Good day, thank you for standing by. Welcome to the Banijay Group call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question, you will need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link any time during the conference. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Marion Heudes , Investor Relations. Madam, please go ahead.
Okay. Now Marion doesn't want to say anything, so I start. Good morning, everyone, and thank you for joining us today. This is François Riahi, CEO of Banijay Group. We are proud to share today another exciting development for Banijay Group following our acquisition of Tipico, which we announced just a few months ago. Banijay Group and RedBird IMI have entered into a strategic partnership to combine Banijay Entertainment and Banijay Live with All3Media to create a global media and entertainment powerhouse. I'm here with Sophie Kurinckx-Leclerc, our CFO, and together we'll walk you through the key aspect of this transformative deal and then, of course, address any questions you may have. As we presented at our Capital Markets Day a few months ago, Banijay Group is one of the very few natural consolidators in the entertainment industry.
We have consistently demonstrated our ability to seize strategic opportunities and create value, most recently with the operation with Tipico. Banijay Group already enjoys leading position across all our activities. Banijay Entertainment is the world's largest independent content producer and distributor. Banijay Live is a leading producer of ceremonies and immersive live events, and Banijay Gaming, with the Tipico acquisition we announced in October 2025, is the largest sports betting platform in continental Europe. The All3Media transaction represents another decisive step for the group. In a fast consolidating market, scale really matters. With the rise of AI, ownership and control of premium IP is more strategic than ever. This transaction significantly strengthened our IP portfolio, enhances our ability to monetize our brands globally and combines complementary capabilities that will unlock new growth opportunities.
In fact, this transaction kills three birds with one stone. First, it's a deal of size, scale, penetration, enlarging our English-speaking capabilities, which is very important. Two, we are partnering with a very strong partner to continue the consolidation of the industry. Three, we get some cash, which will allow us to have the financial capabilities to continue this consolidation. If you look at the industrial rationale of the deal, it's more scale, more IP, more growth. We also see the opportunity to capture cost synergies of approximately EUR 50 million on a run rate basis within 12 months post-closing. Today, I will take you through an overview of the transaction, introduce the All3Media business and explain the strategic rationale behind this bold move. Sophie will take you through the combined financials for this transaction.
I will be back for some closing remarks before we open for questions.
In.
In addition to bringing All3Media.
In.
No, sorry. Let's go to the structure of the deal. We are combining Banijay Entertainment, including Banijay Live, with All3Media into a unified partnership. Banijay Group and RedBird IMI will each hold 50% of the combined business, which will be called Banijay and be fully consolidated by Banijay Group. The combined entity will benefit from strong leadership with Jeff Zucker as chairman, Marco Bassetti as CEO, and Jean Tartt as Deputy CEO. I will come back later on this incredible set of talents. RedBird IMI will fully roll over its investment in All3Media into the combined entity. All in all, this joint ownership will ensure strong alignment on value creation and long-term governance. A true partnership built for sustainable growth.
It is very important to understand that the reason why we are teaming up with RedBird IMI is because we share the same vision of the industry. That's why they and us, we have decided to combine our assets and to unite our strengths to make it happen all together. In addition to bringing All3Media, RedBird is going to buy shares in Banijay, to Banijay Group to reach the 50/50 ownership. Banijay Group will receive an upfront cash payment of around EUR 800 million, of which 625 million from the purchase of shares by RedBird IMI and a pre-closing dividend of EUR 171 million paid by Banijay Entertainment to Banijay Group.
After the transaction closes, Banijay Group's leverage is expected to be around 3 x on a pro forma basis at the end of 2026. This means the transaction bring us back roughly to where we were before the acquisition of Tipico. This partnership with RedBird IMI, a JV combining a very knowledgeable U.S. investment firm, which is a part of the Paramount- Warner deal, for example, specialized in entertainment and a powerful U.A.E. investment vehicle in media, is crucial in giving us the capacity to continue to lead the consolidation of the industry. Of course, the proposed transaction is subject to standard regulatory approval and is expected to close by the fall of 2026. Let's have a look at All3Media. All3Media is a great company that we have been aiming for several years, given its quality and also complementarity with Banijay Entertainment.
It's a leading independent production and distribution company with around 2,000 employees, generating more than EUR 1 billion in revenues and over EUR 160 million of adjusted EBITDA following Banijay standards. Around 2/3 of its revenues come from production activities with creative units in the U.K., massively, the U.S. also very important, Germany, the Netherlands, Belgium and New Zealand. It also has a strong track record of rights retention built on a balanced slate of long-running franchises, new launches, one-offs and miniseries sold to both global streamers and linear broadcasters. In fact, exactly as for the Tipico- Betclic transaction, All3Media has a very similar DNA as Banijay Entertainment. It's a diversified business well suited to the current global content landscape. Non-scripted represents 62% of production and distribution revenues. More than 20% of production and distribution revenues come from streamers.
