2010-04-23 08:35:25

INTERIM REPORT Q1 2010

(NGM:BETT)

Focus on bookmaker product

January - March
• Betting turnover: 2,116 SEK million (2,267)
• Net turnover after trading fees: 8.0 SEK million (19.6)
• Gross margin: 0.38% (0.87)
• Operating income: 2.4 SEK million (14.1)
• Operating margin: 30% (72)
• Net income: 4.4 SEK million (13.4)
• Profit per share: 0.46 SEK

(For full report with tables, see attached file)


Managing Director comments

“The core business continues to show variations between the quarters. We are focusing a great deal of our resources on getting access to the bookmaker market through our bookmaker product”, says Johan Moazed, Managing Director of Betting Promotion.


Overview January - March 2010

Betting revenue for the first quarter was SEK 8.0 (19.6) million. The gross margin was 0.38% which is lower than what we expect over time. Live betting turnover has increased by 54% compared to the corresponding period in 2009. This was mainly due to the increase in the number of matches covered. The company is working on adding more sports to the offering. The market for live betting continues to grow at a healthy rate and it is important for the company to participate in this growth.

The company is in discussions with various gaming operators regarding the delivery of the bookmaker product. The product consists in Betting Promotion delivering oddscompiling and risk management which will create risk free income for the bookmaker. We are also adjusting our offering to cover more sports and markets in order to meet the demands from these types of operators.

Betting Promotion has commercial agreements with a number of different betting exchanges. Some are based on commission-free trading but on exchanges with higher turnover a trading fee is paid by Betting Promotion. During Q1 Betting Promotion paid SEK 4.6 million (3.1) as fees to betting exchanges. These fees are reflected in the gross margin and are itemized in the income statement.


Products

An important part of Betting Promotion’s business concept is to deliver full market-making services even if some products offer better margins than others. Market making is the core of Betting Promotion’s business and is comparable to businesses that guarantee liquidity for different sorts of financial instruments. The company provides a breakdown of “Net Turnover after trading fees” and “Gross margin”, calculated as “Net Turnover after trading fees” as percent of “Betting Turnover” between various products.

Soccer
Soccer remains the core of Betting Promotion’s business and during the fourth quarter accounted for 52% of the total betting turnover, corresponding to SEK 1,105 million. The margin was 0.61%.

Live Betting
Live betting is presently offered in soccer and tennis. The margin for live betting was 0.18%. Betting turnover in Live increased by 54% compared to the same period in 2009.

Other
"Other" includes a number of different sports, e.g. tennis, ice hockey, rugby, basketball and American football. The bookmaker service has lead to an increased offering in this product group.
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