Message from the President and CEO

A Year of Stability

Loto-Québec’s 2011 Annual Report was tabled in the National Assembly on June 9, 2011. I invite you to consult the document.

From a financial standpoint, the Corporation posted consolidated revenues of $3.675 billion in fiscal 2010-2011, representing a decline of 2.1% from the previous reporting period. Our activities generated earnings of $1.338 billion, a result similar to that of 2009-2010 (-0.2%). All of Loto-Québec’s activity sectors saw their revenues decline to various degrees as compared to the previous fiscal year, although the Lottery sector maintained a fairly steady course with sales of $1.788 billion, which was very close (-0.4%) to its performance in the previous year.

During this past reporting period, the Corporation remitted $1.247 billion in dividends to the Québec Government. This contribution enabled the organization to achieve the objective set in its Strategic Plan to maintain its net profit margin
at 35.2%.

The Corporation also reduced its expenses by
$14.9 million vis-à-vis a target of $5 million, thus significantly exceeding the Government’s expectations. These results were made possible thanks to the efforts and ingenuity of all Loto-Québec employees.

Adoption of the 2010-2013 Strategic Plan
The past fiscal year was also marked by the adoption of Loto-Québec’s Strategic Plan. The preparation of this plan served as an opportunity for the Corporation to conduct a comprehensive review of its mission and directions. This extensive reflection process gave rise to the organization’s three fundamental strategic orientations, along with a new one — “to become a recognized world leader in the responsible commercialization of games of chance”. With this new affirmation, the Corporation is firmly setting its sights on the future and on continuing to make social responsibility a top priority.

Online Gaming

This past December saw the official launch of the Espacejeux.com online gaming site. As of
March 31, 2011, Espacejeux.com had a total of
37,753 members and had registered revenues in the order of $7 million. The growth of this site in terms of membership and earnings is fully in line with initial expectations.

Reasonable Distribution of Video Lottery Terminals

As outlined in its 2010-2013 Strategic Plan,
Loto-Québec wishes to maintain its number of VLTs at a maximum of 12,000 units installed at close to
2,000 establishments, including the Québec City and Trois-Rivières gaming centres. It is through reasonable and sufficient distribution that the Corporation plans the concentration of its VLTs in existing or new establishments, which offer better service to their clientele and promote a greater commitment to a responsible gaming approach.

Success of Lotto Max

During the past fiscal year, Loto-Québec awarded
62 prizes of $1 million or more to Québecers, representing twice as many prizes than in the previous year. This success is attributable in particular to the popularity of Lotto Max and its Maxmillions concept.

From the Casino de Montréal to Kinzo

Fiscal 2010-2011was marked by a number of other notable events. These include the continuation of the modernization project at the Casino de Montréal, where 27% of the work is now completed. Furthermore, the past year saw the launch of the Kinzo pilot project, which is to be enhanced with the addition of Kinzo Express satellites at bingo halls within the metropolitan area.

Continuous Dialogue with the Community

Finally, Loto-Québec’s arrival on the social media scene has enabled the Corporation to initiate a direct dialogue with the public pertaining to its commercial activities and contributions to society.

We as a Corporation will be confronting a range of formidable challenges in the coming years, but I am convinced that Loto-Québec’s teams and those of its subsidiaries will face these challenges head-on and meet them with great success.