La Française des Jeux (FDJ), one of Europe’s leading lottery and gaming operators, has released an impressive report for the first nine months of the year, demonstrating the robustness of its financial position following its recent merger with the Kindred Group. This strategic acquisition has not only augmented FDJ’s market presence but has also robustly diversified its offerings, reinforcing its status as a “European champion” in the gaming industry.

Financial Performance Overview

FDJ’s year-to-date revenue reached EUR 2.01 billion ($2.18 billion), marking a significant 12% increase year-on-year. A major chunk of this revenue, approximately EUR 1.9 billion ($2.06 billion), originated from the company’s operations in France, showcasing the strength of its domestic market performance. The lottery segment led the revenue charge, contributing EUR 1.5 billion ($1.6 billion) to the total, which represents an 8% increase year-on-year. This growth can be attributed to favorable trends across various game offerings, appealing to a broad demographic of players.

In addition to lottery sales, FDJ’s sports betting segment saw robust results, generating EUR 407 million ($441.4 million), up 13% from the previous year. This surge reflects a growing interest in sports betting, particularly as major sporting events have captured public attention throughout the year.

Point-of-sale revenue in France increased by 3%, and a noteworthy 9% rise was reported across Ireland. Meanwhile, digital revenue thrived, escalating to EUR 302 million ($327.5 million), indicating an undeniable shift towards online gaming platforms.

ESG Excellence: Moody’s Recognition

As part of its commendable financial performance, FDJ has garnered recognition for its strong commitment to environmental, social, and governance (ESG) practices. Moody’s, a respected ratings agency, reaffirmed FDJ’s position at the top of its Hotel, Leisure, Goods and Services sector ratings with a score of 71/100—a rating that highlights the company’s dedication to sustainability and ethical governance. In a global context, FDJ ranks 31st among 4,500 companies assessed by Moody’s, further solidifying its reputation as a leader in responsible corporate practices.

Stéphane Pallez, FDJ’s Chief Executive Officer and Chair, acknowledged the impressive financial and non-financial outcomes achieved in this period. He expressed optimism for FDJ’s trajectory and the anticipated benefits of the Kindred acquisition for shareholders and stakeholders alike.

Updated Forecast Following the Kindred Acquisition

In light of the recent acquisition, FDJ has revised its revenue outlook for 2024, projecting a 9% increase in full-year revenue and an EBITDA margin estimated at around 25%. With the incorporation of its EUR 2.5 billion acquisition of Kindred, FDJ expects an even more pronounced revenue growth of approximately 16% for 2024, maintaining the EBITDA margin expectation.

This acquisition is monumental for FDJ, as it now holds a 91.77% stake in Kindred—one of Europe’s top five online gaming companies. After successfully navigating the regulatory challenges that accompanied the merger, FDJ is strategically positioned to expand its ownership to 100% and fully capitalize on the synergies between both operational portfolios.

If the acquisition had been finalized on January 1, 2023, FDJ estimates that consolidated revenue for FY 2024 would have reached EUR 3.5 billion. Conversely, had the merger occurred at the start of 2024, the combined first-half revenue would be projected at EUR 1.9 billion, indicating substantial growth potential beginning from the next fiscal year.

Conclusion: A Promising Horizon

The successful merger with Kindred Group not only enhances FDJ’s market standing but also diversifies its gaming offerings, thus setting the stage for continued innovation and growth. As FDJ navigates this transitional period, stakeholders can anticipate a robust fiscal future driven by strategic investments, a solid operational framework, and a steadfast commitment to sustainability.

With commendable financial results, strong ESG ratings, and an optimistic outlook for the upcoming year, FDJ stands poised to solidify its reputation as a leading player in the gaming industry—a true example of resilience and strategic foresight in an ever-evolving market landscape.

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In the dynamic world of online gaming, operators must constantly adjust to market trends, regulatory shifts, and financial expectations. One of the key developments recently has been the financial update from Kindred Group as part of its tender offer by French national lottery operator La Française des Jeux (FDJ). The quarterly financial report scheduled for October 25 has attracted attention, as Kindred reveals vital details about its financial performance and strategies following the merger.

The Results Are in Line with Earlier Projections

In its recent announcement, Kindred reported that the unaudited financial results for its Q3 total revenue mark an important moment in its merger with FDJ. The acquisition, which involved FDJ purchasing Kindred’s entire outstanding share capital, has formed one of the largest gaming conglomerates in Europe. This deal not only reflects FDJ’s aggressive expansion strategy but also signifies Kindred’s growing influence in the market.

Financial Performance Highlights

Kindred noted impressive growth during Q3 2024, achieving a total revenue of GBP 294.5 million (approximately $382.5 million). This remarkable figure showcases the combined earnings from both the operator’s B2B and B2C ventures. Additionally, the gross winnings revenue reached GBP 283.1 million (about $367.7 million), demonstrating continued solid performance and robust market engagement.

Of particular note is the fact that 83% of Kindred’s total gross winnings revenue originated from locally regulated markets. This strategic focus on regulated markets emphasizes Kindred’s commitment to compliance and sustainable growth in an industry that is increasingly scrutinized.

It’s critical to recognize that these figures are unaudited and have been shared with FDJ, which plans to release its own Q3 and year-to-date financials on October 17. FDJ’s report will include a comprehensive view of both entities’ performances, further illuminating the merger’s impact on financial standings.

The Merger Followed a Complex Regulatory Process

The journey toward the merger was not without its challenges. The acquisition underwent a detailed regulatory process designed to maintain competition within the gaming sector. While there were initial concerns that merging FDJ and Kindred could dampen market competition, regulators ultimately approved the takeover with stipulations requiring the separation of Kindred’s gaming operations from FDJ’s lottery activities.

In line with this new corporate structure, Kindred also announced significant changes to its board of directors. Notable departures included James H. Gemmel and Cédric Boireau, while the company welcomed fresh talent in the form of Pascal Chaffard, Edeline Minaire, and Célia Vérot. This leadership overhaul indicates a commitment to rejuvenating Kindred’s operational approach as it integrates into the larger FDJ framework.

Market Reactions and Future Prospects

Despite facing some uncertainties around tax regulations in France—namely discussions about a possible gambling tax increase—FDJ’s leadership appears undeterred. Previous forecasts suggested stringent changes in the 2025 Social Security Financing Bill, but recent updates indicate that no immediate tax hikes are on the horizon. This development could positively influence market sentiment and bolster operational strategies for Kindred and its peers.

Conclusion: Paving the Way Forward

As Kindred prepares for its full financial report and navigates its new relationship with FDJ, the emphasis remains on aligning growth with compliance and market demands. The strategic acquisition by FDJ, coupled with Kindred’s robust revenue performance, places the combined entity in a strong position within the European gaming landscape.

The commitment to maintain a significant share of revenue from locally regulated markets alongside a restructuring of leadership showcases Kindred’s proactive measures to adapt and thrive in a competitive environment. The upcoming quarterly report will provide further insights into the effectiveness of these strategies and the overall health of the newly united gaming giant as it embarks on this new chapter.

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