FDJ United (FDJU) Earnings Call Transcript & Summary

Hello, everybody. Nice to have you here in the room and also, of course, online. So we're able to talk to you as -- talk to all of you. I hope that all the conditions are good. So I'm delightful to be here with you today to present our annual results for 2023. I will, of course, be complemented by Pascal Chaffard on this presentation. But I will start to explain you where we are today and why we are very happy with this year and talk to you about 2024 prospects. So 2023 was a good year. It was a solid year. In terms of environment, I'm not going to describe the macro environment that you know. In terms of the factors that have affected in our activity in the past, I could say that this year was quite normal, particularly in terms of frequentation of our retail point of sales. We're sort of back to usual type of presentation. So in this context, we were able to develop our strategic priorities to demonstrate the solidity of our economic model and to start developing by external growth with, of course, the finalization and the integration of ZEturf and PLI at the end of this year 2023. And of course, as you know, we have been announcing on the 22nd of January, the pursuit of this strategy with the announcement of the Kindred acquisition, and I will also update you on that, of course, at the end of my presentation. So to go back to our 2023 results, why can we say that they are solid with good momentum? We had a revenue increase of 6.5%. All-in-all, 2.8% on a like-for-like basis which is including Aleda and L'Addition entirely from 2022. And this is on the like-for-like and excluding the contribution of PLI and the ZEturf, which was only, again, the last part of the year. All our businesses performed well, and I will come back to that. So revenue is up EUR 2.6 billion. Our EBITDA came to EUR 657 million, up 11% with a margin of 25.1% up from 24% in 2022. Excluding what we qualify as non-recurring year-end items our EBITDA margin would have been 24.3%. So very much in the guidance that we have given for this year, actually a little higher than 24% and much higher again, if you look at the margin, all-in-all. Our net profit came at a record of EUR 425 million. It has benefited, of course, from the high level of profitability of EBITDA and also of -- from a very sharp and very positive change in our financial results. Pascal will explain more the origin of this. But of course, it links -- it is linked to the financial market situation in 2023 that we have completely that we have benefited very directly. So on this basis, we're going to be able to implement our guidance for dividend at 80% of the payout ratio, which is, as you know, our guidance is between 80% to 90%. But with an 80% payout ratio, we have a dividend proposed of 1.78% (sic) [ EUR 1.78] per share, which is 30% increase compared to last year. So we think it's actually a good year for shareholders. And we are, of course, very proud and happy to be in this situation. We have -- and I will talk further on, we have continued to implement and develop our responsible growth model particularly in terms of having an extensive and recreational gaming model. We are very proud also of having this year, 27 million player in the definition, which is has played once a year at FDJ. So this is a good sound element to sustain our growth. We have also sustained our ESG commitments. And of course, we have also contributed over EUR 4 billion to public finance, and we know it's also an important part of our model. So responsible growth, as I said, and I won't be too long on that, but just to give you a little more color, it's also the fact that we monitor our portfolio of games towards having less risky games, which, of course, makes them also more sustainable in the medium term. With the launch of EuroDreams, we increased our portfolio of draw games, which is a less risky in our portfolio and also the most digital ones. They are good on 2 sides. We also have implemented the new Amigo formula, which has been asked by our regulator. And of course, the negative side is that the stakes have gone minus 25% for Amigo but also we took this impact since June of this year. We'll be having it until June of this year in terms of comparison base-to-base comparison. But we also hope that -- with that, we have stabilized this game with less risk, which is also good for the medium term. We also are pursuing our commitment, and we actually are -- have been implementing it in terms of limitation of number -- limitation of percentage of GGR generated by high-risk player on our online lottery. This is a commitment that we took to have less than 2%. So we are in that range. We continue to invest in terms of advertising on the basis of voluntary commitment to spend more than 10% of our advertising budget in the campaign for underage limitation -- underage prohibition of gaming and responsible gaming. We use that, for instance, during the Rugby World Cup this year. And we also are implementing our partnership with ARPEJ, which is a pre-annual partnership, EUR 10 million to invest in prevention for -- to minus about risk of gaming. So we continue to be very committed and active on that. We are also -- we continue to sustain and build our extra financial performance. It's important for every company, but it's even maybe more important in our sector. We continue to sustain a very high level of rating from Moody's, particularly in our sector, we are definitely number one. We are also well rated by S&P and by Sustainalytics. We continue to be certified on responsible gaming by the European Lottery Association. We continue to be best-in-class on the Pénicaud index, which is, of course equality -- gender equality. So third year with the grade of 100 on 100. And we built our CSR valuation, again rated by external experts. And of course, this will also grow in the future with EcoVadis and CDP. All this contribute to this extra financial performance, which has to be at the highest level. We also -- and I wanted also to show you what we show actually now every year about our contribution to the economic and societal growth and jobs in the French economy. And the way we share the value that we create with all our stakeholders. So we measure -- we continue to measure our contribution to French GDP and our contributions in terms of jobs created and maintained, particularly in our retail network. So those are the numbers that you see on the slide. It's over 50,000 jobs that are