Earnings Call: Q2 2021

Aug 3, 2021

Welcome to International Gain Technology Q2 'twenty one Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. I would now like to hand the conference over to your speaker today, James Kirley, Senior Vice President of Investor Relations. Please go ahead, sir. Thank you, and thank you all for joining us on IGT's Q2 2021 Conference Call, which is hosted by Marco Sala, our Chief Executive Officer and Max Chiara, our Chief Financial Officer. We are presenting the results today from multiple locations, so please bear with us if we do encounter any technical difficulties. During today's call, we will be making some forward looking statements within the meaning of federal securities laws. Forward looking statements are not guarantees and our actual results may differ materially from those expressed or implied in the forward looking statements based on a number of factors and uncertainties, including those related to the effects of the COVID-nineteen pandemic. The principal risks and uncertainties that could cause our results to differ materially From our current expectations, our details in our latest earnings release and in our SEC filings. During this call, we may discuss Each of which is posted on our Investor Relations website, you'll find additional disclosures regarding these non GAAP measures, including reconciliations of these measures comparable GAAP measures. And now, I'll turn the call over to Mark Rosala. Thank you, Jim, and hello to everyone. Impressive second quarter results we are reporting today highlight the vitality of our portfolio. Outstanding lottery performance, progressive recovery in land based gaming and strong increase in digital and betting activities drove revenues up more than 70%. Profit growth was even stronger. Adjusted EBITDA of EUR 442,000,000 was over 2.5 times the prior year level and among the highest that we have ever recorded in a quarterly period. In addition to the natural operating leverage in lottery, structural cost reductions from our Optima program Contributed to improve global gaming performance, which returned to positive operating income in the quarter. In the 1st 6 months of the year, we generated $380,000,000 of free cash flow, Record level for a first half period. Our focus on executing with excellence is grounded in good We recently published the 14th Annual Sustainability Report, Improving the quality of the information we disclose about the sustainable activities and solution we have in place across the Highlighted in the report are our efforts at diversity and inclusion, which have been recognized for their scope and impact. We firmly believe our dedication to well-being and developing of our employees The value is tangible in our strong first half results, enabling us to raise expectation for 2021. At this time, we now expect to exceed 2019 levels for key financial metrics this year. This is an important achievement considering the impact of the pandemic has had on the global gaming industry. It validates the unique attributes of IGT's portfolio and the dedication of the IGT team around the world. Well, I want to thank for their resilience, responsibility and good corporate citizenship. Our Lottery business continues to perform at a very high level. Broad based player demand across Games, geographies and channels drove same store sales 35% higher in the 2nd quarter. Lottery's consistent Multi year growth profile is fueled along several dimensions. 1st, with continuous innovation in game content, Add ons to popular draw games franchises such as DHL Auto Extra in Italy and Double Play, Cash 5, Numeris in Eastern Game in Italy is performing very well out of the gate. 2nd, To improve the retail penetration and sales execution, including the optimization of game portfolios and improved logistics, The distribution of games, especially around convenience options such as self-service, online purchasing and cashless solutions Have experienced high player acceptance. The Washington State Lottery, a leader in the development of self-service model, We'll soon deploy our next generation cashless lottery technology as part of a recent multiyear contract And third, by increasing player acceptance in iLottery. I will expand on this a little later. As we look at the second half, we expect global same store sales to be up Mid single digits to last year and up low double digits compared to the second half of twenty nineteen. This is at the upper end of historical trends and applied to higher levels of consumption. It is a compelling outlook for a business with an attractive margin structure and steady growth profile It has proven to be highly resilient to macro dynamics. For the global gaming segment, most markets are Today, our business is concentrated in the U. S. Whereas Lotte GGR has largely recovered to 2019 levels in many jurisdictions. Regarding revenue streams have rebounded quickly, More than doubling prior year levels and up double digit sequentially on higher terminal service revenue and strong digital and betting growth. Sequentially, there are more active installed base units generating Stronger reels. Top performing games, including include several Wheel of Fortune titles And the new multilevel progressive Dragon Light, Jing Kaixin and Gong Chi Fa Kai. Outright sales more than doubled the prior year and were up over 40% sequentially on strong replacement sales. We expect a sustained improvement in unit demand in the second half of the year, both for casino and VLT As operators return to increase the levels of investment, sales will be supported by the PIKOSLAN 49 