SNAI Group – Results of operations as of and for period ended 31 December 2011

• Revenues:Euro 558.5 million
• Ebitda: Euro 74.7 million
• Net financial position: Euro 354.4 million

Milan, 20 March 2012– SNAI S.p.A.’s Board of Directors met in Milan under Giorgio Sandi’s chairmanship and approved the draft financial statement for the year ended 31 December 2011: the SNAI Group’s revenues settled in at Euro 558.5 million, essentially in line with the Euro 566.9 million figure achieved in2010; lower revenues from sports betting were offset by revenues attained in the VLT area. The SNAI Group’s Ebitda amounted to Euro 74.7 million (taking into account nonrecurring revenues and costs determined for management purposes in the amount of Euro 15.9 million), up 16.5% over the Ebitda of Euro 64.1 million attained in 2010: the improvement was achieved thanks to the activation of the VLTs and a more favorable payout for the Group (as better explained below).

The negative Ebit of Euro 5.1 million, as compared with Euro 0.4 million for 2010, was driven by, among other factors, the write-down of the residual value of 1,310 horse racing rights revoked by AAMS amounting to a total of Euro 8.7 million.
Consolidates annual results were negative, amounting to Euro -40.3 million (taking into account non-recurring revenue sand costs determined for management purposes in the amount of Euro 28.1 million), as compared with the loss of Euro -32.4 million registered at the close of 2010.

The SNAI Group’s net financial position, as of 31.12.2011, consists in net indebtedness of Euro 354.4 million, up from Euro 293.4millionat the close of 2010. As compared with 31 December2010, net financial indebtedness has increased by Euro 61 million, due in large part to the payment of the sole tax on gaming and the Preu on entertainment equipment – Awp, which had fallen due but had not been paid at the end of 2010, as well as the payment of balances due on debts related to the purchase of concessions. As widely known, on 8 March 2011, SNAI S.p.A. entered into a contract concerning a loan transaction for purposes of securing a medium/long term facility from Unicredit S.p.A., Banca IMI S.p.A. and Deutsche Bank S.p.A., in their capacity as mandated lead arrangers, structured in several tranches for up to a maximum total amount of Euro 490 million. Through the partial disbursement, in several tranches, of such facility, totaling Euro 354,750 million, SNAI S.p.A. had the funds necessary to repay the financial debt falling due in the amount of Euro 228 million to the prior lenders Unicredit S.p.A. and Solar S.A., and to sustain the development of its business: the facility is guaranteed by security interests granted by SNAI S.p.A. over its tangible and intangible assets.

At the end of 2011, proceeds from gaming operations managed by SNAI (horse race and sports betting, prediction contests, new slots, skill games and bingo on-line), amounted to Euro 4.93 billion, in line with the previous financial year.
SNAI, under its own trademark, confirms on 31 December 2011 its absolute leadership position in the sports and horse race betting segment, holding a market share of 38.5%, and consolidates its market shares in the Group’s other relevant segments.

At the end of 2011, proceeds from gaming operations managed by SNAI (horse race and sports betting, prediction contests, new slots, skill games and bingo on-line), amounted to Euro 4.93 billion, in line with the previous financial year.

SNAI, under its own trademark, confirms on 31 December 2011 its absolute leadership position in the sports and horse race betting segment, holding a market share of 38.5%, and consolidates its market shares in the Group’s other relevant segments.

Sports betting, in 2011, generated proceeds of Euro 1,276 million, registering a 14.5% reduction with respect to year 2010, (the year in which the World Cup Football Championship was held) which had been characterized by a payout of 81.9% as compared with the 78.3% payout for 2011 (a higher payout favors an increase in betting volumes). Totalizator horse race betting is down, as well as the “Ippica Nazionale” (National Horse Racing), due to the prolonged crisis affecting the horse racing segment in Italy.

In 2011, significant efforts were dedicated to the installation of Videolotteries, with the installation of approximately 50% of the total machines envisaged(5,052); machines that are already operational are operating on two certified gaming platforms, Barcrest and Spielo.

At the end of 2011, proceeds from gaming operations managed by SNAI (horse race and sports betting, prediction contests, new slots, skill games and bingo on-line), amounted to Euro 4.93 billion, in line with the previous financial year.

