Française des Jeux (FDJ) has reported that ‘many uncertainties remain’ as the French national lottery operator aims to return to the 2019 operating ‘comparable level of activity.’
Publishing its first interim results as a Paris-based Euronext firm, FDJ said COVID-19 impacts wiped out the company’s ‘early momentum’ as overall community wagers fell by 18 percent to €6.8 billion (H1 2019: €8.4 billion).
FDJ’s flagship lottery company reported a 13 percent drop in revenue to €5.8 billion (H1 2019: €6.6 billion), primarily due to temporary closures of its selling points network and the suspension of its retail distribution programme ‘AMIGO’ under French national lockout orders.
The company’s declines were further compounded as the FDJ sports betting unit reported a 39 percent decline in wagering to €1.1 billion (H1 2019: €1.8 billion) since mid-March after trading with no active sports schedule.
FDJ has announced a series of cost cuts to address extraordinary operating conditions, focusing on securing € 80 million in group-wide EBITDA savings for 2020.
H1 Period cost-of-sales decreased by 17.5 percent to €482 million due to the lower point-of – sale distribution network charges for the product.
FDJ achieved additional savings, raising general and financial corporate and administrative costs by 7 percent to €87 million.
Meanwhile, community marketing expenditures were decreased by 2 percent to €147 million, as FDJ suspended advertisement of its sports betting services but continued to advertise its lottery products during lockdown supporting retail partners.
Underscoring that all retail units had made crucial changes to combat covid impacts, FDJ reported €850 million in adjusted half-year sales, down 15 percent from the €995 million corresponding to H1 2019.
Absorbing group-wide double-digit wagering and declines in sales, FDJ reported a €174 million EBITDA span, down 16 per cent from €208 million in H1 2019.
At the end of the H1 2020 release, the FDJ announced H1 net profits to be €50 million, but corporate governance emphasised that it will ‘not communicate any earnings forecast for the financial year 2020’.
FDJ Chairman and Chief Executive Officer Stéphane Pallez said: “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”.