11-03-2025
La Francaise Des Jeux SA (LFDJF) (FY 2024) Earnings Call Highlights: Strong Revenue Growth ...
Revenue: EUR3,065 million, increase of 17%.
Recurring EBITDA: EUR792 million, up 21%, margin of 25.8%.
Adjusted Net Income: EUR490 million, up 13%.
Dividend Proposal: EUR2.05 per share, increase of 15%.
Net Financial Debt: EUR1.818 billion, leverage ratio of 1.9 times recurring EBITDA.
Cash Conversion: Current EBITDA to cash conversion at 85%.
Pro Forma Revenue: EUR3.788 billion, with recurring EBITDA of EUR964 million, margin of 25.5%.
Bond Issuance: EUR1.5 billion eurobond issued to finance Kindred acquisition.
Cost of Sales: EUR1 billion, primarily retailer remuneration.
Marketing Costs: EUR223 million, increase due to Kindred acquisition and Olympic partnership.
Personnel Expenses: EUR443 million, increase due to Kindred, ZEturf, and PLI integration.
Net Depreciation and Amortization: EUR224 million, increase due to acquisition-related amortization.
Free Cash Flow: EUR675 million, up 15%.
Net Profit: EUR399 million, adjusted net profit EUR490 million.
International Presence: Operations in 13 locally regulated European markets.
Retail Network: 34,000 retailers, including 29,000 in France.
Online Revenue: 35% of total activities.
Warning! GuruFocus has detected 4 Warning Signs with LFDJF.
Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
La Francaise Des Jeux SA (LFDJF) successfully acquired Kindred, forming FDJ United, which has diversified the group's geographical and activity scope.
The company reported a 17% increase in turnover, reaching EUR3,065 million, with a recurring EBITDA up 21% to EUR792 million.
The integration of Kindred is well underway, with identified synergies and cost optimizations expected to generate over EUR50 million.
The company maintained a strong cash conversion rate of 85% and a leverage ratio of 1.9 times recurring EBITDA, indicating financial stability.
La Francaise Des Jeux SA (LFDJF) continues to invest in responsible gaming and sustainability, dedicating over 10% of its advertising budget to responsible gaming initiatives.
The company faces increased taxation in France and the Netherlands, impacting revenue and EBITDA by approximately EUR60 million.
Regulatory tightening in the Netherlands and the UK is expected to negatively affect revenue by EUR30 million to EUR40 million.
Despite the acquisition of Kindred, the company projects a stable turnover for 2025, indicating limited growth potential in the short term.
The integration of Kindred and the rollout of the KSP platform will take time, with full benefits not expected until 2027.
The company's adjusted net profit decreased by 6% due to the cost of debt and amortization related to the Kindred acquisition.
Q: What analytic tools are you using to manage competitive pricing and risk in sports and online betting? A: Pascal Chaffard, Executive Vice President - Finance, Performance and Strategy, explained that they use tools implemented in the Kambi platform for online betting and gaming, as well as in-house tools for Unibet in France. They are transitioning to a unified sports betting platform, KSP, by the end of 2026, which will enhance pricing management and product differentiation.
Q: Can you elaborate on the timing and impact of the mitigation measures for tax and regulation changes? A: Pascal Chaffard stated that EUR20 million in savings is expected in 2025, with a gradual ramp-up to EUR100 million by 2027. The measures include cost optimizations and synergies, particularly from the integration of Kindred and the rollout of the KSP platform.
Q: What is the expected financial impact of the new tax regulations in France and the Netherlands? A: The tax changes are expected to have a EUR60 million impact, with EUR45 million from France and over EUR10 million from the Netherlands. Additional regulatory impacts in the Netherlands and the UK could add EUR30-40 million to this.
Q: How will the omnichannel account offering be regulated, and how does it align with the wallet separation project? A: Stephane Pallez confirmed that the omnichannel account is consistent with regulatory requirements and the separation of exclusive rights and competition market customers. The program has been approved by regulators and will be tested in a French region this year.
Q: Why is the 2025 revenue growth guidance below the long-term target of 4-5%? A: Pascal Chaffard explained that the lower growth is due to tax impacts and regulatory changes. The French Lottery and Retail Sports Betting BU will see low single-digit growth, while the Online Betting and Gaming BU will experience a slight revenue decrease due to these factors.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
