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FDJ ACTIVITY IN Q1 2020 / COVID-19 UPDATE

April 22, 2020 | Lottery News

Boulogne, April 21, 2020 (7:00 a.m.) – La Française des Jeux (FDJ), the leading gambling operator in France, announces its stakes and turnover for the 1 st quarter of 2020 and specifies the effects of the Covid-19 epidemic on its activity.

  • In the 1 st quarter of 2020 [1] , FDJ recorded declines of 5% , to 4.1 billion euros, and a turnover down 1%, to 0.5 billion euros. The good momentum at the start of the year was halted by the first consequences of the Covid-19 epidemic.
  • Since March 16 , the start of containment, bets have dropped by almost 60% with:
  • A decrease in lottery bets outside Amigo of more than 40%;
  • The total suspension of the Amigo game since March 19;
  • A reduction of almost 95% in sports betting following the cancellation of most competitions.
  • Over a month of confinement, this trend is now reflected in a mechanical impact close to 100 million euros on turnover and 50 million euros on EBITDA. At the end of the confinement, the company is assuming a gradual resumption of activity. 
  • The Group has already embarked on an action plan aimed at saving over the rest of 2020 more than 80 million euros , or more than 10% of its annual fixed costs.
  • In view of the uncertainties generated by this unprecedented crisis, the Board of Directors decided to propose to the General Meeting of June 18 to maintain the payment of a dividend but to reduce the amount by 30% to 0.45 € per share.
  • As of April 20, FDJ had available cash in excess of € 800 million . Assuming a gradual recovery from mid-May, the Group’s monthly cash consumption in May and June should be limited to around 10 million euros.
  • Given this solid financial situation, the Group did not ask to benefit from public financial support or partial activity schemes.
  • In addition, after the loan was put in place to finance the financial compensation for its exclusive rights, FDJ made the corresponding payment of 380 million euros to the State.
  • FDJ, already strongly committed to its retailers, will provide nearly 3 million masks for free for its network of 30,000 points of sale, and will strengthen its actions in favor of responsible online gaming. Similarly, the Group contributes to national solidarity through various initiatives, in particular a donation of one million euros to the Alliance “All united against the virus”, 200,000 euros from its Foundation to Secours Populaire Français, and the participation of its employees.

For Stéphane Pallez , President and CEO of the FDJ group: “ Since the beginning of this unprecedented health crisis, the FDJ Group has strengthened its mobilization to limit the effects on the company, its employees and its stakeholders, in a spirit of responsibility and solidarity. This exceptional situation is already having very significant effects on the company’s activity. This is why, we decided to set up a substantial savings plan to limit the impact on the results of the company, while preserving its capacity to relaunch all of its activities as soon as possible. . At the same time, we continue to take concrete initiatives to be at the side of our stakeholders and in particular our retailers. In this context, %, due to uncertainties about the duration and extent of the consequences of the current crisis on the year 2020 . “

In the 1 st quarter of 2020 1 , sales fell by 1% to 0.5 billion euros, with decreases of 5% to 4.1 billion euros.

The stakes recorded by FDJ in the 1 st quarter of 2020 amounted to 4.1 billion euros, down 5.4% compared to the same period of 2019 with:

  • A 1.5% drop in lottery bets, to 3.3 billion euros with, in particular,
    • Circulation bets down 2% to 1.3 billion euros. Loto continues to record good results after its relaunch at the end of 2019, with growth maintained at more than 10%, while Amigo has been completely suspended since March 19;
    • Stakes on instant games down 1%, to more than 2 billion euros;
    • Strong momentum in online lotteries.
  • A more marked decline of 18% in sports betting activity, to 0.8 billion euros, notably affected by the gradual drying up of the offer linked to Covid-19 from the week of March 9, and by a calendar less sporting events provided at the start of the year.
  • Sales tune-ups fell by more than 6% to 3.8 billion euros, while digital upgrades were up 16% to almost 0.3 billion euros.

Until mid-March, activity was in line with annual targets with an increase in bets of + 5%.

In the 1 st quarter, the FDJ group’s turnover came to 511 million euros, down slightly by -0.9%, compared to 516 million at the end of March 2019 1 . This change is mainly due to a rate of return to players (TRJ) of 67.5%, against 68.3% at the end of March 2019, the variation of which is linked to “unexpected” sports results which reduce the TRJ.

  • A significant impact of the decline in activity during containment

Over a month of confinement, this trend is now reflected in a mechanical impact close to 100 million euros on turnover and 50 million euros on EBITDA. At the end of the confinement, the company enters into the hypothesis of a gradual resumption of activity.

  • A savings plan to preserve the Group’s profitability

In order to mitigate the impact of the drop in activity on its profitability, the Group has initiated an action plan, covering all cost items (marketing and communication, administrative and general costs, cost of sales) , aiming to save over the rest of 2020 more than 80 million euros, or more than 10% of its annual fixed costs

  • Dividend set at € 0.45 per share

Given the uncertainties created by this unprecedented crisis The Group Board of Directors, meeting on April 20, 2020, decided to propose to the General Meeting of June 18, 2020 to maintain the payment of a dividend but to decrease the amount of 30%, at € 0.45 per share.

The payment of this dividend, corresponding to a total amount of € 86 million, is scheduled for June 30.

