France’s leading gaming and national lottery operator, La Française des Jeux (FDJ) has revealed that ‘many uncertainties remain’ as it seeks to return to ‘a comparable level of activity’ with 2019 trading.
Publishing its first interim results as a Paris Euronext enterprise, FDJ discussed the impacts of COVID-19 stating that the health crisis wiped out the firm’s ‘early momentum’ as total group wagers declined by 18% to €6.8bn (H1 2019: €8.4bn).
FDJ’s flagship lottery unit recorded a 13% drop in sales to €5.8bn (H1 2019: €6.6 bn), with the group citing the temporary closures of its points of sale network and the suspension of its ‘AMIGO’ retail sales system under French national lockdown orders as a major factor in its figures.
Additionally, FDJ’s sports betting unit also recorded a decline as the vertical posted a 39% decrease in wagering to €1.1bn (H1 2019: €1.8bn) after trading with no active sports schedule since mid-March.
Countering unprecedented trading circumstances, FDJ sanctioned a series of cost controls, focusing on securing €80m in group-wide EBITDA savings for 2020.
H1 Period cost-of-sales were reduced by 17.5% to €482m, as a result of the firm’s lower point-of-sale network distribution charges.
Further savings were secured by FDJ, reducing corporate general and administrative expenses by 7% to €87m.
Meanwhile, group marketing expenses were reduced by 2% to €147m, as FDJ suspended advertising of its sports betting services, but maintained promotion of its lottery products supporting retail partners during lockdown.
Underscoring that all retail units had made critical adjustments to counter covid impacts, FDJ recorded adjusted half-year revenues of €850 million, down 15% on corresponding H1 2019’s €995m.
Absorbing group-wide double-digit wagering and revenue declines, FDJ posted a period EBITDA of €174m, down 16% on H1 2019’s €208m.
Closing H1 2020 statement, FDJ declared H1 net profits of €50m, however, the corporate governance underlined that it will ‘not communicate any earnings forecast for the financial year 2020’.
Stéphane Pallez, Chairwoman and Chief Executive Officer of FDJ, commented: “The Group’s strong mobilisation from the onset of the health crisis and a swiftly implemented cost-cutting plan have limited the impact on the first-half results.
“From mid-June, we have been recording stakes at a level comparable with that of 2019. Our strategic orientations and the strength of the FDJ model have been confirmed, and we continue to invest to support the development of all our activities.”