ZEAL Network SE: ZEAL triples EBIT in the in the first half of 2015

Aug 13, 2015 7:15 AM

ZEAL Network SE / Key word(s): Half Year Results

2015-08-13 / 07:15

Press release

ZEAL triples EBIT in the in the first half of 2015

- Significant EBIT increase from EUR 6.0 million to EUR 18.5 million

- Net profit for the period jumps from EUR 1.5 million to EUR 12.7 million

- Stable underlying business performance with revenue impacted by a high price pay-out but with total operating performance partly compensated by the hedging structure income

- Second interim dividend of EUR 0.70 paid out at the end of June

- Guidance for the full year confirmed

(London, 13 August 2015) ZEAL Network SE achieved strong earnings growth in the first half of 2015. Both EBIT and net profit for the period increased significantly on the back of a solid total operating performance and a considerable decrease of other operating expenses. A single high jackpot pay-out of EUR 47.9 million in May adversely impacted revenue. This effect was however partly offset by a payment from the hedging structure which amounted to EUR 38.3 million. In light of the strong earnings performance in the first six months, management confirms its full year guidance. In line with its dividend policy, the company paid out its second interim dividend of EUR 0.70 per share at the end of June and reiterates its plan to pay out total dividends of at least EUR 2.80 per share in the current year.

Dr Helmut Becker, designated Chief Executive Officer of ZEAL: "We have delivered strong earnings growth in the first half of the year and are on track to achieving our full-year targets. The company is well-positioned for further success while we continue to execute on our growth initiatives".

ZEAL capitalised on a significant decrease of operating expenses mainly driven by decrease in the gaming duty due to HM Treasury amending gaming taxation which supported a rise of the EBIT by more than 200 percent to EUR 18.5 million (prior year: EUR 6.0 million) in the reporting period. After adjusting for statistical fluctuation differences from the expected level of pay-outs, adjusted EBIT amounted to EUR 22.7 million (prior year: EUR 7.2 million). The adjusted EBIT margin tripled to 33.4% (prior year: 10.4%).

Consolidated net profit for the reporting period, increased substantially from EUR 1.5 million in the prior year period to EUR 12.7 million. Earnings per share jumped to EUR 1.52 (prior year: EUR 0.17).

Consolidated revenue declined from EUR 68.2 million to EUR 25.7 million, reflecting the high prize pay-out of EUR 47.9 million. In the first half of 2014, the comparable amount of single high jackpot pay-outs had been EUR 6.7 million. The negative revenue effect was partly offset by a payment receivable from the hedging structure amounting to EUR 38.3 million. Total operating performance, which the company is using as a measure for top-line guidance since May in order to reflect other operating income such as hedging payments, was EUR 65.5 million compared to EUR 71.2 million in the prior year period.

Dr Helmut Becker to assume CEO role on 1 September 2015 -
Susan Standiford appointed as CTO

As announced in May 2015, Dr Helmut Becker has been appointed Chief Executive Officer of ZEAL Network SE and will take on the position on 1 September 2015. After 13 years on the Executive Board of the company, Dr Hans Cornehl decided to step down from his position as CEO in order to take up new career challenges. The Supervisory Board of ZEAL Network SE appointed Susan Standiford as the new Chief Technology Officer and member of the Executive Board in May. Susan joined the company with 20 years of experience in leading software product development and information technology organisations. Susan has vast expertise in marketing and delivering innovative, value-based solutions in B2C and B2B businesses.

Outlook for 2015 confirmed

As announced on 13 May 2015, ZEAL will use 'total operating performance' instead of revenue for its revenue guidance going forward, to adequately account for the effects of the hedging mechanism. The company confirms its positive outlook on the full year and expects 'total operating performance' in the range of EUR 135 to 145 million and consolidated EBIT between EUR 35 and 45 million. The stated ranges also take into account statistical fluctuations in pay-outs for the secondary lottery business.

Selected Financials:

    Q1-2 2015 Q1-2 2014
Revenue EUR '000 25,698 68,193
Total operating performance EUR '000 65,542 71,154
EBIT EUR '000 18,520 5,993
Net profit EUR '000 12,711 1,529
Earnings/share EUR 1.52 0.17


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).

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