Good day and welcome everyone, to the CIRSA Q1 2026 financial results presentation, hosted by Joaquim Agut, Executive Chairman, Antonio Hostench, Chief Executive Officer, and Antonio Grau, Chief Financial Officer. My name is Angela and I am your event manager. During the presentation, your lines will remain on listen only, but if you would require assistance at any time, please press star one on your telephone and an operator will be happy to assist you. Please note that in the Q&A session, you can ask questions by phone or in writing via the webcast, and the answers will always be given orally, with the order of preference being those given verbally. I would like to advise all parties that this conference is being recorded. Now I would like to hand over to Mr. Agut. Please go ahead.
Thank you very much. Thanks to all of you for attending today's CIRSA Q1 2026 results presentation. During our results presentation, we will be covering four points. The Q1 2026 highlights, give you a business overview, to continue with the financial position, finally, an outlook and conclusion chart. Starting with the slide on page 3, I will start my presentation sharing with you CIRSA's highlights for Q1 2026. Q1 2026 shows a very clear, strong start for the year, showing very solid business growth. Excluding COVID, Q1 2026 is our 71 consecutive quarter of growth. Net revenues reached EUR 623 million, a +8% growth year-on-year. This is a +9.5% excluding FX. EBITDA reached a level of EUR 194 million, a +8.5% improvement year-on-year, or a +10.8% excluding FX.
Adjusted net profit reached EUR 70 million, a growth of 33% led by EBITDA and financial savings. Our business diversification works, is leveraged on our leadership positioning across our key markets, and is consistently delivering growth. Organic figures are above our long-term guidance, with net revenues at 7.4% and EBITDA + 8%. On top, we have to add the growth generated by the recent accretive bolt-on integrations. EBITDA margin is being sustained above 31%, with Slots Spain being the start with margins above 50%. In summary, CIRSA is fully on track to meet guidance 2026 high-end value. Moving to the next slide of page 4, this is about revenue growth. Strong growth achieved by all different CIRSA businesses. In Q1 2026, net revenues had very strong performance in both retail and online.
As already commented, net revenues ended at EUR 623 million, representing a +8% improvement quarter-on-quarter, or 9.5% excluding FX. Slightly above our IPO roadshow guidance. LATAM region grew at +15.8% excluding FX, and our Spanish businesses grew at +7.8%. Both delivered very good figures. The revenue mix is quite well-balanced. Retail representing 38% and online 22% of total company revenues. Retail, excluding FX, grew at +9.3% quarter-on-quarter, driven by a very solid performance of organic growth of +6.6%. Online segment turnover was pretty strong, up +32.4%, and net revenues +10.3% improvement, excluding FX. Moving now to the next slide on page number 5, I'd like to talk about our strategy execution discipline here. Regarding our financial position, see that CIRSA is ready for growth, with leverage ratio being virtually at 2.6x.
In financing costs, we already achieved a strong reduction of above EUR 60 million. More savings expected to come from our EUR 375 million bond coming refinancing. M&A strategy is on track. We have a solid pipeline of targets across the world. When deals close, expect yearly EBITDA growth exceeding +10%. Regarding shareholder remuneration, this month of May, we paid EUR 75 million in dividends. For 2027, the prospects look very good. Our adjusted net profit in Q1 2026 grew +33% to EUR 70 million. On the right-hand side of the chart, you can see the comparison between the 2026 percentage guidance growth range of revenue and EBITDA and the Q1 2026 actuals, excluding FX. In both cases, we are meeting or even exceeding the guidance 2026 high-end numbers. Now I'm going to hand over to Antonio, who's going to start going through a detailed business overview.
Thanks, Joaquim. Okay, page number seven, let me start by saying that our Q1 results are a direct reflection of the strategy we have been consistently executing, built on leadership, diversification, and a strong focus on cash generation. This strategic framework is what has allowed us to deliver now 71 consecutive quarters of year-on-year growth, demonstrating both the resilience and scalability of our business model. Our leadership across markets, combined with broad diversification across geographies and channels ensures that we capture growth from multiple sources with both channels, retail and online, contributing meaningfully. At the same time, our focus on efficiency and productivity translates into a high cash generative model. As Antonio will show you later, we've delivered EUR 100 million of free operating cash flow, that is allowing us to reinvest in organic growth while maintaining a strict capital discipline.
