Good morning, ladies and gentlemen. Welcome to the Canal+ FY 2025 results and strategic update. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session through the phone lines, and instructions will follow at that time. I would like to remind all participants that this call is being recorded. I will now hand over to Canal+ CEO and Chairman of the Management Board, Maxime Saada, to open the presentation. Please go ahead.
Good morning, and thank you for joining us. I am Maxime Saada, CEO of Canal+. Welcome to the presentation of our 2025 results and strategic update. I am pleased to be joined today by Amandine Ferré, CFO of Canal+, David Mignot, CEO of Canal+ Africa, Christophe Pinard-Legry, CEO of Canal+ France, and Anna Marsh, Chief Content Officer of Canal+ and CEO of STUDIOCANAL. Following the retirement of Jacques du Puy, who has had a very significant contribution to Canal+, I am pleased to announce that Christophe and David will be joining Amandine, Anna, and myself on the management board. I'm also pleased to announce that subject to staff representative approval, Christophe Pinard-Legry will be leading Europe going forward.
The achievements of 2025, which we will take you through shortly, are just a small part of what this team has delivered, as what we have really done together over the last 10 years is turn around Canal+. This is the same team who will now turn around MultiChoice, together with the support from former leaders at MultiChoice who know their markets. Before we start, I want to highlight that we have taken your feedback at heart and strive to give more insight on the performance of our activities. In this respect, we will first cover the historical perimeter of Canal+ with 2025 numbers and a 2026 guidance. In short, 2025 was a very successful first year for Canal+ as a listed company. We delivered on all our objectives, and we expect to keep doing that in 2026.
We will then focus on MultiChoice and go into the detail required to give you a clear picture of where the business stands now and what to expect in 2026. From there, we'll provide you with a consolidated view of the combined group for 2025 and 2026. Given all the moving parts for this year and probably next year, we have also decided to share for the first time a medium-term outlook for our key financial indicators. Each of our management board members will walk you through our medium-term strategic priorities, and we will end the session with any questions you may have. Let's kick off with the Canal+ historical parameters. Before we go into our 2025 numbers, I wanted to start with a reminder about what has been achieved by the team at Canal+.
One illustration of our progress, we have consistently grown Adjusted EBIT with a CAGR of close to 6% over the past 5 years. We are satisfied with our year 2025, which landed above our guidance and continues this positive trend. 2025 was both a successful and transformational year for Canal+ as we delivered all of our key objectives. We were very pleased to resolve the long-running tax disputes in France and to have clarity for the future. Amandine will provide more detail on that in a moment. We continued to improve the profitability of the business in Europe, where there has been a real turnaround, including a 15% increase in Adjusted EBIT this year. The improvement has been particularly significant in France, which Christophe will cover in a few minutes. As you know, one area we are very focused on is cash generation.
As announced, we had an exceptionally high year in 2025. In 2025, we were also able to undertake significant debt refinancing. It went extremely well, and we managed to lower our overall cost of funding. Again, Amandine will zoom in on that topic in a few minutes. All in all, and most importantly, in what was our first year as a listed business, we achieved or exceeded all of our financial guidance. Focusing on our headline numbers, as I said, we achieved our guidance and actually exceeded it on Adjusted EBIT, CFFO, and free cash flow. At the time we provided our 2025 guidance, we were still operating in Vietnam, and we had not acquired MultiChoice, so we have provided numbers on that basis here for comparison to guidance. On Adjusted EBIT, we guided EUR 515 million.
We reached EUR 527 million, including Vietnam, and EUR 542 million excluding Vietnam. On CFFO, we expected more than EUR 500 million, and we achieved EUR 587 million, including Vietnam, and EUR 606 million excluding Vietnam. On free cash flow, we guided more than EUR 370 million and achieved EUR 428 million with Vietnam and EUR 448 million without it. We start the year in a strong position. Now over to Amandine for more detail on our results.
Thank you, Maxime. Now focusing on the Canal+ historical perimeter, excluding MultiChoice, and as Maxime explained, also excluding Vietnam. Starting with our customer base in 2025, it increased by over 2 million versus 2024, with a peak of 28 million at the end of the year, thanks to the AFCON, which has come off a bit since then. One thing I'm very pleased about is the more than 1 million increase in our retail subscriber, which is, as you know, our main focus.
I'm now going to go deeper into each of our segments, starting with Europe. As already mentioned by Maxime, Europe saw a significant increase in profitability, +1 percentage point versus 2024. This increase in profitability was driven both by top line increase with 1.1% in organic revenues and cost reduction. Improving profitability will remain the critical focus for the coming years, a point Christophe will cover in more detail. On Africa and Asia, our end of year subscriber base increased by 1 million in 2025, with a one-off effect of AFCON. This increase in subscriber base was a key driver of our top line growth, with over 3% increase in revenues.
As you can see, we have managed to maintain a very high level of profitability with a margin rate of over 20% despite increasing in content costs and investment in subscriber acquisition. Of course, this does not include MultiChoice. That will be covered separately later. Finally, turning to content production and distribution. Revenues were down slightly year-over-year, mainly due to STUDIOCANAL's exceptional slate in 2024 with Paddington and Back to Black. What is really important to note here is the ability of STUDIOCANAL to deliver its bottom line even when the slate is not exceptional. Later, Anna will go in more detail, not only on our content slate and plans for 2026 and beyond, which are very exciting, but also on how we are leveraging our competitive advantage on content costs.
It's also worth mentioning the improved economics of Dailymotion, with revenues up by more than 20%. Putting it all together, we had 1% organic revenue growth excluding discontinued operation. We managed to decrease content cost by 6%, while other costs increased due to one-off effect linked to the OSS acquisition in 2024. This, together with our profitability initiative, led to a EUR 22 million increase in Adjusted EBIT before exceptional item, a 4.2% increase and way above our guidance. Overall, Adjusted EBIT margin before exceptional item reached 8.7%, a significant increase versus 2024 and putting us in a strong position to kick off 2026. One of the highlights of 2025 was the resolution of our TST and VAT tax dispute in France.
We are now completely clear on our tax regime moving forward and are very pleased to now leave this issue behind us. This settlement translates into high exceptional cost in 2025 that should be paid in 2026 and 2027, with final schedule yet to be determined. The settlement of these tax issues in France had a significant exceptional impact on Adjusted EBIT with EUR 346 million booked in 2025. The main part of this exceptional item comes from VAT settlement amounting to EUR 363 million that were already partially provisioned. The rest is mostly the TST settlement and some fees related to the MultiChoice acquisition. When you look at our earnings in 2025, the positive here is that we were up nearly 30% before tax.
This is largely a result of our improved cost of financing and the result of our tax group consolidation in France. On cash generation, as Maxime already said, 2025 was an outstanding year. Starting from EUR 542 million Adjusted EBIT, we achieved an exceptional 119% cash conversion rate to reach EUR 648 million CFFO before exceptional and EUR 606 million after exceptional. That include the impact of our redundancy plan that we announced last year and some fees related to the MultiChoice acquisition. After taxed interest and other financial, including Forex, we finished 2025 with close to EUR 450 million in free cash flow. Finally, I wanted to give you clarity on what to expect next year on the historical Canal+ perimeter.
As a reminder, this is not our group guidance as it does not include MultiChoice, and again, this does not include Vietnam that was discontinued. On revenues, we expect to see moderate organic growth following a similar trend as in 2025. On Adjusted EBIT, we expect an increase from EUR 542 million to EUR 565 million, driven mainly by a continued improvement of our Adjusted EBITDA margin. Our margin went from 7.8% in 2022 to 8.7% in 2025, and we expect to reach more than 9% in 2026. We will generate more than EUR 500 million of CFFO before the payment of the VAT settlement and other restructuring cost. This number is way above our historical figures. We are providing figures before the payment of the VAT settlement as the payment schedule is not finalized yet.
Similarly, on free cash flow before VAT and restructuring, we are targeting more than EUR 300 million, which is again much higher than our historical performance. On both metrics, these figures should be understood as floors that we intend to exceed.