Almost 80% of production revenues come from English language content, which is of course a very important element because in fact, English speaking content in our industry is global content. 1/3 of All3Media's revenues is generated by distribution and digital business, including Little Dot Studios, which I will come back to it, a multi-platform digital powerhouse and creator engine. Let's take a closer look at the strategic rationale. The rationale for this deal is clear. It's of course it will generate cost synergies and that's a very important element, but it will unlock growth opportunities, and I will detail these two elements. On the growth side first. The combined group delivers unmatched operating scale.
Over 170 creative labels across 25 countries, distribution in 250 territories, and the deepest IP library in the industry with 20,000 hours produced annually and 260,000+ hours of multi-gen content. This scale, which is crucial in our industry today, is anchored in strong IP ownership, which is even more crucial, providing a unique reservoir of premium rights-controlled content with long-term monetization potential. With production capabilities across 25 territories and a global distribution platform led by Banijay Rights, recently recognized as distributor of the year, you know, once again, we operate a fully integrated growth engine. We can systematically originate, circulate and relaunch formats across our footprint, maximizing lifecycle value and increasing franchise depth.
If you want, you know, an example of how this scale works, especially in the context of this deal, flagship formats such as The Traitors, which is an All3Media format, can move with time from being produced today in six territories by All3Media, to potentially leveraging our full 25 territory production network once combined, significantly expanding global rollouts, recurring revenues and rights value. This combination of IP, production scale, and distribution power positions the group to fully exploit its catalog, accelerate franchise expansion, and drive structurally higher monetization over time. The second element which comes with scale is the positioning with global streaming platform. As you know, it's one of our strategic direction to increase our penetration within platforms, even if we are already the largest provider of platform.
This will be strengthened by the transaction because of the highly complementary quality of the assets. Banijay Entertainment scale and established position with global streaming platforms will be combined with All3Media's premium English language catalog. Following completion, Banijay will not only be the number one provider to global streaming platforms, which it already is, but also the largest English-speaking production studios outside the U.S. This materially enhances our ability to generate global hits and secure multi-territory commissions. Beyond strengthening our positioning with global streaming platform, this partnership materially accelerates our expansion into high-growth digital creator and live ecosystems. All3Media has interesting capabilities in the digital space with Little Dot Studios that will be available to leverage on the combined library and distribution.
Today, Little Dot Studio works with All3Media's catalog, also external catalog, but we will bring Banijay Entertainment catalog, which is very, very large. On the live is the other way around. Banijay is ahead of All3Media with our live capabilities, and we will be able to leverage on All3Media catalog and IP. First, if I say a few words about Little Dot Studio. Little Dot Studio is a prominent digital player with 11 billion+ organic monthly views and over 930 million subscribers across YouTube, TikTok, Meta, Roku, and other major platforms. Little Dot brings strong audience reach, data expertise, and deep integration within the creator economy to a scale that we don't have today in Banijay Entertainment.
Combined with Banijay Entertainment's global production footprint and Banijay Rights leadership in scaling FAST channels and building global social brands such as Mr. Bean, alongside proven talent management expertise with creators such as Jimmy Carr, the most subscribed U.K. comedian on YouTube, we operate a fully integrated digital monetization platform. Enhanced by AI-enabled analytics and optimization tools, this ecosystem strengthens catalog exploitation, improves audience targeting, and unlocks scalable, recurring, and data-driven digital revenue streams.
If I move to the live experience field, as you know, Banijay Live transforms flagship IP into immersive monetizable experiences beyond the screen. With strong in-house creative and production expertise, we unlock incremental event-driven revenues while strengthening direct audience connection and franchise longevity. In fact, you know, We are not only a TV producer or a content producer, but we are also, you know, an IP owner which is able to monetize and exploit IP outside of the TV world in live and digital.
As you know, Banijay, that's the next slide, has always been about talent. Our new strategic partnership continues this focus. I am very delighted that Jeff Zucker, CEO of RedBird IMI, will serve as chairman of the board of the combined entity. He brings senior strategic oversight, immense media experience, especially in the U.S., which is of course, you know, a continent that we know well, but we don't know as well as he does, and a platform-level vision that aligns operational execution with long-term value creation. Marco Bassetti will be CEO of the combined company. Marco, as you know, has been CEO of Banijay Entertainment for the past 13 years, and he has a long track record of driving organic growth and successful M&A in global content markets.
