FDJ United (FDJU) Earnings Call Transcript

Good morning, everybody. So I'm very happy to be able to talk to you today with -- in the company of Pascal Chaffard that you know, and Nils Anden that you might know also is the CEO of Kindred. As today, we are announcing the launch of the recommended tender offer for Kindred and will be free to talk about this very exciting project today. So let me first maybe remind you why we do this, why we announced this today. As you know, I think we have said and reiterated that we want to become leading operator in lottery and online betting gaming with an expanding international footprint. And we have, as you know, started this expansion by the acquisition of the Irish operator, PLI, last year. So we have said that we were looking at opportunities to expand our online betting and gaming. And with Kindred, we think we have found a very strong and fit targets to do so with strong capabilities, iconic brands, best-in-class technology platform and presence in a lot of European markets, and I will come back to that. We are very also delighted to have been able to announce you a friendly offer and to have Nils with us today because it's really on this basis that we think it's a very unique opportunity. It's really based on our conviction, both on the asset, on the company, but also on its management and its talents and this is what also we want to state today. So this transaction is definitely in line with the strategy that we have communicated. We are launching it today. It's recommended by the Board of Kindred unanimously. It is supported in terms of irrevocable commitments by 5 of the main shareholders of Kindred, which represents 27.9% of Kindred's share capital. And of course, we will devote our efforts to get support of all the shareholders of Kindred to complete this transaction. So to go a little bit more in the transaction rationale, I will insist on 4 main objectives and end points. First, of course, once completed, this transaction will create a European gaming champion with increased sales, technology capabilities, greater diversification across geographies, channels and verticals. The combined entity will benefit from a combined GGR revenue of EUR 8 billion of which 12% will come from international and 29% will be online. So this combined entity, FDJ plus Kindred will definitely benefit from a leadership position on scaled and fast-growing European market open to competition. This transaction will be consistent with our best-in-class sustainability and responsible gaming approach. In particular, I would like to emphasize the fact that this combined group will operate only in locally regulated markets. This is a very important statement. It's also a very important commitment that we take because it's part our vision of the sector and the way we want to operate and we'll come back to that. This combined entity will benefit from significantly stronger revenue and earning growth as well as increased operating leverage -- sorry, sorry for that. It is -- we estimate that GGR growth will be accelerated by more than 50 basis points. EBITDA margin will be enhanced by more than 50 basis points. And of course, EBITDA to free cash flow conversion will be maintained above 80%. We also believe strongly that it's a value-creating transaction for our shareholders because we have assessed, and we also can strongly reaffirm that this will drive an increase in shareholder returns for FDJ shareholders, which will transform into an accretion in DPS superior to 10%, while, of course, optimizing the group's capital structure, which is one of our objective also in this transaction and good for our shareholder value in the future. So just to drive you quickly through the transaction highlights. I've already stated that it's a friendly transaction. The irrevocable commitments of 27.9% of share capital from 5 major shareholders that have also committed to support the change in the bylaws that will put the threshold for the squeeze out at 90%. As you are aware, this transaction is occurring in the context of the strategic review that has been launched by Kindred Board last April. So we've been, of course, taking a lot of time looking at the asset, again, having our own conviction and assessment of the quality of the asset. And it's on this basis that FDJ is offering SEK 130 in cash per share, which represents a EUR 2.6 billion enterprise value, therefore, a multiple of 10.9x 2023 EBITDA. In terms of financing, this transaction will be financed on cash on hand and acquisition bridge loan. We reconfirm our commitment to midterm target of net debt to EBITDA below or equal 2x. And we've been working closely with credit rating agencies and expect a solid investment-grade rating profile of the combined group to refinance further this operation. Of course, this operation is subject to regulatory conditions. First, the approval of the financial market authority on the Swedish market. Then we'll have the change of the squeeze-out threshold. And then we have also -- to get the approval of the antitrust authority in France because it's actually the only country where there is really an antitrust question. And this is part of the time line, which leads us to think that this operation should be closed by Q4 2024. So to get a little more in our strategic vision. I think I can stress two things. One is, of course, that, as I said, it's completely aligned with our vision to expand internationally on European markets since Kindred is, again, very top European players, one of the top 5 players in Europe with activity in 7 of 10 top markets. Second, in France, although France again, is only a small part of Kindred. It will also enable us to continue to develop our activities since -- of course, after the approval of antitrust authorities, this would create the third player in France on online betting and gaming markets open to competition with, of course, the prospect of combining our forces and our brands for a stronger challenger since because only 3, but a