FDJ UNITED's "Play Forward 2028": A Blueprint for Sustainable Growth in Responsible Gaming

FDJ UNITED, the European leader in regulated gaming and lottery, has positioned itself as a pioneer in balancing financial ambition with environmental, social, and governance (ESG) leadership through its "Play Forward 2028" strategy. By marrying aggressive revenue growth targets with commitments to reduce harm and advance sustainability, FDJ UNITED is redefining what it means to be a responsible operator in an increasingly scrutinized industry. Here's why investors should take note.

The Financial Engine: Growth, Margins, and Dividends

At the core of FDJ UNITED's strategy is a dual financial target: 5% average annual organic revenue growth and a recurring EBITDA margin of over 26% by 2028. These goals are achievable through three pillars:
1. Digital Expansion: The company aims to drive 20% of French lottery revenue online by 2028, up from 15% today, while its online betting division targets top-3 market positions in seven of its eight European markets.
2. Operational Efficiency: The rollout of its proprietary Kindred Sportsbook Platform (KSP)—a unified tech backbone for all European markets by 2026—will generate over €50 million in synergies by 2027, reducing costs and boosting margins.
3. Debt Discipline: FDJ UNITED maintains an investment-grade debt profile, with a net debt/recurring EBITDA ratio capped at ≤2x, ensuring financial flexibility.

The dividend policy further reinforces shareholder appeal: a minimum 75% payout ratio of adjusted net profit ensures consistent returns. This is critical in an industry where cyclicality and regulation can disrupt cash flows.

ESG Integration: Reducing Harm, Boosting Trust

FDJ UNITED's non-financial commitments are as ambitious as its financial ones:
- Responsible Gaming: Revenue from "at-risk players" (those exhibiting signs of gambling harm) is being actively reduced, with France's share already falling to 1.0% of online lottery revenue in 2025—below the 2023 rate of 1.8%. Proactive interventions, such as automated alerts and restricted access, are key tools.
- Social & Environmental Contributions: By 2030, FDJ UNITED aims to allocate 5% of net profit to social/environmental causes, up from 2.7% in 2024. Initiatives include €5 million invested in reforestation via the Averrhoa fund and support for heritage preservation through games like Mission Patrimoine, which raised €26 million in 2024.

These efforts align with tightening regulations (e.g., EU Digital Services Act) and growing consumer demand for ethical operators. By addressing harm prevention and sustainability head-on, FDJ UNITED mitigates reputational and regulatory risks while positioning itself as a partner of choice for governments and communities.

Strategic Moves: Technology as a Competitive Moat

The KSP platform is the linchpin of FDJ UNITED's strategy. By consolidating operations onto a single architecture, the company achieves:
- Scalability: Faster entry into new markets, such as Germany and Spain, where it aims to leverage localized marketing and real-time analytics.
- Cost Savings: Reduced reliance on third-party providers (e.g., Kambi) and streamlined compliance across jurisdictions.
- Customer Engagement: Personalized rewards and in-play betting enhancements drive retention and loyalty.

The FDJ & Moi omnichannel program, launched in Q1 2025, further unifies online and physical sales, enabling 25% of players to be identified and engaged digitally by 2028. This integration not only boosts data-driven decision-making but also reinforces responsible gaming by tracking player behavior across platforms.

Risks and Mitigation

• Regulatory Headwinds: Tax hikes in France and the Netherlands have already impacted near-term revenue (e.g., a 41% drop in Dutch revenue in 2025). FDJ UNITED counters this with cost optimizations and diversification into lower-regulated markets.
• Technological Execution: Delays in KSP rollout or platform glitches could disrupt margins. However, the successful migration of 32Red in early 2025 and the 2026 deadline suggest strong execution discipline.

Investment Thesis: A Leader in Long-Term Value

FDJ UNITED's "Play Forward 2028" strategy is a masterclass in sustainable growth. Its dual focus on financial discipline (5% growth, 26% margins) and ESG leadership (risk reduction, 5% social contributions) creates a moat against competitors lagging in either area. With a dividend yield of ~4.5% (based on current payout ratios) and a balance sheet that prioritizes investment-grade stability, FDJ UNITED offers both income appeal and capital appreciation potential.

Investors should consider:
- Buying on dips: Short-term regulatory pressures (e.g., Dutch tax hikes) may create entry points, but the long-term trajectory remains robust.
- ESG alignment: Institutions seeking exposure to regulated gaming with strong sustainability credentials will find FDJ UNITED a top choice.

In an industry where ethics and profitability are increasingly intertwined, FDJ UNITED's strategy isn't just about winning markets—it's about winning the future.

Disclaimer: Past performance is not indicative of future results. Consult a financial advisor before making investment decisions.