, excluding extraordinary dividend distributed in 2021, but we will come back to this on the next slide. In the financial summary, MFE net financial position for covenant purposes at the end of the year amounted to EUR 959 million, excluding, of course, ProSiebenSat.1 net financial position and IFRS liability, implying a net debt to EBITDA ratio at the end of the year of 1.5 x well below our 2.5x, which are our covenant. Moving to the next slide. You can find the full group P&L showing the reported MFE figures for final year 2025. I'll skip the advertising revenues because Matteo has already covered it thoroughly in total and provided the necessary details. Within the advertising line, there are also being clear alignment with our overall strategic direction with total advertising now encompassing both proprietary media and third-party media. And this is, again, one of the key changes that we implemented in the accounting, trying to align the Italian, the Spanish and the German reporting. Moving to other revenues. Performance was fully in line with our expectation. The reported growth in this line is primarily driven by Q4 contribution from Commerce & Ventures at ProSieben level. That said, when looking at the like-for-like perimeter, other revenues were very much aligned with the guidance that we have provided in the past. As we look at the 2026, we do not currently any material change in the other revenues line within the entertainment business at this stage. We expect it to remain broadly stable in line with 2025 as far as the MFE Group is concerned. Turning to profitability -- MFE sorry, intending Italy plus Spain. Turning to profitability, including the contribution from ProSiebenSat.1 in the fourth quarter, reported EBIT came to EUR 239 million. As said, the figure reflects EUR 78 million of nonrecurring items, mainly related to restructuring and transaction costs. Excluding these one-offs, recurring EBIT stood at EUR 317 million. Let me comment below the EBIT line now because I will try to give you some guidance at this level. Financial charges were negative EUR 48 million. We see in 2026 interest around EUR 130 million, EUR 10 million more than the compare final year pro forma 2025 of EUR 220 million. Associates positively contributed for EUR 219 million, including, as we already reported in the 9 months results, the revaluation of the acquisition of the stake of ProSieben in the first half. Going forward, we see Associates would be around EUR 20 million going forward. As far as the minorities of EUR 16 million, this reflects the consolidation of ProSieben in the fourth quarter minorities. In 2026, group minorities are close to 0, excluding ProSiebenSat.1 minorities. As a result, the group reported a net profit of around EUR 301 million. Going to the next page regarding CapEx. Total CapEx reached EUR 560 million, again, including fourth quarter ProSieben contribution. On a like-for-like basis, TV rights investment increased by EUR 44 million, reaching EUR 367 million. This is mainly due to some phasing versus previous year and to the production of all-time box office success in Italy, which costed EUR 25 million and some investment we did in Spain to reinforce the programming schedule at the very end of the season for about EUR 10 million. Looking at 2026 and beyond in Italy and Spain, we aim to achieve -- we will come back to a sort of cruising altitude level of EUR 400 million CapEx, including TV rights amortization compared to the EUR 437 million of last year. Moving forward to the free cash flow. It is clear that the cash generation from operating activities remained solid despite the numerous one-off costs and higher CapEx at a constant perimeter. Reported free cash flow picked up to EUR 498 million, of which EUR 290 million on a like-for-like basis. At constant perimeter, Italy contributed for more than EUR 65 million of this EUR 290 million, while Spanish operation generated the remaining EUR 35 million, reflecting some weaknesses of the operation in the advertising market that are now under careful attention within the group. ProSieben consolidation led to additional around EUR 200 million in the fourth quarter. Turning to the net financial position. Let me make 2 basic reminders. First of all, ProSieben financial debt is nonrecourse to MFE. This means that as far as MFE covenant calculation should be done only considering Italy plus Spain. Second, MFE's covenant parameter is different from the ProSiebenSat.1. As a reminder, again, MFE is subject to a net debt to reported EBITDA covenant set at 2.5x for 2026. So this slide shows the evolution of MFE net financial position for the financial covenant purposes that exclude the ProSieben net financial position as well as the IFRS 16 liabilities. As already discussed, the free cash flow in Italy and Spain amounted to EUR 290 million during the year, the group distributed dividend for EUR 153 million last year. And the ProSieben acquisition implied a total cash out of something more than EUR 500 million, of which EUR 462 million the cash -- in relation to the cash portion consideration for the VTO plus the related transaction cost and around EUR 42 million of the previous in-market purchases. As a result, the net financial position for covenant purposes stood at EUR 959 million. We expect the deleverage to happen reasonably fast, targeting around 1x EBITDA in the next couple of years. Thanks to our solid fundamentals, we are pleased to propose to the upcoming Annual General Meeting a dividend distribution of EUR 154 million, corresponding to EUR 0.22 per each A and B shares, which is the highest ordinary dividend in the past 15 years if we exclude the extraordinary dividend distribution in 2021. That reflects our confidence in the group cash generation profile in the future. Once approved by the AGM, just to add a technical reminder, record date will be set the 28th of July and the payment date 29th of July. This is exactly the dividend decided or proposed today is in line with our policy targets of a payout of at least 50% of the net income. In this context, despite the EUR 500 million investment in ProSieben and the uncertain economic environment, we have chosen to remain fully consistent with our shareholder remuneration approach, distributing 55% of the free cash flow generated in the year. Just a few data points as a reference. Considering the A shares, EUR 0.22 dividend represents a yield of 7.8% on the last closing yesterday, 78% on the 3-month VWAP, 7.6% on the 6-month VWAP and more than 6% on the first day of trading of the shares delivered to the ProSiebenSat.1 shareholders that have tendered their shares into the offer. We continue to follow a disciplined capital allocation strategy, balancing the long-term growth investment and deleveraging with attractive levels of shareholder