Zeal Network SE — Earnings Release 2022

Nov 10, 2022

EARNINGS CALL

Quarterly Statement Q3 as of 30 September 2022

10 November 2022

(2) Tipp24 ZEAL BERIA ZEAL WWW ZEAL

CONTENT

• Summary ●
• Financial Update
• Share buy-back Offer
• Guidance 2022 .
• Key Take-Aways

SUMMARY

SUMMARY 9M 2022

• Highest jackpot in the history of Germany reached in July
• · Strong expansion of the customer base
• Appeal proceedings on VAT concluded in favour of ZEAL
• LOTTO24 product portfolio now accessible via the n-tv website

CURRENT REGULATION - LICENSING PROCEDURE

New GlüStV 2021

• ·
• · Opportunities: Games, Sports Betting

Broker Licence

Lotto24 broker permit valid until 30 June 2029

Games Licence (still pending)

• All documents submitted, all requirements fulfilled
• · Acc. to our information, the regulator is currently assessing how to treat state lotteries which apply for a games licence, due to their specific role as monopolists. This is slowing down the process for private lottery companies like us as well.
• · We assume the issues will be resolved by the gambling supervision authority within the next few months and that the corresponding permits could be issued

FINANCIAL UPDATE

JACKPOT DEVELOPMENT - 5 PEAKS IN 2022 VS. 3 PEAKS IN 2021

in €m	Average	Peak
YTD 2022	14	4
YTD 2021	10	0

in €m	Average	Peak
YTD 2022	39	1
YTD 2021	38	3

Draw

ZEAL INCOME STATEMENT 9M 2022 - CONDENSED

INCOME STATEMENT	9M 2022 (in €k)	9M 2021 (in €k)	CHANGE (in %)	COMMENTS
REVENUE + Income from jackpot insurance	74,451	65,053	+14.4	REVENUE: Revenue and Income from jackpot insurance increased by 14% due to the
TOTAL COSTS OF OPERATIONS	-54,567	-47,701	+14.4	higher activity plus better performance of our high margin products TOTAL COSTS OF OPERATIONS:
Personnel expenses	-13,935	-14,485	-3.8	Total costs of operations increased by 14% compared to previous year Personnel expenses:
Other operating expenses	-40,632	-33,216	+22.3	Personnel expenses decreased (159 vs 158 average FTE's) mainly results from the weaker development of the LTI provisions, due to the decrease of
Marketing expenses	-24,096	-18,615	+29.4	the ZEAL share price in the last 3 months Marketing expenses:
Direct operating expenses	-7,697	-7,470	+3.0	Higher jackpots (especially in July) was successfully capitalized with higher marketing investments and resulted in good customer acquisition numbers
Indirect operating expenses	-8,839	-7,131	+24.0	Direct operating expenses: Increase of only 3% although billings increased by 10%.
EBITDA	21,993	17,649	+24.6	Indirect operating expenses: Increase in indirect operating expenses of 24%, mainly due to a one-off effect in the same period of the previous year (release of a provision of €
Amortisation and depreciation	-6,518	-6,573	-0.8	0.4m for a legal dispute), an increase of € 0.4m in travel, training and entertaining costs as well as an increase in insurance costs by € 0.3m
EBIT	15,475	11,076	+39.7	EBITDA:
Net profit after taxes	12,142	7,344	+65.3	EBITDA increased by 25% thanks to the higher revenues while cost base (excl. marketing) was kept stable

OTHER PERFORMANCE INDICATORS I

ZEAL

OTHER PERFORMANCE INDICATORS II

other performance Indicators III

COST PER LEAD, CPL (GERMANY SEGMENT) in €

MONTHLY ACTIVE USERS (MAU) (GERMANY SEGMENT) in thousands

AVERAGE BILLINGS PER USER, ABPU (GERMANY SEGMENT) in €

SHARE BUY-BACK

SHARE BUY-BACK OFFER

• · reference price
• Offer price EUR 28.00 per share
• · Acceptance period: 9 Nov. 29 Nov. 29 Nov. 2022
• Purchase of a total of up to 714,285 shares (up to 3.2% of the share capital)
• Offer document published on 9 November on corporate website
• Optimization of the capital structure and return value to shareholders

