(AOF) – La Française des Jeux (FDJ) has finalized the acquisition of the ZEturf group, operator of online horse racing betting as well as online sports betting under the ZEbet brand, for a company valuation of 175 million euros . The FDJ emphasizes that this finalization comes following the authorization decision of the Competition Authority rendered on September 15. The entry of the two groups into exclusive negotiations was announced in September 2022.
Founded in 2001, the ZEturf group has around a hundred employees and achieved a turnover of more than 50 million euros in 2022. It is the 2nd online horse racing betting operator in France, with a market share of around 20 %. This acquisition allows the FDJ group to become the 4th player in competitive online gambling in France (sports betting, horse racing betting and poker), with a market share greater than 10%.
“After the launch of a poker activity, our entry into the world of online horse racing betting completes the diversification of our online offering, and reinforces the growth prospects of the FDJ group in compliance with its responsible gaming model”, declares Stéphane Pallez, President and CEO of FDJ.
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Key points
– Second European lottery, created in 1933 and 4
th
global player, a leading 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 offer, the societal model, territorial anchoring and sustainability: benefiting from a regulated framework, a monopoly on the lottery ensured 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 (27.42% of voting rights), the veterans’ mutual (14.78% and 19.31%), Stéphanie Pallez president and CEO of the board of administration of 13 members;
– Solid financial situation with €925 million in equity, €968 million in net surplus 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:
– multiplied from its own technological infrastructure (+5 billion transactions per year in the group’s clouds, 100,000 pieces of equipment connected at points of sale):
– 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:
– reduction of CO2 emissions by 50% in 2025 vs. 2017 for the entire value chain,
– Scope 1 carbon neutrality since 2019 by financing carbon offset projects;
– Acceleration of distribution activities in the physical network – public treasury invoices, payment services under the Nirio brand for landlords or energy companies, etc. – and rise of digital (12.7% of total stakes);
– 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
;
– Integration of Aleda and L’Addition;
–
After growth of 7% in revenue at the end of March, 2023 objectives of a turnover increasing by 4 to 5% and a stable margin rate of around 24%;
– 2022 dividend up 10% to €1.37, i.e. a distribution rate of 85%.
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