JAXX AG / Quarter Results 05.11.2009 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Nine-month report: Sports betting generates continuing growth at JAXX - Recovery of betting margins in third quarter - EBIT and consolidated earnings still negative in third quarter - Restructuring programme turns the tide in September Altenholz, November 5, 2009 - The gaming specialist JAXX AG (Deutsche Börse Prime Standard; ISIN DE000A0JRU67) has today published its report on the first nine months of the 2009 financial year. Whereas the result had been dominated by disproportionately weak margins in the Sports Betting segment in the second quarter, the business performance was stabilised in the course of the third quarter. The start of the new football season brought a rise in revenue and helped betting margins gradually return to normal. Further impetus for growth was provided by high lottery jackpots in Europe, growing demand for casino and poker products, and the Spanish market, where tickets for the high-revenue Christmas Lottery have now gone on sale. The traditionally low revenue in the summer month of July, an initially subdued start to the season in August and a persistently difficult market environment in the horse betting area nevertheless meant that the overall result for the quarter was still negative. The exit from German syndicate business at the start of the year - a direct consequence of the State Treaty on gaming - led to a fall in revenue in the Lottery segment. Consolidated revenue rises to EUR 88.9 million Consolidated revenue rose overall by 2.5 percent in the first nine months of 2009, to EUR 88.9 million. Revenue for the third quarter of 2009 totalled EUR 29.4 million, representing year-on-year growth of 2.8 percent. 70 percent of revenue for the first nine months of the year came from sports betting, 16 percent from lotteries and 14 percent from horse betting. The repositioning of the company as a betting rather than lotteries provider thus continues. Although earnings before interest, taxes, depreciation and amortisation (EBITDA) for the first nine months of 2009 were comfortably positive at EUR 2.3 million, this figure was down on the prior-year period. Depreciation and amortisation fell by 8 percent as a result of the exit from German syndicate business and amounted to EUR 5.9 million in the current financial year, compared with EUR 6.4 million in the first nine months of 2008. Earnings before interest and taxes (EBIT) therefore reached EUR -3.6 million, compared with EUR -0.8 million in the prior-year period. Consolidated earnings fell from EUR -1.2 million to EUR -3.9 million. EBITDA for the third quarter of 2009 was EUR 1.3 million (previous year: EUR 1.8 million), and EBIT was EUR -1.0 million (previous year: EUR -0.2 million). Consolidated earnings fell from EUR -0.5 million to EUR -1.2 million. Restructuring programme yields profits in September and October A restructuring programme launched in the third quarter already produced positive results in September and October, and will continue to improve the situation in the fourth quarter. By making increased use of synergy benefits and combining departments, it is expected that cost savings running into the millions can be realised in the course of the year. The cornerstones of the restructuring programme are initially a short-term drive to cut costs, followed by focused strategic repositioning in a second phase. As part of the short-term cost savings, personnel cutbacks of more than ten percent have already been made, service contracts and commission agreements have been renegotiated, and the decision has been taken to boost marketing efficiency and trim the budget. The strategic repositioning places particular focus on making greater use of synergy within the group and on aligning the interests of minorities with those of the Group. This is to be achieved by increasing the interest of the minority shareholders of Digidis S.L., Madrid, and QED Ltd., Malta, (myBet) in JAXX AG coupled with a further reduction in their interest in the subsidiaries, for example by way of a share swap. This should closely and directly reconcile the aims of the management of the subsidiaries with the interests of JAXX AG's existing shareholders. There are currently no plans to acquire the minority interest in Pferdewetten.de AG. Operations such as software development and customer service, as well as product divisions, will be merged to avoid duplication of activities and costs. The decision to focus on product divisions envisages bolstering those products that are fundamentally similar in all countries and can therefore be offered universally with only little localisation, equipping the company with an international product portfolio. These include e.g. pan-European lotteries, poker, sports betting and casino. Initial licensing procedures for the above are in the pipeline in Italy and France, with more to follow. Products offered centrally have already been switched to multi-lingual versions; the language versions for the corresponding target markets will be changed in the short term. Outlook The fourth quarter is generally considered to be the strongest due to seasonal factors. The football season is in full swing and the sales figures for tickets for the Spanish Christmas Lottery traditionally soar in the final few weeks of the year. Spain's most popular lottery comes to a spectacular climax each year one evening before Christmas, with the draw for the jackpot known as 'El Gordo', when winnings in the region of two billion euros are up for grabs. The revenue and financial performance in the fourth quarter is expected to show a general improvement on the second and third quarters. In the first few weeks there have already been clear signs that this will be the case. It is nevertheless unlikely that the profit targeted for the fourth quarter will be able to compensate fully for the accumulated loss of the first nine months. However, the management of JAXX AG is confident that the turnaround kicked off at the start of the financial year can be completed next year, based on the measures in progress to expand business and reduce costs. Key figures for 9 months / 3rd quarter of 20099M/2009 9M/2008 +/- Q3/2009 Q3/2008 +/- EUR '000 EUR '000 % EUR EUR % '000 '000 Revenues 88,912 86,734 +2.5 29,443 28,630 +2.8 Of which: Sports Betting 62,058 49,394 +25.6 20,901 16,674 +25.4 Horse Betting 12,335 20,235 -39.0 3,872 6,195 -37.5 Lottery & Gambling 14,519 17,106 -15.1 4,670 5,762 -19.0 EBITDA 2,341 5,671 -58.7 1,306 1,750 -25.4 EBIT -3,579 -769 -973 -232 Consolidated -3,862 -1,244 -1,156 -454 earnings Earnings per share -0.24 -0.08 -0.07 -0.03 (EUR) 30/09/ 31/12/ 2009 2008 Monetary holdings 9,359 12,861 Shareholders' 20,407 20,315 equity Equity ratio 47.0% 41.8%The full 2009 Nine-Month Report will be published and available for downloading today on the websites www.deutsche-boerse.com and www.jaxx.ag. About JAXX: JAXX AG is a holding company with its registered office in Altenholz, near Kiel, and invests in companies in the gaming industry. From betting, casino and poker to bingo and lotteries, the companies that make up the JAXX Group offer the most popular forms of state-licensed gaming via online platforms such as www.jaxx.com, www.myBet.com and www.pferdewetten.de. Integrity, customer centricity and reliably handled transactions are the top priority in every case. It has investment companies in Germany, the UK, Spain, Austria and Malta. The JAXX Group has a total of around 200 employees, 20 of who work for the holding company. The shares of JAXX AG have been traded at Deutsche Börse since 1999 under ISIN DE000A0JRU67. Contact: JAXX AG Investor Relations & Corporate Communications Stefan Zenker Tel. +49 (40) 85 37 88 47 Fax +49 (431) 88 10 44 0 Mail stefan.zenker@jaxx.com 05.11.2009 Financial News transmitted by DGAP ---------------------------------------------------------------------------
| Language: | English | |
| Phone: | +49 (0)431 88 104-0 | |
| Fax: | +49 (0)431 88 104-40 | |
| E-mail: | ir@jaxx.com | |
| WWW: | www.jaxx.com | |
| ISIN: | DE000A0JRU67 | |
| WKN: | A0JRU6 | |
| Listed: | Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, München, Hamburg, Stuttgart | |
| End of News | DGAP News-Service | |
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