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La Francaise des Jeux SA (FR:FDJU)
:FDJU
RESEARCH TOOLSreports
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La Francaise des Jeux SA
(FDJU)
Rating:79Outperform
Price Target:
€37.00
▲(21.87%Upside)
Positive Factors
Dividends
FCF generation was better than expected, allowing FDJ to announce a higher-than-consensus dividend.
Financial performance
FDJ reported full details of its FY24 results, with revenues and EBITDA coming in above consensus expectations.
International expansion
The Kindred acquisition has transformed the profile of La Française des Jeux from being primarily the exclusive French lottery operator to now having international presence in betting and gaming markets across Europe.
Negative Factors
Leverage
There is a high leverage than expected due to the acquisition of Kindred.
Regulatory risk
Heightened regulatory risk profile not reflected in current valuation.
Taxation
The new gaming tax framework in France and increased taxes in the Netherlands are expected to negatively impact revenues and EBITDA.
La Francaise des Jeux SA (FDJU) vs. iShares MSCI France ETF (EWQ)
Market Cap
€5.61B
Dividend Yield6.75%
Average Volume (3M)348.46K
Price to Earnings (P/E)14.0
Beta (1Y)0.47
Revenue Growth16.93%
EPS Growth-3.18%
CountryFR
Employees5,678
SectorConsumer Cyclical
Sector Strength71
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)1.24
Shares Outstanding185,270,000
10 Day Avg. Volume407,658
30 Day Avg. Volume348,456
Financial Highlights & Ratios
PEG Ratio-1.26
Price to Book (P/B)4.71
Price to Sales (P/S)0.00
P/FCF Ratio13.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€41.17Price Target Upside35.61% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
La Francaise des Jeux SA Business Overview & Revenue Model
Company DescriptionLa Française des Jeux Société anonyme operates lottery and online sports betting games worldwide. The company offers instant and draw games. Its brand portfolio comprises Loto, EuroMillions, Cash, Amigo, Joker, Bingo Live, Keno, Mission Patrimoine, and Parions Sport. The company was founded in 1933 and is headquartered in Boulogne-Billancourt, France.
How the Company Makes MoneyLa Francaise des Jeux SA generates revenue primarily through the sale of lottery tickets, instant games, and sports betting. These sales occur through a network of retail outlets and a digital platform that facilitates online gaming. The company earns profits by managing the difference between ticket sales and prize payouts, known as the 'gross gaming revenue.' FDJU also benefits from a diverse portfolio of gaming products that attract a broad customer base. Additionally, strategic partnerships and sponsorships within the sports industry enhance its market presence, while the monopoly status in France ensures minimal direct competition, contributing to stable revenue streams.
La Francaise des Jeux SA Earnings Call Summary
Earnings Call Date:Mar 06, 2025
(Q4-2024)
| % Change Since: -14.24%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue and EBITDA growth, successful integration of Kindred, and a strategic focus on sustainability and omni-channel development. However, significant challenges from tax increases and tighter regulations pose headwinds, impacting future EBITDA margins and growth projections.Q4-2024 Updates
Positive Updates
Successful Acquisition of Kindred
FDJ United announced the successful acquisition of Kindred, with more than 90% control by October 2024, leading to a diversified and balanced group.
Record Revenue Growth
The group's turnover reached €3,065 million, marking a 17% increase. Excluding Kindred, the increase was 10%, and 8% for gaming activities in France.
Strong EBITDA Performance
Recurring EBITDA rose to €792 million, up 21%, with a margin of 25.8%.
High Cash Conversion
Current EBITDA-to-cash conversion was above 80%, specifically at 85%.
Positive Integration Outcomes
The integration of Kindred is well underway, with identified synergies and cost optimizations expected to generate an additional €50 million.
Sustainable Commitments
FDJ United continued investing in responsible gaming and sustainable commitments, with more than 10% of advertising budget devoted to responsible gaming.
ESG Leadership
FDJ United maintained top ratings in ESG from major agencies, highlighting its commitment to sustainability.
Omni-channel Strategy Launch
Introduction of 'FDJ & Moi,' a strategic project to create an omni-channel account enabling play both online and at points of sale.
Negative Updates
Impact of Tax Increases
Tax increases in France and the Netherlands are expected to have a significant impact, with projections of a €90 million negative effect in 2025.
Regulatory Challenges
Tighter regulations in the Netherlands and the UK are affecting the online betting and gaming segments, with additional impacts estimated at €30 to €40 million.
Reduced EBITDA Margin Guidance
For 2025, the EBITDA margin is expected to be over 24%, down from 25.8% in 2024, reflecting tax and regulatory challenges.
Debt Increase from Acquisition
Net financial debt rose to €1.818 billion due to the Kindred acquisition, though the leverage ratio remains under the target.