return. This is our objective. Now let me start with the first key update of our new chapter that we would like to share with you today, which is essential to properly frame both our targets and our strategic direction in the medium term. On Slide 37, you can see the new segments reported based on the final year 2025 pro forma figures. This assumes 12 months of ProSiebenSat.1 consolidation, which has been realigned to consistently reflect our new footprint and the core business underpinning our strategy. Starting from the left-hand side, when we refer to MFE Entertainment, we are including the old Italian and Spanish operation and businesses together with the entertainment business of ProSiebenSat.1 -- only the entertainment business of ProSiebenSat.1. This perimeter represents the core business of our group. And as I said in the last presentation to the market, also ProSiebenSat.1 will present the numbers coherently with this approach. Obviously, in the future, we will provide the market with a full consolidated results, including both ProSieben Entertainment and Commerce and Dating businesses. But we will give guidance and indication only on the entertainment sector, which is our core business. As far as the dating ventures, only ProSieben as an independent company will provide details and information. So based on the 12 months -- looking at the number and based on the 12 months pro forma consolidation, the MFE reported total revenues of EUR 2.8 billion, sorry, EUR 2.6 billion of net advertising revenues, of which EUR 1.9 billion in Italy and EUR 680 million in Spain. Other revenues for the -- totaled for around EUR 247 million. While ProSiebenSat.1's total revenue were around EUR 2.2 billion, of which net advertising EUR 1.7 billion almost and other revenues for around EUR 520 million. On the 12-month pro forma basis, the MFE Group Entertainment business had revenues in total of something above EUR 5 billion, total cost of EUR 4.9 million, including EUR 149 million one-off on a 12-month basis and an EBIT of EUR 206.5 million. Before turning to the end of the presentation and the cost guidance for 2026, I would grab just 1 minute of your attention to revisit what we communicated in September last year. As a brief reminder, Slide 38 shows the expected ramp-up at the EBIT level following the acquisition of ProSiebenSat.1. On that occasion, we outlined a total uplift between EUR 260 million and EUR 315 million by 2029 in 4 years, with approximately 54% expected to be delivered through cost initiatives and 46% through revenues opportunities. In year 1, we assumed between EUR 53 million and EUR 65 million improvement, of which around EUR 30 million linked to joint cost initiatives. Today, we are in a position to provide more optimistic update on this cost side. Based on the EUR 4.8 billion, EUR 4.9 billion of total pro forma MFE total cost and excluding one-off costs of EUR 149 million, which, again, these are restructuring costs, cleaning up and costs associated with the transaction across all countries, we can derive a pro forma entertainment cost base of around EUR 4.7 billion in 2025 for the group in the entertainment business. Based on this, we expect to have in 2026 between EUR 120 million and EUR 160 million of total efficiency, of which cost efficiencies among the 3 countries -- sorry, among the 5 countries between EUR 80 million and EUR 100 and cost initiatives between EUR 40 million and EUR 60 million, which means approximately 2x the speed originally estimated. Basically, we are 1 year ahead of the announced plan. We are at the beginning of this journey, but anyhow, this number and this, let's say, guidance demonstrates our ability to deliver meaningful efficiency beyond the plan and an excellent work done with our colleagues in Germany and Spain. This cost initiative will be progressively allocated among the countries as they enter into the income statement after the assessment of the respective related party transaction committee. In addition, as discussed in the latest months, we're also expecting some net incremental cost of about EUR 10 million, EUR 20 million in Spain due to a combined -- 2 effects basically combined. One is the new third-party advertising agreement with Warner and Squirrel, which will have certainly a positive impact on EBIT, but incremental cost in isolation in the cost line and some possible reinvestment in content to fuel potential improvement of the advertising market in the second part of the year. All in all, we are all targeting a reduction of around 3% on total underlying entertainment cost in the context in an environment in which the expected inflation in our key markets will be approximately between 2% and 3%. Just last slide, just to sum up what we have been going through in this and apologize very long presentation, but I think it was worth to have it at this stage. In 2025, we have executed a transformational transaction that has significantly reshaped the scale of our group, making a clear step change for MFE and laying foundations for long-term value creation. As highlighted, 2025 represents the day 1 of a new chapter for the group. It's a pivotal year in which we have aligned the group around common strategy, shared vision while introducing uniform standards across operations and reporting. As expected for a foundational year, this was required substantial restructuring effort and significant human and financial investment. On this purpose, let me take this chance to thank our colleagues in Germany that have been very constructive, professional and are making a great contribution to the growth of both companies and to the value creation of the entire group. Today, we benefit from an unrivaled pan-European reach with 6-country footprint that acts as a powerful multiplier of opportunities, both on advertising and operations. The objective is to become more and more relevant in the advertising market in Europe and seek for further adaptation and cooperation within the new business perimeter. At the same time, we have maintained a strong focus on shareholder remuneration, delivering the highest ordinary dividend distributed in the past 15 years despite the acceleration in the pan-European project. Looking ahead, execution is our priority without neglecting the core business rotation in an evolving context. This brings both new challenges and significant opportunities, which we are addressing every day, having in mind that it will be a long journey made of small wins every day. Finally, while 2026 will still be a transformational year, our main objective is cash flow maximization through a fast and effective execution of the revenues and cost initiatives that the new pan-European dimension is allowing. I thank you and apologize again for the very long presentation. But now I will open the floor for your questions.

