Tipp24 AG: Subdued Growth in Sales and Earnings

Tipp24 AG / Half Year Results

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The ongoing intensive political and legal discussions concerning Germany’s gaming market served to dampen the growth of Tipp24 AG in the first half of 2008: billings (+16.3 percent) and revenue (+20.1 percent) grew at a comparatively moderate pace. Due to special items in the previous year, earnings before interest and taxes (EBIT) rose by 86.5 percent in the first half of 2008.

Growth in revenue and billings hampered

Owing to the introduction of Germany’s new State Treaty on Gaming on 1 January 2008, billings grew by just 16.3 percent in the first six months of the current fiscal year to reach EUR 162,285 (139,583) thousand. Revenue – consisting mainly of commissions and additional fees – rose by 20.1 percent to EUR 21,564 (17,958) thousand in the period under review.
At 13.3 percent the ratio of revenue to billings – the gross margin – was above the prior-year figure of 12.9 percent (+0.4 percentage points). The ratio continued to be much higher abroad, where gross margin reached 23.7 percent compared with 12.4 percent for Germany (prior year: Abroad 24.2 percent; Germany 12.0 percent).

There was year-on-year growth in EBIT of 86.5 percent to EUR 4,398 (2,358) thousand in the first six months, while the EBIT margin grew by 7.3 percentage points to 20.4 percent. This increase was aided by negative special items in the second quarter of 2007.

Consolidated net profit rose to EUR 3,482 (EUR 1,987) thousand and thus improved by 75.2 percent, compared with the same period last year.
Regulatory environment

Jens Schumann, Chairman of the Executive Board of Tipp24 AG, states: 'The effects of the ongoing regulatory discussions were felt above all in the second quarter. The requirements of the new State Treaty on Gaming introduced at the beginning of the year led both to increased expenses for legal advice and to considerable cost increases. The more complex registration process also had a significant impact on the number of new customer registrations, which grew by just 60 thousand in the period under review. The number of new customers in Germany was only a third of those added in the same period last year.'

Outlook 

Despite difficult conditions, Tipp24 reaffirms its forecast for the current fiscal year: the company expects customer growth of at least 100 thousand new customers. Tipp24 expects an increase in billings, revenue and EBIT of at least 10%. This increase –aided in part by the favourable scalability of Tipp24’s business model – results partly from the positive effects of customer growth in the past year. Following the current transition phase of the European lottery markets, Tipp24 expects to return to its historically proven medium-term growth targets. These targets include an annual increase in revenue of 30 percent and a disproportionately stronger increase in EBIT.

About Tipp24 AG: Tipp24 was established in 1999 and is now the market leader for lottery products in the Internet on the basis of billings. The company succeeded in achieving impressive growth rates right from the start. Almost all state lottery products are supplied. It only takes a few mouse clicks to buy a lottery ticket – round the clock, quickly and reliably. The ticket receipt is kept safely, winners are notified about their prizes automatically by text message and e-mail and prizes are credited automatically. Subsidiaries of Tipp24 (www.tipp24.de) are Ventura24 in Spain (www.ventura24.es), Puntogioco24 (www.puntogioco24.it) in Italy and MyLotto24 (www.mylotto24.co.uk) in the UK. Shares in Tipp24 AG have been traded at the Frankfurt Stock Exchange since 2005.
Tipp24 AG       
Andrea Fratini       
Head of Media and Public Relations   
Tel.: +49 40 32 55 33-660
Fax: +49 40 32 55 33-5600     
E-mail: presse@tipp24.de     
Internet: www.tipp24.de/presse/  


04.08.2008  Financial News transmitted by DGAP

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Language:     English
Issuer:       Tipp24 AG
              Straßenbahnring 11-13
              20251 Hamburg
              Deutschland
Phone:        +49 (0)40 325533-0
Fax:          +49 (0)40 325533-77
E-mail:       office@tipp24.de
Internet:     www.tipp24-ag.de
ISIN:         DE0007847147
WKN:          784714
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart  
End of News DGAP News-Service  

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