Organization of Football Prognostics S.A. (OPAP.AT) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. I am Gaily, your Chorus Call operator. Welcome, and thank you for joining the OPAP and Allwyn conference call and live webcast question-and-answer session to discuss the combination of OPAP and Allwyn announced this morning, creating a global lottery and gaming operator. Please note, our presentation has been distributed and is also available on the OPAP Investor Relations website. [Operator Instructions] The conference is being recorded. At this time, I would like to turn the conference over to Mr. Jan Karas, Chairman and CEO of OPAP S.A. Mr. Karas, you may now proceed.

Thank you very much. Good afternoon, everyone, and thank you for joining us today. I'm Jan Karas, Chairman and CEO of OPAP, and I'm very pleased to welcome you to this Q&A session in the context of the proposed combination of OPAP and Allwyn. Our full announcement presentation, including a recording of our announcement are available on our website for you. I'm joined here in this Q&A session by my distinguished colleagues, Pavel Mucha, CFO of OPAP; Robert Chvatal, CEO of Allwyn; Ken Morton, CFO of Allwyn; Katarina Kohlmayer, Member of the Board of both Allwyn and OPAP and a representative of KKCG, Allwyn's controlling shareholder. Before diving into the Q&A, we would like to summarize briefly how the transaction we announced earlier today creates a stronger, more resilient and more innovative business for the future. Every industry has defining moments, moments where scale, strategy and vision align to build a stronger and promising future. And this for us is one of those pivotal moments for OPAP and Allwyn, and we are very excited for what the future holds. Together, we are not just executing a transaction, we are shaping the future of the gaming industry. And I'm pleased to say that the transaction we are introducing to you today has been unanimously recommended by the OPAP's Board of Directors, and the decision was driven by a number of reasons that I would like to share. First, combining OPAP and Allwyn, we are bringing together 2 established leaders. One is deeply rooted domestically. The other one is a multinational innovator. Together, the 2 companies will become a global lottery and gaming champion. Starting with OPAP, the #1 lottery sports betting and iGaming company in Greece. As many of you know, we have deep roots in the local community, society and country. In addition to that, we have a successful track record on the ATHEX stock exchange, where we have generated significant value and returns for our shareholders over the years. Turning to Allwyn, leading lottery operator across 7 markets with well-established positions in lottery, retail and online as well as in iGaming. It's also a significant shareholder in Betano, one of the largest and fastest-growing online sports betting and iGaming businesses globally. Betano is also the clear leader in Brazil, one of the most exciting and fast-growing gaming markets in the world. And most recently, through the planned acquisition of PrizePicks in the U.S., Allwyn becomes the category leader in the high-growth daily fantasy sport market. Now looking at the combination itself. Together, OPAP and Allwyn will create a highly diversified platform with leading market positions, a platform with significant exposure to some of the most exciting growth markets in gaming, a platform with strong, high-quality cash flow generation and a platform that control its own faith and meets the demands of today's consumers through its in-house tech and best-in-class content. The combination is also set to benefit from Allwyn's strategy of reinvesting cash flow in value-accretive M&As, an area where it has an excellent track record. Importantly, Allwyn has consistently paid large distributions to its shareholders over the years alongside its M&A strategy and the combined entity's dividend policy will include a continued commitment to substantial cash returns. So overall, the combination presents a highly attractive opportunity, delivering both income and growth for investors while establishing a global leader in gaming entertainment. This brings us to what the proposed transaction means for OPAP shareholders going forward. This is a fundamental step change. It positions our shareholders to participate in the success of a global leader. The combined business will strengthen every key commercial lever that matters in today's gaming industry, scale, growth, digital leadership, proprietary technology and content and the platform and optionality to execute value-creative M&As. It positions us to compete more effectively, innovate faster and capture opportunities that were previously out of reach. The combined business will also be much more diversified, increasing the levels of an optionality we have to grow and improving the quality and resilience of our cash flows. Furthermore, the new platform will operate as one under the Allwyn name and brand. OPAP will also adopt its identity in Greece, benefiting from a vibrant global brand that embodies innovation, entertainment and leadership in gaming. The financial benefits are equally compelling. The transaction is double-digit accretive to both earnings, adjusted EPS and cash flow -- free cash flow per share from the first year post closing. Shareholders will also benefit from a base dividend that remains unchanged at EUR 1 per share with upside through special distributions or buybacks. Importantly, this transaction provides exposure to a significantly higher growth and more diversified business and is no longer dependent on our GGR contribution prepayment, which means the dividend stream is of much higher quality and more resilient even after 2030 when the GGR contribution benefit would come to an end. This is about creating value today and building a stronger, more diversified future-ready OPAP for tomorrow, which is something we are all here excited about. With that, let me now hand over to Katarina, who will provide you with more details about the transaction.

