FDJ United (FDJU) Earnings Call Transcript & Summary

Hello, everybody. So good afternoon or good morning, depending where you are. [Foreign Language] So I'm very pleased to welcome you today for our first Investor Day since our IPO almost 3 years ago this day. So of course, many things have been happening since November 2019. We had, of course, also many opportunities to communicate with you, but we thought it was a good date to take stock of where we are and to tell you where we want to go. So of course, we had -- in those 3 years, we had pandemic crisis. Now we face a new macroeconomic context, which is probably -- which is more difficult. But we know and we have learned to know that uncertainty is one of the things that we have to manage and that we have been able to manage actually during those 3 years. And so today, I want to concentrate with my team on what we have achieved and how FDJ has a clear strategy to continue to deliver sustainable and profitable growth in the medium term. So for this, of course, I'm not alone. All this, we've been doing it together with a strong team. And you're not going to see all FDJ team, but you're going to see a number of people talking about main things that we will cover today. They have accompanied me over the 3 years, and I think it's important for you to hear them too on my side because we are, again, one strong team. So Charles Lantieri and Vincent Perrotin will cover our ambitious ESG strategy. Cecile Lage and Cedric Breton will talk about the successful transformation of the lottery business. Richard Courtois will cover sports betting and now online gaming. And Pascal Chaffard, Finance, will come back to wrap up on the strength of our value creation model. So as I say, we have the ambition in the next 3 hours to cover, if not all, but some of the most fundamental themes of the FDJ journey. And of course, we will let some time at the end of this session for a Q&A session, and we'll wrap up everything by 7 p.m. because -- since we are in a hybrid event, we need to, I think, to keep it in a convenient format. So I will start by talking to you about our strategic ambitions. So to start to talk about strategic ambitions. I want to remind you, first, what we have achieved almost 3 years -- 3 years today since our IPO. I think it was a very successful journey. It was not always easy, but I think we definitely came from this stronger. And if I take, for example, the expectations on our objectives for our 2025 EBITDA, they are higher by 50% than the one at the IPO. So definitely, it reflects the fact that we are stronger today than we were 3 years ago. We can also, of course, look at the share price, which is 80% above the IPO level versus 10% for the SBF 1/20. And I want to -- also to stress that all this has been taking place within fiscal and regulatory framework that was enacted by Pacte before -- just before the IPO, which has created a new regulatory framework, a new independent regulator for almost most of the French gaming and gambling market. And I think this is also part of our context, and this is also in a way an achievement that this has been quite stable and we are in this framework. So our main achievements and successes, I will go quickly over them because, I guess you know them, but I think they are all quite remarkable, and I'm not going to quote everything. So of course, the successful lottery digitalization that Cecile and Cedric will talk more about, but also the remarkable performance of our point-of-sale network, which is actually today 30,000 point of sale. Who would have guessed that it would have been the case 3 years later -- 3 years earlier in 2019. I want also to, of course, to stress the pursuit of the sports betting momentum, including the online market share that we gain. Yes, it's a competitive market, but we definitely fight on this market, and we have successes. And of course -- and it is one of the features of today, the entry in the new online market verticals. We have just launched poker actually last week, and we have actually signed yesterday the acquisition of the tariff. And that's, of course, a step forward that we'll talk more about. Beyond our core businesses, we are also investing in what will nurture our future growth. We invest in France in payment and services, and I will talk a little more about this later on. And we are investing in our international activities to expand further. All this, as you have seen, has been translated into high-level financial and operating performance and also into best-in-class extra financial performance in accordance with our corporate purpose, which has been added to our bylaws at our 2020 general assembly. Gaming is our business. Giving back to society is what drives us. And responsibility is our constant focus. And everything is, of course, critical. So to come back in more -- a little more detail in our performance, I want to show you in a nutshell what is for me a summary of what we have achieved. 3 years of higher performance than the one anticipated, as I said, despite, of course, the COVID crisis. And we are now back on track for recurrent profitable growth for the future. Of course, this is very much linked with the group digital penetration that has doubled. 12% of our stakes are now digital versus 6%, 6 years ago. We've been achieved on average to reach a growth per year of 6% in this period. And EBITDA margin has gained more than 300 basis points to reach around 24% for fiscal year 2022 as we see it today. We are also proud to, at the same time, have delivered best-in-class extra financial performance because we believe definitely, as we believed in 2019, that it is key for our sustainable growth model. So this has been achieved through 4 topics: significant economic and social contribution that we measure every year, with a contribution of around 1.5% to French GDP and more than 50,000 jobs that are created or maintained due to activity; second, concrete societal commitments, with, in particular, of the budget of our foundation that has been increased by close to 30%, and a new fund created for local retailers to help them in difficulties, with EUR 5 million -- EUR 15 million invested. Of course, a very ambitious responsible gaming policy. One example is the fact that we decided to dedicate 10% of our media budget to responsible gaming, beyond, of course, all the regulatory requirements that we do respect. And this, of course, is wrapped up in the high rating by Moody's ESG for the fourth year. We're at A1+, amongst the top 5% worldwide companies and leading corporate in its category with this rating and note. So on this basis, we believe we are in good position to continue our transformation journey. This transformation has, of course, now considerably started with digitalization which has become a new distribution channel and a real ingredient for innovation in our business. It will be pursued towards omnichannel distribution with more and more customer personalization and also more responsible gaming for our individual players. This journey will also mean expansion more internationally because we believe that we have now the assets and the experience to become a real operator beyond France if we have the opportunities. And this, of course, with the aim to continue to be more sustainable, to reduce more our environmental impact and to develop further our positive impact on society. So I just want to say that, of course, we know that today, the macroeconomic environment is, of course, definitely much more negatively oriented and much more full of uncertainties than it was even 1 year ago. It is absolutely fair to say that. We don't ignore it. However, I want to stress that, historically, our activity has been quite resilient in various economic cycles and also that I think, during the COVID crisis, we have demonstrated our reactivity to protect the company's business and profitability. So not to say that we're not watching carefully what's happening around us, not to say that we don't have any impact on our costs, and Pascal will come back on that later, but to say that at this point we don't see signs of change of behavior of our clients, which is, of course, the key thing that we are looking at. We will continue to watch this carefully. But probably, we also benefit from the fact that, when we look at the French economy, the French economy is today resisting better to this environment than other economies both in terms of level of inflation, which is lower than a lot of European countries, and also in terms of level of growth, which is lowering, but not at the level also of other countries. So in this context, we are quite -- I want to change the slide. Thank you. Yes. We are quite confident that we have a number of levers to maintain sustainable and profitable growth for the future. Of course, one is to continue to capitalize on the extensive French market player base. And I will come back to that further on. Another one is investing in lottery responsible growth levers and Cecile and Cedric will take this. On sports betting, as I say, we can sustain and we need to sustain sports betting momentum. But of course, we're going to use our recent move to develop a truly comprehensive online gaming offer present on all the verticals, as Richard will explain later on. And beyond those core businesses, again, we will continue to invest and amplify our payment and service business, particularly through recent acquisition that we closed recently. And we will search for a significant international footprint beyond the existing numerous contracts and partnerships that we already have. So to give you a little focus on the French market, I think it's important to see where we are today. So the French gaming market is the fourth largest European gaming market, just behind Germany. You see the numbers on the map. In France, FDJ is, of course, the unique lottery operator and is the leading operator in sports betting activity when you add the exclusive rights part in the point-of-sale and the online. So all in all, our share of the French gaming market is 55% in GGR. So it's clear that our business today is very linked to this market. And we believe this market has quite a number of positive feature. The first one being the fact that there is an extensive player base in France. 52% of adults are playing, so roughly 20 million people. But at the same time, France has one of the lowest gaming penetration among big European countries. So there is still a potential here. Most of the players in the French market are FDJ customers, not only, of course, but we have 26 million of customers if we count everything. And we have 29% of French adults, roughly 15 million, that are playing an FDJ game at least once a month. So that's quite a strong position, again, in a market, which is, we think, still, on average, moderate. And of course, I'm talking on average. On average, also French citizens have reasonable gaming habits when you compare them to other European markets, both in absolute and relative terms. This is also one of the reasons that we think the French market is probably less vulnerable to inflation and a growth [ destination ] than others because we still have, again, this moderate level of spend. We also -- and this is more strategic. Yes, this is the slide. We also believe that in our strategy and business, we do capture quite well some major evolution of our clients' consumption in general. First, we think we capture well the desire for proximity and mobility at the same time through our omnichannel approach that you will see through our sports betting investment in the point-of-sale through our digital games in the lottery and through all the investment that we've been doing to have -- to modernize our point-of-sale and to have them state-of-the-art in terms of dynamic display, use of data and so on. So we believe we are really very, very close to that trend. Another trend, of course, is the customer-centric approach, the fact that our clients want to have more personalized approach. This is what precisely we want to do based on increased customer knowledge. And this customer knowledge is, of course, fueled by the digitalization of our business. And we've been working a lot, and we will continue to work on the use of data to have a more personalized approach, both in terms -- of course, both in terms of commercial offers, but also in terms of responsible gaming. And third, another trend for me is the fact that our customers, just like any citizen in France and abroad, are even much more sensitive to ethical and durable consumption; and two, the commitments of companies on sustainability and CSR. We come from this world. FDJ has been created for solidarity. But I think what we have done in those last 3 years or so is renew. We have completely renewed the way we see our impact, our policy on society, much more environment, much more measuring impact, and we will continue to go this road, which I think is quite important for the relationship with our clients. So now I will very high level give you a view of the main strategy we want to pursue in our different businesses. And of course, this will be developed by my colleagues in much more details. So in lottery, as I said, I want, we want to reinforce growth, but also responsible growth. We have definitely transformed the lottery business for digitalization. It's not finished. We will detail how we are quite confident in our capacity to increase online stakes by over 20% per year over the next 3 years due to the, I think, the new maturity we have now in this business. And I think you will see that in, again, Cecile and Cedric presentation. So this is, of course, a major lever for the group, both in terms of growth and profitability. Of course, in the meantime, we will continue to innovate and particularly to innovate on our best-known products, on our blockbusters, such as EuroMillions. And in 2023, you will have actually a new EuroMillions game, which is quite a big event because it has not happened actually since the launch of EuroMillions. So that's quite an event. And of course, this is also an important feature for future growth. At the same time, we believe that we need to be even more committed on player protection, and we are committing to reduce the GGR of high-risk players below 2% in 2025, and it will be also expand further. And we will continue to link our business with good causes, for instance, through our good-causes games, such as Mission Patrimoine, which is a huge success for our company. So on sports betting, same, I want to give you a high-level view of our strategy before Richard will get into more detail. As I say, we are very convinced that we can maintain point-of-sale momentum. So growth in the point-of-sale is not finished, even though not at the same level than the online market. We believe we can continue to gain market share on the sports betting market, and we believe we can even go further by becoming this true comprehensive online operator with poker, with horse-racing bets. Because we believe that to be competitive in the medium term in this market, you really need to be present on as many verticals as you can. So we're quite happy to have been able to go to this point, although we are still -- we are going still to wait for the authorization of competitive authorities, for instance, on the tariff to integrate, but that's, however, a big step further for us. Of course, at the same time, as in lottery, and I think it's an important thing to say in the context of the World Cup, we will also continue to embed extensive responsible gaming in our business, and you will see that more concretely in this -- in today's presentation. So in payment and services, we are still creating a new business. We believe that we have already some interesting results and success on what we have been doing by developing in the 14,000 point-of-sale service that -- which people can pay some local bills or some public bills. So we have good signs that it's something that does answer to the needs of our clients and that our retailers also are finding very easy and very good for the traffic in their point-of-sale. So on the basis of this, we have actually put in place a number of assets and projects that will enable us to grow this business. We have a payment license that was granted in 2021. We have a new brand, which is Nirio, that has been launched very recently. We'll have a payment card that will come before the end of 2023. And we have a number of contracts to sign with other companies, contract for their clients to pay their bill in our network. So it will extend. It is still small. But I think it's a very interesting example since it's also -- it nourishes the economic equilibrium of our point-of-sale by having more clients going to those point of sales. In mirror to the strategy that we have with the clients, we aim at also offering complete service to our point-of-sale partners. We believe that we can offer them point-of-sale management systems to better manage their business and their more diversified business. We believe we can provide them new services to extend their activity. And this is why we have acquired 2 small companies, L'Addition and Aleda to accelerate our growth in this strategy. Aleda has been closed today because we just got the green light of competitive authorities. So it's now going to -- we are going now to be able to start working with them and, again, driving the growth of this business. On international development, as I said, we have already quite a number of assets that show that FDJ is not only known but has the capacity to win competitive tenders on international markets. I think that's a fact today. In lottery, we have built a marketplace interactive factory where -- through which we can distribute digital games to lottery. So this is a B2B activity. We believe that there is a lot of potential into that since all lotteries actually are looking to more digital content. We also have a number of clients on bilateral contracts to which we sell services on the base of terminals that are the same terminal that we use in Europe and elsewhere. And we have new partnerships, for instance, with Scientific Games, which is a well-known B2B provider and which has recently formed with us an alliance to sell our digital games in Europe and in the U.S. So that shows also the attractiveness of our offer. In sports betting, we have the ability to offer global services across the entire value chain, including platforms, operations, trading and risk management to manage sports betting. We have already numerous contracts with Israel, with Portugal, with Switzerland, with OLG in Ontario. So this is also, I think, good evidence of our expertise and competitiveness. And we have also new partnerships to, I would say, to have a more sophisticated offer, always more competitive, particularly on data, because sports data is very key. So we believe that, on the basis of this, we have the possibility to explore new opportunities if they appear, and they will certainly appear, to go one step further and to be more and more an operator of lottery or sports betting on the basis of international tenders, license, new license or license renewal or, of course, M&A. And we definitely will want to pursue those opportunities on the basis of our current expertise. I want also say a word about innovation. It's really something that has been, for me, absolutely key in our successes from the beginning. I also believe that we've been also in innovation in the last 3 years. We've been really going one step further in the way we develop and use innovation in our strategy. So our approach has definitely matured. We have a very large open innovation ecosystem with privileged access to around 300 French or European start-up today. We have now also a number of experiments within the company to use those -- this ecosystem to integrate innovation into our business, and we have number of examples of where we already do it today, a number of projects to do it more. And we have defined this around 5 key major innovation topics that we call now MITs. I want to just to finish by saying that, after this high-level introduction, I want to really to be convinced that we are absolutely confident in our medium-term financial and extra financial objectives and guidance. We believe that we have the capacity to sustain our medium-term financial objectives, particularly our average annual revenue growth between 4% and 5% over the next 3 years and to reach an EBITDA margin above 25% in 2025. And in parallel, to, again, to go for more ambitious sustainability objective, such as the share of GGR from high-risk players, but also carbon intensity and, of course, always a high rating from Moody's. I just want to share with you the fact that, through that, I think we believe we have -- we are addressing major trends that will be with us actually in the medium term. One is really that you have to -- we have to strengthen our sustainable growth model based on player protection. This is part of the evolution of the lottery business today. It means, as I said, that we will more and more invest in the individual player relationship and protection to develop a large pool of long-term loyal players with a relationship with them. We will also amplify our positive impact on society. I have quoted a number of examples, going from investing, of course, always in our retail network, but also investing on our impact on climate change and biodiversity. And we'll be more and more international. Because as you have seen, our French business is, I think, in good conditions. Our international expertise is state-of-the-art, and we have many opportunities in the lottery and the gaming market as they evolve today. And now before handing to Charles and Vincent to talk more about sustainability strategy, I want to illustrate the fact that all this, again, is in the context of our purpose. And in this purpose, we have -- the fact that we invest also a lot in sports. And of course, the Olympics are coming, and it's a good opportunity to talk about FDJ commitment in sports. And please, you will have some vision of future Olympics in Paris that we are looking forward to be part of next year. Thank you very much. [Presentation]

