La Française des Jeux : Revenue up 4% in First Nine Months

Finalization of The Acquisition of ZETURF at the End of September and of PLI at the Beginning of November

• Turnover at the end of September of €1,875 million. On a comparable basis ^[1] , the increase is +1% and +5% excluding Amigo and Euromillions, a solid performance in line with that of the 1st ^half .
  • The lottery recorded a turnover of €1,407 million, down -1% but up +3% excluding Amigo and Euromillions. The drop in Amigo activity since June is linked to the new formula of the game revised at the request of the regulator. That of Euromillions is attributable to a low number of high jackpot draws ^[2] , particularly in the 3rd ^quarter , reflecting the hazard of the game
  • Competitive sports betting and online games confirm their good momentum with turnover up +9%, to €360 million
• The acquisitions of ZEturf and Premier Lotteries Ireland (PLI) will strengthen the FDJ model from the ^4th quarter <
  • With the integration of the ZEturf group and its horse racing betting activity, FDJ completes its online gaming offering and becomes the 4th ^operator in the competitive sports betting and online gaming market in France, with a market share greater than 10%
  • The acquisition of PLI, authorized by the Irish lottery regulator in early October, is expected to be finalized in early November. The strategic plan currently being developed aims to accelerate growth and increase profitability of PLI
• 2023 objectives: turnover increasing by around +5%, or between +1.5% and +2% on a comparable basis, with a current EBITDA margin rate maintained at around 24% thanks to the good load control
  • FDJ will also benefit from a high level of financial income, expected to almost double that recorded at the end of June, and reiterates its commitment to distribute between 80% and 90% of its consolidated net income.

Boulogne, October 19, 2023 (5:45 p.m.) – La Française des Jeux (FDJ), the leading gambling operator in France, announces its nine-month turnover at the end of September 2023.

Stéphane Pallez , CEO of the FDJ group, declared: “  Our growth remains solid, with player demand still well oriented, even if our activity is occasionally affected by the low number of high Euromillions jackpots. At the same time, the finalization of the acquisition of ZEturf at the end of September and that to come in November of Premier Lotteries Ireland illustrate our strategy of internationalization and diversification. We are delighted that the teams of these two operators are joining FDJ and that these operations will fuel the sustainable and profitable growth of the Group. »

• Turnover at the end of September of 1,875 million euros, up +3.9% and +1.3% on a comparable basis

At the end of September, the gross gaming product (GRP) amounted to 4,808 million euros, stable compared to 2022. After 3,044 million euros in public deductions, the net gaming product (GRP) [ ^{3 ]} stands at 1,771 million euros, an increase of +0.8%, based on increases of +2.0%.

Taking into account income from other activities of 103 million euros, an increase of more than +10% on a comparable basis, the Group’s turnover at the end of September 2023 stands at 1,875 million euros, in increase of +3.9%.

On a comparable basis, revenue growth was +1.3%. It stands at +4.6%, in line with that of the 1st ^half , excluding Euromillions, particularly affected by the low number of high jackpot draws, particularly in the 3rd ^quarter , and excluding Amigo, relaunched at the beginning of June with a revised formula in accordance with the decision of the regulator.

In the 3rd ^quarter , turnover stood at 586 million euros, down -1% and -3% on a comparable basis.

• By distribution channel and activity
• By distribution channel

Points of sale increased by +0.8% to 13,278 million euros, supported by sports betting and instant games, and despite the impact of Amigo and Euromillions.

Digital marketing continues its dynamic, driven by all activities. They are up +10.6%, to 2,011 million euros, a performance attributable in particular to the increase in the number of players. Excluding Euromillions, online lottery stakes increased by more than +12%. Digital bets represent more than 13% of total bets.

• Lottery

Lottery turnover stood at €1,407 million, down -1.2%, based on slightly higher stakes, but up +2.6% excluding Amigo and Euromillions .

Driven in particular by the success of launches and relaunches, such as Carré Or in January and Numéro Fétiche in May, stakes on instant games increased by more than +4%.

