- Revenue of 2,621 million euros, up 6.5% and 2.8% on a
like-for-like basis1
- Strong lottery fundamentals, 4.9% excluding Euromillions and
Amigo
- Good momentum in sports betting and online gaming open to
competition, up +10.9%, supported by a presence in all gaming
segments
- Strong growth in all online games with an 18.8% increase in net
gaming revenue (NGR)2, to nearly 13% of the Group’s NGR
- Integration of Premier Lotteries Ireland and ZEturf in line
with expectations
- Recurring EBITDA of €657m, up 11.3%, i.e. a margin of
25.1%
- Excluding non-replicable year-end items, the margin would be
24.3%
- Net profit of €425m, which benefited from the high level
of recurring EBITDA and the very sharp change in financial
profit
- Responsible growth with recognised societal commitments
- Expanded and recreational gaming model and continued
commitments to reduce the share of gross gaming revenue generated
by high-risk players
- Implementation of the partnership with the non-profit sector to
support the prevention of underage gambling: €10m over the period
2023-2027
- Extra-financial ratings maintained at the highest level
- Performance benefiting of all stakeholders
- 4.3 billion euros contribution to public finances
- 56,000 jobs maintained or created in France
- 983 million euros paid to retailers
- Strong dividend3 growth at 1.78 euro per share, i.e. a
payout ratio of 80%
- 2024 targets: revenue growth in lottery and sports betting
and online gaming open to competition activities in France of
around 5%. With the contribution from other activities
(International, Payment & Services), the Group’s revenue growth
should be around 8%. Recurring EBITDA margin of around
24.5%
- On 22 January 2024, FDJ announced a tender offer for Kindred
to create a European gaming champion
- The tender offer will open on 20 February 2024 for a period of
nine months. In particular, its completion will remain subject to
obtaining regulatory authorisations.
Regulatory News:
La Française des Jeux (FDJ) (Paris:FDJ), the leading betting and
gambling operator in France, announces its 2023 results and 2024
outlook.
Stéphane Pallez, Chairwoman and CEO of the FDJ Group,
said: “FDJ delivered solid growth and results this year. The Group
reached in 2023 a major milestone in the implementation of its
strategy with the completion of the acquisition of Premier
Lotteries Ireland and ZEturf. The proposed acquisition of Kindred,
announced at the end of January, will enable the creation of a
European champion and significant value creation for the benefit of
all stakeholders, in line with our model combining performance and
responsibility.”
Key figures (in millions of euros)
2023
2022
Change in
Revenue*
2,621
2,461
+6.5%
Recurring operating
income
532
459
+15.8%
Net income
425
308
+38.1%
Dividend per share (€)
1.78
1.37
+29.9%
Recurring EBITDA**
657
590
+11.3%
Recurring EBITDA/revenue
margin
25.1%
24.0%
* Revenue: net gaming revenue and revenue
from other activities
** Recurring EBITDA: recurring operating
income adjusted for depreciation and amortisation expense
2023 highlights
Lottery, sports betting and online gaming open to
competition
- Strong lottery fundamentals: revenue of €1.938m, up 1.1% and
up 4.9% excluding Euromillions and Amigo
- Successful animation of the instant games
portfolio, such as the launches and relaunches of Carré Or
in January, Club Color in March, As de Cœur in October and Mission
Nature in November.
- Successful launch of EuroDreams, in
partnership with eight European lotteries This game, whose
first draw took place on 6 November, gives players the chance to
win up to €20,000 a month for 30 years at tier 1 and €2,000 a month
for five years at tier 2. EuroDreams is a success, especially
online, as this game has the highest digitisation rate of draw
games.
- Low number of high jackpot Euromillions
draws (> 75 million euros) After a 2022 financial year
that had registred a record number of high jackpot Euromillions
draws (43), 2023 was marked by the low number of these draws (23),
particularly in the 2nd semester (8 vs. 27 in 2022), which affected
overall stakes given the strong attraction of such jackpots.