Company Guidance
During the recent call, FDJ United provided comprehensive guidance for 2025, highlighting various financial metrics and strategic initiatives. The company projects a turnover of approximately €3.8 billion, reflecting a stable outlook compared to the pro forma turnover of 2024. The French lottery and retail sports betting are expected to experience slight growth, while the online betting and gaming BU is projected to see a slight decline with a current EBITDA margin of over 24%. Key financial highlights from 2024 include a turnover of €3,065 million, an increase of 17%, and a recurring EBITDA of €792 million, representing a 21% growth and a margin of 25.8%. The company plans to propose a dividend of €2.05, indicating a 15% increase. FDJ United also reported a pro forma revenue of €3.788 billion and a recurring EBITDA of €964 million for 2024, with a margin of 25.5%. Despite facing tax increases in France and the Netherlands, the company is implementing a mitigation plan to gradually compensate for these impacts, aiming for €20 million in savings in 2025 and at least €100 million by 2027. The company's strategic initiatives include the rollout of its KSP sportsbook across markets and the introduction of an omnichannel account, FDJ & Moi, to enhance customer engagement.La Francaise des Jeux SA Financial Statement Overview
Summary
La Francaise des Jeux SA demonstrates robust revenue growth and operational efficiency with significant gross margins and consistent cash flow generation. However, the increased leverage and declining net profit margin could pose potential risks, necessitating careful management of debt levels.Income Statement
La Francaise des Jeux SA has shown consistent revenue growth with a healthy trajectory from 2019 to 2024. The revenue growth rate from 2023 to 2024 is approximately 16.9%, indicating strong performance. The gross profit margin is high at around 55.4% in 2024, suggesting efficient cost management. However, net profit margin declined from 16.2% in 2023 to 13.0% in 2024, which may indicate increased expenses or reduced pricing power. EBIT and EBITDA margins remained robust, indicating stable operational efficiency.82
Very Positive
Balance Sheet
The company maintains a moderate debt-to-equity ratio of 1.96 in 2024, up from 0.40 in 2023, suggesting increased leverage which could pose a risk if not managed properly. The return on equity (ROE) is strong at 33.5%, reflecting effective use of shareholders’ equity. However, the equity ratio is relatively low at 18.1%, indicating high reliance on debt financing, which could affect financial stability.75
Positive
Cash Flow
Operating cash flow to net income ratio is sound, suggesting strong cash generation relative to income. The free cash flow decreased from 2023 to 2024, reflecting increased capital expenditures or changes in working capital. However, the company's ability to generate consistent free cash flow remains a strength. The free cash flow to net income ratio indicates good cash conversion, enhancing financial flexibility.78
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.07B | 2.62B | 2.46B | 2.26B | 1.92B |
| Gross Profit | 1.70B | 1.23B | 1.04B | 934.80M | 778.60M |
| EBITDA | 802.50M | 703.70M | 590.20M | 547.50M | 405.30M |
| Net Income | 398.80M | 425.10M | 307.90M | 294.20M | 213.70M |
Balance Sheet | |||||
| Total Assets | 6.56B | 3.76B | 3.34B | 3.21B | 2.92B |
| Cash, Cash Equivalents and Short-Term Investments | 843.20M | 749.70M | 720.40M | 688.40M | 888.70M |
| Total Debt | 2.33B | 428.80M | 468.20M | 518.90M | 543.50M |
| Total Liabilities | 5.37B | 2.69B | 2.41B | 2.38B | 2.22B |
| Stockholders Equity | 1.19B | 1.07B | 925.40M | 829.10M | 698.70M |
Cash Flow | |||||
| Free Cash Flow | 427.10M | 504.20M | 299.70M | 522.00M | 226.10M |
| Operating Cash Flow | 577.00M | 628.90M | 403.80M | 597.50M | 685.90M |
| Investing Cash Flow | -1.76B | -21.70M | -181.70M | -301.50M | -396.00M |
| Financing Cash Flow | 1.33B | -580.50M | -315.20M | -366.80M | 222.50M |
La Francaise des Jeux SA Technical Analysis
Negative
30.36
Price Trends
31.73
Negative
30.40
Negative
32.57
Negative
Market Momentum
-0.57
Positive
37.52
Neutral
53.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:FDJU, the sentiment is Negative. The current price of 30.36 is below the 20-day moving average (MA) of 31.48, below the 50-day MA of 31.73, and below the 200-day MA of 32.57, indicating a bearish trend. The MACD of -0.57 indicates Positive momentum. The RSI at 37.52 is Neutral, neither overbought nor oversold. The STOCH value of 53.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:FDJU.
La Francaise des Jeux SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | €5.61B | 14.02 | 6.75% | 16.93% | -3.18% | ||
63 Neutral | $17.10B | 10.79 | -8.01% | 2.94% | 1.62% | -25.73% | |
| ― | €3.19B | 23.27 | 6.86% | 1.44% | ― | ― | |
| ― | €3.99B | ― | -10.50% | 0.25% | ― | ― | |
| ― | €188.43M | 21.85 | 2.48% | 1.60% | ― | ― | |
| ― | €234.92M | 9.49 | ― | ― | ― | ||
75 Outperform | €3.42B | 14.09 | 6.00% | -11.47% | -49.98% |
* Consumer Cyclical Sector Average
Performance Comparison
FR:FDJU
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30.36
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.