(AOF) – FDJ announces that it has acquired 2.4 million shares of its Swedish competitor Kindred from Veralda, representing 1.12% of Kindred’s outstanding shares. The gambling specialist, which announced the acquisition of Kindred at the end of January, adds that this decision follows Veralda’s offer to sell 49% of its Kindred shares, or 2.4 million shares corresponding to 1 .12% of the outstanding shares, at a price of 122.5 Swedish crowns per share, and that Veralda’s irrevocable undertaking will continue to apply to its remaining 1.18% stake in Kindred.
Veralda, which holds 2.3% of Kindred’s capital, was authorized to sell 50% of its shares after Kindred’s general meeting, which amended its statutes to allow the implementation of a squeeze-out procedure, on March 15, 2024. If Veralda decided to sell its shares, it agreed to first offer FDJ the opportunity to purchase the shares at a price not exceeding the offer price of 130 crowns per share.
Following this purchase, FDJ owns 1.12% of Kindred’s outstanding shares and the remaining irrevocable commitments with Corvex Management LP, Premier Investissement SAS, Eminence Capital, Nordea and Veralda represent a total of 26.82% of Kindred’s outstanding shares.
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Key points
– Second European lottery, created in 1933 and 4th worldwide, key player in sports betting in France with 50% market share under the brands Loto, Cash, Parions Sport, etc.;
– Turnover of €2.5 billion achieved 77% in lottery, 19% in sports betting & online games and the rest in diversification – payment & services, entertainment, international;
– “Raison d’être” business model based on 4 pillars – the games offering, the societal model, territorial anchoring and sustainability:
– benefiting from a regulated framework, a lottery monopoly guaranteed for 25 years and a network of 30,000 points of sale ensuring regular growth in sales;
– aiming to become a leading international player in games and services;
– Capital held at 20.46% by the French State (27.11% of voting rights), the veterans’ mutual (15.16% and 19.82%), Stéphane Pallez being president and CEO of the board of directors administration of 15 members;
– Unlevered balance sheet with €925 million in equity, €941 million in net surplus at the end of June 2023 and €1 billion in cash.
Challenges
– Strategic plan 2020-2025:
– in 3 points: lottery dynamics, progression of sports betting and growth levers (export of expertise, new services at points of sale),
– increased objectives: annual increase of 4 to 5% in revenues including 20% from digital investments, operating margin rate of +25% and distribution rate of 80 to 90%;
– Innovation strategy: commitments, for €75M, in start-up financing funds (300 supported) with 2 own investment funds, Aria and V13Invest and, internally, an inno Lab;
– Environmental strategy aimed at a 50% reduction in CO2 emissions in 2025 vs. 2017 for the entire value chain, scope 1 carbon neutrality having been achieved in 2019 by financing carbon offset projects;
– Acceleration of distribution activities in the physical network – invoices from public treasuries, payment services under the Nirio brand for landlords or energy companies, etc. – and the rise of digital (nearly 13% of total stakes);
– International development with the acquisition of Premier Lotteries Ireland and recovery of the British Sporting Group;
– Strategic visibility with the confirmation by the State Council of the gaming monopoly.
Challenges
– Uncertainties regarding the maintenance of the participation in the Chinese BZCP;
– Spinoffs from investments in online games: in online poker, in sports betting in France through the acquisition of Zeturf (20% of horse racing betting in France) and, through partnership with Scientific Games, in scratch games phygital;
– After growth of 6.3% in revenues and net profit in the first half, 2023 targets raised: revenues up +5% and margin rate stable around 24%.
Find out more about the “hospitality and leisure” sector
Global tourism still on the rise
Over the first nine months of 2022, 700 million tourists traveled internationally, more than double (+133%) the figure recorded for the same period in 2021. This figure reached 63% of 2019 levels , which should allow the sector to reach 65% of its pre-pandemic levels in 2022. This result is due to a high level of demand and the gradual lifting of restrictions in a large number of countries. Europe is significantly supporting this rebound with the arrival of 477 million people between January and September 2022 (68% of the global total), reaching 81% of the pre-covid level. Tourism there is driven by strong intra-regional demand and travel from the United States. Some destinations saw notable increases in revenue, including Serbia, Romania, Turkey, Latvia, Portugal, Pakistan, Mexico, Morocco and France.