Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the Lottomatica Group's H1 2026 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Mirko Senesi, Head of IR of Lottomatica. Please go ahead, sir. Thanks, operator. Good morning to everyone. Welcome to Lottomatica Q2 2026 results presentation. I'm here today with our CEO, Guglielmo Angelozzi, and our CFO, Laurence Van Lancker. The floor directly to Guglielmo for the presentation. Guglielmo, please. Thanks, Mirko. Good morning to everybody. Let's go up page two of the deck. Another very good quarter and another very good semester. We increased EBITDA 14% reported, 17% on a normalized basis in the quarter. Which means 10% for the semester on a reported basis, recovering a chunk of the payout issue that the market had in Q1. 20% increase on a normalized basis for the entire semester. Even better for the online, of course, which is growing 21% in the semester at a reported level. 24% for the quarter and 25% at a normalized level. Very strong results in terms of EBITDA. Even more so in terms of margins, which increase two points in the semester at group level from 37% to 39%. Mainly driven by the consistent increase in the online profitability from 54% to 58%. Page number three of the presentation. What are the drivers of this growth? The same which we've had in the last 10 years, basically. Strong market growth, 12% in overall online. June peaks at 19%. Of course, very strong iGaming performance. Also sports has been very strong on the bets because the market has suffered in Q1 for the payout. We continue to increase market share when you look at the trend line, both on a year-to-year comparison and on a quarter-to-quarter comparison in iSports, iGaming, and overall online. Let's try to draw a conclusion out of these strong results. A conclusion on the results. There is a consistency of growth in adjusted EBITDA. We are at page four of the presentation. We've been growing every quarter over the same quarter of the previous year, every single quarter in the last 10 years. Of course, except during the COVID restrictions. Consistently looks like an appropriate word for this. Page number five. Consistency again in results. We've consistently grown in margins. This company started a little more than 10 years ago with 12% margin. We have transformed this company in a 39% margin. Mix, efficiencies, all sort of levers that you can use in these type of cases. The online also has been a key driver, not only in terms of mix, but also in terms of internal efficiencies, because the very first profitability of online was 21% back in 2017, and today is 58%. Also, when you look at the latest quarters that you can see on the graph on the right, you can see that notwithstanding the fact that we have consolidated assets which are much structurally lower profitability, like PWO, we've offset that. We've been able to fully integrate these assets. This is the example of PWO, there are others also within the business model of the group and consistently recover the profitability and bring that to the level of the group. This was about consistency of results, which has been driven by the consistency of the drivers underlying these results. Page number six. The first driver and the most important of all, of course, is the market. The online market has been growing consistently in the last 10 years and after COVID is pretty stable in the mid double-digit range. At the same time, on a competitive basis, we've been increasing our market share. There've been periods where the market share has been growing faster, others where it has been growing slightly slower. The trend line is very clear. In a mix of organic growth and M&A, we've gone from a marginal operator to the largest operator in the market. This is also true, as you see in page number seven, in the latest quarters, when you reduce the granularity and look at it on a month or quarterly basis, on a shorter period. You can see, of course, ups and downs, glitches, especially in sports, where you also have the payout, which is impacting the market share, depending on the brand and on the business model. The trend line is also very clear. Page number eight, an update on PWO. It continues to go the direction we've mentioned in the previous quarter. Sport is not only recovered, but is above the levels before migration. We also continue to work on the iGaming. The important point is that we've been focusing on a proper balance between market share and growth and profitability. Market share has to be sustainable. We've cleaned up part of our customer base, limiting abuses, optimizing the bonuses, shutting down unprofitable bonuses campaigns. That's why we basically doubled the company. The brand is very healthy, has done a good journey from the migration, and is doing double the EBITDA. That's pretty much the story. When we go to the other important trend of these last couple of years, page number nine, the consolidation of the tails. This continues. It continues on an organic basis, and it continues because we consolidate some of the smaller operators. This happens also because we offer a very compelling environment for them to continue to grow as entrepreneurs more than they would do on a standalone basis. Last but not least, page 10, the recap of how this all works. This is all about compounding returns. We have a yield of our free cash flow, which, if you measure that basically from IPO to today, has been on average 8%. On top of this, the company has been growing. The growth rate of this lever, the free cash flow, has been in the same period, 26% CAGR. Talking about CAGR. Basically, you get well in excess of 30% of total returns on average, CAGR 30%, sorry, in that period of time. How did we also use that 8%? We gave it back to our shareholders through distributions. Even