Marco, that's a very important point in this transaction, has also already led major integration with great success. The last and not the least one being when Banijay bought Endemol Shine in 2020, which was twice as big as Banijay at the time, and which was done in, you know, a high light. Jane Turton, current CEO of All3Media, with extensive experience in the broadcasting and production sector, will serve as Deputy CEO. Marco and Jane know each other for a long time. They have a mutual respect, and they are very happy to work together in this, you know, consolidator of the industry. We have established a clear governance structure with aligned incentives, fast decision-making, and a strong balance between creative leadership and financial discipline.
The combined group will also be a creative powerhouse and able to draw highly complementary creative ecosystems built on long-standing relationships with top-tier writers, showrunners, directors, and on-screen talents across genre and geographies. You can see some names in the world. I won't do the name-dropping. In summary, this combination combines proven leadership with true creative firepower. Moving to cost synergies. I, we, I hope you see how this transaction is going to allow us to have more growth in the future and commercial synergies and capabilities is at the heart of this transaction. Of course, it comes also with cost synergies. We expect to deliver approximately EUR 50 million of cost savings with a full run rate expected to be achieved within 12 months post-closing.
I think our proven track record of successful integration, and especially the one of Marco, who will be leading the business, gives us confidence we are able to implement them in a short timeframe. These synergies are broadly split into three areas. First, increased coordination across distribution and sales, eliminating duplication and improving commercial efficiency. Second, the optimization of central and support functions. Third, a more integrated approach to procurement and shared services. It's exactly the same as what we did with On Demand. These are structural savings that will deliver an immediate and direct EBITDA margin improvement, stronger free cash flow generation, and scalable long-term value creation. Let me hand over now to Sophie to take you through the combined financials.
Thank you, François. The combination of Banijay Entertainment and All3Media creates a business with pro forma 2024 revenues of EUR 4.4 billion, EUR 3.3 billion coming from Banijay Entertainment and EUR 1.1 billion from All3Media. In terms of revenue mix, the combined entity will remain predominantly driven by production, representing 3/4 of total revenues, complemented by 17% for distribution and 8% for live events and others, which continue to gain importance as monetization levers. In terms of revenue by type of content, scripted contributes just over 1/4 of total production and distribution revenues. Geographically, and as mentioned earlier, the combination meaningfully strengthens our exposure to English-speaking markets, growing to more than 1/3 of revenues while maintaining a broad international footprint across other language and territories.
Overall, the combined financial profile reflects a business with greater scale and improved diversification by revenue type, content, and geography. It also enhances adjusted EBITDA and cash generation, as we shall look at on the next slide. The combined entity would have generated adjusted EBITDA of EUR 690 million in 2024, demonstrating the immediate earnings scale created by the combination. With adjusted EBITDA margins aligned at around 16% across both businesses, the combination demonstrated strong industrial compatibility with limited margin dilution risk. In terms of cash generation, the combined group delivers first close to EUR 500 million of adjusted free cash flow with an adjusted free cash flow conversion of more than 70%, demonstrating strong cash discipline at scale.
Looking specifically at operating cash flow, the combined entity would generate over EUR 380 million of adjusted operating free cash flow with a conversion rate of around 55%, reflecting ongoing investment in content alongside robust cash returns. This does not take into account, of course, the cost synergies. Taken together, the P&L profile highlights a business with material earnings scale, resilient margins, strong cash conversion, and a credible path to balanced deleveraging even before factoring any identified synergies. Let me now hand back to François for some concluding remarks ahead of the Q&A.
Thank you, Sophie. This transaction positions us at the very forefront of the global content industry with strategic step change in terms of global positioning and exposure into the most attractive segments of the global content market. To just repeat a few, the combined entity will establish itself as the largest global independent content platform anchored in an enriched premium IP portfolio, the largest English-speaking production studio outside the U.S., a fully integrated multi-platform IP engine spanning streaming, digital, AI-powered monetization, and live experiences. This growth is underpinned by strong financial fundamentals with strong cash generation, a robust margin, and meaningful cost synergies. We are actively driving consolidation in the entertainment industry as we announced it at our Capital Markets Day through two transformative transactions in just a few months, reshaping the scale of our group and strengthening our leadership.
The recently announced acquisition of Tipico, currently expected to close in H1 2026, increases to 2024 pro forma revenues to EUR 6.4 billion. Adjusted EBITDA will increase to EUR 1.4 billion. Adding the merger with All3Media, Banijay Group revenues would reach EUR 7.4 billion, also on a pro forma basis, and adjusted EBITDA will increase to EUR 1.5 billion. There are some roundup in that. Almost a threefold increase since 2021, our last full year before the business listed in summer 2022. We are creating a materially larger group with stronger pricing and earning power. These moves represents both a step change in scale and are accretive to profitability, building a group with increasing critical mass to be a global leader.