created or maintained because of our activity, particularly in the local retail. As I said, we continue to have our growth aligned with our contribution to public finance with over EUR 4 billion. We attribute our retailers with commission that are close to EUR 1 billion. We have 85% of our suppliers that are French, and we calculate also what this does represent, so EUR 648 million. We also are great believer of the fact that our employees are completely aligned with the performance of the company. And they have -- not only they are at 90% shareholder of the company, but they have also very high level of participation. And [indiscernible] one of the highest level of the company, so they are also benefiting from this. And of course, our shareholders with this dividend that we propose to general assembly. And I remind you that amongst our shareholders, we have close to 15% of the Veteran Association that are our shareholders and that do benefit from this -- from those dividends and invest them in their social activities, which is part of our model too. So to come back to our business, particularly lottery. So on the lottery side, as I said, we have -- we had a solid year. One year which was, as you know, because we commented that a lot during this year, which was a little low in terms of draw games before -- because of our, I would say, bad luck on EuroMillions jackpots. So we had less long cycle with high jackpots of EuroMillions and therefore, less growth and -- less players and less growth on this game. We had also the impact of the Amigo formula that I described. We started to compensate that during the Q4 with the launch of EuroDreams, which was a great success. But we had this, again, loss of luck on EuroMillions. We believe that it does not mean anything in terms of attractiveness of those games, and we have been measuring that including during the Q4 with the special growth that we launched at EUR 200 million. That was a great success, and that also has contributed to a good end of the year. Our instant games revenues have been keeping a dynamic growth with the usual launch and animation of our portfolio of games. And on the online lottery, our growth was only 10%, you could say. But actually, it's interesting to see that if you exclude EuroMillions, which used to be the most dynamic part of this online lottery growth, you actually are over this 10% growth with 17% growth. So it means that, in fact, our online business is growing on a dynamic basis with some, I would say, up and downs due to the impact of our draw games, which are highly digital and therefore, which can influence it both ways, this level of growth. But we are definitely continuing this growth of our online lottery channels, which do represent now 12% of our revenues in the lottery. We had definitely a good year on the sports betting and online gaming part of our business. All in all close to 11% growth, excluding ZEturf, which was only included at the end of the year, it's still over 8%. We had the benefit of the Football World Cup of 2022 beginning of the year, favorable football calendar. But I think more than that, we were able to continue to demonstrate our capacity to gain market share on the sports betting online business. And of course, with now the adjunction of online poker and ZEturf, which is really the way we see our capacity to manage this business. And this has proved very well with the success of our poker offering. We have now 20% of our online sports betting player that are playing poker. And this is exactly what we said we wanted to do, which is to have a complementary popular offer in order to retain those players and better manage their relationship with us in terms of retention, particularly. Just also a word on our distribution channels. Although as I said, we continue to grow online, we are able to maintain positive growth in our point of sales. Of course, they were affected by Amigo, which is only a point-of-sale game. So they were affected by the drop of Amigo sales. There were also little affected by the EuroMillions, I would say, bad luck that we have. But even with that, they were positive, and this is still very solid and positively growing network over 29,000 point-of-sale. In our online business, if you look at it all over the company, it's actually around 13% of all our activities. If you look only at sports betting and online gaming open to competition, we have actually increased, of course, with the acquisition of ZEturf, we have increased that online share of our -- that online business by 35% -- 36% -- sorry, 65%. And of course, the most important thing is, as I said, the fact that this give us the capacity to continue grow our market share in this online market that has already been the case this year. And so we are on a good trend. And lottery, I didn't -- I commented already, 10% all in all, but we believe that we can actually achieve little more than that, if we are lucky. So to -- yes, to comment a little bit, 2 activities that I didn't talk about that we put at this stage in sort of a diversification of our business, of course, very different. One is payment and services. Payment and services, you know that we have started to develop the, what we call proximity payments on the basis of this tender that we won in 2020 with the tax services. So we have been offering in half of our point-of-sales in 2020, the proposal to pay small taxes and a number of local services in point-of-sales. It is actually still growing, and it's growing nicely. It is a success, both with our retailers and with their clients. And therefore, we have started to build, and we've been talking about that already last year, but we continue to build an extension of those payment solutions with Nirio under our own brand. We have signed a number of contracts with social lenders, for instance. And we have started to sign contracts with companies that are managing motorway tools because the system is going to evolve and it's -- we're going to be part of this. So small business, but dynamic growth. And I would say a lot of synergies with the fact that we want to keep this retail network lively with a lot of clients, lot of traffic, that's part of it, too. On PLI, the Irish lottery, so we completed the acquisition beginning of November. They had a good end of the year. We're integrating, so we'll talk more about that when we are on a full year basis because it's only the start, but it's going well. So we are very -- again, we're very satisfied of this year