Boss Media in 2008

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BOSS MEDIA CHIEF OUTLINES THE ROAD AHEAD

End of a turbulent 2007 was stronger than expected

Addressing Swedish analysts at the "SEB Enskilda Nordic Seminar - Copenhagen 2008" this week, Boss Media's CEO Michael Hallen outlined the difficulties overcome by the company last year and his ambitious plans for the online gambling software provider going forward.

Hallen sumarised his presentation as:

* The end of a turbulent 2007 for Boss was stronger than expected
* 2008 is a year of new product launches and increased sales focus
* Given strong market position and balance sheet, Boss Media has ambitions to make acquisitions in a period of industry consolidation
* Boss Media aims to double revenue at sustained 15 percent margins by 2010

Coinciding with the presentation, Boss directors released the firm's half year report, predicting that net sales in 2007 would end at the same level as 2006 but that the operating margin was expected to be below 15 percent. A strong development within several business areas during the last quarter has given the Board confidence in a better result for 2007 than previously communicated.

The Poker and Interactive Gaming Terminals parts of Boss Media's business have steadily grown during the second half of the year and both have exceeded expectations. Although sales development was weak during the first six months of 2007 things have improved as problems were addressed, and customer activity increased.

The company intends to present their view of 2008 in connection with the publication of the preliminary end of year result, which will be done earlier and is intended to become public on Tuesday, January 22, 2008.

Halln's presentation was well received by the analysts and featured a broad description of a company with 210 employees in Sweden, Estonia and Ukraine and 2006 revenues of SEK 320 million with a fifteen percent margin.

Following the predictions of his board of directors, Hallen indicated that strong growth in online poker and gaming terminal products would ensure similar sales revenues for 2007 despite a slow start to the year, when his predecessor left the company in Quarter 1.

The ten largest Boss customers provide 60 percent of the firm's sales and include significant organisations like Svenske Spel, William Hill, Sportingbet, St Minver, Virgin Poker and Atlantic Lottery.

Sales are split equally, a third each from poker royalties, casino royalties and licences and services.

The weak start to 2007 was exacerbated by a research and development backlog and lost markets following adverse legal developments in the United States and Turkey which combined to make a negative impact of some SEK 80 million on the company. Changes in net capitalisation resulted in a further SEK 20 million hit.

However, the company has largely overcome these hurdles with remedial tactics and is facing 2008 with renewed confidence in a buoyant market with good potential. Hallen estimated that online gambling still constitutes a mere 4 to 7 percent of total global gambling levels, presenting a low-maturity industry with strong possibilities - especially in the bingo and poker sectors.

World online gambling is likely to grow by some 15 to 20 percent annually in the period through 2008 - 2010, he predicted.

Hallen's plan for Boss Media going foward emphasised 9 key points:

* Increase sales by more aggressive marketing

* Re-energise management

* The opening of more business-convenient offices in Swedish capital Stockholm

* A heightened global presence

* Building bigger and better online poker and bingo networks to capitalise on a Q4 trend of strong month on month growth.

* A target of doubling revenues with a sustained margin by 2010

* More marketing and more product launches through 2008

* A drive to make appropriate acquisitions in an industry that is undergoing consolidation.
 

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