Now over to MultiChoice. Our accounts will include figures from MultiChoice starting on September 20th, so 3 months and 11 days. Here, we are providing pro forma 12-month figures for MultiChoice for you to understand the new group starting from now. These figures are unaudited. On MultiChoice, I'm going to start by providing you with some context so you can fully understand the current dynamics. MultiChoice experienced great success in its more than 30-year history with very impressive growth from 2010 to 2023. It is only in the last few years that it has faced challenges and a decreasing subscriber base. Indeed, starting in 2023, MultiChoice entered into a negative cycle due to the combined effect of macroeconomic factors, such as currency devaluation in Nigeria and power cuts, a difficult transition to OTT with the expensive failure of Showmax, and finally, strong inflation across most cost items, especially on content.
All of these factors resulted in a strong decrease in profitability that MultiChoice addressed through short-term measures, in particular reduction in subscriber acquisition subsidies and price increases, which in turn had a strongly negative impact on the subscriber base, worsening the original profitability issues. The result of this cycle started in 2023, so it is important to remember that this is a relatively recent trend, was a steady decline in subscriber numbers, in revenues, and in trading profits. The latter has come off by EUR 150 million per year for the last two years from best-in-class profitability of around EUR 500 million to around EUR 200 million by March 2025.
Looking now at 2025 full year figures as of December. We had the first effects of the commercial measures we took since taking control of the company at the end of last September with the slowdown of the decrease of subscriber base. Of course, AFCON helped as well with the usual temporary peak. We'll continue our work and return MultiChoice back to growth, as David will soon take you through. To be noted, while revenues decreased by more than EUR 140 million, Adjusted EBIT decreased by only EUR 26 million due to temporary cost-cutting measures. In 2024, CFFO reached EUR 138 million versus EUR 185 million Adjusted EBIT, a 75% cash conversion rate. Pre-merger with Canal+, MultiChoice deferred payment to meet its bank covenant. Some were still outstanding at the end of year 2025, artificially increasing the CFFO.
In 2025, Adjusted EBIT reached EUR 159 million. Cash conversion reached 142% thanks to this deferred payment, increasing CFFO to EUR 226 million. Tax, interest payment, and other financials get us to a negative free cash flow of EUR 79 million for MultiChoice at the end of 2025. Noting that the EUR 225 million include a EUR 43 million tax provision that MultiChoice had to pay due to the change of its fiscal year to end of December. As you would expect from the first year of any acquisition, there are a lot of moving parts. We wanted to be as transparent as possible on where we stand with MultiChoice. Looking forward, we expect some inertia in the decline in subscribers, driving a slight decrease in revenues.
On Adjusted EBIT, we intend to stop the decline started in 2023 and bringing back up to EUR 170 million. This EUR 170 million figures include the synergy and turnaround plan that Maxime will now break down.
Here is how we get to MultiChoice's 2026 year-end Adjusted EBIT, starting with the EUR 159 million from 2025. Based on the historical annual trend I showed you a moment ago, we expect a EUR 140 million negative impact this year from a decline in top line and from cost inflation. As a reminder, we acquired MultiChoice for two main purposes. One, to capture the African growth opportunity, and two, to benefit from cost synergies with our new greater scale. I mentioned before that investment in customer acquisition had been severely reduced. To turn that engine back on will cost us around EUR 100 million next year, 90% of it variable. David will share more details on that plan.
Regarding synergies, you will remember that in our January cost synergies update, we outlined an expected EUR 150 million in cost reductions for 2025. We have been able to accelerate our synergies plan, and we expect that number to increase to EUR 250 million by the end of this year. Keep in mind that we took control less than six months ago. As a result, MultiChoice Adjusted EBIT should come in at around EUR 170 million this year, excluding PPA. Coming back to the synergies, three important points. One, these synergies account for 3% of the total cost base of the combined group, Canal+ and MultiChoice together. Two, the EUR 100 million are not additional cost synergies. Instead, we have been able to bring forward some of the synergies we had planned for 2027 and beyond.
Three, most of the cost synergies for this year will impact Africa's P&L. This will not necessarily be the case going forward.
We have outlined what we expect on revenues and Adjusted EBIT. On CFFO, we expect EUR 100 million before VAT settlement and restructuring costs, and we expect a negative free cash flow of over EUR 50 million on the same basis.
Now let's move to what the group looks like as a whole and our expectations for 2026. When we zoom out and look at the group picture, it is important to remember this is year one. We are at the very beginning of our journey as a combined business. We have already detailed the challenges, and very shortly, we'll switch focus to the opportunities. Our expectation from the outset was that investing would be required to restart subscriber growth. That is exactly what we're doing now. This will carry additional short-term costs, but that is to be expected in a transition year. Our 2026 guidance Adjusted EBIT is at EUR 735 million, which represents a 5% increase compared to 2024.
We had CFFO and free cash flow at over EUR 600 million for CFFO and over EUR 250 million for free cash flow. Now it is when we move beyond 2026 that things start to get interesting. Over the medium term, we expect to see moderate growth on the top line over EUR 850 million of Adjusted EBIT, over EUR 800 million of CFFO, and over EUR 500 million of free cash flow. and this is important, expect this to be the bare minimum. We are aiming to do more. perhaps even more importantly, this medium-term outlook is not our endpoint. It is not what we're aiming for long term. It is the starting point for the next phase of growth. I can tell you that personally, I'm incredibly impatient to get there.
Now let's cover how we will get there and why we are so confident in our plan. First of all, and most importantly, our group is far stronger today, thanks to the acquisition of MultiChoice. All together on a combined basis at the year-end 2025, we have over 40 million subscribers and nearly EUR 9 billion in revenues. Our combined EBITDA before exceptional items is over EUR 1 billion. Adjusted EBIT is EUR 701 million. CFFO is EUR 874 million, and free cash flow on a combined basis is EUR 447 million. The next few years will be about delivery. There are many initiatives ongoing at Canal+, but today, for the sake of time, we have outlined the four key priorities to deliver on our medium-term objectives.
First, following our comprehensive review of MultiChoice, we will turn around the business and ensure we are well positioned to benefit from Africa's growth potential. David Mignot will take you through our plans next. Second, we will continue to focus on increasing profitability of our operations in Europe, building on our work over the last few years. Christophe Pinard-Legry will take you through this section. Third, we will continue to enhance our already outstanding entertainment platform, which we believe is the best in Europe and Africa today, an area we have long excelled in. That means providing the best local and global in-house content as well as premium sports and partner content. This is a constant priority, and Anna Marsh will take you through this section soon. Fourth, our approach is about discipline.
I have said it before, and I will say it again, companies in our sector struggle because of the lack of discipline. We have seen it happen at Viaplay. We just showed its impact at MultiChoice. This is why we will continue to pursue a rigorous approach to costs, capture synergies, and apply a disciplined capital allocation policy. I will now hand over to David.
Well, thank you, Maxime. I will now take you through our turnaround plan for MultiChoice and outline our strategy for capturing the growth opportunity of Africa. As you know, thanks to its improving macroeconomic, demographic, and connectivity trends, Sub-Saharan Africa has huge growth potential. The population is expected to grow by nearly 800 million by 2050, and GDP is forecast to grow too by 4.5% as an average. What is even more significant is the increasing electrification rate. As I've said before, when people do get electricity, one of the first things they buy is a television set. We are seeing an increase in the pay TV penetration rate, and the good news is that there are still limited competition across the marketplace from streaming companies.
When you look at it in terms of scale, we operate, as you know, in 40 countries, and we are leader in 34 of them. We reached this position thanks to the strength of our content offering and our distribution network. On one hand, local content proved to be a key differentiator in Africa, and we provide content in over 50 languages and more than 100 channels. On the other hand, we have an extensive distribution network and a significant direct-to-customer experience on the continent that is hard to replicate. Still, this is an area where we can do more. We are planning to increase our focus on sales force in MultiChoice markets, which I will come on to in a moment. The one thing you will have heard us talk about before is the strength of our leadership team in Africa.