all in all. On this basis, we are very confident that we can continue to sustain revenue growth. Actually, on our, I would say, core perimeter of luxury, sports betting and online gaming open to competition in France by around 5%. And if you add our other activities, international and payment and service, our overall revenue growth for 2024 should be around 8%, which is, of course, very nice. And we confirm on the road to our commitment that we've been taking in terms of EBITDA margin for 2025 that in 2024, our recurring EBITDA margin should be around 24.5%. Pascal will also come back to this point. So this vision for 2024 in terms of business momentum is based, of course, on the full year effect of EuroDreams, which should be positive both for growth and for online luxury growth. It is based also on the fact that we'll have the impact of the new Amigo formula negative impact, of course, on a comparison basis until early June, but half of the year will be on the basis of a stabilization and therefore, no further impact. And of course, 2024 will be the year of the Olympic and Paralympics games. As we know, it's not so much a direct business impact, although there is some business impact. But it's also a very important moment to expose our brand, our company use our network to talk about those games and use our game portfolio to talk about the game. So it will be also part of what we want to do in '24, and we are well prepared for that. 2024 is going to be also a nice year in terms of sports betting event. It has started with -- already with [ calendar ]. It will go on, particularly with, of course, Euro in June. So it's a good year in terms of events. So this, of course, should sustain growth in this business. And in the meantime, of course, will develop and implement the commitments that we have been taking to the French Competition Authority when we acquired ZEturf to more separate our players' accounts and to have, over time, a legal entity that will regroup all our online activities to separate them from exclusive rights on a more, I would say, even clearer base. So that's important because it's important also for our acquisition of Kindred, which, of course, goes in the same direction. So to talk a little bit about the tender offer that we announced for Kindred, probably you know, already most of what we said when we announced it on the 22nd of January. So we announced the launch, which is going to be next week actually of an all-cash recommended offer, one on Kindred, one of the leading European online betting and gaming operator with strong capabilities, iconic brands and best-in-class technology. We have structured this offer -- for this offer to be friendly, so it's been recommended by Kindred's Board of Directors. We benefit from irrevocable commitments from 5 key shareholders that do represent almost 28% of Kindred share capital. And this, of course, has been very, I think, useful, and I think you've seen it in I think driving the comments and the market in the right direction. Because if you look at Kindred's price -- share price on the Swedish market, you will see that it's now stabilized around SEK 122 per share. So the offer is being SEK 130. The comment is that it does represent a probability of 90% to succeed for this offer. So although we've got a quite long time frame for reason that I explained, which are linked to the fact that we need to get some authorization and particularly the one of the French antitrust authority. And we didn't want to put them under pressure. So that's why we said that we need 9 months -- maximum 9 months to complete the offer, but it seems to be well understood and well accepted from the reaction that we saw. So I'm -- I don't think I'm going to comment a lot the reasons why we launched this very transforming transaction. The reason that really it is a major step consistent with our strategy, and it will if it succeeds completely transform FDJ into a new company, actually, I think it's a new company, very international company, of course, larger, so EUR 8 billion GGR, 20% international activities, 29% online, which is also, I think, very significant. Of course, with a commitment that will put in place when we will be in a position to implement it, which is to operate only in locally regulated markets. And we have, of course -- we've been very strong and transparent about the fact that it might lead us to close some markets, and we have -- we completely -- we are completely aware and transparent about that. But with that, we still -- we think it's a very good deal because it will, all in all, give us possibility to have stronger GGR growth, increased EBITDA margin with a very good level of free cash flow conversion because the 2 companies are, we say, on the same type of economic model regards to that. So we sort of combine our positive financial economic and financial structure into that combination. And that's why we calculated that this will enable us to have more than 10% accretion of our dividend per share after, of course, the transaction, of course, with an optimized capital structure for the whole group. So all this, we think, has been very -- again, very well understood. But now we need to first succeed in the operation, then deliver it. To talk about the operations, so I'm not going to go again about the different characteristics of the offer. Just a word about the time frame now. So tomorrow actually is taking place Kindred's General Assembly, which had to be convened to change the bylaws to make them consistent with our threshold of 90% to succeed the operation and go for a squeeze-out and delisting. We already know but it was in our plans that the first general assembly requiring a number of participation that was not realistic for that type of assembly. So we know that we'll have another one on March 15 with no threshold to be reached in terms of percentage of people participating. So no problem with that. In the meantime, that is say, next week, the offer will be filed with the Swedish financial authority. So February 19th and will begin on the 20 for maximum 9 months, hence, the date of November 19, which is, in our view, the maximum time for us to be over this market offer. Of course, we'll see and we'll use everything in our power to be quicker, but we are dependent on, again, authorization, including anti-trust association in France. So we've been cautious about that. And then with that, I hand over with Pascal to talk more about our financial results. Thank you. Pascal?