Looking at Q1 2026, performance has been clearly ahead of expectations, with net revenues at EUR 623 million, at 8% year-on-year, and EBITDA at EUR 194 million. Today, with data up to May 20th, that was yesterday, I can tell you that Q2 is showing the same good trend as of Q1, supporting the stability of our growth profile while our M&A team is working on a healthy pipeline of bolt-on M&A opportunities, as well as more sizable potential transactions, as we already disclosed in the previous report, to further support our growth going forward. Now, I'm going to break it down, the overview between our retail businesses and the online. In page number 8, we have our retail businesses, which remain the main cash generator of CIRSA.
In Q1, retail delivered strong double-digit EBITDA growth of 13.3% excluding FX, with revenue also up 9.3% ex FX, clearly demonstrating the strength of our operating model. This is high-quality organic growth, with revenues up 6.6% and EBITDA up 10.4% just organically, reflecting both strong demand from our customers and operating leverage. We see more visits to our sites and also a slight increase in revenue per visit in all geographies, for a total of 1.7 unique clients we received during Q1. As reported in February 26th, there are four key drivers behind this performance. First, product innovation and technology. This includes new slot content that applies both to our slot operations within Spain as well as to our casino business worldwide. Second, the Gold Mine project, which drives incremental growth to the already good organic demand.
We have today 14 out of the 20 planned Gold Mine projects for the year that will be completed before August. Third point is the technology tools that allow us to develop advanced CRM and loyalty solutions addressing the 1.7 million customers we had during Q1 2026. This is providing us with deep customer insight and monetization beyond what our peers can achieve. Fourth and last, the accretive bolt-on M&A that has contributed in the quarter 2.8% to EBITDA growth. During this quarter, we had some FX headwinds, particularly in casinos, we have successfully offset this through a strong operational execution and productivity initiatives, which is also reflected in continued margin expansion to 36.2%, up 110 basis points, with a remarkable performance in Spain, as Joaquim said, in Spain slots reaching over 50% EBITDA margin.
Overall, retail businesses combine strong organic growth, margin expansion, and cash generation, making it a highly scalable and resilient core business. Finally, in page 9, let me turn to online, which is our fastest-growing and highest potential segment. In Q1, online delivered excellent organic turnover growth, 22.4%, with both casino and sports betting verticals showing strong momentum. Net revenues reached EUR 143 million, growing 9.4% fully organic, despite some temporary impact from unfavorable sports payouts, which highlights also the strength of the underlying trend. This performance is driven by continuous improvement in customer experience and product, supporting both engagement and acquisition of customers. For the Q, we managed a total of 1.6 million unique clients, which is +7% versus Q1 2025.
In addition to these excellent growth rates, we are seeing a strong operating leverage, with EBITDA growing 26.3% on a like-for-like basis and margin expanding to above 21%. Our focus in this business unit going forward is on, first of all, and we have it in the short term, deploy our World Cup campaigns, which combines new, simple ways to facilitate the entrance of new customers to the betting experience, and also very specific media campaigns customized to its market. As an example, you will see Leo Messi promoting our LATAM brands in the coming weeks. Second is to expand the portfolio of exclusive content. Basically, in the slots and casino offer, we'll have exclusive titles for our brands. Third is the use of AI to increase the number of real-time promotions and personalized journeys.
Lastly, of course, M&A. As Joaquim commented, it is our intention to grow in this channel through acquisitions, considering both existing markets and maybe in new neighbor geographies. In summary, our online business combines strong top-line growth with a clear path to high profitability as we continue to build a critical mass in developing markets, which will progressively enhance margins. For that reason, we remain fully confident in our long-term targets for revenues, EBITDA, and margin in online. Now I'll hand it over to Toni Grau.
