NeoGames S.A. (ALL) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Aristocrat proposed acquisition of NeoGames Conference Call. [Operator Instructions] I would now like to hand the conference over to Mr. Trevor Croker, CEO and Managing Director. Please go ahead.

Good morning, everyone, and welcome. My name is Trevor Croker, Chief Executive Officer and Managing Director of Aristocrat. I'm excited to be here today to discuss Aristocrat proposed acquisition of 100% of NeoGames. We believe this transaction will be truly transformational to our business and lays the foundation to fulfill our ambition to be a global leader in online real money gaming or RMG. Joining me today are Sally Denby, our Chief Financial Officer; and Mitchell Bowen, CEO of Anaxi and Chief Transformation Officer. Before we begin, please note the usual disclaimer statements on Slide 2 of the presentation materials. I'll now move to today's agenda on Slide 3. This morning, we'll be providing a summary of the proposed acquisition, together with detail on NeoGames businesses, the strategic rationale for the deal and a financial overview before we take your questions. I'd also note that there are additional details in the appendix, which provide extra context on the proposed acquisition, all amounts referred to are Australian dollars, unless otherwise noted. Today's discussion will be focused on the proposed acquisition. We'll not be discussing half year financial or operating results. Full details of performance for the period ended 31 March 2023 will be presented on Thursday this week as scheduled. In addition to the proposed acquisition, we're also pleased to be announcing an increase of $500 million to our existing on-market share buyback program, bringing the total of this program to $1.5 billion. This is in line with our capital management framework applying our strong cash flow generation to fund organic growth first and then to deploy capital by inorganic growth opportunities to accelerate our long-term potential, returning surplus cash to shareholders while preserving financial flexibility for the future as an ongoing priority for Aristocrat. We continue to expect the program will be completed by May 2024 and will provide a fuller update on capital management with the half year results on Thursday. Moving now to Slide 5, which provides a summary of the proposed transaction. Aristocrat has entered into a definitive agreement for the acquisition of 100% of NeoGames at a cash price of USD 29.50 per share for a total acquisition consideration of $1.5 billion and an enterprise value of $1.8 billion. We believe this is a compelling and transformative strategic acquisition. It will bring together NeoGames in our growing Anaxi business, positioning Aristocrat with a global scale and all the required capabilities to deliver our online RMG strategy by further expanding our addressable market opportunities and adding strategic capabilities that will allow us to meet a broader range of customer and player needs and fully implement our growth plans. NeoGames is a leading global content and technology solution provider for the online RMG industry, operating across the iLottery, iGaming and online sports betting or OSB verticals, with a full suite service offering. The proposed transaction represents a multiple of 15x NeoGames FY '23 consensus EBITDA and represents a premium of 104% to NeoGames 3-month VWAP as at 12 May. We expect the transaction to be accretive to EPSA in the first full year of Aristocrat ownership in fiscal 2025 on a stand-alone basis. This is before the benefits of various revenue growth opportunities that we expect to unlock through the combination of Aristocrat's market-leading content and long-standing customer and regulatory relationships with NeoGames industry-leading platform and technology. The proposed transaction is subject to, among other things, approval by at least 66.7% of NeoGames shares entitled to vote and present or represent at the relevant shareholder meetings and certain regulatory -- gaming regulatory, sorry, antitrust and foreign investment approvals. Aristocrat has entered into a support agreement with a number of major NeoGames shareholders to vote in favor of the transaction. These shareholders represent approximately 61% of outstanding capital. We expect the transaction to close during fiscal '24. Turning to Slide 6. I'd like to share how Aristocrat and NeoGames content and technology capabilities combine to offer a complete solution to operators across online RMG verticals. The dotted boxes highlight NeoGames capabilities with our existing capabilities in solid outline boxes. Together, Aristocrat and NeoGames will have a presence across the full online RMG value chain, starting with market-leading content across iLottery, iGaming and OSB. Customers will be able to provide seamless experiences to their players by leveraging NeoGames end-to-end technology and platform solutions, including RGS aggregation, player account management and managed services. The combined businesses are highly complementary and will be ideally positioned to address emerging trends and demand by adding new capabilities to meet customer needs over time. Turning to Slide 7. A central feature of this proposal -- proposed acquisition is a powerful ecosystem that will emerge through the combination of our businesses, underscoring how unique and timely this opportunity is for Aristocrat. By adding our world-leading content and deep customer relationships across our gaming and digital businesses to NeoGames technology and platforms will create a positive flywheel that will deliver considerable long-term benefits. This will enable us to accelerate content distribution globally, position us as the technology partner of choice with online RMG customers and ultimately, create an additional sustainable growth engine for the group. Turning to Slide 9. I'll provide more detail on the proposed acquisition. NeoGames is a B2B provider of innovative platform and content solutions across online RMG verticals. It is an industry-leading global iLottery provider offering a complete solution across content platforms and services and predominantly government customers, primarily in North America and Europe. NeoGames has a dedicated iLottery studio and 67% of iLottery shares in the U.S. through a joint venture with Pollard Banknote Limited. AspireCore is a leading online RMG technology provider, offering a full-service platform and managed services solution to iGaming and OSB operators globally. This includes a comprehensive and feature-rich