[Operator Instructions] And our first question today comes from the line of Julien Roch from Barclays.

Yes. [Technical Difficulty]

It looks like the line of Fabio Pavan has been opened.

Yes. Two questions, if I may. First of all, congratulations on the numbers. First question is, could you provide us some update on the advertising trends in the 3 countries, main countries for April and May? Are you seeing any change in the trend following the recent macro updates. Second question is a follow-up on cost. Just was wondering if you please can follow up on the real impact on '26 numbers and the upward revision targets is -- could you tell us something more on what's going better than expected or you are speeding up things?

Okay. I take the first question. Thank you. What about the outlook in this initial part of '26. So it's true more than ever that we live in a very uncertain international environment. So our recovery statement about -- we have a limited visibility is true more than ever. And this is true for us and for any other players in Europe up to now. Anyway, I could confirm that we started with a positive first quarter in Italy despite the fact that we were facing a very challenging comparison due to major events, sports events broadcasted by our competitors. First of all, the Winter Olympics are very successful in our country. So we are proud of that. But having said that, we had a positive first quarter in Italy. While Spain and Germany also showing early signs of improvement compared to the last quarter of '25, they remained in negative territory. The nice thing to share with you is the fact that we have a better outlook for Q2. Again, Q2, it's quite complicated to read because, okay, we are all under this very uncertain economic backdrop and the uncertainty linked to the international situation. We don't know how long the war will last. And we also have to manage the impact of the football FIFA World Cup schedule for June. However, the outlook for the first 5 months of the year is becoming increasingly positive. In April and May, both Spain and the DACH region appear to be improving towards a more positive trajectory. And Italy continues to demonstrate resilience. So we are optimistic.

