Hello, welcome to the FDJ Half- Year 2023 Results Call. My name is Jess, I'll be your coordinator for today's event. For the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star one on your telephone keypad to register your question at any time. If at any point you require assistance, please press star zero, and you'll be connected to an operator. Please note, this conference is being recorded. I will now hand you over to your hosts, Mrs. Stéphane Pallez, CEO, and Mr. Pascal Chaffard, Executive Vice President in charge of Finance, Performance, and Strategy, to begin today's conference. Thank you. Hello. Hello, everybody. Good evening, ladies and gentlemen. I'm Stéphane Pallez, Chairwoman and CEO of FDJ Group, and I'm with Pascal Chaffard, as he presides, Executive Vice President in charge of Finance, Performance, and Strategy to present our H1 results. This presentation, of course, is available online in the investor section of our corporate website. I will start with the presentation, and Pascal will follow to present more precisely our financial performance. To start with, I want to qualify those results are solid results, and also talk about, of course, a major event for us, which is the acquisition of Premier Lotteries Ireland. On our results, they are solid. The group generated revenues are at EUR 1.3, up 60% versus H1 2022, up 4% on a like-for-like basis, which means including L'Addition and Aleda in the 2022 basis. Our overall level of activity has been good. It could have been better for draw games, which I'll come back later on, but still good growth. Second, recurring EBITDA amounted to EUR 300 million, representing the 20.3% margin. Actually, I want to draw your attention to the fact that this, our expenses on the half year include a one-off EUR 10 million allocation for program to prevent underage gambling over the next five years, that we take in one shot. Excluding this one-shot impact, the margin would have stood at 24%. Our net profit came to EUR 181 million. It is 30% up, thanks to a sharp improvement on our financial results, taking into account, of course, the rise in interest rates, positive for our cash balance and a more favorable market environment. In 2023, we expect a reported revenue growth above 5%, above 3% at constant perimeter, with a recurring EBITDA margin maintained at around 24%. We will also, and I will come back to that, continue to strengthen our CSR commitment. We have just, as I said, announced the signature of an agreement to acquire Premier, PLI, Premier Lotteries Ireland, the operator of the Irish National Lottery, which is, of course, a major step in FDJ international development. To come back in our business momentum, I think we recorded solid growth in most of our businesses with particularly for sports betting, double-digit growth across both distribution channels. We are still waiting for the Q2 online market figures that have not published yet, we believe that we outperforming the market for several quarters, which we are very proud of. A nd we also, very pleased that, our point of sale, business has also, outperformed the market growth over the last, quarters. We also had a good, mid-single digit growth in instant game, stakes, despite a high, H1 2022 comparison basis. T his is sustained by the very successful relaunch of, cash in February and successful launches of other, instant games, such as Carré Or, Club Color, or Numéro Fétiche. S o the only point that was, a little weaker than, we have, expected, is, Loto and EuroMillions, stakes that have been falling a little bit short of our expectations. I t's not the case for the baseline, on the, on stakes. Loto and EuroMillions draws continue to rise by mid-single digit figure in H1, which clearly show that those games have a very good appeal for our players. The semester, and particularly Q2, was affected by a lower number of high jackpots. You know that those high jackpots do affect the operator in terms of growth and also in terms of the levers that we have to develop our digital activity. Those are jackpots that we're talking about are those that are exceeding EUR 8 million for Loto and EUR 75 million for EuroMillions. They either come from out a series of unwon draws or are linked to natively high jackpots that we manage within the EuroMillions community, and which start at EUR 130 million. We were not lucky on this, particularly in June, when the last EuroMillions jackpot, which started at EUR 130 million, was immediately won. Good for the player, not so good for the operator. This impacts the half year growth by almost 1 point. Also, as I said, weigh on the momentum of digital stakes since, as you know, high jackpots are very powerful recruitment lever for recruiting online players. That, of course, we do also transform into players that not only play those draw games. So we lack this lever, particularly at the end of Q2, which can happen, but it is significant in this quarter. Also, early in June, we have relaunched Amigo, our point-of-sale game with successive draws, with a new formula that has been asked by our regulator. This new formula is more restrictive in terms of reduction in the number of draws that have to be suspended. I'm not going to describe all the modalities, but have to be suspended for 15 minutes every hour. Also that has been affected by the reduction of the maximum amount per play, which is now EUR 8 versus EUR 20. We have of course had some first impact of this. This was again, relaunched early June. The decline in Amigo stakes is broadly in line with our forecast, but it will of course continue to impact the second half of the year. All in all, these are the main drivers of our growth. With that, our online stakes grew by 13% overall, with a good activity at the point of sale, with stakes up 3%. That's the basis for our growth in this first half. Based on this first half that I just explained, and the full impact of the new Amigo formula that we can expect on this basis for second half. We are now expecting on the full year, our revenue to grow by more than 5%, all in all, and by more than 3% on a like-for-like basis. We, of course, maintain our objective for the current EBITDA margin at around 24%. We have started, as we have explained in the first half, to implement operating efficiency measures, in particular to offset the impact of inflation on our cost base. These measures will be continued and stepped up in the second half of the year to be in line with our EBITDA margin objective. In the meantime, we have continued, because it's also part of our business model, to strengthen our CSR commitments. I've been