Thank you, Jan, and good afternoon, everyone. Let me start by saying that this is a really exciting moment for OPAP and Allwyn, one that I believe will define our continued future success and one that I'm proud to be presenting to you today. I'll start by outlining the structure of this transaction. As of today, Allwyn owns 52% of OPAP with the remaining 48% held by shareholders like you. As a part of this transaction, Allwyn will inject all of its gaming assets, excluding its stake in OPAP itself, into OPAP in an all-share transaction. Post transaction, KKCG plus J&T Arch will hold 78.5% in the combined company, with the remaining 21.5% held by OPAP's public shareholders. Pro forma for the transaction, OPAP shareholders will own a significant stake in a much larger and more diversified business with exciting growth prospects and more resilient cash flow generation. The combined entity will be rebranded to Allwyn and importantly, will retain its ATHEX listing. Last but not least, our Greek roots and our long-standing commitment to country are reinforced by this transaction. OPAP's deeply rooted Greek heritage is and will remain a core strength of the combined group. Now let me run through the key terms of the transaction. Post transaction, shareholders will continue to benefit from a clear dividend policy, a minimum EUR 1 annual dividend for each financial year, plus an EUR 0.80 dividend post closing, which effectively replaces what would have been OPAP's final dividend for 2025. The combined company will be led by the existing Allwyn management team. Robert Chvatal will be CEO. Robert has been leading the group from the very beginning, initially as CEO of the Czech business, then as a group CEO leading the international expansion. Kenneth Morton will be CFO. The current OPAP management team will continue to lead the operations in Greece and Cyprus and our founder, Karel Komarek, will chair our Board of Directors, which will be comprised of 50% independent directors. Through this transaction, we are transitioning Allwyn from a private company to a listed business. Therefore, we have opted to introduce a dual class share structure with ordinary and preference shares. Preferred shares carry negligible economic value but provide higher voting power and are expected to be held exclusively by KKCG. KKCG will handhold 85% of voting and 75% of economic rights. Why are we doing this? Our strategic goal is to grow Allwyn and maximize long-term shareholder value. The structure enables us to use equity for future growth whilst maintaining Karel's control and active stewardship of the business. The headquarters of the combined group will be in Switzerland with our listing, as mentioned previously, remaining on ATHEX. Furthermore, we intend to pursue an additional listing on another leading international exchange. And before giving the floor to the Q&A, I would like to invite Robert to make a few final remarks.

Thank you, Katarina. And to conclude, please allow me to summarize and reemphasize some of the key reasons why this transaction is very compelling. Since 2013, KKCG and Allwyn have accompanied and supported OPAP and transformed it into a modern Greek gaming champion, delivering strong returns to shareholders. We have also observed natural limits of one country focus, and this transaction will be the next stage on that journey. The proposed structure positions OPAP shareholders for success in a fast-paced and changing industry, thanks to Allwyn's scaled and differentiated platform, a platform of own tech stack, own content, additional competencies and financial power to compete and give back on a global scale. Our track record is more than proven. OPAP shareholders will benefit from a unique combination of growth, geographical diversification, a broader product portfolio and steady cash remuneration. I have been part of OPAP and Allwyn's journeys from the very start. I'm a member of both Boards, and therefore, I would be truly thrilled to continue partnering with you as shareholders in the combined business. On a very personal note, I have an enormous respect to our Greek team and Greece is remaining very important base for Allwyn with OPAP, Allwyn Lottery Solutions, Stoiximan/Betano as well as Novibet teams. And this marks the beginning of an exciting chapter, and we couldn't be more energized about the journey ahead. We value the trust that you have put in us as stewards of OPAP, and we're committed to continue to deliver on that trust with purpose, passion and performance. As mentioned at the outset, this is only a brief summary before diving into the live Q&A, and we encourage and invite you to review the full presentation on our website. And with this, we will now open the floor to Q&A. Thank you very much.

[Operator Instructions] The first question is from the line of Young Ed with Morgan Stanley.

I've got 3 short ones, if I can. The first is on brand. Could you give more color on the decision to change the OPAP consumer brand to Allwyn? I know you've been advertising it, including on F1, but would love to hear what you think it gives you and whether we should expect this to be used as a consumer-facing brand more widely across the group over time. The second is on the listing. You made the commitment to Greece very clear. You've also talked about pursuing additional listing on a leading international exchange, such as London or New York. What are the key considerations for you in that choice? And do you have any targets around, for instance, trading liquidity for the stock? And then finally, on digital, so scale and reinvestment is clearly a big part of the rationale for the deal. Can you talk through the steps we should expect you to take on the digital side as you harness that scale, particularly as you complete on Novibet and PrizePicks in addition to the wider group digital assets? And I guess embedded within that question is whether you think it will be strategically beneficial to own a majority stake in Kaizen in your view?