As far as cost, let me summarize again, maybe it was not clear. I'll try to be very fast just to not lose -- waste your time. So the reported 12 months pro forma 2025 cost of entertainment, which includes the all Italy, the all Spain and only the entertainment vertical of ProSieben was EUR 4.874 billion. That was the reported. Then we announced EUR 149 million one-off, which I said are mainly restructuring costs happened in the 3 countries, some cleaning up clearly when you have such a transformational deal and all the costs associated with the transaction, both in Italy and in Germany. So the base for your consideration in 2025 should be, in our view, something in the region of EUR 4.725 billion. We are assuming between EUR 120 million, EUR 160 million efficiencies, which are, let's say, again, between EUR 80 million and EUR 100 million are pure efficiencies that will happen in each country, plus cost initiatives between EUR 40 million and EUR 60 million. The value of this cost initiative will be allocated during the year and will be part of the discussion that our respective related party committee will have and they are still -- they are actually having in these days. What are these cost initiatives? You remember that in our September presentation, we had a clear path. So we've been studying for a long time this potential initiative, and we based all our strategy in the pan-European level on this, let's say, study and this evidence that we had in -- with the Spanish business. So we're talking about something that we have -- is already running in a way which is already being implemented regarding the OTT platform operations, regarding the AdTech operation in Italy and Spain, the implementation of best practices in, for example, organization accountability, procurement, real estate management. There is also a part which is purely, as I said, alignment of accounting principle. And we are also starting to deliver, as you've seen in the last -- one of the last press release, I application -- AI application both on the production, let's say, side and also on the, let's say, service to production. So these are the main things that we are trying to implement these days. Clearly, we have -- probably you remember that we have 18 actions that we could deploy on the cost side, and we are, let's say, running on this very rapidly. So it's a learning by doing. So clearly, now that we have in play and thanks -- again, let me say that, thanks to our German colleagues that have been very open, and they shared immediately our vision, we are going to be faster than expected.

We will now take the next question. And the next question...

Julien, it's your turn now.

Yes. Thank you, sir. It's Julien Roch from Barclays.

Look who's back again? So on the EUR 4.725 billion, which is the base, so you're talking about EUR 120 million to EUR 160 million of efficiency. So let's call that EUR 140 million as the midpoint. So do I take EUR 4.725 billion and I subtract EUR 140 million? Or will there be one-off cost in...

Julien, sorry to interrupt. The line is not very clear, and I can really -- it's hard for us to understand what you're saying.

Is that better now?

Maybe if you can speak maybe a little bit far from the speaker.

Is that better now?

Much better. Much better.

Sorry about that. So sorry. Going back on the EUR 4.725 billion, you're talking about EUR 120 million and EUR 160 million of efficiency. So let's call that EUR 140 million. Do I take EUR 4.725 billion, remove EUR 140 million and that's my '26 number? Or will there be one-off costs to achieve those EUR 140 million of efficiency? And will there be normal inflation?

No, no, there are no one-off costs. There might be some additional investment, but no more, let's say, in the region of 100 -- sorry, EUR 10 million to EUR 20 million, but no additional cost apart from what I said on Spain. So on Spain, there might be additional between EUR 10 million and EUR 20 million, which is the combination of 2 effects. One is that we're getting -- one is just nominal in a way because we are getting new advertising agreement on the Warner and Squirrel channel, which clearly are creating an uplift of our advertising revenues. But at the same time, we have to give back, let's say, part of this revenue share to the publisher. And so that will be accounted in the cost line. So at the EBIT level, there will be clearly an improvement. But if we isolate the cost line, there will be clearly an increase. And then in addition to that, also, we are planning to have -- in case the advertising market in Spain improves, we would like to invest a little bit more in content just to have -- to be ready to capture all the opportunity that may happen in the second part of the year. So -- and that net impact could be between EUR 10 million and EUR 20 million in our estimates.

On top, so I take EUR 4.725 billion...

Not really. So if you take EUR 140 million, you have to add EUR 10 million or EUR 20 million, so means EUR 130 million or EUR 140 million. Sorry EUR 130 million, EUR 120 million.

But there's the EUR 10 million EUR 20 million in Spain coming from the third party and then there's also EUR 10 million, EUR 20 million coming from potential reinvestments. So this EUR 10 million, EUR 20 million twice?

No, no, no. It's just the combination of the 2. So what I'm saying is that the increase of third-party, let's say, revenue share plus some, let's say, additional investment in Spain should bring at between EUR 10 million and EUR 20 million additional cost. Not efficiency. Cost.

Okay. And then when you say that other revenue would be flat, I assume that is Italy, Spain and non-ad revenue for entertainment at ProSieben and you're not taking a view on dating and commerce. Is that correct?

