FDJ expects almost €200m revenue hit from Covid-19

24 March 2020

Formerly state-owned French operator La Française des Jeux (FDJ) expects a revenue decline of around €192m and an earnings decline of around €77m due to the effects of the novel coronavirus disease (Covid-19).

FDJ said its lottery vertical, which accounts for 80% of group revenue, is expected to see revenue fall by up to €72m, with the country under lockdown and all non-essential shops and retailers closed, with earnings before interest, tax, depreciation and amortisation (EBITDA) expected to be down €27m before new cost-saving measures.

The Amigo lottery game, in which TV screens in bars and cafés show a new set of winning numbers every five minutes, has been suspended, which is expected to cost FDJ around €17m in revenue and reduce EBITDA by nearly €10m.

Declines from a lack of customer activity in other games due to social distancing is expected to lead to a further monthly revenue impact of around €55m, and reduce EBITDA by €17m.

The group said online lottery “continues to post good results", however.

In sports betting, which makes up the remaining 20% of group revenue, revenue is expected to be cut by up to €120m, and earnings by €50m, before any mitigation. However, the group pointed out that some of these losses could be recouped if major sporting events such as Euro 2020 or the French Open are held on later dates.

“Today we are facing an unprecedented and exceptional situation that requires the mobilisation of everyone and will weigh on our business for an indefinite period,” Stéphane Pallez, chairwoman and chief executive of FDJ, said.

"In that respect, the FDJ Group has very quickly organised itself to face this unprecedented health crisis in a responsible manner and limit the consequences on its employees, customers, retailers and shareholders, thanks to its resilience, responsiveness and the commitment of everyone at FDJ.”

The group’s dividend payment - its first as a publicly-listed company - came to €122m and was originally scheduled for 30 June 2020, but has now been postponed.

The operator said that nearly 80% of FDJ points of sale remain open, as most of these are in tobacconists and newsagents, which are not required to close. In addition, it said it had “sufficient cash available in the short term to deal with the situation".

FDJ added that it would donate €200,000 to Secours Populaire Français, a non-profit organization dedicated to fighting poverty and discrimination in public life.

Formerly government-owned FDJ was privatised in November 2019, with the government making €1.89bn through an initial public offering of 99,320,000 shares co-ordinated by banks including BNP Paribas, Citi, Goldman Sachs and Société Générale.

In February, FDJ projected 5% growth in both player stakes and revenue for 2020 after seeing net revenue rise to €1.96bn in 2019.

Shares in La Française des Jeux were trading up 6.98% at €21.28 per share in Paris Tuesday (24 March) afternoon.