Thank you for the question. I will start with the first one regarding the brand. Yes, you have correctly noted that there is already a lot happening in Greece and proceeding all the way through to changing OPAP to Allwyn, for us, it's been a strategical decision that has been based on our need to stay connected with our customers in modern, relevant, attractive, innovative and meaningful ways while further upgrading our proposition to meet evolving expectations, especially when it comes to younger generation, but generally all of the customers. So it's part of the strategy, which is much broader than just rebranding. The rebranding is one of the vehicles for what we want to deliver. Now the choice of Allwyn, Allwyn is a modern, fresh and vibrant brand. And we have, before making this decision, thoroughly explored its use in the Greek and Cypriot market. And not only based on the market research and analysis that have clearly shown the positive reception, but also very lately with all the activities that we are already doing in Greece, this certainly proves to be the right choice. If we take the international perspective, the rebranding also serves the Allwyn's broader ambition of becoming a B2C brand as well as its vision of being the leading gaming entertainment company in the world. So that's where it obviously helps as well to have the brand presence in Greece.

On the listing, then perhaps I'd start maybe by stepping back a little bit and explaining the value that we see from going public as Allwyn. Historically, we've been able to fund all our growth with cash flow and on the balance sheet. But we do see some significant financial and strategic benefits to being listed. And however, for those to play out, the listing needs to be a listing, which is liquid. So liquidity will absolutely be a key criteria when we consider which secondary venue we would look to pursue and making the OPAP stock more visible to a broader pool of investors is one of the major benefits that we see from a secondary listing.

Your last question regarding Kaizen. Well, Kaizen is a -- Kaizen Betano. It's a fantastic business. As you know, we own a minority stake. It is separately managed by its founders and the management team. So I think it has an independent path. So I think nothing is changing vis-a-vis us being a minority shareholder in a partnership with the other owners. But we do see a value in owning a sports betting platform, and that's, hence, why we are investing into Novibet. The transaction hasn't closed yet, but we are hopeful we will in early '26.

The next question comes from the line of Draziotis Stamatios with Eurobank Equities.

Well, I actually got a few points I'd like to cover. So maybe we could go step by step if that's okay. So firstly, just wondering about the preferred shares. Could you elaborate on the purpose of issuing preferred shares given that Allwyn would already hold well over 75% of the voting rights post transaction even without this provision, please?

Okay. Well, let me elaborate on that. As you correctly said, this is not about small minority shareholder gaining a control of the company through use of preference shares or double voting rights. It's really about already a majority shareholder keeping or having an instrument that will help to retain the control of the business that he is interested and committed to own and lead over the long term. So as already mentioned before, part of the big rationale for the transaction for us is to be able to use equity as a currency for future transactions. And so we do not -- or Karel doesn't want to be limited in his ownership stake when it comes to a value-accretive, interesting transformational transaction. So it's really for him to be able to retain the control of the business and to actively lead the development of the group as he did thus far without having any limitations from this side.

May I just -- sorry to follow up on this. I mean, -- are you concerned about the governance read-through for the new structure? And maybe if I can rephrase, do you plan to implement maybe any additional safeguards or, I don't know, transparency mechanisms to ensure confidence among institutional investors who have traditionally supported OPAP for its governance and predictability?

Yes. I think that -- I mean, look, I think we've been controlling shareholder, Allwyn has been controlling shareholder of OPAP for a long period of time. So I think we intend to continue to govern as a controlling shareholder of the combined group without any changes from the past experience that the shareholders have had with us. So we plan to be the same kind of partner we've been thus far. We do not -- as far as safeguards, I'd say we are very transparent. Allwyn has issued a lot of public securities, has a number of bonds listed, very frequent disclosure, quarterly numbers published with regular conference calls, so when it comes to transparency. And last but not least, we will be expanding the Board of Allwyn. We'll be adding 2 more independent directors. So 50% of the combined group Board of Directors will be independent. So we hope a combination of these factors will give the investors the comfort they are looking for.

That's great. And my second question has to do with the dividend policy. you basically reaffirmed that this EUR 1 per share minimum dividend will stay in place from '26 onwards. Could you clarify what this corresponds to in euro terms? And also as a percentage of pro forma free cash flow, so I'm thinking about free cash flow cover here. And how should we think about the balance between dividends, deleveraging, reinvestment once the group is operating as a single entity, please?

