FDJ praises 2020 strategy as revenue grows 5.5% in H1
French gaming operator La Française des Jeux (FDJ) has reported a 5.5% year-on-year increase in revenue for the first half of the year, with chief executive Stéphane Pallez crediting the FDJ 2020 digital transformation strategy as driving growth.
Amounts wagered for the six months to 30 June, 2019 increased 7.2% to €8.4bn (£7.5bn/$9.4bn), aided by growth across all product verticals.
Lottery sales were up 5.2% year-on-year at €6.6bn, of which €4.1bn came from instant win sales, across FDJ’s retail network and online, while draw-based game sales rose 1.6% to €2.5bn.
The operator noted that the instant win category benefitted from the launch of the €3 Quitte ou Double scratchcard, which launched in March. This was the first title that could be bought at a point of sale, then continue to be played online, and almost 50% of ticket winners took advantage of the online component.
For draw-based games, FDJ said growth had been driven by expanding the retail network, and players shifting online. Online player numbers rose 20% year-on-year in H1, aided by uptake in the operator’s mobile offering.
Sports betting, meanwhile, saw total stakes grow 15.0% to €1.8bn, a new record for the vertical. Growth across retail and online was driven by increased activity around this year’s Africa Cup of Nations and the FIFA Women’s World Cup.
FDJ’s sports betting brand ParionsSport benefitted from updates to its product offering, as well as partnerships with French football clubs and the US National Basketball Association. Growth is expected to continue in the second half of the year, aided by the Rugby World Cup.
Players won a total of €5.8bn during H1, which saw FDJ’s return to player increase to 68.4%. This left gross gaming revenue of €2.7bn for the period, up 5.5% year-on-year. After the operator’s contribution to French public finances was removed, net profit stood at €933m, which increased to €944m - up 5.2% - once income from other activities such as investments was factored in.
"The performance and achievements of the first half of 2019 illustrate the success of our 2020 strategy, aimed at continuing growth through the digital transformation of FDJ,” chief executive Stéphane Pallez said.
“The growth of the business continues with the development of our online offering, and a strong commitment to responsible gaming.”
Beyond the core gaming business, the first half saw FDJ make significant strategic progress in a number of areas. Via its FDJ Gaming Solutions subsidiary, it acquired betting technology and trading specialist Sporting Group, enhancing its B2B offering and allowing it to accelerate international expansion plans.
It also won a tender to process payments to the General Directorate of Public Finance, in partnership with the French Confederation of Newsagents. From next year, members of the public will be able to pay taxes, fines and state utility bills through newsagents across France, powered by FDJ’s payment technology.
“[We] are setting the stage for the group's future development and strengthening the resilience of our business model, including the development of the international B2B business and payment services, two strategic axes of our 2025 startegy, recently adopted by the [FDJ’s] board of directors,” Pallez added.
The FDJ 2025 strategy will replace FDJ 2020, which has seen the operator overhaul its online offering, investing €500m in new technology, including €250m to transform its gaming platform. This plan also led to the creation of the operator’s B2B subsidiary FDJ Gaming Solutions.
Plans to sell of the French government's 72% stake in the business are also moving forward, with the body responsible for the sale, the Agence des Participations de l’Etat (APE), selecting a consortium of eight banks to oversee an initial public offering.