Thank you, Stephane, and good morning, everybody. Happy to have the opportunity to present those very interesting and good results of FDJ. As Stephane mentioned, our revenue raised by almost 7%. The recurring EBITDA rose more sharply due in particular to non-recurring items that has been already mentioned by Stephane, namely reversal of provision and favorable sporting results for the operators at the end of the year. And it's important to note that without those items, the recurring EBITDA margin would have been 24.3%. That is a comparison basis that you have to take into account to look at our guidance of 24.5%. And we can also say that we are very comfortable with the fact that we will achieve the 25% plus EBITDA margin on a regular basis in 2025. So the other items are all growing as you can see on this slide, and I will comment every element. I will not go deeper -- very deep into the turnover, the revenue that Stephane has already mentioned before. Just maybe to mention the revenue from other activities that have more than doubled. And this strong growth was mainly due to the full year effect of Aleda and L'Addition, the 2 equity acquisition that we completed in 2022 and also the acquisition of PLI completed during the end of the year 2023, and ZEturf, I also have to mention it. On a restated basis, including Aleda and L'Addition a full year basis, the revenue growth of those type of diversification activity would have been 26.5%. Now if we take a deeper look at the EBITDA, it is construct. I don't have to tell you again the big figures that you can see here, just maybe to have the comparison with 2022, the EBITDA margin in 2022 was 24%, and it's 24.3% on a comparison basis -- on a good comparison basis in 2023. First, maybe before coming into every cost items, I would like to highlight the good cost control that we had in 2023 because if we exclude the perimeter effect with the cost base rose by only 1%, which is notable in the inflation context that we all know. So now if we look at the different items, the 2% rise in the point-of-sale commissions mainly reflects the increase of the stakes. The other cost of sales rose by 15.5%. And this is mainly due to the consolidation of Aleda and L'Addition on a full year basis. The marketing and communication spends are very stable at EUR 422 million. It is made of first advertising spending, and they are down by 6.6%. Now they represent less than 1% of the GGR. And if you look at the other part of this big item, it's investment in the offer development. And to recall, it is a design and operation -- operating cost for game and services, but both in marketing and IT, and this item continued to rise by almost 5%, and it's mainly due to perimeter effect. It's a EUR 12 million increase and upon this EUR 12 million, EUR 8 million are related to the acquisition of the 4 acquisitions that we made in 2023 or have an effect on the full year 2023. And lastly, the G&A expenses, they are up, including the EUR 10 million exceptional location to support initiative by association to prevent underage gaming mentioned earlier by Stephane and also a part of the scope effect related to the different acquisitions we have made 2022 and 2023. If this slide now is -- you can see the breakdown of the transition between the recurring EBITDA of 2022 and the one of 2023, and we see the contributions of all the BU, and I will detail it in the following slides. The holding cost increase is mainly due like the G&A to the EUR 10 million allocation to prevent underage gaming and also scope effects, no surprise. On the lottery side, if we look at it a little bit closer, the 1.5% rise in revenue to EUR 1.9 billion, combined with virtually unchanged costs, boost its contribution margin by 30 basis points to 37.3%. The change in point-of-sale commission is correlated to that of network stakes. Other cost of sales are up 3.3%. And it's relating in particular to instant games tickets with a volume effect, but also the price effect due to inflation. And lastly, our marketing and communication costs fell by 2.7% as a result of the reduction in advertising and promotional expenditures. If you look at this subitem, it's almost a decrease of 9%. And on the other side, investment in the development of our offering, which were maintained in 2023 plus 2%, mainly on the digital content part. Now if we move to sports betting and online gaming open to competition, the 10.9% increase in revenue to EUR 518 million, combined with a tight control of the costs explain the improvement of more than 4 points in the contribution margin, which now stands barely at 