Good morning, this is the CorusCo conference operator. Welcome and thank you for joining the Lottomatica Group's 9 Month 2025 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 at Lottomatica. Please go ahead, sir.
Thanks, operator, and good morning to everyone. Welcome to Lottomatica Q3 results presentation. I'm here today with our CEO, Guglielmo Angelozzi, and our CFO, Laurence Van Lancker. Now the floor directly to Guglielmo for the presentation. Guglielmo, please.
Thanks, Mirko, and good morning to everybody. Happy to announce another very strong quarter. We are paged on the tool of the presentation. The quarter has been very robust, both in financial terms and in competitive terms. EBITDA is up 18%, in line with the increase that we had in Q2. Market share is at record high on the entire portfolio. This is driven by the performance of the historical brands, which reached a peak of 24.8%. We achieved a record high on the entire portfolio, notwithstanding the migration of PWO. PWO is at its lowest during the quarter, but of course, because we completed the migration during the quarter, it is on the path to recovery, and we already see very encouraging and strong signs. Very good quarter. Page number three of the presentation.
This is not the end, of course, because there is more to come, we believe, with the PWO integration completed, head of plan, with a lot more product and tech innovation, which has been done during the quarter, and having a positive online regulatory backdrop. We think that there is room for further organic growth. This will generate, of course, additional cash flow, and discipline on capital allocation and focus on shareholders' return will remain key. Now, let me focus on a few points that we have highlighted in this slide, namely the PWO integration, the completion of the PWO integration, and the implication of these. All the jobs that we have done in terms of product and tech innovation, and how this will reflect potentially into additional market share gains, and then, of course, on capital allocation. Now, to start with PWO integration, page number four of the presentation.
You can see here quarter -by -quarter what I was mentioning before, the strong, very strong track record of the historical brands, which gained 3.2 percentage points of market share compared to quarter one of 2024. We are having a look, give or take here in this slide, to the last two years, quarter -by- quarter. PWO, as you can see, has been pretty stable until the beginning of the migration. At the completion of the migration in Q3, it reached its negative peak, but then it restarted to go up after the migration was completed. This happens because during migration, pre-migration, and during the migration, you freeze the product implementation and all the innovation on the old platform. There is very limited CRM activities that you can do, and also, when you execute the technical migration, you actually freeze the customer base in order to migrate clients.
When the customer base, when the brand is onboarded on the new platform, on the group platform, you can restart all CRM activities. You do a bunch of targeting to do reactivation of the customers which have been impacted in migration. You can do much more effective CRM. You have a better product, of course. And in the case. Of PWO onboarding, the group's platform. We have the availability of Lottomatica Core, which is our proprietary MarTech platform, which is going to be a very strong lever for the competitiveness of PWO. On page number five, we see a little more in detail what the anticipation of the migration has implied.
Of course, on the negative, higher impact, negative impact on the revenues in general and compared to historical brands in the year 2025, because, of course, with the migration, with all the slowdowns that I just mentioned, revenues also slowed down. There has been a higher impact in 2025. On the other side, you have an anticipation of the synergies. You see more synergies in 2025, actually, than planned. This results in basically no effect on the group's EBITDA, that we estimate at circa EUR 860 million for the year, assuming the year to date to September and assuming a normalized payout for Q4, and revenues that we expect to be at EUR 2.27 billion for the year. Now, going on to the second block. PWO is completed, no impact on EBITDA in the mix of revenues and anticipation of synergies. The second block is product innovation.
As I mentioned, we've done a lot of product innovation in this quarter, especially in iGaming. As you can appreciate from the slide, there has been a constant progression in terms of new content launch through the years. It is important to innovate and make available new products to players to give them opportunities to choose. You have to present these opportunities in the best possible ways through your apps and websites. We've continued to increase the throughput of new games through the years and also in 2025. Another key point here is that we focus more and more on exclusive content. Exclusive content means content that, through agreements with top providers, we get on a time-based exclusivity, so we have an advantage towards the market. You can appreciate from the slide that this is 10 x the amount that we had in 2021. We're focusing a lot on this.