Nevertheless, stakes on high jackpots offered in 2023 have reached
historically very high levels. As Euromillions is a game with a
high stakes-into-revenue conversion rate, the later was therefore
particularly affected by the low number of high jackpot draws. The
same applies to the performance of the online lottery, as this game
has a significant digitisation rate. Net gaming revenue from online
lottery games increased by more than 10%, and by more than 17%
excluding Euromillions. This performance was mainly due to a
further increase in the number of players. More than 5 million
players played at least once a year in an FDJ online lottery game.
In terms of responsible gaming, the target of generating less than
2% of the gross gaming revenue of online lottery games with
high-risk players was achieved in 2023.
- New Amigo formula Amigo, a
point-of-sale game with a draw every 5 minutes, was relaunched in
early June 2023 with a revised formula in accordance with the
decision of the French regulator (Autorité nationale des jeux).
This revision notably concerns the reduction in the number of draws
(with a suspension of 15 minutes per hour between 6:00 and 14:00)
and the maximum amount per bet (8 euros vs. 20 euros). Since its
relaunch, Amigo’s business has stabilised at a level down by around
25% compared to the same period in 2022.
- Good momentum in sports betting and online gaming open to
competition, bolstered by a presence in all gaming segments FDJ
has historically been present in point-of-sale and online sports
betting, online poker since the end of 2022 and online horse-race
betting since the acquisition of ZEturf at the end of 2023. Sports
betting and online gaming open to competition continued to show
good momentum, with a revenue up 10.9% to 518 million euros and up
8.4% excluding ZEturf. This performance is based on a still buoyant
sports betting market, which benefited in particular from the
momentum generated by the FIFA World Cup at the end of 2022. For
the 3rd consecutive year, ParionsSport En Ligne has gained market
shares. Revenue growth is also explained by the first consolidation
of ZEturf in the 4th quarter and sporting results favourable to the
operator, in particular during the Champions League and Ligue 1. In
addition, the poker offer works very well, with nearly 20% of
online sports betting players also playing it.
- Strong growth in online games: net gaming revenue (NGR) up
18.8% to nearly 13% of the total, compared to more than 11% in
2022 The strong momentum of the Group’s online activities,
lottery on the one hand and sports betting and online gaming open
to competition on the other, enabled FDJ to record an increase of
18.8% in its net gaming revenue from online games, which represents
nearly 13% of total NGR compared to more than 11% in 2022.
Excluding the integration of PLI and ZEturf in the 4th quarter, the
annual increase in NGR for online gaming activities would have been
13.9%. Confirmation of the exclusive rights of La Française des
Jeux by the Council of State Following a referral in December
2019 by an association and several gambling companies, the French
Council of State ruled, on 14 April 2023, that La Française des
Jeux’s exclusive rights comply with European Union law. It also
ruled that the twenty-five-year term of its exclusive rights,
defined in the framework of the Pacte Act, is not excessive.
Concerning the equalisation payment of 380 million euros paid to
the State in respect of its exclusive rights, the Council of State
will decide after the European Commission’s decision on the
appropriateness of this sum, following its State aid investigation
launched in July 2021. External growth transactions
- Premier Lotteries Ireland (PLI) On 3 November 2023, FDJ
finalised the acquisition of 100% of the share capital of Premier
Lotteries Ireland, which holds exclusive rights to operate the
Irish National Lottery until 2034, after the authorisation from the
Irish National Lottery regulator. This transaction is part of FDJ’s
strategic ambition to become an international B2C operator and FDJ
thus operates a foreign lottery for the first time.
PLI’s strategic plan aims to accelerate its growth and increase
its profitability by sharing the best practices of the two
operators so as to capitalise on FDJ’s experience to run PLI’s
instant games portfolio, boost the draw game player base, and
continue to improve the digital experience of Irish players.
- ZEturf The acquisition of the ZEturf group, an online
horse-race betting and online sports betting operator under the
ZEbet brand, was finalised on 29 September 2023 following the
authorisation from the French Competition Authority. ZEturf rounds
out FDJ’s online betting offering, which has become the 4th largest
operator in the French sports betting and online gaming open to
competition market, with a market share of more than 10%.
