Year-end Report 2000

Year-end Report 2000 Boss Media AB (publ) · Net sales increased by 101 percent to SEK 185.5 (92.5) million. Net sales for the fourth quarter amounted to SEK 56.7 (26.6) million. · The profit after financial items amounted to SEK 74.7 (26.5) million and the profit margin was 40.3 (28.6) percent. The profit for the fourth quarter amounted to SEK 20.8 (9.6) million and the profit margin for the same period was 36.6 (35.9) percent. · During the year Boss Media signed license agreements with Svenska Spel and Sun International Hotels Limited. · A total of 20 (9) licenses were sold during the year. At the time of this report, two additional licenses have been sold. · The Board of Directors will propose to the Annual General Meeting a dividend of SEK 0.40 per share. The Group Boss Media AB (publ) is one of the leading providers of turnkey solutions for casino operations on the Internet. Potential licensees are offered a customized client-server system, an integrated payment system and the maintenance and administration services necessary for the daily operation of an Internet casino. The Boss Media-share is listed on the OM Stockholm Exchange's O-list (Attract 40). More information about Boss Media can be viewed on the company's website http://www.bossmedia.se. Unless otherwise stated, the following information is for the group as a whole. Sales and market conditions Demand has been strong during the year. A total of 20 (9) new license agreements were signed. This brought the total number of casino license agreements for Boss Media to 34 (14) at the end of the year. The company witnessed a decrease in license sales during the fourth quarter, although demand continued to be strong. This is due to the fact that demand is now primarily from corporations in the land-based gaming industry, and this has led to an increase in the time necessary to conclude purchase agreements. Customers that lack any direct association to the land-based gaming industry will experience increased difficulty in establishing their operations within the Internet gaming market. They will be disadvantaged from the start because they lack a well-established trademark and a pre- existing customer base. In the future, major land-based gaming interests will become the leaders in the Internet gaming industry. Therefore, Boss Media is currently increasing its efforts to make these land-based interests its primary customers. Thus far, Boss Media has signed license agreements with two major gaming corporations: Svenska Spel, a company owned by the Swedish government, and Sun International. The latter is a land-based casino corporation with operations in several countries. During 2001, licenses will be sold primarily to interests within the land-based gaming industry. Another important customer category is comprised of established Internet casino operators that wish to replace their former system developers and software platforms. At the beginning of 2001, Boss Media signed a license agreement with Global Interactive Limited, an established Internet casino operator. This was Boss Media's first sale to an established operator. At the end of 2000 and beginning of 2001, Boss Media was given authorization to run Internet gaming operations in the Mohawk Territory of Kahnawake in Quebec, Canada and in Curacao of the Netherlands Antilles. The construction of a technical maintenance and customer support center in Canada was begun during the end of 2000. At the time of this report, the first Internet casino to be operated from Canada has now been launched. Construction of a technical maintenance center in Curacao will begin this spring. Casino.com On July 1, Casino.com became a separate division within the Boss Media Group. Casino.com's long- term goal is to create the leading Internet portal within the gaming industry. The number of Casino.com employees at the end of the year was approximately 15. At the end of the year, Casino.com began to generate revenue, primarily from the sale of advertisement space. Net sales and result The Group's net sales increased by 101 (71) percent to SEK 185.5 (92.5) million. Adjusted for exchange rate fluctuations, the increase was 81 percent. The total number of sold licensed casinos at the end of the period were 34 (14), of which 20 (9) were sold during 2000. At the end of the year, 24 (11) licensed casinos were in operation. Eight licenses were taken up as an income according to the principles of gradual profit recognition. Income from two licenses sold at the end of the period were not recorded since work on these contracts had not commenced prior to the closing day. The income from the sale of licenses increased substantially, and amounted to SEK 46.9 (15.8) million, an increase by 197 percent. The strong increase is explained by the rapid rate of license sales during the year. Adjusted for exchange rate fluctuations, the increase was 165 percent. The total number of profit-generating licenses amounted to 17.3 (6.5). The royalty income, the primary source of funding for Boss Media's operations, increased by 121 percent and amounted to SEK 60.9 (27.6) million. Adjusted for exchange rate fluctuations, the increase was 97 percent. The income from Service & support amounted to SEK 22.4 (11.3) million, an increase by 98 percent. Adjusted for exchange rate fluctuations, the increase was 80 percent. The increase in income is explained completely by the increase in the number of Internet casinos in operation. The income from Gold Club Casino amounted to 54.7 (37.7) Mkr, an increase by 45 percent. Adjusted for exchange rate fluctuations, the increase was 31 percent. This positive development can be explained by increased marketing efforts. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/02/13/20010213BIT00740/bit0001.pdf The full Year-End Report http://www.bit.se/bitonline/2001/02/13/20010213BIT00740/bit0002.doc The full Year-End Report