Message from the President and CEO

Greetings to all.

The last three months of 2011 saw essentially all of Loto-Québec’s activity sectors post positive performance.

The Corporation’s earnings during the third quarter of fiscal 2011-2012 equalled $901.2 million, and net results totalled $339.1 million. Compared to the same reporting period of the previous fiscal year, these results represent respective increases of $6.7 million (+0.8%) and $8.2 million (+2.5%).

This growth is primarily attributable to the Corporation’s rigorous cost controls. In fact, despite the inflationary pressures on our procurement and the costs related to our collective agreements, we succeeded in reducing our spending by $4.2 million (–1.8%).

We fully intend to pursue our efforts to improve Loto‑Québec’s overall efficiency and performance during the course of the coming year.

Positive Performance in All Our Activity Sectors
Between September 27 and December 26, 2011, the Lottery sector posted revenues of $440.8 million, which essentially corresponds to the result recorded during the same quarter of the previous fiscal year (‑0.4%). During the same period, no less than $201 million in prizes was awarded to lottery winners.

For its part, the Casino sector registered total revenues of $203.8 million, representing an increase of 1.4% over the same quarter of fiscal 2010. Despite the scale of the modernization effort undertaken at the Casino de Montréal, the gaming house saw its revenues grow by 1.7%. The establishment is clearly as popular as ever with gaming enthusiasts, as evidenced by the fact that it played host to more than 34,000 visitors on January 1, 2012 alone.

The Video Lottery sector’s earnings showed a slight increase of 0.5% during the last quarter. Similarly, the Québec City and Trois-Rivières gaming centres saw their combined revenues rise by 8.7%.

As for the Bingo sector, earnings were up by 11.6% thanks to Kinzo express.

Finally, virtual gaming recorded total income in the order of $4.6 million. As the espacejeux.com site commenced activities on December 1, 2010, it is clearly understandable that its results cannot be compared with those of the same period the previous year.

Reduced Size of Lottery Tickets
Last November, we reduced the size of all online lottery tickets. This change currently applies to wagering tickets, which represent close to half of the total volume of tickets printed at the terminal. Thanks to this initiative, we will be able to diminish our annual consumption of paper by some 82,000 kg — or approximately 30% — while enjoying savings in the order of $800,000.

Modernization of the Casino de Montréal
Begun in 2009, the modernization work at the Casino de Montréal is well on course in terms of both schedule and budget. To date, more than half the work has been completed and significant progress will be made during 2012. In fact, a new main entrance is expected to be finished by the spring, and redeveloped sections will be opening progressively over the course of the next 18 months.

Célébration
As is the case every holiday season, the traditional Célébration lottery again enjoyed resounding success. It was a couple from the Montérégie who ended up winning the $1,000,000 prize during the Célébration 2012 gala this past January 15. In addition to the prizes awarded in the draws held that evening, Célébration has given out 45 $1,000,000 to lucky Québécers since it was first introduced.

For more information, I invite you to consult the Quarterly Report.

Gérard Bibeau
President and Chief Executive Officer