Thank you, Stephane. And good afternoon or good morning. I am Charles Lantieri, and I am Deputy CEO of FDJ. And I am with Vincent Perrotin, Commitment and Responsible Gaming Director. So sustainability leads our strategy. And as you know, when the national lottery was created in 1933, its purpose was oriented to solidarity with veterans of the First World War. And these veterans associations are still shareholders of the company. And nowadays, responsibility and contribution to society are at the heart of FDJ preoccupation. And this has been featured as our purpose in Articles of Association since 2020 during the general assembly that can be summarized by the sentence you can see on the screen and concerning business, society and responsibility. This purpose forms 6 main commitments, thus ensuring the sustainability of the company's activities. These 6 commitments are appearing on the screen. The 3 main topics: the first one, very significant for FDJ are those concerning responsible gaming. We invest significant resources in that field, human resources, of course, but also studies, training, various tools for the player, financial support associations and many other actions. And our explicit and public goal is to reduce the part of GGR made by high-risk gamers under 2%. The second one is environment. With the determination to lead lotteries towards ambitious strategies, we have a strong commitment to cutting by half the intensity of our carbon print. The third one is contribution to society. FDJ has been committed to greater good since inception, and its contribution to society is a key component of its purpose and thus its business model. With several access like promoting social inclusion through our corporate foundation, supporting for French sports, all contributing to French heritage restoration and preservation. And these 3 major issues for FDJ, Vincent Perrotin will come back in more details just after my talk. But before that, I will now say some words on our other commitments. The fourth one is economic value creation. FDJ activities contribute to 0.2% of the French GDP, particularly, but not only, of course, because FDJ relies on a network of more than 30,000 points-of-sales across the whole territories of the country. And the economic value creation is made through our gaming activity, of course, which represents more or less 30% to 50% of their revenue, but it is made as well through the diversification of the services we provide such as tax and public service bill payments and, in the near future, day-to-day bills like rents, heating, energy or water bills. And all in all, almost 55,000 jobs are created or maintained in France, thanks to our activity. The fifth one is integrity. We are fully committed to reducing the risks associated with the integrity of our business. This is, of course, also essential to build trust in our gaming model. And to that end, we deploy and ensure compliance with rules and procedures shared with our stakeholders. We have a particular focus on combating gambling fraud and money laundering, which has been recognized by the French Financial Intelligence Agency in its last report. The sixth one is diversity and inclusion. We are keenly aware that employee engagement is an essential factor in achieving sustainable performance. We value this attachment at FDJ, which is currently at the very high level of 90%. That's why we keep working to ensure an ambitious, innovative and inclusive employee experience with a particular focus on quality between women and men. FDJ is considered as one of the most advanced company on this field among SBF 120. Employment of persons with disabilities, 5.2%. This is the rate of direct employment of persons with disabilities. And diversity of origins, especially by organizing sourcing in underprivileged areas. And of course, ESG management is fully embedded in corporate governance at the level of the Board, of course, and with a strong commitment of its ESG and Responsible Gaming Committee. But because we want these commitments to be translated into realistic and measurable goals, we have decided to challenge them with our stakeholders. Several forums for dialogue and co-construction with addiction experts like responsible gaming expert committee or with associations of the civil society like Societal Lab deal with subjects related to responsible gaming. But more important is the stakeholder committee, which monitors the commitments of the purpose and structures high-level and multi-stakeholder dialogue. You can see on this slide on the screen the various personalities sitting on the Stakeholder Committee. They represent the different domains of interest of the FDJ purpose at a high level. Maybe I can give you 2 or 3 examples. Responsible gaming, for example, is represented by a French addictology psychiatrist and one of the main specialists of excessive gaming in Canada. The fight against money laundering is represented by the Head of Compliance of Veolia, who was the former Head of the Financial Intelligence Agency of the Ministry of Finance. And another example, environment, which is represented by one of the leader of the top French university students committed to environmental protection. This committee join together 3 or 4 times a year during almost 1 day to give advice and challenge our action plan on each our purpose commitments. All this strategy, work and results have been recognized outside FDJ. That's what we can see through the ESG agency ratings on the screen. And as you can see on the screen, they are at a good level, and we aim at increasing them, of course. Of these agencies, Moody's ESG rated us for the longest, and we have an explicit and public goal of maintaining the highest level reached on Moody's ESG notation, that is to say the level of A1+. But in order to maintain this level, we know that we have to constantly improve our performance in the different included areas. And one way to keep ourselves on track is through our incentive plans. And through this mechanism, all of the company's management and employees are encouraged to achieve ESG performance. For Executive Directors, ESG criteria weigh almost 1/3 of the annual variable compensation. For the top management, it weighs 1/5 within the long-term incentive plan. And for all employees, it's included in the qualitive short-term incentive plan, what we call in French [Foreign Language]. I will now give the floor to Vincent Perrotin so that he can describe our actions on the 3 main pillars of our sustainable strategy, as I already said: responsible gaming, environment and positive contribution to society.

