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Nine-month report: Sports betting generates continuing growth at JAXX

JAXX AG / Quarter Results

05.11.2009 

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Nine-month report:

Sports betting generates continuing growth at JAXX

- Recovery of betting margins in third quarter
- EBIT and consolidated earnings still negative in third quarter
- Restructuring programme turns the tide in September

Altenholz, November 5, 2009 - The gaming specialist JAXX AG (Deutsche Börse
Prime Standard; ISIN DE000A0JRU67) has today published its report on the
first nine months of the 2009 financial year. Whereas the result had been
dominated by disproportionately weak margins in the Sports Betting segment
in the second quarter, the business performance was stabilised in the
course of the third quarter.

The start of the new football season brought a rise in revenue and helped
betting margins gradually return to normal. Further impetus for growth was
provided by high lottery jackpots in Europe, growing demand for casino and
poker products, and the Spanish market, where tickets for the high-revenue
Christmas Lottery have now gone on sale.

The traditionally low revenue in the summer month of July, an initially
subdued start to the season in August and a persistently difficult market
environment in the horse betting area nevertheless meant that the overall
result for the quarter was still negative. The exit from German syndicate
business at the start of the year - a direct consequence of the State
Treaty on gaming - led to a fall in revenue in the Lottery segment.

Consolidated revenue rises to EUR 88.9 million

Consolidated revenue rose overall by 2.5 percent in the first nine months
of 2009, to EUR 88.9 million. Revenue for the third quarter of 2009
totalled EUR 29.4 million, representing year-on-year growth of 2.8 percent.
70 percent of revenue for the first nine months of the year came from
sports betting, 16 percent from lotteries and 14 percent from horse
betting. The repositioning of the company as a betting rather than
lotteries provider thus continues.

Although earnings before interest, taxes, depreciation and amortisation
(EBITDA) for the first nine months of 2009 were comfortably positive at EUR
2.3 million, this figure was down on the prior-year period. Depreciation
and amortisation fell by 8 percent as a result of the exit from German
syndicate business and amounted to EUR 5.9 million in the current financial
year, compared with EUR 6.4 million in the first nine months of 2008.
Earnings before interest and taxes (EBIT) therefore reached EUR -3.6
million, compared with EUR -0.8 million in the prior-year period.
Consolidated earnings fell from EUR -1.2 million to EUR -3.9 million.

EBITDA for the third quarter of 2009 was EUR 1.3 million (previous year:
EUR 1.8 million), and EBIT was EUR -1.0 million (previous year: EUR -0.2
million). Consolidated earnings fell from EUR -0.5 million to EUR -1.2
million.

Restructuring programme yields profits in September and October

A restructuring programme launched in the third quarter already produced
positive results in September and October, and will continue to improve the
situation in the fourth quarter. By making increased use of synergy
benefits and combining departments, it is expected that cost savings
running into the millions can be realised in the course of the year.

The cornerstones of the restructuring programme are initially a short-term
drive to cut costs, followed by focused strategic repositioning in a second
phase. As part of the short-term cost savings, personnel cutbacks of more
than ten percent have already been made, service contracts and commission
agreements have been renegotiated, and the decision has been taken to boost
marketing efficiency and trim the budget.

The strategic repositioning places particular focus on making greater use
of synergy within the group and on aligning the interests of minorities
with those of the Group. This is to be achieved by increasing the interest
of the minority shareholders of Digidis S.L., Madrid, and QED Ltd., Malta,
(myBet) in JAXX AG coupled with a further reduction in their interest in
the subsidiaries, for example by way of a share swap. This should closely
and directly reconcile the aims of the management of the subsidiaries with
the interests of JAXX AG's existing shareholders. There are currently no
plans to acquire the minority interest in Pferdewetten.de AG.

Operations such as software development and customer service, as well as
product divisions, will be merged to avoid duplication of activities and
costs. The decision to focus on product divisions envisages bolstering
those products that are fundamentally similar in all countries and can
therefore be offered universally with only little localisation, equipping
the company with an international product portfolio. These include e.g.
pan-European lotteries, poker, sports betting and casino. Initial licensing
procedures for the above are in the pipeline in Italy and France, with more
to follow. Products offered centrally have already been switched to
multi-lingual versions; the language versions for the corresponding target
markets will be changed in the short term.

Outlook

The fourth quarter is generally considered to be the strongest due to
seasonal factors. The football season is in full swing and the sales
figures for tickets for the Spanish Christmas Lottery traditionally soar in
the final few weeks of the year. Spain's most popular lottery comes to a
spectacular climax each year one evening before Christmas, with the draw
for the jackpot known as 'El Gordo', when winnings in the region of two
billion euros are up for grabs.

The revenue and financial performance in the fourth quarter is expected to
show a general improvement on the second and third quarters. In the first
few weeks there have already been clear signs that this will be the case.
It is nevertheless unlikely that the profit targeted for the fourth quarter
will be able to compensate fully for the accumulated loss of the first nine
months. However, the management of JAXX AG is confident that the turnaround
kicked off at the start of the financial year can be completed next year,
based on the measures in progress to expand business and reduce costs.

Key figures for 9 months / 3rd quarter of 2009


                     9M/2009    9M/2008    +/-    Q3/2009  Q3/2008  +/-
                     EUR '000   EUR '000   %      EUR      EUR      %
                                                  '000     '000
Revenues               88,912     86,734   +2.5   29,443   28,630   +2.8
         Of which:
    Sports Betting     62,058     49,394   +25.6  20,901   16,674   +25.4
     Horse Betting     12,335     20,235   -39.0   3,872    6,195   -37.5
Lottery & Gambling     14,519     17,106   -15.1   4,670    5,762   -19.0
EBITDA                  2,341      5,671   -58.7   1,306    1,750   -25.4
EBIT                   -3,579       -769            -973     -232
Consolidated           -3,862     -1,244          -1,156     -454
earnings
Earnings per share      -0.24      -0.08           -0.07    -0.03
(EUR)
                       30/09/     31/12/
                         2009       2008
Monetary holdings       9,359     12,861
Shareholders'          20,407     20,315
equity
Equity ratio            47.0%      41.8%


The full 2009 Nine-Month Report will be published and available for downloading today on the websites www.deutsche-boerse.com and www.jaxx.ag. About JAXX: JAXX AG is a holding company with its registered office in Altenholz, near Kiel, and invests in companies in the gaming industry. From betting, casino and poker to bingo and lotteries, the companies that make up the JAXX Group offer the most popular forms of state-licensed gaming via online platforms such as www.jaxx.com, www.myBet.com and www.pferdewetten.de. Integrity, customer centricity and reliably handled transactions are the top priority in every case. It has investment companies in Germany, the UK, Spain, Austria and Malta. The JAXX Group has a total of around 200 employees, 20 of who work for the holding company. The shares of JAXX AG have been traded at Deutsche Börse since 1999 under ISIN DE000A0JRU67. Contact: JAXX AG Investor Relations & Corporate Communications Stefan Zenker Tel. +49 (40) 85 37 88 47 Fax +49 (431) 88 10 44 0 Mail stefan.zenker@jaxx.com 05.11.2009 Financial News transmitted by DGAP --------------------------------------------------------------------------- Language: English Company: JAXX AG Ostpreußenplatz 10 24161 Altenholz Deutschland Phone: +49 (0)431 88 104-0 Fax: +49 (0)431 88 104-40 E-mail: ir@jaxx.com Internet: www.jaxx.com ISIN: DE000A0JRU67 WKN: A0JRU6 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, München, Hamburg, Stuttgart End of News DGAP News-Service ---------------------------------------------------------------------------