player account management platform or PAM. Aspire currently serves over 88 brands and over 30 partners across Europe and North America. Moving now to Pariplay, which is a global leader in iGaming content aggregation and development. It distributes iGaming content through its proprietary aggregation platform as well as operating in-house content studio wizard and a game development kit or GDK. It currently serves more than 140 operator customers with over 15,000 third-party games from leading suppliers and over 1,000 brands. Finally, to BtoBet. This is a complete sportsbook solution for the global OSB industry, including a feature-rich platform and services. These business segments are highly complementary. They operate on a common platform and technology stacks offering a complete solution that will facilitate seamless future integration and expansion in online RMG. Moving to Slide 10. NeoGames is a scaled global player with over 200 customers and operates across over 50 regulated jurisdictions. It operates in high-growth segments with a combined TAM of USD 81 billion, USD 11 billion for iLottery and USD 70 billion across iGaming and OSB verticals. NeoGames holds leading positions in a number of markets and regions, as previously set out. These markets are largely fragmented and offer significant opportunity to continue to take share over time. I'll now step through more detail on NeoGames business units, starting on Slide 11. NeoGames provides both innovative content and solutions to the iLottery market across the globe with deep capabilities and core competencies that have built up over many years. ILottery is a highly regulated segment with long-term contracts that provide strong and growing recurring revenues. It is also highly complementary to NeoGames' other business segments as iLottery has proven to be an effective way to enter new markets. ILottery footprints can then be leveraged to facilitate expansion into iGaming and OSB segments as regulated jurisdictions open up new forms of online RMG. Turning to Slide 12. AspireCore provides 2 main offerings: a PAM and managed services for both iGaming and OSB. It is a leading provider in Europe serving over 30 partners with 88 brands. AspireCore also benefits from its deep understanding of B2C given its roots as a B2C business, which offers a significant [Technical Difficulty] Thank you, we're back. Slide 13 focuses on Pariplay, which operates in 28 regulated jurisdictions where it provides aggregation services to over 1,000 brands. It has access to over 15,000 third-party games from leading suppliers bringing an impressive catalog of content for operators. It also has a dedicated in-house content studio and TDK as previously referenced, which provides a turnkey solution, enabling third-party developers to rapidly scale on its platform. This is all combined with a suite of unified retention and engagement tools, making Pariplay a partner of choice for customers. Finally, looking at BtoBet on Slide 14. BtoBet offers a sportsbook platform linking scalable content and a full suite of managed trading services, including omnichannel capabilities and player engagement tools. This has supported a rapid growth across Africa, Europe and Latin America, where BtoBet now serves over 50 brands across 20 partners. Moving now to Slide 16. I'd like to share more on the strategic and financial rationale for the acquisition. First and foremost, the acquisition of NeoGames will immediately position Aristocrat as a scaled global leader in the large and growing online RMG industry. The acquisition also deliveries significant and exciting revenue opportunities as we combine Aristocrat's leading game content and long-term customer and regulatory relationships with NeoGames' technology and platform solutions. Third, the transaction offers significant international growth opportunities for the combined group, particularly to expand in large, growing and still relatively nascent North American segment as well as more broadly across Europe and the rest of world markets. In addition, through NeoGames leading iLottery business, Aristocrat will partner in a highly regulated, attractive and complementary adjacency, which will also facilitate further penetration across other online RMG verticals. Aristocrat plans to invest and grow in this important vertical. And finally, in addition to the strength of the underlying business, NeoGames has an experienced and proven management team that will continue with the business going forward, contributing to overall online RMG growth and supported by a strong cultural alignment between our 2 businesses. I'd like to expand on each of these powerful benefits a bit more across the next 5 slides, starting with Slide 17. The combination of NeoGames and Aristocrat will immediately deliver our ambition to build, scale and capability in online RMG and effectively complete our build-and-buy strategy. Aristocrat will be positioned to compete in a total addressable market of USD 81 billion across the iGaming market, iLottery and OSB value chains. Furthermore, our ability to offer a full suite of services will enhance our ability to become a partner of choice for online RMG customers across segments, distribution channels and markets globally. Slide 18 highlights the significant revenue growth opportunities we believe this acquisition will offer. For example, we expect to rapidly accelerate the distribution of Aristocrat's leading content by Pariplay's strong aggregation network. We also expect to leverage our existing deep customer relationships to expand the placement of AspireCore PAM and managed service offering, along with Pariplay's aggregation platform and BtoBet OSB platform, being able to offer a complete solution to customers across verticals and a common tech stack provides further advantages as previously noted. Meanwhile, we believe our deep regulatory experience and long-term relationships will also accelerate NeoGames efforts to expand into new jurisdictions. On Slide 19, we provide further granularity on international growth opportunities for the combined group. North America represents a large, growing and still relatively nascent market opportunity, particularly in iGaming. While Europe is a larger and more developed market, North America is expected to quickly catch up in the years ahead as regulation increases across verticals. Again, the ability to leverage existing relationships and offer a complete solution to customers will deliver strategic benefits and enhance our ability to grow in North America. Turning now to Slide 