ZEAL expands its international footprint

May 12, 2017 7:00 AM

DGAP-News: ZEAL Network SE / Key word(s): Quarter Results

12.05.2017 / 07:00
The issuer is solely responsible for the content of this announcement.

ZEAL expands its international footprint

  • Launch of lottery betting in Ireland, and charity lottery licences granted in Norway and the Netherlands
  • Billings increased by EUR 1.9 million to EUR 68.4 million
  • Underlying Q1 performance and cash position remain strong despite high prize pay-out
  • EBIT for the reporting period amounted to EUR 0.2 million

(London, 12 May 2017) ZEAL Group[1] maintained the positive momentum from 2016 during the first quarter of 2017. The Group made good progress with the further internationalisation of its business, while ensuring that both monthly active users and billings continued to grow. In March, MyLotto24 Ltd. launched a licensed lottery betting business in Ireland, allowing customers to bet on the outcome of several lottery draws. Lottovate made tangible progress towards its strategic aims with the acquisition of licences in Norway and the Netherlands.

MyLotto24 was once again able to make a life-changing payment to a customer, with a jackpot prize of approximately EUR 15 million. Despite the large prize pay-out, the underlying performance of the business and cash position remained strong. Consolidated revenue decreased, due to the large win mentioned above, to EUR 23.6 million (Q1 2016: EUR 37.6 million) in the first quarter. Total operating performance was down from EUR 38.6 million to EUR 24.1 million in the same period. Consolidated "normalised" revenue[2] in the first three months of 2017 amounted to EUR 35.1 million (2016: EUR 35.6 million).

Despite the big win noted above, ZEAL was able to deliver a positive EBIT for the first quarter of EUR 0.2 million (2016: EUR 14.2 million). The ZEAL Group also continued to invest in the organisational structure and marketing. Personnel expenses rose by 19 percent to EUR 8.0 million (2016: EUR 6.7 million) primarily due to the internationalisation strategy. Other operating expenses grew from EUR 14.4 million to EUR 15.6 million, mainly driven by higher investment in marketing activities. This reflects the Group's continued focus on driving customer acquisition and re-activating the dormant proportion of the B2C customer base.

Billings rose by 3% to EUR 68.4 million (2016: EUR 66.6 million) for the quarter. Average monthly active users (MAU) increased by 10% or 36.3k to 392.9k in Q1 2017, compared to the comparative period (2016: 356.6k), highlighting the effectiveness of the marketing strategy. Q1 2017 saw a reduction in average billings per user (ABPU) EUR54.35 (2016: EUR57.45) compared to the same period in 2016, driven mainly by new users and a shift in product mix.

Helmut Becker, Chief Executive Officer of ZEAL: "Our journey continues. The launch of our online lottery betting product in Ireland as well as the new licences in Norway and the Netherlands prove that we are successfully expanding our business with locally tailored strategies. We continue to increase our footprint and bring our innovative and modern lottery products to an increasing number of customers."

Strategic outlook remains unchanged

The strategic outlook remains unchanged with attractive growth opportunities in ZEAL's target markets. The Group has made progress towards its strategic goals, especially with regard to its internationalisation strategy. ZEAL remains well positioned to capitalise on opportunities arising from changes to regulatory conditions and the relatively low internet penetration of the lottery industry. Following the acquisition of the new licences, the launch of business in Norway is planned for the current quarter (Q2) and in the Netherlands for the third quarter of 2017.

In line with the revised guidance provided in March, ZEAL expects the consolidated total operating performance in 2017 to be in the range of EUR 130-140 million and a consolidated EBIT of between EUR 15-25 million. ZEAL confirms its intention to pay out a total dividend of at least EUR 1.00 per share for the current financial year, subject to periodic review and may be amended in the future depending on the earnings and financial position.

Selected Financials:

    Q1 2017 Q1 2016
Revenue EUR '000 23,574 37,574
Total operating performance EUR '000 24,142 38,634
EBIT EUR '000 245 14,244
Net profit EUR '000 165 8,695
Earnings/share EUR 0.02 1.04


ZEAL Network SE

Press office
Phone: +44 (0)20 3739-7000
Email: media@zeal-network.co.uk

Investor Relations
Phone: +44 (0)20 3739-7123
Email: ir@zeal-network.co.uk

Internet: www.ZEAL-network.co.uk

About ZEAL Network SE:
ZEAL is a holding company specialised 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 AG. In November 2014, the company was renamed ZEAL Network SE. Its shares are listed on the Prime Standard of the Frankfurt Stock Exchange and are included in the SDAX index. Since its incorporation, ZEAL has generated stakes of 3.0 billion euros.

ZEAL holds equity interests in businesses running under the following brands: Lottovate offers digital services to licensed lottery operators around the world (www.lottovate.com). Lotto Network enables private business partners to host their own branded lotto product (www.lottonetwork.com). Ventura24 is a lottery ticket broker in Spain (www.ventura24.es). Tipp24 offers consumer facing lottery betting products (www.tipp24.com).

[1] ZEAL Group includes all subsidiaries of ZEAL Network SE and the companies of the independent shareholding MyLotto24 Ltd.
[2] Consolidated "normalised" revenue represents gross revenue generated adjusted for differences between actual and expected prize pay-outs. Further explanation is included on page 7 of the Q1 2017 report.

12.05.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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