Ladies and gentlemen, thank you for joining us for the FDJ conference call. I'll now hand over to Pascal Chaffard, Group CFO. Sir, please go ahead.
Thank you, Clotilde, and hello. Good evening to you all or good morning according to your time zone. Thank you for attending this FDJ Q1 2022 revenue presentation. You might have read the press release that we published after the closing of the market some minutes ago. The presentation that I'm going to comment is available online in the investor section of our corporate website. I will keep this presentation brief to allow maximum time for the Q&A session. We can jump directly to slide three. We had an excellent first quarter of 2022. Our revenue was up 14% to EUR 0.6 billion based on stakes up 10% to EUR 5.1 billion.
This performance is based on a strong growth in point of sales stakes +1 2%, which we are very pleased with. It's true that the comparison basis with the Q1 2021 still impacted by the health crisis was favorable. If you recall, nearly 10% of our network was closed on average, mainly the bars, and a number of shopping centers were also closed during at least part of Q1 2021, and some curfews were imposed nationally. Our performance on the retail network is above all on this quarter due to the success of our commercial and marketing initiative, which have well exploited the return to a normal footfall. Our players have totally resumed their usual gaming habits in a network maintained at more than 30,000 point of sales. Moreover, our performance on online is solid.
Online stakes remain at more than 11% of total stakes. Their slight increase is a good performance compared with a very challenging basis of comparison as Q1 2021 benefited from COVID situation and also from several long lottery cycles, including a record EuroMillions jackpot of EUR 210 million. On Q1 2022, we had zero EuroMillions jackpot, and you know that, high jackpots are an important vector of digital recruitment and activation. Our baseline online stakes reached in Q1 the level of last year's peaks. All this confirms the 20%+ growth trend that we forecast on full year. Our lottery and sports betting activities are both growing with revenue up 14% and 13% respectively. We fully confirm our full year guidance, and you know that, FDJ's financial performance cannot go without extra financial commitments.
We are very proud that for the fourth consecutive year, Moody's ESG Solutions has awarded us the highest sustainability rating, namely A1+. If you move to the next slide four, this slide gives you an additional element regarding our Moody's ESG Solutions rating. With an A1+ rating, FDJ is ranked among the top 5% of all the about 5,000 companies rated by Moody's ESG worldwide. With a score of 72 out of 100, we gained 2 points versus last year's rating and 6 points versus that of two years ago. FDJ ranks fifteenth in the world and first in the Hotels, Leisure Goods & Services sector. FDJ ranks well above the Hotels, Leisure Goods & Services sector average of 32, 35, and 45 out of 100, respectively.
Our 72 out of 100 score can be broken down into 70 over 100 on the E, 74 on the S and 69 on the G. Let's come back to the Q1 revenue and stakes. We are now on slide five. Our revenue increased by 14% to EUR 613 million, with a double-digit growth for both lottery and sports betting. Based on stakes up by 10.2% to EUR 5.1 billion, with a different situation on lottery +15% and sports betting -5%. I will detail lottery and sports betting on the next slide. I have already commented on stakes by channel. U.S. increased by about 12%, precisely 11.5%.
Online stakes increased by 1% versus again, an exceptional Q1 2021. I will also come back to this just on a few slides. Now we are on slide six. Let's have a look at the activity by business unit. First we regard lotteries, revenue increased by 14%, I told you that, broadly in the same proportion as the stakes, which increased by 15.3%. Draw games increased by 9.5% with Amigo reaching a higher level of activity than before the crisis, about -50% last year Q1 2021, but +150% in Q1 2022.
Second thing on the lottery, instant games continued to do very well, +19%, thanks to the success of launches and relaunches during the quarter. Three successes in a row in this quarter. Baraka in January, then Cash in February with a record level of stakes, and finally, 3 en 1 in March. We look at sports betting, the revenue increased by 13.4%, while stakes fell by 5.2%. This situation is explained by the persistence since the end of November 2021, it's more than four months, of a low player payout ratio related in particular to unexpected poor sporting results, mainly in football. Q1 2022 player payout ratio, PPO, is 4 points lower than Q1 2021.
This is good in the short term for the GGR and the revenue, but as the players lose more frequently, they place less bets. In the longer term, this could have an impact on the number of players. Nevertheless, this situation should normalize. We are used to succession of high and low PPO cycles. Our performance compares favorably with other operators that have disclosed their Q1, for example, 888 and Kindred. On sports betting, as for the rest of the market, the key of the year will be in Q4 with the football World Cup, so we will have to wait a little bit. If we move to slide seven, let us now consider for a moment the online activity. Here you can see the quarterly history since the beginning of 2019.