20, which focuses on iLottery, a new segment for us. As I previously noted, iLottery is fast-growing, attractive complementary vertical which is highly regulated in nature and NeoGames has a strong position in key markets, including 67% share in the U.S. As iLottery is often the first online gaming vertical -- online RMG vertical to be legalized in many markets, NeoGames' established relationships with operators and regulators should facilitate growth in other regulated online RMG verticals as they come online. We believe we can leverage NeoGames leadership position and innovation in U.S. lottery in particular, to expand iGaming and OSB as more jurisdictions regulate. Finally, turning to Slide 21. Key members of NeoGames proven management team who have scaled the business successfully over a number of years have committed to remain with NeoGames under Aristocrat ownership. We're very happy to be working with a team that has a track record of developing and scaling complex technology and has deep RMG capabilities. NeoGames' CEO Moti Malul will also be among the leaders coming across with the transaction and will be instrumental in furthering Aristocrat's overall online RMG efforts. We see strong cultural and business alignment across our 2 companies. Both Aristocrat and NeoGames customer-first approach and commitment to being a partner of choice has underpinned their successes. Further, both of our businesses have a strong focus on innovation and a people-first culture. NeoGames shares our commitment to sustainability and responsible gameplay, which is central to everything we do. So we're excited by the talent and capability that will be joining Aristocrat and look forward to this partnership. I'd now like to turn to NeoGames financials. NeoGames has been a successful high-growth business. It has delivered a revenue CAGR of 38%, an EBITDA CAGR of 34% since 2019 on a pro forma basis with each of its divisions contributing to this performance. We'll now provide more on the fiscal '22 year in the chart and how you should think about it when -- about the revenue and profit numbers under Aristocrat. Slide 24 provides a reconciliation of NeoGames public financials to their full year 2022 pro forma numbers in U.S. dollars and the illustrative adjustments that we expect to make under Aristocrat ownership. I'll step you through a few of those important points. Firstly, NeoGames public numbers in the first column do not include a full year impact of the acquisition of Aspire Global, which was finalized midway through fiscal 2022, the pro forma adjusts for this. Looking ahead, there are 3 main call-outs on the adjustments to provide consistency between NeoGames pro forma financials and risk reporting and accounting treatment. One, the iLottery joint venture, NeoPollard Interactive will be reported in associate interest rather than being proportionately consolidated in revenues as reflected in NeoGames pro formas. The JV profit will be included in Aristocrat's EBITDA. The second adjustment on the slide is for stock-based compensation expenses, which will be included in our calculation of EBITDA. And thirdly, NeoGames capitalizes certain game development costs expected to be expensed under Aristocrat's accounting policy. All in, you'll note the adjusted pro forma EBITDA of $59.5 million in the final column for FY '22, which aligns with EBITDA used in other financial slides in the deck. Moving to Slide 25. The acquisition will be funded with existing cash resources, resulting in a pro forma net debt-to-EBITDA ratio of 0.7x based on our fiscal '22 financials. It should be clear from the slide that the adjusted balance sheet items do not take Aristocrat's first half result fiscal '23 into account or the additional $500 million on market share buyback that we announced today. Slide 26 provides a consolidated view of the company in Australian dollars, reflecting the fundamental adjustments we've discussed in the previous slides. As I outlined upfront, we expect NeoGames to be accretive to EPSA during the first full year of ownership, which is expected to be fiscal 2025. It's important to appreciate that this expectation does not factor in any of the revenue opportunities we expect to deliver, which are key rationale behind the deal. Before we conclude, I want to round out the financial discussion and revisit the strategic revenue opportunities we highlighted earlier. I'm on Slide 27. While we are not quantifying these revenue opportunities today, we thought it was important to provide some specific examples of where they are expected to be delivered across the online RMG value chain. Looking through the value chain, there is an opportunity to bring Aristocrat's high-quality content into Pariplay's global network of over 140 operators while also leveraging our numerous relationships across over 300 jurisdictions globally to a new contracts with AspireCore and Pariplay. In particular, we believe we can win new PAM and managed service contracts by providing an integrated end-to-end solution of content, platforms and services. And while we're excited about the immediate opportunities in this transaction provides, we see significant potential to expand into large and growing North American market as it opens up over time. Overall, we see significant opportunities across iLottery, iGaming and OSB through this vastly expanded network of content and customers using this combined technology platforms of the enlarged group. In summary, we're extremely excited about the transformational news that we are sharing with you today and the benefits we believe it will deliver for our customers, players and shareholders for years to come. The proposed culmination of Aristocrat and NeoGames will instantaneously create scale leading global business with a full range of capabilities to grow in online RMG and deliver our build-and-buy strategy. This proposed acquisition brings together Aristocrat's world-class Land-based and social gaming content and a long-term customer and regulatory relationships with NeoGames proven online RMG platform and technology capabilities to forge a true industry leader across the full online RMG vertical. This is very much aligned with Aristocrat's strategy investing for long-term growth, and we are energized by the broad range of new opportunities that this will present. We look forward to welcoming NeoGames management team and the talented employees to accompany us on this journey that lies ahead. Thank you with that -- thank you. And with that, I'll ask the operator to open the line for questions.

