Intralot Sa

Ladies and gentlemen, thank you for standing by. I'm presenting as your conference call operator. Welcome and thank you for joining the Bally's Interlot conference call and live webcast to present and discuss the first quarter 2026 financial results. All participants will then listen on the note and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Robson Reeves, CEO of Ballet Interlot. Mr. Reeves, you may now proceed.

Thank you, Operator. Good afternoon to everyone joining us today. I'm pleased to be presenting our first quarter 2026 results, which mark a strong start to the year for Ballet Interlot and demonstrate the growing earnings power of our platform. Before I take you through the numbers, I want to address a broader strategic context As we announced, Bally's Intraloft is exploring an emerging opportunity tied to Evoque, which we are actively pursuing, and we shall be able to provide more color on this in the coming days. I will not deviate from what is already in the public domain, but I would ask you to read this alongside what we're about to tell you about our margins, our platform, our operational track record, and our cash generation. The strategic rationale is not difficult to follow. Now let me turn to the results. Q1 2026 marked a strong start to the year. Group revenue reached €268.1 million, with adjusted EBITDA of €100.2 million at a 37.4% margin, a meaningful improvement of 5.8 percentage points year on year. This reflects the first full quarter of consolidation of Bali's International Interactive, which is performing exactly as expected. On a performer 12-month basis, the combined organization delivered 1.06 billion euros in revenue and 427 million in adjusted EBITDA at a 40.2% margin, fully in line with the projections and guidance previously provided. I'm extremely proud of that delivery. Let me address what I know many of you will want to hear about, the UK, the tax change, and where we stand. Our UK online business continued its strong momentum in Q1, growing 10.5% on a constant currency basis. Preliminary April revenues were up a further 11.5% year on year. the UK remote gaming duty rate doubled from 21% to 40% on the 1st of April, 2026. And we entered that change from a position of strength, not retreat. Active players are up year on year. Our brands are very robust. Our product is competitive and our player base is growing. We are generating more efficient revenue from a larger player base. This is precisely the environment we said we would benefit operators with our scale and margin profile. And that is exactly what is happening. On 2026 guidance, we reaffirm our adjusted EBITDA targets for approximately 422 million. The early trading data gives us continued confidence in delivering it. On capital allocation, our approach has not changed. We continue our share buyback program and the board has recommended a pre-dividend subject to shareholder approval during the shareholders meeting that will take place tomorrow, reflecting our confidence in the cash generation of this business. Liquidity remains robust at 417.3 million out of the 31st of March, 2026. I'll now hand over to Andreas to take you through the financials in detail.