In order to take full advantage of the merger with ZEturf and
the synergies within its competitive online activity, the FDJ Group
will adopt a new organisation for this activity, in line with the
commitments made to the Competition Authority.
Societal commitments
- Increased support for the prevention of underage
gambling To further strengthen its actions in favour of
responsible gaming, FDJ is providing €10 million over the 2023-2027
period to support the underage gambling prevention programme
targeted at young people and implemented by the ARPEJ
association4.
- Extra-financial ratings maintained at the best levels
- For the fifth consecutive year, Moody’s ESG Solutions awarded
FDJ the highest sustainability rating in the “Hotels, Leisure and
Services” sector with 72/100. The second largest operator in the
sector received a rating of 53/100. The Group is ranked 20th out of
nearly 5,000 global companies monitored by Moody’s ESG
Solutions.
- FDJ remains in the Top 3 in its sector in the S&P Global
ESG Scores rating despite increased requirements.
- MSCI raised FDJ’s sustainability rating from “A” in 2021 and
2022 to “AA” in 2023, with a maximum rating of 10/10 on the
environmental side.
- Performance that benefits all stakeholders For the
eighth consecutive year, the Economic Information and Forecasting
Office (Bureau d’information et de prévision économique or
BDO-Bipe) assessed the FDJ Group’s economic and social contribution
in France.
- In 2023, FDJ’s contribution to national wealth amounted to 6.6
billion euros, i.e. 0.25% of Gross Domestic Product (GDP)
- In terms of employment, the FDJ Group’s activities created or
maintained 56,000 jobs in France, including 21,800 in the network
of bars, tobacconists and newsagents.
- FDJ’s growth is benefiting the national community and in
particular public finances, with a total contribution of
more than 4.3 billion euros, including 4.1 billion euros in public
levies on games, which benefit:
- Endangered French heritage sites. Thanks to
the Mission Patrimoine lottery games, more than 28 million euros
were donated to the French national heritage foundation (Fondation
du Patrimoine) for the 2023 edition;
- And French sport, both professional and
amateur, via the action of the National Sports Agency (ANS).
The company’s economic impact is significant, particularly
on:
- Local retail, with 983 million euros paid to its more
than 29,000 retailers;
- French suppliers, with 648 million euros in purchases,
mainly from SMEs and mid-caps, i.e. more than 85% of the total of
purchases.
FDJ Group’s value creation is shared between employees and
shareholders, with:
- Personnel costs of 369 million euros, including profit-sharing
and incentive bonuses representing 24% of total payroll5;
- 262 million euros in dividends in respect of the 2022 financial
year, which benefit veterans associations, who are founding
shareholders, to finance their social initiatives, and nearly
400,000 individual shareholders.
Post-closing events
On 22 January 2024, FDJ announced that it was launching a tender
offer for Kindred, one of Europe's leading online betting and
gaming companies, to implement its ambition to become an
international gaming operator, and thus create a European
champion.
This offer:
- Is made at a price of SEK 130 per share listed on Nasdaq
Stockholm, and corresponds to an enterprise value of Kindred of 2.6
billion euros;
- and will create value for FDJ’s shareholders. In particular, it
should result in a more than 10% accretion in dividend per share,
as soon as the dividend paid for the 2025 financial year.
- The transaction takes the form of a public tender offer, which
will open on 20 February 2024 for a period of nine months. The
completion of the takeover bid will remain subject in particular to
obtaining regulatory authorisations and the acquisition by FDJ of
at least 90% of Kindred’s share capital.
2024 targets
In line with the Group’s medium-term objectives, in 2024 FDJ
aims:
- Revenue growth from lottery and sports betting and online
gaming open to competition activities in France of around 5%. With
the contribution from other activities (International, Payment
& Services), the Group’s revenue growth should be
around8%;
- and a recurring EBITDA margin of around 24.5%.
To date, these projections do not include any element related to
the tender offer on Kindred.
In 2024, the lottery will benefit from the contribution of
EuroDreams on a full-year basis but will continue to be affected by
Amigo’s new formula in comparison until early June. A normative
level of Loto and Euromillions draws with high jackpots was
retained.