As you can see, we have kept a core team of exceptional leaders from MultiChoice who have significant experience in the market, and we have added some of the best leaders from Canal+. This is a highly capable group. They have all played significant roles in designing the turnaround plan, and they will handle its execution. This team is one of the key reasons we are so confident that we will return MultiChoice back to growth. Remember that prior to the acquisition, Canal+ was already a significant player in the African market. As Maxime said, I became CEO of Canal+ Africa in 2012, and most of the team you have just seen have been with me and part of the growth journey you can see here. In 2010, we had around 400,000 customers in French-speaking Africa.
Since then, our subscriber base has multiplied by more than 20, and we have closed 2025 at around 9 million subscribers. Second, this will give you a sense of the scale of our business, we have today a 50% audience share of our in-house channels onto our subscribers. Just as Canal+ has been the leader in French-speaking Africa, MultiChoice has for a long time been the leader in the English and Portuguese-speaking Africa. MultiChoice has also demonstrated its ability to grow on the continent, having more than quadrupled its subscriber base between 2010 and 2023. Again, a lot of our leadership team today played important roles in this growth journey. However, as you know, MultiChoice has not been performing as well over the last 3 years. This decline was due to a combination of internal and external factors.
MultiChoice markets have been struck by currency devaluation, inflation, load shedding, especially in South Africa and Zambia. You add price increases on top of that, less investment in the commercial engine, and you can see why the base has declined over the last three years. That is all history, and what is important is what is coming next. At the highest level, our aim is very simple. We will leverage our experience, both from Canal+ and MultiChoice, to reverse the recent trends at MultiChoice. That work is well underway and already having an impact, but it will take time before we see the full impact. We will get back to profitable growth, and this work has already started, as Maxime mentioned. We are investing EUR 100 million this year in our boost plan, and so we are starting quickly.
Let me get into the turnaround plan now. Our aim, and this plan is how we will achieve it, and the plan has four pillars to it. First, as you would expect, we focus on content. Through joint productions, our in-house channels, international content, which our scale makes easier as we can negotiate much broader agreements than MultiChoice could alone. By sharing content and rights, we will provide the best content offer on the continent. Second is how we package that product, and we will make it as appealing as possible. That means clear and simple commercial offers and branding and of course, improving and intensifying our marketing. Third, which is very closely related to our second pillar, of course, we are increasing our focus on new subscribers.
With the best content and simple appealing commercial offers, our acquisition engine can and will be far more effective. In fact, we are going to shift the focus of our business much more towards sales. On top of that, we will broaden our distribution network, and we will lower the entry cost. As needed, we do provide a premium experience, and there is an aspirational element to it, but it has to be accessible. Those first three pillars are what we will do, and we know from our experience how effective they will be together. We also know this only all works when it is underpinned by operational excellence. This is where being part of the global Canal+ group really comes into play with best practices, our standard operating model, and of course synergies from our scale.
Last but not least, we have also learned a lot on anti-piracy, and we implement that in Africa too. MultiChoice were already doing good work here, but there's more we can bring across from Canal+. Those are the key elements. Nothing revolutionary, but a lot of work to do. Now going into a bit more detail on each of those four pillars, starting with content. As you may know, sport is a critical part of our offer in Africa. Football especially is huge, and this is one area where we are very strong and the clear market leader. Like all content, sport is local and global. Both are critical, and that's why we offer both. As I said, football is huge in Africa. We have the best football from around the world, Champions League, Premier League, La Liga, Ligue 1, and more locally, the recent AFCON.
The average audience was 1.5 million in French-speaking Africa alone, with a peak of 5 million in the Morocco against Cameroon semifinal, and millions more watched AFCON in MultiChoice markets too. On top of that, our subscribers can watch the biggest sporting events from around the world, from Grand Slam tennis to PGA golf, the NBA through to Formula One and MotoGP and racing, international cricket, UFC, and so on. Locally, there are huge fan bases and audiences for the Basketball Africa League, the Premier Soccer League in South Africa, South Africa rugby, as well as the SA20 cricket, and more. This is all underpinned by Canal+ Sport and SuperSport, major brands in their own right, with the highest level of productions, analysis, as well as internationally recognized talent. That's just what we have in sport. More broadly, we offer so much content.
It really is the best you can get on the continent. We have over 100 in-house local channels in Africa fully dedicated to giving the audience what they want, including super strong channel brands, just like SuperSport. We produce local series, TV shows, which are key for domestic consumption in markets like South Africa, but also across the African continent as a whole. We developed this local content with creatives who have a deep understanding of their audience, being strongly rooted in many African cultures and languages. In total, every year, we produce 10,000 hours of fresh local movie series shows for our audiences in Africa.
This really isn't just about providing the global content we would recognize in Europe and the U.S., and of course, we do that too, as you can see, but we do far more than that, and we keep producing and providing local content that is made for our subscribers. On that global content, it is important that we deliver content from partners like Warner Bros., Universal, and Netflix, among others. Apart from the tailored local content, what our subscribers in Africa watch is not so different to what our subscribers will watch in Europe. Again, we will be looking to really extend our partnerships as we did with Warner Bros. at the start of the year, and just as we added Netflix to our offer in French-speaking Africa last year.
Finally, we also provide a large range of international channels and IPs like Discovery, CNN, National Geographic, and many other mainstream TV networks. Also importantly, content is one area where we are already seeing the advantages of our combined scale. Since the transaction, we have already made a lot of content available across from MultiChoice and Canal+ countries. We've also added English language options for Canal+ subscribers on some content too, including from SuperSport and National Geographic, and this is all within the first few months. Of course, this is just the beginning of what we can do here. Finally, on content, we announced last year that we would extend our partnerships with Netflix into Africa. I'm pleased to say that we have now done that, bringing Netflix to 20 countries in Africa, and that was a first on the continent.
Our partnership with Netflix began in France in 2019, and it is stronger now than ever. You may have seen that Ted Sarandos joined our Original+ event in Paris in December, at which he and Maxime Saada discussed the importance of our partnership, both to our businesses and our subscribers. Given the quality of the Netflix content, the benefits to our subscribers is obvious. This partnership really is beneficial to both of our businesses too, as our subscribers can enjoy Netflix world-class content alongside with our own without taking a separate subscription and are less likely to churn as a result.
OTT penetration is only 4% in our markets in Africa, and as broadband penetration isn't as high, satellite will be by far the best content delivery method for quite some time, and that's also of interest for Netflix. That's the content, our product, which is already brilliant and is getting better. Next is our second pillar, how we package that content in our commercial offers. You can see that today there is a huge variety of different offers, tiers, and there's actually 17 different price points and up to 5 different decoders too. We know from our experience at Canal+ in Europe and Africa that this isn't what consumer wants. They want simplicity, they want value for money, and that's exactly what we are going to give them.
Another benefit of our new scale comes through branding and marketing. We have incredibly strong brands in Africa with Canal+ and DStv, both of which are nearly universally recognized. We have too many sub-brands, and that fragments our marketing investments and dilutes the impact. In France, for example, we use the Canal+ brand across DTH and streaming, so the brand is the same for every subscriber and every cent we invest in marketing benefits the master brand as well. That's not true for Africa. In MultiChoice markets, for example, we have DStv for DTH, GOtv in DTT, Showmax and DStv Stream in OTT, and there are also a wide mix of premium channel brands and local channel brands.
Some of them, like SuperSport, are hugely valuable brand in their own right, but rationalizing our brand portfolio is another thing we can do to improve our position in Africa and make better use of our marketing investment. On our third pillar, our powerful acquisition engine, one difference that really stands out today, look at the slide, is the entry price for Canal+ and MultiChoice. That's the ticket price for our customers, and so buying and installing a set-top box and satellite dish with one month subscriptions. There is a point at which this becomes too high and puts people off from subscribing. As you can see, in Canal+ countries, it can go down to around EUR 40 , but for MultiChoice, it's usually 3x higher. This is one area where we are correcting quickly.