The concept here is providing more content, innovation, and differentiation in terms of content through exclusivity. Time exclusivity is not enough. Lately, we've been focusing on another concept, which is bespoke, tailor-made exclusive content. We have a lot of experience and know-how in B2C online. We have know-how in omnichannel, which means in terms of product games with a very good payout. We have our own studios, so also, we know how to build the products. This allows us to be able to ask for specific products which are designed on purpose for us by top third-party providers. We have full exclusivity, not time-based, on these products. This increases the distinctiveness of the offer and also improves the product portfolio lifecycle. There are a couple of data points here, of course. This has not been going for long, but it looks to be very promising.
We've tripled the lifecycle of the games with these bespoke, exclusive content. There are a couple of examples here of a couple of games. One that we launched, the first experiment in this, one year ago, which has shown a massive premium in terms of turnover compared to the other launches that we've done in the same period, 18 x more. Another game that we recently launched, which is currently in our top 10 of most played content. Innovation, lots of new content, exclusivity, time exclusivity, and tailor-made content. Another point in terms of offer is the onboarding of PWO on Lottomatica Core, our MarTech platform. This means having available for PWO lots more data, behavioral and business-driven personalization, data that allow us to improve the customer journey, and a much more effective SEO engine, basically.
This is another important improvement that we get from the migration of PWO on the group's platform. All of these, we are at page nine of the presentation, results into additional opportunities for market share, additional market share gains in the future. We tried to outline this brand by brand in this slide. Of course, there are things which are common to every brand, namely the redistribution of the long tail of the operators, which we believe will start to happen with the new concession scheme and throughout 2026, but also the improvements coming from the Lottomatica Core. There are others which are specific to each brand. Planetwin, I already mentioned, the recovery post-migration and the exploitation of the functionalities of the group's platform. Bestplay, which is doing much better in iSports, but still has unexpressed potential compared to its position in iGaming.
GoldBet and Better, who can focus even more on omnichannel experience and cross-sell. Totosì, which will benefit from additional commercial agreements and on the work that we are doing and going to do on the profitability improvement in the midterm. As I mentioned in the beginning, we are page number 10. This will result, has already resulted in operating cash flow improvement and potentially even more in the future, which brings us to the point of managing these in a wise manner. Going back to our capital allocation principle, we have our dividend policy, we have our financial policy, and then all the excess cash available is deployed to basically currently the buyback, which is doing fine, very well. We've bought back 2% of the share capital. It's been driving compounding returns. Alternatively, it could be deployed in M&A, but with discipline. Page number 11.
This is just to remind a key point. M&A, we've always been doing it. We're pretty good at doing it, but we want to keep our disciplined approach and measure that on value creation and benchmark that vis-à-vis the share buybacks. In the last five years, we've not been sleeping. We've assessed 57 targets. We've fully due diligenced 14, but we've pressed the button only on three of them and only in Italy. Because we have a very selective approach, which is focused, as I said, on value creation and shareholders' returns, and we're committed to keeping that. Good news. On the current business momentum, opportunities on additional market share growth in the future on the various brands. Very strong operating cash flow generation and potentially also better in the future. Discipline in capital allocation. I give the floor now to Laurence. Laurence, please.
Thank you, Guglielmo. Moving on to page 13, when we look at the group results. The company achieved EUR 1.64 billion revenues in the first nine months of the year, recording an overall growth of +16%. Looking at adjusted EBITDA on a reported basis, we've recorded EUR 617 million of EBITDA, equivalent to a growth of +28% versus the previous year. In Q3, we've recorded EUR 511 million of revenues and adjusted EBITDA of 195, which is equivalent to an 18% growth compared to the previous year. When we look at the margins, clearly, there has been an improvement since last year. We've recorded 37.6% of adjusted EBITDA margins, and this is thanks to a mixed effect where online with a higher margin is growing faster. Secondly, because of the synergies that have come in the nine months and also ahead of schedule, as Guglielmo mentioned earlier.