already talking about the increased support that we're going to pay for the prevention of underage gambling, which is a very important subject on which we want to contribute. We have this special exceptional allocation of EUR 10 million over the next 5 years that we have now committed to, and which will start to be operational during the second half of the year. Our foundation is continuing its work. It has celebrated its 30th birthday. Since 1993, the FDJ Foundation has helped more than 300,000 beneficiaries, in several aspects, education, inclusion, and so on. With a very measurable social value impact. We are also quite committed and keen on the result that we have on our environmental strategy, and particularly the A rating that we got on the Axylia Carbon Score, which has been renewed. Also the fact that we are amongst the 40 companies in the SBF 120 with the best Carbon Score, recognized by an A on the Vérité40 Index. I will now maybe to say a few words about our new international adventure with the announcement of the signature of the agreement to buy PLI. W hen we had our Capital Markets Day in November 2020, we have been stating clearly that after being active for the last years, mostly through B2B strategy and contracts, we are definitely convinced that we had to expand our international strategy to become, if possible, a B2C operator in lottery or in sports betting, depending on the opportunities that we could find. We have, during the last months, been screening opportunities and looking at the one that were available and interesting. We've been part of the process that was launched by OTPP, which is the current owner of the operator that manages the Irish National Lottery. We have been part of this process, and we have been chosen as the winner of this process, which has just been signed, actually, today. The Irish National Lottery is the lottery operator that was privatized in 2014 with a 20-year license then valid until November 2034. It was awarded to a consortium led by OTPP, a Canadian pension fund, together with An Post, which is the Ireland National Postal Service. This operator operates the lottery under exclusive rights in the Irish market, where 76% of adults are playing a lottery game. It has 200 employees. It offers a range of around 45 games available through a diversified network, 300 point of sale. As well as online, with over 15% digital stakes. Draw games in Ireland make up for two-thirds of the stakes, and instant games are one-third, and 65% of its GGR is given to good causes through 4,000 charitable organizations. PLI has reported a GGR of EUR 399 million and NGR of EUR 140 million, with an EBITDA margin that is very similar to FDJ. We believe that this acquisition is, of course, a very important step in the deployment of our international ambition. We believe that the Irish market is both well-regulated and dynamic. We know quite well the Irish National Lottery because it's a well-known partner, particularly in the EuroMillions community. We share a lot in common in terms of ESG commitments and good causes funding. We believe that we have a very interesting opportunity to work together within FDJ Group to, of course, build further the value of this asset within this framework. The completion of this transaction is, of course, subject to standard conditions, including approval by the Irish Regulator of the National Lottery, which is expected to take place in the second half of 2023. I will now, at this point, pass the floor to Pascal, to comment further our financial performance. Thank you, Stéphane, good evening, everyone. I will now come back, yes, to our key figures for the semester, which up to the recurring operating income are compared with the first half of 2022 reported, and on a like-for-like basis, like Stéphane said, including La Française des Jeux on a full-year basis. Our revenues are up 6.3% versus reported. showing the positive impact on our growth of our diversification strategy and 3.6% growth at constant perimeter. Also, as mentioned, as Stéphane mentioned, the low number of high jackpots on Loto and EuroMillions has limited the business growth by almost 1% in the first half of the year. Recurring EBITDA, i.e., recurring operating income, adjusted for depreciation and amortization, amounted to EUR 300 million, representing a 23.3% margin. Exclusive the one-off impact of EUR 10 million for a 5- year responsible gaming program, already mentioned, it would have been 310 and 24% margin rate. Last year, adjusted H1 EBITDA margin was 25%, but in the context of a low sports betting PPU level, normalized on H2 and lower cost on H1 2022, saved for World Cup on the second half of the year. Reported net profit rose nicely by 13% to EUR 181 million, and the net cash surplus is of EUR 941 million, an increase of EUR 41 million compared to end December 2022. The definition of this metric has been slightly adjusted, and I will come back to this later. Let's now look in more detail at performance by business. Lottery sales rose by 1.3%, driven by a 2.3% increase in stakes. The momentum was good in instant games with a 4% increase. Wide draw games, as it has been said before, were down 1%, and they reflect the low Loto and EuroMillions high jackpot level of semester. It's a decline of about 10% in draws and more than 10% in stakes related to high jackpots. What it is important to note is, as said Stéphane, the fundamentals of these games have not been disputed, with stakes of what we call baseline draws up mid-single digits. The digital penetration of Loto plus EuroMillions and once more increased, it's now 24%, it was 22% before. Finally, as these games have a high stake-to-revenue ratio, the reduction in their relative weight explain the gap between the growth in stakes and the growth in revenues. As regards to Amigo, we launched at the beginning of June with a revised formula in response to ANJ, the regulator, request. The decline, as Stéphane said, is in line with our forecast, but the impact on the game itself, is in line with what I've just said. However, the carryover stakes that has been estimated, particularly on instant games, is slightly lower than our forecast, and it will have an impact on the global year. In sports betting, also, as it has been said, the business was very satisfactory this semester, with revenues up 10% on the stakes, which increased by, based on stakes, increased by 13%. Both point of sale and digital have well- performed. As Stéphane mentioned, the Q1 growth is higher than the market. It's three times higher on the when we compare the growth on the online and the market online, slightly