To build on what Sophie shared earlier at Banijay Group level, let me add that post-transaction, 2024 pro forma revenue would be balanced between sports betting and gaming, around 41%, and content production and distribution around 59%, highlighting through the diversification at the group level. On the EBITDA side, it would be slightly weighted to sports betting and gaming, reflecting the relative profitability contribution of the two divisions. Overall, the 2024 combined profile will deliver a 21% adjusted EBITDA margin whilst generating EUR 1.2 billion of pro forma adjusted free cash flow, implying a conversion rate of nearly 80% and EUR 1.1 billion of adjusted operating free cash flow. In fact, we have already exceeded our target of the capital markets in 2028.
Of course, our targets were organic, with this transaction we are already way ahead of the figures we were targeting. I will now show you what the next steps are before we open the floors to questions. As we have just seen in the numbers, these major transactions mark a decisive new chapter for the group, with Tipico positioning us as the number one sports betting operator in continental Europe and All3Media strengthening our exposure to the most attractive growth segments of the global content market. We are materially reshaping our scale and profile. Together, they strongly strengthen both our positioning and our growth trajectory. We will therefore host a strategic update on March 26 to outline our enhanced profile, refined strategic positioning and updated midterm financial guidance.
As we have already exceeded our guidance for 2028, we need to give you some new, some new horizons. Before that, we look forward to speaking with you again tomorrow for our full year 2025 results. That's all for now. Let's open the floor for questions.
Thank you. To ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. If you wish to ask a question via the webcast, please type it into the box and click submit. Thank you. We will now go to our first question. Your first question today comes from the line of Davide Amorim from Berenberg. Please go ahead.
Bonjour, Sophie. Bonjour, François. Can you hear me?
Yes, very well, David.
Okay. Thank you for taking my question. Just three for me, please. First, with this transaction, could you please share the two implied enterprise value of Banijay Entertainment and All3Media, please? Secondly, could you elaborate a bit more on the growth profile of All3Media? Is it in line or below the level of Banijay Entertainment? It seems that their revenue in 2024 was down 10%. If you could share what, a bit more detail on what happened during this year for them. Lastly, Banijay Group has changed significantly over the past year, as you just explained, with the acquisition of All3Media and Tipico. Do you still have the same level of priority regarding your call option on The Independents? Thank you.
Regarding the enterprise value. Your first question regarding the enterprise value of Banijay Entertainment and All3. As you could see on a pro forma basis, we have an EBITDA of around EUR 700 million. We also gave you the debt. Based on the multiple in the market, we will let you do the math for sure. It's quite a strong profile and quite a strong group that we are building all together. Regarding the growth profile of All3. As you know, All3 is mainly based in U.K. and U.S. We already mentioned in our previous call that the market, this is also something we discussed for this transaction.
The market is tougher with a little bit more constraint. This is what we mentioned during our previous call, and specifically in English-speaking territories. Of course, All3Media face also this kind of constraint. What we can say is that altogether now, the profile of All3Media will be more diversified, specifically in terms of territories. As François mentioned, we will be able to, with their IP, to roll over all these new IPs in our catalog all over the Group and to seize growth opportunities with this new IP in our catalog. Clearly the growth profile of All3Media, well, we will not look at it independently now. They are part of our Group, and we will benefit from this new IP coming from them.
Just to add on Sophie's first answer. For the transaction, we used a 10x multiple on both companies, which of course is not our dream multiple, but given the strategic rational of the deal, it was, we accepted it. Of course, we believe now the multiple should be higher. On your question about The Independents. No, it doesn't change the question of priority, but of course, it creates a new environment because now we have a partner also. We need to discuss with them about it. We are currently also discussing with The Independents' founders.
It hasn't changed, the question. We have a call, which is this year, probably Q2 or Q3. We'll update you when the decision is made. Of course, we will look at it, with our partners. Thank you.
Thank you. Your next question today comes from the line of Annick Maas from Bernstein. Please go ahead.
Good morning. Thank you very much. My first question is, on one of your slides, you say that one of the things that All3Media brings to you is the very good connections that it has with the established streaming platforms. Can you just elaborate a bit more on that? Does that mean they make more revenues from the streamers? How can you use that good connection? What does it mean, really? Secondly, in the press, in the French press, you seem to be saying that you don't rule out still looking at ITV Studios. Just in terms of timeline, can we get an idea of how you are thinking about continuing to consolidate the content market? If, Sophie, you could give us a little bit more detail about where the cost synergies are coming from and how we shall expect them from a quarterly point of view in the next quarters? Thank you.