We are introducing subsidizing, standardizing set-top boxes and dishes, and of course, the cost of this is already included in our Boost plan. Bringing down the ticket price is absolutely key for getting new subscribers in, and it is well worth the investment, but it's just one side of the coin. The other side is ARPU. Once they become subscribers and then maintaining and increasing that ARPU, we have managed this successfully both at Canal+ and MultiChoice in Africa by providing high-value offers. Of course, all of this only works if you have an effective sales force and distribution network. As you can see here, this is one area where MultiChoice is clearly underway.
We have 3.5 x more points of sale per electrified household in Canal+ market than we do for MultiChoice, and we are going to fix that. As I said at the start, those three pillars, providing the best content, simplified appealing offers, going hard after new customers with the acquisition engine, those three will need to be underpinned by operational excellence, and they will. This is what we call our Mastermind framework, and we apply it across 15 functions. We have identified 270 best practices that have proven effective across the group, and we are implementing them and, more importantly, tracking their impact across 30 business units and countries. You will see a few examples here and how we think about it.
For example, in some markets, our top channels are not available for replay on the app, so we are not capturing the full audience potential, and that's just one example from 270 that we are fixing and getting into. Now let's focus on over-the-top. I'm sure you will have seen our announcement last week on Showmax and our decision to discontinue it. You will often hear us talk about our state-of-the-art platform as a differentiator, and it really is, and there is nothing else like it, and certainly not in our markets.
Our long-term aims is to unify our platforms and approach to OTT in line with what we have done in France and to strike commercial and aggregation partnerships with streamers, as we have with Netflix in Africa, but with local telcos, and to ensure our platform is available on smart TVs, just as we have done in other markets with Samsung, LG, and other manufacturers. As well as providing the best content, we want to provide the best OTT platform, and we want to make that platform accessible as widely as possible. That's our return to growth plan. To get it all going, we are already deploying up to EUR 100 million that we are saving from cost and starting this year.
We are not only going to break the negative cycle Maxime talked about earlier, we are going to turn it around completely. Our go-to-market initiatives will fuel the subscriber base, which in turn will increase profitability. That's the cycle MultiChoice should be going in, and we know how to get it there. Now let me hand over to Christophe.
Thank you, David, for sharing the turnaround plan for MultiChoice and the African growth opportunity. I am now going to cover our second strategic priority, which, as Maxime outlined, is increasing profitability in Europe. Europe is where we started, of course, our historical base and where Canal+ has a large and diversified platform with significant scale and strong market position in France and Poland. Beyond scale, our focus is very clear. Profitable growth. Today, besides Africa, Europe is one of our two key markets, and with 18 million subscribers, it accounts for nearly half of the group's subscribers and the revenues. We operate in around 10 European countries, including France, Poland, Belgium, Czech Republic, Slovakia, and the Netherlands. Together, those territories represent 200 million people, offering Canal+ a significant opportunity of growth in markets where audiences are highly engaged with content and willing to pay for premium offerings.
We also hold a strategic stake in Northern Europe through Viaplay. As we have observed in the past months, several major European media groups appear to be refocusing on their domestic markets, such as Sky, which is exiting Germany, and Bertelsmann refocusing on Germany and exiting countries such as France. This creates an opportunity for Canal+ to reinforce its leadership in Europe and become the only player with a true Pan-European ambition and footprint. Across Europe, we apply one common strategic framework, but we have different priorities depending on the maturity of the market. In Benelux and Central Europe, led by Yacine Bouzoubaa, our operations are profitable but no longer increasing. In order to reverse the profitability trend, we have two key priorities, premiumization and shifting to OTT. These markets have historically relied on lower-priced channel bundles.
The objective now is to enhance the value proposition, including launching Canal+ branded channels with premium general entertainment content and sport rights. We have already started this strategy in Austria, as we now offer the Champions League, the Europa League, and the best golf competitions, and in Czech Republic and Slovakia with the Premier League and the WTA. In Poland, led by Edyta Sadowska, who is doing an amazing job in a very competitive landscape, the business is profitable and well established. We already have a premium value proposition with premium movies and series and premium sports rights, such as the Champions League, LaLiga, the Premier League, and very popular local content such as Speedway and Ekstraklasa. Our focus there is now to accelerate the OTT transition and making sure our satellite subscribers increase their usage of our digital platform.
Finally, in France, our historical markets and where our model is the most mature, we have the strongest value proposition with the best of cinema, series, and sports. Which has been enhanced with a successful super aggregation strategy. The transition to digital is largely complete. This is why our main focus in France is improving our profitability. Let's now focus on that. Over the past few years, we have already made significant progress in France. As you can see, between 2023 and 2025, our Adjusted EBIT in France increased by EUR 130 million. We have achieved this improvement with two key levers on which we will continue to rely. First, top-line initiatives. Second, and more importantly, a systematic review of our cost base, ensuring that every euro invested contributes to value creation. I will now deep dive into these two elements.
First of all, our top line, we took advantage of a tremendous market growth driven by global platforms such as Netflix, Prime Video, Disney+, Paramount+, and HBO Max. Over the past 10 years, the French pay TV and SVOD market has doubled, starting from 10 million households with a subscription in 2016 and reaching 22 million households in 2025. This incredible increase provides Canal+ with a significant potential for further growth. Thanks to a deep reshuffling of the Canal+ model in France, we have successfully captured part of this market expansion and turned around the business. Declining prior to 2019, our retail subscriber base in France has today returned to sustained growth and has increased by 21%. 2025 is our sixth consecutive year of growth, and both 2024 and 2025 recorded the strongest increase in the past 15 years.
The turnaround of Canal+ in France has been supported by deep remodeling of our distribution strategy. The digital-first approach has allowed us to enlarge our commercial footprint and to target new audiences. Online sales have been multiplied by 13 over the last 10 years and now represents 50% of our sales. This strategy enabled us to maintain control of our distribution, with 60% of our sales directly handled by Canal+. Also, we can still rely on strong relationships with telecom operators. Moreover, we remain the only player distributed in France's leading retail stores such as Fnac and Darty, which is a clear competitive advantage versus U.S. streaming platforms. We will continue to expand our distribution footprint through new partnership whenever it makes sense, like we did recently with smart TV manufacturer or Air France or Renault, for example.
In addition to digital sales, we have successfully executed the OTT transition, shifting the usage of our DTH subscribers to our digital platform with a lot of them keeping their DTH subscriptions. Today, 26% of our subscribers directly have access to Canal+ through an OTT equipment. Most importantly, 91% of our subscribers use the Canal+ app monthly. This improves user experience and customer loyalty. Thanks to that, we also have a better understanding of their usage to push the most relevant content for each subscriber. Besides the shift to OTT, the main driver for Canal+ is to enhance our value proposition. We now provide the most comprehensive content offering on the French markets, built on three main pillars. First, cinema, with the best of French and international movies available six months after release exclusively on Canal+.
We also provide the best series, including our own original contents. Second, major sport rights, including 100% of the UEFA Champions League until 2041, and a host of other competitions which enabled us to end our historical dependency on Ligue 1. Third, our super aggregation strategy with major streaming platforms such as Netflix, Paramount+, Apple TV, and HBO Max directly into our offering and our application. The benefit of this strategy is gonna be reflected in our customer satisfaction and loyalty scores. With 82% satisfaction among subscribers, which is a record for Canal+. In addition, 85% of our subscribers are currently committed with a 1- or 2-year commitment contract. It is an intangible asset for us. The large proportion of our subscribers have remained loyal to Canal+ for many years. 25% of them for more than 20 years.
