FDJ reports “solid” year-on-year sales growth of 6.5% for 2023

La Française des Jeux (FDJ) has reported 6.5% year-on-year revenue growth to €2.62bn (£2.24bn/$2.81bn) for the 2023 financial year.

FDJ attributed the “solid” revenue growth to momentum in sports betting and online gaming. This was evidenced by an 18.8% increase in net gaming revenue (NGR), which accounted for almost 13% of the group’s NGR.

FDJ’s 2023 report came following the group’s submission of a SEK 27.96 billion (£2.10 billion/€2.45 ​​billion/$2.67 billion) bid to acquire it of Kindred Group’s total outstanding share capital in January.

In 2023, FDJ’s net profit increased by 38% to 425 million euros, compared to 307.9 million euros in 2022. Recurring operating income increased from 459 million euros to 532 million euros, again a notable increase corresponds to 15.8%.

Despite the increase in sales, the 6.5% increase in sales fell short of the 9.1% increase reported last year to $2.46 billion. Last year’s success was largely due to an 11% increase in lottery numbers. Interestingly, the lottery sector only grew by 4.9% in 2023.

FDJ recorded an 11.3% increase in EBITDA to €657 million with a margin of 25.1%. The group attributed the increase in net profit to high recurring EBITDA and increase in financial profit.

Dividend growth was also described as “strong”, rising by 30% to €1.78 per share with a payout ratio of 80%. The group says it now has a significant amount of available cash of €855 million.

FDJ:A Commitment to “responsibility”

Responsible Gambling Jumio
FDJ has reiterated its commitment to responsible growth and gambling

Stéphane Pallez, Chairman and CEO of FDJ, said the company reached milestones in 2023 in terms of its M&A activities.

“FDJ has delivered solid growth and results this year,” she said. “The Group reached an important milestone in the delivery of its strategy in 2023 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 that combines performance and responsibility.”

A big topic in the FDJ 2023 annual report was the topic of responsible growth. The group emphasized a three-pronged plan to support this strategy.

The first is a comprehensive model for recreational play. FDJ revealed that less than 2% of gross revenue from online lottery games comes from high-risk players. Over 10% of the group’s advertising budget now goes towards responsible gambling.

The company also wants to recognize its social commitment. Particular attention is therefore paid to maintaining the highest extra-financial ratings. This notably includes a rating of 72/100 from Moody’s ESG Solutions for financial sustainability.

FDJ also strives to ensure that its performance benefits everyone involved. The company contributed 4.3 billion euros to public finances and created 56,000 jobs. 21,800 of these are in local retail stores.

FDJ’s planned acquisition of Kindred

In a statement following the offer, FDJ said the deal to acquire Kindred would create the second-largest operator in the European gaming sector. It added that the merger would result in a “European gaming champion” with stronger revenue and profit growth.

Both the Kindred board and the FDJ support the planned takeover. This would be the latest in a series of purchases for the French lottery and gambling giant.

FDJ completed its €175 million acquisition of ZEturf in October, while the group also completed its €350 million purchase of Premier Lotteries Ireland the following month. In the 2023 report, FDJ stated that the integration of these two companies was “in line with expectations.”

Outlook for 2024

For 2024, FDJ is targeting group-wide sales growth of 8% with a recurring EBITDA margin of around 24.5%.

The group is targeting sales growth of 5% in its non-competitive areas of lottery, sports betting and online gaming for the next financial year. This will be driven by the multitude of sporting events in 2024, including the Paris Olympics and the UEFA European Championships.

FDJ also expects additional growth from the contribution of other activities such as international, payments and services.

The deal with Kindred also opens up future growth for FDJ. In an interview with iGB, Ed Birkin, senior analyst at H2 Gambling Capital, described the move as a “significant step change” in FDJ’s strategy towards becoming a “multi-product European leader.”

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