In sports betting and online gaming open to competition, the
2024 financial year will be marked by numerous major sporting
events (Africa Cup of Nations, UEFA EURO 2024, Paris 2024 Olympic
and Paralympic Games) and FDJ will continue to capitalise on its
offering enrichment. The high margin recorded by the operator on
sports betting in 2023 does not seem to be able to be renewed for
the 2024 financial year. Finally, the establishment of a new
organisation in order to fully benefit from the potential of the
merger with ZEturf, in line with the commitments made to the
Competition Authority, is continuing.
At the same time, the Group will continue to develop its
societal commitments, in particular to the fight against underage
gambling and excessive gambling.
2023 activity and
results
- Revenue of 2,621 million euros, up
6.5% and 2.8% on a like-for-like basis Gross gaming
revenue (GGR = stakes – player winnings) came to 6,710.4 million
euros (+2.8%). Net gaming revenue (NGR = GGR – public levies on
games) constitutes the FDJ Group’s remuneration from gaming. After
4,237.1 million euros in public levies (+2.2%), the NGR amounted to
2,481.4 million euros (+3.9%). After taking into account revenue
from other activities for 140.0 million euros, the Group’s revenue
amounted to 2,621.4 million euros, up 6.5% and up 2.8% on a
like-for-like basis.
€m
2023
2022
Change in €m
% change
Scope impact
Organic change
Lottery
1,937.8
1,916.2
+21.5
+1.1%
-
+1.1%
Sports betting and online gaming
open to competition
518.1
467.0
+51.1
+10.9%
+2.5%
+8.4%
Other activities
165.5
77.8
+87.6
+112.6%
+104.7%
+7.9%
Group total
2,621.4
2,461.1
+160.3
+6.5%
+3.7%
+2.8%
- Recurring operating income of 532
million euros and recurring EBITDA of 657 million euros,
representing a recurring EBITDA margin on revenue of 25.1% compared
to 24.0% in 2022 Cost of sales amounted to
1,392.5 million euros (+4.7%). This includes 983 million euros
(+1.9%) in remuneration paid to retailers, which are correlated to
stakes recorded in the network. The increase in other sales costs,
44.6 million euros, is mainly due to acquisitions, particularly
that of Aleda.
Marketing and communication costs include the costs of
advertising and designing offers, as well as the costs of IT
development and operation of games and services. They amounted to
455.6 million euros. The decline of 1.2% was mainly due to
advertising spending, particularly corporate communications, which
came out at 1% of GGR.
Administrative and general costs mainly comprise the
personnel and operating costs of the central functions, as well as
the costs of buildings and IT infrastructure. Their 14.2% increase
to 241.5 million euros was due in particular to a scope effect as
well as the exceptional allocation of 10 million euros to support
actions to prevent underage gambling carried out by the associative
sector over the 2023-2027 period.
The Group’s recurring operating profit was thus 531.8
million euros, up 15.8%.
Net depreciation and amortisation expenses amounted 125.1
million euros compared to 130.9 million euros in 2022.
Recurring EBITDA, recurring operating profit restated for
depreciation and amortisation, was 656.8 million euros, up 11.3%,
i.e. a recurring EBITDA margin of 25.1%, up from 24.0% recorded in
2022.
The recurring EBITDA level notably reflects the strong digital
momentum. It takes into account the exceptional level of sporting
results favourable to the operator at the end of the year and a
reversal of provisions relating to disputes with former
broker-agents. Without these elements, the margin rate would be
24.3%.
- Net income of 425 million euros
compared to 308 million euros in 2022 In 2023,
non-recurring operating revenue and expenses were stable at -10.6
million euros, and included in particular costs related to external
growth transactions.
Operating income amounted to 521.1 million euros in 2023, up
16.1% compared to 2022.
The change in financial profit (+42.7 million euros in 2023
versus -28.7 million euros in 2022) is mainly explained by the high
level of interest rates that remunerate the Group’s cash position,
whereas in 2022, the decline in the markets had affected the
Group’s financial profit. The revision of the Group’s investment
policy at the end of 2022 enabled it to fully benefit from this
rate hike in 2023.