On page 14, when we look at it by segment, we see that on the left-hand side, online continues to remain the main growth engine of the group, recording a growth on a reported basis of +27%. This is followed by sports franchise with +22% for revenue growth. This has also been supported by the favorable payout in Q1. Then gaming franchise recording low single-digit growth in the first nine months. On an adjusted EBITDA basis, taking into account also the effects of the synergies, growth has been faster with online recording 33% growth, sports franchise 51% growth, and gaming franchise +5% growth, also thanks to the effect of the bolt-ons that are coming into the P&L.
On page 15, when we look at the operating cash flow, on the left-hand side with CapEx, we see that recurring CapEx of EUR 67 million in the first nine months, which is pretty much in line with what we spent last year. We have EUR 46 million spent on concession CapEx. Here in the callout, you can see what we expect to spend for the full year, which is EUR 77 million for the retail concessions that are in our prorogation regime, and then EUR 35 million for the upfront CapEx for the online concession. It will all be paid in 2025. Then EUR 52 million of one-off growth CapEx, which. Include the deferred components and carryover from the 2024 bolt-ons that we had indicated at the beginning of this year of EUR 32 million, as well as the integration CapEx related to PWO of EUR 20 million.
This brings us on the right-hand side to an operating cash flow defined as EBITDA minus CapEx of recurring and concession of EUR 504 million, which is compared to EUR 353 million in the nine months of 2024. On page 16, you see the net financial debt. Bridge from 30th of June 2025 to 30th of September 2025. In addition to EBITDA, you have a negative impact of networking capital. This is negative by EUR 87 million due to the payment of the imposta unica tax, which is typical for Q3, given that is a large payment that is done in the month of August. This reflects the normal typical seasonality that we have where Q3 has the highest cash absorption due to working capital.
Followed by CapEx at EUR 46 million, financial expenses and leases of EUR 15 million, and then a buyback of EUR 64 million, which is the amount that we spent just in Q3. Just as a reminder, the total amount that we've spent to date is EUR 117 million, equivalent to 5 million shares or 2% of the total share capital issued. Then other of EUR 30 million, which includes integration costs of EUR 13 million. This brings us to a net financial debt as of the 30th of September of EUR 1.856 billion, including EUR 221 million of cash and a net leverage of 2.1x , which continues to remain at the low end of our financial guidance. That said, we have completed.
Excuse me, this is the CorusCo conference 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 the handset when asking questions. Anyone who has a question may press star and one at this time. We will pause for a moment as participants are joining the queue. First question is from Ed Young, Morgan Stanley.
Good morning. I've got three, please. First of all, on the concession license, obviously, we're now close to the time that's going to be coming into effect. Could you give us an updated view on how much you think is sort of up for grabs and addressable, and how quickly we might be able to see that, do you think, in your financial results? The second is online margins were very strong in the quarter. I guess that's the benefit of PWO as well. Is the Q3 online margin the right expectation for that going forward, or is the nine-month number closer to what we should model? And then finally, on M&A, thank you for the detail on the sort of discipline you're applying to your M&A lens.
You've also spoken a lot about the technology plans, both integrating PWO and all of the other sort of product improvements you're making to technology. If we take a step back and think about your M&A lens, if you were to do something outside of Italy, do you have in your mind's eye a view of how large you would like an acquisition to be, ideally? And in your mind's eye, is that also a deal that you would be synergizing, i.e., putting onto your platform. Or would you potentially be running a multi-platform strategy? I just wondered if you had any view from those 14 deals you've looked at, what you'd ideally like to achieve. Thanks.
