FDJ posts double-digit growth, changes name to FDJ United

La Française des Jeux (FDJ), now rebranded as FDJ United, has announced impressive growth in revenue for 2024, achieving a double-digit increase. However, the company also highlighted the potential ramifications of escalating tax rates in France, with forecasts suggesting a tax obligation of €100 million by 2027.

In its comprehensive financial results released on March 6, 2024, FDJ reported robust revenue of €3.07 billion ($3.3 billion/£2.56 billion), representing a remarkable year-on-year growth of 16.9%. The company’s EBITDA surged by 20.6%, reaching €792 million for the year.

This fiscal year marked the first complete cycle of earnings following the acquisition of Kindred, a strategic move valued at €2.45 billion, finalized in October of the previous year. While the earnings from Kindred are not delineated as a stand-alone entity in the report, their integration is significant for FDJ’s overall growth trajectory.

FDJ’s growth has been tempered by the burgeoning tax liabilities in France, contributing €45 million to the national treasury in the past year. With ongoing reforms, the company anticipates a dramatic increase in tax contributions, projecting a financial commitment of €100 million in its 2027 fiscal year, predominantly driven by its online betting and gaming operations, including Kindred.

In the current financial climate, FDJ expects a near €45 million tax expense in France and an additional €10 million contribution in the Netherlands. These factors are expected to influence revenue targets, with an overarching goal of achieving €3.8 billion in group revenue by 2025 and maintaining a recurring EBITDA margin exceeding 24%.

The revised tax regime, effective July 2024, will introduce higher rates across the gambling sectors within France, including augmented social security contributions as outlined in the recent finance bill associated with the 2025 budget. The gambling tax framework in France is predicated on Gross Gaming Revenue (GGR), with variances across different verticals, subject to separate social security payments, which are expected to see increases across the board.

Analyzing Business Segments

FDJ’s French lottery and retail sports betting segments generated a cumulative revenue of €2.5 billion during the review period, reflecting an increment of 5.8%. This segment includes revenue from lottery operations, which amounted to €2.05 billion, alongside retail sports betting generating €453 million. The segment’s performance was significantly bolstered by major sporting events, notably the UEFA Euros held in summer 2024.

For 2025, FDJ has issued a revenue guidance of €3.6 billion. However, the company cautioned that the impending tax hikes and regulatory constraints in the Netherlands and UK/I markets could curtail revenue potential.

In the online betting and gaming domain, net revenue reached €1.03 billion, with casino gaming accounting for 51% and sports betting comprising 41% of the total. Additionally, international lottery revenue contributed €190.5 million, while the Nivio payments service, which facilitates utility and tax payments among others, generated revenue of €64.4 million over the year.

FDJ’s cost-reduction initiatives, launched towards the end of 2023, yielded positive results, leading to a recurring EBITDA of €293.2 million, equivalent to 28.5% of revenue. This efficiency drive included the strategic withdrawal from the North American market, streamlining operations for greater focus on core activities.

Strategic Management Restructuring and Rebranding

In conjunction with the financial results, FDJ unveiled a new management structure and a rebranding initiative designed to encapsulate the company’s international ambitions.

The transition to FDJ United signifies a commitment to reflect the organization’s European footprint while honoring its historical legacy. A company statement emphasized, “This new name captures our group’s expansive European vision while celebrating our unique heritage. The FDJ United title underscores our foundational name while embracing our future trajectory.”

The new brand signature, “Playful. Play fair. Play forward,” encompasses all facets of the company’s operations across its geographic footprint. Although the overarching brand will be FDJ United, the distinct brand identity of FDJ will persist in France, given its entrenched market presence.

The rebranding effort coincides with a reshuffle within the executive committee. Notably, Kindred CEO Nils Andén has been appointed as Chief Online Betting and Gaming Officer, while Patrick Buffard transitions from his role overseeing the French lottery to Chief Officer for both the French lottery and retail sports betting sectors.

FDJ’s current leadership, including CEO Stéphane Pallez, Deputy CEO Charles Lantieri, and CFO Pascal Chaffard, remains intact, ensuring continuity during this transformative period.

Moreover, the organizational structure has been optimized with distinct business units: one focusing on French lottery and retail sports betting, and the other tasked with online betting and gaming, encompassing sports betting, poker, and online casino gaming.

As FDJ United embraces its rebranding and strategic restructuring, the company stands poised to navigate the evolving landscape of the gambling industry while remaining firm in its commitment to innovation and growth.