Thank you, Annick. On your first question, of course, we are already working a lot with the streaming platform. We're the number one provider. We have, for example, a very strong relationship with Netflix ourselves, but I would say that All3Media also has a very strong relationship with Netflix. For example, they are the ones producing Squid Game: The Challenge, which is the largest non-scripted show ever on Netflix. I think on this front, we are strengthening our positioning to the global platform. Also, as you know, this global platform, they buy local content, and sometimes they have to buy local content by law. They buy Spanish series, Italian series, French series, et cetera. But the English-speaking series are global content.
Of course, it has more value, it has more, I would say, reach, for these global streamers. The fact that we are strengthening our capabilities in English-speaking countries, and especially the U.K. and the U.S., is strengthening naturally our position with global platform. On your second questions, you know, what I said to the French press was, we are excluding nothing. Maybe they have been a little bit far in saying that we, of course, you know, it means that we are, if we are not excluding nothing, it goes also for ITV Studios as for every other studio. I think clearly the point is today, as we said, consolidation is the name of the game.
You know, when you look at the Warner-Paramount deal, it's very easy to understand why you need to be big and global, to be relevant in this, in this sector. We share this view with RedBird IMI. They bought All3Media to create this type of global platform. I think they realized that they could not do it, starting with All3Media, which was smaller than us, smaller than ITV Studio and others. That's why they combined their asset with ours in, you know, in the strategy of building the largest and most powerful content company in the world. Today, we believe that, if you look at it, we are a French company, very proud of it.
Now, we have U.S. and Emirati partners, and this, I would say, strengthens a lot our capacity to position as the global leader in the field. Sorry, I've been long. Sophie, please, on the synergies.
Yeah. On the cost synergies, as mentioned by François, we expect EUR 50 million run rate cost synergies. We expect them to be implemented within 12 months. Of course, as we demonstrated in the past, with Zodiak Media and also Endemol integration, we have a strong track record on this. We are quite confident. We are very confident to implement this in this timeframe. Where does it come from? Well, as mentioned, well, of course, we have. If we combine the two groups, we will have a coordination to be made, for example, in distribution, in distribution business. We expect also to have growth opportunities, we also have the central and support function that we will optimize. These are mainly.
Well, these are the main sources of these cost synergies, and this is what we will implement as soon as the closing is done.
Okay. Thank you very much.
Thank you. Your next question comes from the line of Silvia Cuneo from Deutsche Bank. Please go ahead. Hello, Silvia. Is your line muted?
Hello. Good morning. Can you hear me?
Yes.
Hello? Okay. Thanks.
Hello.
Hi, everyone. Congratulations on the transaction. A few questions from my side. The first one is that given the 50/50 ownership factor between Banijay Group and RedBird IMI in the combined entity, I wanted to ask, what is the long-term vision for this partnership? Are there any predefined options or mechanism within the agreement that could foresee a change in this 50/50 structure over time? You know, what is your intention to keep this as it is? Secondly, the strategic alliance with RedBird has been highlighted as a platform for further consolidation in the presentation. Could you elaborate a little bit about how this will facilitate future M&A, particularly regarding the financing contributions from both parties? It's related to the earlier question about the 50/50 structure, really.
Related to that, I wanted to ask if, you know, the creation of liquidity of the stock would remain a priority when you consider future deals? Finally, if you could provide a little bit of color on the timing and initiation of this transaction, specifically, if you could comment about who approached who and whether the current market backdrop in the English-speaking countries has facilitated reaching a deal? Thank you.
Thank you, Silvia. On the 50/50 ownership, it was really a strong request from RedBird IMI, as they really have a strategic view on the sector, and they really want to be a partner and not just an investor in this building. Yes, we have built a long-term partnership, there's nothing in the documentation which, you know, would go in the sense of a short-term exit for RedBird IMI. I think they are really considering it as a long-term partnership.
Yes, this strategic alliance is very important for consolidation because, in fact, you know, we often had questions when we were saying we want to consolidate the content industry, which were, "How are you going to do that because you already have a lot of debt. So what is your capability to really to really do transformative M&A?" I think this transaction is the demonstration that, yes, we can. And, in fact, because first we are teaming up with a strong partner with deep pockets, deep capabilities, connected to to the world.