Yeah. Hi, Ed. Guglielmo. I'll take one and three. On the question, yeah, I mean, we stick to the estimate that we've given so far. We estimate that the potential area for the potential grab for the market is 7%-10%. That is basically done by the 3% which has already opted out and is actually going out of business on November 13, plus the remaining part, which is based on business models which are not compliant with the new concession anymore. It could be anything between 7%-10% at market level. How fast that happens? There's probably going to be some which happens around the start of the new concession, meaning November and December, because that's the part you will see the effect of those who have opted out.
For the rest, it will take more time, so we go into 2026, because part of that is going to be driven by the new technical and compliance rules, which require technical upgrades, which will take until May 2026. It will be spread during 2026. In terms of impact on our P&L, we have a strategy which we discussed, which we shared in the last earnings call, which is trying to maximize the reach, say, how much customer base we can, out of this redistribution, we can address, we can grab. Several of these cases come at a much lower profitability than our historical brands for lots of reasons. It's a longer value chain, and we will have to work on profitability in the midterm.
First, it's customer base and market share, starting from the new concession and into 2026, and then work on profitability, which is a mix of basically supplier conditions and improvement of the margins alongside the value chain. It's not coming immediately. It's taking time, but it will come, hopefully. On M&A, and then I'll leave point number two to Laurence. We don't think that going international with bolt-ons will be at this stage particularly meaningful. You don't achieve diversification, and at the same time, you make the story more complex. If we do something international, it will have to be something meaningful, and it will have to be an industrial rationale. It will have to come with synergies. For sure, the synergies will be around strategic suppliers. We all buy from the same content suppliers, the same, we all buy the same business services all around Europe, at least.
There's a synergy potential with that, which may be significant. It's not different from putting together two in-country online assets and doing international M&A. It's the same type of providers, counterparts, and things that you have to do. This is the baseline. Then it will depend on the asset you may have. There's not a prescription here. You may have an asset which is very sizable in a country, which is already doing. Very well, which is a very good product, and it makes no sense to do replatforming of the gaming platform. Absolutely no sense, and it is going to be very risky, and you do not see why you should do that. At the same time, you can integrate that.
You can provide to that the layer above that, which is the MarTech layer. It is the Lottomatica Core, which is functionalities which can be linked to the platform without changing the gaming platform, which is the risky business. It is on top of that. Still, you can create a lot of value, especially on all the digital marketing activities. That does not require replatforming. On the other side, there may be assets where the trade-off between the risk of a replatforming and the benefit of providing a better product, not necessarily the same product for all the countries, but a better product, can be worth the effort. It will be a decision which will be made on an asset-by-asset basis.
Nevertheless, you can have top-line synergies relevant, and not only top-line, because the MarTech will also help you on the cost side, on the cost of managing affiliation programs, on the cost of managing bonuses and promotions. You can have synergies on the tech side without a replatforming of the gaming system, but with adding the Lottomatica Core MarTech layer. I hope I answered your questions.
Maybe on the second one, I'd say this Q3 has been a strong quarter in terms of margins, which has been helped by the acceleration of the realization of synergy realization. There's also some timing of costs. I would not take this as a normal run rate, as a run rate margin. We were more looking at for online in particular at mid-50%, which is pretty much in line with what we've seen in the first nine months.
Very helpful. Thank you for the color.
Next question is from Clark Lampen, BTIG.
Thanks very much. Good morning. I wanted to follow up on PWO first and maybe see if there's a target for market share, I guess, beyond just solely recapturing what's been lost over the past couple of quarters with migration. As we're looking at the synergy target that you guys provided in the slide deck, is that primarily revenue synergies, as we're thinking about 2026? Maybe second question, sort of following on Ed's questions with regard to relicensing. As we think about maybe the sort of medium-term state of the market a couple of years as we sort of flow through the relicensing, do you expect something as the market sort of concentrates and coalesces around a smaller number of operators? Could market share start to eventually resemble what we're seeing offline? Or, if not, why should we expect maybe it to sort of settle out in a different way? Thanks a lot.
