bwin Confirms Outlook, Set for 2009 Profit

bwin Interactive Entertainment AG has reported a marginal drop in net gaming revenues to €83.3 million for the third quarter of 2009, with the company's games and sports betting products offsetting declines in poker and casino during the period. With significant reductions in expenses, the company said that it remains on track with its forecasted EBITDA of at least €110 million for this year.

Net gaming revenues (NGR) were virtually unchanged compared to the same period last year, with the company stepping up measures for customer acquisition and reactivation by means of bonuses and the b'inside loyalty programme, particularly in connection with the launch of the company's new poker platform at the end of the quarter.

As a result of the higher expenses for bonuses, NGR from poker declined by 11% to €17.7 million during the quarter, while casino NGR fell marginally to €14.4 million following a planned reduction in marketing activities.

Sports betting NGR increased by 1% to €44.9 million as a result of reactivation measures in the form of football bonuses after the summer break, with NGR from games was up 36% to €6.3 million following the launch of the backgammon platform on the Greek betoto label in July.

Due to the expiry of rights to the first and second German soccer leagues and the resulting absence of revenues and costs from the sale of these rights, other revenues fell 32% to €9.0 million.

bwin was able to reduce total expenses by 15% to €77.8 million, with marketing expenses down 19% to €24.0 million following effective cost controls, while personnel expenses fell 5% to €23.1 million, and other expenses dropped 20% to €30.7 million.

A total of €13.8 million in customer bonuses was granted during the quarter, up from €9.5 million last year, as a result of increased reactivation measures in connection with the launch of the P5 Poker platform.

Total active customers rose marginally to 1.06 million quarter-on-quarter, with 258,188 new active customers during the period.

As a result, bwin recorded a 75% improvement in EBITDA to €16.8 million, leading the company to a profit after tax of €7.9 million during the quarter versus a loss of €7.0 million in Q3 2008.

For the nine month period gross gaming revenues increased 4% to €313.3 million despite below average sports betting margins, with NGR falling marginally to €263.2 million with double digit growth in both poker and games. EBITDA increased by 84% to €60.9 million with profit after tax totalling €26.9 million compared to a loss of €2.7 million last year.

Including the recent acquisition of Italy's Gioco Digitale, bwin anticipates total gross gaming revenues of between €435 million and €450 million for the full 2009 year, with EBITDA expected to be at least €110 million. The company plans a payout ratio of 30% to 50% on consolidated profit for 2009.

As a market leader in the booming Italian online gaming market, as well as new product launches set for Italy and the soon-to-be regulated French gaming market, based on the gross gaming revenues of over €570 million forecast for 2010, bwin's management anticipates an adjusted EBITDA of more than €150 million for next year.

As at September 30th the company held cash, cash equivalents and securities of €173.0 million compared to €142.0 million last year.

Shares in bwin Interactive Entertainment AG (Co. Profile) (BWIN.VI) have gained 1.50% to €38.56 per share in Vienna this morning following the announcement.