above on the when we compare the pace of the online market and the figures of the offline market, offline activity of FDJ. The price payouts regularly normalized in Q2 compared with the high level in Q1, as we announced during the Q1 communication. Nevertheless, on the whole semester, it was slightly higher, 80 basis point than H1 2022, which was, if you remember, particularly low. Business growth benefited from the momentum generated by the World Cup, as we said, during Q1, but also with a more extensive football calendar, with some league matches being postponed until 2023. Finally, regarding our poker offer, launched at the end of November and completed in January, the results are very good and even higher than our expectations. Today, around 20% of ParionsSport en Ligne players also play poker up versus end 2022 level. Revenues from our adjacent activities have grown by almost 14% on the semester, and we will see that in a minute, the profitability has improved with a positive contribution margin. Now let's move to the EBITDA. It amounts at EUR 300 million, as it was said before, a margin of 23.3%, and 24%, if we take into account the one-off impact of the commitment to the prevention of underage gambling. Our main OpEx items now, cost of sales comprises retailers' remuneration. It amounts to EUR 493 million, in line with previous stakes growth, other cost of sales, which increased by 6.5%, this increase reflects the impact of inflation, for example, on our scratch card tickets and the bet slips, the transport, etc. Marketing and communication costs were stable. They include, if I may recall, cost link to the development of games and services offering, notably digital, which continue to rise, advertising and communication costs, which are decreasing, -EUR 7 million. G&A expenses mainly include personal costs and central functions, as well as building IT infrastructure costs, etc. Their increase takes into account the EUR 10 million of the prevention of underage gambling already mentioned, as well as inflation. To achieve our full year 2023 margin target of around 24%, stable compared to level of 2022, with a restated H1 2023, we expect G&A to remain stable in H2 2023, in particular, compared with the high H2 2022 basis. More generally, as clearly as already explained, we have to compensate the full year impact of inflation, which is actually closer to EUR 50 million versus the first estimate of EUR 40 million. Those extra costs are, and will be offset through operational efficiency measures and cost savings. Now, you can see on this on the next chart, on the left, you will find the EBITDA breakdown by business. For lottery, both the margin and the margin rate are virtually stable compared with H1 2022, at EUR 349 million, and 36.4% respectively. For sports betting, the contribution margin was EUR 74 million, an increase of EUR 6 million, representing a high 28.9% margin rate, comparable with the one of H1 2022. The contribution margin from the ABU was positive, + EUR 3 million, and holding costs totaled EUR 126 million. As announced at the first time of our full year 2022 results, the group has taken measures to improve profitability of its U.K. business. On the 5th of July, a preliminary agreement was signed to sell Sporting Group's B2C spread betting business, which will be effective once the relevant U.K. authorities have given their approval, namely the FCA. If we look at the evolution of the EBITDA in numbers, on the right chart, we see that the EUR 20 million drop is linked to the one-off holding and G&A cost we have just mentioned. Now, let's come to the bridge from the EUR 300 million EBITDA towards the EUR 181 million net profits. Depreciation and amortization o`f EUR 60 million are virtually unchanged from H1 2022, and mostly are related to IT and point-of-sale equipment. Non-recurring items of EUR 40 million mainly include the impact of the revaluation of Sporting Group's B2C spread betting asset in the process of being sold, as just mentioned, and the costs related to the external growth strategy. The financial results, which is a profit of EUR 19 million in the first half of 2023 compared interest rates. Finally, the tax charge of EUR 65 million, corresponding to a tax rate of 26.8%, which can be extrapolated over the full year. To conclude, a word about our cash. I think you are now familiar with this bridge. The main indicator of the group's cash position is its net cash surplus of EUR 941 million at June 30th, compared with EUR 900 million at the end of last year. Just to mention, the calculation is now based on the new definition, and I would remind you that this is not appropriate to extrapolate the half- year situation over the financial year, as there is a strong calendar effect at the end of the year. 1 is certain, this is the payment in advance of December, the public release of December, and 1 is possible, which is the booking of a jackpot that has not been yet paid. I promise that I will come back to the net cash definition. This definition evolved to better reflect the group net financial assets that can be mobilized in the very short term, as we have an objective of doing M&A. 4th, non-consolidated securities, mainly comprising shares in venture capital funds, innovation, etc., are now excluded from it. Thank you for your attention, now Stéphane and I will be happy to answer your questions. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. The first question comes from the line of Ed Young from Morgan Stanley. Please go ahead. Good evening. Thank you for taking my questions. The first one was on PLI. Obviously, an exciting deal to be entering a different country. I wonder if you could talk a little about the opportunities you see to drive synergies on either the revenue or the cost line. And then the sort of, you know, other side of that would be, are there any areas where there is potentially need for more investment? I know there was some looking into using, you know, unclaimed prizes for marketing in the past. Are there any deficits around, you know, either marketing or operations, where there needs to be more investment made? Just love to hear your perspective on that. Okay, that's your, that's your only question? I've got a couple of those. I can ask them now. Oh, it's okay. It's It's okay. If you don't mind. Maybe let me start. Maybe ask Pascal to compliment. As you say, well, it is a very exciting and very exciting deal. We've been of course looking at all the synergies that we might develop. At this stage, they are mostly revenues, synergies o n revenues. Although you should never, I would say, avoid