30% and compared with the 25% in 2022. I have to say there that it's not re-predictable at this level in 2024 as the major part of the non-recurring part of our EBITDA in 2023 is related to sports betting margin. The operating expenses rose by 4.3%. The point-of-sale commission follows the net worth stakes like in the lottery part and other cost of sales rose by 11.7%. It's mainly due to the integration of ZEturf and the full year effect of the poker offer that has been launched at the end of 2022. The marketing and communication costs rose by almost 10%, but only 3.4% if we exclude ZEturf it -- and it's driven globally by the development of the offer, while advertising and promotion remain broadly stable in this area of sport betting. Finally, the group's recurring EBITDA is made up of the contribution margin of the 2 business units, lottery on one side and sports betting and online gaming open to competition on the other side and that of the other activities from which we subtract holding cost. I've just explained the situation in luxury and sports betting. The contribution margin from diversification activities came to EUR 15 million -- plus EUR 15 million, mainly attributable to PLI. And in addition, as announced last year, we have taken measures to improve the profitability of the group's UK operations, which are now close to breakeven in terms of contribution margin, which means that we have totally reached our goal in this area. If I continue and have a look on the transition from recurring EBITDA to the group net profit, the depreciation and amortization totaled EUR 125 million, and they are down -- slightly down EUR 6 million. The non-recurring items represented a net expense of EUR 11 million. It's barely the same figure than the one in 2022, and it refers mainly to M&A transactions. The net financial income was EUR 43 million and as you have probably seen, it's an increase by EUR 71 million if you compare with the loss of EUR 29 million in 2022. And this change is mainly due to the higher level of interest rates in 2023 that remunerate the group's cash whereas in 2022, we suffered from the decline in the markets that had affected the group financial results. And if you recall, we mentioned in 2022 specific product that have led to market-to-market loss of EUR 14 million, and we regained this -- those elements in 2023. We had explained that last year and it has happened exactly as we have mentioned. So if you want to have a vision on what could be the financial results in 2024, you should not take into account this non-recurring item and take also into account that level of cash is a little bit less important in 2024 that it was in 2023 due to the acquisition that we have made. And at the end of the year, we'll have the impact of Kindred, that's another story we will come back later -- to that later, not today. And finally, if we took -- if we take into account the tax charge of EUR 141 million, which implies a 25% tax rate, the consolidated net result is -- was EUR 425 million in 2023, which is a plus 38.1%. So the group cash flow generation has been very satisfactory with a continued excellent conversion of recurring EBITDA to cash of 89%. The free cash flow was EUR 586 million, up 7%, and you see how it is calculated. And I think I don't have to go into much more detail about that. Just maybe mentioning that we have continued to invest, our CapEx are growing a little bit. Our CapEx are mainly focused on IT with, for example, in 2023, a new draw gaming giant that has been rolled out. And also, we have invested a little bit more on -- in our building, notably in the context of the reduction of the carbon emission. And finally, at the end of 2023, the net cash surplus us was EUR 671 million compared with more than EUR 900 million last year. And this reduction is obviously due to the investment that we made on the M&A and to move from the cash and cash equivalent that you can see on this slide of EUR 539 million to the balance sheet to the net cash, we include the term deposits and also deduct the EuroMillions funds that are not available. And we have now an available cash of more than EUR 800 million -- EUR 855 million. And a big part of the, what we call investment securities mentioned at EUR 281 million that made of the bond that I referred a little bit earlier and will be -- again, cash at the end of 2024. And so finally, we have this SEK 671 million net cash surplus that makes us very comfortable to look now forward at the acquisition of Kindred. So now I thank you for your attention, and Stephane and I are available to answer your questions.