Sure. Happy to take that. This is Ken Morton. In terms of the amount, the minimum dividend is simply EUR 1 per share. I don't know if that answer the first part of the question. In terms of cash flow coverage, we haven't provided specific cash flow guidance, although you can probably get to a good number based on the guidance that we've got in the presentation. I would note that the dividend is very well covered. We've drafted the dividend policy in the way that we have with a solid minimum dividend in line with OPAP's current base dividend in order to provide visibility to the market that the business will be generating significant amounts of cash and paying a significant amount of that out as distributions to shareholders. But we've also left flexibility to invest significant amounts of the cash that the business generates in growth where the opportunity arises. And where it doesn't arise, we've also specifically noted that we will consider special dividends and buybacks as a way of returning capital to shareholders. So we intend to have an efficient balance sheet, a moderate level of leverage and to retain flexibility to invest in growing the business organically and primarily inorganically at the same time as providing a significant amount of cash to the shareholders in terms of the base dividend and potentially also special dividends and buybacks. There's a slide in the deck from this morning where we show that over the last 5, 6 years, we very consistently paid substantial dividends at the same time as investing a lot in M&A. The business generates a lot of cash, and that's a key strength of the story from our perspective.

Just to also follow up on this -- on your response. I've seen in the presentation, you mentioned somewhere that pro forma '26 cash conversion will stand near 90%. And I'm just wondering what is the track record for the Allwyn business, excluding OPAP in the last few years. So how has cash conversion been, again, excluding the contribution from OPAP?

Yes. So the metric that you mentioned is EBITDA minus CapEx, right? So obviously, we do have interest costs, we have taxes to pay and all those things which impact the free cash flow to equity. But we include this as a metric to give an indication of the low capital intensity of the business. If you look at our historic CapEx, you will see that in the Continental European business, which includes Czech Republic, Austria and Italy in addition to OPAP, CapEx has consistently been a few percent of revenues. So similar to capital intensity actually to what you see in OPAP, although maybe marginally less, in fact, given the absence of the retail platform in -- the less extensive retail platform in some of those markets. The aggregate CapEx number has been impacted by some investment that we're making in the U.K. We took over the operations of the National Lottery in the U.K. a couple of years ago. And we've been making some fairly substantial investments in the business, primarily updating the central lottery system and other core gaming systems and also updating the POS infrastructure in the retail channel. And that's impacted the aggregate CapEx number that you would see if you look in our consolidated financials. But in our MD&A and other disclosures going back over the last several years, you'll see that we report CapEx separately for each business and that it's typically an amount that's broadly in line with OPAP's CapEx intensity.

Great. And my final question has to do with the growth outlook. I mean I see you, you basically guide for mid-teens EBITDA CAGR. But I just noticed that excluding the pending acquisitions of PrizePicks and Novibet, the underlying organic growth is, as you say, in the mid-single digit. I'm just basically wondering about the organic growth potential of the business based on the current pro forma perimeter, i.e. without new M&A. So using current pro forma figures, assuming all transactions are completed. What is the organic growth profile of the business? And what is the organic CapEx envelope required to sustain this trajectory in the medium term, please?

Yes, certainly. So I would refer you to Page 31 of the presentation from this morning as well as the more detailed guidance. Starting on Page 31, you can see that we expect that the businesses that we consolidate currently will deliver higher EBITDA growth over '24 to '26 than OPAP and that will take the current perimeter of the business to a mid-single-digit EBITDA growth before any impact from M&A and also importantly, from any impact from Betano. We report Betano as an equity method investee. This is one of the fastest growing, but also the largest sports betting and iGaming businesses globally. So the continued growth of that business will have a quite substantial impact on our growth trajectory going forward. And then finally, on Page 31, again, you can see that the impact of announced M&A is expected to be around 10%. So we've indicated 9% to 11%, which takes the total growth of the company to mid-teens.

The next question is from the line of Kourtesis Iakovos with Piraeus Securities.

First question has to do with the completion of Novibet acquisition. I think that the combined entity would hold a quite large market share in terms of online betting online operations, online gaming. In Greece that would exceed 70%. Wouldn't this worry you in terms of competition committee approval? That would be my first question. Second question has to do with the preferred shares. As far as I understand, the preferred shares carry a coupon rate -- fixed coupon rate of 5%. Wouldn't you say that this represents a cash outflow that normally would go to -- or it could go to dividends for ordinary for common shareholders that will be...

Sorry apologies. So I will take the first question about Novibet. This is Robert Chvatal, Group CEO, and then Katarina would follow with the preferred shares. We announced the Novibet deal in the very end of 2024, and we assumed roughly 12 months completion for the closure. So where we are now is, especially in Greece, in a standard phase in the evaluation process, which is utilized in a customer role by any antitrust commissions or authorities internationally. And they collect information to examine the case and consider any sort of unique circumstances pertaining to this particular case. So we -- as you can imagine, we are cooperating closely with Hellenic regulator and antitrust commission and remain confident and committed to receive the antitrust clearance. So I would say this is was to be expected, and we hope to close that deal in a few months.

