• Language:

Press Releases

FLUXX aiming to break even in 2007

FLUXX AG / Final Results

Release of a Corporate-announcement, transmitted by DGAP - a company of
EquityStory AG.
The issuer is solely responsible for the content of this announcement.

FLUXX aiming to break even in 2007

- Reduction for impairment of deferred tax assets diminishes 2006 earnings
- Expansion into other European countries continues   

Altenholz/Hamburg, March 29, 2007 – The gaming specialist FLUXX AG (ISIN
DE000A0JRU67) presented its final accounts for 2006 at today's Annual Press
Conference in Hamburg. Revenue showed a 132 percent rise, from EUR 22.0
million in the previous year to EUR 50.9 million in 2006. The main driving
force behind growth was sports betting business, which generated over half
of the total revenue in the past financial year.

The consolidated result was well into the red at EUR -8.7 million (previous
year: EUR 1.7 million), though this is largely attributable to the
reductions for impairment applied to deferred tax assets. This also
explains the difference of EUR -3.2 million compared with the provisional
result announced at the start of March. The non-cash adjustment applied to
the loss carry-forwards which, according current plans, can no longer be
realised with adequate probability during the period covered by the
forecast. The uncertain regulatory framework especially in the German
gaming market had rendered it necessary to review the long-term group
planning of FLUXX AG.

In the sphere of business operations, the increased expenditure for legal
consultancy and lobbying activities in connection with the debate on the
monopolistic situation in Germany had the effect of diminishing earnings.
Earnings before depreciation and amortisation, interest and taxes (EBITDA)
fell from EUR 6.5 million in the previous year to EUR 0.5 million in 2006.
The sports betting provider myBet.com, which has belonged to the FLUXX
Group since the start of 2006, contributed a negative EBITDA (loss) of EUR
2.0 million as a result of high marketing expenses in connection with the
football World Cup. It is, however, expected to make a positive
contribution to earnings in 2007 – myBet.com was already operating
profitably in the first two months of the current financial year.

Earnings before interest and taxes (EBIT) were down from EUR 2.3 million in
2005 to EUR -5.9 million in 2006 and were therefore on a par with the
provisional result announced. This reversal was attributable to increased
depreciation and amortisation in the rapidly growing business areas of
syndicates and lottery from retail outlets.

Despite its high expenses, the FLUXX Group generated a positive cash flow
from operating activities. The downturn in freely available cash and cash
equivalents to EUR 15.1 million consequently stems largely from capital
expenditure on the expansion of over-the-counter lottery sales and the
financing of the myBet.com acquisition.


The 2007 financial year will continue to be dominated by the debate on the
future shape of the German gaming market, with the prospects for private
enterprise now looking brighter. The State Treaty on gaming presented by a
majority of federal states will in all probability not take effect in its
present version, following harsh criticism from the EU Commission. However,
the Federal Constitutional Court has called for the German sports betting
market to be reformed from 2008. Together with a large number of other
companies in the industry and Schleswig-Holstein's Christian Democrats,
FLUXX AG is advocating an unchanged lottery market and the introduction of
a licence model for sports betting.

To reduce its dependence on the German gaming market, the legal position of
which is still uncertain, FLUXX will be increasingly investing in other
European countries. Following its successful market entry in Spain, other
countries are to follow in 2007. The focus will be on those EU countries in
which the market for gaming is already partially or entirely liberalised or
where the process of liberalisation is already under way. These include
countries such as the UK, Austria, Spain, Italy, Belgium and certain
Eastern European states.

FLUXX is currently analysing several highly promising companies which could
usefully bolster the strategic position of the FLUXX Group in the European
gaming market. In December 2006, FLUXX already established a United Kingdom
subsidiary that was granted a British bookmaking licence in February 2007.
This licence is to be used to set up an online service for sports and horse
betting during the first half of 2007.

While the legal uncertainty regarding the further development of the German
gaming market continues, FLUXX AG will persevere with its lobbying
activities in 2007 and have an increased need for legal consultancy. The
Management Board nevertheless expects a significant improvement in its
financial performance in 2007 compared with 2006. The aim is to break even
and achieve a positive operating cash flow.

Key figures for 2006

                                       2006               2005
                                       EUR '000           EUR '000
Gross sales                            127,716            102,938
Betting stakes                         76,795             80,986
Revenues                               50,921             21,952
EBITDA                                 533                6,536
EBIT                                   -5,886             2,334
Consolidated earnings                  -8,740             1,719
Earnings per share (EUR)               -0.60              0.13
                                       31/12/2006         31/12/2005
Net cash                               15,118             24,282
Shareholders' equity                   39,035             47,572

The full 2006 accounts will be published and available for downloading today on the websites www.deutsche-boerse.com and www.fluxx.com. 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, Lycos and Yahoo! Espana, 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 around 150 employees. Contact: FLUXX AG Investor Relations & Corporate Communications Stefan Zenker Tel. +49 (40) 85 37 88 47 Fax +49 (431) 88 10 44 0 Mail stefan.zenker@fluxx.com DGAP 29.03.2007 ---------------------------------------------------------------------- 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 ---------------------------------------------------------------------------