SNAI, under its own trademark, confirms on 31 December 2011 its absolute leadership position in the sports and horse race betting segment, holding a market share of 38.5%, and consolidates its market shares in the Group’s other relevant segments.

Sports betting, in 2011, generated proceeds of Euro 1,276 million, registering a 14.5% reduction with respect to year 2010, (the year in which the World Cup Football Championship was held) which had been characterized by a payout of 81.9% as compared with the 78.3% payout for 2011 (a higher payout favors an increase in betting volumes). Totalizator horse race betting is down, as well as the “Ippica Nazionale” (National Horse Racing), due to the prolonged crisis affecting the horse racing segment in Italy.

In 2011, significant efforts were dedicated to the installation of Videolotteries, with the installation of approximately 50% of the total machines envisaged(5,052); machines that are already operational are operating on two certified gaming platforms, Barcrest and Spielo.

In addition, the foundations have been laid for purposes of innovating the range of gaming activities to be offered to gaming customers. New live betting modalities have been introduced for football, basket, tennis, volleyball and rugby. In the on-line gaming sector, in July 2011,the cash modality was activated for poker.

A plan has been implemented for the optimization of the services offered to the sales network, through both a reduction of costs and the introduction of new instruments such as the new “electronic posters”, high definition, highly legible screens which allow for the gradual elimination of the current hard copy posters, a greater quantity, flexibility and speed of information for gaming customers and with updates to data in real time.

The parent company SNAI S.p.A. produced revenues of Euro 532 million, down 0.9% with respect to Euro 537 million for 2010. The Ebitda amounts to Euro 70.7 million (up from Euro 57 million in 2010), while Ebit is negative, amounting to Euro – 5.8 million (as compared with Euro -1.7 in 2010).

Results of operations are negative, amounting to Euro – 41.6 million (as compared wtih Euro -33.4 million for 2010): the reasons are essentially those already explained with regard to the Group’s results).

On 17 February 2012, judgment 214/2012 (the “Judgment”) was filed with the clerk’s office of the Court of Auditors against SNAI S.p.A. and another nine operators holding concessions for the activation and operation of a network for the electronic management of lawful gaming through gaming machines.

SNAI S.p.A. was ordered to pay the amount of Euro 210,000,000.00, including inflation adjustments plus legal interest accrued from the date of publication of the Judgment until actual payment of the compensation for the alleged damages caused to the tax coffers as the result of an alleged failure on the part of SNAI S.p.A. to meet the service levels envisaged under the concession.

SNAI S.p.A.’s Board of Directors has resolved to appeal the Judgment with a view to proving that its conduct was fair and proper and may not be deemed to give rise to any liability whatsoever. The filing of the appeal will give rise to the suspension, automatically by law, of the effects of the Judgment. SNAI S.p.A.’s legal team expects to file the appeal within the next several days.

With regard to the Judgment, SNAI S.p.A. and Cogemat’s Shareholders have mutually acknowledged that a condition subsequent has occurred, which therefore terminates the agreement for the acquisition of Cogemat Spa and consequently the transaction will no longer be concluded (reference is made to the press release issued on 24 February 2012).

Following Director Niccolò Uzielli De Mari’s resignation, the Board of Directors has co-opted Rohan Maxwell to replace him in accordance with art. 2386 of the Italian Civil Code.

SNAI S.p.A.’s Board of Directors has resolved to put before the Shareholders’ Agreement (called and scheduled for 27 April 2012, on first call, and 28 April 2012, on second call to the extent necessary)a proposal to cover the loss using available reserves.

The notice of call of the Shareholders’ Meeting scheduled for 27/28 April 2012 was published in the “Corriere della Sera” on 18March 2012 and the related agenda includes, among other matters to be resolved upon, the appointment of members of the Board of Directors, upon determining the number of directors and their compensation, which resolution will be necessary on account of the expiry of the term of office of the current directors upon the approval of the financial statement as of and for period ended 31 December 2011. The Shareholders’ Meeting has also been called for an extraordinary session in order to
approve a number of amendments to the Company’s By-laws.

The executive in charge of preparing accounting and corporate documents for the Company, Dr. Marco Codella, declares pursuant to paragraph 2 art. 154 bisof the Financial Services Act (TestoUnico della Finanza) that the financial disclosure set forth in this press release accurately reflects the relevant financial information contained in the Company’s accounting documents, books and records.