Yes. Okay. On the preference shares, I don't think this is something that you need to be concerned because of 2 reasons. One is the absolute amount of the value of the preference shares is very small compared to the overall size of the capital structure of the company. So would be very small coupon in terms of overall euro amount. And secondly, the way we will arrive at this 5% that was trying to make it very comparable and really lower than what is the dividend yield on the ordinary. So it should be a comparable compensation for equity ownership. And the preference shares will not have a right to a dividend. So preference will get the 5% interest, ordinary shares are getting a dividend and there is no more -- no additional compensation. But I think the most important is that the amount of prefs, it's less than 200 -- believe it's less than EUR 200 million from memory. So we are talking about a very small leakage overall.

So just to make it clear, the amount is based on the value of EUR 161 million is what you're saying?

Yes, yes.

So it will be 5% coupon rate on the EUR 161 million. That's what I understand.

Correct. You understand it correctly.

Your next question is from the line of Katsios Nestoras with Optima Bank.

So if you are kind enough to help me on the transaction market is, especially on the EPS after the merger. You mentioned that it's EPS accretive by double digit. If my calculations are correct, currently OPAP shareholders have an EPS of EUR 1.40 more or less. If my calculations are correct, the next -- the new entity will have an EPS of EUR 1.20. What -- please elaborate on this?

Sure. Happy to elaborate on that. I think it's important to note that the accretion metric that we quote in the press release is adjusted for the net income that is currently generated by the GGR tax prepayment, which obviously is going to come to an end in a few years. So we felt that, that is a sensible adjustment to make to give an indication of the underlying long-term EPS that's going to be generated by the business. And obviously, you also see looking forward, a significant impact from the different growth rates of the existing OPAP business and the combined Allwyn business, which results in increasing returns to shareholders in the next years and also in the medium term.

The next question is from the line of Pointon Russell with Edison Group.

I have 3, if that's okay. So I'll do them one by one. First question is going back to one of the previous questions about the pro forma guidance. It looks as though the pro forma guidance just implies no incremental growth beyond what is already known for the combined businesses plus M&A. So is it correct there are no revenue or cost synergies to come from the transaction? And if so, if not, why not?

Okay. Yes, happy to answer that. I mean, we haven't shown any synergies explicitly on the guidance slides in the presentation. This is a conservative view. The reality is that there are clearly revenue synergies. One of the reasons why we're so excited about this transaction in the long term is that the Allwyn Group platform brings a lot to OPAP in terms of technology, in terms of content, in terms of the brand as Jan was explaining previously. On the cost side, we don't see any changes to the setup of the OPAP operations in Greece. So no changes to headcount. There are certainly some benefits to be captured through more efficient exploitation of economies of scale. We do this to a limited extent. But as one of the biggest companies in the gaming sector globally, we clearly have a lot of potential leverage over suppliers. And this is something that we do intend to focus on in the short and medium term, but none of that is reflected in the numbers that you see.

Okay. And kind of related to that, Slide 9 shows OPAP depends on third-party suppliers for tech and content, and it implies a shift to in-house capabilities under the new structure. So does that mean there will be a transition from a tech and content perspective within the combined group?

If I may comment, this is Jan speaking. So we -- this is not something that will be happening overnight. Overall, our strategical direction clearly is owning the tech stack and be as less independent on third parties as possible when it comes to core gaming and content delivery platforms. And alongside of that path, as we will be building those capabilities that already today, we are using in some jurisdictions, we will be adopting them in Greece in time and space of the future. Those plans are to be finalized and designed and it's a subset of our 2030 strategy, exploring those technology opportunities ahead of us.

If I can -- can I add to it also from the group perspective, in one sentence, Allwyn sort of journey 2030 could be summed up as one brand, one tech, one team almost. And when it comes to one tech, we clearly see potential to be sort of making rather than buying going forward. We have the business actually increase as well. I mentioned it in my closing remarks, I called Allwyn Lottery Solutions, which is developing a central lottery system which is developing a iLottery stack, which is developing content delivery platform. We also mentioned some sort of vertical integration when it comes to IWG, Instant Win Games, which is in the business of [ e-scratches ]. So all of that, as Jan said, would be step-by-step evaluated so that if, a in the first place, gives commercial rationale. And then if the commercial rationale is there and clearly identified, then we could be more in the business of feasibility of technical deployment.

Great. And my last question is just on the regulatory. There's limited geographic overlap, but where do you think there would be greater regulatory issues to answer?

