REG-ZEAL Network SE ZEAL Network SE: Strong results and an exciting future

ZEAL Network SEAnnouncement

21/03/2019 06:35

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   ZEAL Network SE (-)
   ZEAL Network SE: Strong results and an exciting future

   21-March-2019 / 07:33 CET/CEST
   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   London, 21 March 2019

   ZEAL Network SE: Strong results and an exciting future

     • Billings up nearly 6% to EUR 296.3 million
     • Adjusted EBIT up 85% to EUR 46.6 million; Statutory EBIT up 52% to EUR
       38.3 million
     • Revenue up 15% to EUR 154.8 million
     • Record number of new registered customers acquired for the Group and
       partners
     • First foreign lottery operator to be awarded a licence in the Czech
       Republic
     • Acquisition of Lotto24 AG on track

   ZEAL Network SE ('ZEAL') today announced strong financial results and
   record new customer acquisition for 2018, as it moved closer towards
   completion of its acquisition of Lotto24 AG ('Lotto24').

   The Group delivered an 85% increase in Adjusted EBIT to EUR 46.6 million,
   generating Statutory EBIT of EUR 38.3 million (2017: EUR 25.2 million).
   The adjustment accounts for one-off costs primarily associated with the
   Lotto24 transaction and restructuring. Billings and revenue grew for the
   third consecutive year. Billings were up 6% to EUR 296.3 million (2017:
   EUR 280.5 million) while revenue increased 15% to EUR 154.8 million (2017:
   EUR 134.3 million). Total Operating Performance (TOP) was EUR 159.7
   million, an increase of 13% year-on-year (2017: EUR 141.2 million).

   ZEAL also acquired a record number of new customers for the Group and its
   partners, while significantly reducing its acquisition costs. The 614,000
   new registered customers represent a 49% increase on the previous year
   (2017: 411,000), while the cost per lead in the lottery betting business
   reduced by 42% in 2018.

   Jonas Mattsson, CFO, ZEAL, said: 'ZEAL delivered a very strong performance
   in 2018. We reduced our financial risk, improved our cost structure and
   increased the efficiency of our marketing - delivering a record number of
   new customers and excellent financial results. We achieved this while also
   preparing to adapt for the future as we initiated our plan to reunite with
   Lotto24 - a strategic move that protects our core business, reduces
   shareholder risk, and creates strong platform for growth. This, combined
   with our excellent financial performance makes ZEAL a highly attractive
   long-term investment proposition.'

   Building on the progress made in 2017, ZEAL continued to lay the
   groundwork for its international diversification. During the year, it
   became the first foreign lottery operator to be awarded a licence in the
   Czech Republic and acquired its third and fourth stakes in external
   lottery-related start-ups, Wshful (Cloud Canyon Limited) and The Dream
   Makers (De Integro Limited).

   In November 2018, ZEAL announced its intention to reunite with Germany's
   largest digital lottery broker, Lotto24, and transform its core German
   business model to locally-licensed digital lottery brokerage. ZEAL
   shareholders approved the all-share transaction in January 2019 and, to
   date, nearly 74% of Lotto24 shareholders have accepted ZEAL's offer.
   Completion is anticipated in May 2019.

   Dr. Helmut Becker, CEO, ZEAL, said: '2018 was a pivotal year for ZEAL. We
   delivered excellent financial results, continued to lay the groundwork for
   international diversification, and made ourselves more efficient. Through
   our plan to acquire and reunite with Lotto24 we created a sustainable
   growth path for our core German business. Online penetration in the global
   lottery market remains low and the opportunity is as exciting as ever. I
   believe we have positioned ZEAL exceptionally well for the future and the
   sector's digital shift.'

   Selected financial results to 31 December 2018:

                             2018                2017
   Billings                  EUR 296.3 million   EUR 280.5 million
   Statutory Revenue         EUR 154.8 million   EUR 134.3 million
   TOP                       EUR 159.7 million   EUR 141.2 million
   Adjusted EBIT             EUR   46.6 million  EUR   25.2 million
   Exceptional items         EUR     8.3 million EUR -
   Statutory EBIT            EUR   38.3 million  EUR   25.2 million
   Net Profit                EUR   26.7 million  EUR   17.2 million
   EPS                       EUR   3.18          EUR    2.04

   Normalised Adjusted EBIT* EUR   49.4 million  EUR   38.1 million

   * The difference between the actual pay-out and the expected prize pay-out
   is referred to as 'normalisation'

   2019 Outlook:

   In view of the special situation created by the Lotto24 transaction, which
   is moving closer to completion, and the transformation of its core German
   business model later in 2019, ZEAL does not intend to provide any
   financial guidance at this point in time. ZEAL's dividend policy for 2019
   is currently under review.

   - ENDS -

   Media contact:
   Matt Drage
   Head of Corporate Communications, ZEAL Network
   T: +44 (0)7976 872 861
   matt.drage@zeal-network.co.uk

   Investor Relations contact:
   Frank Hoffmann
   Investor Relations Manager, ZEAL Network
   T: +44 (0)20 3739 7123
   frank.hoffmann@zeal-network.co.uk

   Notes to Editor:

    1. ZEAL is an international digital lottery group.
    2. The company was founded in 1999. Renamed as ZEAL Network SE in 2014.
    3. The company is headquartered in London and its shares are listed on
       the Prime Standard of the Frankfurt Stock Exchange.
    4. The Group has more than 3.9 million customers globally. Since its
       incorporation, ZEAL Group has generated stakes of more than EUR3
       billion and paid out more than EUR1.5 billion in winnings.
    5. ZEAL Group includes all subsidiaries of ZEAL Network SE and the
       affiliated companies of the independent shareholding myLotto24 Ltd.
    6. Total Operating Performance is calculated as the sum of Revenue and
       Other Operating Income as disclosed in the Consolidated Income
       Statement.
    7. ZEAL's 2018 Annual Results are available at:
        1 http://www.zeal-network.co.uk/investors/publications/

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   ISIN:           GB00BHD66J44
   Category Code:  ACS
   TIDM:           -
   LEI Code:       391200EIRBXU4TUMMQ46
   OAM Categories: 1.1. Annual financial and audit reports
   Sequence No.:   7891
   EQS News ID:    790063


    
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