stronger challenger definitely than what we are today. Our condition is also based on our view of the European online betting and gaming market. We think it is an attractive market. It has attractive fundamentals. It has growth. Of course, it had very dynamic growth between '23 and '28 but it is still a good prospect of growth in the years to come with 9% provisional growth from now to 2028. It's been a market that is consolidating since definitely the main actor of this market thinks that it's a scale market. It's a market where you need to have scale to invest in your technology, brands, platforms and markets. And this is why we think it's very pertinent to invest in Kindred today. It's a market where when you have the scale, you offer attractive profitability metrics because you have significant operating leverage coming into that. And of course, we also see that as something that is possible because those markets are now converging to regulating models. Of course, FDJ could not operate on unregulated markets. And -- but this market is now more and more converged towards regulation. And we will, of course, accelerate that. So again -- and Nils will talk more about that. When you look at Kindred, you see that it's among the top 5 players in the Western European market. So it has a scale to invest in brands. It has the ability to develop proprietary technology platform, and this is a very important feature in this business and for us in this transaction. And it is also, of course, the capacity to have unified B2C online platform that drive efficiency and profit. And of course, Nils will come back on all those points. What we have also looked at is, Kindred's recent strategic announcement and they have been very important for us to make a decision about the quality of this asset and the alignment with what we see. First, of course, first priority of Kindred is to continue to gain market share as a trusted source of entertainment in its core markets in Europe, and Nils will talk about it. Second point, which was announced this fall, Kindred has announced the exit of operations from North America by mid-2024, which will allow to focus on core markets in Europe, and this is also a critical point for us. Third point is the investment that has been already starting to develop and implement a proprietary platform, KSP, which will allow for improved product offering and customer experience and reduce dependency to third-party. So we think it's a very -- also a critical point in terms of quality. We've been looking very closely at this project and we believe it's one of the positive feature definitely of this asset. And finally, Kindred has also announced decision to optimize its cost base and again, to focus resource allocation on the markets where there is more value to gain. So all this has been part of our assessment and decision and is, again, very, very critical. Now let me talk a little bit about the question of nonlocally regulated markets or illegal markets, as people would call them. It is, of course, a very important point for us. FDJ can only act and operate on regulated markets. What we have been looking at with Kindred is first, the fact that Kindred is already committed to increase its exposure to locally regulated markets, actually committed to come -- a completely regulated player. It has also a proven track record of transitioning successfully into regulated market once there is a framework that is adopted by the authority, as it has been demonstrated in the Netherlands, where you, of course, all have been following the situation. And now Kindred has regained its position of #1 in this market after a transition phase that has lasted for a certain time, which, of course, has not been easy, but it is, I think, a clear demonstration of this ability to manage the transition towards this regulated framework. So definitely, we want this combined entity at -- if we are successful in this operation, to have 100% exposure to locally regulated markets. What it means is that we will exit all markets where Kindred operates on a nonlocally regulated basis and where there is no visible and transparent process to make it locally regulated, for instance, Norway seems to be definitely in that situation. So we have accounted for the change in figures that it would mean, Pascal will talk about it. In Finland, I want to insist that in Finland, we believe on the basis of very public and official statement made by the authorities that there is now a clear path to regulation. And therefore, we could stay in the transition for, of course, to get a license in the new scheme that should be in place beginning of 2026, as I understand it at this point. I also want to say in addition that Kindred and FDJ share a number of commitments which makes them best-in-class players in their respective activities. On responsible gaming, as you know, FDJ is definitely best-in-class in this. We believe Kindred in its activity is also a best-in-class player, has taken commitments, particularly in terms of limitation of its activities on risk players -- on high-risk players, which are very, very important, and we expect to continue to work together, of course, in that direction, which is very important in our business model. We could -- I could also talk about environment, diversity and inclusion, where as you see our commitments are also very similar. Another point of similarity is the type of economic and financial model that FDJ and Kindred are today. Of course, Kindred is having higher growth rate and prospects that -- than us. It's part of the attractiveness of this transaction. But if you look at EBITDA margin, capital intensity and free cash flow conversion, you can see that we share the same type of very attractive and very solid business model. So we expect this, of course, to be a nice combination also from a financial point of view. And I will now hand over to Nils, which I thank again for being here with me today in Paris, and will talk to you more about Kindred. Thank you, Nils.