I'm sorry, I'm not sure we understand your questions. The transaction itself does not imply any regulatory issues whatsoever in the Greek market, but maybe that's not what you're asking.

Yes. No. I mean there's a slide which talks about completion in the second quarter next year, and it references regulatory clearance. So are there any countries outside Greece, where there would be issues. I assume not just to clarify.

No. So yes, it's a good question. As a highly regulated business, many things that we do require regulatory approvals, but we don't see any reasons why there should be any challenges here. None the assets change control as a result of this transaction, which is typically what the regulator is focused on.

The next question is from the line of Nekrasov Maksim with Citi.

I have a few questions. First is more of a follow-up to Greece and Cyprus and strategy there in terms of rebranding. And I was wondering if it's going to be applied to Stihima as well and whether we should expect additional investments and marketing related to the implementation of this unification with Allwyn. And also regarding the OPAP specifically, I was wondering when you were talking about the synergies and the technological aspect, what is particularly new that you were not able to realize currently, right before being effectively a part of the Allwyn Group? And finally, it's a question related to the valuation and the valuation of Allwyn, excluding OPAP. I think it's implied about EUR 9 billion. I wonder what is the basis of that valuation and whether you can confirm what kind of multiple that implies if we exclude OPAP. As -- I get around 13% in EBITDA in the last 12 months, excluding OPAP. So yes, how did you come up with that valuation?

So if I may start, Jan speaking on the branding and rebranding. So we intend -- this is important clarification. We intend to rebrand OPAP to Allwyn as a consumer-facing brand. All the game brands remain untouched. So you will be seeing Allwyn on the facets of today's OPAP stores. You will be saying opap.gr changing to allwyn.gr and equally our digital assets being rebranded to Allwyn, but that is where the rebranding stops. We do not have any intentions now to be changing neither Stoiximan brand nor pamestoixima.gr, our online brand. All these will continue as you know them. When it comes to branding and rebranding cost, there is some incremental cost related to rebranding when it comes especially to communication, both media as well as production. But it is something that is to a very large degree, contributed by Allwyn Group and not paid by OPAP locally as this is a group investment into our rebranding here locally. And very important is for the -- anything that where you see when it comes to communication OPAP today, you will see Allwyn or in the early days message OPAP is now Allwyn. And therefore, any commercial initiatives that we would be doing anyway will be used as a vehicle of communication of the rebranding. So overall, this is a single-digit -- low single-digit increment in our usual OpEx cost that we will see as OPAP in the next year. Then the next question was what you can do, what you will be able to do, what you cannot do now? Obviously, we explore already today as a member of the Allwyn family many of the synergies. But it's one of those milestones where will take us here will not get us there as the class success. And there is much more that we need to explore going forward, especially when it comes to quickly adopting technologies, evolving in the digital space, adopting AI and in many of these disciplines, a scale and the brainpower that we have across the group is something that will be significantly beneficial for OPAP. And obviously, being 100% member of that family will give us a stronger position to leverage those benefits as well as be at the table of decision-making and prioritization for the benefit of the business locally. So we see a step change in what we have today for better and more intensified relationships across multiple disciplines of the local Opco versus group cooperation.

Okay. I will take the valuation question. It's Pavel Mucha, CFO of OPAP. So we valued Allwyn based on the 2026 estimated EBITDA adjusted related to the assets which will be contributed to the combined company. And the multiple which we used was in parity with OPAP's multiple when you adjusted for the temporary benefit of the GGR contribution, which is expiring in 2030. So it's pretty much valued at the parity with OPAP when we adjust for GGR contribution. We have seeked also fairness opinion, the Board of Directors was seeking fairness opinion from the Morgan Stanley. And also, we had second fairness opinion for Grant Thornton in their capacity of providing independent auditor report for the related party transaction under the Greek law because the whole transaction implementation agreement is related party and needs such opinion.

The next question is from the line of Blake Eric with Fitch Solutions.

I was wondering if you could just give me some kind of indication of how this is going to affect your plans to finance PrizePicks.

So I don't think it affects our strategy for financing that transaction at all. As we communicated previously, we'll fund that with a combination of new financing in the debt market and existing liquidity cash flow generation. And just looking at the time lines, we expect that the PrizePicks transaction closed before this transaction.

Okay. And so are you then planning on doing anything to streamline your debt stack?

And we've actually spent quite a lot of time this year already improving our capital stack. So we've refinanced all our near-term maturities. We've refinanced our bank loan at much better terms. We repaid some of our more expensive debt. So we don't have any immediate plans that we should communicate at this point.

There's not going to...