cabinet, Which is now offered for sale with proven high performing games such as Regal Riches and Scarab Link. Adoption of IGT's best in class cashless solution is expanding. Later this year, the Agua Caliente Included in the offering will be the proprietary IGT Pay full service funding solution For cashless wagering via credit and debit cards, bank accounts and e wallets. And there are more deals in the pipeline. The industry is also taking notice of our accomplishments. Our ability to consistently bring excitement and innovative products and Services to market was recognized at the 2021 Global Gaming Awards London, where IGT won casino supplier of the year. It also supports our expectation of progressive improvement in global casino gaming in the balance of the year. We continue to build on our leadership position in iGaming, iLottery and Sports Betting. We are Investing along the many dimensions to bring the most compelling digital games to market. In addition to leveraging our deep and Proven land based portfolio, we are also developing new digitally native games. Cash Eruption is a recent example and has quickly become our top performing game in Michigan In several European markets, it will launch in New Jersey soon. We are also creating partnerships that Provide access to new and innovative game features as we did with the Wheel of Fortune Megaways. These arrangements enable our partners to develop their own new game content using IGT's enhancing the value of IGT's iGaming ecosystem. Distributing 3rd party contents provides another opportunity for incremental market share. We expect to be distributing over beginning in Georgia. We expect that these leading edge solution will greatly enhance our competitiveness. Notably, it is the 1st cloud based iLottery solution to go live for WLA customers, Enabling faster delivery of game content while reducing costs. We are also The portfolio of games that feature and reach audio visuals and enhanced bonus play features. VIP Gold Grand and Triple Platinum are the recent new Easter games that are generating All time IPUs. Multi price instance games like INVASIONE SPACIALI Have been very successful in Italy. The deployment of our Play Sports platform continue to expand at the fast clip. It is currently powering approximately 50 U. S. Sportsbooks for 18 customers across 15 states. One of the more recent addition is Resort Awards Las Vegas Retail Sportsbook as well as its supported by innovative product launches and overall cost and capital control. At the same time, we significantly reduced our debt, improving our financial condition and leverage profile. With the tailwinds like attractive long term lottery industry trends, the global gaming recovery And fast growing digital embedding businesses, we expect these positive trends to continue. As always, Our growth initiatives remain grounded in our commitment to sustainability, building on the important progress we have already made. Now I'll turn the call over to Max. Thank you, Marco, and hello to everyone. Like last call, I will be primarily speaking to continuing operations in this presentation due to the sale of our Italy B2C Gaming business, which closed in May. Before doing that, I want to highlight where we stand on our recovery path to pre pandemic levels. Q2 was another outstanding quarter from both operating and financial perspective, as we see markets across our industries recovering at a faster pace than originally expected. This, combined with our cost savings initiatives being well ahead of plan, drove the outstanding results we are reporting today. And importantly, we have accelerated the pace of our cash generation, allowing us to return to pre pandemic leverage 6 months ahead of our target. The details of our results continue to showcase the unique strength of the IGT portfolio. Year to date, net income improved by over $1,000,000,000 from the prior year period, and we generated $1.94 in earnings per share. This increase was the result Of 3 main drivers sustained improvement in operating profitability, the capital gain recorded on the sale of our discontinued operations And an impairment charge in the Q2 of last year that was triggered by the beginning of the pandemic downturn. On the next slide, 11. You can see that our results were impressive across all key financial metrics. During the Q2, IGT generated over $1,000,000,000 in revenue, $244,000,000 in operating income and $442,000,000 in adjusted EBITDA. Revenue grew over 70% from the prior year, while EBITDA was up 170%. Like last quarter, we can see the impressive operational leverage of our Lottery business and of structural cost savings actions. We achieved over 2 thirds of our 200,000,000 savings target versus 2019 by the end of the second quarter, having accomplished over 70% of our product simplification and margin improvement efforts. The operational excellence piece is driven by the pace of the gaming recovery, and we expect to benefit more from this savings in the second half of the year. Turning to our Lottery segment on Slide 12. Revenue impressively increased over 50% to $725,000,000 Global same store sales rose 35% from the prior year and were up 24% from Q2 2019, which highlights the strong player demand. Italy Lotteries had an incredible performance in the quarter with sales more than doubling from the prior year. Some of this is due to an easy comparison since lottery points of sale were heavily impacted by the pandemic restrictions last year, and there was an outsized benefit in the Q2 this year because Gaming halls in Italy were closed until June. In North America and the rest of