ZEAL has undergone strong development despite global uncertainties

ZEAL has undergone strong development despite global uncertainties

• ZEAL publishes preliminary figures for fiscal year 2022
• Ambitious growth objectives achieved in a challenging environment​
• Online market share expanded to ​around 41%​
• VAT case won, resulting in a high special dividend
• Outlook 2023: Continued business growth expected​

Hamburg, February 28, 2023. ZEAL Network SE, the leading German online provider of lottery products, today published its preliminary figures for fiscal year 2022. Despite ongoing global uncertainties, ZEAL has undergone a strong development.

Improved jackpot situation influences transaction volume and revenue
In 2022, ZEAL took advantage of the improved jackpot situation for targeted new customer acquisition and, with 703 thousand registered new customers, acquired 29 percent more new customers than in the previous year (2021: 544 thousand). Billings increased by 16 percent to € 758.4 million (2021: € 656.5 million). Due to a higher-margin product mix, ZEAL's revenues grew by 21 percent to € 105.2 million (2021: € 86.8 million) and the company's gross margin exceeded its prior-year level of 12.9 percent by 0.7 percentage points (2021: 12.2 percent). All of the above figures are based on preliminary calculations.

Profitability increased further
In order to expand its customer base in an efficient and targeted manner, ZEAL greatly expanded its own marketing activities in high jackpot phases. As a result, marketing expenses increased by € 11.8 million to € 34.1 million (2021: € 22.4 million) and were thus responsible for most of the increase in other operating expenses to € 57 million (2021: € 41.1 million). Thanks to the expansion of the business volume, ZEAL was nevertheless able to increase EBITDA by € 3.9 million. The company's market share also increased to 41 percent compared to 2021 (39 percent).

License to broker lotteries in Germany renewed until 2029
In 2022, ZEAL reached an important milestone for LOTTO24 AG by obtaining the follow-up license for lottery brokerage in Germany. This is the first license for LOTTO24 AG under the new State Treaty on Gaming, which has been in force since July 1, 2021. The license is valid for seven years, until June 30, 2029.

VAT proceedings concluded in favor of ZEAL
In its decision of August 12, 2022, the German Federal Fiscal Court (Bundesfinanzhof) rejected the appeal of the Hanover North Tax Office against the decision of the Hanover Fiscal Court of November 2019 in favor of myLotto24 Ltd. in a legally binding decision. At the beginning of 2023, the tax office refunded the down payment of around € 54 million made by myLotto24 Limited. An additional repayment of the associated interest amount of € two million is still expected. The refund had no impact on ZEAL's income statement as the corresponding receivable was already recognized in other assets.

Special dividend payment planned
At the Annual General Meeting on May 9, 2023, ZEAL will propose the payment of a dividend of € 3.60 per share (2021: € 2.10 per share), corresponding to a distribution to shareholders of approximately € 78.0 million (2021: € 47.0 million). The dividend consists of a basic dividend of € 1.00 as well as a special dividend of € 2.60. The payment of the special dividend is a further step towards optimizing the Company's capital structure.

Outlook 2023
In the financial year 2023, ZEAL plans to further expand its market leadership as an online provider of lottery products and to introduce new products, including online games under the license for virtual slot machine games the company applied for. Depending on the general conditions – and an average jackpot development – ZEAL anticipates billings in the range of € 800 million to € 830 million for the Germany segment. Moreover, ZEAL expects revenues in a range of € 110 million to € 120 million in fiscal year 2023. EBITDA is expected to reach in a range of € 30 million to € 35 million. Compared to the previous year, ZEAL plans to invest significantly more in the acquisition of new customers and expects marketing expenses of € 34 million to € 39 million.

"We are proud of our strong development despite the ongoing global uncertainty and the resilience in the lottery products these times," says Jonas Mattsson, Chief Financial Officer of ZEAL Network SE. "The positive development of our business figures in almost all areas proves that we have sustainably invested in our own growth with our measures in 2022. In 2023, we will not only focus on further expanding our base business, but also drive innovation to further extend our market leadership."

Invitation to the conference call
Dr. Helmut Becker (CEO) and Jonas Mattsson (CFO) invite all interested investors, analysts and journalists to a conference call including webcast on the occasion of the publication of the preliminary figures for fiscal year 2022 and outlook 2023 on

Tuesday, February 28, 2023, at 2:00 p.m.

To attend, please register prior to the start of the conference at the following link:

Registration link

After registration, participants will receive a confirmation email with individual dial-in details.

The webcast for the conference call can be found at:

https://www.webcast-eqs.com/zeal-2022-prelimfy/no-audio    

Should you wish to follow the conference as a listener only, you can find both the audio live webcast and the presentation for download at the following link:

https://zealnetwork.de/de/investoren/berichte-prasentationen/

There you will also have the opportunity to access an audio replay synchronized with the presentation during the reporting day.

The conference will take place in English.

The detailed annual report as of December 31, 2022 will be published on March 23, 2023.

About ZEAL:   
ZEAL Network SE is the leading German provider of lotteries on the internet. Through the portals LOTTO24 and Tipp24 of the subsidiary LOTTO24, the company brokers customers' tickets to the state lottery companies and to charity lottery operators. The product range includes LOTTO 6aus49, Spiel 77, Super 6, Eurojackpot, GlücksSpirale, lottery clubs, Keno, the Deutsche Fernsehlotterie, Scratch Games, the Deutsche Traumhauslotterie and freiheit+. Founded in Germany in 1999, ZEAL started out as a German lottery broker under the name Tipp24. In 2005, the company went public on the Frankfurt Stock Exchange (Prime Standard) as one of the most successful IPOs in Germany at the time. In 2019, ZEAL took over LOTTO24 AG.  

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