Thanks, Antonio, good morning, everybody. Let me now walk you through our financial position. I'll be starting with the key drivers of cash generation and capital allocation. First, I would like to highlight the consistency of our EBITDA margin, which remains sustainably above 30%. This level of profitability continues to be a core strength of our business model and also gives us a solid base to fund our growth in a disciplined manner. During this Q1 , we have accelerated our CapEx deployment, reaching EUR 65 million, primarily focused on our retail operations. This includes the rollout of our growth initiatives, such as the Gold Mine program. 14 out of 20 gold mines that have been approved have already been launched, or the continuous renewal of our slot machine estate. Importantly, this is not just about investing more, but it is about investing better.
We are maintaining strict capital allocation criteria with expected returns on growth CapEx above 20%. Turning now to cash flow. Reported free operating cash flow stands at EUR 61 million. However, this figure is temporarily impacted by a one-off working capital effect, mainly related to payment timing differences versus last year, as we informed in our Q4 results presentation. If we adjust for this effect, underlying cash generation remains very solid, with recurring free operating cash flow broadly stable at around EUR 100 million. That's essentially in line with last year. Overall, what we are seeing is a business that continues to deliver resilient and predictable cash conversion, even in a quarter where we have stepped up investment to support future growth. Moving to our next slide, please. Let me address our capital structure and deleveraging profile.
We continue to see a clear and consistent deleveraging trend, with leverage now being at 2.69x or 2.6x on a pro forma basis, pro forma for the M&A annualized contribution to EBITDA, which is already, as Joaquim was mentioning before, close to what we consider our steady-state level of 2x-2.5x . This progress has been achieved while keeping debt broadly stable, despite the acceleration in CapEx and the beforementioned one-off impact on working capital. Again, this highlights the strength of our cash generation and our financial discipline. Looking ahead, we remain on track to deliver further gradual deleveraging. We are targeting a reduction of around 0.2x-0.3x per year. Another important highlight is the significant reduction in financial expenses, as we were already anticipating in previous presentations, with being 34% down in the quarter, which will be sustained throughout the year.
This has been achieved following the actions taken in 2025, which you already know, including the IPO, the debt refinancing at a lower coupon in October last year, and active debt management. With this, we are already achieving more than the EUR 60 million of annual savings that we are announcing. Together with EBITDA increase, they are expected to be the main drivers for the substantial increase in net profit for 2026, which subsequently will imply a substantially higher dividend payment in 2027 for the 2026 results. There is also further upside ahead. That's not the end of the savings. Also, as Joaquim was commenting, with a planned bond refinancing in July 2026, we expect to continue reducing our cost of debt, which will further support net profit growth going forward.
I would like to conclude by saying that we believe the financial profile of the group remains very solid, with a strong and sustainable profitability, disciplined high return on investment, resilient cash generation, and a well-managed and increasingly efficient capital structure. All of this positions us well to continue executing our strategy with consistency and financial discipline. In particular, this is important, it opens the possibility for an acceleration in M&A investment with good accretive opportunities, but also important, maintaining our leverage ratio below 3x . Thank you. Now I hand over to Joaquim for the outlook and conclusions.
Okay. Thank you. Thank you very much, Toni. Now on slide 14, which is about our final remarks and conclusion. CIRSA strategy and its execution works achieved 71 consecutive quarter including COVID, growing EBITDA. CIRSA management team always delivered. During the last 20 years and regardless of business cycles, CIRSA's diversification has been a key pillar for our consistent and recurring financial delivery. 2026 is another year with a strong set of opportunities where growth will come from both organic and M&A. We'll continue with our bolt-on accretive acquisitions, and we are ready for another sizable M&A, another acquisition total type of acquisition. Our sound capital structure supports further M&A. The management team is fully committed to deliver shareholder long-term value and will deliver attractive dividends, earnings growth, and cash flow generation. As commented several times during the presentation, we are on track to deliver guidance 2026 at high ends.
Finally, to say that at CIRSA, ESG and responsible gaming activities matter. For us, being on the top positions of ESG international ratings is a must-win condition. Thanks a lot. Now we are ready to take your questions.
Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your headsets and make sure your phone is not on mute when asking your question. Your first question comes from the line of Francisco Riquel with Alantra.
