Stéphane Pallez (FDJ United) : "Aujourd'hui, c'est un bon point d'entrée sur l'action FDJ !"

Good morning.

So, they may have been sales but the stock price increased, there you go, and I think that because there are a few figures missing in your presentation which otherwise is obviously entirely fair, that it's also a year where we generated our record cash flow. Free cash flow. Well, you know it's important, 900 million, 800, I don't have the exact number in mind, almost 800 million of free cash flow, so 87% of EBITDA converted into cash flow, which obviously is fundamental for a company, especially a company that is accustomed to distributing a dividend permanently and increasing it to its shareholders. And moreover, if I take it between 2019 and 2025, we increased our revenue by almost 2, we increased our EBIT beyond 2, we increased our cash flow by 2.6 and we increased our dividend by 4.6 times. So there you go, so we are in reality and I will explain later why this year was difficult because we are fundamentally a growth company.

So it's a year of transformation because behind these results, an enormous amount has happened, which is the creation of this large European international group which is FDJ United and in which we have put extraordinarily important things for the future of the group and for our future results for the return to growth. So why didn't we have revenue growth this year? And for a quite simple main reason: a large part of what would have been revenue growth went to income for the states and notably the French state. There you go. So it's factual, it's quantified, and it's the 2025 finance law which increased social levies on gambling.

I did a little digging, well look, ah well it's 50 million euros in 2025 and in fact, so there is the French part and there were also tax increases in other markets where we are. So the finance law already costs you 50 million euros, the finance law, on corporate income tax, on tax, no it's not corporate, no it's really the impact, 15% tax? No, no, no, sorry, it's the impact of the increase in levies on gambling, so I in this I do not count, if I may say, what is part of the general corporate tax increases that I pay otherwise. So there, I am specifically talking about the increase in specific levies on gambling, including indeed the advertising tax, but the main thing is that we had an increase in the specific state levy on gambling in France and also in other countries. So 50 million in 2025 and as part will apply over a year 2026, that will make a total of 140 million that we will absorb in 2026. There you go.

I am an international group, so I speak all inclusive, so 140 million. So that is still quite fundamental because in fact it is unprecedented in recent years, especially since FDJ has been a listed company where the tax framework had remained stable and moreover for the greatest good of the state since in fact the state has benefited enormously from FDJ's growth and the best model for the state is indeed the levy on a stable base relative to growth since between our IPO, finally between our stock market listing and today, the state has received more than, well, 1.5 billion more than what it received in levies each year.

So the French state collected around 3.5 billion at the time of the IPO and this year 3 billion. There you go. No, but it's important or not, I'm tired [laughs] but yes, so 3.5 billion per year absolutely, so there it's not dividends, it's really the levies on French state gambling and this year we had, if I may say, the satisfaction, at least one satisfaction, which is to pay more than 5 billion to the French state in levies. There you go. So the main beneficiary of FDJ's growth since the IPO. It happens that the French state in 2025 decided to increase the CSG rate on gambling. Overall, it was not a very good deal for it because elsewhere, obviously it had repercussions on our value, as our shareholders have seen, or we gain on one side, we lose on the other. So what is the best model for shareholders and for the French state is stability and growth of the company, and that is what we aspire to continue in the future.

Come on, I have given you the group's global figures. We are not going to do it market by market because otherwise it would take us a long time to understand what happened.

So firstly, fiscal measures, we talked about it, so the 50 million in 2025, 140 million in a full year globally and there will be a little more coming from announcements in the UK which will be in 2027. So that, well, that's what we are seeing, states all seeking to increase their revenues and in their trade-offs have also tended to apply these tax increases.

Yes, that's it. Yes. Yes.

So fiscal, there you go, it consists of increasing the level of levies in a number of countries and particularly in the Netherlands. So in the Netherlands, it was announced at the end of 2024, so we've known it for a long time. In the UK, it was announced at the end of 2025 if I may say. It's the last significant announcement on an important market. So that's fiscal and all these figures are fully integrated into our 2025 results for those we knew and into our 2026 outlook which we also announced. So that's fiscal.

Then, something was added that is indeed important in our sector since we have a regulated sector in which we have regulators country by country that determine the conditions under which we sell an activity that is a risky activity. That is part of our business and which especially in the Netherlands decided to limit in an absolutely drastic way the amount each player can play, unless they demonstrate that they have a financial capacity that allows them to play more. So in principle why not, I was going to say, in principle that we must limit risks on how it was done. It was, by the admission of the Dutch authorities themselves, not very well done since it was done in such an impossible way for operators to apply that the main consequence is that the legal market decreased by 25% and the illegal market increased, and so in the end the Dutch state has less tax revenue on gambling than before doing that. Of course.

It's a part of our activity, online betting in competition, which itself represents about a quarter of the group's activity and so it's part of our portfolio of 10 countries. So in fact, it's quite small overall, but since it's an activity on which we had rather growth prospects because it's an activity, online betting, which has a stronger dynamic than lottery which is more mature. Obviously, that capped our prospects. So 2025 is indeed the result in terms of figures of what we commented on and the fact that we had a year of revenue decline, which is not the habit of FDJ and which is not my intention for the coming years. So it is indeed a year where our growth was absorbed by fiscal measures; 2025 will remain exceptional.