to find the cost synergies, but they are first on revenues, and they are more linked on our capacity to bring expertise both in, in games, in marketing, in instant games, for instance, since as you have seen, the Irish National Lottery is more developed in draw games than instant games. We have a number of, of things on which we believe there is good possibilities to develop further revenues of the lottery based on our common exchange of experience and best practice. Second point, I think is also that, as, you know, we are obviously a bigger lottery than the Irish Lottery, and more specifically, I think a lottery that has invested more in its own capacity, own IT capacity, to develop games. There is probably some possibility to have the Irish Lottery benefiting from our capacities too. Which doesn't mean to answer your question, I think it doesn't mean increased investment as such. It would be more to have the Irish Lottery benefiting from the development that we do manage internally on our lottery business and for instance, on our digital lottery business. There is certainly also scope for development and efficiency. No, it's exactly that. What we have already done during the process, and I will not go into too much details, but we have already worked on a number of initiatives that will very concretely help PLI to benefit from our experience. For example, on marketing plans, on game design, on a number of things that are not very costful, but that will for sure enhance the business of PLI. You have to take into account the fact that we are 3,000 people within FDJ. There are 200 people, they are good, but they are quite small, we have more important experience, we can share this experience and really enhance the activity of PLI doing that. This is we are really positive on the fact that we can fuel the growth of this lottery in a very responsible way, very compatible with what the regulator of Irish regulator is needing. You had a question about the unclaimed prices, yes, your unclaimed prices are financing marketing expenses into this lottery. This is set into the license, and it will last until the end of the license. We have looked at this very precisely. There had been some discussion around that, but those discussion will not lead to change this because this is part of the set of the licence. Understood. That's very clear. I'll ask the next two together, Stéphane, so you don't have to wonder what I'm gonna ask. My last two questions. Second, Amigo, is that around 10% of the lottery business? Could you help us out on the size it is currently? When you say it's currently performing as per your forecast and expectations in terms of the negative impact of the changes, could you perhaps quantify or share what that range might look like to help us model? Then the final question, just on online, I notice your revised targets don't include online. I know that you said around 20, and probably that's difficult to get to, given what's happened in Q2. Is that particularly important to you, or do you think you're sort of just de-emphasizing the online growth aspect within the guidance? Is it sort of just less important going forward, so we may not get that sort of reinstated next year, if you like? Thanks. Okay. Amigo- On Amigo, you want. On Amigo, we the share Amigo among the total lottery is, you're right, something like 10% of the total lottery. The impact of the relaunch of Amigo is around 25% on this game. As Stéphane said, the game has been cut by 2 draws each hour on the morning until 2:00 P.M. The maximum stake has been cut from is now EUR 8, and it was previously EUR 20. We have quite important effect on this game. The effect on this game was forecasted. We knew that perfectly. What is maybe a little bit disappointing is the effect globally around Amigo and not only on Amigo, with the customer that are not playing Amigo and not playing other games also. We will have an effect on the full year, but we reset Amigo at another level. When this other level is now in the base, we will continue to grow after that. This is for Amigo. Do you want to comment on online? On the online growth and online objective, first comment that I will make is that obviously the objective that we have on online growth, first is more a way, a lever for us to reach our growth and EBITDA objective than an objective, a financial objective as such. Just it's not exactly at the same level. However, it is very important medium- term lever. We consider it to be something that we continue to invest on. We had to accept that we are still this very direct relationship, not only between high jackpot and growth, but even more between high jackpot and recruitment on the digital, on the online lottery. Of course, this can also reverse, depending on the long cycle that we get on the jackpot. We definitely think that we can do better than what we did this semester, not only by having luck by high jackpot, but to continue to do what we have started to do, which is to be less dependent on those jackpots. Obviously, we are still, in terms of recruitment, not at the level that we would like to be. We will definitely continue to work on that. Also, when we look at our action plan for second semester, we might actually have more room to work on our front in online, because in the first half, we have been actually investing a lot in the change on our draw system, which was a big change that happened very nicely and smoothly, and that actually is very key to develop our strategy and our innovation in the next years. We'll have more room to invest on the online experience, the online simplicity, and so on. I'm not going to promise to come back to 20% because it's definitely I think not not realistic for the second half. We're definitely going to continue to invest in medium term, in order to have a better baseline in terms of online lottery than the one that we have this semester. Understood. Thank you for the detailed answers. Appreciated. Okay. Please, the next question that comes from the line of Jaafar Mestari from BNP Paribas. Please go ahead. Hi, good afternoon. I've got three, if that's all right. The most important one, really, maybe I ask this one first. This semester, you had a couple of direct impacts, jackpots, Amigo relaunch, you're also suggesting a couple of indirect impacts. For example, you say that the low jackpots have been negative in your efforts to recruit players online. You're also saying that the Amigo relaunch has impacted the other games that were played by the same players. Can you share some evidence that you have to make those correlations and to not just say that