Thank you, Charles. I'm now going to guide you through our 3 priority topics, starting with responsible gaming. As Charles said, responsible gaming is a major issue for us and is at the core of our sustainable strategy. Our aim is to be best-in-class in this area. And this is what has been driving us for more than 20 years and continues to drive our actions today. In addition to our extra financial notations that Charles shared a few minutes ago, we make sure to secure the highest level of specific certification in our business. Our responsible gaming policy covers 2 priorities: to fight against underage gambling and the fight against excessive gambling. We used a wide range of tools on both fronts from the design of our games to player support. The level of attractiveness of our games is systematically assessed according to our internally developed Serenigame matrix. All of our retailers receive continued support and training with a particular focus on the prevention of underage gambling. Controls are being conducted in the point-of-sale through mystery shoppers to make sure retailers do not sell games to minors and detentions if they do. We also communicate extensively to the public to convey prevention messages both on the ban on underage gambling, which is generally not very well known in the absence of public health campaign in this field in France, and also to inform the public about the potential risk associated with underage gambling as well as about the different tools we provide our players to manage their gambling habits. It's a necessary and important effort for us on which we chose to devote 10% of our media budget. Finally, we provide responsible gaming support for players with a focus on the detection of potential [ problem ] gamblers to which we give particular attention and support and through strong collaboration with 8 partners organization. You're now going to see a short video to show you how proactive and comprehensive our responsible gaming policy is. [Presentation]

All the actions that you show in this short video are directed towards limiting the potential negative impact of our activity. That is why, as Stephane and Charles said earlier, FDJ has chosen to set itself a goal of reducing the gross gaming revenue generated by high-risk online lottery players to less than 2% by 2025. Player risk profile is determined based on player actual gaming data and on AI and data models. Proactive actions adapted to each player risk profile will help secure the achievements of this objective. Now the second priority topic of our sustainable strategy, as highlighted by Charles, is to fight against climate change and the preservation of biodiversity. Here again, it's a long-standing commitment for us on which we try to continuously strengthen our action and our long-term ambition. For more than 10 years, FDJ Group has been committed to reducing the direct and indirect carbon emissions generated by these activities. Since 2019, the climate strategy has been aligned with the science-based targets initiative, SBTI, consistent with the well below 2-degree global agreement -- sorry, goal set by the Paris agreement at the world level. We already achieved our 2025 SBTI reduction objective on direct emissions with an effective reduction of 59% of CO2 emissions on Scope 1 and 2 in 2021 versus 2017. Several initiatives we're implementing, among which the reduction of energy consumption or the sourcing of electricity covered by a certificate of guaranteed renewable origin. 34% of our suppliers are now committed to a SBTI reduction trajectory. FDJ also contributes to global carbon neutrality through the financing of certified projects by offsetting 100% of our residual emissions. Our ambition on this is to keep on strengthening our action and our ambition and this crucial issue. In 2022, we have accelerated our actions to reduce our energy consumption as part of our Sobriety Plan. We're also raising our mid-to-long term ambition with an objective of reducing by half in 2030, our global carbon intensity that is to say the carbon footprint relative to our activity. All of this consistent with a more ambitious SBTI targets aligned with a 1.5-degree scenario. The preservation of biodiversity is another key part of our environmental policy. It's also an issue on which we have started our actions a decade ago. First, by choosing to print all of our gaming materials, including our [STRAT] tickets on FSC certified paper, the most rigorous certification framework in the forestry sector. Then more recently by financing forest restoration and conservation projects in France. We are currently working on the new biodiversity road map in order to continue developing these actions in the future. The third priority of our sustainable strategy is the contribution to society. This commitment is deeply rooted in our history as Stephane and Charles outlined it. We focused our actions on 3 areas. First, through our corporate foundation, which supports social integration projects to promote equal opportunities for vulnerable groups facing social discrimination, economic exclusion or various inequalities due to the agenda or disability. We have decided to devote EUR 25 million over the next 5 years to strengthen our action in this field. Secondly, through our support to French ports, which takes different forms such as the promotion of women's sports through a dedicated program encouraging high-level women's sports and athletes activities for all women. The sponsoring of the cycling team for more than 20 years, including a women's team since 2017, all the partnership with Paris 2024 Olympic Games, as you saw in the video. The third area is the support to national heritage, thanks to the dedicated Mission Patrimoine games launched since 2018, which helped raise EUR 120 million and restore or save more than 300 projects. I will now give the floor to Charles to conclude.