more than that 8%, you can see the example of the last year. On average, we have generated 8%, we've given back in the last year more than 10% between dividends and buybacks, because we could do more buyback because of the 26% growth, which gave us incremental leverage capacity. Stronger compounding returns, and use of the returns to provide enhanced distributions to our shareholders. I leave the floor to Laurence for the second part of the presentation. Thank you. Thank you, Guglielmo. Moving on to page 12, the group financial highlights. You can see on the left-hand side how revenues have grown + 5% in the first half, and in Q2 on a reported basis, + 6% and + 8% on a normalized basis. On the right-hand side, you see how overall EBITDA has grown + 10% in the first half. Also taking into account on a reported basis, taking into account the impact of the sports payout. In Q2, we've grown at + 14% on a reported basis and + 17% on a normalized basis with normalized payout. Also, looking at EBITDA margin, it has increased over the group level by two percentage points. This has been driven by mix effect, given Online at higher margin has grown faster than the other two segments. It's the effect of the run rate synergies that we completed last year. Finally, also the effect of the cost efficiencies realized in the first half of this year. On page 13, on the left-hand side, you'll see how Online continues to remain our engine of growth, with growth in revenues on a normalized basis of 17%. Sports Franchise continues to grow very nicely on a normalized basis of + 9%. When you look at it on an adjusted EBITDA basis, you'll see that on a normalized basis, Online has grown at + 27%, and Sports Franchise at + 18%, while Gaming has been broadly flat. In terms of margins, Online is now hovering at 58% in the first half, with Sports Franchise at around 25.5% and Gaming Franchise at 24%. Going on to page 14, on the left-hand side, we can see the total amount of CapEx spent, both recurring and concession, amounting to EUR 80 million, broadly in line with what we spent last year, circa 7% of total revenues. On the right-hand side, operating cash flow, which achieved a growth of + 12%, slightly higher than the EBITDA growth given the leverage effect on CapEx. Look at page 15. You can see the net leverage that has stayed broadly constant at 2.3 turns. When you go through the bridge, you start from EUR 2.051 billion of net financial debt as at 31st of March. Other than adjusted EBITDA, you have a positive effect of the net working capital, then taxes paid of EUR 75 million, CapEx, which include also the one-off CapEx and growth CapEx including also bolt-ons of EUR 16 million that amount in total to EUR 57 million. Financial expenses and leases that include also the cost of refinancing that we've done in the second quarter on a total of EUR 65 million. We've bought back EUR 58 million in shares and paid a dividend of EUR 101 million. Then other costs that primarily include the extraordinary items in relation to the closure of the Serbian branch, as well as the minority acquisitions and puts that were exercised in the second quarter. This is in total to achieve a net financial debt of EUR 2.11 billion, with taking into account the cash amount of EUR 366 million gets on net financial leverage of 2.3 turns, so in line with Q1. With that, we've completed the presentation. Thank you, sir. Would you like to begin the Q&A session? Yes. Thank you very much. Okay. This is the conference call operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. We kindly ask you to use handsets when asking questions. The first question comes from Ed Young of Morgan Stanley. Good morning. I've got three, if that's okay. The first is on the World Cup. You've not really isolated it during the presentation, but wonder if you could talk about the impact on the business and where it came versus your expectations for acquisition, player engagement, and mix on the business. Second of all, in online, your GGR revenue conversion was noticeably strong in the quarter, and perhaps a little bit counterintuitive given the World Cup I just mentioned. Can you talk perhaps a little bit about your promotional strategy and more broadly about the competitive intensity in the market that you're seeing? Finally, online EBITDA margins obviously stepped up, and you mentioned Serbia. You presented it today as this continuous long-term improvement in margins. Should we be thinking about this as a new normal level with scope to improve, or is it something that could end up being lower in other quarters as you retain flexibility to invest in the business? Just trying to think about the operational gearing and how you think about the target for the in online. Thanks. Sure. Ed, I'll take these. On the World Cup, listen, it's been ultimately in line with expectations. This was also included in the guidance that we've given for the full year. The numbers that we've done in the second quarter are, I would say, pretty bang in line with what we expected. As we said also, I think in other forums, it doesn't really move too much the needle at an EBITDA level. It was factored in the guidance range. Online GGR, I think we also mentioned it on the slide with Planet. We've continued to maintain good discipline in our promotional activity. We are focused obviously on growth, but especially on profitable growth. The results that you see reflect also this approach. Thirdly, I think on online margin, I'd say we've probably gone a little bit faster in terms of margin growth than we originally anticipated. This is because a number of things happened in the meantime. I know we've made our structure more, let's say, more efficient. I think in terms of guidance, I'd say that probably mid-50s probably won't hold. As we