In 2019, the online share of total stakes was 6.5%. The following year, in 2020, it rose to 9.6%, thanks to a very strong increase in online activity at 40%, hence over EUR 1.5 billion in online stakes over the years. The lockdown and curfew linked to the health crisis have been the catalyst for that. We have explained that many times. As we said before, this strong growth was enabled by FDJ's strategic investment in digitalization and the offer and in its IT systems. This momentum continued in 2021 with growth of 42% and some online stakes representing 11.4% of total stakes.
In Q1 2021, this quarter was marked by a very high basis of comparison with a long Loto and EuroMillions cycles and the effect of the health crisis. This is not a surprise. It was anticipated in our forecast except the lack of long cycles in Q1 2022. We are far below average. Nevertheless, despite the lack of long cycles, the level of stakes in Q1 2022 exceeded that of Q1 2021. Thus, Q1 2022 is the second best quarter ever achieved with EUR 575 million in online stakes. A very good performance that illustrates the strength of the online base. As an example, we add in Q1 two times more new players than in Q2 2021. What was once a peak has become the bedrock now.
The comparison basis will be far more favorable in Q2 and Q3, as you can see in the slide. Statistically, we can expect more high jackpots. For example, this Friday, tomorrow, EuroMillions reaches EUR 124 million. This is the beginning of a high jackpot cycle. Again, we are confident on a 20%+ growth in the full year. Given the excellent performance recorded at points of sale, the online penetration rate stood at 11.4% over this quarter, stable year-on-year, which is also a very good performance. If we move to the last slide, and to conclude, I would simply like to express again our confidence in achieving our 2022 objective, both in terms of revenue growth and EBITDA margin, and remind you of our long-term commitment to profitable and sustainable growth for the benefit of all stakeholders.
Before we start the Q&A, maybe a few words on our financial calendar. Our annual general meeting will be held in a few days, on April 26th. It will be our first face-to-face real life general meeting. It will be hybrid, so also available online. Shareholders will be asked to approve a dividend of EUR 1.24 per share for the 2021 financial year, with payment on May 4th. Our next meeting will be on for H1 results. That will be presented on July 28th. Thank you for your attention, and I'm now ready to answer your questions.
Thank you, sir. Ladies and gentlemen, if you wish to ask a question, you may press zero one on your telephone keypad. Zero one on your telephone keypad. We have our first question from Mr. Edouard Aubin from Morgan Stanley. Go ahead.
Thank you. My first question is on the online stakes growth. You said you're still confident of getting to the 20% mark for the year. I think that implies.
Mm-hmm.
High 20s growth from here. I honestly understand the comparison basis is more favorable in Q2 and Q3, but there are sort of lighter quarters for sports betting. Outside of long cycles, is there anything else to bear in mind for why, given it was up 1%, I appreciate your comment about making a bedrock now, but is there any reason why we should be expecting high 20s growth?
For the remainder of the year, or do you expect any Q4 phase into it the World Cup? Or is there anything we should think about in terms of that phase?
Okay, I will split my comment on sports betting and on lottery because long cycle things and so on is relating to lottery and not to sports betting. If I focus first on lottery, yes, we have reached this quarter the level that we had reached last year, but last year was really boosted by long cycles, and this year we had no long cycles. This is why I say I'm confident because the baseline of our activity is 20% higher than it was last year if we take the same level of long cycle.
If you look at the Q2 and Q3 2021, you will see that they are far below the level reached in Q1 2021. Even if we have no long cycles in Q2 and Q3, this is improbable, we will get 20% more growth on those quarters just by doing the same thing that we have done in Q1, and it will be done for sure, because what we have done in Q1 is really the base, the new minimum base that we can do on the online lottery. We are not worried about that.
We will have surely some long cycles in Q2, Q3 and Q4, so this will add some more business for sure. It's statistically probable, at least. Other points, we are working hard on our CRM, on our recruitment, on our gameplay, on our all things, and all that will reinforce month- after- month the strength of our business on online lottery. Really, we are very convinced and very positive about the fact that we can achieve this 20% goal on the lottery online. As I said, we had anticipated a growth less than average on Q1. We knew that this Q1 was not a favorable comparison basis.
It was on our models. No worry about that. On sports betting, it's different. We had a growth in online stakes in Q1 on sports betting online. I spoke about globally, - 5% on sports betting stakes, but it's a little bit more decrease in sports betting offline, and it's an increase, it's growth on sports betting online. No worry about sports betting online. We know that all of the year will be done on the second half of the year, and especially on the Q4.