So questions, please.

Sabrina Blanc, Societe Generale. I have 2 questions at this stage. The first one is regarding the launch of EuroDreams. I know that you are not providing an idea of the size, but just to understand how it might offset the new formula of the Amigo. And the second question is regarding the legal entity that you have mentioned, separate for the online activities, just to understand what will be online? Is it also a lottery? Is it only the sports betting, but that means sports betting on the point-of-sales? Just to understand the difference and in fact...

I will answer to this one. Maybe Pascal will take your -- so on this one, thank you for asking because I think it's important to be very clear about that. It's really -- as I said, it's a commitment to put in a separate legal entity, the activities that are not a part of the exclusive rights. So definitely, luxury is completely under exclusive rights, both off-line and online. So it's not at all concerned with that. And it means that the activity -- the sports betting activity that we have under exclusive rights in the point-of-sales will be also eventually part of this entity. So this entity is not going to be set in 2024. It's -- the commitment that we have taken is to set it in the next 18 months. So in fact, we are not obliged to formalize it before the end of this year. Of course, in the context of Kindred, we want to, I would say, completely encompass all our activities that are not under exclusive rights. So we'll have to think how we do it and in which calendar, but we are committed to do it in the French market on the activities that are not under the exclusive right in the next 18 months. So 2025 is our deadline. So we'll talk more about this, of course, when we have set our plan. Those commitments were, of course, taken in the context of ZEturf -- acquisition of ZEturf. As a matter of fact, we can say it now, it was difficult to say it before, but we thought that those commitments were going to be useful anyway if we were to go for a much bigger operation. So in their essence, they're not modified. On the contrary, they are even more important in the context of the Kindred acquisition because we have, as you know, to obtain the authorization of the anti-trust French authority for the French activities.

And the second question regarding EuroDreams, EuroDreams is partly offsetting the drop in Amigo, not totally, but when we talk about that stakes. But when it comes about contributing margin, its better. As we have mentioned, this game, EuroDream is also online with quite important part of online, more than 30%. And as you also know, we have a contribution margin that is better on their minds. So if you look at the mix, it's more online than Amigo, which is 100% retail, so it's better. And again, even it's -- if it's just partly offset the drop in Amigo, it makes our global offer more recreative. So it's a good thing at the end of the day, more digital and more recreative.

Johanna Jourdain from ODDO BHF. 2 questions also on my side. So the first one on the separation and reorganization of the activities under monopoly. Just to be understanding, can you use the cash generated through the lottery, for instance, to finance some investments or, let's say, the operating business at the other activities, which are not under monopoly. And second question is a very usual ones regarding the European Commission investigation. Do you have any update to provide us today?

Okay. So on the first one, yes, we are a group, and there is no rule or no jurisprudence that would prevent us from using our global cash at the level of the group to finance all activities. So this is what -- this is clear. On the second one, European Commission, there is no official news today. We are working very hard with the French state that is handling this procedure with the commission to get a decision in the year. That's -- and we believe -- as I think I formally said that the fact that the commission is going to change after the European elections half of the year is a positive factor to come to a decision. So other questions?

Sabrina Blanc again. Yes, I would like that if you can come back on the non-recurring that you have mentioned at EBITDA level. You have mentioned 2 things. First one was a reversal of the provision and the second one, just to understand correctly.