mentioned earlier, we'll be a notch above that. There may be quarters, as you know, there is always some volatility due to payout, there may be quarters we may be lower on EBITDA margins, but I think we are trending in a direction which is in line with what we're seeing now. It reflects, let's say, a rebased cost structure that is sustainable in the medium term. Thank you. Just to come back on the promotional intensity point, it was quite a big step up sequentially. I understand the commentary there is around profitable growth, is that sort of ongoing mindset for here, or is there other noise in the quarter that we should be aware of, whether it's tax mix or anything else that could have affected that number? When you talk about the numbers, which number are you referring to exactly, Ed? Online GGR to revenue conversion. Yeah. No, we have had, if you look at it, remember we have done also some additional cleanups, as we mentioned. Not a bit more, but we always maintain discipline. We have had a number of cleanups as well during the quarter. I don't necessarily think that we'll stay at these levels, but it is sort of an indication that we want to remain disciplined on all the promotional activity. Very useful. Thank you. May I make a quick comment, a quick additional integration to this. These big events are good acquisition tools, as we always said. You have to distinguish between acquiring clients, which are then there to stay, and acquiring clients that disappear immediately after. You not necessarily want to deploy a lot of money on the second group, which is about discipline. That's another point I would like to stress. Okay. Thank you both. The next question comes from Estelle Weingrod of JP Morgan. Hi, good morning. I've got a couple of questions as well. The first one on online margin, just to come back to Ed's question. What are the key drivers of further improvement from here, and how much of that is structural cost efficiency versus operating gearing? Another one on the retail concession framework. Is it still the case that an agreement could happen in August? If so, when do you see the earliest cash outflow, please? Thank you. I can take the first. Estelle, we've always been, as you know, a bit cautious always in guiding to further improvements. I think the levels at which we are now is a, let's say, level we're comfortable with going forward. I would not bake in further margin improvements for the time being. Do we have operating leverage? Yes. Are there any further cost efficiencies potentially materializing in the future? Possibly. If those were to materialize, we'll talk about them when we do them. I think that we are, I would say, relatively comfortable with the levels we've achieved now. Okay. Estelle, on the retail concessions. It's very hard to say. The reality is that whether you have an agreement or not, basically nothing changes. The outcome is exactly the same in the next two to three years, which I think answers to the second part of your questions, because the reality is whether you don't have the framework, the agreement, or you have it tomorrow morning, you will need, in any case, to have an extension of the current concessions for a couple of years, maybe three now, depending on how you want to phase it. That's the bare minimum that you need to bridge from an agreement tomorrow morning and the awarding and the payment of the next concessions. Long story short, whether you have that tomorrow or you don't have it, what happens in the next couple of years, three years probably, is going to be exactly the same. Just think about the reform of the online. You had the law in, what was that? March 2024, and you had the concession in November 2025. For one product, pretty easy, straightforward, like the online, it took 18 months. These are two, not to say three, because you also have bingos there, complex tenders. And with the involvement of local regulation for the distribution, it's going to take much more than that. One way or the other, what happens tomorrow and for the next two to three years before you get to the new concession is going to look exactly the same in the two scenarios. Very clear. Thanks. Welcome. The next question comes from Pravin Gondhale of Barclays. Hello, good morning. Thanks for taking my questions. Firstly, can you comment on current trading trends into July and whether the momentum has remained broadly consistent with Q2? Secondly, on the sort of proportion of market share there, in online, which is up for grab, are there any sort of change in your views that what could ultimately become available following the sort of concessions here, given the intensity that you have seen in the World Cup, then the progress of PWO market share wins here? Thank you. Pravin, I think this current trading July, obviously so far so good. On the market share, I think from our perspective, the views in terms of what is up for grabs has not changed. It remains consistent with what we said in the past. In addition to that, as Guglielmo pointed also earlier, we're focused on growth and especially profitable growth. We will remain disciplined in how we continue to grow. Thank you. You're welcome. The next question is from Charlie Muir-Sands of BNP Paribas. Good morning, gentlemen. Thank you for taking my questions. I have two, please. Firstly, just with respect to the buyback, I saw in the bridge that the spend in the quarter was only about EUR 58 million, down on the acceleration that we saw at the beginning of the year. I just wondered, given where the share price is and the leverage, what your considerations were with respect to the pace of execution of the capital return program. Secondly, just with respect to some of your recent small bolt-ons, Bgame and Sportbet, can you just remind us now where they sit within