Tipp24: Successful realignment of business fields

Mar 31, 2010 11:00 AM

Tipp24 SE / Final Results

31.03.2010 11:00

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* Focus on non-German business
* Basis for business largely removed in Germany

In its fiscal year 2009, Tipp24 increased revenues by 95.4% to EUR 89,551
(prior year: 45,838) thousand. Consolidated earnings before interest and
taxes (EBIT) grew to EUR 23,052 (8,897) thousand.

There was strong growth in revenues generated outside Germany to EUR 88,537
(5,856) thousand and a corresponding rise in EBIT of the Abroad segment to
EUR 32,708 (-2,079) thousand.

As a result of the virtually complete withdrawal of its business base in
Germany following the introduction of the State Treaty on Gaming (GlüStV),
revenues of Tipp24's Germany segment fell by 91.9% to EUR 3,256 (39,983)
thousand. Consequently, the EBIT result of the Germany segment fell to EUR
-11,344 (10,976) thousand. The new legislation in Germany completely bans
the online brokering and advertising of the state-run lottery (Lotto).
Non-recurring restructuring costs and start-up losses in the Skill-Based
Games division placed a further burden on earnings.

Earnings after taxes according to German Commercial Law (HGB) of Tipp24 SE
(net profit) amounted to EUR 22 thousand in fiscal year 2009. The net
profit could only be achieved due to a non-recurring effect from the
restructuring of business. The company must bear considerable running costs
- mainly for administration and legal advice - but has very few revenue
streams itself from its own activities. The profits of associated companies
in the Abroad segment, however, are currently being carried forward and not
distributed to Tipp24 SE. As the balance sheet profit of Tipp24 SE was
zero, no dividend will be paid for fiscal year 2009.

Realignment of business fields - focus on non-German business 

Following the introduction of the second stage of the GlüStV on 1 January
2009 and the resulting withdrawal of the company's previous business model
in Germany, Tipp24 SE restructured its business fields as of 1 January
2009: the majority of activities in connection with the brokerage or offer
of lottery products were terminated and numerous no longer required assets
transferred to MyLotto24 Ltd. and its subsidiaries, which has been active
in the UK since 2007.

On 30 April 2009, Tipp24 SE transferred control over its UK subsidiaries in
accordance with company law. The move reflects the autonomy and individual
responsibility of these companies. Specifically, 60% of the voting shares
in both MyLotto24 Ltd. and Tipp24Services Ltd. were sold to a Swiss
foundation set up by Tipp24 SE. The inclusion of this affiliated company
and its respective subsidiaries in the consolidated financial statements is
based on an economic view of their situation, whereby the significant
opportunities and risks are borne by Tipp24 SE.

Legal situation in Germany still unresolved 

Tipp24 SE expects that the German legislation which controversially forbids
its operations will be adapted again to the requirements of higher-ranking
European legislation in the medium term.

Various injunctions and verdicts of German courts, concerning both Tipp24
and other market participants, mean that the legal situation remained
extremely unclear in 2009. Numerous proceedings have been suspended until a
settlement has been reached at European level. The government of the
federal state of Schleswig-Holstein gave the GlüStV its first publicly
stated rejection from a leading political body by announcing their
intention to overturn it at the next possible opportunity.

Dr. Hans Cornehl, sole Executive Board member of Tipp24 SE: 'The State
Treaty on Gaming has failed to achieve its objectives. There is neither
legal certainty, nor have fiscal revenues been secured. There are only
losers: the state lottery organizers, the commercial brokers, the
advertising industry, consumers whose freedom of choice has been
restricted, and the German federal states themselves. In the period up to
late 2008, Tipp24 alone had brokered over EUR 1.5 billion of stakes for the
state-run lottery companies and thus contributed EUR 600 million in taxes
and duties. These funds are now no longer available to support sports, the
arts and welfare institutions'. After the legal situation has been settled
in its favour, Tipp24 SE intends to resume its previous activities as a
private broker of state lotteries in Germany as swiftly as possible.


In view of the earnings and experience gained in its Abroad segment in
2009, Tipp24 expects consolidated revenues to increase to at least EUR 100
million and EBIT to reach at least EUR 40 million in 2010. Statistically
unusually high or frequent payments of large winnings, however, would also
dampen these expectations.

Should the current legal and economic conditions remain stable beyond 2010,
our forecast for 2010 would apply in the same way for 2011. Against the
backdrop of an extremely unstable regulatory environment at present,
however, this is subject to considerable uncertainties.

About Tipp24 SE: Tipp24 SE was founded in September 1999 and holds equity
interests in a number of companies in Spain, Italy and the UK, which enable
participation in lottery-based games via the Internet, especially via the
websites www.ventura24.es, www.giochi24.it, www.mylotto24.co.uk and
www.tipp24.com. In Germany, the subsidiary Tipp24 Entertainment GmbH
operates the games platform www.tipp24games.de. From its foundation to the
end of 2008, Tipp24 SE has brokered tickets worth over 1.5 billion euros to
the state lottery companies - in recent years over 330 million euros
annually. Shares in Tipp24 SE have been traded in the Prime Standard
segment of the Frankfurt Stock Exchange since 2005. In June 2009, the
company was admitted to the SDAX index.

Tipp24 SE       
Andrea Fratini       
Head of Media and Public Relations   
Tel.: +49 40 32 55 33-660     
E-mail: presse@tipp24.de  
Internet: www.tipp24-se.de/presse/ 

31.03.2010 Ad hoc announcement, Financial News and Media Release distributed by DGAP.
Media archive at www.dgap-medientreff.de and www.dgap.de

Language:     English
Company:      Tipp24 SE
              Straßenbahnring 11
              20251 Hamburg
Phone:        +49 (0)40 325533-0
Fax:          +49 (0)40 325533-77
E-mail:       office@tipp24.de
Internet:     www.tipp24-ag.de
ISIN:         DE0007847147
WKN:          784714
Indices:      SDAX
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin, Düsseldorf, München, Hamburg, Stuttgart
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