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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:77Outperform
Price Target:
€37.00
▲(11.18%Upside)
Positive Factors
Dividends
Better-than-expected free cash flow generation allowed FDJ to announce a higher-than-consensus dividend.
Financial Performance
FDJ reported revenues and EBITDA above consensus expectations, showcasing strong financial performance.
International Expansion
The acquisition of Kindred has transformed FDJ's profile, expanding its presence in betting and gaming markets across Europe.
Negative Factors
Market Position
FDJ shares trade at a premium to European B2C peers despite having a slower mid-term growth profile and fewer local leadership positions in key competitive markets.
Regulatory Risks
Heightened regulatory risk profile is not reflected in the current valuation, posing a potential threat.
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
€6.17B
Dividend Yield5.34%
Average Volume (3M)355.03K
Price to Earnings (P/E)15.4
Beta (1Y)0.52
Revenue Growth16.93%
EPS Growth-3.18%
CountryFR
Employees5,678
SectorConsumer Cyclical
Sector Strength60
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)1.24
Shares Outstanding185,270,000
10 Day Avg. Volume390,358
30 Day Avg. Volume355,032
Financial Highlights & Ratios
PEG Ratio5.12
Price to Book (P/B)7.75
Price to Sales (P/S)0.00
P/FCF Ratio23.93
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€39.38Price Target Upside18.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
La Francaise des Jeux SA Business Overview & Revenue Model
Company DescriptionLa Française des Jeux SA (FDJ) is the French national lottery and gaming operator, primarily engaged in offering lottery games, sports betting, and online gaming. Established in 1933 and headquartered in Boulogne-Billancourt, France, FDJ operates under a government-granted monopoly, providing a wide range of gaming products both in physical retail locations and through digital platforms. The company is committed to responsible gaming and contributes significantly to public finances and the French economy.
How the Company Makes MoneyLa Française des Jeux SA generates revenue primarily through the sale of lottery tickets and gaming services. The company operates through several key revenue streams, including traditional lottery games such as Loto and EuroMillions, scratch cards, and sports betting. FDJ's retail network, comprising thousands of points of sale across France, contributes significantly to its earnings, as does its growing digital presence through online and mobile platforms. Additionally, FDJ benefits from its exclusive rights to operate lottery games in France, a monopoly granted by the French government. The company also engages in strategic partnerships and sponsorships which enhance its brand visibility and customer engagement, further driving revenue growth.
La Francaise des Jeux SA Earnings Call Summary
Earnings Call Date:Mar 06, 2025
(Q4-2024)
| % Change Since: -5.99%|
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 solid revenue growth and operational efficiency, with robust gross margins and consistent cash flow generation. However, the increase in leverage and decline in net profit margin could pose potential risks. Overall, the company shows a healthy financial position, supported by effective equity utilization and cash flow management, but should be cautious of increasing 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
Positive
33.28
Price Trends
31.10
Positive
30.92
Positive
32.91
Positive
Market Momentum
0.58
Negative
66.17
Neutral
75.66
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:FDJU, the sentiment is Positive. The current price of 33.28 is above the 20-day moving average (MA) of 32.42, above the 50-day MA of 31.10, and above the 200-day MA of 32.91, indicating a bullish trend. The MACD of 0.58 indicates Negative momentum. The RSI at 66.17 is Neutral, neither overbought nor oversold. The STOCH value of 75.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:FDJU.
La Francaise des Jeux SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | €6.17B | 15.42 | 5.34% | 16.93% | -3.18% | ||
76 Outperform | €3.14B | 22.94 | 6.86% | 1.46% | 10.79% | 26.09% | |
75 Outperform | €3.41B | 14.06 | 5.23% | -11.47% | -49.98% | ||
62 Neutral | $16.72B | 10.85 | -7.48% | 3.11% | 1.66% | -24.52% |
* Consumer Cyclical Sector Average
Performance Comparison
FR:FDJU
La Francaise des Jeux SA
33.28
3.25
10.82%
FR:BAIN
Monte-Carlo Societe des Bains de Mer
103.00
1.93
1.91%
FR:VRLA
Verallia SAS
28.22
-4.00
-12.41%
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.