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mybet Holding SE: operating turnaround successfully launched in 2014 financial year

mybet Holding SE / Key word(s): Preliminary Results

2015-03-31 / 09:01

mybet Holding SE: operating turnaround successfully launched in 2014 financial year

- Revenue of EUR 70.4 million around 10 percent up on adjusted prior-year level

- 20.9 percent growth in Sports Betting

- Clear improvement in profitability in 2014: EBIT of EUR 0.6 million approximately EUR 11.9 million up on 2013

- Continuing emphasis on repositioning in 2015 financial year

- At earnings level, significant burden of up to EUR 2 million in 2015 from introduction of sales tax on certain products

Kiel, March 31, 2015 - mybet Holding SE (Deutsche Börse Prime Standard, ISIN DE000A0JRU67) today publishes provisional, unaudited figures for the 2014 financial year. Due to unforeseen organisational bottlenecks, publication of the full, audited Annual Report is now anticipated for the start of April.

Within the context of the turnaround initiated in the 2014 financial year, the business operations of the mybet Group developed positively. Both the revenue forecast and the EBIT forecast for the full year upgraded at the end of October 2014 were achieved. In addition the company identified further opportunities and launched measures to provide a lasting boost to the future business performance, too.

2014 financial year

mybet achieved an increase in revenue of 5.1 percent year on year to EUR 70.4 million in the 2014 financial year (previous year: EUR 67.0 million). Key factors behind the revenue growth were the acquisition of new customers in the Sports Betting segment and growth in online business for the Horse Betting segment. This meant that by focusing on core business, mybet was able to more than compensate for the loss of revenue contributions from the deconsolidation of the Spanish subsidiary DIGIDIS S.L. and the exit from lottery operations. After adjustment for the lottery revenue from the deconsolidated DIGIDIS S.L., growth was even more marked: measured against the adjusted revenue for 2013 of EUR 63.8 million, revenue increased by 10.4 percent in the 2014 financial year. Profitability, too, improved substantially. For business operations, mybet achieved positive earnings before interest and taxes (EBIT) of EUR 0.6 million (previous year: EUR -11.3 million).

Sven Ivo Brinck, CEO of mybet Holding SE, commented: "We increased both our revenue and earnings as planned in 2014. It was made possible by our being able to capitalise fully on the FIFA World Cup in summer 2014, in conjunction with optimised system stability. We also introduced a large number of new products and features, such as our loyalty card, betting terminals and new, improved mobile applications. In addition, we focused on pushing through further improvements to our cost basis. The performance in 2014 shows that we are on the right track. We will actively take up the challenges that lie ahead of us."

mybet achieved growth in the Sports Betting and Horse Betting segments in the 2014 financial year. This compensated for the fall in revenue for the Casino & Poker segment, where mybet had withdrawn from a number of European markets due to local regulation, and also for the exit from Spanish lottery business. Revenue for the Sports Betting segment in 2014 was around 20.9 percent up on the previous year at EUR 40.3 million (previous year: EUR 33.3 million). The factors behind this growth included growth at sports betting shops following the upgrading of the shop structure and the FIFA World Cup, which had a correspondingly positive impact on revenue. In the Casino & Poker segment, revenue fell as expected by 6.4 percent, down from EUR 23.4 million in the previous year to EUR 21.9 million. The prior-year figure still includes revenue for various European markets from which mybet withdrew in mid-2013 due to national regulations. The Horse Betting segment increased its revenue by 25.4 percent to EUR 7.1 million in the 2014 reporting period (previous year: EUR 5.6 million). Strong growth in online business lay behind this development. The revenue of the other operating segment stems mainly from the activities of C4U-Malta Ltd.; it was roughly on a par with the previous year at EUR 1.1 million (previous year: EUR 1.3 million).