As a public company -- look as a public company, I guess you do see some credit benefits from it. That's certainly one of the benefits from this transaction. Obviously, we have quite a lot of debt which we can reprice or refinance. So we have a certain amount of fixed rate debt in our stack, but some of that is actually already callable. And we've got a significant proportion of bank debt and TLV, which can also be -- which can be refinanced, obviously, with great flexibility. So it's an option certainly potentially.

The next question is from the line of Mantzavras Paris with Pantelakis Securities.

Actually, 2 questions. The first one refers to the condition you have attached to this merger. Basically, that's no more than 5% of total shareholders of OPAP exercised their exit right. Isn't this a pretty tight criterion? And why have you attached this? And the second question refers to the change of domicile to Switzerland. And the question is whether this will have any impact on the dividend withholding tax for Greek investors. Actually, now it's a pretty preferential system of around 5% withholding tax rate. So is this going to change after the change of domicile?

Thank you for the question. So okay, yes, we put the condition quite relatively low, meaning that because we are interested -- we are interested very keen in the overall support of the shareholder base for this transaction. So for us, when we complete the transaction, we would like to have a healthy free float, and we would hope that the investors who are currently invested in OPAP will join and stay as investors in the combined company. So this is why we put this threshold at the 5%. And our hope is that the current size of the free float, even though it will be a smaller percentage of the total company, but in terms of absolute size will stay roughly as it is. So we hope to be successful in this. Thank you for the question of the withholding tax. We -- so Allwyn is a Swiss domiciled company. So we want to keep this domiciliation as we are today. So that's why the combined will be in Switzerland, but listed on ATHEX. And as far as the dividend, we have part of the structure, and you see that the transactional structure is quite complicated. We have to go from Greece to Luxembourg and then Switzerland. But part of the overall structure, the goal is that we will have sufficient capital contribution reserves post the transaction that the investors for foreseeable future will not suffer Swiss withholding tax. So the dividends received by Greek investors should be received in the same way as they've been receiving today with the same treatment. At least they will not have a negative consequences of Swiss withholding tax.

The next question is from the line of Tzioukalia Fani with Euroxx Securities.

On my end as well, a couple of questions, please. First of all, what do you expect to be the total cash outflow at the group level for 2025 and '26? Basically, I'm referring, I think, on Page 39 of the presentation, you mentioned some one-offs of around EUR 270 million, a CapEx of EUR 280 million and other investing cash flow. So if we could have the consolidated cash outflows for 2025 and '26, just to make a distinction on these costs as well. And secondly, I know it has been discussed a lot in the call, but it would be great if you could give more concrete guidance on the -- on what do you think is the benefit of this transaction to the OPAP business per se? And last but not least, you mentioned that you plan to use equity as a currency while also leaving room from own cash flow generation. So do you have a targeted free float in mind? And also, do you have any specific M&A opportunities in mind as well?

I'm happy to start with the question about the '25 and '26 outflows. I mean we've provided pretty granular detail on all the key items on the guidance slide. So beyond that, there really isn't anything to note. If you stack those up, you will get to the right number. We felt it was better to be more granular so that you can really understand what the moving parts are.

So you can confirm that following up on that -- sorry, just to confirm that we're talking about one-off cost of EUR 270 million, which refers to the technology transformation in the U.K. and then a CapEx outflow of EUR 280 million at a group level, I guess. And then CapEx outflow of EUR 285 million from LottoItalia and EUR 201 million for Stoiximan minorities.

Yes, the final item is the potentially a couple of tens of millions of earn-outs for the IWG acquisition, which is a bolt-on acquisition that we made a couple of years ago, has performed very well. So there's a small earn-out payment there as well.

Okay. Okay. And to the second question, as I said, maybe it was a bit more of a highlighted, the business is the benefit that you see for OPAP business per se from this transaction. I guess it's the technological advances that you mentioned that I guess weren't there beforehand and...