consumer demand is weak? According to, Amigo has a lower-` income demographic. When you've done the homework to identify the weakness in the state growth, and I'm sure you found there was factually at the Amigo point of sale, what additional research did you do to be certain that this is the relaunch and it's not weakness in low-income consumers, for example? Yes, yes, I can answer clearly on Amigo, because on Amigo, we, we have a weekly monitoring of the stage. We know exactly what was the growth before the relaunch and what is precisely the impact of the relaunch. What is true, is that before the relaunch, we were growing on Amigo, and just after the relaunch, the stakes have been reset at 25% lower than the level it had before. What we can maybe say about the impact of the, of, the weaker consumption, is maybe at the moment when we offer the opportunity to the Amigo customers to spend less money, as we cancel the two draws out of 12 each hours until 2:00 P.M. We lower the maximum stakes from EUR 20- EUR 8. They really took the opportunity to lower their level of spend, instead of compensating it. This is true, but the fact is that before the beginning of June, this game was growing, and this growth has been stopped by the change of the game. Okay. It's very mechanic, effect. Of course, we will continue to monitor out this mechanic effect, but it seems to be very, mechanic and very, directly linked, to the restrictions that were done on this game. Maybe a word to comment a little bit more on Loto and EuroMillions, if you we have said that, but I think it's interesting to stress it. The baseline of those games is correct. What is the baseline? The baseline is the stakes that we have with the minimum jackpot, with no fueling, no event, nothing. This baseline is growing low, mid-single digit, not low, mid-single digit. This is how we monitor that the health of those products is okay. This is, this is also very true. What said Stéphane, about the recruitment, the consequences on the recruitment? It's on the recruitment online, because we are, we said that too much dependent at this time, but we are working to be less dependent on when we recruit new players on the online, on our online offer. They are coming with high jackpots of Loto and especially EuroMillions. When you have less high jackpots of Loto and especially EuroMillions, you have mechanically less recruitment online, and we are working on other ways to recruit players online, to be less dependent on those, high jackpots. Okay. To answer your question, we don't see today, and of course, we've been monitoring this and asking also this way, we don't see sign of lower demand for our customer that would come as a consequence of the macroeconomic context, or. It's really very linked to the characteristic of the those two games, actually, the one that we talked about. Amigo, because change of formula and lower jackpot on the grow base, but we don't see any sign of a general lowering or of consumption demand. Okay. Thank you very much. Hopefully, the next ones are simple and quick. Just on the margins the 24% target that's reiterated, is that as reported, so it includes the EUR 10 million underage gambling campaign, meaning in reality, you'll be at 24.4%? Yes. Yes. Super. Yes. Thank you. on the acquisition, so it's not consuming all of your surplus cash. You had EUR 900 million last December, even if I don't go into seasonality. What do you think is the right level of debt for this company? If we assume there's no financial penalty, no revision to the 2019 licence costs, can you at least be at zero debts, or do you have to maintain some net cash for some reason? No, we don't have to maintain some net cash for some reason. What we said previously is still true, is that we would be comfortable with the net debt to EBITDA level of 2x. We are far from that. We are still some firepower. As we have cash generative, we will be able to deleverage quite quickly. We can bear some debt, as we said, up to 2x the EBITDA. Super. Lastly, on digital, you've removed the 20% growth target for the year. It's just impossible to make that after H1, but you think you will end the year close to 20%? As a result, we're gonna be very comfortable with the next 4 years of digital mix shifts, or do you think this year as a whole will be a low year in terms of the digital recruitment? Well, I think that given the profile, what we had in the first half, and given the profile of the year that we can expect in second half, it is absolutely unlikely that we will be close to 20%. I think we will have to I would say at the end of the year this year, whether this change or not, and in which range, our assumption of digital growth. I think it's too early to say now. Thank you. Very clear. Thank you. The next question comes from the line of Kiranjot Grewal from Bank of America. Please go ahead. Hey. Hey, guys. Firstly, just building on that point of your net debt position, you were being happy with 2x, and you're quite far off it. What sort of other deals are you considering? Are you still looking at deals now, or given you've done two in the last sort of recent period, are you sort of waiting before you make your next move? That's the first question. Secondly, apologies if I missed this during your presentation, but the incremental costs at the holding level in H1, how should these develop in H2 and next year? Lastly, given your focus has mainly been sports and lotteries so far, when you're sort of looking at deals outside of France, would you consider sort of venturing out from just sports and lotteries into potentially gaming as well? Thank you. Okay. Maybe I can take the first and the third question because they are quite. The second is for me, I know that. Pascal will take the second. I think our attitude on the potential deals is very pragmatic and linked to what I actually, what we put on the site that gathered for the presentation just before, just at the beginning of when we talk about the Irish Lottery, that since November 2022, we've been very clear on the idea that we might consider B2C operation, either in lottery or in online betting and particularly sports betting. We have definitely, we have not said that we would consider only lottery. I think we are very, very satisfied to in a way to start with this deal with the Irish Lottery, because it's very, I think, very close to our core business and expertise. It's, I think, it's a nice way to start. I don't think it's it has any meaning in choosing to make only to look only at assets in the lottery. We are definitely active at screening the market for value- creative