betandwin.com publishes numbers for Q1 2004

Notes – first quarter of 2004

Manfred Bodner (Co-CEO)
In compliance with the requirements for companies listed on the prime market of the Vienna Stock Exchange, with effect from its report for Q1 2003, BETandWIN.com Interactive Entertainment AG now publishes more detailed information. This includes a complete consolidated balance sheet, a consolidated income statement, a consolidated cash flow statement, and a consolidated statement of changes in shareholders’ equity. This move is designed to significantly improve the quality and transparency of interim financial reporting on the group’s assets and profitability.

In order to ensure improved comparability with previous periods, betandwin now publishes selected key figures in pro-forma consolidated form and using the at-equity method. However, the consolidated balance sheet, consolidated income statement, consolidated cash flow statement, and consolidated statement of changes in shareholders’ equity are presented only using the at-equity method.



Highlights Q1/2004 (pro-forma consolidated)

    Record turnover of over EUR 136 million (Q1 2003: EUR 90 million; up 52%)

    Record net winnings of EUR 8.7 million (Q1 2003: EUR 5.8 million; up 51%)

    Record EBITDA of EUR 2.7 million (Q1 2003: EUR 1.5 million; up 76%)

    Liquid assets of EUR 27.8 million (31 December 2003: EUR 25.5 million; up 9%)



Development of business (pro-forma consolidated)

Record turnover of over EUR 136 million (Q1 2003: EUR 90 million; up 52%)

Norbert Teufelberger (Co-CEO)
betandwin increased turnover from its betting and casino operations as well as lottery games to EUR 136.321 million. This compares with turnover of EUR 89.955 million in the same period the previous year, and represents a rise of EUR 46.366 million, or 51.5%.

Turnover from betting operations totalled EUR 58.438 million (Q1 2003: EUR 39.569 million*; plus EUR 18.869 million, or 47.7%), whilst turnover from casino operations was EUR 76.599 million (Q1 2003: EUR 50.386 million; plus EUR 26.213 million, or 52.0%). Lottery games generated a turnover of EUR 1.284 million.

(*) Includes sports betting turnover of EUR 11.7 million and net winnings of EUR 1.5 million respectively from a contract with a distribution partner that expired in June 2003.



Record net winnings of EUR 8.7 million (Q1 2003: EUR 5.8 million; up 51%)

Net winnings after commission and taxes** from betting and casino operations as well as lottery games totalled EUR 8.713 million in the first quarter of 2004 (Q1 2003: EUR 5.778 million), an increase of 50.8%. Net winnings from betting operations totalled EUR 6.664 million (Q1 2003: EUR 4.504 million*; plus EUR 2.160 million, or 48.0%), from casino operations EUR 1.964 million (Q1 2003: EUR 1.274 million; plus EUR 0.690 million, or 54.2%), whilst lottery games generated EUR 0.085 million.

The net winnings margin from betting and casino operations as well as lottery games was 6.4%, as in the same period the previous year. The net winnings margins in the product segments were virtually unchanged compared to Q1 2003, remaining steady at 11.4% for betting operations (Q1 2003: 11.4%) and 2.6% for casino operations (Q1 2003: 2.5%). A net winnings margin of 6.6% was achieved with lottery games.

Apart from the net winnings mentioned above, revenues totalling EUR 9.665 million (Q1 2003: EUR 6.256 million; plus EUR 3.409 million, or 54.5%) included revenues from foreign currency gains and capitalized software development cost and charged fees for payment services.



Record EBITDA of EUR 2.7 million (Q1 2003: EUR 1.5 million; up 76%)

EBITDA for Q1 2004 amounted to EUR 2.673 million (Q1 2003: EUR 1.519 million; plus EUR 1.154 million, or 76.0%), with EBIT at EUR 1.426 million (Q1 2003: EUR 0.004 million).

Expenses for personnel, marketing, and other expenses rose by EUR 2.255 million, or 47.6%, to EUR 6.992 million (Q1 2003: EUR 4.737 million).

Personnel expenses of EUR 1.930 million (Q1 2003: EUR 1.420 million) were up by EUR 0.510 million, or 35.9%. Against the background of the company’s accelerated expansion plan, a staff development programme initiated in the fourth quarter of 2003 led to hires especially in the areas of sales and IT development. At the reporting date of 31 March 2004, the company employed a staff of 156 including freelancers (31 March 2003: 115).

Marketing expenses in the first quarter of 2004 totalled EUR 2.677 million compared to the same period the previous year of EUR 1.368 million (plus EUR 1.309 million, or 95.7%). In line with betandwin’s communicated growth strategy, the company has been focusing on steady organized growth in its defined core target markets in continental Europe.

Other expenses include bank charges, IT services, external odds calculation, consulting, investor relations, and increases to EUR 2.385 million (Q1 2003: EUR 1.949 million; plus 0.436 EUR million, or 22.4%). These cost increases were almost entirely associated with growth-related costs such as bank charges. The increase in depreciation/amortization was attributable to the amortization of goodwill due to the acquisitions completed during the year 2003.

Result before tax was EUR 1.867 million (Q1 2003: EUR 0.178 million; plus EUR 1.689 million). After the deduction of minority interests, the write up of deferred taxes and the accrual of appropriate tax provisions, profit after tax totalled EUR 0.745 million.

The number of registrations totalled 60,472 (including 2,522 customers migrated as a result of acquisitions and 57,950 new registrations) as compared to 31,391 in Q1 2003, an increase of 29,351 registrations, or 93.5%.

The number of bets placed in the first quarter rose up to 8,997,483 (Q1 2003: 4,328,129); an increase of 107.9%.



Liquid assets of EUR 27.8 million (31 December 2003: EUR 25.5 million; plus 9%)

Despite investments totalling EUR 0.6 million, due to the positive cash flow from current business activities and the positive financial result, liquid assets including short-term securities rose to EUR 27.845 million as of 31 March 2004. This figure compares with EUR 25.493 as of 31 December 2003, an increase of EUR 2.352 million, or 9.2%.

(**) Key indicator net winnings after commission and taxes: to ensure better comparability with previous periods, the revenue indicator „net winnings after commission and taxes“ (= revenues from betting and casino operations and lottery games less winnings from betting and casino operations and lottery games minus betting duties, casino taxes and commissions) is now reported instead of the previous indicator of „net winnings“.