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DGAP-News: Lotto24 AG / Key word(s): Quarter Results Lotto24 AG: Press release on the first nine months of 2012 - Lotto24 AG reaches milestones for nationwide launch

12.11.2012 / 07:24

Press release on the first nine months of 2012

Lotto24 AG reaches milestones for nationwide launch

- Lotto24 receives permit for online brokerage of state lotteries - No significant revenues yet, earnings strongly affected by start-up investments

(Hamburg, 12 November 2012) Lotto24 AG today publishes figures for the third quarter of its fiscal year 2012. Following its successful IPO in July, Lotto24 AG was one of the first private German companies to receive a five-year permit in late September for the online brokerage of state lotteries - albeit with several restrictions that continue to hamper the development of business. Although the permit generally lays the foundation for nationwide operations, its late issue means that no significant revenues could be generated in the third quarter. The companys earnings in the first nine months were strongly affected by start-up investments.

The permit issued in late September contains several restrictive provisions, especially with regard to the protection of minors and a regionalization duty. The latter forces the company to submit tickets in the federal state of the respective player and to conclude agreements and create IT interfaces with all 16 state lottery companies. Moreover, Lotto24 is still not allowed to advertise its online products on national TV or via the Internet. This requires an additional advertising permit, which will not be issued until December at the earliest - once the First State Treaty to Revise the State Treaty on Games of Chance (GlndStV) has come into force in North-Rhine Westphalia.

As a result of these restrictions, business in the first nine months of the year was still extremely limited: from stakes received solely in Schleswig-Holstein of EUR 129 thousand, Lotto24 AG generated revenue of EUR 8 thousand (prior year: EUR - thousand), while losses before interest and taxes (EBIT) reached EUR -2,694 thousand (prior year: EUR -133 thousand). The increase in loss recorded resulted mainly from costs for the spin-off and IPO of Lotto24, as well as start-up expenses incurred to develop the business. Net loss for the period rose to EUR -2,354 thousand (prior year: EUR -110 thousand). Earnings per share amounted to EUR -0.19.

Outlook

Lotto24 has been enabling customers in 10 federal states (Baden-Wrttemberg, Bavaria, Berlin, Brandenburg, Hamburg, Hesse, Lower Saxony, Rhineland-Palatinate, Saxony and Schleswig-Holstein) to participate in the German state-run lottery (Lotto) via the Internet since early October. The company expects that all remaining state lottery companies will be connected by the end of the first quarter of 2013 and that online brokerage of lottery products will once again be possible in all federal states. In order to make the required age verification process as efficient as possible for its customers, Lotto24 has developed a new system which has been operational since October.

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DGAP-News: Lotto24 AG: Press release on the first nine months of 2012 - Lotto24 AG reaches milestones for nationwide ...