[Operator Instructions] Your first question comes from Matt Ryan with Barrenjoey.

Just had a question on the logic for the acquisition. It's obviously been a while since the Playtech acquisition was terminated. So just curious on what you saw in NeoGames that perhaps other deals didn't assuming that you've been looking since then and whether there was anything, I guess, more recently that sort of got you over the line with Neo?

Yes. Thanks, Matt. I appreciate the question. We've been in this market for a number of years now. We've continued to look at the market. We looked at what are the strategic importance for us to entering into the RMG market, and we've spoken about talking to our customers and talking about how we leverage our content. When we looked at this deal, particularly, NeoGames brings a very good tech stack, so a very solid technology stack that comes with it. It brings a strong ability to fill out in the OSB market and the iLottery and the iGaming market. So it brings a whole suite of offerings. It's got a proven PAM that is now used in a number of markets in Europe and the ability to then leverage that PAM into the North American market as well. We also felt that the fact that they have consolidated the business, they've got common management across Aspire and Neo. They're a proven management team that have been around the industry for some years. They offer great, if you like, cultural alignment to what Aristocrat is. And also, we saw that they had a very strong certainty with 61% of the founding shareholders committing to the transaction as well. So we've continued to stay in the market. We believe this is a compelling solution, very impressed by the management team, the product and the customer relationships and excited by the opportunity that iLottery provides to Aristocrat as well.