Thank you, Vincent. I will be short, maybe 3 reminders in conclusion. Sustainability is of first importance for our gaming model. It's based on our purpose and its resulting commitments. We have a comprehensive strategy to reach ambitious goals, and these goals include 3 major priorities: responsible gaming with a KPI of online lottery GGR made by high-risk players under 2% in 2025. And environment with a KPI of cutting by half our carbon intensity and all scopes and more generally, ESG performance with the KPI of A1+ rating by Moody's ESG. I will now give the floor to Cecile and Cecile Lage to tell you about lottery strategy. [Presentation]

Hi, everyone. I'm very happy to be with you today. I am Cecile Lage, I am Executive VP in charge of lottery and customers. Over the next minutes with Cedric, we will tell you a growth story, the growth story of lottery business. It has been a continuous growth for the last years. and we'll see how we build the future growth and even accelerate on digital business. Stephane mentioned it. In the last 3 years, we had an average growth on the global lottery business of 6%. And what's remarkable is that this growth is really balanced between the 2 ranges draw games on 1 side with brands such as Loto, Euromillions or Amigo. And on the other side, Instant Games with brands with such as Cash, Astro, BlackJack, for instance, with a plus 7 average growth in the last 3 years. And this is remarkable because we really chose to prioritize the draw games in our portfolio for 2 reasons. The first 1 is that these games are really profitable and Pascal will explain you how it contributes to the profitability of the group. And the second reason is that draw games are really a big booster to accelerate online stakes. If we look at online stakes as precisely, Stephane mentioned, we doubled the penetration globally speaking for the group. It's the case also for the lottery business. We were at 5% in 2019, we are now at more than 11%. It was last year. It will be over that this year. And this is due to a very dynamic growth of plus 40%. This growth is really permitted by this choice of prioritizing draw games which are now 2/3 of the online stakes. And for some games, for instance, if we take EuroMillions, the digital share is over 25% already. With this very dynamic growth, so the plus 42% between 2021 and 2020, FDJ today is one of the best operators in Europe among the top 3 and we have a total stake of EUR 2.2 billion on digital business. Let's deep -- let's look a little bit deeper into the growth and the model we choose. It's really based on our DNA, which is focused on the extension of player base. If you look at the right-hand side -- at the left-hand side, sorry, of the slide, you can see that in 3 years, we doubled the number of players for digital lottery we were -- we will be today at the end of the year at around 5 million players compared to 2.5 million in 2019 and what we plan for the future for 2025 is again a significant growth of plus 14%, which will represent 2/3 of the global growth of the lottery. And how do we do that, both by recruiting new players, we are today around 2.2 million or 2.3 million new players per year. And we will be at around 3 million new players in 2025. And at the same time, we work hard to reduce the churn. The maximum rate we had was in 2020 with a 30% rate and we will reduce it to 20% in '25. Cedric will explain you how we'll do that. Of course, as a consequence, we are building the growth with a moderate average stake growth of about 7%. This is exactly the number we added in the last 3 years. And the reason is that we really want to focus on player protection and to build a responsible performance. The idea here is really to focus on the casual players to push their frequency, for instance, for somebody coming and playing for a high jackpot on the EuroMillions. We will push him or suggest him to play to scratch cards or bingo, and we will also adapt with personalized promotion. Doing this, we will increase the player lifetime value, but of course, we are excluding of all our marketing actions, all the high-risk players. And the target you already heard that minutes before, some minutes before with Stephane and Vincent. The target is to reduce by 2025, the GGR high-risk players below 2%. It's today at about 2.8%. So to reach this target, we have, of course, marketing actions but we also have a set of tools, and we have really a compressive player protection set of tools based either on control of the player behavior analysis of the payer behavior. So the main thing here is that, of course, the regulator has requirements, you can see them in gray on the left-hand side. But we go beyond that and we have developed proprietary tools at FDJ. You can see them just close to the FDJ logo, such as, for instance, to control the behavior, time alerts on the site or as analysis tools, we have a player scan auto score. We have self-test on gaming practices. And we also have developed a dedicated support plan for internally detected excessive players. So this is for the focus on the player protection. I will now hand over to Cedric. We've been working a long time together for hedges. He's a great specialist of a digital business. and is a main contributor of the past growth, and that's the reason he is also the right guy to explain you how we build the future growth.

Thank you very much, Cecile. And as you've seen, we have great expectations, especially in our digital business. So what I'm going to do in the next 15 minutes is show you how we are going to reach these ambitions. And these ambitions are based on 3 strategic levers: games, mobile and digital marketing. So let's begin with games. As Cecile said before, Draw-base games are fundamental in our strategy. Next year, we will enrich our draw-base game range with the launch of Euro dreams, a new game with EuroMillion [indiscernible] proposing an unprecedented annuity win up to EUR 20,000 per month for 30 years. And as we can see it on other games in France or abroad, annuity win is always an opportunity to recruit younger players. And on this new game, we expect an important share of digital sales, 1/3 by 2025. But that's enough, I can talk about this game. And secondly, to improve the part of digital for our draw-based games, we will reinforce our events because as you can see, our events, draw-based game events have a double effect. On the 1 hand, the share of digital on events is around 5 points higher than without events. And on the other hand, draw-based game events are the most efficient moment to recruit online players as, for example, 66% of our 2021 new online players were recruited on high jackpots. So we will add new events like Super jackpots or showers of millions, and we will massively support these events in media. Instant game wise, we have several goals to reach. But before sharing any kind of details, I want to show you another video because I want you to see more about our online portfolio. [Presentation] As you saw, we have a fully diversified portfolio. So our first goal is to continue to diversify this catalog, especially with innovation on gamified games, as, for example, on [indiscernible] , gamified game, which is our best performer of the year. And secondly, with the contribution of third-party suppliers as for Mega goal, a game developed by [indiscernible] and which is our best launch ever for the category. And to maximize this contribution of third-party suppliers, we have now a strong alliance with Nordic lotteries, named Lea, like the Princess, which consists in the marketplace of digital games. So each member of the alliance can pick Instant Games in this chair catalog and custom it for its own markets, a very innovative model to reduce costs and share liquidity in order to propose, for example, in the future, common jackpots. Our second goal on Instant Games is to digitize new players by breakthrough innovation. On mobile, with the multiplayer experience, we propose on it. You can discover the video up here with a dedicated mobile app we launched 2 months ago, it's a brand-new concept. You can play with your FDJ accounts, convert your money into tokens, play with your tokens in different multiplayer emissions. And if you want to win money, you can convert your tokens into money and test your luck by spinning a wheel. It really breaks through and we'll probably have to improve or to adjust this concept in next month, but it's promising and illustrates a possible evolution of lottery digital games. And on a more long-term season, we digitize new players by continuing to launch a new digital game every year. Like Deal or no Deal that we can discover there to promote omnichannel behaviors and centralize our traffic in the FDJ app. By the way, the markets has validated our vision through a partnership with Scientific Games, Stephane mentioned before and that we announced last month for the international resale of this type of digital games under the brand I decide. So games are essential in our digitization, but so is the customer experience. And our vision of digital goes through the mobile and in particular, through the app to be closer to the players. Our digital business is mainly mobile from 2019 with a massive contribution of the app around 60% at the end of last year. And our challenge on last year's was to increase the customer value on the app, and now it's superior as web or desktop. And in parallel to switch our traffic on this platform with great results because we were the first lottery mobile app on Google Play store. And an interesting fact is that in France, FDJ is the leading gaming app ahead of Candy Crush or [indiscernible] . And you can see behind me, our customer experience we propose is cutting edge. So our mobile app will stay in the heart of our vision and our next challenges on mobile will be on personalization, omnichannel features like digitized for game receipts and on the socialization in the app. Now let's move on digital marketing to talk about recruitment at first because Cecile told you before, recruitment is our first business development level. That means it's strategic for us to control the value chain of this level. And that's the reason why we are probably the only lottery in the world, which internalizes its digital media levers, SCA in 2020, paid social in 2021 and in the next months, affiliation and display. So we will no longer need intermediaries such as the media agency on this pareto. And it's certainly a proof of our digital evolution over the past years. And this control allows us to work with best performers on a tech with notably several French tech players and obviously, with big leaders as Google, Meta or Apple. And as you saw it previously, our recruitment is at a very high level, more than 2 million new players every year. So we need a strong control of our acquisition costs, and it is with a stability in the past 3 years. So that would seem easy, but the market or e-commerce trends is, especially in 2022 is really towards rising costs. So we invest a lot on a tech because of our business model. But we don't forget data and MarTech for all that and our data strategy from collection to activation is a key to transform and personalized customer experience and meet our responsible gaming objectives. Our main strategic use cases are more on the first steps of customer life cycle, in order to activate them depending on their predictive value, for example. But our CRM teams combined several goals to increase customer value and limit sub. And all this with an automated segmented approach and promotions or incentives based on customer value. So we devote a lot of effort to developing our data and market capabilities in order to anticipate positions for our recruitment strategy. And in order to adapt our customer relationship plans to GDPR evolutions. Because at the end of this year, we will have to manage 5 million player customer base and prepare the transition to more ominous cases. I mean the next challenge to scale digital lottery is point of sales. And Cecile, I'd like to conclude.