This level of loyalty is extremely rare in the media industry, and we can count on it to continue growing our subscriber base. Another benefit of our super aggregation strategy is to expand successfully reach among younger audiences. Through our dedicated offers, such as the RAT+ package and content, Canal+ provides the most attractive entry-level offer for subscribers aged 18 to 26. As a result, the number of Canal+ subscribers under 26 in France is now significant, with more than 500,000 subscribers. Looking forward, we will continue to target new audiences thanks to our super aggregation strategy and our comprehensive offering. French households have multiple subscriptions. 22 million households each accumulate 3.8 subscriptions on average and spend on an average of EUR 30-EUR 40. Thanks to our unique bundled offers, integrating streaming platforms, Canal+ is well-positioned to take advantage of the situation.
As you can see, for example, the Canal+ Ciné Séries offer provide a competing value proposition compared to subscribing individually to each platform with a 50% discount versus market price. Looking ahead, we see a number of other additional levers for top-line growth. First of all, entry-level offers supported by advertising. This could enable us to reach more price-sensitive audiences while generating additional advertising revenues. As a matter of fact, our advertising revenues have increased by 13% per year since 2021. Another lever we can pull is selective price increases on our customer base, supported by the strength of our value proposition and the loyalty of our subscribers. There is the potential targeted reduction of cost sharing outside the household, which could represent another monetization opportunity as observed on the market. Finally, profitability will mostly come from cost-cutting and demonstrating our strong cost discipline.
Several measures have already been taken and are starting to have an impact, while others will contribute to improving our margin in the coming months and years. On the content side, it includes the end of the Ligue 1 contract, the end of the Disney+ distribution partnership, the renewal of the Champions League rights at more favorable terms, which will see the benefits from 2027. The new agreement with French Cinema, with an average spend of EUR 160 million over 2025-2027, compared to EUR 220 million in 2024. In addition to that, we have already implemented structural cost measures, including a layoff plan and the exit from DTH distribution. More will come. Overall, our European business benefits from strong structural foundations, and our focus going forward is very clear, improving profitability. Thank you. Now to Anna Marsh.
Thank you, Christophe. Now moving to our third key medium-term priority. Canal+ delivers an unmatched value proposition by offering subscribers access to the very best content available globally. Our unique aggregation model showcases our very own in-house produced Canal+ channels and brings this together with leading third-party platforms, including Netflix, HBO Max, and beIN SPORTS, as well as pay and free TV channels like National Geographic, BBC, and SABC. This aggregation strategy delivers several key benefits. Firstly, it appeals to the entire household by offering a diverse range of content that caters to different tastes and age groups. Secondly, it helps reduce churn. With such a diverse content mix, subscribers are more likely to find something that keeps them engaged over time. Thirdly, it supports premium pricing and drives higher ARPU, as customers see strong value in accessing a broad selection of high-quality content in one place.
Finally, it provides flexibility in managing costs, since the platform does not rely on any single piece of programming. I know Maxime will elaborate on that later. Let's take a look closer at what this means for our customers and the breadth of content they can access. Canal+ offers top sports coverage in every territory, broadcasting major competition leagues in football, rugby, golf, basketball, motor racing, and more, with live events produced by our expert teams on our very own channels, Canal+, and of course, SuperSport in South Africa. We have secured major sports rights in Europe and Africa for the long term, including rugby's Top 14 and the Champions League in Europe until 2032 and 2031 respectively, the Formula One through 2029, as well as long-term contracts for football, golf, and cricket in Africa.
We offer subscribers extensive access to premium U.S. content through partnerships with top American platforms and major Hollywood studios. Our U.S. content portfolio is broad and diverse. From Margot Robbie to Tom Cruise to award-winning shows like Adolescence or The Pit, there is something for everyone in the household. As demonstrated, aggregation is essential and is a differentiator. There is also something else that sets us apart, and that is our in-house production engine, STUDIOCANAL, which I'm truly proud to lead. We will continue strengthening our capabilities with STUDIOCANAL, the leading content studio in Europe and Africa, with a network of 23 production companies across 16 countries producing 200 films and 80 TV series per year. We own the single largest and most comprehensive catalogues in Europe and in Africa, with a combined 18,000 titles providing strong IP and extensive adaptation rights for ongoing storytelling.
In Europe, we continue to expand our production capacity and library with targeted M&A. This year, we acquired a minority stake in UGC, which owns 160 titles, including the iconic Amélie, and operates 550 theatrical screens across Europe. We also took a 51% stake in Lucky Red, Italy's top independent producer and distributor, hence recently adding 500 more titles to our catalog. In Africa, we believe local stories hold the potential for global appeal. We have begun investing in local productions with TV series Spinners in its second season and epic tale Shaka iLembe in its third.
Two feature films and two series are in development in the English language, including Graceland, the story of Hugh Masekela and Paul Simon's creation of the said music album, and an Ocean's 11 style heist movie to be directed by the acclaimed Ava DuVernay and starring David Oyelowo. We are also proud to be developing Chimamanda Ngozi Adichie's best-selling novel Americanah into a TV series. Our achievements rely on building strong relationships with world-class talents. We aim to provide a positive experience for everyone, whether they are on or off camera. We foster continued success and future collaborations with writers, showrunners, actors and directors, both in Europe and internationally. With our extensive geographical footprints, strong catalog of assets and excellent talent relationships, we are well-positioned to truly focus on building global IP that can thrive across all our markets.
This is demonstrated by a successful debut TV series franchise, Has Fallen, now in its second season. Beyond that franchise, we are creating new TV series based on several of our well-known IP, including Army of Shadows, The Red Circle, Non-Stop, or The Avengers. For over a decade, we've built a highly successful global franchise in Paddington that has seen over EUR 1.5 billion in gross consumer sales. Paddington boasts over $700 million in global box office revenue, making it the biggest independent family film franchise ever. Beyond the cinema, our beloved bear appears in various other forms, including an Emmy Award-winning animated series, a Roblox game, an immersive experience on the South Bank, in a newly renovated store at Paddington Station, and a West End musical at the Savoy Theatre.
We're proud to announce that we have generated some of the highest advance ticket sales in the history of the West End, and on Sunday won 9 WhatsOnStage Awards. We have also become the most nominated new musical with 14 further Olivier nominations. This, of course, encourages us to continue to replicate this model and develop new global franchises, especially in the kids' space. Our expertise demonstrated through the success of Paddington will serve as a foundation for developing additional brands into similarly thriving franchises. As illustrated, we have numerous promising projects underway, each rooted in robust intellectual property with the potential to become global franchise successes. Among these are Pippi Longstocking and Mr. Men and Little Miss, both being developed in collaboration with our Paddington producing partner, David Heyman.
There's also Britain's Toto the Ninja Cat, France's Astérix & Obélix, tween fantasy adventure Beast Quest, and Lottie Brooks, an adolescent character reminiscent of Bridget Jones prior to her adult experiences. Now, there is one thing that all these properties have in common. That is, they all began as books. With that in mind, we will shortly be announcing an exciting partnership with one of the world's leading publishers, Hachette Livre. From the top 100 worldwide box office hits last year, 40% were literary adaptations. Of those running for Best Picture at the 2026 Academy Awards, half are book adaptations. Needless to say how excited we are about this future opportunity. Before Maxime and Amandine discuss cost discipline, I would like to briefly explain our approach at STUDIOCANAL. Our strategy is twofold.
We keep production costs lower than most American studios and reduce risk with pre-sales and strategic partnerships. To illustrate our approach to managing productions within strict and efficient budget parameters, here are three examples that demonstrate how we deliver large-scale films while significantly reducing overall costs. Firstly, for Glen Powell starring How to Make a Killing, we successfully turned Cape Town into New York City and lowered the estimated budget from $25 million to $16 million, all while preserving the project's scale and integrity. For Paddington in Peru, instead of taking the full cast and crew to the Amazon, we sent a small team to South America to film real jungle scenes. These shots were expertly blended with UK locations, creating the illusion that our bear was truly in Peru, thereby saving tens of millions of dollars.
