JAXX SE / Key word(s): Quarter Results 11.11.2010 08:40 --------------------------------------------------------------------------- Lottery business and legal proceedings place burden on JAXX SE result for quarter - 20.5 percent revenue rise in the first nine months thanks to steady growth of myBet - Nine-month EBIT of EUR -0.9 million (previous year: EUR -3.0 million) - Successful start to fourth quarter Kiel, November 11, 2010 - The Kiel-based financial holding company JAXX SE (formerly JAXX AG; Deutsche Börse Prime Standard ISIN DE000A0JRU67) today publishes its report on the first nine months of the 2010 financial year. It shows that revenue for the continuing operations rose 20.5 percent to EUR 93.1 (previous year: 77.2) million compared with the first nine months of the previous year. EBIT improved by 69.7 percent to EUR -0.9 (-3.0) million thanks to the good first half of 2010. The first nine months were shaped by continuing strong growth for the Maltese investment QED Ventures Ltd. Under the myBet brand, QED operates numerous sports betting shops in Europe, enjoying a market-leading position in Germany, and also runs the internet service myBet.com. By contrast, lottery business was increasingly loss-making. Earnings before tax (EBT) for the continuing operations amounted to EUR -0.9 (-3.0) million after nine months. The earnings contribution of the discontinued operations, which comprises the interest in pferdewetten.de AG that is available for sale, was EUR -0.7 (-0.6) million. Consolidated earnings for the first nine months were EUR -2.2 (-3.9) million, with earnings per share amounting to EUR -0.13 (-0.22). The continuing operations account for EUR -0.04 (-0.04) of this amount. Dwindling lottery business burdens result for quarter In the third quarter, revenue for continuing operations was up 14.4 percent on the prior-year quarter to EUR 29.4 (previous year: 25.7) million. Although revenue from betting was again boosted disproportionately by 22.9 percent, the summer break in European football leagues resulted in a typical seasonal dip of EUR 2.2 million compared with the second quarter of 2010, when the World Cup in South Africa also took place. As well as the seasonal effect in the Sports Betting segment, third-quarter earnings were also affected by the impact of the economic crisis on business in Spain and by gradually dwindling lottery business, which entails relatively high fixed costs. Third-quarter revenue from commissions and handling fees, largely constituting the lottery segment, was around 30 percent lower than in the previous year yet the cost basis was virtually unchanged. Earnings before interest and taxes (EBIT) for the continuing operations consequently fell to EUR -1.5 (-0.6) million. The result for the quarter was also burdened by legal proceedings. Increase in administrative proceedings prior to ECJ ruling In the weeks prior to the European Court of Justice ruling that overturned the State Treaty on gaming at the start of September, the German authorities exercised increasing pressure on private betting providers. Observers assume that in the run-up to the ECJ ruling the authorities were attempting to demonstrate the enforceability of the State Treaty on gaming, which had been seriously doubted. In this connection both JAXX SE itself and the companies in which it holds investments were plagued with administrative proceedings and threats of penalty payments. The increase in administrative proceedings had resulted in a marked rise in legal consultancy costs and other expenses in the third quarter. Drastic cost-cutting measures introduced to flank greater focus on sports betting In response to the ECJ's positive ruling and the increasing losses incurred by lottery business, the Management Board extended the restructuring programme introduced at the end of 2009. In future, the JAXX Group will be focusing on the high-growth area of sports betting and will cease to invest in German lottery business. As a result cost-cutting measures, including drastic moves such as the shedding of around 30 jobs in the JAXX Group, were introduced in October. The resulting earnings effect is worth around EUR 3.0 million for 2011. Good start to final quarter of 2010 The fourth quarter has got off to a highly promising start in all segments. Consistently strong growth in the sports betting area with good odds to date, high volumes for the casino and poker products and rapidly accelerating sales of tickets for the Spanish Christmas lottery all point to a successful final quarter of 2010. Against that backdrop, the Management Board continues to expect the 2010 financial year to end with a positive EBIT despite the loss at the nine-month mark. 9M /Q3 key figures (continuing operations): |[![CDATA[|[pre|]]]|] 9M 2010 9M 2009 +/- Q3 Q3 +/- 2010 2009 EUR EUR % EUR EUR % '000 '000 '000 '000 Revenue 93,085 77,233 +20.5 29,424 25,720 +14.4 of which betting stakes 72,974 55,953 +30.4 23,100 18,803 +22.9 Gambling fees 12,308 10,590 +16.2 4,234 3,942 +7.4 Commissions & handling 7,013 10,091 -30.5 1,963 2,822 -30.4 EBITDA 1,989 2,628 -532 1,549 EBIT -913 -3,005 -1,511 -635 Consolidated earnings -2,203 -3,862 -1,529 -1,156 Earnings for discontinued -728 -649 -229 -361 operations Earnings per share (EUR) -0.13 -0.22 -0.08 -0.05 30/09/10 31/12/09 Cash holdings 6,266 9,562 Shareholders' equity 15,723 17,093 Equity ratio 42.3% 42.1% |[![CDATA[|[/pre|]]]|] The Nine-Month Report will be made available for downloading in the course of today on the websites www.deutsche-boerse.com and www.jaxx-se.com. About JAXX: JAXX SE, listed in the Prime Standard of Deutsche Börse, is a financial holding company with holdings in international companies in the gaming industry. JAXX currently holds interests in companies in the UK, Spain, Austria and Malta. JAXX SE has its headquarters in Kiel. The holding companies cover the entire spectrum of the games and gambling industry. Depending on national regulatory structures, they broker or market sports and horse betting, lotteries, and casino and poker games. The JAXX Group generated total revenue of EUR 114.5 million in 2009. The shares of JAXX SE have been traded at Deutsche Börse since 1999 under ISIN DE000A0JRU67. Contact: JAXX SE Investor Relations & Corporate Communications Stefan Zenker Tel. +49 (40) 85 37 88 47 Fax +49 (40) 85 37 88 30 Mail stefan.zenker@jaxx.com 11.11.2010 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: JAXX SE Jägersberg 23 24103 Kiel Deutschland Phone: +49 (0)431 88 104-0 Fax: +49 (0)431 88 104-40 E-mail: ir@jaxx.com Internet: www.jaxx-se.com ISIN: DE000A0JRU67 WKN: A0JRU6 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Hamburg, München, Berlin, Düsseldorf, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------
DGAP-News: Lottery business and legal proceedings place burden on JAXX SE result for quarter
| Source: EQS Group AG