opportunities. I think we are very satisfied to have started with this this acquisition given it's sort of natural fit with what we are. Again, it's not the end of the story for us. Pascal? Yep. You can expect the G&A level to be stable in H2, compared to H2 2022. It will help you to figure out the complete year. Super. Thank you. The next question comes from the line of Sabrina Blanc from Société Générale. Please go ahead. Good evening, Stéphane. Good evening, Pascal. I have 3 questions, if I may. The first one is regarding the guidance in terms of organic sales growth for the full year. Just to understand the in terms of impact from Amigo or high jackpots online, which one has the highest impact? The second question is regarding the mitigation and the impact on EBITDA margin on the second part of the year. Could you provide more color? To finish by the acquisition, could we have an idea of the business model, how it works between return to players, the type of growth that they used to have before? Just to have a, a large framework on the, on the lottery there. Okay. I'm not sure to have understood your second question. Yes. About the litigation. Yes. Can you repeat the second one? Yeah. You have mentioned some cost mitigation in the second part of the year, which could offset the inflation. Can you provide more colors on where it come from, compared to what has been done already in the group? Okay. Okay. The first one is in the impact of our guidance, what is the relative weight? I can take t his one. Amigo versus high jackpot? You can figure out two-third is related to the high jackpots of the first semester. One-third is related to Amigo, full impact second semester. For your second question, which is related to the cost mitigation, we have launched a number of initiatives to reduce costs, and they will have, for some of them, impact more important on H2. On H2, we will also not have the one-off impact of what we had the first years, first month of the year with the EUR 10 million that we already mentioned. Last year, at the end of the year, we had some extra costs that we will not have this year. For example, I don't know the exact translation in English, but It's pre-retirement. Pre-retirement. Program. Program. That has been accounted for at the end of last year, for quite a nice figure, which will not be there in H2 2023. It's a mixture of clear cost reduction, all the costs have been touched. Also, the fact that the basis of comparison will be easier on H2 2023 than it was on H2 2022. Your third question was related to the business model of PLI. Yes. This is quite very simple because it is exactly the same business model as the one of FDJ. We know it, quite, quite well. The figures are, that, 30%, 65% of the, sorry, GGR. Yes. 65%, it's like that, 65% of the GGR is, has to be given back to good causes. It means that the rest is makes the NGR of the company. When you have the NGR of EUR 140 million, you have an EBITDA margin, which is much more the same of the EBITDA margin of FDJ. You find the level of EBITDA of this company. It's quite very similar to the one of FDJ. The level, the average level of the PPO is a little bit lower, as they don't have any sports betting in their activity. In Ireland, it's different from France. There is a clear separation, between lottery and online gaming, and, like in England, like in the U.K. The operator of the lottery cannot do at the same time sports betting. Clearly, the license refers only to lottery, 100% lottery. This is one of the difference between FDJ. If you look at the historical figures of this lottery, the historical growth is something like 5% per year. Very similar to the one of FDJ. If you look at the mix between online and offline, it's a little bit better than FDJ. It's 15% online. It's 13% in FDJ today. If you look at the mix between scratch cards and the draw games, it's two-third draw games and one-third scratch cards. Very similar to the UK lottery, but quite different from FDJ. We have majority of our stakes made of scratch cards. For example, we think that this is one of the areas in which we think that we can bring some more values, but also on the draw games, to be clear. Clearly this mixed two-third, one-third in favor of the draw games can be improved in the future. Thank you very much. It's a little sister of the FDJ. Understood. Thank you very much. The next question, it comes from the line of Matthew Spiegelman from Locust Wood Capital. Please go ahead. Thank you. I was wondering if you could talk a little bit about, more about online. I think in, you know, at the Investor Day, in the past, you've talked about the drivers of growth and enriching the game offering, you know, the app and mobile usage and marketing the app. You know, in the past, we've had these sort of fluctuations, you know, when the prizes go down, there's less enrollment. I was just wondering, are you seeing any changes, you know, fundamentally, in the opportunity to grow digital? Or does it look to you more like a timing issue, just in terms of, you know, what happened with some of the jackpots in the quarter? I think, what we, what we talked about during the, the Capital Market Day, is absolutely, still valid in terms of, our view of, the opportunities that we have, in online. S o I would qualify it, more as a timing issue. The timing, there is, sort of an, and, a short-term, impact, but very significant when you look it on the, one semester with the lower level of jackpot than we, than we expected. S o that's one element of timing. There is also the fact that, well growth in the point of sale is good. So that's another that's certainly another, another element. All in all, I still continue to believe it is a very important driver, both of our growth and of our ability to also to increase of the performance of the company. I think it's more a question of timing at this point in my view. Also I wanted to. Sorry, I'm trying to, one thing I wanted to add, yes, yes. Sorry. There's one element also that I should add at this point for medium-term view of that, is that since we know that draw games again have a very direct impact on our capacity to recruit people to come to our online business, and then to transform them into full-fledged customer. The fact that we're going to launch end of October a new draw game within the EuroMillions community with EuroDreams, I think is an important factor. It's not a factor that we can count on in full year since it's very late in the year for this year. If, and this is what we are working on with all the EuroMillions community, if we are successful with this very important