That is correct.

Okay. And then historically, you never adjusted nor disclosed purchase price amortization, which was like EUR 8 million in Spain and maybe EUR 10 million in Italy. But with ProSieben, you should -- you're going to have a PPA that's going to be quite high. So does your [ EUR 425 million ] include the ProSieben PPA? And will you start to actually disclose and exclude PPA or not?

2025 does not include PPA, of course, because we don't know how much it's going to be. It's going to be a process that I agree with you a little bit, I would say, complicated. But we will give clearly evidence of the PPA that will be at the end decided and so will be -- since there's no cash, I tend to say that it's going to be somehow adjusted by the PPA, any P&L impact. But I mean, in any case, it's up to you how to treat the PPA. So it's -- in any case, we will give the evidence of what is the amount of the PPA.

Yes. But now that you're CFO, if we could get it in the actual accounts because historically, you actually never disclosed...

We will. We will.

There was like EUR 8 million in Spain and like EUR 10 million in Italy that actually was never disclosed. So yes that will be...

We will disclose the PPA.

And I actually think you should report EBIT pre PPA like everybody else.

We will. We will.

And then on -- as your EUR 120 million and EUR 160 million is basically you're like a 1 year ahead in terms of synergies, does that mean everything is going to be lower going forward, right? Because if we look at Page 38, your initial guidance was like EUR 30 million, and now you're doing EUR 120 million to EUR 140 million. So I assume that it's not going to be in 4 years, it's going to be in less and then you're going to be down by, I don't know, '27 or something like that?

Of course. I mean, I'm still on the fourth year, let's say, plan. That is for sure. So now I'm not in the position to tell you whether the synergies on the cost initiative will be more than expected as it seems, honestly, or we're simply going to have something anticipated. So same amount anticipated. I'm not yet in the position to tell you.

Okay. And last question is, when you look at the free cash flow you generate, your shares are arguably quite undervalued. Anything you think you can do to reduce that undervaluation, either buyback or buy more ProSieben and have less cash flow leakage? What's -- any consideration in terms of value creation for shareholders apart from the high dividend yield?

Well, I believe that high dividend yield is pretty much a good, let's say, shareholder return. No, for the time being, we are not planning to have any buyback even if we ask to the next AGM to renew the authority we had in 2021. And as of today, there are no plans to buy more shares in ProSieben. I believe that now the company should focus and the group should focus, as I said, on cash flow generation and synergies and maybe also a sort of deleverage of the present net debt, both in Italy and in Germany.

And our final question today comes from the line of Pierre Andrea Randone from Intermonte.

Just a quick few questions. The first one is if you can help us in having an idea about the cash generation you expect in 2026 according to this guidance. If you can remind us the dividend policy, I mean, I wonder if you can help us in understanding on what numbers will be applied to the dividend policy? And the last question is about the cost guidance. If you can help us in understanding what is the part -- the portion related to Italy and Spain of the total amount in order to understand also how the target talks to the target provided by ProSieben?

Okay. So let's speak about the cash flow forecast. Honestly, it's very difficult because clearly, as you know, we have sort of -- every year, we have a sort of sensitivity budget and plan, which is very dependent from the first line, the top line. And honestly, now it's very difficult to provide you with an indication. Clearly, it will pretty much depend on how the next few months will progress. I cannot give you any guidance, but let's say that it seems to me that the EUR 290 million might be a certain level of which we believe could be affordable, thanks to the cost initiatives that we are implementing. I'm always talking about entertainment. As far as the breakdown between Italy, Spain and Germany, let's say, we will provide you with the breakdown between Italy and Spain and Germany. Now Spanish business is fully integrated. And honestly, we prefer to -- and also from our, let's say, managerial point of view, it's just, let's say, the MFE channel in Spain more than a stand-alone business. So honestly, it's not how we -- for reporting reasons, we have budget and everything split. But from the business model implementation, this is something that we prefer not to -- because it doesn't make any sense at this stage. Sorry, I don't remember the third question.

The third question was the dividend policy.

As far as the dividend policy, going forward, we keep -- the intention is to keep our dividend policy. I mean, which is 50% of the net profit, the reported net profit and decided every year in function of the general trends of the market, the kind of leverage we are at and also the potential additional investment in M&A. So I have to say that this year, after having invested EUR 500 million in the acquisition of ProSieben, we -- the Board decided anyway to propose a pretty high, let's say, dividend yield. And therefore -- but this is a sort of exception. So -- but going forward, we will keep our policy. So no changes in the dividend policy.