The financial and liquidity situation of the mybet Group was likewise stable at the 2014 reporting date. With a positive cash flow from operating activities of EUR 2.8 million (previous year: EUR 0.5 million) and cash and cash equivalents of EUR 8.7 million the debt-free company enjoys a high equity ratio of 51.2 percent (previous year: 44.4 percent).

Outlook for 2015

Having successfully initiated the turnaround in the past year, the mybet Group will continue to pursue its chosen strategy and concentrate on its operational core skills. The Management Board believes implementing the necessary product innovations and platform optimisations will be decisively influence how successful the turnaround is in the current year 2015. Sven Ivo Brinck: "The turnaround at mybet is still continuing. The focus for 2015 is emphatically on the product and the brand. According to the maxim of Product and Customer First, we are pursuing three specific goals: a clear brand promise, a perfect product, and excellent customer service - not just in the betting shop and on the fixed web, but also on your mobile phone."

The Management Board foresees two possible scenarios for the 2015 financial year. In a basic scenario, it expects revenue of between EUR 70 and 75 million. Chief Financial Officer Markus Peuler elaborates: "Essential investment in products and systems, persisting regulatory and legal barriers to capitalising on further opportunities for growth as well as negative exceptional effects from the introduction of value-added tax for casino and poker games will all influence mybet's revenue and earnings. We therefore expect balanced earnings before interest and taxes as the basic scenario, assuming a steady development in revenue. It should be taken into account that the new rules on sales tax throughout the EU will impose a tax burden - of which we were as yet unaware in 2014 - of just under EUR 2 million on a number of our products from 2015. Without this additional burden the planned result would be around EUR 2 million higher. Unfortunately the introduction of sales tax eats up the entire earnings growth."

In an alternative scenario, the Management Board is examining additional investment in technology and products. According to Markus Peuler, this would have the following effects on the forecast: "If, after our examinations, we decide in favour of technologically extending the sports betting product range, the upper end of our revenue forecast of EUR 75 million could be achieved or, in the best case, just exceeded. However the additional outlay required would mean our best-case EBIT would then probably come in at EUR -0.5 million. This scenario envisages that the investment spending will pay healthy dividends from the 2016 financial year and might consequently produce overproportional rises in income.

The full 2014 Annual Report with the audited Consolidated Financial Statements are expected to be published at the start of April and made available on the following websites:

German online report: http://geschaeftsbericht2014.mybet-se.com/

English online report: http://annualreport2014.mybet-se.com/

The conference call will take place after publication of the 2014 Annual Report. The exact date will be announced in due course.

Key figures for 2014 financial year

  2014 2013 Change
  EUR '000 EUR '000  
Revenue 70,361 67,028 +5.1%
Sports Betting 40,301 33,337 +20.9%
Casino & Poker 21,920 23,419 -6.4%
Lotteries 0 3,183 -100.0%
Horse Betting 7,045 5,620 +25.4%
Consolidated transfers
EBITDA, adjusted*
EBITDA 2,966 -7,095 n/a
EBIT, adjusted* 596 -10,883 n/a
EBIT 596 -11,291 n/a
Net profit/loss for the period, adjusted* 215 -10,075 n/a
Net profit/loss for the period 215 -10,806 n/a
Earnings per share (EUR) -0.01 -0.45 n/a
  31/12/2014 31/12/2013  
Cash and cash equivalents 8,676 7,965 +8.9%
Shareholders' equity 18,934 16,960 +16.4%
Equity ratio 51.2% 44.4% +6.8pp

* For better comparability, after elimination of DIGIDIS S.L., which was deconsolidated with effect from November 30, 2013

mybet Holding SE
Investor Relations & Corporate Communications
Yulia Link
Tel. : +49 (40) 8537 880
Fax : +49 (40) 8537 8830
Mail : yulia.link@mybet.com

mybet Holding SE
Investor Relations & Corporate Communications
Yulia Link
Tel. +49 (40) 85 37 88 47
Fax +49 (40) 85 37 88 30
Mail yulia.link@mybet.com

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339647  2015-03-31