Groupe Française des Jeux (FDJ) has reported revenue growth across all business segments ahead of incorporating the online gambling assets of Kindred Group Plc.
On a year-to-date basis, the Paris Euronext gambling group’s corporate revenues stand at €2.09bn, up 12% compared to 2023 results of €1.87bn.
French income, excluding international contracts and payment services, accounted for €1.9bn of corporate revenues (91%).
Stéphane Pallez, Chairwoman and CEO of the FDJ Group, said: “FDJ continues to deliver a solid financial and non-financial performance, which allows us to confirm our growth and profitability trend for the year as a whole. This performance was driven both by the lottery and by sports betting and online gaming open to competition, and by all our distribution channels, with a network of points of sale in progression and strong momentum from digital games.”
Year-to-date trading sees FDJ’s lottery unit report a 6% increase in revenues to €1.5bn (YTD 2023: €1.4bn), as sales of lottery games (draws and scratch cards) are boosted by “digital penetration reaching 14.0% versus 12.0% at the end of September 2023.”
Lottery sales were further boosted by the “return to growth of AMIGO in June,” driving sales of EuroDreams and Euromillions jackpots across FDJ’s French retail network.
This summer’s UEFA Euro championships and the Paris 2024 Olympic Games saw FDJ’s sports betting and online gambling business record a 13% increase in revenues to €407m (YTD 2023: €360m).
Heightened customer engagement with these major sporting events saw FDJ provide new cross-sell opportunities with ParionsSport en ligne.
Elsewhere, revenues generated by FDJ’s International and Payment Services increased by 75% to €190m – with growth attributed to the “successful integration of Premier Lotteries Ireland.”
Period trading saw FDJ highlight its increased distribution via digital channels (+25%), which accounted for €302m of Q3 revenues, representing 15% of group income.
Prior to integrating Kindred assets, management stands by its ‘FDJ scope’ that the business would generate “revenue growth of close to 9% and above 5% for its gaming activities in France, along with a recurring EBITDA margin of around 25%.”
Yet, after taking 91% ownership of Kindred as of 11 October, FDJ provides a new outlook that “growth in reported 2024 revenue would be around 16%, with a recurring EBITDA margin of around 25%.”
The integration of Kindred assets will see FDJ expand its presence in Western Europe, being “present in seven of the top ten European markets, including the Netherlands, the UK, France, Sweden, and Belgium.”
Financial projections for the FDJ and Kindred combination indicate that if Kindred had been acquired on 1 January 2023, the combined revenue would have been approximately €3.5bn, with a recurring EBITDA of around €840m for the full year 2023.
Projections for 2024 would see a combined revenue of approximately €1.9bn, with a recurring EBITDA of around €490m for the first half of the year. By the end of September 2024, the total combined revenue would have reached €2.8bn.
Completing its deal requirements, from 14 October, Kindred will cease “activities in markets that are not locally regulated (Norway and other .com sites).”
FDJ secured a €2bn bridging loan on 7 October to fund its €2.5bn acquisition of Kindred. As of September, the Group had €908m in available cash and a net cash surplus of €636m.
The Q3 statement concluded: “This transaction, amounting to €2.5bn for all shares, creates a European champion with a diversified and balanced profile, based on monopoly activities, primarily lotteries, in France and Ireland, and on online sports betting and gaming activities open to competition in Europe. The new combined group resulting from this offer will generate around 26% of its revenue internationally, and its online gaming range open to competition will account for around 27% of its revenue.”