Clark, I think at least on the market share for PWO, I mean, we're now at around 6% of total online. We were at 7%, a bit north of 7% pre-migration. I think it's fair to say that. Our objective is to at least recoup that amount, and then the rest is to be seen. Of course, I don't think we would be happy stopping there, but it's always hard to predict or give any guidance on that. I think on the synergy target, what you'll see is of the total amount, there's only—you can see the split between CapEx and OpEx. You'll see the revenue on OpEx of EUR 77 million run rate. EUR 10 million of that is revenues, the rest is OpEx. And then there's an additional EUR 10 million of cash costs that bridges the EUR 77 - EUR 87, which include CapEx synergies as well as synergies on the guarantee costs that we've already achieved.
Yeah. Hi, Clark. On the relicensing and the market in two years' time, yeah, it will be more concentrated. Most likely, it will be more concentrated. That's where all the forces, that direction, all the forces are pushing. Will it be as concentrated as much as offline? Probably a little less, because in offline, you always, things are more sticky because you have a physical network, and you just don't wake up and have a physical network and change the market share. It's for sure more sticky business. So once you are concentrated because of the size and quality of your network, that pretty much stays unless you do something very, very bad or very good on the other side. But that's a tendency, yes. It will be for sure. We believe that there's all reasons to think that it will be. Offline can be a benchmark, not probably the final ending point. But yes.
Thank you very much.
You're welcome.
Next question is from Praveen Gondhale, Barclays.
Hi. Good morning. Thanks for taking my questions. Firstly, on the retail concessions, do we have any update there? Secondly, you sort of talked about synergies and timing of some cost-benefiting the Q3 margins. Could you help us quantify the timing of those costs and what's the nature of those costs that help the Q3 margins? Thank you.
I'll go on retail concessions. Where do we stand with retail concessions? I mean, the government continues to work on the overall reform of the retail, which also, and a part of that, of course, will be the renewal of the concessions because you have the reform, and then you can launch the concession tenders and award the new concessions. I think we're all aware since a few months of the new scheme, new proposed scheme for the reform of the sector, which is pretty constructive. We commented on that in the past. Now, the government continues to discuss with the regions to find an agreement. I don't think there is any update on that side except that there looks to be a strong focus and a strong commitment this time in achieving an agreement. The basis for that are, as I said, very solid and constructive. Hopefully, they'll make it.
Thank you.
Next question is from Estelle.
Maybe. Apologies. There was maybe a second point. I was on mute responding to Praveen's second question. I think in terms of what synergies were brought forward, I mean, we brought forward a certain amount of synergies in the year because we completed the tasks of the integration just earlier. They primarily relate to the network of franchisees. We talked about one of, there were two items in particular, which is one is the replacement of the points of sales, the lower productive points of sales that went ahead of plan. Secondly, the contract renegotiation with the points of sales that was going to be carried out over the course of the year has been completed ahead of schedule. These are the main drivers.
Thanks, Laurence. That's really helpful.
Next question is from Estelle Weingrod, JP Morgan.
Good morning. Thanks for taking my questions. The first one, with respect to your targeted market share gains following the new online concession regime, you're proceeding with two structures from what we understand. The first one is via Totosì, and the second one via direct deals, whereby you take minority stakes. How should we think about the longer-term market share potential across the two? I also have a question on the payout within iSports. We only got the one for the sports franchise for Q3, I think. Thank you.
Yeah, Estelle. On the structure, yes, there are actually two structures. I mean, there are three ways to gain market share. One is because redistribution happens, you are on the market, and you gain market share just doing the work that you always do because you're able to attract the clients. There's nothing specific around that except that you continue doing what you do. Then there are two specific initiatives. One is commercial deals. Usually, these commercial deals will be related to Totosì. As you, they will be deals basically for the migration of the customer, the usual structure we discussed. Then there is the latest addition to the toolkit, which is the one that we discussed in the last signing school, which is these deals with minority deals with a path to control. They might relate to Totosì or to other things.
