La Francaise Des Jeux SA (LFDJF) (H1 2024) Earnings Call Highlights: Strong Revenue Growth and ...

GuruFocus News
4 min read

In This Article:

  • Revenue: EUR1.43 billion, up 11% versus H1 2023.

  • Gaming Revenue in France: Up 7% to nearly EUR1.3 billion.

  • Digital Revenue: Up 40%, accounting for 15% of total revenue.

  • Point of Sale Revenue: Up 8% overall, 3% in France.

  • Recurring EBITDA: EUR370 million, representing a 25.9% margin.

  • Adjusted Net Profit: Up 28% to EUR235 million.

  • Net Cash Surplus: EUR615 million, down EUR55 million from December 31, 2023.

  • Lottery Revenue: Up 5%, 8% excluding Amigo.

  • Sport Betting and Online Gaming Revenue: Up 15%, 7% at constant perimeter.

  • International, Payments and Services Revenue: EUR129 million, up from EUR74 million in H1 2023.

  • Retail Remuneration: EUR570 million, up almost 5%.

  • Marketing and Communication Costs: Up 16%, 6% on a comparable basis.

  • General and Administrative Expenses: Almost stable.

  • Tax Charge: EUR78 million, with a tax rate of 26.8%.

Release Date: July 25, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • La Francaise Des Jeux SA (LFDJF) reported a strong revenue growth of 11% in the first half of 2024 compared to H1 2023, with a 5% increase at constant perimeter.

  • Digital revenue saw a significant rise of 40%, contributing to 15% of total revenue, driven by an increase in the number of players.

  • The recurring EBITDA margin improved to 25.9%, supported by strong business momentum, particularly in digital and sports betting.

  • The company introduced a new indicator, adjusted net profit, which increased by 28% to EUR235 million, reflecting solid economic performance.

  • LFDJF reiterated its full-year 2024 guidance, expecting a reported revenue growth of around 8% for the group and a recurring EBITDA margin of around 24.5%.

Negative Points

  • The sports betting revenue fell short of expectations due to specific factors like the political context in France and the national team's performance.

  • The company anticipates a lower EBITDA margin in the second half of the year, partly due to higher advertising expenses and the normalization of sports betting margins.

  • There is ongoing uncertainty regarding the European Commission's investigation, with no definitive timeline for resolution.

  • The integration of acquisitions like Kindred and ZEturf is subject to regulatory approvals, which could pose potential delays.

  • The company faces challenges in maintaining digital growth momentum, particularly as it laps the launch of successful games like EuroDreams.

Q & A Highlights

Q: Can you explain the expected margin for the second half of the year and any specific reasons for a lower margin compared to the first half? A: Pascal Chaffard, Executive Vice President - Finance, Performance and Strategy, explained that the first half's 25.9% EBITDA margin included an exceptional sports betting margin that is unlikely to repeat. Historically, the second half has higher advertising expenses, leading to a lower margin. The company is confident in achieving a 24.5% margin for the full year.

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