The tax expense amounted to 141.0 million euros, representing an
effective rate of 25.0%.
Consolidated net profit thus amounted to 425.1 million euros
compared to 307.9 million euros in 2022.
By
business
The Group’s organisation is structured around
three operating segments: two Business Units (BUs), the Lottery and
Sports betting and online gaming open to competition, and
diversification activities (International, including PLI, and
Payment & Services) with cross-functional support functions (in
particular customer, distribution and information systems). In
addition, the holding company mainly covers overheads.
The contribution margin is one of the key
performance indicators for these segments. It is calculated as the
difference between segment revenue, sales costs (including retailer
remuneration) and marketing and communication costs (excluding
depreciation) allocated to them.
- Lottery Lottery revenue
totalled 1,937.8 million euros, up 1.1%. Sales costs totalled
1,045.5 million euros (+1.2%) and correspond mainly to the
remuneration of retailers, which are correlated to stakes recorded
in the network.
Marketing and communication costs totalled 169.6 million euros,
down 2.7%, mainly due to the decrease in advertising and
promotional expenses.
The contribution margin of the lottery was 722.6 million euros,
i.e. a contribution margin on revenue of 37.3%, up from 37.0% in
2022.
- Sports betting and online gaming open
to competition Revenue from sports betting and online
gaming open to competition amounted to 518.1 million euros, up
10.9% compared to 2022 and up 8.4% excluding the first
consolidation of ZEturf in the 4th quarter. Stable at the end of
September 2023 compared to 2022, the operator’s margin6 increased
significantly in the 4th quarter compared to the low rate in the
4th quarter of 2022 attributable in large part to the victories of
favourites in World Cup matches. Thus, over the full year, the
operator’s margin stood at more than 11%, up from its 2022 level.
Cost of sales amounted to 238.8 million euros, an increase of 1.6%.
They correspond mainly to the remuneration of retailers, which are
correlated to stakes recorded in the network. Other sales costs are
increasing, in particular due to the integration of ZEturf and the
first year of poker.
Marketing and communication costs amounted to 125.9 million
euros (+9.8%). Excluding ZEturf, they rose by only 3.4%, driven by
the development of the offering, while advertising and promotional
costs decline.
The contribution margin for sports betting was 153.4 million
euros, i.e. a contribution margin on revenue of 29.6%, compared to
25.1% in 2022.
- Other activities Other
activities (International including PLI, Payment & Services)
recorded a revenue of 165.5 million euros. The 87.6 million euros
increase compared to 2022 is mainly attributable to the full-year
effect of the acquisitions of L’Addition (end-July 2022) and Aleda
(end-November 2022) and the contribution of PLI from November 2023.
The contribution margin of 15.3 million euros in 2023 is mainly
attributable to PLI. Furthermore, as announced, measures have been
taken to improve the profitability of the Group's activities in the
United Kingdom, which is at breakeven in terms of contribution
margin.
- Holding company Holding
costs amounted to 234.5 million euros. Their 18.1 million euros
increase compared to 2022 is mainly attributable to the allocation
to actions to prevent underage gambling and perimeter effects.
Solid financial
structure and free cash flow of 855 million euros
The Group’s investments in tangible and
intangible assets amounted to 124.7 million euros, compared to
104.1 million euros in 2022. They mainly relate to the development
of information and back-office systems as well as point-of-sale
gaming terminals.
Acquisitions of ZEturf and PLI represented
483 million euros, taking into account the net debt of the acquired
companies.
The normalised change in working capital
linked to the activity (restated for calendar impacts and unclaimed
winnings) was 54 million euros in excess. Thus, based on recurring
EBITDA of 657 million euros, free cash flow7 amounted to 586
million euros, up from 545 million euros in 2022, with a recurring
EBITDA to cash conversion rate of 89%.
At the end of December 2023:
- The Group’s shareholders’ equity stood at 1,071.1 million euros
out of a balance sheet total of 3,760.8 million euros;
- The net cash surplus8, one of the indicators representative of
the Group’s net cash position, was 671 million euros, down from 900
million euros restated9 at the end of 2022; FDJ has available
cash10 of 855 million euros.