your statutory unadjusted revenues, EBITDA, net income? Thank you. Sure, I can take them both. On the buyback, the EUR 58 million reflects the fact that we had to stop the buyback for, I think around three weeks because we had to wait for the new approval from the AGM. Technically, in order to be able to extend the buyback beyond the original limit and to the new limit that we've approved in the latest AGM, you have to stop. It's not a conscious slowdown because we want to spend less. The buyback is executed based on an amount that we give to the bank, and the bank does it autonomously. We reiterate the same message we said in the previous results presentations, which is we are planning to buy back up to EUR 700 million this year and next year. In terms of bolt-ons right now, in the statutory accounts, you will not see anything other than an investment. It's an equity investment. In the adjusted EBITDA we've added the contribution of Sportbet today. It is immaterial to our numbers. Many thanks. The next question is from Clark Lampen of BTIG. Thanks for taking the question. Maybe first I wanted to follow up on the question that was asked, I think sort of two previously around share. If we were to look at the iGaming business, I think you've been running steady in the sort of low 30s, maybe 32% this quarter and last. Was there any impact from the World Cup, and players wagering more on competitor platforms or, with your sports business more than iGaming this quarter that might have impacted those numbers? Or did you see market-wide that the same trends were fairly uniform for your competitors? Second question is a little bigger picture. When we think about AI integration and impact to your business, I'm curious, as we look at the back half of the year specifically, do you see just sort of very high level, more opportunity on the revenue side of the business for optimization? Or is there more near-term optimization opportunity on the cost side? Thanks very much. Yeah. Hi, Clark. I'll take this. The pocket of the player is a certain amount and there's a lot of overlap between sports and iGaming, especially moments where there is occasional gaming, like in these big events. Clearly, if sport flies, iGaming is impacted. It depends on why sport flies. If sport flies on its own, which has always happened also in the past. You may have some glitches, but the fundamentals of iGaming growth remain pretty much the same. The fundamentals of sports growth in some of retail and online. Short answer in the very short term, yes, because there is a correlation. You will find that mathematically. It's basically short-term dynamics which do not alter the trend, which we continue to see exactly the way we have represented it so far. On the second point, which is AI integration. We think that by far the largest impact of this will be on the revenue side. We have a huge number of projects and already active agents that are working on the top-line side and get improved release after release. We mentioned several times talking about risk management and bet acceptance, talking about the casino presentation of pricing, talking about the communication, automation of communication and promotions to players, the intensity of the bonuses. Much stuff which is related to the top line. Clearly, and this is to the business, across the entire company, there's a lot also around productivity, which is also very important and can be very material on the cost side. I wouldn't say one is long-term, the other is short-term. Also, the agents and the applications on the top line are already up and running. It's not that one is revenues is long-term. We're working on both, and there are other opportunities will come on the content side from AI, which clearly work both on the cost side, how much you pay the content, how much the content costs to us, and what's the quality of the content, so the top line driven by that content. There's a long list. Clearly, the revenue side is more sexy and potentially larger. That is in a nutshell. We haven't provided a number yet on this topic, because we want to accumulate experience and data points. This is clearly something relevant. Very relevant. Thank you very much. I apologize. The next question is from Ben Shelley of UBS. Hi. I would like to go back to the online GGR-to-revenue conversion topic and potentially link it with this theme around AI. Are the tools and infrastructure you have around bonusing, are they improving? Is that sort of a big part of the driver here? Just love to hear more thoughts on that. On PWO, can you talk more about the market share development on the iGaming side? Where is that versus pre-migration levels, and how is that progressing? Thank you. On the first point, as I said, we have tools which are up and running, I would like to get onto the actual impact on that type of GGR-to-revenues conversion. As I said, we want to have a large and consistent set of data points before giving numbers and KPIs. It's already up and running, I don't think we are at the point yet that we can disclose an impact, or give a guidance on that. I would prefer to confirm that it's there and it's relevant, but not too early to get into the numbers. On PWO, maybe you want to comment, Laurence? PWO has performed extremely well, particularly on the sports side. They're continuing to grow market share. We're very happy with that, and that went definitely beyond expectations. We've gained 0.2 percentage market share compared to pre-migration levels. In iGaming, this is the journey. We had recovered half of what we had lost. We probably have another 0.5 percentage points to recover, we're still hovering around those levels. Again, we tried to stress this also on the slide, which shows the performance of PWO. We want to continue to grow market