With our current production, The Custom of the Country, we're recreating Gilded Age New York in Lisbon, Portugal, starring Sydney Sweeney. Choosing this location delivers similar visuals and reduces costs by roughly 30%. Here you can see that the Mafra Palace convincingly stands in for the Metropolitan Museum. The scene set in Paris will be filmed in our homeland as well. Now, it is important to note that all of these examples, the initial quotes we use as benchmarks, are already competitively priced and well below standard market levels. The final net costs for each of the films presented here are substantially lower than what a U.S. studio would typically spend to produce comparable projects. We combine rigorous budget management with a robust pre-financing model, ensuring that our commercial teams secure pre-sales prior to the commencement of production.
In TV, lead commissioners typically cover between 80%-90% of the net budget, as seen in the Olympus Has Fallen example, which was pre-sold to Hulu, Amazon, Mediaset, and Movistar outside Canal+. This level of risk offsetting is not as common in feature films, but much like in television, STUDIOCANAL targets early and robust pre-sales. In this case study, pre-sales representing more than 80% of the net budget for these four English language films were secured prior to release through partnerships with reputable, long-standing collaborators, several of whom are featured here. While we're on the topic of sharing costs with like-minded partners, I'm delighted to announce a partnership between Canal+ Group and the creators of The Day of the Jackal, Sky. This new partnership will see both companies team up to co-develop a slate of high-quality event TV series.
We're thrilled to collaborate with like-minded partners sharing a complementary geographical footprint and similar editorial goals. Our past experience working together has proven successful, having already co-produced several hit shows like Jude Law's The Young Pope and ZeroZeroZero. By combining our resources and creativity, both partners will be able to share production costs and maximize the potential of new ambitious content. I'll now hand over to Maxime and Amandine for the next section.
Thank you, Anna. Our fourth and final priority underlining all the others is our disciplined approach to cost and capital. In this section, we will cover three areas. First, we will detail a rigorous approach to cost management. Second, we will provide you with an update on cost synergies we will deliver following the MultiChoice acquisition. Third, we will present the key principle of our capital allocation strategy. You have heard Maxime and I saying that many times. Costs are a key focus for us and for everyone at Canal+. That is not going to change, and it has become even more important with our new scale.
The first pillar of our rigorous approach to costs is our generalist and super aggregation model. What do I mean by that? Simple. By providing free-to-air channels, in-house and third-party pay TV channels, and streaming platforms across all our geographies, we are not dependent on any specific content. Because we are covering the full spectrum of content, this model brings benefits in terms of customer acquisition, customer loyalty, and most importantly, in terms of costs as we enter negotiations and tenders from a position of relative strength. When contracts are no longer financially viable, we drop them, just as we did in France with Ligue 1 and Disney, with very little impact on our subscriber base. As you know, the second pillar of our rigorous approach to costs is our analytic capabilities, which enable data-driven decisions.
We have developed a unique state-of-the-art model, which tells us exactly how significant to rate these on our subscriber base and how much it is worth to us, how it will impact customer acquisition or loss, loyalty, and ARPU. Recent UEFA tender is the best example of this. We knew the precise value of these rights for our business, and that enabled us to be very disciplined and accurate in our negotiations. We bid the right price for us, and in this case, we were delighted it worked out as UEFA is a great partner. Beyond costs, having another five years of exclusivity allows us to provide the visibility our subscribers need to make long-term commitment to our platform. We are now taking these digital and analytics capabilities to the next level using AI. Today, I am very proud to announce two new equally important partnerships with Google and OpenAI.
Starting with Google, we will deploy Google Cloud's latest AI tech into the Canal+ app and trial the technology for specific uses in production. With improved content video indexing, we can individualize the experience on the Canal+ app, including on the home screen. On content creation, creatives from STUDIOCANAL will be able to use AI to generate scenes that were previously impossible to produce, expanding the creative possibilities of Canal+ productions. This is not about replacing human creativity, it is about adding another tool to our production kits, not unlike the improvements in special effects over recent years. This teaser video will explain what content indexing is far better than I can. We are also partnering with OpenAI to build major enhancements to the Canal+ app. OpenAI's technology will power the app to offer a search experience that goes far beyond traditional keyword-based queries.
Subscribers will be able to express what they want to watch in their own words and to receive tailored content suggestions that truly meet their expectations.
Moving now to synergies to explain how we'll deliver the ambitious plan we presented earlier through a relentless focus on execution. As already explained, achieving synergy through scale is one of the two reasons why we decided to acquire MultiChoice. Continuing our work since the January announcements, we are pleased to announce that we will deliver these synergies even sooner than we initially anticipated. Indeed, we are now confident we can deliver at least EUR 250 million Adjusted EBIT and EUR 220 million free cash flow cost synergies as soon as 2026. To be clear, these are not additional synergies. These are synergies that we had planned to capture in later years, but we are implementing now. Of course, this acceleration brings additional cost in 2026.
As a result, we are updating our restructuring cost estimate for 2026 to between EUR 70 million and EUR 100 million. It's important to understand that these costs are not new. They were initially planned for 2027 and beyond and are mainly anticipated, like the synergies. One reason why we are able to accelerate this delivery of synergies worth EUR 100 million is linked to the announcement that we have made last week, the discontinuation of Showmax, to which I will come back shortly. This is not the only reason. We were also able to accelerate other cost-saving initiatives, not only on content and branding, but also structural cost, tech, especially with the restructuring of Irdeto based in Amsterdam. We have said that before on Showmax, it was bleeding money. These losses alone could have brought down MultiChoice.
It was incredibly important that we resolve this quickly, and so we are pleased to have done that earlier than expected. The discontinuation of Showmax is a start of a new chapter. We will eventually roll out the Canal+ app already available in 32 countries across all of the MultiChoice markets. One platform, one brand is the Canal+ recipe to successfully transition to OTT. To support our growth in Africa, as David has said, we are shifting our model and strengthening our commercial capabilities. To do this, we will increase our on-the-ground presence with a major recruitment plan on sales-focused position. Following the closure of Showmax and to adapt to our new phase of development and optimize the group's cost structure, a voluntary plan will soon be open to Showmax and MultiChoice support function in compliance with the social procedure of each country.
We will also begin the restructure project at Irdeto, MultiChoice technology and cybersecurity company in the coming weeks. These developments are part of a clear strategy to streamline certain functions while investing more in activities that directly support the group's growth and business development. Following the acceleration of the overall synergy plan and the recent developments around Showmax, we are pleased to announce that more than EUR 120 million of the EUR 220 million free cash flow synergies expected for 2026 have already been secured. This is a significant increase versus the last figure we communicated a little more than a month ago, and it provides us great confidence that we will achieve our target for this year. After the discipline on cost, moving on to discipline on capital. On the debt side, we successfully completed three refinancing operations in 2026.
A key takeaway is that our big euro bond and the bond facility were both highly oversubscribed, and so we managed to obtain attractive pricing conditions, which not only enable us to lower our average cost of funding for the group, but also reflect the underlying strength of the business. These refinancing operations were completed in large part to pay for the acquisition of MultiChoice, increasing our net debt from 0.59x in 2024 to 2.75x in 2025. Our aim is to remain below 3.0x in the near future to maintain a sound and healthy balance sheet. Turning now to the equity side. Our focus is to invest where we can have the best returns.
From Ethiopia in 2024 to Canal Olympia and Vietnam in 2025 and Showmax in 2026, we now have a strong track record on discontinuing activities that are not performing up to our standard. One of our core focuses for the years to come is to continue reviewing our portfolio of activities to increase the overall profitability of the group. In addition to monitoring the performance of our activities, we will continue to build strong partnerships with other players in the entertainment and media industry across content and distribution to optimize investment, and again, make sure every euro invested is really worth it. Another significant part of our capital allocation strategy is to distribute dividends to our shareholders.
We are pleased to announce an increase of the dividend of +10% this year compared to last year, EUR 0.022 subject to shareholder approval at the general meeting on May 29th. Finally, an important component of our strategy is to improve the liquidity of our shares with the new investors. In that respect, I am pleased to confirm that we are aiming at completing a secondary listing on the JSE, the Johannesburg Stock Exchange, by end of Q2 2026. Canal+ will become the first French company to be listed in South Africa.