The drop of almost -6% in draw game stakes is attributable to the full impact of the new Amigo formula launched at the beginning of June, and in accordance with the decision of the National Gaming Authority, as well as to the drop in number of high jackpot Euromillions draws (19 at the end of September 2023 compared to 32 at the end of September 2022), particularly notable in the 3rd ^quarter .

Excluding Amigo and Euromillions, draw stakes increase by +1% and those of the lottery by more than +3% compared to 2022, an “exceptional” year for draw games, in particular Euromillions which showed stakes growing by nearly +20% at the end of September 2022. Overall, the attractiveness of this game remains strong, with an increase of almost +10% in its stakes compared to 2019, after its relaunch in the 1st quarter of ²⁰²⁰ .

The gap between the evolution of stakes and that of turnover is particularly linked to Euromillions, whose conversion rate of stakes into turnover is high.

• Sports betting and competitive online games

Revenue from competitive sports betting and online games stood at €360 million, an increase of +9.3% in line with that of stakes. The rate of return to players for the 3rd ^quarter is very close to that at the end of June and that recorded at the end of September 2022.

The growth in activity, strong both at points of sale and online, benefited from the continued momentum of the FIFA World Cup at the end of 2022 despite a slightly less favorable football calendar in the ^3rd quarter 2023.

The acquisitions of ZEturf and Premier Lotteries Ireland (PLI) strengthen the FDJ model

• ZEturf completes FDJ’s online gaming offering, which becomes the 4th ^operator  in the French competitive sports betting and online gaming market, with a market share of over 10%.

ZEturf is the 2nd ^online horse racing betting operator in France, with a market share of around 20%. This acquisition allows the FDJ group to become the 4th ^player in competitive online gambling in France (sports betting, horse racing betting and poker), with a market share greater than 10%. Finalized at the end of September, this acquisition is consolidated in FDJ’s accounts from October ¹ .

In order to fully benefit from the potential of the merger with ZEturf and the synergies within its competing online activity, and in accordance with the commitments made to the Competition Authority, FDJ will adopt a new organization of this activity.

With a turnover of more than 50 million euros in 2022, ZEturf:

• Doubles the turnover of the online activity in competition with FDJ;
• And will have an accretive effect on the contribution margin of the competitive sports betting and online gaming activity from 2025.

• PLI: 1st ^step in the international B2C lottery with solid prospects

The acquisition of Premier Lotteries Ireland, the operator of the Irish lottery, is a major step in the deployment of the FDJ group’s international strategy. On October 3, the Irish lottery regulator gave its approval to this operation, the finalization of which should take place at the beginning of November, from which date PLI will be consolidated by FDJ.

In 2022, Premier Lotteries Ireland recorded a gross gaming revenue (GRG) of €399 million and a turnover of €140 million, with an EBITDA margin rate comparable to that of FDJ.

The strategic plan currently being jointly developed aims to accelerate the growth and increase the profitability of PLI, based on sharing the best practices of the two operators to:

• Capitalize on FDJ’s experience to drive PLI’s instant games portfolio;
• Boost the player base for draw games;
• And continue to improve the digital experience for Irish players.

Outlook 2023

In the 4th ^quarter , the Group anticipates:

• For competitive sports betting and online games, a near-stability in turnover reflecting the continuation of the dynamics recorded since the start of the year but with a high basis of comparison attributable to the FIFA World Cup. FIFA end of 2022;
• And for the lottery, an increase in turnover driven by drawing games excluding Amigo, with several events including the launch of the EuroDreams game, and by instant games.

For the entire 2023 financial year, FDJ is targeting an increase in turnover of around +5%, or between +1.5% and +2% on a comparable basis, with a margin rate of Current EBITDA maintained at around 24% thanks to good cost control.

• At the end of July, the Group had communicated 2023 objectives of a turnover increasing by more than +5%, and by more than +3% on a comparable basis, with a current EBITDA margin rate maintained at around 24 %.

The Group will also benefit from a high level of financial income, expected to almost double that recorded at the end of June, and reiterates its commitment to distribute between 80% and 90% of its consolidated net income.

Next financial communication from the Group

FDJ will communicate its 2023 results on Thursday February 15, 2024 before market trading.

SOURCE: FDJ.