the world, lottery momentum continued from Q1 With same store sales growing 21% in Q2 over the prior year with broad based strength across game categories the benefit from higher discretionary income in the U. S. Strong same store sales as well as the higher mix of Italy business, We generate more revenue per wager that led to margins well above the normal range. Operating income more than doubled from the prior year period to $300,000,000 with adjusted EBITDA growing 87% to $414,000,000 Last quarter, we recognized $80,000,000 in revenue from LME incentives and outsized jack productivity that flow through almost entirely to profit. While we did not have those benefits this quarter, our strong same store sales growth translated into an EBITDA incremental margins of over 70%. Turning to our Global Gaming segment on Slide 13. Revenue more than doubled from the prior year, Driven by an improvement in recurring service revenue and higher unit shipments. We saw 19% sequential revenue growth versus Q1. Sequentially, the global installed base was relatively stable with terminal service revenue growing on higher productivity from more active machines. Currently, over 90% of our U. S. Casino installed base is active and yields continue to be higher than they were pre pandemic. Given the positive trends in overall gaming service revenue, which includes strong digital and betting growth, we expect to be back to Q4 2019 levels Q4 of this year. We sold roughly 6,300 units globally in the quarter, doubling our prior year shipments And growing 44% sequentially. Unit shipments were driven primarily by strong replacement demand from casino and VLT customers. We also saw higher shipments on replacement units internationally, particularly in Australia and New Zealand. The gaming business returned to operating profitability in the quarter as top line trends continue to improve and our optimal cost savings actions benefited results. Adjusted EBITDA of €49,000,000 is a sequential improvement, a trend we expect to continue for the rest of the year. On Slide 14, you can see that continued healthy cash conversion and CapEx discipline drove $176,000,000 in free cash flow. We've generated $380,000,000 in free cash flow in the first half of twenty twenty one, which is the highest reported amount for the first half in company history, Along with roughly $750,000,000 in net proceeds from the sale of our Italy gaming business, we can see the direct impact to net debt. Leverage is 4.3 times of 4.3 times is back to pre pandemic level 6 months ahead of our target. The next slide shows our debt maturities, which have improved significantly over the last year. The proceeds from the Italy gaming business were used towards full redemption of the 4 75 percent, EUR 2023, EUR 850,000,000 bonds. And we recently amended and extended our term loan With our strong financial position allowing us additional liquidity and extended maturity and lower interest costs, We now have a weighted average debt maturity of roughly 5 years. Since the beginning of the year, our combined capital actions have reduced annual interest costs by $65,000,000 compared to 2020 levels, of which almost half will start accruing through the second half of this year and a bit more than half in 2022. Over 80% of our debt is fixed And the variable piece is prepayable with minimal cost, allowing us to effectively manage our exposure to interest rate volatility. In summary, we have delivered an impressive financial performance in the Q2 year to date period. Strong player demand in lottery, progressive recovery in gaming And our structural cost savings initiatives have all contributed to these results. We continue to generate robust free cash flow and reduced debt, And our balance sheet shows improved liquidity and a more favorable debt structure. On Slide 17, we have our outlook which implies strong year over year growth for both metrics. Global Lottery is expected to return to more normal growth rates applied to higher levels consumption. Q3 to date same store sales are up double digits versus 2019, which is at the high end of the historical trend. Global Gaming should maintain its time of progressive recovery. There are some important differences between the first half And the second half, revenue and operating income will be lower versus H1 on the normalization of lottery growth trends. Cash from operations is expected to be lower than H1 as the elevated lottery revenue quickly converted to cash in the period. In addition, cash tax payments are concentrated in the second half of the year. And while working capital was a source of cash during the height of the pandemic, It is now expected to return to more normal levels. We estimate capital expenditures will total about for the full year. Depreciation and amortization should be in line with first half levels. I should note that these current expectations do not factor in any potential impact from additional COVID-nineteen restrictions. That concludes our prepared remarks. Operator, can you please open the call for questions? Thank you. Operator, we're ready for the questions. Your first question comes from the line of Carlo Santarelli If you guys wouldn't mind, just kind of as you think about the lottery business And the expectation for the back half of the year and obviously the growth rates which are lower than what you've experienced in the first half, but Provided some color on the 3Q. So my question really is, is there anything that you're seeing in the current trends That is materially different than what we've you've been experiencing here over the last several months? Or