New customers, revenue and earnings significantly increased, forecast raised

ZEAL continues to grow: New customers, revenue and earnings significantly increased, forecast raised

• Group revenue grows by 41 % to € 121.0 million compared to the same period of the previous year
• EBITDA grows by 51 % to € 35.0 million
• Record number of 807 thousand new customers in the first nine months of this year
• ZEAL raises its revenue and EBITDA forecast for the 2024 financial year as a result of its business performance
• Successful launch of the new charity lottery Traumhausverlosung
• Cancellation of all treasury shares resolved
• Share repurchase offer of up to € 25.0 million announced

Hamburg, 06 November 2024. ZEAL Network SE, the leading German online provider of lottery products, achieved significant growth in both revenue and EBITDA in the first nine months of 2024. Consolidated revenue increased by 41 % to € 121.0 million (2023: € 86.0 million). EBITDA grew even faster than revenue, increasing by 51 % to € 35.0 million (2023: € 23.2 million).

“We are proud of our excellent business development since the beginning of the year, which is reflected in significant growth in revenue, EBITDA and new customer acquisition. The efficiency gains and scale effects of our business model are reflected in a disproportionately high increase in profitability. Although the jackpot situation in the third quarter was less favorable than at the beginning of the year, we were able to significantly increase lottery revenue by 42 % compared to the same period last year. Another highlight of the third quarter was the launch of our new charity lottery Traumhausverlosung, which significantly exceeded our expectations,” says Sebastian Bielski, CFO of ZEAL.

Lottery revenue grows by 35 %
ZEAL's positive revenue development in the first nine months of 2024 is mainly due to the strong performance of the lottery business: Revenue from lotteries climbed by 35 % to € 107.6 million (2023: € 79.4 million) and billings from lotteries grew by 17 % to € 743.1 million (2023: € 633.2 million). This growth is attributable to the 17 % increase in the average number of active customers per month (1,347 thousand). The average billings per active user was on a par with the previous year. In addition, ZEAL improved its gross margin by two percentage points to 14.5 % (2023: 12.5 %) by changing its product mix and optimizing margins.

Strong result thanks to record customer growth and lower acquisition costs
ZEAL has once again significantly expanded its customer base since the beginning of the year. The number of registered new customers rose by 56 % to 807 thousand (2023: 518 thousand), a record figure in ZEAL's history. In the third quarter of 2024, ZEAL acquired 28 % more new customers, although there were no maximum jackpots for the Eurojackpot and Lotto 6aus49 compared to the same period in the previous year. Thanks to more efficient marketing measures, the successful acquisition of new customers led to a year-on-year decrease in acquisition costs per registered new customer (cost per lead, CPL) of 24 % to € 35.54 (2023: € 46.81).

Other operating expenses increased by 29 % to € 63.2 million (2023: € 48.8 million). Due to the company's strategic decision to use the good jackpot situation in the first half of 2024 for accelerated and efficient customer growth, marketing expenses increased by 20 % to € 36.9 million in the first nine months of the year compared to the same period of the previous year (2023: € 30.7 million). The higher direct operating costs of € 12.4 million (2023: € 8.6 million) are attributable to the increase in payment processing costs, customer identification costs and commissions paid to external developers for the expansion of the games portfolio.

EBITDA increased disproportionately in relation to the strong sales growth due to efficiency improvements and further economies of scale and, at € 35.0 million, was 51% higher in the first three quarters of 2024 than in the same period of the previous year (2023: € 23.2 million). At € 28.9 million, EBIT even exceeded the previous year's figure (2023: € 16.6 million) by 74%.

Forecast raised
Due to the above-average business development in the first nine months of 2024, ZEAL raised the forecast published on 20 March 2024 in October. Depending on the general conditions – in particular the further jackpot development – the company now expects revenue of between € 158 million and € 168 million for the 2024 financial year (previously: € 140 million to € 150 million). ZEAL also expects EBITDA to be in the range of € 42 million to € 46 million (previously: € 38 million to € 42 million).

First dream house raffle in Germany
ZEAL launched the first raffle for an existing property in Germany on 1 August 2024 with the Dream House Raffle (German name: Traumhausverlosung). The first dream home on the Baltic Sea was raffled off on 4 November 2024, followed immediately by the raffle for the second home on the Flensburg Fjord. Demand during the entire first draw period was well above expectations.

Squeeze-out of LOTTO24 AG completed
With the acquisition of the remaining shares in LOTTO24 AG, ZEAL has reached an important milestone in the optimization of the Group structure. On 27 August 2024, the Annual General Meeting of LOTTO24 AG resolved to transfer the shares of the minority shareholders of LOTTO24 AG to ZEAL Network SE against payment of a cash compensation of € 479.25 per share. The squeeze-out was entered in the commercial register on 8 October 2024 and completed on 16 October 2024. ZEAL now holds 100 % of the LOTTO24 shares and has proposed to the Extraordinary General Meeting of ZEAL on 15 November 2024 the conclusion of profit and loss transfer and domination agreements between ZEAL and LOTTO24 AG.

Cancellation of treasury shares
The Management Board and Supervisory Board of ZEAL have resolved to cancel all 733,851 treasury shares currently held by ZEAL and to reduce the company's share capital accordingly. The cancellation and capital reduction relate to approx. 3.28% of the current share capital.

Public share repurchase offer announced
ZEAL announced today that it will repurchase up to 568,181 shares at a price of € 44.00 per share by way of a public share repurchase offer, which corresponds to up to 2.62 % of ZEAL's share capital after implementation of the capital reduction described above. The share repurchase offer thus has a volume of up to € 25 million and will be financed by utilizing existing credit lines. The acceptance period for the repurchase offer starts on 18 November 2024 and ends on 29 November 2024, subject to extension. The new share repurchase serves to further optimize the company’s capital structure. It is intended to cancel the shares acquired as part of the repurchase offer by reducing the share capital. Further details of the repurchase offer are contained in the offer document, which will be published on 18 November 2024 on the company's website (www.zealnetwork.de) in the section "Investoren / Aktienrückkauf 2024" and in the German Federal Gazette (Bundesanzeiger) (www.bundesanzeiger.de) (German language only). In addition, the company will publish a non-binding English translation of the offer document on its website (www.zealnetwork.de) in the section "Investors / Repurchase Offer 2024".

About ZEAL
ZEAL Network is an e-commerce group of companies based in Hamburg and the market leader for online lotteries in Germany. Founded in 1999, we brought lotteries to the internet. Today, the ZEAL group now has around one million active customers and more than 200 employees at three locations. ZEAL allows the participation in state-licensed lotteries via the LOTTO24 and Tipp24 brands and also offers its own lottery products. ZEAL also owns the brands ZEAL Instant Games, ZEAL Ventures and ZEAL Iberia. In 2024, the ZEAL Group celebrates its 25th anniversary. Since our foundation, growth, innovation and success are at the heart of what we do.

Press Contact: 
ZEAL Network SE  
Kristin Splieth  
Head of Corporate Communications 
Kristin.splieth@zealnetwork.de  
Tel: +49 (0) 40 808117560