Thank you, Stephane, and good morning, everyone. So my name is Nils Anden, I'm the CEO of Kindred. And let me just start by saying I'm delighted to be here as part of the transaction announcement between FDJ and Kindred, which is a very exciting opportunity and will create a global gaming giant with the strategic and financial capabilities to be a true leader in this industry. So if we look at Kindred at the glance, Kindred is a pure-play online operator within the betting and gaming space. We have a very strong financial profile, extensive digital experience and cutting-edge technology across all product verticals and platforms we operate in. If we take a snapshot at 2023, as you might have seen from the trading update we released this morning, we had a good 2023 that was really underpinned by the fact that we regained the #1 market position in Netherlands with 13% growth on our gross gaming revenues. And even more pleasing, we saw almost 60% growth on our underlying EBITDA that came in at GBP 204.5 million for the year, which was also in line with the targets that we had communicated to the market. In terms of key figures for the company, we are north of 2,000 employees across Europe, Australia and still North America. We have six top 5 market positions, which is, of course, very important as we know, scale matters in this industry. We are currently in 13 license jurisdictions outside of North America. And at the end of Q4, we had 1.6 million active customers. Kindred has a very robust and resilient base of revenues. If we look at the first 9 months for 2023, we had roughly 40% of our revenues coming from sports betting, a little bit less than 60% coming from casino and games and 5% from poker and other products such as bingo, for example. We also have, and we're very proud to say best-in-class customer rating across a number of our core markets and also the #1 brand awareness across the digital-only operators in 3 of our 5 core markets. Of course, important to mention here, we operate a full set of house for brands. But we, of course, have Unibet, which is our flagship sports betting brand and one of the few truly pan-European powerhouse brands. We then supplement that with hyper-local casino brands that tend to operate within 1 market, for example, 32Red in the U.K. or Vlad Cazino in Romania. As mentioned, we have, over the last couple of years, invested heavily into our technology. That means that we have a very strong in-house player -- account management platform, similarly, regulatory integrations and payment options. We have also in this time span ensured that we could vertically integrate from a product perspective enabling both cross-selling and cost synergies. We have our own horse-racing platform. We have our own poker product. We have a number of exclusive casino games supplied by our in-house game studio, Relax. And we are also on the path of rolling out our own proprietary sports betting product called KSP, which will be fully rolled out by the end of 2026. This proprietary tech stack, of course, ensures that we can have a great level of product differentiation, ensure a fantastic customer experience, but also provides us with cost and scale benefits. The diversification of revenue does not only come from our product split but also in terms of our global footprint. As you can see here, we have a number of markets contributing to our revenues, and none of them are slightly more than 20%, which provides robustness and resilience, especially in navigating a very complex regulatory landscape. Maybe worth calling out here, Netherlands, U.K., which are the 2 largest markets for us and the very strong market positions we have in France, Sweden and Belgium. We look at them a little bit more closely. As Stephane mentioned, we went through a transition of reregulation in Netherlands, but we're very pleased to see that we have regained our #1 market position at the middle of last year. Netherlands is also one of the fastest-growing regulated gaming markets in Europe with an estimated 11% CAGR over the next 4 years. U.K., which is our second largest market, also a strong market for us, where we have outgrown the market and taken market shares for the last 7 years consecutively. And we see further growth opportunities there. And then we, of course, have markets like France, Sweden, Belgium, where we are very well positioned with strong brand presence, good products and a very nice opportunity for further growth. If we look at the Kindred's journey today, where we now stand at a very exciting crossroad as we look forward to combining with FDJ. We have really focused on since the launch in '97, product innovation and ensuring we can provide an excellent customer experience. Worth pointing out that the last 12 years has been really a transformation in moving from .com to locally regulated markets. That has also meant that we have to reinvent our business model to ensure that we can take height for the increased betting duties that have come with the local regulation. But I'm also proud to say that we have remained on a fairly stable EBITDA margin throughout this period, which is a testament to the balanced portfolio of both markets and product revenues. If we look forward, we are very pleased to continue on the strategic journey of really growing and focusing on continuing to take market share in our core markets, focus on excellent content and customer experiences. But ensure that we can continue to invest in our platform and proprietary technology across all product verticals. With that, I hope you got a little bit of flavor for Kindred, and I will hand over to Pascal to continue.

