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Bwin/Party Selling gaming subsidiary Win

Thursday January 1,2015 : BWIN PARTY TO SELL OFF SOCIAL GAMBLING SUBSIDIARY
 
Warns that revenues have been hit by a weak gross-win margin in recent sports betting.
 
Ending 2014 on a sour note, the Bwin.Party Digital Entertainment online gambling group warned Wednesday that revenues have been hit by a weak gross-win margin in recent sports betting, and revealed that it is in discussions regarding the sale of its loss-generating social gaming subsidiary Win.
 
In a pre-closing trading update the company advised:
 
* Bet volumes and active player numbers were on track, but exceptionally weak gross win margin in sports betting, particularly in December, has impacted overall revenue performance in the fourth quarter;
 
* Total revenue for 2014 is now expected to be in the range Euro 608 million to Euro 612 million;
 
* The company remains committed to achieving Euro 30 million of cost savings in 2014;
 
* Continuing Clean EBITDA margin for 2014 is expected to be between 16 percent and 17 percent including Clean EBITDA losses of approximately Euro 10 million from New Jersey and Euro 7 million from social gaming;
 
* Discussions with third parties regarding industry consolidation are continuing and further announcements will be made as and when appropriate.
 
The company reported: "In the period since 30 September 2014, trading has been broadly in-line with expectations except for an exceptionally weak gross margin in sports betting with the leading teams in several European leagues enjoying a strong run to the cost of European-facing sports books.
 
"Further to the announcement made on 12 November 2014, the group is continuing its discussions with several parties regarding a variety of potential business combinations with a view to creating additional value for Bwin.Party shareholders.  There can be no certainty as to whether or not such discussions will result in an offer being made for the company."
 
Turning specifically to its social gaming interests, the company advised:
 
"We are in active discussions regarding the sale of Win, the group’s social gaming business, and expect to make a further announcement shortly."



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