Zeal Network SE — Earnings Release 2018

May 4, 2018

ZEAL Network SE

Investor Call Quarterly Release as of 31/03/18

London, 04 May 2018

Important Notice

This presentation has been produced by ZEAL Network SE (the "Company") and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person.

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No representation or warranty (express or implied) is made as to, and no reliance should be placed upon, any information, including projections, estimates, targets and opinions contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, none of the Company or any of its subsidiary undertakings or any of such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.

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Contents

• 1. ZEAL at a Glance
• 1. Business Unit Update
• Lottery Betting
• Lottovate
• Other Topics
• 1. Financial Update
• 1. 2018 Guidance
• 1. Appendix

ZEAL at a Glance

➢ ZEAL Group delivered another strong quarter

➢ Our extensive diversified product portfolio helped the Group to deliver growth in Billings (+6%) and Total Operating Performance (+65%) in the first quarter

➢ Strong EBIT of €9.2m demonstrates the underlying strength of our business.

➢ The Group has continued to invest in new customer acquisition, with 140k new customers for the Group and our partners in Q1 2018. 59% up on prior year

➢ Launched in Australia with lottery betting business today

Other Topics

Brexit Following the invocation of Article 50, the Company is making the necessary preparations to ensure that the impact will be minimal

Case filed with the court. First court decision is now expected in H2 2018. We remain confident that ultimately the outcome will be favourable for the Group

German VAT

Development of Billings in million €

• Billing continues to develop favourable supported by the successful launch of US lottery products
• Strong Q1 billings of €72.8m for the Group; up 6% on previous year
• 140k new registered customers up 58% YoY

Development of TOP and Normalised Revenue in million €

• Total Operating Performance in Q1 2018 up on previous year due to a reduction in the value of exceptional prize pay-outs

• 'Normalised' Revenue in Q1 2018 increased on previous year by 12% thanks to a more favourable product mix
• 'Normalised' Revenue decreased only by 3% from Q4 2017 to Q1 2018

Development of Expenses in million €

• Expenses increased by 28 % in Q1 2018 relative to the prior year:
• Increase in direct costs of €4.6m, which is mainly driven by €3.0m increase in physically hedged ticket costs
• Increase in marketing investment of €0.7m which in part drove 140k new customers
• Increase in other costs of operations of €1.6m, which is mainly driven by additional consulting costs

Development of EBIT and Normalised EBIT in million €

• Statutory EBIT of €9.2m & 'Normalised' EBIT of €10.2m
• Net profit of €6.4m
• Earnings per share (EPS) of €0.76 (Q1 2017: €0.02). Effective Tax rate of 30% (in line with expectations)

Net Cash in Q1 2018 has increased by €30.3m:

• €12.9m increase in cash and short-term deposits
• €20.0m decrease in the hedging reserve due to the improvement in our hedging structure
• Offset by a €2.6m negative movement in other working capital balances

¹ Definition of Net Cash: Cash (without pledged cash) + Short-term financial assets + Other current assets and prepaid expenses, less Trade payables, Other liabilities, Income tax liabilities and a €30m hedging reserve

Total Operating Performance	€ 150 - 160m
EBIT	€ 33 - 43m
Dividend	€ 1.00 per share

Strong first quarter performance

Good results and sustained operational growth

Relentless focus on growth, internationalisation and customers delivers results

Promising set of plans for 2018

Appendix

Consolidated Income Statement and Balance Sheet in €k

		31/03/18	31/03/17	Change in %
t n e	Revenue	38,700	23,574	+64.2
m e	Total operating performance	39,830	24,142	+65.0
at	Total costs of operations	(30,671)	(23,897)	+28.3
St e	EBITDA	9,458	585	+1,516.8
m o	EBIT	9,159	245	+3,638.4
c n I	Earnings before taxes	9,095	235	+3,770.2
	Profit	6,368	165	+3,759.4

		31/03/18	31/12/17	Change in %
et	Current assets	138,021	134,477	+2.6
e h	Non-current assets	7,121	6,634	+7.3
S e	ASSETS	145,142	141,111	+2.9
c n	Current liabilities	29,930	32,730	(8.6)
a al	Non-current liabilities	2,297	1,765	+30.1
B	Equity	112,915	106,616	+5.9
	EQUITY & LIABILITIES	145,142	141,111	+2.9

	Lottery betting	Lottovate	Business unit total	Normalisation adjustments	Other adjustments	Statutory total
Revenue	37,075	2,080	39,155	(506)	51	38,700
Other operating income	1,622	91	1,713	(579)	(4)	1,130
Total operating performance	38,697	2,171	40,868	(1,085)	47	39,830
EBITDA	12,933	(2,013)	10,920	(1,085)	(377)	9,458
Depreciation/amortisation	(227)	(72)	(299)	–	–	(299)
EBIT	12,706	(2,085)	10,621	(1,085)	(377)	9,159
Financial result	–	–	–	–	(64)	(64)
EBT	–	–	10,621	(1,085)	(441)	9,095
Income tax	–	–	–	–	(2,727)	(2,727)
Net Profit/loss	–	–	10,621	(1,085)	(3,168)	6,368

e		Q1 2018	Q1 2017	Variance
u n	Statutory	38,700	23,574	15,126
e v e	Normalised	39,206	35,140	4,066
R	Variance	(506)	(11,566)

		Q1 2018	Q1 2017	Variance
T BI	Statutory	9,159	245	8,914
E	Normalised	10,244	11,995	(1,751)
	Variance	(1,085)	(11,750)

Billings (in €m)	Q4 2016	Q1 2017	Q2 2017	Q3 2017	Q4 2017	Q1 2018
	69.9	64.1	64.0	61.7	72.4	68.3

ABPU (in €)	Q4 2016	Q1 2017	Q2 2017	Q3 2017	Q4 2017	Q1 2018
	57.9	54.4	56.2	60.3	59.7	58.0

MAU (in k)	Q4 2016	Q1 2017	Q2 2017	Q3 2017	Q4 2017	Q1 2018
	404	393	380	341	405	392

Publication of Annual Report 2017	22 March 2018
Publication of Q1 Report	4 May 2018
Annual General Meeting	1 June 2018
Publication of Q2 Report	2 August 2018
Publication of Q3 Report	1 November 2018

Frank Hoffmann, CEFA Investor Relations Manager

ZEAL 5 th Floor - One New Change London EC4M 9AF

T +44 (0) 203 739 7123 M +49 (0) 175 2673420 F +44 (0) 203 739 7099

frank.hoffmann@ZEAL-network.co.uk www.ZEAL-network.co.uk