Bwin

Bwin reports results

VIENNA, Austria – (PRESS RELEASE) --

* Legal development in US and Europe triggers strategic change earlier than initially planned

* Early changeover from accelerated growth strategy of recent years to profit orientation and increased focus on European markets

* Cessation of Real Money products for US customers: 2006 gross gaming revenues of around EUR 375 million and balanced EBITDA before deduction of restructuring costs.

* Gross gaming revenues of EUR 289 million trebled compared to previous year (Q1-Q3 2005: EUR 96.3 million)

* Nearly 1.8 million active and 1.1 new active Real Money customers

* EBITDA of EUR 9.4 million after investment phase (Q1-Q3 2005: EUR 8.3 million)

* Result after tax of EUR 49.8 million (Q1-Q3 2005: EUR 1.4 million) strongly impacted by depreciation charges in association with Ongame acquisition

bwin changed its strategic approach with effect from the beginning of Q4 2006 in reaction to the legislative developments in the USA and in view of the uncertainties in several European countries. A year earlier than originally planned, bwin's aggressive growth strategy will be changed in favour of the profitable development of the Company with increased cash flow generation. An efficiency enhancement programme embracing all areas of the Company has been initiated. The resulting savings should be reflected in the results with effect from Q1 2007.

bwin estimates the restructuring costs associated with the cessation of its Real Money gaming products for US customers at around EUR 5.5 million. Consequently, bwin anticipates gross gaming revenues in the amount of around EUR 375 million for the current financial year, with a balanced EBITDA before deduction of restructuring costs. Over and above this, management expects to make a non-cash charge for the write-off of assets with a current net book value of EUR 534 million acquired as a result of the Ongame transaction. Shareholders' equity will remain strongly positive.

bwin increased its gross gaming revenues in the first nine months of 2006 to EUR 288.7 million. Of this amount, gross gaming revenues from sports betting operations amounted to EUR 125.2 million (first nine months of 2005: EUR 65.2 million). The gross gaming revenues generated by the casino, poker and games sectors amounted respectively to EUR 60.9 million (first nine months of 2005: EUR 22.2 million), EUR 92.6 million (first nine months of 2005: EUR 5.9 million), and EUR 10.0 million (first nine months of 2005: EUR 3.1 million). US customers accounted for 22.5 per cent (EUR 65 million) of gross gaming revenues in the first nine months of 2006.

A total of over 1.8 million customers were active in the first nine months of 2006 (first nine months of 2005: 524,000, up 250.7 per cent). Of these, 1.1 million customers were active for the first time.

EBITDA in the first nine months of 2006 totalled EUR 9.4 million (first nine months of 2005: EUR 8.3 million). This development was due to a significant increase in marketing investment associated with the Soccer World Championships and a greater involvement in the field of sports sponsoring, designed principally to increase the familiarity of the bwin brand.

The consolidated loss after taxes and third-party interests was EUR 49.8 million for the first nine months of 2006 (in the first nine months of 2005: profit of EUR 1.4 million). A charge of EUR 27.3 million was made due to the non-cash depreciation of the customer base and software acquired as a result of the Ongame transaction.

source: casinocitytimes.com