Also we get back some cash in this transaction, which gives us some financial flexibility to continue the consolidation not only on the content side, but potentially on other parts of the entertainment industry, including, of course, sports betting, and gaming. That's why this transaction is a clear transformation, even if All3Media is not like, you know, Tipico and Betclic, which was the same size, and we are doubling the size. Of course, All3Media is smaller today than Banijay Entertainment. But it's complementary and it's opening up new avenues to position ourselves. It improves dramatically our positioning given this alliance. Third, your third question. Of course, the liquidity of the stock remains a priority, and we are not very happy where it is today.
You know, for sure. Clearly, as I said earlier, we are inviting you to an update on our Capital Markets Day at the end of the month, and hopefully, to open up the possibility to increase the liquidity of our stock, which is for us the key priority. I believe that these two transformative deals should bring attention and more interest in what we are doing because I think we clearly demonstrated our capability to be a very significant company in the entertainment space. On your question, I think, you know, in 2022, RedBird IMI and us were competing to get All3Media. They won.
We were disappointed, but it was not, you know, as if a direct competitor was buying All3Media. We thought right away that there could be a way to get it or to make it happen later. We have from the next day started to exchange with RedBird IMI on the opportunity to combine our businesses because we have synergies, both commercial and cost, which they hadn't just them. In fact, it has not been just, it's not a deal which was triggered by, you know, research or market, et cetera. It was a very structural deal. They have talked to other people. We have talked to other people, sometimes the same.
We didn't achieve, you know, a consolidation on other studios. Finally, it was natural that we come together and say, "Okay, you know, we want the same thing. We try to do it with other partners. Let's do it together. We are going to succeed because we want the same thing." That's how it happened. It has been more than one year of discussion. We believe that yes, you have some market movements on the English-speaking countries. Look at the valuation of Warner. Why is Warner, you know, valuing so much? Because in our industry, IP scale and global position are very, very important, and that's what we are strengthening with this deal.
Thank you. We will now go to the next question. The next question comes from the line of Conor O'Shea from Kepler Cheuvreux. Please go ahead.
Yeah. Yes, thank you for taking my questions. A few questions from my side as well. Firstly, François, just to come back on the mechanism for the calculation of the cash injection from RedBird to get to 50%. I think you mentioned 10x multiples, I guess is that EBITDA. Just trying to work out how that reconciles with the proportion of contribution to combined EBITDA from All3Media, which I think is below 25%. Paying EUR 700 million-EUR 800 million to get up to 50% seems to imply a lower EBITDA multiple for Banijay Entertainment's part. If you could just explain a little bit more around that would be helpful.
Secondly, maybe for Sophie on the debt ratios of around 3 x. Just to clarify, is that proportionate EBITDA? Excluding the 50% minority in Banijay Entertainment, or was that before excluding the minority? The last question, just on the cost synergies, EUR 50 million within 12 months. Would you expect more after that or is that, is it all gonna be achieved more or less straight away? Thank you.
Thank you, Connor. On your first question, I'm not going to open the doors of the kitchen of the transaction. On what you say, I think we bring also more debt. They bring, you know, a smaller EBITDA than we do, but we also bring more debt and more leverage. At the end of the day, you know, that's what it leads to. And of course, you have some discussion and adjustments, et cetera. I think the main answer to your question is about the proportion of debt on the two companies. On the second question, I leave it to Sophie.
On the debt ratios, we are around 3x , it's 100% of the net debt, 100% of the EBITDA. If we would have to exclude the minority interest, this ratio would be better, but we present the leverage with our reported figures. On the synergies, the EUR 50 million is what we expect to implement within 12 months. EUR 50 million is the cost synergies. Clearly, in the future, we will see growth opportunities. We didn't give any figures because for now it's quite difficult to approximate. Clearly, we have strong growth opportunities that will be delivered from the closing, but of course, over the life of the group.
Of course, you know, at the end of the month, we have the update on the figures, so it will be an opportunity to give you the guidance, mid-term guidance on our figures, for the next years, including-.
Okay.
All3Media.
Understood. Just a quick question on the pro forma net debt at the Banijay Entertainment level, so shared with the minority, can you give us a sense of how much that would be compared with Banijay Group?
It would be around 4x.
Four times. Okay. That's very helpful. Many thanks.
Thank you. We will now go to the next question. The question comes from the line of Anna Patrice from Berenberg. Please go ahead.
Yes. Hello. Thank you for all the questions. I'm sorry, my line was not very well, so maybe I repeat some questions that I missed before. The question on All3Media. Apparently, it is highly indebted. If I look at the report, annual report on the Companies House, it was loss-making. Is there anything that is changing? How do you want to attack the debt? Otherwise it's gonna be dilutive for you on the earnings side. Regarding the structure going forward, if you decide to do more acquisitions on the Banijay Entertainment, does it mean that you need to have the approval of the All3Media or how there will be the alignment on the future strategy? Thank you.