launch, again, which is the first big new game within the EuroMillions community since EuroMillions, will actually have an additional lever to have more digital growth. Since again, there is still a very close link between draw games and digital. This comes late in the year, so it will not compensate with what we have lost in this first semester with having lower jackpot. But it will definitely be something that can boost us again for the years to come if it's successful. Maybe just to add one thing, because it, I think it's important to have it in mind. The draw games have a digital penetration, if we talk about Loto and EuroMillions, over 20%, between 20 and 30%. What we aim, obviously, is to have at least this level of digital penetration with this new EuroDreams games. It's easier to transfer to have a an higher digital penetration with with a draw game than with scratch cards. If you look at the UK or lottery, or the Irish lottery, now we know it quite well. They have the same difficulty to transform the point of sale scratch cards to digital instant games. It's less easy. It's important to continue to drive the growth on draw games that will also fuel the growth of the global online. Maybe just to add another thing, last thing. We have to recall what was our Q1. Our Q1, we added 20% growth on the online lottery. Overall, more than that, because to recall also sports betting online has a growth that is above 20% online from the beginning of the day and close to 30%. You have to take also that into account. Just coming back on the lottery, Q1 was 20% growth almost because we had two quarter, Q1 2022 and Q1 2023, with the same style of a profile, of jackpot profile. It was low jackpot versus low jackpot, and we had this almost 20%. Second quarter, we were comparing to a high jackpot quarter in 2022. I think it's important not to be too quick to have conclusions as we just have 1 quarter with a low jackpot compared with the high jackpots. Thank you. That's very helpful. I just had 1 quick follow-up question, which was, you know, in regards to what happened with Amigo, you know, as the investor base thinks about the regulatory changes in other areas, you know, whether that could potentially impact you that are similar to this, or, you know, whether this was really more of a truly one-off small impact. Can you just share any other thoughts on, you know, potential other regulatory shifts that may or may not have an impact on you, based on what you see? Just maybe one comment on that. I think, well, this year, if you look at the type of regulatory decision that we had, w e had the decision on our advertising and promotion budget that we actually cut, not only because of the regulator, but also because of cost efficiency that we cut by 20%. That's one thing that I don't expect to do every year, clearly. Another thing that we had, and again, it's something that you can imagine coming on a recurrent basis often is, again, this very structural change of Amigo. We definitely, well, we had to do it, so we knew it was going to clearly decrease the level of the game. All these are, again, big decisions and it's difficult to imagine the equivalent every year. In fact, in a way, we took two big decisions this year, and at the end of the day, we're still, of course, a company with good growth and good profitability. Of course, the regulatory context is more restrictive. That's true. But not, I think it's been quite restrictive on us this year. But in a way, I think we have taken already sort of big consequence of that. We have sort of adjusted to that, particularly in terms of how we manage our advertising budget with a regulator that doesn't want to have advertising completely forbidden. But that is more on the view that it has to be selective and so on. But we already have taken this adjustment. I think that's not, of course, an absolute answer. It doesn't mean that we will have only decisions that we like, but I think it's difficult to imagine such critical decision as the one that we had this year, every year, to be frank. Thank you. That's very helpful context. I appreciate it. Thank you. The next question comes from the line of Leo Carrington from Citi. Please go ahead. Thank you. Good evening, Stéphane, Pascal. Could I ask 3, please? Firstly, does the acquisition today imply potentially less of a focus on the diversification activities going forward as more attention is dedicated to the integration of the Irish asset and generating the revenue synergies that you've outlined already? Can the two not be tied together like that? 2, probably quite quick follow-ups. Firstly, on the EUR 10 million allowance for safer gaming, for restriction of underage gambling, can you outline the origins of this? Is this something the regulator has asked for, or is this an opportunity that you identified and are pursuing? Third, very quick one, European Commission decision still pending. I know this is mostly out of your hands, but any update on timing or anything you can share with us there? Thank you. Okay. Thank you very much. I will start by the third one and go back to the others. European Commission, I would have loved to share with you news today, because I'm as eager as you are to finish with this case. I'm eager because as I think stated recently, we had actually very good news on the national basis, on the decision that was issued by Conseil d'État, and that basically has confirmed that our exclusive rights are absolutely consistent with European legislation. It sort of narrows the question of the amount that we pay to a very, I would say, a very narrow discussion about whether the calculation could have been done differently, but it really, it's not anymore, I think, a question about whether we have to pay for the full right. You know, all this is now, I think, out. I would love to come with a conclusion. I think it's, it should be coming, in my view, now, it should be coming because, again, I think, we've been advancing quite well to narrowing the discussion. However, as you said, it's not in my hands. I'm pushing everybody to come to a conclusion. Of course, I would like to have this as quickly as possible since I'm again quite reassured by the elements that we had recently. On the, on the EUR 10 million, it's definitely something that we decided and that was not required by the regulator. We believe that part of our mission and interest is really to prevent underage gambling. It's very high on the regulatory and political agenda, so that's why we invest. It's on our own willingness to do it with a partnership with a very good actor specialized in that. On first