Snai Group, results of operations as of and for period ended 31 December 2012

The income data for 2012 have been affected by an unusual higher restitution to players (payout) on the sports betting market (which has reached record levels with respect to the last five years), and the block on the Vlt Barcrest platform, which was due to the well-known incident which occurred in April 2012 partially offset by the accelerated deployment of the second gaming platform.

Essentially for these reasons, the Snai Group’s revenues declined to Euro 514.4 million, down from Euro 558.5 million in 2011.

The Group’s Ebitda for year 2012 is down with respect to 2011, having fallen from Euro 90.6 million to Euro 64.5 million (before taking into account non-recurring operating revenues and costs in the amount of Euro -7.1 million). As already mentioned, the unfavorable trend in the payout for the sports betting segment (82.7%, up from 78.3% for 2011) contributed toward this reduction, with a negative impact on revenues and Ebitda for the Company with respect to the previous year in the amount of approximately Euro 39 million. It is worth noting that at the Italian market level, the payout figure was even higher (82.9%). The contraction in Ebitda is also due to the further contraction in horse racing, with particular regard to the management of the racetracks.

The Group’s Ebit is negative, in the amount of Euro 13.9 million, down from the negative Ebit of Euro 5.1 million for year 2011.

The Group’s consolidated results for year 2012 are negative, amounting to Euro 42.6 million down from the loss of Euro 40.5 in 2011.

The Snai Group’s financial indebtedness, as of 31.12.2012, amounts to Euro 369.6 million, up from Euro 354.4 million as of yearend 2011. With respect to the close of 2011, the Group’s net financial indebtedness has risen by Euro 15.2, due, among other things, to the further delay accumulated by Assi (formerly Unire) in its payments to Società Trenno S.r.l. and Teleippica S.r.l.

The parent company Snai S.p.A. produced revenues in the amount of Euro 497.7, down by 6.5% from Euro 532.4 million in 2011. Ebitda amounts to Euro 67.2 million (before taking into account non-recurring operating revenues and costs of Euro -5.9 million), down from Euro 85.7 million in 2011, while Ebit is negative in the amount of Euro 7.4 million (Euro -5.8 million in 2011). The results for the year were negative in the amount of Euro 46.1 million (down from Euro -41,6 million in 2011), which is essentially due to the same reasons set forth above in connection with the Group’s results.

THE SNAI GROUP’S PERFORMANCE - In 2012, the Group attained gaming wagers totaling Euro 5.5 billion, up from Euro 4.9 billion in 2011, as it increasingly enriched its sports bets services, Videolotteries (Vlts) and Remote Gaming (Gioco a Distanza or Gad).

In 2012, despite initiatives on the part of new competitors on the Italian market, especially in the internet gaming segment, Snai maintains its leadership position in the horse race and sports betting segment. The on-line digital segment also constitutes an important element for development the potential of the Snai brand in the channel that is registering the highest growth.

In year 2012, the Group attained an increase in market share in casino games, skill games and betting; wagers for sports bets rose by +11%, more than the increase registered by the market (+9.7%) and for digital games wagers rose by + 71.6% (the players’ outlay rose by +12%). The total figure amounts to +16.7% with respect to 2011.

In August 2012, the Sport App for tablets and smartphones was launched, which was met with a positive response in terms of both downloads and wagers; in December 2012, on-line slot machines were introduced, which led snai.it to attain an estimated market share exceeding 10% in this specific segment.

Year 2013 will also be focused on growth in the product range with a view to attracting new users and facilitating a broader accessibility to gaming for everyone, through a special focus on the mobile channel.

The wagers from sports bets registered in 2012 for the whole market amounted to Euro 3,941 million, up 2.37% over 2011, mostly realized in the second half of the year.

In sports bets, Snai’s market share is 31.07%. Horse betting registered an additional decline however: totalizator bets and national horse racing bets fell 26.2% with respect to 2011, due to the general crisis that has hit the horse race sector and the approximately 40 days of strike at the beginning of the year. Our market share amounted to 54.5%.

The Company has achieved a solid position in the collection of wagers through its entertainment device business, achieving wagers of Euro 2.84 billion. Snai connects approximately 30,000 Awps that are duly endowed with operating licenses, in over 9,000 points of sale throughout the territory, and owns 5,052 rights for the collection of wagers using Vlts.

As regards the Vlts, in April 2012, the Company was faced with the need to manage the anomalous event which affected the Barcrest platform which was blocked starting on 16 April, giving rise to a consequent decrease in the average number of machines for the collection of wager.

After the disactivation of the Barcrest platform, the Company promptly took actions aimed at mitigating the resulting inconveniences and, among other things, entered into an agreement with a new supplier (Novomatic) for an additional System, the testing of which was completed at the beginning of January 2013.

Snai initiated a legal action against Barcrest and its parent company seeking compensation for all of the damages caused by the malfunctioning that occurred on 16 April 2012.

At the end of year 2012, approximately 3,000 Vlts were installed in over 800 stores with the Sistema di Gioco (Gaming System) operated through the Spielo platform. At the start of 2013, the installation of the Novomatic system Vlts was commenced.

OTHER SIGNIFICANT EVENTS - On 21 September 2012, Aams decided to revoke the certificate of conformity of the Snai-Barcrest 01 gaming system, which caused a prohibition on collecting gaming wagers through such system, which has already been suspended and is no longer in operation. Snai has performed the due requirements and formalities envisaged under the legal framework and the Concession Agreement for the removal of the Barcrest devices from the points of sale.

The proceedings initiated by Aams which could have led to the possible expiry of the Concession was concluded with protocol ruling 2013/8734/Giochi/ADI served upon the Company on 22 February 2013 pursuant to which Aams, on the basis of, inter alia, the copious technical documentation submitted by the Company, established that it did not have to proceed with the revocation of the Concession, and merely ordered the application of certain contractual penalties, for a total amount of approximately Euro 1.5 million.

On 29 January 2013, the agreement between the ex-Assi and its subsidiary Teleippica srl was signed in connection with the new agreement for horse racing tv, for a term of six years from the date of activation.

The value of the contract for the entire contractual term is Euro 53.9 million.

On 20 March 2013, lastly, the new concession was entered into in connection with the construction and operation of the network for the electronic management of lawful gaming through fun and entertainment devices provided under art. 110 paragraph 6 of the T.U.L.P.S.

REPLACEMENTE OF A MEMBER OF A CONTROL AND RISKS COMMITTEE - The Board of Directors appointed as member of the Control and Risks Committee , Mr. Sergio Ungaro to replace Antonio Casari who resigned on January 29 2013.

Mr. Ungaro meets the requisites imposed under the laws and regulations in force applicable to listed companies in order to hold the role of member of the Control and Risks Committee.