Thank you for the presentation and for taking my questions. I want to focus on the online business. First, I want to ask about the margins in online, just under 15%. You mentioned over 5 percentage points from the gaming tax in Peru. I understand this tax was effective already from the H2 of 2025, and margins were close to 18% in Q4 2025. I wonder if the P&L accrual of the tax is linear during the year or, if not, if you can please explain. You mentioned a negative sports payout for another quarter, you can comment if this is a sector trend in the three markets where you operate or if you are investing more in any specific market where you perceive the increased competition.
Lastly, the potential uplift of 150-100 basis points in some of the new markets when they reach maturity that you commented. If you can please elaborate about this and update on your long-term margin guidance and also for 2026, if possible. Thank you.
Okay, Francisco, let me answer. I think, first of all, what I would like to remark is the growth that we have in the online segment everywhere. As I told you, we are seeing not only Q1, but the numbers today are showing that in turnover because you know that depending on the results, the GGR might be, or the win, the revenues would be higher or lower depending on margins. On turnover, we remain in this double-digit growth, above 20% in all our geographies. What happened in margin terms is something that we already knew because the progressive tax uplift that we had in Peru was known from the day this was regulated in 2024. This is something that was factored when we said that our mid-term view was to be close to 25%. Having said that, where this improvement in margin will come from?
As I said, we have today operations in Mexico and Colombia and Panama that are, let's say, breakeven. We are still in the investing period. As far as we can keep growing those operations, which is the case, this will be positive contributors and will turn margins in the range of 25%- 30% in those markets. This will help in our guidance to that more than 20% margin. Secondly, another topic is that in Italy, due to our business model, we have potential to improve our margin because today we are, let's say, sharing some of the win with third parties that are taking care of the marketing side of the business. We are in conversation with some of them to capture that margin and increase the margin also in Italy. See, all in all, we remain fully confident.
This was a 15% margin Q, but this will be consolidated. You are right, this started in Q3 last year. In Q2, this will be the last year where we will have this, let's say, downgrade in margins, but from then on, we expect that to grow to higher numbers. On top of that, I think Joaquim and myself, we already commented that we plan to add new members to the family through M&A. Of course, that does not depend only on us. The third party also has something to say, but we are confident that during the year, we'll give you good news on M&A in this channel.
Thank you.
Your next question comes from the line of Ricardo Chinchilla with Deutsche Bank. Your line is now open.
Hey, thank you so much for taking my questions. Congrats on the solid performance. I was wondering if you could give us a little bit more color on what type of M&A opportunities you're pursuing, given that your remarks on the call hinted that you were looking for more of a larger target than the bolt that you continue to do every quarter.
Okay. Remember we gave you a guidance that during this three years period, we were spending from EUR 450 million-EUR 500 million. This means that for acquisitions, we are going to spend in the range of EUR 150 million every year, and we remain confident on that. That is purely considering bolt-on transactions in our countries. I think that applies to both Spain, Italy, Latin America, and as well as something also appears in Morocco. We are ready to execute there also. What we said in the previous report is that now, because of the size of the company, we are also open to explore new geographies. New geographies would mean maybe one remaining or two remaining geographies in Latin America.
The new thing is that we are looking at Western Europe countries, where there might be opportunities both in the online channel as well as in the retail channel. Of course, the priority for us would be to start investing in profitable business in the online segment.
Got it.
EUR 450- EUR 500, we are ready. As Toni explained, our capital structure would accept a higher investment in M&A.
Got it. Perfect. On the front of leverage, what would be your maximum leverage that you would consider given your high free cash flow generation potential, so that even if it increases by, let's say, one or two turns, you could easily go down to the current levels. Do you have any maximum target or any specifics? That would be very helpful.
Yeah, Ricardo. The view we have in terms of leverage, and that's been explained sometimes several quarters before, is that this acceleration of M&A would be temporary and not reaching the 3-point level. Yeah? That's where we will be. From that, under 3-point level, whatever it is, 2.8, 2.9, whatever it is, we would be able to reduce annually at the rate of 02, 03. Quite quickly going back to the levels around 2.5x or below. That's what we have and the opportunities we have on the pipeline. If this acceleration occurred, we would be below that 3.0 level.