  • Maintaining a high level of cash

As of April 20, FDJ had available cash in excess of € 800 million. In the event of a gradual recovery from mid-May, the Group’s monthly cash consumption in May and June should be limited to around 10 million euros.

Given this solid financial situation, the Group did not ask to benefit from public financial support or partial activity schemes. In addition, after the loan was put in place to finance the financial compensation for its exclusive rights, FDJ made the corresponding payment of 380 million euros to the State.

  • Exceptional provisions vis-à-vis employees, retailers and customers in the context of the health crisis linked to Covid-19

The vast majority  of  Group employees have been teleworking since mid-March, with their salary being kept at 100%.

The Group is committed alongside its retailers to facilitate the work of the points of sale that remain open and to help them enforce health regulations. To this end, in addition to communicating messages on barrier gestures and social distancing measures on all of its information media, the Group bought more than three million masks for its employees, its network of retailers and Ehpad of the Union of the wounded of the face and the head (Gueules cassées) and of the Maginot Federation, its main historical shareholders.

In order to support its network, the Group has also suspended financial levies for closed points of sale, and has implemented flexible levy management for retailers that remain open, which will be adapted as the situation arises. each.

FDJ also communicated with  its customers  to limit their trips to the point of sale. To do this, the Group has decided to postpone the deadlines for payment of winnings for all of its games so that the winners can get paid after the confinement period. In addition, to avoid parking in front of the screens at the point of sale, the “Amigo” game has been suspended since March 19.

  • Responsible gaming: a priority

In this very specific period of confinement, FDJ is continuing to deploy a large number of actions in the area of ​​responsible gaming. On its online site, the Group continues to make various services available to players in order to support their playing. FDJ wanted to supplement the already existing prevention measures by reinforcing the responsible gaming messages, relayed to its players online and on its sites, and by further monitoring online gambling behavior. This is to identify and contact players whose playing behavior has changed significantly since the implementation of containment measures

  • FDJ and its collaborators committed to national solidarity

A socially responsible company, FDJ is naturally committed to making its contribution to the national effort in the fight against Covid-19, with a donation of one million euros to “All united against the virus” . This operation, launched by the Fondation de France in association with the Institut Pasteur and the Assistance Publique – Hôpitaux de Paris (AP-HP), for caregivers, research and support for the most disadvantaged, aims to fight the Covid-19. Group employees have also taken action by committing to donating more than 1,400 days of leave, the monetized equivalent of which amounts to more than 300,000 euros will be paid in favor of the “All united against the virus ”and associations supported by the FDJ Corporate Foundation.

For its part, the FDJ Foundation has already responded to the emergency call from the Secours populaire français with a donation of 200,000 euros so that it can maintain its aid for the most vulnerable.

The Group’s next financial communication

Given the changing nature of the situation, the estimates and forecasts presented by FDJ cannot constitute either a forecast or a target. The Group will take stock at its Annual General Meeting on June 18, publish its half-yearly results on July 29 after the close of trading and communicate its new 2020 outlook as soon as possible.

The FDJ General Assembly will be held on June 18. Given the grouping restrictions in force, this will be held behind closed doors and will be published on the Group’s website.

About the FDJ group

National Lottery and French leader in money games, 2 nd lottery in Europe and 4 th in the world, FDJ offers point of sale and online a public offer, playful, responsible and secure lottery games (draw and instant games ) and sports betting (ParionsSport). FDJ performance is supported by a portfolio of brands and iconic news, the 1 st close sales network in France, a growing market, recurring investment and innovation strategy to enhance the attractiveness of its offer and its distribution, with an enriched gaming experience.

The FDJ group is listed on the regulated market of Euronext in Paris (Compartment A – FDJ.PA) and is included in the SBF 120 and STOXX Europe 600 indices.

Annexes

Data 2019 on a comparable basis, with the application in a full year of the new tax apply from 1 st January 2020 and incorporating Sporting Group over 12 months.

In millions of euros Q1 2020 Q1 2019 Var.
Stakes * 4,108.1 4,340.7 -5.4%
of which Lottery 3,334.1 3,386.2 -1.5%
Draw games 1,307.0 1,333.6 -2.0%
Instant games ** 2,027.1 2,052.7 -1.2%
including Sports Betting 766.5 936.2 -18.1%
Digitized *** 823.4 833.6 -1.2%
In the physical network 3,803.5 4,066.6 -6.5%
       

* The stakes are the stakes of the players and do not constitute the turnover of the FDJ group

** Mainly scratch games (point of sale and online)

*** Digitized bids include online bids and dematerialized bets at points of sale, i.e. using a digital service / an application for their preparation, before registration by the retailer

In millions of euros Q1 2020 Q1 2019 Var.
Bets 4,108.1 4,340.7 -5.4%
Share returned to the winners -2,773.9 -2,963.3 -6.4%
       Average TRJ (%) 67.5% 68.3%  
Gross Game Product (PBJ) 1,334.2 1,377.5 -3.1%
Public levies -837.6 -875.1 -4.3%
PNJ – Other sports betting activities 3.9 3.6 8.6%
Net Game Revenue (NPC) 500.7 506.0 -1.1%
Proceeds from other activities 10.6 9.7 9.8%
Turnover 511.2 515.7 -0.9%

 


[1] Data on a comparable basis in 2019, with the full-year implementation of the new taxation applicable from 1 st January 2020 and incorporating Sporting Group over 12 months.

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