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FLUXX grows by 123 percent in third quarter

FLUXX AG / Quarter Results



Corporate news transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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- Revenue for quarter up from EUR 5.3 million to EUR 11.8 million
- Increased expenditure for legal consultancy and lobbying activities
- Roll-out of JAXX Lotto Service being stepped up to 50 terminals per week

Altenholz, November 9, 2006 – The gaming specialist FLUXX AG (ISIN
DE000A0JRU67) today publishes the report on the third quarter and the first
nine months of 2006. The report reveals that revenue rose by 123 percent in
the third quarter, to EUR 11.8 million. Compared with the first nine months
of the previous year, revenue is up 114 percent to EUR 35.3 million. Both
commissions and handling income from lottery agency business were up on the
previous quarter thanks to healthy lottery business in the third quarter.
As expected, the third quarter was unable to match the high level of
revenue in the Sports Betting segment in the second quarter, during which
the football World Cup took place.

The expenses for marketing and legal consultancy, which were already
relatively high in the second quarter, rose further in the third quarter.
The costs for legal consultancy and lobbying activities in particular
continued to rise, against the backdrop of an ongoing political and legal
debate on the future shape of the German and European gaming market. As a
result, the consolidated earnings in both the third quarter and
cumulatively for the nine-month period are clearly negative.

Earnings before interest, taxes, depreciation and amortisation (EBITDA)
fell from EUR 1.4 million in the third quarter of 2005 to EUR 149 thousand
in the third quarter of 2006. EBIT was down from EUR 428 thousand to EUR
–1.5 million. The consolidated earnings fell from EUR 467 thousand in the
third quarter of 2005 to EUR -792 thousand in the third quarter of 2006.

EBITDA was down from EUR 4.4 million in the first nine months of the
previous year to EUR 1.3 million. EBIT fell from EUR 1.4 million in the
previous year to EUR -3.0 million in the first nine months of 2006.
Consolidated earnings slipped from EUR 1.0 million to EUR -1.5 million, and
earnings per share from EUR 0.08 to EUR –0.10.

Cash and cash equivalents, including securities, amounted to EUR 17.3
million at September 30, 2006. The equity ratio was 80.3 percent.

Outlook

The fourth quarter of 2006 will continue to be dominated by the debate
concerning the future shape of the German gaming market. The Prime
Ministers of the federal states intend to approve the new State Treaty on
gaming on December 13 and initiate the ratification process. If the treaty
should take effect on January 1, 2008 in its present form, this would have
marked negative consequences for private lottery agents. In close
cooperation with the Federation of Lottery Agents, a broad-based campaign
to highlight the devastating macroeconomic consequences and legal
implications of the State Treaty on gaming has therefore already been
launched. This will prompt a renewed significant rise in marketing and
consultancy expenses in the fourth quarter. The Supervisory Board of FLUXX
AG has approved an additional budget of up to one million euros to support
the campaign.

In operating terms, a slight rise in revenue is expected compared with the
third quarter, as the fourth quarter began with a record jackpot and the
syndicates, sports betting and Direct Lotto areas all continue to make
positive progress. The roll-out of the lottery terminals for the JAXX
Lottery Service at retail outlets gathered considerable pace once more
following the ruling of the Higher Regional Court of Düsseldorf, with the
result that terminals should be delivered at the rate of around 50 a week
by the end of the year.

The growth target of 110 to 130 percent for 2006 as a whole still appears
to be realistic. With regard to earnings, the Management Board of FLUXX AG
now expects a clearly negative result of between EUR –2.5 m and EUR –3.5
million due to political and legal factors. The expectation had previously
been that the company would break even for 2006 as a whole.

 Key figures for the first nine months / 3rd quarter of 2006


                   9M       9M       +/-      Q3       Q3
                   2006     2005              2006     2005
                   € '000   € '000   %        € '000   € '000   %

Gross sales        93,490   77,087   +21      31,379   25,005   +25
Betting stakes     58,195   60,577   -4       19,560   19,693   -15
Revenues           35,295   16,510   +114     11,819   5,312    +123
EBITDA             1,333    4,352    -69        149    1,440    -90
EBIT               -3,012   1,378             -1,464     428
Consolidated       -1,523   1,007              -792      467
earnings
Earnings per       -0.10     0.08             -0.05    0.015
share (€)
                   30/09/06 31/12/05

Net cash (incl.    17,283   24,282
securities)
Shareholders'      46,940   47,572
equity



The full 2006 Nine-Month Report will be published and available for
downloading today on the websites www.deutsche-boerse.com and
www.fluxx.com.

Further information from:


About FLUXX:

FLUXX is a company specialising in the handling of lotteries and betting,
with registered office in Altenholz, near Kiel. The necessary rights and
licences and the technical and market-relevant expertise place FLUXX in a
position to be able to arrange any form of licensed gaming for consumers,
using a variety of sales channels. In addition to the self-marketed
services jaxx.de, jaxx.com, myBet.com and Telewette, FLUXX makes its
products and services available to other companies and organisations with
extensive customer contacts. These include the online services AOL,
freenet.de and LYCOS, the pay TV station Premiere, the publisher Burda and
the lottery companies in the states of Schleswig-Holstein, Brandenburg and
Mecklenburg-Western Pomerania. FLUXX AG has been listed on the Frankfurt
Stock Exchange (Deutsche Börse) since September 1999 (ISIN DE000A0JRU67).
The group currently has 141 employees.

 

FLUXX AG
Investor Relations & Corporate Communications
Stefan Zenker
tel. +49 40 85378847
fax +49 431 8810440
email: stefan.zenker@fluxx.com


DGAP 09.11.2006 
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Language:     English
Issuer:       FLUXX AG
              Ostpreußenplatz 10
              24161 Altenholz Deutschland
Phone:        +49 (0)431 88 104-0
Fax:          +49 (0)431 88 104-40
E-mail:       info@fluxx.com
WWW:          www.fluxx.com
ISIN:         DE000A0JRU67
WKN:          A0JRU6
Indices:      
Listed:       Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin-Bremen, Düsseldorf, Hamburg, München, Stuttgart
 
End of News                                     DGAP News-Service
 
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