Got it. Last one from me. Have you seen any change in consumer behavior, even in frequency on the size of bets from some of your customers following the concerns with the Middle East and inflationary pressures? Or everything has been normal in terms of the health of your players? That would be it. Thank you.
Nothing out of normality. In our markets, I think what's happening in the Middle East is too far away from meaning anything.
In reality, Antonio, what we see across the business is revenues per machines going up, and we see visits increasing to all our sites.
Same thing in online.
Thank you.
Your next question comes from the line of Ricardo Benevides Freitas with Santander. Your line is now open.
Thank you. Hello, all. Just two questions from my end. Firstly, on M&A, another question on this. You mentioned the acceleration of growth to more than 10% revenues and EBITDA, I believe. More or less, this acceleration, considering your execution, when should we be seeing it? Are you talking about an acceleration if you close the transactions that you want this year, that we would be observing that acceleration this year? Or is this more a run rate type of growth for, let's say, the following three, four years? My second question is regarding the sports betting unit. I was just wondering, in terms of current trading, are you seeing any increases in sign-ups, in terms of accounts, volumes, in advance to the World Cup?
Yes, the calendar. Our expectation is to close those, let's say, that accelerated funnel during this year. As I said, this is not just depending on us, but our expectation internally is to have those opportunities during 2026. With regards to the World Cup, this is something that just started. What I can tell you is up to now, the numbers that I reported on Q1 are very similar to what we have seen up to last week. It is really starting this week, all the campaigns that we are going to start around the World Cup. I cannot tell you as of today, we have not seen anything happening because the campaigns will be starting in the coming days.
Okay, perfect. Thank you.
Your next question comes from the line of Ed Young with Morgan Stanley. Your line is now open.
Thank you. Two questions, please. First of all, on Slots Spain, continued outstanding performance there. In terms of the margin in particular, if we look at your written commentary, it looks like a lot of those impacts on the performance are structural. Is it time to sort of get to a more sustainable, positive picture on the margin and growth outlook there? Are there any one-offs in the quarter that we need to be aware of within that performance? The second of, on online, I think most of the questions have been addressed on that probably already. Just to be clear, is it that you couldn't mitigate that tax impact or you sort of haven't chosen to mitigate that tax impact? Has been playing into your desire to do some M&A, which sounds like it might be geared towards online. Thanks.
About our Slots business in Spain, you are right. It is now the fifth consecutive quarter where we have margins above 50%. We have been a bit reluctant from now on. I think we feel confident that being in the range of 50% can be taken as a fact in this business, which is performing extremely well, with the growth rates that you have seen, and which continue to be outstanding in this quarter. Regarding online, I don't know if I got your question, the truth is that we knew from the beginning of 2024 that this is what's going to happen. I think growing the business will help us to, let's say, to balance this hit that we had during this Q.
As I said, combining this with the winning critical mass in our other Latin American operation as well with adding through M&A new operations with good margins will help us in reaching that target of 25%. I feel quite relaxed about it because this will come month-on-month.
Okay, thank you.
Your next question comes from the line of Richard Stuber with Deutsche Bank. Your line is now open.
Hi, good morning. Just one question from me, please, again on the online margin, and apologies if you've already answered this. From my understanding, the Peruvian tax had been fully introduced, say, by the Q4 of last year. Your online margins still fell a further 2.5 percentage points or so. Is the reason behind that then more to do with the customer-friendly payouts? Is there something else which we should understand? We're just trying to work out really when we should start seeing the online margin improve in terms of which quarter. Thank you.
Could be that margin. We think that you should see that margin going up. You're right that this started last year. We don't see any reason why this shouldn't go back to the margins we had in Q4, and especially because maybe during this Q1, we had a bit, as I said, unfavorable sports results. We don't think this is going to stay this way. On top of that, I want to remark that we are having more than 20% growth in turnover, which is an outstanding figure that we have seen when I look at the competitors in our markets. Let me go back what you can see on page 9. If you compare apples with apples, our margin of 18.5% would be in a like-for-like basis, 21.3%. This is also good.