We will also be boosted in Q4 by the launch of our poker offer, on which we are working, and we announced that we will launch it before the World Cup, and it will be done. This will also help us to achieve our goals in 2022. No worries on lottery and no worries on sports betting.
Okay, thank you. Second question, I appreciate this is a revenue call, but just thinking through one of the things you said drove the strong momentum at the point of sale was the return of the marketing and sales initiatives. We've also got a lighter than average number on online mix, if you like, for the year in Q1. Does that all suggest if we're thinking through to, you know, the H1, H2 split, that might lead to a sort of lighter margin in H1 versus H2? Is that also a fair way of thinking through how the year might look?
It's complicated because I do have the figures of the margin of Q1, but we don't disclose the margin quarter by quarter. What I can say for sure is that we are not late on our current trading on margin on Q1. There is the question of the mix online, offline. Yes. There is also another very interesting point, which is the operational leverage driven by the level of activity, which is very high. Globally, we are on a good trend on our margin, at least to do our guidance.
You know, no worries about the level of margin despite the fact that the split online versus offline is less favorable to online. We do have more higher level of margin on online, it's true, but offline is very relative if you look at the additional contribution of additional revenue. When we make EUR 100 more stakes in point of sale with the same types of products, it's quite very relative, so no worries on the margin on Q1 and on Q2. We don't expect any problem. On the global year, maybe if I can just comment that because I think it will be one of your questions further.
You may ask us about the impact of inflation on our cost base in 2022. Globally, there is an impact, but it's globally very low and totally absorbable at our level. We are protected by contracts that fix the prices of, for example, the tickets and other things like that on all the years. We will not be impacted in 2022 at least, not impacted. We will have some impact, but it will not be seen on our level of margin in 2022.
You've anticipated me well. Thank you. Thank you for that. That's helpful. I guess I'll ask, finally, another inevitable question, perhaps it'll be a short answer, but what if you could tell us if there are any updates on the timing of the European Commission investigation?
We don't have any new information. What we can say is that French state has answered again to the European Commission because French state answered first time in November. The full length inquiry was published. FDJ and the other people concerned have answered to the European Commission by the beginning of the year. The state have the information of what the other people answered and have answered again in April. What we think that could be a good timing is before the end of the year and maybe H2.
We think that it could be H2 2022.
Okay.
to have a decision.
Okay. Thank you for those, all very helpful. Thanks.
Thank you, sir. Next question is from Madame Sabrina Blanc from Société Générale. Madame, go ahead.
Good evening, everybody. I have just one question. It's regarding the AGM and the proposal of resolution concerning the statutory reserves. I would like to understand what's happened to those reserves and what that means potentially in terms of share buyback.
Okay, let's talk about the statutory reserve. This reserve is no longer very useful as it's supposed to protect the shareholders from some bad experience of FDJ, bad level of, for example, statistics, you know, in draw games and so on. But if you look at the situation, we had since the IPO insurance that is protecting us from problems related to counterparty subjects, for example, on Keno or on other games like that. It's no longer very useful.
If you look precisely at the way it has been set, we have the obligation to rebuild this statutory reserve as soon as we use it, so it doesn't. It's no use, really no use. It's something like a little bit less than EUR 100 million. It gives us some room, yes, to be able to distribute this money, or, and it's more like that. For example, if we do some M&A, we don't want to have difficulties to serve 80%-90% of dividend each year.
It gives us some more room to work with the results, because you know that when you do M&A, you may have one or two years to get the cash from the target and be able to distribute the results that have been accounted for on the consolidated basis, but it has to be accounted for on a statutory basis to be able to distribute it. It's more technical than a big thing. Clearly, it's not a way to propose a share buyback. As we said before, we don't have a lot of money to make share buyback.
We now have potentially EUR 100 million more, but we still are committed to use our cash to do M&A than doing share buyback. We gave an interesting positive sign to our shareholders on the level of distribution because we move from 80% to a range from 80%-90%, and we think this is a good way to have this balance between an interesting distribution to shareholders and also the investments and the development of the group.
Thank you very much. It's very clear.
Thank you, madam. Next question is from Mr. Simon Davies from Deutsche Bank. Ma'am, sir, go ahead.
Yeah, hi. Two from me, please. Firstly, I was just wondering, have you seen any signs in the latter part of the quarter of softening demand from consumers given the current squeeze in discretionary spend across Europe? Secondly, you talked about your online poker launch in the fourth quarter. Online poker's been a very challenging product vertical for a number of the other operators. I was just wondering what you think you're gonna do to differentiate yourself, and how material do you think online poker could become, i.e., what would you view as success in this product launch?