Thank you, Robson. Good afternoon, everyone. I will take you through the financial performance for the three months ended on the 31st of March, 2026, using the figures that have been released this morning. Moving directly to page number three on the revenue bridge, Group revenue increased by 172.5 million euros compared to the first quarter of 2025, reaching 268.1 million euros in the first quarter of 2026. This increase was driven predominantly by the B2C segment, which contributed a revenue uplift of 179.6 million euros primarily reflecting the full consolidation of Paris International Interactive, which had 183.6 million euros in the quarter. Within our legacy B2C operations, which comprise Argentina and Turkey, revenue declined by 4 million for 15.9% on a reported basis with no effects impact. In Turkey, reported revenue declined by 19.2% year-over-year to 16.6 million euros, largely due to the amendment to billionaire's remuneration structure. Nevertheless, billionaire continued to gain market share, outfacing the Turkish online sports betting market, which expanded approximately 35% in local currency terms, while billionaire grew by 45% year-over-year. Only in the last quarter, billionaires' market share grew by 1% versus 2025 year end. Argentina held broadly flat at 4.5 million euros, down by 1.3%. The B2B segment saw revenue decline by 7.1 million euros to 63.5 million euros which represents a decline of 10% on a reported basis and 3.9% on a constant currency basis, excluding BII. This reflects a foreign exchange headwind of approximately 4.6 million euros, almost entirely US-related. The US, the group's largest market, recorded a 6.2% revenue decline on a constant currency basis, driven mainly by software lottery activity. The remainder of the legacy B2B business remained broadly stable, underscoring the segment's resilience. Turning to adjusted EBDA, the group delivered 100.2 million euros in the first quarter of 2026, compared to 30.2 million in the first quarter of 2025. more than a three-fold increase. BII contributed 72.7 million euros in its first full quarter of consolidation at the 39.5% adjusted EBITDA margin, which clearly demonstrates the quality of the digital B2C business being integrated. Excluding BII, legacy adjusted EBITDA stood at 27.5 million euros with a decline limited to 2.8% on a constant currency basis. At the segment level, the B2C legacy adjusted EBDA reached 7.1 million euros with margin improving to 34% from 33.1 in the first quarter of 2025, supported by cost efficiency initiatives that partially offset the impact of the amendment to billionaires remuneration structure. The B2B segment delivered adjusted EBITDA of 20.4 million euros, down by 7.1% on a reported basis, but up 1.3% on a constant currency basis, with the US remaining the largest profit contributor. Group adjusted EBITDA margin expanded by 5.8 percentage points year-on-year to 37.4%. Moving to slide number four, and focusing on the revenue mix. Across our three dimensions, first of all by game type, the iGaming and sports betting emerged as the largest contributor to our top line, accounting for 74.8% in the first quarter of 2026 revenue, followed by lottery gains of 20.4%. VAT monitoring contributed 4%, while casino and other activities represented 0.8%. This is a significant shift from the first quarter of 2025 when lottery-grade games represented 63.9% and iGaming just 24.7%, reflecting the transformative impact of BII's full consolidation. By geography, The UK is now our largest region at 64% of group revenue in the first quarter of 2026, with America at 18%, Europe at 9%, and the rest of the world also at 9%. On a performable year basis, the UK represented approximately 64%, confirming the group's significant shift towards the UK digital consumer market. by activity line. B2C now represents 76.3% of reported revenues with B2B 23.7 in the first quarter of 2026. A big transformation from the first quarter of 2025 when B2B accounted for 73.8% and B2C just 26.2%. This mixed shift is the primary driver of the margin expansion that we are delivering. Moving to slide number five, we have the detailed P&L. So on a reported basis, the first quarter of 2026 revenue of 268.1 million euros compares to 95.6 million euros in the first quarter of 2025. The BII contribution was 183.9 million euros. with 72.7 million at the EBITDA level, representing a 39.5% margin. Intralot Legacy contributed 27.5 million euros at the 32.7% adjusted EBITDA margin. The combined Q1, 2026 adjusted EBITDA of 100.2 million euros gives us a margin of 37.4%. On a pro forma, 12 month basis, the combined group delivered 1,062,000,000.9 in revenue and 427.2 million euros in adjusted EBDA representing a 40.2% margin. This is full in line with our guidance. Below adjusted EBDA, depreciation and amortization was 43.2 million euros in the first quarter of 2026 reflecting the amortization of acquired intangibles from BII as well as purchase price allocation adjustments. Net finance expense was 34.8 million euros reflecting the group's new debt structure. After the tax charge of 9.8 million euros, the first quarter of 2026 moving to slide number 6 we have the key financial metrics dashboard revenue grew from 96 million euros in the first quarter of 2025 to 268 million in the first quarter of 2026 with a performance of 1 billion 63 million adjusted EBDA grew from 30 million at 31.6 margin in the first quarter of 2025 to €100 million at a 37.4% margin in the first quarter of 2026, with the performer figure reaching €427 million at a 40.2% margin. The operating cash flow nearly doubled year-over-year to €84.4 million, underpinned by the strong cash generation profile of BII which contributed 78.4 million euros in its first quarter of consolidation. Net capex in the first quarter of 2026 came up 15.4 million euros, 9.8 million euros above the first quarter of 2025, primarily reflecting BII's contribution of 7.9 million euros, coupled with higher investments in the US projects. Adjusted net debt, at the end of the first quarter of 2026 remained broadly stable at 1 billion 493.1 million euros in line with year end 2025. On a pro forma basis, the adjusted net leverage ratio stands at 3.5 times, reflecting our consistent funded debt structure of the group. Looking at the net debt reach for the first quarter of 2026, So starting from the 1.493.9 million euros of December 2025, the group generated solid free cash flow of 59.1 million euros during this quarter. This supported 22.6 million euros in net interest payments, 17.8 million euros in purchases of own shares, and 8.1 million euros in the organization and refinancing related outflows coming from the previous year. Other debt movements amounted to 9.8 million euros, primarily comprising 7.7 million euros of accrued interest, 2.6 million euros of amortized loan costs, and 1.4 million adverse effects impact on the GDP denominated loans, partially offset by 1.8 million euros decrease in lease liabilities. This brings adjusted net debt to 1 billion 493.1 million euros at the 31st of March 2026, essentially flat quarter on quarter, which we view as an important proof point of group's cash conversion capability. And with these final remarks, Thank you, Andreas.