Richard, let me emphasize that the only driver for the lower margin is the percentage of gaming taxes. If you look at the other components of the cost, they evolve positively, and this is purely impact of gaming taxes. The rest is evolving positively from previous quarters.
I see. Just to doubly confirm, the full Peruvian tax was already effective by Q3 2025. Is that correct?
Yeah. There was a progressive build-up, so it already existed in Q1 and Q2, but there was the increase to the final level happened in Q3 and Q4. This remaining tax that is based on turnover, so if turnover grows, it may have some more impact, but the final number is set from Q3 2025.
Great. That's very clear. Thank you.
Your next question comes from the line of Fabio Pavan with Mediobanca. Your line is now open.
Yes, good morning, and thank you for taking my two questions. The first one refers to the decision to give more confidence on the full-year guidance now seen at the higher end of the range. I was wondering is there any specific business which is performing better than your initial expectation? Maybe the Slots Spain. The second question is, on looking at online performance, is there any country in which the performance, again, is in terms of turnover going beyond your expectation? Thank you.
With regards the guidance we feel today, that will be at least in the top range of the guidance we gave you, and I cannot say we will, but we expect to overcome the guidance because the numbers that we reported, and as I said, Q2 is working in the same direction. Regarding the growth in the online, I would say especially we have very good growth rates in Peru and Spain, but Italy is also doing well. I saw a few days ago April numbers in Italy, and we are the number 1 in growth in that market, which is very competitive. We are seeing very good trends everywhere.
Thank you.
Your next question comes from the line of Juan Ros with Oddo BHF. Your line is now open.
Hello, good morning. Thank you for taking my questions. I have a couple of quick ones. First one, it's regarding sports betting. I don't know if you guys feel that or fear that maybe artificial intelligence might be narrowing the mathematical house advantage that you have on your sports books, or is it just, as you mentioned, user-friendly results or maybe there's something going on deeper than that? Second, I know comparisons are terrible, if you look at Lottomatica's Q1 results, they were solidly set, like probably yours. They were upping their guidance. You just nuancing your own guidance for the year to the upper end. What's your opinion on the stock performance? It's just low liquidity. It's just a matter of distrust in terms of Latin American taxes. I don't know, what do you guys think on what's going on with the share price? Thank you.
I'll take the first one was sports betting. I would like to remark that in terms of turnover, volumes, customers, we see growth everywhere where we are and have growth in organic terms of 23%, as I reported. I think it's an outstanding performance. With regards the margins in sports betting, what you mentioned on AI, it is true that these are tools that are in the hands of the players, but also take into consideration that we are also using AI to, let's say, counterpart and take our actions and use AI also to improve our margins. We haven't seen today that AI is revolutionizing the way people are placing bets in the bookmakers. With regards share price-
About the stock performance, what I can say about two different things, and about the liquidity issue that you mentioned. You know that recently Blackstone decided to sell a 4 point something percent of their stock. Of course, we are not Blackstone, and we don't know what they are going to do. What is clear is that logically, step by step, they should be continuing on their divestment process related to CIRSA stock. The other thing about our thinking regarding the stock performance, what I can say is that the management team is fully focused delivering. Okay? We grew this last quarter at +8% revenues and 8.5% EBITDA. I think this is a hell of growth. This is beyond our commitment that we provided during our roadshow. We said that Q2 is moving in a similar direction. Okay?
On top of that, we see all our businesses growing. From a management perspective, we believe that we are doing the right things, and also, you know that we committed to distribute 33% of our adjusted profits. If on top of that, you add that we are ready for new acquisitions because our financial structure is allowing us to do it, well, I think that all the fundamentals are there. The rest is really getting the right answer from your end.
There are no further questions. I would now like to hand the call back over to Mr. Agut for closing remarks.
Thank you very much to everyone for attending our call. As you know, for any further detail or whatever, you can contact us directly. Thank you, and hopefully we see you very soon. Thanks. Good morning, and bye-bye.
Thank you. Bye.
That concludes today's call. Thank you all for joining. You may now disconnect.