Loto-Québec Annual Report Message from Lynne Roiter, the President and Chief Executive Officer

in Finance

Message from the President and Chief Executive Officer

We show higher results for a fourth year in a row thanks to good performance of all of our businesses and tight control over expenses. In fact, our products totals were $ 84.9 million (+ 3.1%) higher than last year.

Our consolidated net income surpasses last year's gain of $ 72.7 million (+ 5.4%), which is $ 147.4 million more (+ 11.7%) than our budget target. Our total expenses for their part, they are down $ 22.0 million (-2.3%) compared to 2017-2018.

The lottery sector had a remarkable year, mainly because of the number of jackpots outstanding at Lotto Max. Instant lotteries also continued to grow, as did event betting.

The casino sector has also obtained good results, notably thanks to the success of the themes are organized, allowing visitors to enjoy
of our entertainment offer in many ways.

Our online gambling site, lotoquebec.com, continued its up, posting revenues up 23.2% compared to the previous year. In 2017-2018, we
have developed a portal facilitating navigation between our product lines - whether it's games lottery or casino - which has greatly contributed to the increase in revenues, thereby increasing our market shares.

As for the gaming sector, it presents fairly stable income. The network of bars and breweries, however, show a slight decline. This is more pronounced in the areas where we have removed from video lottery machines (VLTs). The lounges on the other hand, enjoyed good growth.

It should be noted that new accounting standards1 change the presentation of our financial statements to lotteries, bingo and Kinzo. The prizes awarded are now deducted from the products, as it was already the case for casinos and video lotteries, which does not affect gross profit or net income.   
Figures from previous years have been adjusted to for comparison purposes.

The pursuit of a winning strategy 

To achieve these good results, we continued the approach from our 2017-2020 strategic plan.  We have remained customer centric, have
intensified our game-entertainment positioning, maintained a responsible marketing approach and continued to improve the way we do business to foster convergence, agility and efficiency.
To obtain these vouchers results, we have continued the process arising from our plan Strategic 2017-2020.
A customer centric year We have once again made many winners in all of our sectors. We paid a record number of 129 lots of $ 1 million or more at the lottery.
The lottery lottery payment centers in our casinos and our gaming halls receive more and more winners, which shows that they enjoy this local service.
A full year of festivities has been planned for celebrate the 25th anniversary of the Casino de Montréal, the first of our casinos to open,
October 9, 1993. Customers were entitled to several surprises as thanks for their loyalty.
By the way, we have adapted some of our products to meet the expectations of consumers. The image of certain lotteries, including Winner for life, has been updated and the event betting offer has been improved.

Entertainment put forward

Several initiatives have helped to accentuate our positioning focused on entertainment. Among those the thematic activities we have in our casinos and our gaming rooms. They allow visitors to entertain themselves in multiple ways, whether either by visiting one of our restaurants or our bars, by attending a show or taking advantage of our offer diverse game.
We also launched products introducing features out of the ordinary, including the box bingo, which combines board games and lotteries. We wish so please our customers.
Casino game lovers are not left out, since we have reserved novelties, like the Live Casino. This allows you to play table games online and chat in real time with real presenters. We have also launched keno games on the site lotoquebec.com.
To renew the customer base of the bingo industry, we set up a bingo pilot project electronic, bingo +. Offered in four rooms, it promotes socialization and proposes new forms Entertainment. Remember that bingo is a source of funding for several organizations without
We have infused entertainment into our sponsorships by providing festival-goers with fun experiences.  We have also maintained our partnerships with players in the fields of video games and innovation. An always responsible approach Marketing our offer responsibly is
for us a constant priority, as evidenced by our level 4 certification of the World Lottery Association, the highest level. We work renewing our certification for 2020.

During the past year, several initiatives information and awareness-raising activities, including:
holding a campaign to promote the importance of to respect his limits; broadcasting a web capsule explaining the operation of chance; and adding a tab in our online gaming site giving easily access to responsible gaming content.
The responsible marketing of our offer goes also by training our employees and our retailers. Significant efforts are being made to this end.
The coaching of video lottery retailers has Moreover, it has been reinforced in the framework of the network of ALV. In addition to econfiguring the network, which now has less than 9,900 ALVs, we have tightened the application of the marketing code responsible for all license holders. The Government has also adopted new criteria socio-economic criteria for the granting of apparatus, among others to the material deprivation index used by the National Institute of Public Health.

Our support for various philanthropic causes continued. Our employees have once again been generous by contributing to the All Winners campaign, for the benefit of Centraide, PartenaireSanté-Québec, the Canadian Red Cross, Quebec Division, and the Harvest organizations partners.Market our o oer responsible way is for we a constant priority.

Proactive improvements
We continued the improvement and harmonization of our ways of doing things. The goal is to have an offer convergent, which meets  expectations and habits consumption, and to be more efficient. In particular, improvements have been made to our slot machine park, at our gaming site online, at our lottery kiosks and at the payment of lottery lots.

In recent years, we have assured to control the expenses and we continue to do. The $ 20 million decline in our expenses compared to the previous year - which also showed a decline - as evidenced. 

I thank the board of directors and the government to have reiterated their confidence in renewing my mandate last February.
I take this opportunity to welcome both new members who joined the board of directors at the end of the fiscal year, Mr. Jean-François Blais and Ms. Ann MacDonald.
Thank you also to my colleagues on the board of directors for their valuable collaboration and support unwavering.
I wish to greet MM. André Dumouchel and François Tremblay, who acted respectively as Corporate Vice President, Resources Human Resources and President of the Company's operations Quebec gaming establishments. They took their retirement at the beginning of the 2019-2020 fiscal year. I thank them for their important contribution to the Society.
The excellent work of all the staff of Loto-Québec must also be underlined. The franc success of the past year is really attributable to the
professionalism and commitment of our employees.   I am very grateful to them.
Finally, I would like to say thank you to our customers. Trust that they testify to us motivates us to surpass ourselves.
Lynne Roiter
President and CEO

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