question was whether we are going to be so much focused on the Irish Lottery, that we would be less focused on diversification. When you talk about diversification, you I guess you allude to payment and services, or. Exactly. Sort of, yeah. It's absolutely not the same. I think it's absolutely compatible. It's not the same teams at all. Really, on the Irish Lottery, I think we commented a lot. It's really how we do project our expertise on our core lottery business on this asset. On payment and services, it's really how we do capitalize on the value of the of our network and infrastructure in our network to grow a business that is in the first place, is bringing more traffic, more clients in our point of sales, which is of course, a very positive impact on our business. Of course, if we can develop it more, we will do more. It's really very different type of strategy, not the same teams. So it's absolutely compatible. To complement this answer, it's also other teams that are working on online gaming. Lottery, online gaming, payments and services, three type of teams. When we talk about business teams, globally, that's on corporate teams, it's shared resources, but we are equipped and organized to do both on the corporate side and on the business side, it's different, separate teams. Thank you. That's very helpful. The next question comes from the line of Alexandre Gérard from CIC. Please go ahead. Yes, good evening, and thank you for taking my questions. Four quick questions on my side. First question, I just wanted to have your opinion on the rumors that we hear more and more in France regarding the regulator thinking of authorizing online casinos in France. What could be the likelihood of that? And would that be detrimental to your lottery games? First question. Second question, if Pascal could come back rapidly on the financial result, the swing, which is important, is it a cash impact or not? Third question, M&A-wise, do we have to understand that you might have an interest for a part of the Kindred Group, which is undergoing a strategic review at the moment? Last question, regarding the Olympics in France next year, would that be, or might that be, a major catalyst, for you? Thank you. Okay. On the online casino rumor, as you qualify. First, it's not, I think that's important to say, it's not in the hands of the regulator, it's in the hands of the parliament. Actually, it's, it's, it, it would require the parliament to vote a law to authorize online casinos. I think that's important because it's, I would say, a more, definitely more complex and more public and open debate. Why is there this rumor? I think the main reason for this rumor is the fact that some actors, some operators are pleading for it. It's not completely new, but they have started to do it again. On the regulatory side, I think the regulator, I said that they were going to try to understand what was the size of the illegal market and what was the right answer. They have not said, they have not taken definite position. It is a debate that actually has already occurred in France and was concluded by saying that it was actually a very, very dangerous idea in terms of creating more intensive players and more risks. This debate is happening again, and for me, it's difficult to say how it will end. On the potential impact on us, if this were to happen, I think it's fair to say that on one hand, it would probably impact our online lottery business. I'm not going to give any again any figure because I think it's too, really too early or and not appropriate to do it. On the other hand, of course, if it was to be opened as an online operator in France, we would have to operate it also. At the end of the day, what would it mean? I think it's really, again, not the appropriate timing to talk about it, since all this, again, for me, is absolutely not a certain and immediate scenario. On financial results, I think Pascal w ill take it. On M&A targets, as I said earlier, we are looking at all assets that could be value creative for us. I'm not going to make any specific comments on any assets more than that. Impact of the Olympics, I think that was your fourth question. Impact of Olympics is actually not very not very significant in terms of business, direct business, because it's not such an important event as would be a football event. In the whole year, it's not very significant. It is, however, a very interesting time to expose the FDJ brand, and that's why we are a sponsor. We are sort of a natural and legitimate sponsor, because we are investing a lot in sports, so it's a good occasion to expose our brand. We believe that brand exposure is value creative for a company like us. Yeah. To come back to the financial results, the swing, important swing, between the last year and this year is mainly due to interest rates and not the volume of our cash. The volume of our cash is a little bit higher this year than it was last year, but this is not the main point. The main point is that if you look at the way we invest this cash, and it was the last year, similar to the one of this year, we have mainly our cash in a cash and cash equivalent and in term deposits. Last year, the interest rates for those types of cash was barely 0%, and now it's something like 3%+. It changes a lot when you have EUR 1 billion with 3% or EUR 1 billion with 0% interest rates. Last year, we had suffered from the mark-to-market of the stock part of our cash. It's a small part, and now we sold it totally. Last year we had a small part, but as the markets were very down at the end, end of H1, we suffered a little from that, and we also suffered from the mark-to-market of bonds, mid-medium-term bonds that had suffered from the higher interest rates, the rising interest rates. Those mark-to-market impact will be upset because we have kept those products and we will keep them until the end, and we will get this value back until 2024 or beginning of 2025. Mainly, if you look at EUR 1 billion cash with 0% and some mark-to-market negative impact on 1 year and 3% interest rate on another year, it explains the whole thing. All right. Thank you very much. There are no further questions in the queue, so I will now hand over to Mr. Pascal Chaffard, to conclude this conference. I prefer to hand over to my CEO, Stéphane Pallez. No, don't worry. We are a team anyway. Thank you very much for your questions. I hope our answers were profitable and interesting to you. Of course, we look further to more exchange with you. Thank you very much. Thank you. Good evening. Thank you for joining today's call. You may now disconnect your line.