That's really helpful. And I just want to clarify, I think in your prepared remarks, you might have said something about that the deal sort of completes the sort of buy and build strategy in regards to RMG and obviously, you've announced a new buyback on a go-forward basis. So I guess just thinking through your capital allocation framework, are we sort of to suggest now that sort of RMG is sort of complete, in your words, and perhaps M&A might fit outside of that, but we might also be looking at, I guess, the period of capital returns rather than M&A? Just any color on that sort of thing would be really helpful.

Yes. I may make a couple of comments and then hand to Sally. But I think the key thing, first of all, this does build out our build and buy. The build strategy is going well, and we'll talk to you about that later in the week. I'm very happy with what we're learning and how we're growing that business going forward. This does give us a complete solution like we said. It gives us exposure in Northern -- in Europe, and it gives us access to North America, so we can scale our content into Europe and also into North America. If you think about what does this mean for the group, we've continued to focus on investing in the organic business is our #1 priority. So we continue to spend -- I'm sorry, D&D dollars to drive the best content technology and hardware into the business every year. We use UA to accelerate our growth, and we apply capital to our gaming operations because that remains our #1 priority. And number two, our priority is to use the capacity of the organization to accelerate our inorganic growth, and that's what this deal does. It accelerates the inorganic growth for the longer-term shareholders and for the business as a whole. And at the same time, with the strong cash flow generation, we're returning cash back to our shareholders. And we continue to see that as a viable solution at this point in time. We've now committed to $1.5 billion of capital return. At the same time, having the confidence to invest in the future of the business and it doesn't constrain our ability to consider further M&A for the parts of the business when and if they become strategically important to our business. I don't know, Sally, if you wanted to add?

No, I haven't really -- I haven't got any thoughts on this one.

Your next question comes from Rohan Sundram with MST Financial.

Just a couple for me. Trevor, can you just enlighten us on how the acquisition originated? And just how confident are you of deal completion? I take on board your comments around the shareholder, the undertakings. And just which regulatory approvals are you after and how confident are you on those?

I'll talk to the confidence levels, Ryan, and then Mitchell might talk to some of the more technical aspects of it. But we've been engaging this segment for years. As you may recall, we've talked to you a number of times about this, and we've been continuing monitoring the markets. And this target actually changed its structure last year, which made it a more possible and probable conclusion. And so we've been continuing to monitor, and we've been engaged with this target for over 12 months and been engaging with them on a lot of basis, this is about understanding them as people, understanding their business, understanding their markets, understanding their technology and really getting to the core of what drives their organization as a whole. From that point of view, we've satisfied ourselves well in the process, and then we started to move into more of the completion and the deal structure and what are the opportunities and what were the synergy growth opportunities for us as partners going forward. If we get to some of the technical side of it, I think we have 61% of the shareholding capital committed to this transaction now. We believe in that we have absolute confidence in their ability to deliver that proposal to us. Noting we only need 66.7% to actually move the transaction forward through the regulatory approval processes. But Mitchell, you may just want to talk a little bit about the regulatory piece and just your engagement with the teams as well.

Yes. Thanks, Trevor. I think the only observe I would have is, I think, as you're aware, Rohan, we spent a fair bit of time looking at the market, understanding where we should or shouldn't play, understanding customer feedback and then making an assessment on what makes logical sense for us to enter. And all of these adjacencies make logical sense for us to enter. As Trevor talked about, the NeoGames themselves have the baseline technology and building blocks for us to now go and execute against a lot of the revenue synergies that we've identified through the deck. And as we've talked about previously, as markets like North America continue to regulate, as our customers continue to get more and more interested in the digital regulated space, that's why this transaction makes sense for us today.

I want to just draw a line on that too, Rohan, just in case. The acquisition is not pending on market openings. This is all about us taking share in the markets we operate in, scaling in the markets that NeoGames operate in, and it's not dependent on markets opening for us to have the confidence on the future value of this acquisition.