It's going to be decided on a case-by-case basis, but this is not particularly important. The important thing is not where the gain shows up in terms of the brands that we have today. It's more that we have three options. One is being competitive and benefit from the redistribution. The other one is doing deals on the customer base. The third is doing deals with operators who want to find, want to onboard a larger project. How much is going to be of each of these categories, it's very hard to say. It's very hard to say today. It's almost impossible to make a plan on how much will come from each of these flows. It's something that we'll have to comment once it's done, unfortunately. All of the three are active, that I can say. We're actively working on all of them.
On the second question regarding the payout, in Q3, we had, for the retail, it was 81.5%. And for online, 86.1%. They are both sort of, they are below or above the normalized levels. In terms of payout benefit, clearly, what we were carrying in the first half as payout benefit has been slightly eroded in Q3 as a result of a higher payout.
Thank you. Could you perhaps just quantify the adverse impact of PWO on the online NGR growth in Q3 specifically, if you have it?
You mean the impact of what? At the revenue level?
Yes.
We do not sort of, we do not break it down, but I would say that the impact of, let me say, the impact of PWO is the primary. The negative impact of PWO is the primary driver for, let's say, for the lower growth that we have experienced to date. That is the main driver.
Okay. Thank you.
We're not disclosing precisely the split yet.
Okay. Thank you very much.
Next question is from Ben Shelley, UBS.
Hi. Thanks for taking my questions. I've got two. I wanted to come back to capital allocation and M&A. The narrative you've outlined in the presentation, would it be fair to conclude the core message you're giving today is that given the attractiveness of the Italian market and the propensity for shareholder returns, the bar is very high for transformational international M&A? My second question is, you've got a notable free cash flow conversion improvement in 2025. I wanted to get your thoughts on what areas or cash outflows you think you can continue to gain leverage over or improve on in 2026.
Yeah. Hi. Guglielmo , the first one on capital allocation. Yeah. The bar is very high, definitely. The bar is very high. This doesn't mean it's out of reach, but for sure, it's very high. Right conclusion.
On the second point, it's actually a good point. Because. Through this year, there's been a good improvement. Next year, I'd say, in addition to EBITDA growth, obviously, if you start looking at the various components like you have sort of concession CapEx, we know that recurring CapEx are quite scalable given they're primarily driven by the size of the footprint, which doesn't change. The CapEx in tech that is highly scalable. That is, the recurring CapEx are a very scalable item. Concession CapEx, we know what we'll pay. Next year, we will not have. We will have the recurring, sorry, the concession CapEx for retail, which we know already the amount. Online, we'll have zero because we'll have paid everything this year. In terms of other, let's say, extraordinary items, you'll see that basically the line items will almost disappear. We'll have significantly fewer non-recurring.
We would expect because the PWO integration is substantially complete now. By the end of the year, we'll be practically done. You will not have these, or you have way fewer non-recurring items. It's also cleaner when you look at the earnouts and deferred considerations that we've had in the last couple of years. The payment of the Betflag earnout is just not there anymore. That's done. GoldBet, most of it is practically done. It's a much cleaner cash flow profile. When you look at the financial expenses, obviously, we've refinanced half of our capital structure, a bit more, earlier this year. That has driven the average cost of debt down. You'll see the full year benefit. You only see half-year benefit this year. Next year, you'll see the full benefit of it. That's another item. The other items like leases are pretty stable.
You're really only left with cash taxes. All of this to say that you have fewer extraordinary items you would expect, more scalable CapEx, and lower financing costs. It looks, let's say, also neater from a cash flow generation perspective.
Thanks very much, guys.
Next question is from Hugo Paternoster, Kepler Cheuvreux.
