(News Bulletin 247) – The gambling specialist delivered growth deemed solid in the first half, thanks in particular to sports betting which benefited from results that defied predictions, which benefited turnover.

FDJ has the winning hand on the stock market this Friday. The gambling operator, introduced on the stock market in 2019, gained .59% to 34.6 euros at the start of the afternoon, after delivering its first-half results.

Over the entire first half, the group led by Stéphane Pallez generated revenues of 1.428 billion euros, reflecting growth of 10.8% over one year. The amount is 5% higher than the Visible Alpha consensus, cited by Stifel.

All of the company’s activities proved dynamic over the period. The lottery recorded growth of 5%. Excluding the impact of Amigo, a game whose formula the group reworked to make it less addictive at the request of the National Gaming Authority, the growth of lottery games would amount to 7.8%, the company explains. Also in this activity, digital was strong, with growth of 24.4%.

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Favorable predictions for Euro 2024 football

In sports betting and non-lottery online gaming, growth was also pronounced, with revenues increasing by 14.5% year-on-year and 6.7% excluding scope effects.

“The performance of the first quarter was affected by the high comparison base of the first quarter of 2023, which notably benefited from the very positive impact of the World Cup at the end of 2022,” the company explains.

“In the second quarter, bets on the Euro football championship came out below expectations but turnover benefited from results that defied predictions and were therefore favourable to the operator,” FDJ continued. In short, punters had more difficulty making good predictions, which meant that the money returned to the player by the company was lower than expected, thus inflating turnover.

Let us recall that the turnover (or more precisely the “net gaming income”) of FDJ corresponds to all the players’ bets from which the return to players and tax deductions are subtracted.

2024 objectives confirmed

On its other lines of accounts, the company published a gross operating result (Ebitda) of 370 million euros, up 23.5% year-on-year. The corresponding margin stood at 25.9% compared to 23.3% in the first half of 2023. According to Stifel, profitability significantly exceeded the consensus, which was counting on 24.4%.

The company’s net profit came in at 213 million euros, up 17.5%. “Overall, we consider this publication to be robust,” Stifel said. “This is a solid publication for the first half of the year, which provides a good level of comfort for the achievement of the forecasts for the 2024 financial year,” Oddo BHF added.

At the end of this half-year, FDJ confirmed its objectives for the current year, namely an 8% growth in its turnover and an EBITDA margin of 24.5%, targets which seem a little cautious in the eyes of Oddo BHF.

Let us recall that FDJ shares have been penalized for three years now by a major sword of Damocles: the investigation into exclusive rights by the European Commission.

Brussels opened an investigation in 2021 into the French state’s granting of exclusive rights to physical and online lottery and sports betting to FDJ for a period of 25 years in exchange for a cash payment of €380 million. The European Commission is seeking to determine whether this transaction, carried out as part of the group’s privatisation, did not provide the company with an undue advantage.

The verdict of the European Commission has been slow in coming. The market fears that it will result in a significant price supplement for the group (the Citi bank mentioned more than 1.5 billion euros in 2022).

However, FDJ told News Bulletin 247 that it “remains confident” and hopes for “a decision before the change of team within the European Commission which would take place by the end of the year”.