We have 2 more questions. And our next question comes from the line of Milo Silvestre from Equita.

Just one question also from my side. On 2026 synergies, can you elaborate on the revenue initiatives and how are the development? And if you confirm the target on 2026?

If I got it right, the question is about revenue synergies. Am I right?

Yes. If you can confirm the 2026 target.

Yes. The honest answer is that we just started 12 weeks ago, so a very short time span. But having said that for year 1, we are on the right track. There are 2 main areas that you could easily understand they could deliver revenue synergies in the very short time period, so this fiscal year. And they are the international ad sales that, as I commented in my presentation, we are already leveraging the new area of direct relationship with headquarter and generally speaking, with international clients. And on the other hand, there is the pure additional revenue we are getting from the small and medium business because any additional euro coming from the long tail of small and medium business is, by definition, by default, by design, a new euro adding to our revenue. So these are the 2 main, let's say, areas that will contribute for year 1 in our ambitious plan. Of course, we are also addressing all the other areas we presented last year in our, let's say, equity story, so the AdTech and the AdProduct synergies. I also commented on the third-party synergies. We are offering ourselves as a unified European platform, not only for our owned and operated properties, but also for third parties. And as I commented, we are progressing in that direction. Impresa is one important chapter, but also the local third-party synergies are generating additional incremental revenues for our business. So that's the full, let's say, answer at week #13 in our first year in the new chapter, as Simone commented before.

So you confirm a 2026 target of about [ EUR 20 million. ]

Yes, it was confirmed, sorry.

We will now take the next question, and the question comes from the line of Julien Roch from Barclays.

I'm back. On cash flow, I understand you said it's very difficult in terms of forecast because there's a sensitivity based on top line. But if advertising in the 3 countries is 0, i.e., same as last year, not 0 on an absolute basis, what could be free cash flow? That's the first question. And then looking at your pro forma 12 months free cash flow of EUR 219 million which you show at the end of the presentation, with Spain and Italy at EUR 290 million, that would mean that ProSieben at minus EUR 70 million of free cash flow. Is that correct? And if it is correct, can we have a split between entertainment and commerce and dating?

Yes. Well, your assumption on ProSieben are correct. Yes, that is correct. I mean clearly, you know that they all -- I mean, for the last time, they are reporting the adjusted free cash flow. From the first quarter 2026, they will report the free cash flow. So you will have all the information to -- you can add up to our, let's say, free cash flow generation in each -- every period. As far as the assumption 0 advertising, I believe that we will remain more or less in the same, let's say, EUR 300 million cruising altitude.

Despite the EUR 120 million to EUR 160 million plus EUR 10 million, EUR 20 million reduction in cost, why is that not going into cash flow then if top line...

It is going to cash flow, but it depends when the advertising revenues will be shaped because, I mean, Matteo told you that the Italian business is flattish in the first quarter and still resilient in the first 2 months of the year. And you know that we have 90 days of cash in of our revenues. So it depends when the sort of the shape of the year. Same for Spain and same for Germany. I mean -- and probably you have seen and you have listened the ProSiebenSat.1's conference call as we did, and they said that the full year, they should have 0 free cash flow. So again, it will be pretty much depending on -- so it's not easy to say 0. It depends also when the revenues will come in. So sorry, Julien, it's very difficult for us. I'd be happy to provide you with the free cash flow generation guidance because you know how we are focused on that, but it's very difficult for us.

Okay. And then do you know the split between entertainment and commerce and dating of the minus EUR 70 million?

No -- yes, clearly, we know that, but we cannot give it to you. It's ProSieben that has to deliver this information.

We will now go to the next question. And the next question comes from the line of Pierre Andrea Randone from Intermonte.

Just a quick follow-up. I mean when you talked about April and May performances, about Spain and Germany, you talked about an improvement or about a positive figure? Just a clarification.

Thank you for the question. No, no. We are talking about positive figures. April is definitely positive in both countries, and we are quite optimistic we can confirm a similar trend for the next incoming months. So that's the answer. Thank you.

Thank you very much, Matteo, and thank you very much, Simone. Thank you, guys, for all the questions and for spending your time today with us. As always, Investor Relations department will be available for any questions you may have. Have a nice evening.