is it just more of A comp stack issue that kind of has that growth decelerating from what you experienced in the 2Q. Good morning, Karl. It's Marco. This is a good question. I think the good news is As we said during our remarks, our expectation is to grow in the second half of the year, to grow On the half of the year to grow single digit against last year that, by the way, was growing overall In 8% to 9% versus 2019 and to be up low double digits Compared to the second half of twenty nineteen, so what we are experiencing is some stickiness of players at The higher level of consumption they have experienced during the pandemic. We have Seeing that this business benefited from the lack of other entertainment options, In Italy, more specifically, benefited from the closure of the gaming goals and the sport betting shops. But what we are Seeing that even after the reopening, we have a quite a good performance, especially of scratch tickets in Italy. That is somehow reaffirming what the consumer researches were telling us that players overall that they will have an average consumption higher than what they had pre pandemic. From that level, I I guess that we will get back going forward to more secular trends, but from a higher level of Personal consumption. Great. That's super helpful. Thank you, Moskari. And if I could just ask one more question. As it pertains to your capital return philosophy at this point with leverage where it is and what are your latest thoughts? Hi, Carlo. This is Marc speaking. So as we are approaching our 4 times Leverage goalpost. Obviously, we have accelerated our strategic thinking around the next phase of our posture visavis the capital allocation priorities. And again, in front of our Investor Day coming up In November, I would not preempt our thinking right now. The only thing I want to tell you is that we are Right now, we're gravitating toward moving to a range of leverage Ratios that we would look into to maintain over the full cycle. And as you know, for us, cycle means Years of low upfront fees payments versus years of higher upfront fee payments, which, as you know, They may be coming to fruition in a couple of years out. So that's where we currently sit in terms of our high level thinking. And I would defer to the Investor Day to a more precise answer. But again, we're very happy that we are able to Get closer to that 4 times faster than we originally anticipated. That's helpful, Max. Thank you. To complete it, the next years, we do not have a major upfront fees ahead of us. So The good news is that we are generating a strong cash flow, but the major capital Your next question comes from the line of Chad Beynon Macquarie, your line is open. Hi. Thanks for taking my question and congrats on the results. Max, you noted that you guys plan to be back to gaming levels in the Q4 of 20 21, as you saw in the Q4 of 2019. Could you just expand a little bit in terms of if you were thinking revenues or EBITDA? And then related to that, how are you thinking about some of the more cyclical items like product sales and how operators plan to purchase Slot machines, how that's trending? Thank you. Yes. So first of all, a clarification. That comment was made in regard to The service recurring revenue business portion, which we expect to continue to improve quarter after quarter. And right now, we see potentially Q4 of 2021 seeing a trend in the service part similar to what we were left with at the end of 'nineteen pre pandemic. On the product sales side, there's going to be more A much longer curve to get back to the 2019 levels. You probably will need to see a Full year of development. We have started to see some of the operators willing to come back at the table, But we're still in the very early innings for that dynamic to really take hold and allow us to bring back Product sales to the level of 2019, which we don't anticipate until probably late 2022, early 2023. Okay. Thanks for that. That's correct. The sentiment, Chad, if I can elaborate on it, the sentiment of operators is becoming More and more positive. And we will see a progression in terms of product sales over the next recover the pre pandemic level, but if you talk about the sentiment, definitely, the sentiment The GGR operators are experiencing are making them more relaxed in discussing About capital expenditure for the next month, one thing is to discuss about it, one thing is to cut deals. But it's already a very good news, and I'm rather excited About the possible accelerated velocity in terms of core product, Again, not reaching the prior year level. But if we elaborate on the Q2, it was in North America, 11 Set below 19. So this is, I think, a good point. Perfect. Thanks, Marco. And then regarding iLottery, you noted your new cloud based technology that you'll be rolling out in Georgia. Can you talk about just the overall iLottery education process with state legislators in the U. S? And process with state legislators in the U. S. If they're better understanding the benefits and the technology That comes with this and if you still believe that the markets could double in the near term, just any update from a legislative No, I think definitely that the market can grow and can double in the foreseeable Future, we see that there are legislation authorizing I Lottery just approved in Arizona and Connecticut. And but what I think is that the jurisdictions that When they will seeing the importance of ILottery in the other jurisdictions that have already regulated, They will get more motivation out of it. I give you an example. For example, for among the jurisdictions