Just to confirm, and sorry if this is in the presentation deck. But is NeoGames only in regulated markets? And is NeoGames in the major U.S. iGaming markets?

I can take that one, Rohan. So yes, NeoGames are in the major regulated U.S. iGaming markets and through Pariplay and AspireCore and, obviously, the NeoLottery. And what we're looking through from expecting the markets over through Europe in transitional sections, but it's really immaterial in the grand scheme of things.

Your next question comes from Andre Fromyhr with UBS.

I guess, Trevor, you've been pretty open in previous conversations around the need to build PAM capabilities or more specifically to buy PAM capabilities. Is that sort of the underlying motivation around this? And I guess, as an extension to that question, do you have plans to grow the lottery of the sports betting businesses further or is it mainly about getting the PAM in place of your existing Anaxi offering?

Yes. Thanks, Andre. I -- first of all, this business comes with a very, very strong PAM. If you go back to the core fundamentals of the business, it comes with a very, very strong PAM. And we get a PAM that's proven and its scale and operates in iLottery, operates in sports, and operates in iGaming. So we get a very good PAM product, and we're very happy with the PAM. And that was part of one of the attractive offers to why this target was there. Your question about do we intend to grow iLottery and grow sports? That's all we do. We don't buy business to manage, and we buy businesses to grow, and we see a great opportunity to invest to grow iLottery. And we see that sports is an important offering for our customers when you start to think about the total RMG solution. And therefore, we'll continue to work with BtoBet and also the NeoGames businesses, and we intend to grow all of those as we increase the PAM penetration through our relationships and regulatory positions in North America, leverage their PAM and aggregation content outside North America and then invest behind securing more iLottery contracts and also offering sports across the whole portfolio for our customers.

And just more on the process to play out. So the timeline you flagged sometime during FY '24, does that -- how critical a period of time do you think that is for the industry? And do you have any sort of agreements with Neo about how they continue with their strategy or how you might even work together in the meantime, just to make sure that you don't miss out on opportunities as the industry changes rapidly?

Yes. First of all, a couple of steps here. There's obviously the shareholder approval step, which is really determined by Neo and that process is going to take a short period of time. The larger amount of time is actually the standard regulatory process. So whether it was this asset or any other asset, would be the regulatory approvals that are required under gaming licenses, which is predominantly the long pole in the tent from a timing point of view. As it goes to existing markets, they already have a pipeline of activity to continue to run their business and drive in existing markets. We obviously would be keen to work with them once we are in a position to work with them post close. But I don't think that we're missing out on opportunity in North America, if you look at what's happening in the iGaming markets. We'll talk to you about the Aristocrat penetration in the build side of iGaming. They're also making penetration into iGaming and providing solutions through Pariplay already. The pace of market opening is not determining -- is not seeing us miss out an opportunity, and we believe that over the close period that there'll be more interest around how Aristocrat and NeoGames will provide a full suite solution to our customers in North America.

Okay. And just one more, if you don't mind. You previously described the layers of the iGaming market with sort of aggregation and the PAM being quite separate roles. Can you just confirm or provide a bit more detail as to how, as the PAM provider, you don't need to have the aggregation as well that you can be sort of -- you can work in hand with other aggregation technology, if that's what the operator proceeds with?

Yes, sure. I'll hand to Mitchell, who can just give you the -- how it all works together and...

Yes. I think the question -- if I turn to the question, you do not need to have the same PAM with the same aggregator with the same content, all connected. So the PAM is open. It can connect it to a range of RGSs or remote game servers and aggregators and the Pariplay aggregator can connect to multiple different PAMs, does not have to be the Aspire or Neo PAM. So the way the value chain works that we talked about previously, content aggregation platform and services and then operations, what this does is it brings us all the way up in the value chain to the platform and obviously fall short of operations, which is never our intention. So what it does is it gives us flexibility -- or an operator flexibility to have a full tech stack end to end or we can use parts of that tech stack across different customer bases to add value where appropriate.

Your next question comes from David Fabris with Macquarie.

Look, I'm curious on how you think about scaling into other RMG verticals like Live Dealer and iTables. I mean is this something that will happen near term? You need to wait for NeoGames to settle. And is this something you can build or is this another area where you need to acquire these verticals?