Thank you very much, Nils, and good morning, everybody. I'm very happy to have the opportunity to talk to you this morning of this transformation journey of FDJ. I'm about to -- I'm going to present the key figures of the combined entity FDJ plus Kindred and especially the benefits of the acquisition in terms of value creation and strengthening of the financial profile of FDJ. So first, I would like to present you FDJ Group operating model post integration of Kindred. The group will be organized around 4 pillars. The first one is France monopoly, which will include FDJ lottery, point-of-sales and online and also point-of-sales sports betting. France monopoly is expected to account for around 2/3 of the group pro forma full year 2024 revenue. Secondly, competitive online betting and gaming, which is the topic of the day and which will include Kindred activities and FDJ online betting and gaming activities, i.e., online sports betting, online poker and online horse-racing. Kindred will be the cornerstone of FDJ online betting and gaming activities on markets open to competition, which are expected to represent around 30% of the group pro forma revenue. The third activity is international lottery, which will include Premier Lotteries Ireland and lottery B2B operations and will account for around 5% of the group pro forma revenue. And fourth, payments and services activities in France. Before going into more details on the financial profile of the new group, let's come back a moment on Kindred's EBITDA, taking into account the perimeter we are acquiring as we will exit nonlocally regulated markets as it has been precised by Stephane and also North America, which is going to exit also. Our estimates of Kindred full year 2023 EBITDA on this perimeter is around GBP 170 million, GBP 180 million. For 2024, Kindred has confirmed its guidance to reach at least GBP 250 million and FDJ estimates that it would be over GBP 200 million on the future perimeter, again, excluding contribution of nonlocally regulated markets and North America. So now we will turn into euros and not pounds and taking account the -- again, the future perimeter of Kindred. I would like to show you on this page, the combined entity pro forma financial profile. Nils has commented the good results of Kindred in 2023, published this morning. And as you may have seen, FDJ has also communicated this morning, the full year 2023 figures. Those figures are good, slightly above the guidance in terms of gross and EBITDA margin. The group is in good health. The combined figures I'm presenting are based on those good and solid results for 2023. And this combined entity will benefit from a strengthened and solid financial profile, a GGR close to EUR 8 billion and the revenue close to EUR 3.5 billion, pro forma EBITDA close to EUR 860 million, which implies a 25% margin and free cash flow, close to EUR 740 million, which implies a net active 85% cash conversion. The acquisition of Kindred is really transformative for FDJ as it enhances diversification across both geographies, verticals and channels. Contribution of international GGR will increase from 6% to around 20%. Online betting and gaming activities, which represent activities on markets open to competition will represent almost 20% of the GGR versus only 2% today. And the share of digital in our GGR will be more than doubled from close to 14% to almost 30%. On the free markets open to competition in France, this transaction will bring us the opportunity to create a stronger challenger, moving from fourth to third position in our estimation of the local -- of the total of the free markets, subject obviously to antitrust authorizations. The acquisition will accelerate our online gaming momentum. We also expect some synergies arising from technology and performance initiatives. And our activities in France will benefit from Kindred's best-in-class technology stack and customer proposition with the well-known digital brands such as Unibet. Here, you can see the different levers of our -- the operational value creation as presented by Stephane earlier. Those levers are the underlying elements to the financial performance that I'm going to detail now. The combined group will benefit from significantly stronger growth and earnings generation profile. All the KPIs of the group are enhanced from day 1. The acquisition of Kindred will have an accretive impact on growth with enhanced revenue growth, EBITDA growth and free cash flow growth. We expect, in particular, an acceleration of GGR growth by more than 50 basis points. The acquisition of Kindred will also have an accretive impact on margin profile with higher pro forma EBITDA margin and maintain free cash flow conversion over 80%. We expect, in particular, our yearly EBITDA margin accretion over 50 basis points. This transaction will also have an accretive impact on the FDJ earnings per share with an EPS accretion over 10%, starting from year 1 post integration. The FDJ pro -- balance sheet -- pro forma balance sheet will remain solid, and we reiterate our midterm target of net debt on EBITDA below or equal to 2x, and the combined group will seek public credit rating as part of the bridge refinancing and aim at solid investment-grade rating profile. I already showed you that all the KPIs will be enhanced. To end, I would like to emphasize the fact that the acquisition of Kindred will generate a strong value creation for FDJ shareholders through over 10% accretive impact on dividend per share starting for year 1. We will update our dividend policy after the completion of the transaction. The calculation basis of net income will be adjusted to exclude notably purchase price amortization and the payout will stay at a high and attractive level of 75% of the adjusted net income. Now I hand over to Stephane for the conclusion.