Dividend
FDJ’s Board of Directors, at its meeting of Tuesday 13 February,
approved the Group’s 2023 financial statements. It will propose a
dividend of 1.78 euros per share to the Shareholders’ Meeting of 25
April 2024, an increase of 30%, i.e. a payout ratio of 80% in line
with the Group’s commitments. Payment will be made on 7 May
2024.
The audit procedures on the consolidated financial statements
have been completed. The audit report will be released after the
review of the management report is finalized.
A financial presentation and the 2023 consolidated financial
statements, in French and English, are available on the FDJ Group
website: https://www.groupefdj.com/en/publications-and-results/
Next financial release
The FDJ Group will publish its revenue for the 1st quarter 2024
on Wednesday 17 April after the market close.
The FDJ Group will hold its Shareholders’ Meeting on Thursday 25
April 2024.
Forward-looking statements
This press release contains information on FDJ Group’s
objectives, as well as forward-looking statements. These statements
do not reflect historical data and must not be interpreted as
guarantees that the facts and data mentioned will occur. The
information contained herein is based on what the Group considers
to be reasonable data, assumptions and estimates. FDJ operates in a
competitive and rapidly changing environment. The Group is
therefore not in a position to anticipate all of the risks,
uncertainties or other factors likely to impact its activity, the
potential impact thereof on its activity, or even to what extent
the materialisation of a risk or a combination of risks could
present significantly different results from those mentioned in any
forward-looking statements. The information contained herein is
provided solely as at the date of the present press release. The
Group makes no commitment to update this information or the
assumptions on which it is based, aside from any legal and
regulatory obligations to which it is subject. FDJ will disclose to
the market any update to information provided that is likely to
have a significant impact on its activities, results, financial
position or outlook, in accordance with applicable regulations, and
will comply with the ongoing disclosure obligations applicable to
all companies the shares of which are listed for trading on the
regulated market of Euronext Paris.
About FDJ Group
France's leading gaming operator and one of the industry leaders
worldwide, FDJ offers responsible gaming to the general public in
the form of lottery games (draws and instant games), sports betting
(through its ParionsSport point de vente et ParionsSport en ligne
brands), horse-race betting and poker. FDJ's performance is driven
by a large portfolio of iconic brands, the leading local sales
network in France, a growing market, and recurring investments. The
Group implements an innovative strategy to increase the
attractiveness of its gaming and service offering across all
distribution channels, by offering a responsible customer
experience.
FDJ Group is listed on the regulated market of Euronext Paris
(Compartment A – FDJ.PA) and is part of the SBF 120, Euronext 100,
Euronext Vigeo 20, EN EZ ESG L 80, STOXX Europe 600, MSCI Europe
and FTSE Euro indices.
For more information, visit www.groupefdj.com
X @FDJ Facebook FDJ Instagram @FDJ_official LinkedIn
@FDJ
1Including Aleda and L’Addition on a
full-year basis in 2022 and excluding the 2023 contribution from
PLI and ZEturf
2NGR corresponds to gross gaming revenue
(GGR = stakes – player winnings) net of public levies
3Proposed to the Shareholders’ Meeting of
25 April 2024
4 Support is given to the RPEJ endowment
fund
5 Withheld at the Urssaf gross level
6 NGR rate on stakes
7 Free cash flow = cash flow generated by
operations after investments related to operations.
8 It corresponds to non-current financial
assets, current financial assets and cash and cash equivalents, net
of non-current financial liabilities and current financial
liabilities, less: (i) current and non-current deposits and
guarantees given; (ii) cash subject to restrictions; (iii) sums
allocated exclusively to the winners of the Euromillions game; (iv)
non-consolidated securities, mainly composed of units in venture
capital funds (FDJ Ventures).
9 Non-consolidated shares, presented under
non-current financial assets, are excluded from the definition of
Net Cash Surplus from January 1, 2023 and restated accordingly.
10 Cash available = cash & cash
equivalents net of Euromillions funds, and deposits available
within thirty-two days.
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