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April 18, 2018

2017 Results: FDJ generates an EBITDA of €316million (+5.3%) and a Group net income of €181 million (+ 2.8%) - Economic contribution: €5.3 billion in national wealth and 54,200 jobs created or retained in 2017 (BIPE Study)

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For the past three years and on the initiative of Stéphane Pallez, President and CEO of the FDJ Group, FDJ has been committed to the transformation and growth project FDJ 2020, focusing on new digital technologies for gaming and customers. FDJ has set itself the following targets to be achieved by 2020: 20% of all sales to be digital and an additional 1 million customers to be recruted.

The financial and non-financial results for 2017 show that the FDJ 2020 project is already bearing fruit, in terms of increased player stakes (+5.7% in 2017, +17% over three years), a stable customer base (26 million players), digital transformation (€1.7 billion in digital stakes, 3.5 times higher than three years ago) and strong economic performance with an EBITDA of €316 million, an increase of 5.3% on 2017, and a net income up 2.8% to €181 million.

The 2017 BIPE Study (following that of 2016) highlighted FDJ's contribution to national wealth creation and employment with 0.2% of national GDP. In this context, and for the first time, FDJ assessed its societal contribution across the French regions, notably via its retailer network (anywhere in France, there is always a point of sale within 10 minutes). The BIPE also calculated the impact of the 2017 dividends paid to its two long standing shareholders; La Fédération Nationale André Maginot and L’Union des Blessés de la Face et de la Tête.

Stéphane Pallez explains: "FDJ continues to improve its operational, financial and non-financial performance, through the implementation of its strategic project FDJ 2020, designed to guide the business towards the consumer habits and gaming technologies of the future. Its results have contributed to an increase in national wealth and to the social initiatives of its long standing military veteran shareholders. It has boosted employment and generated significant economic flows throughout the country. In a fast-changing gaming sector in France, Europe and worldwide, from a customer, technological and competitive point of view, FDJ is currently the second largest European lottery and is ready to face the related challenges head-on".

FDJ Group reports robust and increasing financial indicators

Player stakes increased to €15.1 billion in 2017 (+5.7%), thanks to a rich and diversified gaming portfolio, and player winnings increased to €10 billion (+6%), while FDJ's gross gaming revenue (difference between stakes and winnings) reached €5 billion in 2017 (+5%).

FDJ represents almost 50% of the French gambling sector, with growth marginally above that of the market (gross gambling revenue in France of €10.2 billion, an increase of 4.5% from 2016).

The Group's contribution to public finance was €3.4 billion, an increase of €89 million. It represents 1% of the State budget.

Revenue (Gross gaming revenue - Government levies + Revenue from other activities) was €1,762 million, an increase of 3.9% compared with 2016.

EBITDA rose 5.3% to €316 million. FDJ has boosted its profitability through a controlled 4% rise in operational expenses, in line with its increase in revenue. Retailer commissions rose in line with the higher player stakes in the retail network, to a total of €755 million (+5.2%). Personnel expenses increased to €213 million; an increase of 8% due to the takeover of 49 sales areas and the recruitment of new skills to pursue the Group's strategic project. Other operational expenses (IT, game design and promotion) were kept under control at €533 million (+0.6%). Operating profitability (EBITDA/Revenue) was 18%.

Group net income totalled €181 million, an increase of 2.8% on 2016. Over a period of three years, FDJ has absorbed the bulk of the cost of its sales restructuring programme launched in 2014. FDJ has a solid financial structure with net cash flow of €948 million, an increase of €38 million versus 2016.

€5.3 billion in national wealth created and 54,200 jobs created or retained (BIPE 2017)

For the second consecutive year, the 2017 BIPE Study has assessed the economic and social contribution of the FDJ Group in France*.

FDJ's contribution to national wealth amounted to 0.2% of the national gross domestic product (€5.3 billion in 2017, an additional €200 million compared with 2016). FDJ also produces an economic ripple effect, similar to that of the automotive industry.

FDJ is a local player that supports businesses throughout the French regions through its network of 30,800 points of sale, spread throughout both rural and urban areas. FDJ has a 99% coverage in densely populated areas. An FDJ point of sale is always available within 10 minutes, either on foot in urban areas or by car in more rural areas.

In terms of jobs, FDJ has created and/or retained 54,200 jobs across the country, including a quarter of the 80,000 jobs in the bars, tobacconists and newsagents sector (20,230 jobs). FDJ has contributed to 15,910 jobs in the civil service sector and 7,860 jobs in the sport industry.

FDJ plays an instrumental role in three economic ecosystems:

- the national community, with €3.4 billion from gaming activities paid to the State (excluding generic taxes and duties), an increase of 3%;

- French sport, with €250 million invested in the industry; an increase of 5%;

- a network of supplier businesses and local shops.

FDJ is ramping up its community action and the memorial contributions of its long standing military veteran founders and shareholders. The €16.7 million of FDJ dividends received in 2017 by the Fédération Nationale André Maginot and the Union des Blessés de la Face et de la Tête were used for community initiatives (223,000 beneficiaries, 314 associations and 1,400 people received direct assistance). They were 90% funded by FDJ (dividends and investment revenue). These dividends were in fact the main source of financing for the two EHPAD retirement and care homes managed by these associations.

* The methodology applied in the 2017 BIPE Study consists of the international standards used by major authorities, including the UN and the European Commission, for assessing economic impacts. The study examines the direct, indirect, induced and catalytic effects of the FDJ to calculate its contribution to national wealth (Gross Domestic Product) and employment in France.

Non-financial results for 2017 driven by a Corporate Social Responsibility policy in line with the FDJ 2020 strategy

FDJ assumes its corporate social responsibility through four principles of action that apply to all levels of the business:

Commitment to protecting our customers, our employees and future generations. The prevention of problem gambling is a key focus for FDJ, which it addresses through the assessment of new games both before and after their launch, the introduction of moderators to monitor players' stakes and time spent playing online, and reinforcing the prevention of underage gambling (inspection of every point of sale, training for sales staff, etc.).

This commitment also encompasses the fight against discrimination, the promotion of gender equality, and efforts to reduce the Group's carbon footprint.

Commitment to guaranteeing ethical compliance. In 2017, this notably focused on the fight against money laundering, which involved the co-development with IBM of a "safergame" tool which rates the risk associated with sports bets and offers enhanced monitoring of betting activity, particularly as part of the National Platform for Preventing the Manipulation of Sporting Competitions.

Pioneers of promotion and innovation. In 2017, at the initiative of FDJ, the European Lotteries (EL) members adopted a set of "Corporate Social Responsibility Guidelines". FDJ also created the "Nudge" films to help customers think about their habits.

Solidarity to be of use to all. In 2017, this focused on developing the corporate purpose of the FDJ Corporate Foundation, "equal opportunities through gaming", which has been extended to include education, integration and disability. Furthermore, 17% of all FDJ investment are made in socially responsible investment funds.

2018 Highlights

Ongoing commercial and geographical restructuring of the business

  • New retailer remuneration scheme 2018-2020
  • New local organisation and completion of the roll-out of automated direct distribution

Lottery

  • Launch of games promoting the "Heritage in Danger" campaign

Sport

  • Sports betting: a busy year with the FIFA World Cup
  • Preparation for the 2024 Summer Olympics in Paris and the involvement of businesses

FDJ 2020 transformation: a new head office for the Group

Attached documents

FDJ Group simplified income statement

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