It's -- so I will try to be more specific. There are several dimensions. Robert was referring to this also earlier. So it's one brand, one tech, one team. Starting from the people, we have a great know-how across the group and expertise that not only is in people's heads, but comes from all the heritage and experience that people built over the years across multiple jurisdictions, multiple countries, multiple regulatory environments, et cetera. So that sets us with a great, let's say, a brain power experience that can be very well leveraged across the group and being 100% integral part of it, like the other businesses of Allwyn sets us even closer to this. Second being the one tech, we have covered several times. But to give you a practical example, right now, in Q4 already, we will be leveraging the content house of Allwyn for bringing some very exclusive games to the Greek customers that we wouldn't be able to offer in such a short time to the extent that we will be doing, and there is more of things like that coming in the future, again, developed once and quickly brought to market locally. So it's on the tech side. The customer propositions equally very important, building the portfolio of attractive games that are something that our customers appreciate and bringing innovations in what we offer to them is again something that we leverage not only from a best practices exchange and the brain power I was referring to before, but also from practical solutions. So for example, now, we are cooking for next Christmas, a special scratch that will be combining the digital experience with the classic paper experience into quite an innovative product that we haven't seen before and that we would most likely not be able to launch on our own, a result of a cross-group cooperation and brought to market much earlier than what we would be able to do on our own. In particular a specific agenda that I think will be significant -- will bring significant change to our business is the -- as much as many other businesses is the adoption of AI, and I've been referring to that earlier, adoption of AI for us is going to be happening across multiple disciplines, ranging from customer solutions themselves all the way through platforms and the tools we are using to deliver the customer solutions as well as our own internal productivity and capabilities, for example, in the communication creativity or software development. Again, adopting AI, finding the right solutions, training people, embracing this faster is something that doing as OPAP will be much more difficult for us than being an integral part of the group and its work in operations that we will be able to benefit when exploring this new opportunities. So I hope that helped to bring you some more perspective as to where these benefits will be coming from. We are already today excited about what's coming.

Thank you. I'm happy to take the other 2 questions. I think was about the target...

One more. Basically, just to remind, it was -- you mentioned that you plan to use equity as a currency going forward. And you also have room to your own cash flow generation by reiterating the dividend policy as it is. So I'm wondering, do you have any targeted free float in mind going forward post the dual listing? And second, do you have any specific M&A opportunities in mind as well?

Yes, sure. So maybe a couple of points to highlight. First of all, the secondary listing wouldn't as currently envisioned involve any additional equity issuance, right? So just to be clear, the base case -- sorry, I should say, our expectation is that after this transaction, OPAP will have approximately the same free float that it does now in number of share terms. Hopefully, some valuation upside, but the existing OPAP public shareholders will have the shares in a new entity that they currently hold in OPAP. As we mentioned earlier in response to another question about the secondary listing, we see the strategic flexibility and financial flexibility that we get out of this transaction as being dependent on the stock being liquid. So I wouldn't say that we target any particular free float, but we do absolutely target ensuring that the stock will continue to be listed, that it will continue to be covered by analysts and hopefully, both liquidity coverage, investor interest will increase as a result of this transaction. As regards to specific M&A targets, we can't disclose anything beyond what we've already disclosed around the pending PrizePicks and Novibet transactions. In terms of kind of things that we've done historically, I think if you look in the presentation that was published this morning, Slide 17, you can see that we consistently made acquisitions, a combination of bolt-ons and slightly larger transactions. The most recently announced PrizePicks deal is one of our larger deals. It's about 20% of our pro forma EBITDA. So sort of a meaningful deal, but certainly not betting the house on something risky. And I think that you can expect to see our strategy in terms of inorganic growth continuing broadly as it has very successfully for the last 10 years. Does that answer the question?

Yes, yes. And one last question from my side. So where do you see the cash flow conversion for 2026 and '27?

Slightly similar answer to the previous question, it's the outputs of the various items that we've highlighted on the guidance side. We haven't provided a specific number, but hopefully, the guidance is granular enough that you will see that you'll be able to calculate a number quite actually.

The next question is from the line of Kourtesis Iakovos with Piraeus Securities.

Just to confirm, your primary listing will remain in Athens Stock Exchange and you seek an additional listing, but as a secondary listing in London or New York, correct?

Yes, absolutely correct.

Okay. So no thoughts about the primary listing in ATHEX. That's what I wanted to confirm.

The next question is a follow-up question from the line of Draziotis Stamatios with EuroBank Equities.

My question is what happens in '26 because it's just becoming hard to know exactly what they are doing. Sorry, this is what I mean to [indiscernible] I think that's the key issue with Jumbo.

I'm sorry, I think the gentleman is not asking a question.

One second, please. Mr. Draziotis, can you hear us?

He is not talking to us, I'm afraid.

Okay. I'm removing him. The next question is from the line of Katsios Nestoras with Optima Bank.

Again, a quick question on the cost of debt -- the existing cost of debt of following. Is it at the area of 6% to 7%, if you could confirm that.

That's not correct. I mean our most recent bond transaction, which was just a couple of months ago was issued at 4.125% -- we -- sorry, I should mention that we do have some older instruments in the structure, which will remain in place for a period. But the most recent financings that we've done have been that kind of level. We also did a debut in the U.S. dollar market at a margin of 200, which is kind of approximately equivalent to the 4.125%, which I mentioned for our most recent bond transaction.

[Operator Instructions] Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Karas for any closing comments. Thank you.

Thank you very much. Thank you all very much for your questions for being with us today. And as always, our IR teams are here for you to follow up with you and any questions that come to your mind later. Have a beautiful rest of the day. Bye.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a pleasant afternoon.