that Have already I lottery. We were talking about the importance of an I payout in I lottery to drive the growth of the business. And for example, Tanazink, Kentucky and Georgia now have decided to increase the payout of the new products because they realize they can grow faster. I give this As an example of the motivation of the jurisdictions regarding this segment, By the way, is getting the consumer attention. And we are working a lot On our portfolio, in order as I said in previous calls, investing in talent, in technology and contents And the next generation iLot platform you have referenced to is a good example As well as with all the investments that we are doing in contents in order to strengthen our offering and to be Prepare for when other jurisdictions will regulate this space. That in my opinion, definitely will happen over the next years. Thanks, Marco. It's great to hear. Appreciate it. Your next question comes from the line of Barry Jonas of Tuohy Securities. Your line is open. Great. Thank you. Hi, guys. We're seeing increased COVID cases and restrictions From the Delta variant, aside from the comments you gave around Italy, I'm wondering if you've seen or maybe would you expect any other Regarding the delta variant, unfortunately, we are all experiencing an increased number of cases. When it comes to The consequences to our business, let's focus on gaming because we have seen that Lottery has been rather resilient, I Say more than resilient. As a matter of fact, we got traction out of the overall situation. Digital benefited out of it. Gaming, regarding gaming, we expect that We do not expect that these adjunctive closing measures in Europe and you were referring to Italy. The only debate We have here in Italy regarding the effect of showing what we call Green 48 hours before entering a gaming goal. Regarding what we see in the United States, the only measure that for the time being We are seeing is in Nevada and in several other jurisdictions the request for players But wear the face mask. So all in all, I do not see that at this stage, we should Something truly worrying regarding the gaming business. But we are in a stage where we have altogether look at the evolution. But I do not see in the government's attitude The approach to get back to lockdowns. Great. Appreciate that, Marco. And just as for my follow-up question, Scientific Games just announced they're selling their lottery and sports betting business. We've got a few questions concerning that as it relates to IGT. So I guess, first, how meaningful Is bundling across your business lines? And 2, is selling off any part of the company something you would consider exploring if the price was right? This is a very good question. Overall, I think we have a consistent portfolio To start with, our businesses are focused on delivering content and solution to The world regulated real gaming market, and this is, in my opinion, what binds them together. And we are focused on serving governments and licensed private operators as a B2B provider, and this role can expand to comprise a full outsourced lottery operation where appropriate. This is just to say that we see consistency of our portfolio. And by the way, these each business in our portfolio is Profitable and as a good growth perspective, it will generate strong cash flow, Enabling the significant deleverage in the next years. Having said that, our new organizational structure gives us more flexibility to evaluate value creating portfolio That is, if compelling opportunity materialize. And by the way, just to give a little Good. We are considering the possibility of creating a digital segment going forward if the performance will be maintained at this level. So I think I tried to provide you what where we feel we are and but also providing the sense of All right. So next question comes from the line of David Katz of Jefferies. Your line is open. Good morning, everyone. Thanks for taking my questions. I wanted to just go back to discussion about lottery demand and lottery sales levels in the back half of the year. And how much of that is Predicated on the reopening of land based halls. And I suppose I'm wondering whether That reopening getting pushed out on a little bit of COVID resurgence would prospectively Drive upside to what you're guiding today if that were to occur. How much of it is land based open or close driven? No, it's we are talking about land base providing these figures. I can tell you that Now the situation of the reopening in our main geographies does not is not Included in our outlook because we were considering all the gaming alternatives and in general, the The payment alternative options are running. So the performance I offered you for the I do not expect that the measures I was commenting regarding the resurgence of the Delta Variance of COVID will influence very much at the lottery at this juncture. Okay, perfect. Thank you. And as my follow-up with To the premium or the U. S. Installed base in particular, We've been sort of looking for that base to be flat and maybe even start to go up Over time. Just how are you thinking about kind of the addition of units there and the yield that they generate? And is it reasonable for us To expect at some point that, that U. S. Installed base would flatten or even turn up at some point in the near term? I think, first of all, as we were saying in our prepared remarks, things are progressing quite Positively because now the active units are above 90% and the yields are truly very, very strong. And they They are getting stronger notwithstanding the increased number of