Okay. On your first question, we don't see any problem on demand. If I well understood, you were asking if we see some problem on demand on our product, caused by the recent crisis. This is, I have well understood your question. This is,
Yeah.
That?
Absolutely.
We don't see anything to date. It doesn't mean that we will never see nothing. It's really too soon to be too affirmative. What I can say is that our model is an ethical model. We have proved it for the last 30 years. France has faced some economic crises for the last 30 years. For example, the 2008 crisis, worldwide crisis. We haven't seen any impact, no positive or negative, on our activity of those crises. I must say one thing is that in France, those type of crises are a little bit. How can I say?
Soften?
Yes, often because of the welfare state in France, if I can put it like that. We did not really, in the last 30 years, suffer from a very deep crisis in France. No deep economic positive cycles on the contrary, but this kind of cushioned crisis, I can say, is what we have faced in France since 30 years. If we have to face those kind of crisis, we know that our model is very resilient to that. Our model is resilient because it's a very large number of players, 25 million, that play low stakes. This is very different lottery from gambling from other types of gambling.
If we had at the moment of the 2008 crisis looked across Europe to the consequences of the crisis, it is true that lotteries resist far better than other types of actors with higher stakes, less players playing higher stakes. We are quite positive because we know that we are resilient. What we don't know to date, and it would be foolish for me to say that we can resist to anything, we don't know what we will face, and I cannot say that we can resist everything.
We know that the crisis that we are facing in France for the last 30 years, we have no impact on our activity. This is, we think, a very good thing for us. Maybe the kind of effect that we can have is two kind of consequences. Maybe I can comment it. One is the consequences of purchasing power. This is why, what I commented. The other that you can ask us is the impact of the inflation on business. If I explain it, we cannot raise the prices of our tickets.
It's not very easy to raise the prices of Cash from EUR 5 to EUR 5.5. You can-
Yes.
I think that we are not very easy to adapt our product. This is not true because what our customers are doing, they are buying a basket of products, so they can arrange their basket of products first. Second thing, we have a large range of products from less than EUR 1 to EUR 15, and they can choose the kind of product that fits them the most. This is why, since several years, the core price of our instant tickets is now EUR 5. It was EUR 2, 15 years ago.
It can move now to EUR 10 if the inflation is there, and we will adapt by launching a product with higher price point. On the sports betting, there is no problem because you choose your bets. No problem. On the draw games, no problem, because it's very rare that you buy only one grid. You buy a number of grid. You buy a number of two euros. The average number of grid bought is 3-4. This also can adapt. We don't have any big problem of adapting the prices. It will be quite automatic. Great. That's very clear.
What would you view as success in terms of the launch? Sorry, the poker. Okay. Yes. To be clear, we want poker to be an add-on activity to the sports betting. What we think is that it's mandatory to be an actor in the French market to offer more than one activity online. It's mandatory because this is a demand from the players. This is a condition for a player to choose our platform as its main platform.
If we don't have any poker or betting, it's a problem, but it's less important, but poker is a problem not to have it. We are the only actor which has not poker in its offer in France. This is why we are doing this move. We are doing this move not by investing a lot in a poker platform. We will connect to a B2B poker platform already present in France and which have already a number of player. We will not operate directly. We'll operate via our supplier. There is no risk, no important, no financial, no operational risks for us.
It will be just a cross-sell between sports betting and poker. We don't have big expectations on the level of market share that we can have on poker. It's really the fact that we want to propose our sports betting player the capacity to play also poker, to better retain our player on our platform, and also to upsell their spending on our offer. Those things are important for the economics of the activity. Does it answer your question? Yes, absolutely. What platform are you moving on to? We haven't disclosed it yet.
We will do it, I think, at the moment when we will do the file for the ANJ. We've asked a license for the poker. We'll do it at this moment, I think. Maybe end of H1, but we have not disclosed it yet. What I can say, it's a very well-known platform internationally. The question for us was not to take any unusual risk on this activity. Great. Thank you very much.
Thank you, sir. We have no other questions. Ladies and gentlemen, I would like to remind you that if you wish to ask a question, you may press zero one on your telephone keypad. Zero one on your telephone keypad.
It seems there's no further questions. Maybe, Pascal, if you want to conclude the call.
Yes. Thank you for attending this call. I think you are convinced that we have very good performance in this Q1. We will do, I hope, the same thing in Q2, and we will speak again at the end of Q2 to disclose our H1 results. I hope and I'm positive that they will be very good and very positive for the group. Maybe you will connect to the general meeting on April 26th, or I say see you at this event physically or digitally.
Goodbye, and thank you very much for your time.
Ladies and gentlemen, this concludes the conference call. Thank you for your participation. You may now disconnect.