So you already saw this slide. The idea is really to conclude for the lottery representation is really to share together that we have a very solid past performance, but also, I'm sure you're convinced we have a very solid growth in the future, thanks to digital and all the strategies Cedric explained. The new challenge for us is really to put digital in the points of sales and also to develop omnichannel usages among the players from the point of sales. So this is important because we will need this just to achieve this objective, Stephane mentioned of having a growth on online stakes over 20% between 2022 and 2025. At the same time, of course, we don't want only financial performance, but we also want responsible performance. This is the reason why we are working to reduce the GGR of high-risk players below 2% and also innovating in the games and going further concerning our societal commitments with other games for good causes. So this is it for the lottery, I will now hand over to Richard, who is CEO of the Sports & Poker business unit. [Presentation]

Hello, everyone. I'm Richard Courtois, and I'm in charge of all B2C Sports Betting and Booker activities for FDJ. Before going to the details of our ambition and plan I would like to remind you what is the French sports betting market in 2022. The total market has got around 6 million players with 2 types of sport betting activities. The point-of-sale sports betting activity, which represent around EUR 0.9 billion with a CAGR of around 3% in the last 4 years. And the online sports betting activity, which represents EUR 1.4 billion with a CAGR of around 18% in the last 4 years. So over the next 10 minutes, I'm going to show you how we are going to continue to consolidate our point-of-sale activity and become one of the top operators in the online gaming space in France. All of this under a comprehensive responsible gaming and player protection plan. Indeed, we have strong action on this matter. We have, in particular, 2 global commitments. We dedicate 10% of our media budget on responsible gaming, and all our games are going through our selling against metrics that has been presented to you by Vincent just before. We've also got specific action plan on each of our distribution channel. On point of sale, for example, we provide clear prevention messages as well as full retailers training program, all of this on responsible gaming. And for the online part, we provide player control tools as well as support program for high-risk players. All of this going beyond the regulatory scheme. Ahead of the football World Cup, we've been working with regulators to reinforce the current gaming communication framework. And we have contributed to design several commitments that must be honored by operators media or media association, all of them with a clear objective, moderate advertising and prevent underage and excessive gaming. If we focus on the point-of-sale sports betting market, we had a steady growth with a CAGR of 3% since '19 despite the COVID and the regulation that is a lot more constrained compared to the online market. Indeed, we have a smaller maximum payout ratio, less authorized offer and specifically no live betting. But as we will see in a couple of minutes, we've been able to greatly improve our offer and our overall customer experience. And this has been possible thanks to the QR code success, which has been a strong enabler for us. And I'd like to show you a quick video to remind you how the QR code is working in our point-of-sale mobile apps today. [Presentation]

So as you've seen, the QR code is very simple to use for our customer and is a great success for us. So what are we going to do to keep this momentum. Well, we have 7 customer-centric priorities to keep going with our growth with, as we said, responsible gaming at the heart of everything we do. And so we will continue to improve our offer, our old competitiveness and our brand recognition. We will also continue to provide strong retail support and training, and we will develop our identification program in '25. We've been creating a best-in-class mobile app for our point-of-sale activity but digitalize the overall customer experience. The QR code, you've just seen before is now used by more than 85% of our stakes and has been a strong innovation enabler for us. We've also made a specific mobile app to help our 28,000 retailers with useful information, training program and a simple way to exchange with us directly. And if we look more precisely what we've done in the last couple of years, we're broadening our offer at point of sale with almost 3x the number of beds compared to 2019. We've been developing a best-in-class mobile app with an average rating of 4.7 on iOS. And we've been introducing new products on point of sale that our customers loved like new categories in the put betting space such as Loto Rugby or Loto basket or the option to boost a multiple when you play a certain number of flags through our Combibuos products. Now if we look at the French online gaming market, we also had a very strong growth during the past years especially in sports betting with an estimated 80% CAGR over the '19, '22 period. But as you can see, we also had a strong growth in poker and horse racing betting during the COVID period. And we don't think this growth is over. We are still confident there is more to come, but at a lesser pace with a CAGR between 22% and 25% in the high single digit to mid-teens. And this is well backed up if you look at some of the GGR per adult in other European countries. We still have room for growth. Meanwhile, in the last 4 years, we've been able to outperform the online sports betting market with a CAGR of almost 26%, and we regularly gained market share since 2017. And this has been possible in all market conditions, including when the market declined like in the first semester of '22. In the same way, we've identified customer-centric priorities on point of sale. We've got 6 customer-centric priorities on the online activity. And to continue to grow, our plan is based on diversification and differentiation. And again, with responsible gaming being at the heart of our actions. So we are broadening our offer, and I get back to you on this just after. We are also creating differentiation through innovation, best-in-class customer experience as well as price competitiveness. We will continue to work on our brand awareness and our digital marketing based on state-of-the-art ad tech solution, and we will continue to improve our operating model, all of this to get the best customer satisfaction. And I wanted to give you 1 example of the type of leverage we can have by mixing some of our assets with a strong and clear communication. Here, you can see that we are using our new partnerships to create a clear differentiation by leveraging our old competitiveness through VIP of our partners, the Paris and [Masa] Football teams, The NBA and the French Rugby Federation. And the good thing is that no one else can do that. Entering new segment is also an important part of our strategy. Indeed, all French major operators have a broader offer than us in terms of verticals. And we know that our players are eager to play on other verticals such as poker and Horse racing betting. And as importantly, they are happy to do it for an increase of overall gaming expenditures, creating new value opportunity for us. That's why we just started a poker offer some days ago. The poker market had a boost in the last 2 years, thanks to the COVID crisis. We think we still have growth potential at around 5% CAGR by 2025. It's an offer that will reduce our churn, increase royalty and developed player value. That's also why we are looking at the horse betting vertical, a market that has also been boosted by the COVID situation, and in which the online part has been growing 4 years now. You can see that even with the forecasted decline in 2022, there is a clear growth between '19 pre-COVID and '22 post-COVID. And we think we will have an online growth of around 4% between '22 and '25. And so for the exact same reason that for poker, we think this market is an interesting one for us. So how do we do it? Well, in order to accelerate on this vertical, we've just signed an acquisition protocol with ZEturf Group, which is the second largest online racing betting operators in France with a very strong brand recognized back punters. That will provide us a clear path to become a major player in the French online gaming market as well as a base to start our international expansion. So if I have to sum up the main points. On the point of sale, we will maintain our growth momentum. And for the online, will we continue to gain online sports betting market share, and we will add new online verticals such as poker and Horse racing betting to become one of the leading online gaming operator in France. All of this using a comprehensive, responsible gaming and player protection and of course, leveraging our top matter ships. And the way I would like to show you a short video to exemplify how, thanks a lot for your time. [Presentation]