Yes. Yes, we have mentioned that the 25.1% EBITDA margin should be taken on a recurring basis at 24.3%, and it's mainly due to 2 items. The first item is a reversal of a provision with a very old dispute with our former broker agent. It was something that has begun in 2003. So it's a very old thing that has been completely terminated at the -- by the -- at the end of the year 2023. This is one of the part. The major part is what happened on the sports betting activity. And it's not only FDJ, if you look at probably the communication of all the other actors, they have overseen November and December, a very low level of -- very high level of margin for the operator and low level of winnings for the players, and we don't expect that it is -- it would be the case in 2024. It can, but it's not really realistic to forecast the fact that we will have the situation in 2024 in a year with a Euro, for example, which is, in general, more demanding regarding the winnings. So this is the 2 elements. And if we subtract the effect of these 2 elements, we arrive at 24.3% margin, very simple.

Ed Young, Morgan Stanley.

I just had one question on EuroDreams. It's very clear what you said, Pascal, about the contribution and sort of stakes impact this year. But just taking a step back, how big do you sort of dream it could be within the mix of your business? And if I look at the EuroMillions development back in the sort of mid-2000s period, it took perhaps 2 or 3 years for that product to get up to being 30% of your draw games or sort of 15% of the business. Do you think it's similar that you'll meet -- or that you'll have the benefits, I guess, of a multiyear growth to get this up to scale or do you think the fact that the EuroMillions brand is already so well established and you've got EuroMillions players that there could be a sort of quicker ramp to get to the sort of scale you expect it to be?

Yes, we will see in the future what will happen, but we don't expect EuroDreams to be at the level of EuroMillions, clearly. It's a complementary game to EuroMillions also. And we also -- and you're right to expect that it will take also some time to have the full benefit of this game. So it will take a little bit of time to have the full effect. We'll see during the full year 2024, we'll have a first clue about that. But still, it is not dimensioned to be another EuroMillions in terms of global stake.

Other questions? There is a question in the room, I think.

Tatiana Velandia from Stifel. One question regarding your EBITDA margin guidance. This implies like 20 bps increase from today from 24.3%. And you said that you were really comfortable with this target. So with all of the good things going on this year with the full effect of EuroDreams with a low base in terms of EuroMillions and the digital -- the online lottery this time was 10% growth. And without this low -- high jackpots in the year, it would have been 17%. So with a lot of these in 2024 going on, what makes you -- what could make you go like to be more, let's say, positive in the EBITDA margins? Why it is so low?

So very...

Why are we cautious?

No, no, it's not to be cautious. It's to take into account 2 headwinds that we have to face. I'm sorry, Stephane, we said, it's not -- one of those is not a headwind. It's a good thing for the group. And the good thing to the group is what you see on the slide, it's -- the fact that we are in the Olympic Games and a partner of the Olympic Games, it will -- we will invest on this event, Olympic Games, and it will cost in 2024, clearly. But it's good for the brand, it's good for the company. No problem about that. But if you look just at the cost and the result that it will -- that we will gain in 2024, it's an element that will have an impact. The other impact is that we have to fight against the inflation. Inflation is going a little bit lower now, but we have some effects that are still there that we have to fight against. Again, we have -- we did a good job in 2023 to compensate a part of the totality of the inflation. So those 2 headwinds will really be there in 2024. And I said that we are very comfortable in the fact that we will achieve the 25% margin that we promised to you 2, 3 years ago on -- for 2025. No problem. 2024 -- 24.5% is the good assumption that we can have today with good things, as you said, with EuroDreams on a full year basis, but also, again, half a year with the situation of Amigo, which is at minus 25% that we have to face in the first half of the year. So there is some very positive thing and something that are a little bit less positive. But again, when you look at the trajectory, medium term of the company, we are globally in a situation that our profitability is getting higher and higher.

Yes, you have another question?

I don't know if you can give us some details on the cost of Olympic Games because if I'm not wrong, you already spent some amount in the previous years. I don't know what is -- how many bps 10 to 20 bps in the margin or...

I don't think we'll communicate...

I don't think we have indicated precisely the cost, but it's actually -- yes, it's true that we have started to have some expenses, some cost of this on the previous year but on the year...