Yes. Thanks, David. I appreciate the question. I'll go back to the point that we believe this completes a solution from our perspective. Now there are those other verticals that, over time, like could we consider a bolt-on in other parts of business or an adjacency, we would look at those. What this gives us is it gives us a great iGaming platform, gives us strong iLottery position and it gives us sports. And all of those, we believe we can scale on the PAM that we're buying through this. Those other adjacencies are there for us to enter once in time. But at this point in time, our focus is on integrating this business, scaling this business using the strength of our customer relations, our regulatory relationships in our content with the technology behind Neo and their capabilities. That's the focus, and we see great opportunity over the next few years to do that. And at some point in time, if I -- if live dealer is required or poker, et cetera, then we will consider those based off customer needs, but this gives us a platform to be able to provide that to them.

Got it. And I know this question has already been asked. But if we're thinking about M&A here, I mean, could we still see sort of sizable studio deals for Pixel United or Land-based or do you need to take a break now to integrate NeoGames?

Look, I think, to be honest with you, David, we've made a big commitment here about the future growth of the company. Like we said, this is about the medium-term growth of the company. We have the capacity. You can see the strength of the balance sheet of Aristocrat. You can see our commitment to share money with our shareholders, but also to continue to invest to drive both the short- and long-term delivery. It doesn't preclude us from doing those deals. We will still focus on talent deals, but I don't think you need to do big deals to do talent deals when you think about what we're building out. So it will be about our strategic allocation of capital. It's the right things that actually accelerate our strategy, not just what's on the market at a good price.

That makes sense. And just sorry, one last question. Just with NeoGames, can you clarify whether they bring game development talent or it's more third-party content?

Yes, sure. I'll hand to Mitchell, for you, on that one.

Yes, David. So they have 2 content studios, 1 within the NeoGames iLottery business and 1 in the Pariplay business that are producing content for those respective verticals. And then the Pariplay aggregation program they have in place and their content creation tools like GDKs are available for all emerging studios to develop on that want to gain distribution through that platform.

The next question comes from Adrian Lemme with Citi.

First question was just understanding the strong growth prospects for iLottery. It's been mentioned there, 26% CAGR growth. Is that new markets opening up or can you just talk to that, please?

Do you want to just put some context around it?

Yes, I think that's historical.

Yes. The context in that document is historical, but the way forward we look at it is in a couple of buckets. Obviously, combining -- as we've talked about in the presentation, combining Aristocrat content through the iLottery channel. Obviously, as new markets and new deals, win and then new innovation through functionality that comes in from player engagement, those sorts of things, is how we plan to grow that iLottery segment in partnership with Neo.

Right. Yes. No, I was just reading it off the Slide 20 to 22 to 27 forecast CAGR. And then just the second question, just trying to understand what kind of management turnover has played out through NeoGames business because they've obviously had a series of acquisitions where they bought Aspire and Pariplay and BtoBet or whatever over time. So I understand that the top 3 people have committed, signed letters to intent. But can you talk about how stable that management has been at the lower levels, please, and the intention of retaining those people?

I'll just make some broad comments, Adrian, and Mitchell can make some more context. First of all, that's a very seasoned and cohesive management team that have been working together and working with the founders of the business. So these are a tight group of people that are operating and investing in NeoGames for a number of years. So very strong and tight relationship from that perspective. We have commitments with a broader group of people that we believe are important to the future of the combined organization that are going to come with the transaction as well. And we feel very comfortable that they are a great team that fit well with our culture and that are going to be really accretive as far as teaching us and helping us understand this segment, but also continuing to leverage their growth through the segment as well. But Mitch, you might just give some context on some of the people and depth that you have in turnover.

I think the only thing I would add is, I think someone's got to remember that these businesses used to be together. They've known each other for quite a while. They're split up in order to grow in their independent channels, and they've recently come back together. So the management team have got years and years of experience working together. Culturally, they share very similar values to what we do within Aristocrat. And looking forward, in terms of your specific note around attrition, they're in growth mode. And so they've been in growth mode for quite a while, as we've talked about and will continue to be. And so that business are very well aligned to what they need to do going forward and have worked together for quite a few years.