share profitably. We're still on that journey, and we think the potential is there. Again, we'll see how long it takes, but whilst we do it, we care about the bottom line. All right. Thanks very much. The next question is from Domenico Ghilotti of Equita. Good morning. A few questions. The first is on the Serbian branch restructuring. If you can provide some additional color on, first of all, if you have already booked all the costs in Q2, or you have some additional cost to be booked, and if the positive contribution was already, say, fully on stream in the second quarter, or if we have additional upside in the next quarters. Second question, well, just a clarification. I saw that the normalized tax rate was a bit higher in the semester. If you can reconfirm the expectation for the full year and next year. Okay. I can take those two quickly. Serbia, yes, the restructuring costs have been fully loaded in Q2. The numbers are, also the benefits are already baked in EBITDA. With regards to taxation, it's just a matter of timing for the year. The full year taxation costs are broadly in line with consensus. Okay. Thank you. Sure. The next question is from Chiara Pampurini of Intermonte. Thank you. Good morning. I had two question. What are the main factors you expect to support growth in the second half? If you still expect further synergies and efficiencies to come through in the second half of the year from PWO. The second question is on the one-off CapEx, if you can give us some color on what are the main items that are included in the number of the second quarter. Thank you. Sure. On the second half of the year, there's not really much to say other than our estimates support the fact that we'll have achieved the upper part of the guidance. We don't have any other further efficiencies baked in other than what we've already done. If there'll be something, we'll include it, otherwise, there's nothing else in that. It's clear that H2 also is a stronger half than H1, given the seasonality of the business and how strong Q4 is. You have to factor that in as well when you look at the seasonality of the business. In terms of one-off CapEx, they're predominantly bolt-ons and other investments we have to do in relation to the concession. These are the main items. Thank you. The next question is from Richard Stuber of Deutsche Bank. Hi, good morning. Thanks for taking my questions. Two, please, both on cash. The first is, I think you did EUR 385 million of operating free cash flow in the first half. It appears during the presentation that your priority is largely about shareholder returns, and you did, what, EUR 110 million share buybacks, EUR 100 million of dividends. What I'd like to know is a bit more about your appetite for using cash for M&A, particularly outside of Italy, and if you've got any sort of thoughts there. The second question on cash, I think that Q2 you did EUR 114 million working capital inflow, which seems quite a lot. Can you just remind us what that relates to and whether that's sustainable, and what your guidance for working capital is for the full year? Thank you. Sure. where we have significantly value accretion deriving from the multiples at which we acquire businesses which are below where we are trading today. Internationally, I think we've said a number of times, whilst we look at international opportunities, we're always focused on returns, and so far the best returns have been achieved via buybacks. There's no change in view on that. With regards to second question on the working capital, the EUR 114 million, it reflects the seasonality of the business. Q2 tends to be a quarter which has very positive inflow due to change in working capital. That's because we receive back the 0.5% from ADM, and then we accumulate the gaming taxes of Imposta Unica. This reverses in Q3, which tends to be negative. In Q4, it's broadly flat, slightly negative. If you look at the history of our working capital movements, Q2 is the quarter with the strongest cash inflow. You see reversals in the other quarters. It is a seasonality effect. Very clear. Thank you. Gentlemen, the last question is from Andrea Bonfà of Akros. Hello, good afternoon. I hope you can hear me. Very quickly, I would like to have, let's say, your general view on the residual market share of tail-end operator. Do you expect that to gain market share from those operators going to be more difficult, or it's going to be standard, or less difficult? Just if you can share your view with us. Thank you very much. I think, Andrea, there's a couple of points here. The point is not only acquiring market share, but acquiring quality market share at a sustainable cost. That's the key point. Which is true both if you do that organically and if you do that through deals. When you do that through deals, the main driver is the quality of the counterpart. You want to do a deal with a counterpart which has good quality, and you have vetting, you can do a journey for the long term. When you do that organically, it's mainly about what type of customer base are you acquiring. Is that good bets or bad bets? And what you have to spend for that. I wouldn't say the difference is on the strength of the operator. I would say that is not typically at which you do that. That's the real driver of the decisions more than the strength of the competitor. This is not about the strength of the competition. This is about what you want to get. I hope this clarifies. Thank you. Very useful. That's the balance. It's more like an art more than a rule. That's a very important point. I agree with you, it depends on that. Thank you. Welcome. Thank you, operator. I think we are done with the questions. Perfect. Thank you, gentlemen. Ladies and gentlemen, the conference is now over and you may disconnect your telephones.