Thank you. I take the second question and leave the first to Sophie. Of course, you know, they are partners, so after a certain, you know, at least of a certain size, we would need to agree on M&A acquisition. That's why I really underline strongly that we share the same vision of the industry, and we have exchanged extensively with RedBird IMI on what we could do together, and we are really alike. That's why we are very excited, I think, on both sides, about this partnership.
Of course, you know, to do a large acquisition moving forward, we will need to agree both Banijay Group and RedBird IMI on the way to do.
For your first question, if we take the 2024 figures and we combine them together, what we can see is that we are deleveraging the group with the combination of these two groups. Maybe I missed something in your question, but in fact, if we take Banijay on a standalone basis, we are more around 4.5, 4.4. If we combine the two groups, we are more around 4 x. Clearly, this is not. Well, this is a deleveraging that we expect from this combination.
Sorry. If we go through the P&L below the EBITDA, probably what wasn't clear for me, maybe we can start with EBITDA. You're talking about the EBITDA of All3Media at around 15% margin. When I look at the Companies House annual report, the EBITDA margin there is much lower. Probably you're adjusting for something. I'm not sure for what, because they're talking about EBITDA of roughly GBP 100 million. If I look further down on All3Media, they have quite significant debt and hence very high interest expenses. They are loss-making on the net income level.
My question would be, if when you are taking over, if there's something going on with the debt, if it's gonna be reduced or what kind of debt are you taking over into this group, into the combined group? Another question also on the CapEx side, are there any things on the OpEx or CapEx side? Are there any acceleration in the CapEx to make the group more digital, i.e. to increase efficiencies on the production side and make it with the AI age, kind of more efficient? Thank you.
Okay. Sorry, I missed a part of your first question.
It's like.
Sorry. What we explained during this call is that from this combination, first, on the debt, we expect a deleveraging. Secondly, we expect to deliver strong cost synergies within 12 months, then we expect to seize high growth opportunities. Even if in the past this group, All3Media, was loss-making, together, all together, we will be stronger. As I told you, we will deliver these cost synergies and clearly we expect to have a very strong growth profile and cash generation, as we mentioned, around 70% and deleveraging progressively the group so that we. Well, to have the same kind of profitability profile than today.
On your AI question, of course, it's a very important one, and one which is at the heart of the deal also. Today, it's fair to say that AI is a reality for us, especially in the post-production, in the cost optimization. We will start to see really a real benefit on this front with AI. I think what is really important for the future is that with AI, the most important element is intellectual property. In fact, AI lowers the barriers to entry to make videos. It gives new avenues of monetization of IP. The IP is even more valuable.
I think that's how I see the valuation of the Warner deal. It's all about IP, which are very valuable with AI. A very important element also with AI that we have already mentioned, but which explains why scale is important is the usage of AI to create videos from our library. Today we have, you know, before the deal, I think 200,000 to 240,000 hours of content, and maybe we are exploiting 5% or 10% of it in terms of monetization. Why? Because it's very, you know, complex to find what we have in the catalog and to exploit all the monetization avenues.
With AI, tomorrow, it's not ready yet, but we have been working on it for the past 18 months. We will be able to with a prompt to say to, you know, to our catalog, "Okay, create a two-minute format with the best recipes of MasterChef globally on burgers." It will be creating it instantly at no cost and, you know, very efficiently. This will allow us to monetize more our catalog through digital channels, YouTube, and social network. Of course this, it's an investment. It's a complex tool and we can do it because we have the scale. With All3Media joining us, we have even a bigger scale, and we'll be also able to use their catalog in this.
That's how AI is going to increase our capacity to monetize our IPs and our catalog. I hope it answers your question.
Yes. Thank you very much. Can we just go back to the question on the EBITDA? You're talking about adjusted EBITDA for All3Media at EUR 160 million, while once again at the Companies House the EBITDA is lower. I would like to understand what are the adjustments of the EBITDA or if there's something I'm missing. Thank you.
In fact, the 160 is under Banijay definition. We provided, I think, a bridge, or not. If not, we will catch up.
Okay, that's fine. Thank you.
I think the main difference is about distribution advances that are not accounted the same way by All3 and Banijay.
Okay. Thank you very much.
Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. If you wish to ask a question via the webcast, please type it into the box and click submit. Oh, the question was just withdrawn. I will now hand the call over for webcast questions.
Let me see the webcast question. I think that we already answered the rest of the questions we have. Maybe a few of the questions. First, hello. Is the change of control or refinancing expected?
