Total net revenue for the six months to 30 June at FDJ was clear of the €1.29bn posted in H1 last year. The group reported growth across both its core lottery and sports betting and online gaming segments, as well as international and payment services.
Gross gaming revenue (GGR) for H1 was also 11.1% higher year-on-year at €3.66bn. After €2.30bn in public levies, this resulted in net gaming revenue of €1.36bn, up 11.3%.
An additional €72.0m from international operations and payment services pushed group net revenue to €1.43bn.
Digital dreaming
The standout figure for FDJ in H1 is a 39.8% rise in digital revenue. FDJ says this was helped by its acquisitions of Premier Lotteries Ireland (PLI) and Zeturf, both of which went through last year. On a like-for-like basis – assuming PLI and Zeturf were part of FDJ in Q1 last year – digital revenue was still 25.1% higher.
Increased player numbers are what FDJ attributes to this increase in digital revenue, meaning newer players are taking a greater interest in FDJ’s digital offering. By outpacing point-of-sale, the share of digital revenue increased and now accounts for 14.8% of total revenue, compared with 11.8% in H1 2023.
Although slower, FDJ reported that point-of-sale still saw some growth, with revenue from such activities rising 7.5%. In France alone, point-of-sale revenue increased by 2.6%.
Lottery leads the way for FDJ
Breaking down the operator’s performance by product, lottery remains by far the primary source of revenue for FDJ. During H1, net revenue from France-facing lottery activities hit €1.01bn, up 5.0% from last year.
Revenue from draw games was up by 2.1%, driven by the EuroDreams game and higher Euromillions jackpots. Instant games revenue increased 6.7% on the back of new game launches including Ticket d’Or in January.
FDJ also noted strong digital momentum in this segment, with 24.4% of lottery revenue coming from digital. This, it adds, takes lottery’s digital penetration in H1 to 13.8%, compared to 11.6% last year.
FDJ says Euro 2024 fell short of expectations
Sports betting and online poker revenue was up 14.5% to €294m.
FDJ noted that the first quarter of the reporting period was impacted by tough comparable figures in the previous year. The first quarter of 2023 benefited from the positive impact of football’s World Cup at the end of 2022.
As for Q2 2024, betting on Euro 2024 fell short of expectations but revenue was helped by operator-friendly results in the tournament.
Online gaming – currently only poker – revenue was up 28.3% on a like-for-like basis. FDJ noted the benefit of cross-selling on ParionsSport en ligne, particularly with its poker product.
International and payment services make a strong contribution with revenue up 72.9% to €129m. FDJ credits the integration of PLI for the growth, as it performed particularly well across EuroDreams and instant games.
Net profit and earnings growth
In terms of spending, FDJ only published limited figures. Cost of sales for lottery increased by 1.8% to €536m while sports betting and online gaming cost of sales was up 1.5% to €125m. Central costs for the holding company were level at €128m.
Other operating income and expenses hit €22.0m, leaving €285m in recurring operating profit, up 19.9% year-on-year. Profit measures have experienced stronger growth than revenue as costs have remained relatively stable. This is also demonstrated in recurring EBITDA, which climbed 23.5% to €370m with a margin of 25.9%.
Other non-recurring operating income and expenses amounted to €21m up from €14m last year. This mainly relates to acquisition costs and the revaluation of Sporting Group’s B2B assets, which are in the process of being sold.
As such, operating profit for H1 hit €265m, an increase of 17.4%. FDJ also noted €23m in net financial income, reflecting the continuing high level of interest rates, while tax payments totalled €78m.
This resulted in a consolidated net profit of €213m, up 17.5% year-on-year.
Adjusted profit reaches €235m
FDJ is now, however, also publishing adjusted net profit figures, with effect from H1 this year. This is to reflect actual economic performance and enable it to be monitored and compared with competitors.
This eliminates certain items, including depreciation and amortisation of intangible and tangible assets, recognised or revalued when allocating the purchase price of business combinations. It also discounts the non-cash impact of the currency hedge relating to the acquisition of Kindred Group, as well as changes in deferred tax resulting from these items.
After taking this into account, adjusted net profit for H1 was €235m, up 28.3% from last year’s comparable figure.
“The second quarter confirmed the positive trend seen since the beginning of the year thanks to our network of points of sale and to a very strong momentum from digital games, which now account for 15% of group revenue,” FDJ CEO Stéphane Pallez said. “This solid performance confirms our annual targets.”
Kindred acquisition edging closer for FDJ
FDJ also made reference to its pending acquisition of Kindred, which was announced early in H1. The deal is valued at €2.45bn, with the public tender being published a few weeks after the initial announcement.
An acceptance period began in February and is due to run through to 19 November. FDJ has already secured several approvals for the acquisition. At this stage, approval from the French Competition Authority is the last regulatory condition necessary to finalise this offer.
An initial commencement of settlement date is set at 28 November.
“We hope to finalise the acquisition project of Kindred in the near future, thereby marking a major new step in the group’s development, both internationally and in our online sports betting and gaming activity, to the benefit of all our stakeholders,” Pallez said.