active units. Regarding your question, our goal is for sure to From the launch of especially the MLP's products where we are devoting the most part of our investments. I think the pipeline of products we have is reassuring. We see that over last year, we got In almost stable installed base, we think that going forward, Not in the short term necessarily, but the our goal is definitely to stabilize and increase the installed base, and are investing in the right part of the portfolio, in my opinion, to achieve that goal. Okay. Thank you very much. Thank you, David. Your next question comes from Domenico Ghilotti of Okta. Your line is now open. Good morning. My question is related to the cost saving initiative. I like to understand how much of the cash P and L contribution you had in the 1st semester. And my question is related to the fact that Basically, for the second half, you are projecting a very similar top line. So the EUR 2,000,000,000 is not far away from the first half, but A much lower, dollars 200,000,000 lower EBITDA or EBITDA despite the high contribution from synergies. And a follow-up on this is if you see additional opportunities going forward, so for 2022. And last, based on your say or the projection, your indication for second half, we should expect also a tough comparison. So a sequential not sequential, year on year decline In the 1st semester of 2022. Hi, Dominika. This is Matt speaking. I'll take this one. So as we have displayed, our OPTIMA program in action is made up by 3 parts. So there is a margin improvement action, which relates to our ability to contain cost, reorganize back offices, We look at our footprint initiatives, and this has been in full swing and motion in the first half, and we have been able to kind of achieve Almost 70% of those initiatives and they are up and running now going forward. The second portion is the product simplification. So we have looked into the combination of product geographies across the board. We have been able to reduce spending in certain of those, and that initiative is also up and running To the tune of 70% of its potential and it's kind of meant to stay there. The last one, which is running a little bit behind, but it's consistent with our Initial expectations is the operational excellence because that requires the volume of new production to Come up. It's moving forward, slowly moving forward quarter after quarter. But again, Until we get to full fruition of the gaming the land based gaming demand, which As we said before, it's going to come probably towards the end of next year. It's not going to get to full benefit. So All in all, we are ahead of our plan in terms of the savings. We have been able to count the hard savings on maintaining strict discipline on cost spending so far. The more dramatic supply chain reorganization Benefits will come to fruition over time, and so there is a little tail that will come to fruition potentially next year. In terms of first half to second half, probably in the second half, there will be some of the call, we are expecting something around $10,000,000 max $15,000,000 this year. And we think we have enough We'll take our last question from John DeCree of CBRE. Your line is now open. Hi, everyone. Thank you for taking my questions. I think most of That have been answered, but maybe just one on the U. S. Sports betting landscape. I think you've mentioned in your presentation that you've got about 50 Play sportsbooks up and running in a pipeline that might be over 40 potential customers. Marco, I was wondering if you could elaborate a little bit on that pipeline your expectations and maybe high level, your current thinking and outlook for your business in the U. S. Sports betting arena would be helpful. For sure. Good morning. We are very positive regarding our opportunity in sports betting. We see traction in In this part of the business, we see an opportunity for us mainly as a supplier of Our commercial relationship and our end to end solution, the platform and the risk management service. But who want to have their own branded sports books, low investment opportunity to build the sports And we can enable them doing it. And those are the In the kind of customers that represent our target, we have already 9 active or announced sports books across 6 jurisdictions, Colorado, Washington State, Louisiana. And in this respect, we have 40 commercial leads that we are currently exploring. And in Nevada, as I said during my prepared remarks, it has been important for us powering the recently opened resorts award Las Vegas, that is the It follows what we have done with Boyd earlier during the year. So this is the way we see this opportunity for us, I don't know if it is clear or if you want To ask you something else, I'm not ready to answer. Yes, that's perfect, Marco. Thanks so much and congratulations on another strong quarter. Thank you. There are no further I will now turn the call over to Mr. Marco Sala, IGP's CEO. Thank you for joining us today. We appreciate your interest in IGT. Q2 was another outstanding quarter From both an operating and financial perspective, in the first half of the year, we have accelerated the pace of Cash generation, enabling us to return to pre pandemic leverage 6 months ahead of schedule. With the tailwinds like attractive long term lottery industry trends, the global gaming recovery and fast growing digital and betting businesses, we This positive trend to continue. We look forward to seeing you at the broker conferences this fall This concludes today's conference call. Thank you for participating. You may now disconnect.