• Revenue in 2014 up 8.3 percent to EUR 140.7 million
• EBIT of EUR 19.2 million in line with revised forecast
• EBIT between EUR 35 million and EUR 45 million targeted in 2015
• Revised dividend policy: Annual dividend payments expected to amount to at least EUR 2.80 per share from 2015 onwards and to be paid in quarterly instalments

(London, 26 March 2015) In fiscal year 2014 ZEAL Network SE prepared for its further international expansion in accordance with its growth strategy. Following the relocation to London, the centre of the European online gaming industry, ZEAL made progress in developing activities in its three areas of business: consumer facing secondary lotteries, B2B services for licensed lottery operators and the operation of own lottery games.

Dr Hans Cornehl, Chief Executive Officer of ZEAL: 'In 2014 we laid the foundation for further growth. We sharpened our strategy, we implemented the necessary organisational and structural changes, we relocated and renamed our company, and we started numerous business initiatives to execute our strategy. We are confident that we have created excellent prerequisites for future sustainable growth, fully supporting our vision to create a better world of lottery.'

Consolidated revenue in 2014 was up 8.3 percent to EUR 140.7 million (prior year: EUR 129.9 million). This was in line with the revenue target of EUR 135 to EUR 145 million.

ZEAL generated an EBIT of EUR 19.2 million (prior year: EUR 19.5 million) which was in line with the adjusted EBIT forecast of EUR 15 to EUR 25 million announced in August 2014. The company incurred additional costs for the development of new business activities, higher marketing expenses for the acquisition of new customers, and costs for the renewal of hedging structures in the secondary lottery business.

ZEAL generated a consolidated net profit of EUR 4.2 million (prior year: EUR 10.2 million) on the back of a lower financial result and a higher consolidated tax rate in 2014. The financial result was mainly impacted by start-up costs at associated and joint venture companies. Earnings per share amounted to EUR 0.50 compared to EUR 1.23 in the previous year.

Strong operating cash flow and solid financial position

Cash flow from operating activities increased by 38 percent to EUR 23.1 million (prior year: EUR 16.8 million). This was mainly driven by lower tax payments. As of December 31, 2014 ZEAL had cash, pledged cash and short term deposits of EUR 108.1 million (prior year: EUR 156.1 million). The net cash position of EUR 39.6 million was significantly lower year-on-year due to the pay-out of the special interim dividend of EUR 7.50 per share in April, which totalled EUR 62.9 million. The company continues to have sufficient financial headroom to pursue its business development and growth initiatives.

Annual dividends expected to amount to a total of at least EUR 2.80 from 2015 onwards

Going forward, the Executive Board has proposed, and the Supervisory Board has approved, with immediate effect, a revised dividend policy under which the company will pay regular interim dividends.

Jonas Mattsson, Chief Financial Officer of ZEAL: 'Against the background of ZEAL's promising business perspectives, we intend to pay sustainable annual dividends of a total of at least EUR 2.80 from 2015 onwards, provided that the company's financial position and performance enables such a dividend. Dividends shall be paid in quarterly instalments. We resolved to pay the first interim dividend of EUR 0.70 per share on March 31, 2015.'

Strategic growth initiatives progressing as planned

In addition to the successful consumer-facing secondary lottery business operated independently by the MyLotto24 sub group, ZEAL has pressed ahead with its growth initiatives in its other two business areas.

Under the Lottovate and Lotto Network brands, ZEAL offers digital services to licensed lottery operators and private business partners in various international markets. In 2014, the company was able to significantly grow the online channel of the ONCE lottery in Spain operating as a digital service partner. In the UK, ZEAL runs online lotto games for football clubs such as Arsenal London.

In the third business area, ZEAL aims to organise own lotto games in the medium term. Geo24, a joint venture with the minority participation Geonomics, optimised the innovative online lotto game GeoLotto for the UK consumer market and launched the revised product in September 2014.

Outlook: ZEAL anticipates improvement in profitability in 2015

The company continues to see attractive growth opportunities in its target markets in Europe and North America. With its three strategic business areas, ZEAL is well-positioned to capitalise on opportunities which may arise from changing regulatory conditions as well as from the low level of digitalisation of the lottery industry in many markets.

For 2015, ZEAL expects consolidated revenues of EUR 135 million to EUR 145 million. The company furthermore anticipates an increase in consolidated EBIT to between EUR 35 million and EUR 45 million. The stated ranges for revenue and earnings take into account statistical fluctuations in pay-outs for the secondary lottery business.
 

Selected Financials:

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Press contact:
ZEAL Network SE
Press office
Tel.: +44 (0)20 3739-7000
E-Mail: media@zeal-network.co.uk
Internet: www.zeal-network.co.uk

About ZEAL Network SE:
ZEAL is a holding company specialized in the area of online lottery. We offer consumer facing lottery-based games as well as business to business solutions. Our vision is to create a better world of lottery.

ZEAL Network SE is a London based company, founded in Germany in 1999 as Tipp24 SE. In November 2014, the company was renamed in today's ZEAL Network SE. Its shares are listed on the Prime Standard of the Frankfurt Stock Exchange and are included in the SDAX index. To the current day ZEAL has generated stakes of 2.5 billion euros and thus contributed over 650 million euros in taxes and duties.

ZEAL holds equity interests in businesses running under the following brands: Lottovate offers digital services to licenced lottery operators around the world (www.lottovate.com). Lotto Network enables private business partners to host their own branded lotto product (www.lottonetwork.com). Geolotto is an innovative geographical based lotto game in the UK (www.geolotto.co.uk). Ventura24 is a lottery ticket broker in Spain (www.ventura24.es). Tipp24 offers consumer facing secondary lottery products (www.tipp24.com).