Thank you, Amandine. To summarize before we move on to Q&A, we had a successful 2025 at Canal+. We exceeded our guidance and have a positive outlook for the year ahead. It was a challenging year for MultiChoice. We are now shifting this organization and resources to getting back to growth in English and Portuguese-speaking Africa. We have updated our synergy implementation plan to accelerate, and we are pleased to have already secured half of what we are aiming for in 2026. In the medium term for the group, we expect a minimum of EUR 850 million in Adjusted EBIT and a minimum of over EUR 500 million in free cash flow.
As outlined, we will get there by focusing on four priorities, turning around MultiChoice, increasing profitability in Europe, further enhancing our entertainment platform, and of course, underpinning it all, having a disciplined approach to cost and capital. Now we'll take your questions.
Ladies and gentlemen, we will now begin the question and answer session. If you have dialed into the call and would like to ask a question, please signal by pressing star one.
Before asking your question, please ensure your line is clear and that you're speaking from a quiet environment. We'll pause for a moment to assemble the queue. Your first question comes from the line of Nicolas Langlet from BNP Paribas. Your line is open.
Yes. Hello. Good morning, everyone. I hope you can hear me well.
We can. Thank you.
I've got a couple of questions. Maybe I will go one by one, if it's okay with you. The first one on Showmax. Can you tell us a bit more about the terms of the discontinuation? What happened to the financial commitment MCG had with Comcast? And what's the cash effect in 2026 and subsequent years related to this discontinuation?
Do you want us to answer now? We can-
Yes. Maybe let's go one by one.
Hello, this is Maxime speaking. We can't really disclose the terms. As you can imagine, this is a confidential agreement with Comcast. But we are very happy with the terms which enable us to generate synergies quicker than we initially expected. As you know, this was a severely loss-making activity on which we saw no recovery no matter what was done. We very quickly found an agreement with Comcast that we needed to end this as soon as possible, and we needed to end the financial commitments to this as soon as possible.
Now, of course, the priority is to make sure that the people who have chosen this offer, and David can answer more specifically than I, end up on something that is an even stronger experience going forward.
Yes, just to complement maybe. We have an obvious overlap of technology on over-the-top in Africa today. We have the Peacock technology. We had the Peacock technology of Comcast. We also have the technology of the group. We already have, like, two platforms operating on the Showmax footprint, which were Showmax, but also DStv Stream. We are busy as we speak to make sure that all features and content that was available on Showmax will be available on DStv Stream in order for the customers to have another choice.
I think maybe going forward, I also want to highlight the fact that we now own this activity 100%. We expect a lot from this activity and OTT in general.
Okay, thank you. Second question on Showmax. Can you tell us what was the level of operating loss in 2025, and how much of it is fixed versus variable? The question is how much of the losses is truly gone once the service is terminated?
I don't know if we want to disclose that. It was in excess of EUR 100 million. It is close to that in terms of synergies. It's not trivial to calculate because some of the resources allocated to Showmax were actually mutualized. Some of the content is available on other platforms than Showmax, for example. You get a sense I think with the numbers I gave you.
Just to be clear on what Maxime was saying, stopping the Showmax activity, we won't have 100% gain in 2026 and 2027 due to the stop because we will still have some cost, especially on content that were mutualized between Showmax on one side and the MultiChoice on the other side.
This content provides value to our subs.
As David was mentioning, it will be available on the MultiChoice.
Okay. Now on the boost plan, the EUR 100 million you plan to invest at MultiChoice in 2026, should we consider it as a one-off expense in 2026, or you will have to sustain that effort for the coming years?
No, it's a sustained effort because the platform need to get back to growth and to improve its sales engine. We are re-accelerating very quickly the sales engine to get back to numbers that were already in place back in 2022. It's a get back to growth and get back to a commercial engine power that used to be the one of MultiChoice just a few years ago.
Most of it is variable. 90% of it is variable. If you succeed in reboosting the engine like David just said, you get the revenues. This is something that David has done a number of times, and he is very clear on the ROI of these investments.
Okay. Okay, super. Maybe one last quick question on the Google partnership you announced this morning. On the production side, what's the current use of generative AI tools at STUDIOCANAL in the production, and how the new partnership with Google will accelerate the deployment of those tools? What do you think are the mid- to long-term implication for STUDIOCANAL profitability? Meaning, do you expect to let most of the gain drop through the bottom line, or you will be more inclined to reinvest most of the gains?
Hi. I think in terms of AI tools for production, it's definitely something that we're taking very seriously, enabling us to gain both, especially in terms of time, and obviously time and productivity. So it basically means that it will allow us to, you know, continue to follow our ambitious editorial strategy using tools that will allow us basically to put more money on screen. Well, at least make it look like there's more money on screen, thanks to those AI tools. So obviously, as I alluded to, we definitely know how to make movies at a budget that's a lot, you know, lower than a lot of the American studios.
Obviously, using these tools is only going to enable us to keep driving that strategy, and making those ambitious movies with the tools available and respecting obviously the parameters of our industry, which is obviously really important for us that we're working with the talent as well to make sure that everybody is on board, when we're working with Google and OpenAI.
Maybe just to be clear, the deal that we just signed with Google and OpenAI, it's not just only a STUDIOCANAL, it's more wide than that. It's really also focused on the Canal+ app and using those partnership to get the best of the large set of content that we have. You know, we have this aggregation strategy, so we have a lot of content in the Canal+ app, and the objective is to make sure that our subscriber can get access to this content. These deals are gonna enable us to provide data, additional data based on the content, and so to improve the recommendation of the search engine within the Canal+ app. It's also gonna be a huge value for our subscribers.
Mostly.
Okay. Thank you very much.
Your next question comes to the line of Conor O'Shea from Kepler Cheuvreux. Your line is open.
Yes, good morning, everybody. Thanks for taking my questions. Three questions from my side as well. First question just on Canal+ Africa margins in 2025. I think they were down year-over-year. Can you give a little bit of color on that? And also on STUDIOCANAL margins, I think they were up despite the decline in revenues. So just to understand what's happening there. Then second question on Maxime, your comments on the variable element within the EUR 100 million extra costs in MultiChoice. I think I saw a reference to 1,000 new hires in MultiChoice on the sales side. So that seems to suggest a slightly higher fixed cost element within that.
If you could just maybe elaborate a little bit more on the variable component and that, or are those sales people paid on commission or how does it work? Then the third point, just to come back on the closure of Showmax, and so on, just to be clear about what your streaming strategy is in Africa, in the MultiChoice footprint. Are you saying that you're reverting to mainly sort of a satellite approach because of the infrastructure in those markets? Or are you pursuing sort of a dual approach in that? Just to understand what your strategy is post-closure of Showmax. Thank you.
Africa margin is decreasing because of the inflation of some cost of content that we think is non-structural.
We are still at more than 20% margin at Africa.
Okay.
20.8%, which is best practice on pay TV business, so it's still a very profitable business.
STUDIOCANAL, Anna has completely improved the way we function, and she's able to increase the margin even when we don't have an incredible year, because last year was incredible. 2024 was incredible. 2025 was. We expected more normal, you know how it is in the movie business. You don't have a Paddington or Back to Black or Bridget Jones every year, unfortunately. We knew that. The model now is very resilient, thanks to a number of things that she has described, the pre-financing, the cost control, and the incredible library which enables to generate very constant revenue streams. We're very, very happy to show that, no matter what, she delivers on the EBITDA, Adjusted EBIT.
It's also helped by Dailymotion in that segment because we mentioned that Dailymotion is close to now breaking even basically with a 20% increase in revenues. The 1,000 hires are mostly commission. Yes, this is mostly variable. This is what we intend to do. I mean, we are set by the fact that these costs need to be variable because again, we want to. We, you know, this should generate revenues and we don't want to add. We already think there is an issue of structural high cost at MultiChoice, so the idea is not to add a fixed cost. The idea is to lower fixed cost. On OTT, no, we have a very ambitious strategy. You look at our strategy in Europe.