Yes. Good morning, gentlemen. Thank you for the presentation and taking my question. I will have two follow-ups, if I may. The first one is on the online concession rollout. And regarding the data that you mentioned, the 7%-10% data suggests that the cake to be redistributed may be smaller than initially thought, I would say, like six months or one year ago. How does this change your expectation for competitive dynamics of the Italian online market? You mentioned that on the medium term, you expect further rationalization. Would it go through organic rationalization, or are those M&As still an option in this market? The second question remains on the M&A, the M&A abroad. You have mentioned that you are evaluating a lot of opportunities in international. Could you elaborate, give us a bit of an update on your M&A strategy there?
Specifically, in the context of a recent move in Germany, a French company acquiring a German one. Would you have a look at this company since it, I would say, featured a lot of what could fit your strategy, sports franchise, both on the online and retail? Is this something that you considered? Was it too big? Any color on this, I would say, would be helpful. Thank you.
Yeah. I'll go on the first one. Look, no, I wouldn't say the assessment is smaller. I think we've always said it was around 10% because you started from a 15% of the tail. Then you had to take out all the aggregations and consortiums. Then you had to take out those who were absolutely stable within the cluster. So you ended up around 10%. Today, we can say it's between 7%-10%, which is not, of course, you have a lower end, but I don't think we're talking about different numbers than originally envisaged. No, I don't think that there's going to be a, we're not thinking about this as already a significant change. There's going to be pressure on that part of the operators, of the tails to consolidate in the coming months and coming couple of years, as we commented. Part of this is happening fully organically.
Part is happening through commercial deals. Part is happening through the small deals that I mentioned to you. There may be some bolt-ons also in the market. They might come up. So it's a mix of things. I think all options are open in the next couple of years. I think the key point is that clearly, there is a push towards some additional consolidation. How you get there, that was also a question. We're going to see. It's very hard to say how much is going to be coming from bolt-ons, how much is coming from commercial agreements, how much is coming from organic redistribution. It's going to be a mix. The end game is a more consolidated market.
Maybe for your second question, I think the recent wave is a testament that the industry is currently going through a phase of consolidation. I think for what we can comment, I think these are—we appreciate the move that took place. I mean, on the face of it, they're very good assets. I mean, we can't comment on the deal other than say that they are—both assets are sort of high quality. I don't think we can really say much on the size, really, whether something is too big or too small. I mean, we have all the levers to be able to do a deal of a similar size. We have both the financial capacity, balance sheet capacity, as well as ability to issue equity to do transformational deals. I don't think that the size necessarily is a hindrance to any potential M&A.
Okay. Thank you very much.
Next question is from Domenico Ghilotti, Equita.
Good morning. A few questions. First, I'd like to have your updated assessment of market trends moving into 2026, so if anything has changed compared to your previous comments on market expectations. Second is a clarification on the synergies. I'd like to understand how much has really gone through already in 2025 P&L. I just want to understand what is, let's say, the balance that we can also count on for 2026. If you want, give us a quick comment on the current trading. We've already seen a very strong high gaming market trend, not yet on iSports. If you can just comment on that.
Yeah. I'll take this. Listen, I think in terms of market trends. The broad strokes. We've held similar views than we originally said. What you may see is some movement of the demand, particularly in sports, between the online channel and the retail channel. What you'll see is, if you look at online, if you look at online, in iGaming, we'll continue to see these, we expect to continue to see these mid to high teens growth. I think there are really structural tailwinds that continue to support it. In iSports, it's more towards sort of the low double-digit type of growth. Obviously, you have to take, given that it's a heavily omnichannel market, you will see that growth in sometimes, so demand can move more towards the retail end.
In fact, if you look at the growth for this year in sports franchises, it has been significantly stronger than we've had originally expected. It's just some of the masses have moved more towards the retail. In aggregate, you'll see that the sports segment, when you combine retail and online, has been growing consistently between 8%-9% per annum. We expect to continue to see iSports growing faster. You may have periods where it grows, it doesn't grow, it grows a bit less fast, and retail grows faster than the original expectation that we had set of mid-single digit. Gaming franchise, I mean, we'll continue to see the decline of mid-single digit that I think is our expectation. On the synergies that we've already seen in our P&L, I mean, for this year, we'll see circa EUR 50 million in the whole for the full year.
