FDJ CFO dismisses monopoly fears over Kindred Group acquisition
Pascal Chaffard claims Winamax and Betclic will remain the dominant players in the country as rumours over the removal of Unibet from France also rubbished
La Française des Jeux (FDJ) CFO Pascal Chaffard has dismissed concerns the firm’s acquisition of Kindred Group could trigger competition issues in France as he insisted the transaction would go ahead.
Speaking as part of the FDJ’s analyst call following its H1 results yesterday, 25 July, the finance chief was bullish on his projections that the French authorities would give the go ahead for the purchase.
FDJ has confirmed the final regulatory step needed to complete the deal is approval from the French Competition Authority (ADLC), which the operator notified of its acquisition plans on 14 May.
The business has also moved to further differentiate its monopoly lottery arm and sports betting division, within which Kindred would be housed when the transaction completes.
The measure comes after pressure from third parties suggested that if FDJ was to acquire Kindred, it would lead to a stranglehold on the market.
However, Chaffard pushed back against such claims and insisted that even when Kindred is acquired, FDJ will only be the third largest online gambling firm in France.
The CFO noted the group already has separate customer wallets in place for its lottery and sports betting arms as a key effort to put distance between the two verticals, a measure also necessitated after it acquired horseracing operator ZEturf last year.
He said: “When you add Kindred, we will still be below 25% market share. We will still be third; far behind Winamax and Betclic, which have more than 30% market share each.
“If you look at poker, we have a market share of 10%, whereas Winamax is more than 60%. We will still be a challenger in horserace betting activity with something like 20% market share compared to 75% market share for PMU.”
Bosses also went on to dismiss suggestions that FDJ could fold the Unibet brand in France as a concession amid concerns over monopolisation of the market.
FDJ’s head of IR Marc Willaume said: “There are a lot of things which are being said regarding the fact that maybe among the remedies, there could be a disposal of the Unibet brand in France. To put it bluntly, this is totally false.”
The deal for Kindred, which values the Unibet and 32Red parent company at £2.1bn, is expected to complete by 19 November.
In terms of H1 performance, revenue increased 11% against H1 2023, from €1.3bn (£1m) to €1.4bn.
Lottery drove that growth, with the vertical producing a little over €1bn in revenue, up 5% YoY, while sports betting returned revenue of €294m, up 14.5% from €257m in H1 2023.
However, FDJ said predictions for Euro 2024 “fell short of expectations” but revenue was bolstered by favourites failing to win.
The group’s payments and international operations division reported revenue of €129m, up 72.9% from €75m, as Premier Lotteries Ireland performed well for its new parent company.
EBITDA came in at €370m, up 23.5% YoY, as operating profit landed at €265m.
FDJ added that if Kindred had been acquired on 1 January, H1 revenue would have hit €1.9bn while recurring EBITDA would have come in at €490m.
On 2024 outlook, FDJ management reiterated its existing objectives of around 8% increase in total group revenue, with 5% revenue growth in France.
Bosses added the full integration of ZEturf and Premier Lotteries Ireland should also see recurring EBITDA margin hit 24.5%.
Touching on the H1 performance, FDJ CEO Stéphane Pallez said April, May and June continued the “positive trend” seen at the start of the year.
She said: “This solid performance confirms our annual targets. In addition, we hope to finalise the acquisition project of Kindred in the near future, thereby marking a major new step in the group’s development, both internationally and in our online sports betting and gaming activity, to the benefit of all our stakeholders.”