Good energy. Hi, everyone. I'm Pascal Chaffard, Group CFO. And you've seen presentation from my colleagues in charge of lottery and sports betting and that have shown you how their business will maintain its growth momentum. And now I will give you 4 messages. First, reiterate our confidence in meeting our group short- and medium-term objectives. Second, shows that FDJ is a resilient business able to navigate through current economic turmoil. Third, explain the operating margin leverage linked to online lottery increased penetration and also the other levels of the margin improvement. Then I will end by highlighting our recurrent operating cash flow generation model and our clear view regarding capital structure and external growth. So let's start with my first point, financial guidance. We can reiterate full year 2022 targets we communicated to the market mid-October regarding revenue growth and also EBITDA margin. This very high level of performance above our initial expectation reflects the combination of the continued rebound activity in point of sales post-COVID with also the continuation of a very good momentum online. Over the medium term, our guidance is confirmed at even reinforced. We expect now an average annual organic revenue growth in the upper end of the plus 4% to plus 5% range communicated at the start of the year. And this organic growth is over the 2022 to 2025 time frame. The 2025 EBITDA margin rate is still expected above the 25% threshold. Please note that thanks to the continued performance of the group, the level of EBITDA in 2025 expected today is like, as Stephane said earlier, 1.5x higher than the level that was expected for 2025, 3 years ago. Based on the strong performance in 2022 and 2023 revenue growth within our medium-term trajectory, we expect a stable EBITDA margin in 2023 compared to 2022 in the context of a non-certain macroeconomic environment. But before I come back in more details to the macro context and FDJ resilience, let's have a quick look at the other elements of our medium-term guidance. Two things are important to notice on this slide. First, we haven't changed the guidance regarding CapEx, cash flow and payout. You should note that the level of CapEx over2020 to 2025 has not changed, even though growth in EBITDA are higher than initially planned at the IPO. Secondly, I want to detail our online stakes CAGR growth objective. We had previously communicated an objective on the penetration rate of digital stakes of 20%, this objective was based on an average annual growth greater than 20%, which is the one retained from now on. Simply, the growth now expected in point of sales is higher than initially expected, and thus, the digital penetration rate could simply tangle the level of 20%. Let's now come back to the macroeconomic environment and FDJ resilience. FDJ is in a cyclical business. Stakes have grown steadily whatever the macroeconomic context. It is true over the last 25 years, as shown on the graph. You can see just 3 years when stake declined. In these free instances, the decrease was specific to FDJ and not at all related to macroeconomic issues. This cyclical character is also true over an even longer time horizon. If we come back now to 2022, we haven't observed any change in our clients' behavior to date. However, we are cautious as this crisis is different from those of the last 40 years. We will continue to monitor the situation, and if necessary, to adapt, I think we have well demonstrated this capacity during COVID crisis. In the context we are experiencing, 3 elements need to be considered. First, the customer behavior, facing an increased cost of living and a potential lower purchasing power. The risk of a negative arbitrage of gaming spending is mitigated by the fact that we benefit from a very large base of players who play moderate amounts. Moreover, in France, within a strongly increasing leisure spending budget, the share allocated to gaming remain moderate, as Stephane showed you earlier. The second element is pricing power. We cannot adjust our prices automatically, but we offer a wide range of products from EUR 0.25 to EUR 15 minimum stake, often purchase bundled in basket, allowing a sort of natural hedge. The last element is the impact of inflation on our cost base. Let's take a closer look at this point. Our cost structure gives us some room of maneuver to cash on [exterior]. Our costs are 60% variable as related to our stakes, essentially point-of-sale commission. Those costs are not directly affected by inflation. For 2023, we have already hedged a significant part of our costs. It is difficult to make precise forecast regarding inflation. However, only a few cost items will be significantly affected, and this overall cost increase will be offset by cost savings of the same amount on the expenses illustrated in green, on the slide, mainly subcontracting, communication overheads. The items that will be affected by inflation are mainly the ones illustrated in red, our source services, game tickets and slips with the combined effects of raw material, paper, transport, and also exchange rates as our tickets are printed to date in North America. Salary costs which represent 17% of our overall cost base in 2022 and finally, our energy costs, but for a limited amount in value, even if it's a significant percentage of increase indeed. Now before diving into the operating leverage, let me remind you the FDJ business model based on the 2021 figures. FDJ net gaming revenue amounted in average to 12% of group stakes. after redistributing 88% of the stakes in winnings to players and in our public levies to the French state. The stakes conversion into revenue depends on the product mix. It is a first level of margin optimization. Let's now see what are the specific levers for lottery and for sports betting. So in lottery, as you can see on the left-hand side, we convert stakes into revenue a little better for draw games than for instant games, thanks to the different player payout ratio and public levies calculation between the 2. Hence, a mix effect sometimes within total revenues. Therefore, we have been working on the revamp of our Loto and EuroMillion games with new formulas, very successful, by the way, and generating more high jackpots than before. Furthermore, draw games are the most responsible with almost 0 behavior games at risk. Let's consider now the bridge from revenue to contribution margin on the chart to the right. Online, the cost structure is different from the point of sales, although there is no retailer remuneration, but marketing and communication costs are much higher online requires over 4x more advertising and promotion than retail. Also, IT expenses are higher as well as customer relations. But in the end, lottery online contribution margin is higher and support lottery profitability improvements. However, the impact of marginal additional stakes is very significant at point of sales. And this is especially visible in 2022. The very strong retail growth is the driver of the improved margin versus initial forecast. So to sum up, product mix, our channel mix and marginal growth are the 3 main levers of lottery operating leverage. Now for sports betting. Thanks to different player payout ratio capped at 76.5% at POS and 85% online. The conversion of stake into revenue is almost twice higher at point of sales than online. But just like lottery, online, we save the retailers Commission. Regarding the cost structure, the relative weight of marketing and communication costs is higher for sports betting than for lottery, 24% versus 12%. And which can be explained by the strong competitive environment in sports betting. The cost structure of the online activity has more fixed costs. and you can therefore understand that the main lever for improving profitability lies in the operating leverage, i.e., the need for critical mass, increase the scale of our operations. The acquisition of the turf is a good move in that direction. Going back now to our medium-term objectives. This chart clearly illustrates that beyond 2022 with a continued post-COVID catch up 2022 to 2025 -- but our outlook is in line with our proven historical trends. So after a strong online momentum over plus 30% CAGR between 2019 and 2022, online average annual growth should stabilize over 20%. And it's important to note that while we are supporting the growth of our online business. Online average annual growth should stabilize over 20%. And it's important to note that while we are supporting the growth of our online business, this is not at the expense of our point of sales. Our network of 30,000 points of sale is doing well, and we will continue to support its development. Our business structurally generates excess working capital. It is also asset light with low CapEx needs, which explains the high EBITDA to cash conversion rates expected to remain above 80% in the future. As such, our cash surplus EUR 900 million is mainly the result of operations and their development and is, therefore, not directly distributable. As you can see on the right, our distributable reserves were only EUR 300 million at the end of June 2022. The allocation of our cash is primarily aimed at developing our business, particularly through external growth M&A. I would like to conclude this section by talking about our vision of our optimized financial structure. We have committed a very high dividend payout ratio, raised at the beginning of the year to a range of 80% to 90% versus 80% previously, allowing for more flexibility. I've just mentioned that our business model combines high EBITDA margin with structural excess working capital bearing in mind that we have an extremely prudent cash management policy and a low and very steady need for day-to-day working capital. At this year's AGM, we turned non-distributable reserves into distributable ones, breaking the total I mentioned earlier to EUR 300 million. Given our ambition and our financial resources, we look at external growth on a fairly broad spectrum. I will come back to this on the next slide. within net financial debt-to-EBITDA ratio on which we will be comfortable up to 2x. Regarding external growth, M&A, we have a 3-part strategy based on, first of all, managing lotteries operation internationally and operating sports betting and online gaming in Europe, bringing scale and synergies. These developments will be capital intensive as achieved through M&A or needing upfront license fees. And otherwise, we will strengthen our diversification activities, payments and services, entertainment that can be achieved through bolt-on acquisitions. So to conclude, we will continue to deliver and meet our financial objectives as we have a resilient business, have improved its capacity to adapt with margin improvement levers and a strong cash flow generation model and with a clear vision on external growth and capital allocation. So thank you very much for your attention. All -- now all the speakers will join me for the Q&A session or my colleagues. Please come to me.

So ladies and gentlemen, I hope that you have enjoyed those presentations. And we are ready for Q&A. So we're going to take, I think, first question from the room. We'll start with the room. And of course, will ask also for questions from people that are following us on the screen. And I hope it's clear at that. So who wants to start? we don't hear you at this point.

Can you hear me?

Yes.

All right. Super. It's Jaafar Mestari from BNP Paribas Exane. I've got 3 questions. First one, just a recap. You've provided some group level targets and the only division level or product level target that I've picked up in this presentation is online lottery growth a CAGR of over 20%. Just to check if you have given any color on the divisions or on the products that I've missed or if you could give some color by products in your expectations?

You have other questions? Yes, maybe you can.

So secondly, on the margin trajectory above 25% in 2025, but you also said 2023 would be relatively flat on the good levels achieved this year. then '24, as you flagged is the year of the Olympics. So presumably a bit of a marketing push there. So my question here is how back-end loaded is the margin improvement from here? Does it all happen in 2025, the remaining 100 bps or so. And then a bit of a product question really on online lottery. You've said that draw games were the big focus, but then a lot of the examples were around instance. Could you elaborate a little bit on how you push draw from here? Are there any easy wins to make EuroMillions even more popular? And I think on online instant games, I think you said some of the games use alignment mechanics, which is basically saying they play like slots. Can you remind us how you're able in terms of regulation and responsibility to offer games where you have geometrical forms moving on the grid while none of your competitors are allowed to do online casino games in France.

Okay. Thank you. So we'll start with your 3 questions. So First question is on how far we can be specific on the guidance of the -- our different business unit. Pascal, maybe you can take this one.

Yes, I will take this one. Yes, [indiscernible] is running, okay. Yes, the other thing that you have missed that we have on our 2025 targets is 20% growth online is not only -- it's true for lottery, but it's true also for global online activity on the group. Sorry, I would like to complement you on that point. We don't give more color, but I will say something on the different business units. But what you can have in mind is that we will -- the growth would be quite equivalent on luxury and on sports betting, and we will have extra growth coming from our diversification activities.

So that's from the -- on the growth guidance. On the margin guidance and the question was how much is -- if our margin guidance for 2025 is backloaded. That is to say, if every improvement is happening at -- in 2025. Maybe, Pascal, you want to answer. It is true. What I think I want to maybe to start saying is that definitely, we are, as we stated, upper this year, both in revenue and margin than we have anticipated because we had a kind of exceptional growth due to, I think, the comparison with 2021, which was actually a year still impacted by COVID partly in our network. So we benefited in 2022 from a kind of [indiscernible] effect that has fueled more growth, and in addition, we were definitely very, I think, very good at managing our big draw games with a little bit of luck that is always helpful, so the level of margin that we've reached this year is also related to that, as Pascal explained, draw games have also a higher margin rate. So all in all, this has produced this level that we wish this year and that we qualified as exceptional. So I think when we look at our medium-term trajectory, we sort of come back to what we have anticipated which is, of course, some impact of inflation next year, but that I think we added capacity to manage. And I would say, current improvement over the year on our different business. But Pascal, maybe you want to complement that.