Thank you, Pascal. So I think we've been quite explicit on all the reasons that we think it's a very important and attractive operation so it's just to -- just to summarize and wrap up what we said. It will create a European gaming champion with increased scale technology, capabilities and greater diversification. It will be consistent with our best-in-class sustainability and responsibility, particularly in terms of responsible gaming approach and regulated markets. It will make a new group that will have significantly stronger revenue, stronger earnings growth and increased operating leverage. And it will be a value-creating transaction for our shareholders, particularly leading to a significant increase in shareholder returns. And those are the reasons why we are here today, very happy to launch this offer. It's going to be a long process. We know that we're going to have to work a lot together to implement it. We are very enthusiastic about doing it together. And of course, now we'll let you ask questions and be happy to answer them. Thank you very much.

[Operator Instructions] We will take the first question from line Ed Young from Morgan Stanley.

I just first wanted to clarify on your stance on regulated markets. You've been very, very clear that you'll only operate in regulated markets. You called out Finland is one where you're happy to sit through the part of regulation. I just want to clarify through the remaining markets, you said you'll exit Norway. Besides Norway, I guess, I mean, in particular, Hungary, trying to confirm you're looking to exit that market and every other market except Finland, I guess, in the unregulated space?

Thank you very much. Well, this is -- I think this is globally correct. I mean what your understanding is globally correct. As I said, in Finland, we've been looking very closely at the path to regulation that the authorities have been talking and are working on today. So we believe it's quite consistent with our approach. Norway is very different. As you say, so Norway is exit. On the .com markets, they will be closed. Hungary and Poland, there is the theoretical possibility to obtain a license. But at this point, I don't know whether it's possible or not. So if it's not possible, we'll exit.