Well, for Banijay Entertainment on a standalone basis, there is no change of control. There is, we don't have to refinance this debt at the closing. Regarding All3Media, there is a change of control clause, but we secured a financing for this part. We could, at some point, refinance the total debt, but this is not our intention, and this is something we will contemplate later on.
The next question is, will All3Media be included in the restricted group regarding the bonds issued out of Banijay Entertainment S.A.?
All3Media will be included and will be below Banijay Entertainment and will be included in the restricted group of Banijay Entertainment.
How will you finance the EUR 171 million dividend to be paid by Banijay Entertainment to the group? Will the term loans at All3Media refinance in public market? Will you expect a leverage target? I think that on the later one, latest one we already answered.
Yes, for sure. Regarding the EUR 171 million dividend, sorry, we secured a financing that on which we could draw if need be. On the regarding the term loans of All3Media, I already answered in the previous question. Are there any other questions? I don't think so.
We have some more phone questions if you would like to take them.
Okay.
Thank you. Your next question on the phone lines comes from Hannah Francesca Waddilove from Oaktree Capital Management. Please go ahead.
Hi there. Thank you for taking my questions and thanks for the call. firstly, could you just elaborate a bit more on the EUR 170 million dividend and the third-party financing you've secured to backstop the change of control? Could you just explain? 'Cause obviously the term loan at All3Media is larger than that size. keen to understand that bullet point a bit more, if possible.
My second question is just around the kind of pro forma cash flow for the combined entity, specifically, your guidance on CapEx, earn-outs and working capital. I think when I last spoke to you, earlier in 2025, you had CapEx intensity guided at 2% of revenues. On an LTM basis, I think we're closest to 3%-4%. That's with Banijay Entertainment. Just if you're able to give any cash flow guidance on a pro forma combined entity basis, that would be very helpful for those three items.
Sorry, I didn't understand properly your question on the debt. What I mentioned is that we secured a financing to finance the dividend part of EUR 171 million, and we also have a secured financing to secure the debt, the refinancing of All3Media. Maybe I missed something, but this is what I mentioned.
Okay.
On the perspective, what we expect in the future from the combined group in terms of pro forma cash flow, as we mentioned, we will give you a strategic update by the end of this month, and clearly we will give you some guidance, on these different topics and key KPIs.
Okay. Is there any chance you're able to disclose the LTM cash flows for earn outs?
You mean in the LTM?
On a combined basis, yes.
At this point in 2025?
Earlier if. Obviously, we don't have full year 2025 results, but.
Maybe we can do a follow-up on this specific question.
Okay. Just, I mean, it alludes to the earlier question around the differences in EBITDA definitions, specifically at All3Media. That's fine to follow up. Thank you.
Thank you.
Thank you. We have one further phone question, and the question comes from the line of Anna Patrice from Berenberg. Please go ahead.
Yes, hello. One more question. My understanding is that the financing you do under your Banijay Gaming and Banijay Entertainment, business units. The money that you will receive, the cash money that you will receive from All3Media, they go directly to Banijay Group as on the holding level, right? What are the intentions to use those money for, and is it to finance their, the independent stake? Thank you.
Yeah. Well, thank you. Yes, the money will be at the holding level. We will give some views on how we intend to use it. As I mentioned, it's firepower for M&A. Of course, we also have some. It includes the calls to exercise on Tipico.
Please continue to stand by. Please continue to stand by. Your conference will resume shortly. Please stand by. Your conference will resume shortly. Please stand by. Your conference will continue shortly. Please continue to stand by. Your conference will resume shortly. Please continue to stand by. Your conference will resume shortly. Hello, you are now back live in the call. Thank you.
Hello?
Hello.
Hello. You are now live back in the call.
Sorry, our line was cut. If there are no more questions, maybe one last question and then we end up the session.
Sir, would you like me to open Anna's line again? 'Cause I think her question was cut off when your line disconnected. Let me just open Anna's line again. One moment please.
No, it was answered. I asked how the proceeds will be. The answer was that we will provide more details, and it will be used partially for the Tipico, and it will be used for the M&A, and we'll have more details at the end of March, right?
Yeah, sure. Also that, yes, it gives us the capability to do as independent, but the decision is not made yet, and we want to discuss it with our new partners.
Okay. Thank you very much.
Thank you. There are no further phone questions. I will hand the call back to you, François.
Thank you. Thank you for attending our call. You know, we are very excited about this transaction as we were excited by the Tipico transaction. We are excited by this year, 2026, which is a year where we are changing our scale, and we are demonstrating that our strategy is in action, and we'll come back to that with details and figures at the end of March. Thank you.
Thank you. Bye.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.