FDJ FY revenue up 6.5% as Kindred bid confirmed

The trading update comes as the lottery and gaming company confirmed it had submitted a SEK27.96bn (£2.10bn/€2.45bn/$2.67bn) offer to acquire Kindred Group. The news was reported by the Wall Street Journal over the weekend.

FDJ said it aimed to build a “European gaming champion” with the acquisition, while Kindred CEO Nils Andén said FDJ would help Kindred to “further expand its global footprint”. Kindred’s preliminary 2023 results – which were also released today (22 January) – saw revenue of £1.21bn for full-year 2023.

Looking at FDJ’s trading update, revenue totalled at €2.62bn for 2023. Revenue from its online gaming business grew 18.8%, accounting for 13% of its overall revenue compared to 11% in 2022.

Recurring EBITDA growth and M&A activity

FDJ saw a growth in recurring EBITDA in 2023, which it attributed to its digital businesses. Recurring EBITDA stood at €657m for the year, resulting in a margin of 25.1%.

FDJ noted that this would have been 24.3% if not for the reversal of a provision relating to disputes with broker agents and high sports results.

FDJ’s bid for Kindred follows on from a steady year of M&A activity. Following payments related to the acquisitions of ZEturf and Premier Lotteries Ireland, FDJ had a net cash surplus of €671m at the end of December. This was 25.4% less than the €900m generated in full-year 2022.

FDJ’s acquisition of ZEturf took place in October and saw ZEturf valued at €175.0m. The lottery giant agreed to acquire Premier Lotteries Ireland in July for €350m. The deal was finalised in November.

Revenue improves in Q4

For Q4, revenue increased by 13.8% to €747m. This was a 7.1% rise on a like-for-like basis. Lottery revenue grew 7.8% to €531m for the quarter. FDJ said this division benefitted from the launch of EuroDreams in November and the €200m Euromillions super jackpot in December.

FDJ’s competitive sports and online gaming revenue hiked up by 14.9% to €159m during the fourth quarter. On a like-for-like basis, this comes out at a 6.3% rise.

FDJ’s full 2023 results will be published before trading begins on 15 February.

Kindred would align with FDJ

As part of its offer to acquire Kindred, FDJ offered SEK130 in cash for each of Kindred’s Swedish Depository Receipts. Compared to the price of Kindred shares at close of trading on 19 January – SEK104.50 – this is 24.4% higher.

In confirming the deal, Kindred said it had recommended “unanimously” that its shareholders accept FDJ’s offer. The acceptance period for the offer is projected to occur on 20 February and end on 19 November.

FDJ CEO and chair Stéphane Pallez said Kindred would naturally align with FDJ’s strategy.

“Given their respective histories, strategic strengths and core values, FDJ and Kindred are highly complementary,” she said. “The combination will result in a stronger strategic positioning and significant value creation for the benefit of our shareholders and broader stakeholders.”

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