Okay. Then just as a follow-up on that. If I look at the difference between Kindred's 2024 guidance, which is GBP 250 million of EBITDA, and you said restated you expect it to be over GBP 200 million. If I take the unregulated revenue and exclude Finland from it, I think it's probably about GBP 150 million, GBP 160 million of revenue. So it seems like you're either assuming quite a low drop-through on that bridge, maybe 35% or you're assuming you might continue to -- could you perhaps clarify how you've got to that number and -- or secondly, whether you've assumed that you are exiting all .com except Finland and that GBP 200 million pro forma number you've given?

So Pascal?

Yes, I'll take this one. Yes, what we have done, first, it's FDJ estimate at this point. Secondly, we have taken into account the exiting of all the .coms and including Hungary and Poland. And if it's possible to get a license in those countries, it will -- the actual figures will be a little bit higher than that. And we also take into account the exit of North America that has been already announced by Kindred. So globally, if we do the calculation of all that, we arrived at a GBP 200 million of EBITDA on this perimeter -- over GBP 200 million EBITDA on this perimeter for 2024.

Perfect. And then one final question. You haven't talked at all about synergies in the presentation or the order statement. I just wondered if you could perhaps talk a little bit about what you think they might be able to be, whether it's on the cost side, specifically, but also perhaps on the revenue side as a more general longer-term point?

Yes. Your question is on synergies, I think -- sorry, because the sound was not great. The -- our view of the value of the asset that we expressed with the price is really the intrinsic value of the company. So we have identified a number of synergies, but they're actually not included in the price that we are offering on this asset. So we, of course, believe that they are revenue synergies in the way that we will work together to grow the activity in different markets. And on cost synergy, the main question, of course is on France, but we have not included any in our price, even though we think that there probably will be synergies in France, including in terms of brands because, of course, if we were to complete this transaction in France, we would have the possibility to have a better probably brand with Unibet. That's, of course, part of the synergy that you might imagine. But we've been very cautious on that at this point in the price.

We will take the question from line Jaafar Mestari from BNP Paribas.

Is it okay if I ask a few handful of short question, hopefully each very short. So on the synergies, could you maybe just tell us a bit more about the EPS accretion range that you've communicated? Do I understand correctly from your previous answer that with 0 synergies, you would still be double-digit accretive to EPS?

Yes.

Yes. Yes. The answer is yes. I don't know whether you want more details, but the answer is yes.

We would all love more detail. And then in terms of the financing, what are the interest costs on the bridge financing you've arranged for now on the acquisition, please?

I don't know if I can answer precisely this question. But they are very attractive and assuming that we are investment-grade profile. And the question will be more the refinancing of the bridge. And the refinancing of the bridge, if you take into account an investment-grade profile, you will see about which type of interest rate we can get.

Super. Yes, I guess that was the related question. So on debt refinancing, do you need to refinance the bridge financing lower to be at double digits EPS accretive? Or again, same question, do you think you will be double-digit EPS accretive even on the original financing terms and that's really the floor for EPS accretion?

The answer is clearly yes.

You will be -- okay? And then related to that, can you maybe just update us on the ZEturf and Premier Lotteries integration? And how would you say investors should perceive your track record of swift integration of the assets you've acquired so far before this large transaction now?

Well, I think it's a question that probably would take -- will more take place in our annual results communication, but I can briefly say a few things. On ZEturf, as you know, we've been closing quite recently this transaction in the fall because we've been waiting for the antitrust authorities decision that we got in September. So since September, we've been working very closely with the teams of ZEturf that we were not supposed to work with before, defining our integration plan and things are -- have been going very well on that. Of course, with this transaction, we might have another look at the way we're going to manage this integration to take into account the potential positive impact that we could get from Kindred. But this is something that we'll see further on. On PLI, again, quite a recent closing. So we've been working closely with the PLI team since actually October. We have put in place our new governance, and we have defined our common objectives and work together very well. So I think there is actually nothing more that I could tell you today, but it's on track.