Of course, Europe is more mature than Africa today with broadband and high speed penetration and a number of things, and the cost of data. South Africa, and David can speak to this again better than I can. South Africa is much more mature than some other African countries. It's actually in some ways closer to Europe in that respect. I really want to, you know, insist on that. We will develop a very ambitious OTT strategy, but we will just do it with our platform that we own 100%, proprietary platform. You look at what we've done in Europe, and you have a pretty good idea of what we will be doing in Africa. Now, every
Today, every one of our subscribers in France or in Poland. Let's take the example of France. We have still quite a substantial number of subscribers on DTH. Every one of them goes on our app every day. Our DTH subs actually are on the OTT as well. Christophe has done that very well. We don't have any, you know, decay rate like we've seen with the cable industry in the U.S., where we see them losing cable subscribers going to Netflix. We don't have that because our DTH subs, all of them have access to our OTT platform, and that's the strategy David has already rolled out in French-speaking Africa and will be rolling out in the MultiChoice territories. Okay, very clear. Many thanks.
Your next question comes from the line of Ben Shelley from UBS. Your line is open.
Hi. Thanks for taking my questions. I've got three. First of all, could you expand a bit more on the timing of your medium-term outlook? Is it right to think about that being 2028 or more towards the end of this decade? Then a couple of more detailed questions on the cash flow. Can you give us some visibility on what minority dividends will be for the combined group in 2026? Likewise, can you give us some visibility on what cash exceptional costs will be for the combined group in 2026? Thank you.
On the first question regarding the midterm, yes, we are more midterm like, around 3 years, so 2028, 2029, around that, so before the end of the decade to answer your question. Regarding cash flow, it's a bit early to provide some figures regarding the dividend 2026. On the exceptional item that we will have, part of it is gonna be the payment of the VAT settlement that we signed in December 2025. We announced that we will have to pay EUR 363 million. We don't have a clear schedule yet with the French tax authorities, but we plan to pay that in 2026 and 2027. Probably a large part of it will be paid in 2026, but we don't have a view actually, to be honest, on when we will have to pay.
It's gonna be less than EUR 365 probably, but we don't know yet. What we'll have also in exceptional costs is gonna be the implementation cost of the MultiChoice plan and the synergies that we presented. You saw that in the slide. We believe that to implement the synergies and the synergies acceleration, we will have to spend between EUR 70 million and EUR 100 million in 2025, and this is depending on the pace and the condition of the voluntary plan that we are gonna launch. We will have some remaining payment of the layoff plan that we had in France. We started it in 2025. We paid part of it second semester of 2025, but we still have a few tens of millions EUR to pay in 2026.
These are the main items.
Thanks very much, guys. Very clear.
Your next question comes from the line of Adrien de Saint Hilaire from Bank of America. Your line is open.
Yep. Thank you. Good morning, everyone. I've got maybe one question for David and one question for Maxime, I suspect, or maybe you can take them both combined. On the boost plan of EUR 100 million, I mean, I know it's a difficult one. What's the degree of confidence you have that this is enough to fix the situation around subscriber trends? Maybe Maxime, 'cause you have, of course, experience during the French turnaround, about 10, 15 years ago. I'm just wondering from your perspective, like, to what extent the MultiChoice situation today feels similar or different to what you had in France about 10 years ago.
Maybe I can take the first one. The confidence is super high, and I tell you why. If you look at the numbers between 2013 and 2020, 2023 even, like, number of sales and the powerhouse of sales of MultiChoice was at full speed. For cash pressure purposes, especially investment in the Showmax that we have switched off and some others, the company has to decrease its investment into, you know, commercials and sales. We are just getting back to normal, if I may say so, and we already have, some effect as we speak. It's just getting back to what used to be back in between 2020 and 2022.
We are super confident, to answer your question, to clarify your question, to our ability to of commercial power that used to be just three years ago.
Sorry. I was joking this morning that the situation seemed very, very similar to what we had in France. That's another reason we're confident. We know how to do this. The dynamics are very strong. The market is very strong. David needs to rebuild what he has built already in French-speaking Africa with the retailers, and we know how to do this.
Thank you.
Another element that we know how to do is that if you look at the MultiChoice numbers, and we really were very transparent on that, a big part of it is cost of content inflation. We also know how to deal with that.
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Yes. Good morning also. First question, just to be sure, on the EUR 100 million investment in terms of commercial activities, when you said variable, just to be sure, you said 90% variable. Does that mean that if the recovery don't take place, which I don't wish, that
Does that mean that the cost will be 10 only? That's my first question. Second question on the inflation in terms of cost at the MultiChoice level for 2026. What is it exactly? Is it linked to currency or to a structural additional investment? And if that's the case, when do you plan to reverse that in the medium term, if it reverse? Lastly, so you said, organic revenue guidance should be slightly up. Could you give a bit more details between France or this is for Europe, so France, Poland, and the rest of Europe. Thank you.
Not sure about the last one. I'll let Amandine deal with that one. Yes, you're right on the first point. If sales don't materialize, it will be 10.
Yeah.
Correct.
Confirmed.
On the cost of content, it's not structural, it's not additional content. It's just negotiations of current content with inflation. What we call elevated inflation, like a yearly inflation which amounted to EUR 100 million in 2026. We don't believe this is structural at all.
Regarding the organic revenue growth, especially in the European segment, actually we have different dynamics. If you are looking at France, we expect to have some decrease in the French revenues. This is due to the change of offer that we had to do due to the new VAT settlement that we signed in December. We had to change slightly the offers, and it will have a slight impact on the revenues. We will have also a decrease in the former M7 perimeter. As you know, the offer in those territories is a bit similar to what we had for the French Canalsat ten years ago. It's mainly multi-channels offer, and so we are currently completely changing the strategy in those territories.
This is what Christophe talked about earlier, and that on the short term, it will create a decrease in the revenues. Overall, on the Europe segment, we expect a decrease in 2026, but it should be offset by an increase in the African one on the former Canal+ perimeter, so French-speaking Africa and GVA. Now also it's performing very well, to be honest. It's small, but working very well.
Just want to come back on the content. These are inflations that are in the contracts, so we have to renegotiate the contracts. Some will take place maybe next year, some on the year after that. We have to look in detail at the contracts. Of course, as you know, we expect a lot of improvements in the terms with our new scale. We have already proven that in the contracts we've negotiated. You may have noticed that we announced an acceleration of synergies, and not only the ones we plan to achieve in this year, but the ones we have already secured, which amount to EUR 120 million already. Part of this is already content negotiations.
Thank you.
As a reminder, if you wish to ask a question, please press star followed by one on your telephone and wait for your name to be announced. That is star one if you wish to ask a question. There are no further questions. Apologies. Your next question comes from the line of Eric Ravary from CIC CIB. Your line is open.
Hello. Thank you for taking my question. Just one remaining. Could you give us a range of the subscriber base assumption you have for MTG medium term, on which you made your guidance for revenue and EBITDA possible?
I don't know if we want to answer that one. No, I don't think we can.
What we can say is that we expect to get back to growth, and to have the end of the decrease in 2026.
I think the other thing we can say is I think we understand you. We have been conservative because turning around the business, you mentioned France earlier, we know how to do it, but the speed it takes, you don't necessarily know. We have been conservative. I think we've quite clearly said, and I will say it again, that the numbers we've given for the medium-term outlook are a bare minimum as far as we're concerned. From there, we intend to continue to grow to the long term. This is a starting off point, 2028, and we expect it to be higher than the numbers that we've shared with you this morning.
There is a lot of uncertainties, and as you know, we don't want to commit to anything we're not absolutely positive we will deliver on.
Okay. Thank you. Just a follow-up on the subscriber base for MTG. Are you confident that here you can come back to growth for this subscriber base before year-end 2026?
Well, most likely.
Okay. Thank you.
You know, we come from EUR 1.5 million loss every year. It's a lot.
It's a lot.
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Thank you.
Thank you very much. Thank you all.