Yes, just to complement. It's true that Olympics will have some cost, but also it is interesting for us because it will fuel the growth afterwards. But globally, even in 2024, we have other levers to improve our margin. The growth on online will not stop in 2024. So this is not the only thing that we have -- that you have to have in mind the Olympics. We have other levers of improving margins. So not true to say that 100% of the improvement of the margin will come from 2025. After that, I'm -- I don't know what will be the inflation situation in 2024 and 2025. But as we have shown -- we have said that we will do in 2023, we have also the capacity to offset a part or totality of those effects.

And on your question on products, I think for me, there were 2 questions in your question. One is about our draw games and how we can manage and fuel extra growth on those draw games by our management. One -- and the second one is about our instant digital games and how do they fit into the regulatory framework. Maybe I'll take this one, and I'll pass -- I'll hand it to Cecile and Cedric on the other one. Clearly, all our games are have to be authorized by the regulator within the current framework where Casino online is not open on the French market. So all the games that we have shown have been authorized by the regulator that is currently implementing this framework. So definitely, the question of the definition of Online Casino, is not linked to the type of, I would say, digital animation that you can see on those games. It is really linked with the level of payout ratio, which is quite different from the casino game. That is why the regulator, I think, has authorized those games. But again, factually, they're absolutely within the framework, and you can count on the regulator to implement correctly the framework that we are living in the French market.

So on the question for the dynamism of draw games. Maybe I would say that the first reason, and it's true for the past and also for the future, is the fact that we reworked the games, Loto and EuroMillions in the last 3 years. And we managed so that the jackpots are coming sooner and higher. And this is really key because it's really the opportunity for new players to come. And as we mentioned in the presentation, since they are there, it's our job to develop cross-sell and upsell in lifetime value. So the first point is really our capacity to rework regularly the games but it was done recently for Loto and EuroMillions. There's no need to do it again in the future, but the performance is still there and will be there. I would say, as a second reason, we have really decided to focus our commercial investments, advertising on EuroMillions because we really saw that when we increased the advertising on EuroMillions, we increased the number of new players. And I would say, to explain that or to illustrate that today in the European community -- EuroMillions community, FDJ is the best performer this year, thanks to this advertising strategy. Maybe for the instant gap, so Cedric?

Not just [ priced ] instant games. -- it's important to have in mind that we have a lot of mechanics. You mentioned alignment symbols mechanic. But we -- one of our stake on this category is to diversify our catalog like I said before, and we have dignified games. We have classical lottery games with our brands as Loto and some lottery games with skill, too, as we saw it on Wizz.

Thank you. Maybe I can take another question in the room, Yes.

Yes. Sabrina Blanc, Societe Generale. I have 2 questions. The first 1 is regarding the -- the games for good causes. You have mentioned the -- of course, Mission Patrimoine as a good example. But is there any upside behind that? And do you have any opportunities behind that? And the second quick question is regarding more ZEturf acquisition. And according to the press release, it has been mentioned that the deal could be accretive in 2024. Could we have [indiscernible] more colors on the EBITDA and the guidance? And my third question is behind that, what is the upside in terms of cross-selling between the sports betting, the Poker and the horse racing.

Okay. So maybe I will take the first -- your first question, and I will turn to a combination, if I may, of Pascal and Richard to talk a little bit about ZEturf and how we see it. So on good causes game, we have mentioned, Patrimoine, I think it's a huge success, not because it is a big -- not because it's a huge game. It's not -- it does not compare to any of the favorite game that Cecile and Cedric mentioned in terms of stakes. But because it is a very -- it is a very powerful game in terms of link between FDJ, its clients, its retailers, local authorities and public -- French public opinion. So it is probably the best game that we have for that. Again, not because everybody is playing it, not because it's a very -- it's really a game that is concentrated in a certain period, but it has a strong impact on our -- I think on the vision that people have about what FDJ is doing and how it is benefiting its stakeholders. So it is something that is very, very precious. It cannot be, I think reproduced on any cause. So I think this is something quite specific. Heritage is a very specific theme. It is very -- it is shared and very local. So I think that our attitude towards that, and this is the way you have to see it is that there might be another one or other ones, but not many. Again, because it's not something that you can reproduce on many, many causes given the different characteristics that you have to have. And so I have to mention because this is public that there is now a potential new game of this type that could be, I would say, could get a legal basis, but it's not yet done since during the discussion of the fiscal law in Parliament, there was one amendment that was actually approved by government to create a biodiversity game. So we're not at the end of this discussion. We will know January 1, whether it is actually encompass into the law. This is the basis that we would need to do the same type of mechanism as Patrimoine. And again, it's not something that will be as we see a big chunk of stakes in business, but it is very much in the line of heritage in terms of talking in a very concrete way about the way we want to impact and link with society and biodiversity. I think it's fair to say that today, it's something that is very much at the heart of a lot of debate. So that's one possibility. I don't think that there will be many. All this, of course, has to be authorized by the regulator that I don't think will authorize many games of that sort anyway. So that's the way you have to see, sorry to have been longer, but just to explain, and so on ZEturf, I think we -- I'm going to pass to Richard and Pascal. We basically have given you what we can say at this point about what we just signed in fact, last night, during the night, I said during the night, I can testimony that it's -- it is an achievement, a very recent achievement. So we'll -- we have given what we can give, which is the price and our view about how it can be accretive. And of course, we do it to be accretive. I don't know whether Pascal, you want to give more color about this and Richard can say a little bit about on what you already said during presentation about the way -- the positive aspects of -- on cross-selling and churn and how we can build that to make it a very interesting acquisition.

On the financial part, you have all the clues in the press release. We said that the turnover is around EUR 50 million. We said also that it would be accretive on our contribution margin on sports betting and online gaming from 2024. It means that before we will have some integration to do. And then accretive on the contribution margin on sports betting, you have the figures for sports betting, so it's easy to do all the calculations. So basically, you have everything that you need to do your calculations.

Yes. And just 1 thing also to explain why we're talking about 2024 is that we have now to go to the Competition Authority, which has -- which should take roughly 6 months at sort of the average schedule for that type of subjects. And of course, in the meantime, we cannot integrate the asset. So we can prepare and we're actively, of course, preparing that, but we cannot integrate it before the Competition Authority and the -- and our regulator -- by our regulator, I think it will be more in checking that it's okay for FDJ to become the shareholder of ZEturf, which I don't think should be a big question. So if I may, Richard?

Yes. So just one point on the cross-sell. As you know, we've been sport betting -- online sport betting activity without other verticals. So -- and as I said in the presentation, we've put Poker and now horse betting on top of that. The good thing is that there is a lot of cross-sell opportunities here because as you've seen in the slide, our customers are eager to play on other verticals, being Poker or horse betting. And so we will have our customer base. We will make sure that we will create core sale to other verticals including horse betting. And that will provide not only cross-sell, but better customer retention and a lot of better loyalty of our customers. And that's -- you can see that in other operators. So that's really the important part is to create this mix of cross-sell opportunities and the fact that we see our customer base is eager to play another -- and they do, in fact, but not in our...

not with us.

Not with us today, but they will tomorrow. And that's the important point, I think, on that.

Thank you. So I think we should ask questions from the people that are not in the room. So do we have questions?

We did not have anybody at this time ma'am, [Operator Instructions]

Okay. So we can go on with a question in the room if you have some, please.

Hugo Paternoster, Kepler Cheuvreux. I may have just 2 questions on the M&A side. The first 1 is on the reinforcing or the service and activities in POS, what technological bricks are missing at the moment? Or what elements do you see or you can improve in your opinion? The second one is on the possibility to explore new opportunity -- international opportunity. At this moment, are you able to share with us what do you have in the pipe and especially in which countries or which location, if possible?

On the first question, which is what do we miss in our payment and service strategy in terms of technology. I think that's how I got it. I think we -- with the acquisition that we just did with Aleda and L'Addition, we, I think, did acquire what is something absolutely key in this strategy, which is the point-of-sale management system and all the soft and the application that go with it to develop both the management point-of-sales and new services on the basis of the -- of this point-of-sale systems. What we miss, but maybe it's not a question of technology, but more a question of having the right partners is because we are not going to become a payment company. I think we want to provide payment services, but we are not going to become at this point, a payment company. So what we need, and that relates to what I indicated about having payment card in '23 is, of course, the capacity to offer our clients. I'm talking about final clients, a larger offer of payment services, and this will be more done through at this stage, partnership and agreements, if I made this at this point. So we'll see whether we'll have other needs and other opportunities. But I think at this point, we are quite well equipped to do at least what we have described for 2023 and 2024. But we will stay opportunistic in that, of course, in that activity also. For M&A. Well, as you know, it is always -- it is rare to be able to share M&A pipe before it has happened as a general rule, I think -- I think in my presentation and in Pascal's presentation, we have, on purpose, stayed quite large in our view of this market because we don't believe it's a question of one country or one zone, although we say on gaming that it was more Europe. But it's more a question of opportunity coming because you have either new tenders coming, new license, new license that are possible or potential for acquisition. So there is no one country that we aim at. We sort of looking now more actively to the opportunities, we have to create a more extensive and a more substantial international business as an operator because we think we have the capacity to do so. We have sort of tested our capacity in several occasions. And so we are going to be pretty optimistic and looking at what's happening in this market, where actually a lot of things are happening those days. And that's, I think, the -- how far I can go under the control of my colleagues that seem to be okay. Any -- maybe we can start with someone that has not ask a question yet, and we'll come back to you.