Super. And my last question, just quickly on the deal is on any conditional closures. There's one that's mentioned in the release about antitrust regulation, but all the other financing terms are. What's a way out of this deal on your side, just to confirm that this is fairly committed? And similarly for Kindred, is there any commitment from the Board not to continue to seek alternative options in line with the April strategic review?

So on FDJ side, we are committed, as you -- I think, as you have heard. Again, if we have defined the length of the offer as 9 months maximum, it's because we have to get the authorization of the French antitrust authorities. And of course, this is a very important thing that has to be -- that needs some delay. Since we've been working with these authorities and taking commitments for the acquisition of ZEturf, I think we know pretty well how they are reasoning, so that's helpful. But still, it takes time. And that's the main thing that explains the length of the transaction. But we are completely committed to the transaction. And if you want to answer from Kindred.

Yes, of course, ultimately a question for our Board, but I think it's very important to point out that we have been through a very lengthy strategic review process where we, in management and the Board, jointly have looked at a number of alternatives. And the Board has unanimously recommended this transaction. So I think that says a lot about what the Board of Kindred thinks.

Yes. And maybe to just add one more thing. Stephane has also commented in her presentation that we are irrevocable for -- with a number of major shareholders of the company, including Corvex. And maybe last -- one last thing, one of the condition is to go to complete the deal, the competition authority and the other condition is to get 90% of the total of the shares of Kindred.

Of course. Yes. Thank you, Pascal.

That's all on the deal. I just had a separate one to finish on the European Commission investigation on your 2019 license cost. We've been waiting for some more developments there for a couple of years. At the moment, what's your working assumption on timing? And when you consider deploying significant capital into an acquisition like that, should we assume that you expect no material financial impact from any conclusion on the price you paid for the license in 2019?

Well, as you know, because we've been discussing this a lot of time, we've been working with the French state to make this process coming to end as soon as possible. We would, of course, have loved to have this behind us today. But as we also stated, we are now, I think, fairly convinced that we have good arguments, solid arguments, particularly after decision of the consolidator that I commented several times. So as I stated, we said several times, we believe that this question does not prevent us from using our balance sheet and cash to make acquisition. And therefore, of course, we hope for a conclusion this year. But I would refrain from being more precise since it's not completely in my hands. Thank you.

We will take the next question from line Martin Arnell from DNB Market.

Just a couple of questions from me. Firstly, on the rationale, how do you see Kindred's Sportsbook Platform, the project? What's your view on that in the due diligence? And also how much of the GBP 200 million adjustment for Kindred in '24 is burdened by cost for this project?

Pascal, you want to answer? And maybe Nils also.

Yes, we rely on the new sports betting platform. And maybe to answer on what are the type of cost behind that, I'll let Nils comment.

Yes. So I think we are firmly on track with the deliverables for the KSP platform, as we communicated in Q3. And we haven't specified the exact double cost that we carry, but we have said that they peaked in 2023. So we will see an improvement on the overall cost structure for the totality of our sportsbook, but we haven't communicated the exact double cost on that.

Okay. And then a question on the locally regulated markets and that you're exiting the nonregulated markets. Is that -- That's the same thing as you will not accept players from nonlocally licensed markets, right?

No, of course, of course. Of course, no -- not, of course, not.

Yes, exactly. And can you give us any sort of time frame from this, when this is going to happen?

Well, first, we have to complete the transaction. So as we indicated, we hope to complete the transaction by Q4 2024. And then once we are in the capacity to do it, we will do it as soon as possible in the different markets. There are some markets where it might take more time. But again, we announced our intention right now, so it's quite clear.

Yes. Okay. And to you, Nils, just a final question here. I know what you can't say. But I guess you and the Board, you explored potential alternatives. That's what you have stated. Did you have a potential interest from other potential bidders?

It's a very direct question. I cannot speculate in the process and what's been happening over the last 9 months. I think we're very pleased to come to the end of the strategic review with a very positive outcome. That's all I can really say on that.