Mainly amortization of the asset which is the right...

Amortization of the asset which is our -- the cost of our sponsorship with the [indiscernible] the Olympic Committee organization. But in fact, in the year of the Olympics, this is the year where you activate this sponsorship to get the positive impact that you believe are positive on the medium term on the brand, on the exposition on the positive impact of your brand reputation to your players. And this is what is exceptional. This is really -- the other part is just something that we have taken, of course, over several years, yes.

And there is a part of extra costs and a part of the cost that would be focused on the Olympics, a part of our communication will be on the Olympics instead of being towards other elements. So there is a part of a reallocation of cost to the Olympics and a part of extra costs.

Other questions online, because I don't see what's going on online.

Andrew Tam, Redburn.

Just a quick question, just to ask a question in another way about sports results. I think the sports betting revenue growth was 8%. Can you unpack that in terms of getting volumes versus the higher margin of the year? How much of the 8% revenue growth is actually due to the higher margins?

It was difficult to hear you, frankly, no.

I'm happy to see that I'm not the only one that...

No, no, it's not -- there was -- because your voice was -- the sound was really bad on some part of your sentence. Could you -- sorry, could you try to repeat it once?

Sure. How much of the 8% revenue growth, sports betting revenue growth was due to the higher margins.

Okay. Okay, I -- we get it this time. If we -- if you look at the difference between the 25% margin and the 24.3%, it's barely, if I don't say crazy things, EUR 20 million, something like that. And you have a big part of that, that is related to the sports betting. So you can guess what is the part related to spot betting. If I could put it differently, the level of winning that we get from sports betting in the which is a marginal part of the sport betting is under 75% which is very low. And the forecast that we have usually is between 50% -- 75.5% and 76%. This is the good guess that you -- that we can have, for example, making our forecast. So we are something like 75 basis points lower than the minimum that we can guess to make a good forecast. So it has a very important impact. If you look at 50 basis points of difference in the winnings, it's barely EUR 10 million in different -- in the EBITDA margin. So it's quite sensitive. This is why we are taking care. We are looking very carefully at these elements.

And just in terms of the EBITDA guidance, as a separate question, the '24 -- in 2024 are there any updates, or do you still stand by your Capital Markets Day targets in 2025 for the EBITDA margin there?

Yes. What we have said in our Capital Market Day is that we will be over 25%. And what I say is that we are comfortable with this target, and we are in the good path and a good way to go to this target in 2025.

Kiranjot Grewal, Bank of America.

Just a quick question. Firstly, you spoke about 20% of your customers cross-selling into poker, sports customer's cross-selling the poker. Are you able to comment on the change in average spend on those customers? And then secondly, when it comes to your '24 projections, how much of a boost are you expecting from the Euro Cup?

Yes. So on the poker customer, what is happening is that before we had this poker offer, we had a difficulty to retain customers as, if they wanted to play poker, they had to play poker elsewhere. And now when they play poker, they play poker happily on our offer. So it's obvious that we have a little bit increase of the spend of those customers. But if you look at their global spend in the full area of the market, it's really not sure that they have increased their global spend. It's another story, but if we look at the perimeter of FDJ, yes, what we intend to do is to complement the spend of the players in sports betting also to poker. But again, mainly to prevent them to go elsewhere and play poker on the different competitors that we have in this area.

So the second question was, if I understood it, what type of assessment of the activity we'll have on the euro?

Yes. On the Euro, if you recall the -- what we did for the World Cup, we said that the World Cup globally was something like 6% of the GGR of the year. So it's important. It's not totally -- it doesn't change totally the year, clearly. And what is also -- has also to be taken into account, it's regarding the margin. Usually, we have a less important margin on those events. First, because usually, we have a little bit more winnings. And secondly, we invest to recruit new players. So the impact of the euro is in the short-term, not that interesting regarding the margin, but interesting in the medium term because it's a very good occasion to recruit new players and to try to retain them further ahead. So it has to be looked at an investment more than something that has an important profitability as itself.

Other online questions?

There are no further questions, ma'am.

Okay. Questions in the room? No? Okay. And for you, thanks you very much. Nice time for having you here this morning, and we're looking forward, of course, for our further exchange and have a good day. Thank you very much.