What we've seen already in the last 12 months, ending 30th of September, we see around a bit more than EUR 40 million already in our last 12 months. In the remaining, as we get into the full year, that EUR 40 million+ will go into EUR 50 million. Domenico, remind me, the last question is a market trend for October.
Yeah. It's on iSports or sports in general, so.
Sports in general, I think it continues to be, I mean, we'll have to wait until we can publish the data that comes from, that will be published in the coming days. In that, sports continues to remain similar trends that we've seen. If you look at the trend line, it's continued to be pretty strong at the same levels. I mean, October particularly, we'll comment on it when the numbers come out. I would say that in general, if I take a step back, particularly on this segment, it is important to note that if you plot, particularly if you plot GGR of the whole sports segment, the trend line is pretty clear. You have periods where you're above the trend line, periods where you're below the trend line.
More recently, we're in a period where it's below trend line, but we'd expect the trend line to continue to remain valid going forward. We'll see. On October, I reserve until we see judgment, until we see what the outcome of the whole market is.
Okay. Thank you.
Next question is from Chiara Pampurini Int ermonte.
Good morning. Thank you. I have a couple of questions. The first one is on the gaming franchise division. I think sports posted a very strong EBITDA, like 11% growth. What is supported by bolt-on and its performance, or one-off, or some of these performances will be possible to see in the next quarter? The second question, on curiosity, looking at both, particularly in the U.K., we have seen increasingly negative lines about regulation toward the end of the year.
Chiara, apologies if I interrupt. We can really barely hear you. It's very muffled.
Okay. Sorry.
We tried to guess the first one, but do you mind restarting if you?
Yeah. What's the first one?
Yes. Yes. I think we probably got it, but we want to make sure now that we got it right. Yeah.
Excuse me. Now it's better?
A little bit better. Yes.
Okay. Sorry, some problem with the earphones. The first one is about the gaming franchise division. In the third quarter, we see a strong EBITDA with 11% growth in the division. I'd like to know if it was supported by bolt-on, if this was a one-off, or if some of these positive performances will be possible to be seen also in the next quarter. The second one is about the regulation. It's a curiosity looking at growth, particularly in the U.S. and United Kingdom. We've seen increasingly negative headlines about regulation toward the end of the year. So far, we haven't seen any concrete negative development in Italy as change regulation is ongoing. I want to know from you if you see a risk of worse news over the next two months. Thank you. Hope you hear better.
Okay. I'll take the first one. Listen, the performance of the gaming franchise business in Q3 is, I mean, the growth is entirely driven by the bolt-on activity that we've carried out. The growth is entirely, so it has more than offset the decline of the market, decline of retail gaming. You want to go?
Yeah. On the second one. I mean, there's nothing in the current draft of the budget law, and there's no discussion around that. I think that's the short answer to that.
Okay. Thank you.
The last question is from Andrea Bonfà , Banca Akros.
Hello. Good morning to everybody. Very quickly, I got two curiosities, if you can allow me. First of all, if it's possible to know if you are on a due diligence phase on your M&A scouting abroad. The second one is I calculated more or less you spent just over EUR 50 million on the shares buyback in the month of October. Is this a level that we might consider normal at this price level of your share? Thank you very much.
Andrea, if you don't mind, on the first one, we very politely pass. Whether we're in due diligence phase.
That's right.
The second one on yes, I mean, the spend that you see for the buyback, the reality is it's algorithmic. It's not something sort of that we give the total amount to spend, and then the bank carries it out. I think what we had ultimately said is that we have authorization for up to EUR 500 million. We got now, since mid-June, we spent almost EUR 120 million. I think you should look at how it averages out per month, and I think that's a fair proxy. It's hard for us even to forecast it because the buyback is done really with an automatic tool.
Thank you very much.
Thanks, Operator. I think we are done with the Q&A. Thank you all for joining. Bye-bye.
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