Alex Gerard from CIC. Three questions. The first one regarding sport betting. So we understand that your offering has increased over the last 3 years, particularly when you mentioned that the number of bets has increased from EUR 0.5 million to EUR 1.6 million, where do you stand on that metric, for example, compared to your main peers always the same question in terms of market share, are they above 20%? And are you around 6% or 7%? Or the gap or -- is the gap smaller than that? Second question on the Lottery side, you mentioned that the your growth is coming through the number of players, which is increasing on the online part of that. But about the offline number of players, and can we have a feel also of whether the growth is coming from the increase in average spend per player or the number of also offline payers? And my last question is regarding the international development. There is no country at all, more or less the same question, where there are countries will tender spending at the moment. That might be official.

So on international development, I probably -- I don't have more to say than what I just say, okay, again, they are -- it's not that nothing is happening that it's always happening. So there is no one specific situation. I think that I could -- that I should focus on. Maybe on Lottery, so your question is really, do we also have more offline players? And what type of spending, what do we know about the level of spending that they do have. So Cecile will take this one. And we'll come back to sports betting afterwards.

Okay. So I'll begin with your question on Lottery. We have a very stable player base offline of around 25 million players. And they're spending, I would say, 50% more than online. And there are many reasons for that. One of them, for instance, is that when you are in the point-of-sale, it's really easy to buy together several scratch cards and to have a lot of greed and so on. It's not so easy to have this kind of a basket when you are paying online. So this is the main reason.

So on sports betting, I think your question was, can we disclose the share on the sports betting online market. So no, we don't disclose it. I think it's not a new question, but it's not a new answer either. Sorry for that. I think it's fair to say that when we talk -- when we say , which is absolutely true that we have gained market share, what we are still an outsider to the 3 leaders of this market at this point with the Poker and ZEturf acquisition, we definitely aim at being a more -- a stronger challenger to those players. But well, they don't disclose their market share either, by the way. But it is clear that the 3 leaders are definitely above us. But we're now, I think, becoming a strong challenger -- even stronger.

And there was a part of the question, apart from the offering, the question.

yes. Sorry, how do we compare - yes sorry for that. How do we compare our offer on online sports betting in terms of -- to our peers in terms of number of bets and which net of the offer. So Richard, maybe you...

On the online part, we've done a great increase of our offer in the last couple of years. And now seriously, we are on par. So there is no distance between us and the best in class today.

So you want to...

Yes, I had a couple of follow-ups, if that's okay. So firstly, on international, one of your targets is to become a truly international player. What does that mean? And how do you assess it? Is it profit contribution, revenue contribution or just international cloud. Can you have 45 clients in B2B with small revenue and be satisfied or do you want 10% of group profit from international?

We have not set officially a target. But to your point, when we say we want to be truly international operator. It's because that, yes, we have through our B2B expertise we have shown that we have the expertise both Lottery and Sport Betting. But we definitely think that if we want this business to be more significant in terms of margin revenue and margin contribution. We have to give more a global operator of one of those business than just to be in the B2B contract, which is where you have -- of course, you have, of course, some revenue linked to the activity, but you're staying smaller in terms of revenue and in terms of level of margin. So we believe that we have the capacity to be -- to grow in terms of positioning towards that type of operation. And this we did not really try before, we were really again more in answering to B2B offers, which is good and which is, I think, a good asset. But if we want this business to be more significant, and this is our aim, even though we don't give a figure today, that's why we want to seize more global opportunities to be an operator.

So B2C to clarify.

B2B2C -- in the Lottery business, actually, there is a kind of continuity between B2B, B2B2C, B2C. So yes.

And then my last question is on the responsible targets of taking down the share of Online Lottery revenue from high-risk players, so from 2.8% to below 2%. So firstly, it's the first time we see this metric. So it'd be useful to have a bit of context. How big was it before COVID? Has there been a bit of a lockdown impact that makes it dangerous now? Or is it just business-as-usual, but you want to take it down? And how do you take it down? Do you need to remove 1% of your player base or you need to keep all of them, but they need to be educated and spend 30% less with you to be sustainable?

Maybe before letting Cecile answer this question. I think, well, it's first, that type of objective I think is, I would say, in the air. So you will see other operators that would set that type of objective. Why can't we have that type of a hit now? I think we can have it because with the development of a significant online player base, we can measure it in a rational way, measure it and monitor it in a rational way. So I don't think we're going to, again, go back to the past, because I don't think it would make a lot of sense in a way because we are now, I think, at a stage where our digital business is mature enough for us to look at this, to measure it and to, again, monitor it. So that -- I think that's one important point. On the -- so if we give this objective, it's because, we think it's absolutely consistent and manageable, of course, within the type of growth and guidance that we have. So it's -- obviously, it's not that we are going to have to separate from the large base of our customer. So maybe, Cecile, if you want to or Cedric give more flavor there, Cedric?

Yes. Now we are more precise than in the past because we have developed, for example, a predictive model to identify risky players and to frame their behaviors. We have in project to develop other moderators to frame, again, risky players behaviors. And the last thing, which is important is that our development on digital lottery will be on mainly the customer base, for sure. But two, with the increase of the frequency for occasional players, not the frequency or the average stake of risky players.

Maybe Vincent, you can complement on that also.

Yes. Maybe a couple of things in complement. The first thing is that we've been kind of following these metrics for some time before setting up this objective. Obviously, COVID was not really the trigger for us. We've been closely monitoring what was happening during COVID since we had a very important development of our player base during this time. But what we saw in terms of responsible gaming metrics was pretty stable on this. But -- we try to develop a new kind of actions during COVID, for example, proactive calls to be able to call the highest-risk players. But it was not very different between the COVID. But what's important is to be able to keep developing the tools just like Cedric just explained in terms of profiling, in terms of moderating, in terms of calling the highest-risk players. And it's true that we're kind of the -- there's not a lot of lotteries today that are setting this kind of objectives, but we -- there's a couple of others that already do it, but we believe it's the right way to balance the sustainable path that we want to have on Lottery.

Thank you. So other questions in the room? Online?

Yes, ma'am. We do have a question right now. The question is coming from Stephen Errico calling from Locust Wood Capital.

Would it be possible if you could give us an update on the situation with the EU?

Yes, I was surprised not to have any question on this. So I was really waiting for your question. So thank you for asking. As a matter of fact, if I didn't mention it, if we didn't mention during presentation, it's because we have actually no news. So -- but it's always important that everybody knows where we are. So we have been providing, of course, with the French State all the elements that the commission has been asking to us and also answering to the question of the commission and also reacting to what has been said by the -- all the interested parties. So this was mainly achieved actually before the end of the first semester. So after that, we have been clearly eager because we want this to be behind us. We've been eager to -- well, to be in contact with the commission in order to know whether they need more information from us or additional arguments. We did not get any new official request. We might have some additional requests before the end of this year, as I understand. So all this means that we're not going to have a decision before the end of this year, which is, I think, what I already said when we published our H1 result. We're still, of course, doing everything that we can for this to come to a conclusion in 2023. And hopefully, but again, it's not in my hands only, first semester of 2023. So on substance, really have nothing more to say than what I think we've already explained about our arguments. Again, re-insisting on the fact that this inquiry was opened on the level of the equalization payment that we paid, not on the fact that we have exclusive rights or any other issue. And again, we are still waiting for further developments coming and trying to do our best for this to come to a good end. Thank you. So any other questions online?

We do not have any other questions at this time, ma'am.

Okay. In the room? Last chance. Okay. So if there are no other questions, I think I will conclude this meeting at this point by saying that I hope -- well, by first, thank you for attending offline and online. I hope that you have enjoyed our presentation, our beautiful -- in our beautiful studios, and I hope you have enjoyed our magnificent videos. I hope more seriously that you learned some interesting things about FDJ's strategy and execution of its strategy that you are convinced that we are very confident in our capacity to go forward and deliver what we have promised. And also that you have seen with this team, how we are engaged moving forward, innovative with a lot of energy, and I want to thank all the people here to have been very strong and very supporting on this -- for this event. So if you don't have any more questions, I will, of course, give you as a next [indiscernible], February 15, I think, for our annual results. And of course, we'll keep you posted if something else is happening in the meanwhile. So thank you very much, and hope you had good afternoon or morning for some. So bye-bye for people that are online, and thank you for attending this event and see you soon. Bye.