GUIDANCE 2022

CONSOLIDATED GUIDANCE 2022

In €m	2022 GUIDANCE	2021 ACTUAL	GROWTH RATES
Billings (Germany segment)	at least 750	656.5	> +14%
Revenue 1)	at least 105	86.8	> +21%
EBITDA	at least 30	27.7	+8% л > +60%2)

1) Including income from jackpot insurance

2) Adjusted for one-off effects and marketing savings in 2021

In our fiscal year 2022, we plan to maintain our position as the leading online provider of lottery products.

Depending on the general conditions – and an average jackpot development – we anticipate billings of at least €750 million for the Germany segment. Moreover, we expect revenue to be at least €105 million in fiscal year 2022. Adjusted EBITDA is expected to reach at least €30 million.

Compared to the previous year, we plan to invest significantly more in the acquisition of new customers and expect marketing expenses of around €30 million.

ZEAL

KEY TAKE-AWAYS

KEY TAKE-AWAYS

• Profitability continues to rise
• Strong customer acquisition
• No significant business impact identified due to current changes in the geopolitical and economic environment
• VAT case won O
• Share buy-back tender offer started

Questions

Answers

DISCLAIMER

The information contained herein must not be redistributed, reproduced, published, reproduced, published, or passed on to any other person or used in whole or in part for any other purpose.

This document contains certain forward-looking to the businesses, financial performance and results of the Companies and/or the industry in which the Companies operate. Such forward-looking ssumptions, opinions and views of the Companies and statements from third parties, are uncertain and subject to risks. A multitude of factors can cause actual events to differ significantly from any anticipated development. The Companies do not guarantee that the assumptions underlying such forward-ooking statements are from errors, nor do they accept any responsibility for the future accuracy of the opinions express on or the actual occurrence of the forecasted developments.

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 lability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, none of the Companies or any of their subsidiary undertakings or any of such person advisors accepts any liability whatsoever arising directly or indirectly from the use of this document.

By accepting this presentation, you acknowledge that you will be soley responsible for your own assessment of the market position of each of the Companies and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of each of the Companies' businesses.

This presentation is for information only and shall not constitute investment advice. It is not intended for solicitation purposes but only for use as general information..

This presentation is dated November 2022. Neither the delivery of this presentation nor any of the Companies with any of the recipients, shall, under any circumstances, create any implication that there has been no change in the Companies since such date.

IBERIA ZEAL GAMES

10.11.2022

APPENDIX

CONSOLIDATED INCOME STATEMENT AND BALANCE SHEET IN €K

INCOME STATEMENT	9M 2022 (in €k)	9M 2021 (in €k)	CHANGE (in %)
Revenue + Income from jackpot insurance	74,451	65,053	+14.4
Total costs of operations	-54,573	-48,081	+13.5
EBITDA	21,993	17,649	+24.6
EBIT	15,475	11,076	+39.7
Profit before taxes	15,485	10,760	+43.9
Net Profit	12,142	7,893	+65.3

BALANCESHEET	30/09/22 (in €)	31/12/21 (in €)	CHANGE (in %)
Current assets	126,813	176,331	-28.1
Non-current assets	321,273	327,067	-1.8
ASSETS	448,086	503,398	-11.0
Current liabilities	32,096	48,660	-34.0
Non-current liabilities	65,103	69,796	-6.7
Equity	350,886	384,942	-8.8
EQUITY & LIABILITIES	448,086	503,398	-11.0

BUSINESS UNIT SEGMENT REPORTING AS OF 30/09/22 IN €K

	GERMANY	OTHER	TOTAL
Revenue	70,976	3,476	74,451
Other operating income	811	1,304	2,115
EBITDA	20,134	1,859	21,993
Depreciation/amortisation			-6,518
EBIT	Income.		15,475
Financial result			133
Share of loss from associates			-122
EBT	I		15,485
Income tax			-3,343
NET PROFIT/LOSS		Income.	12,142

10.11.2022

		Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022
BILLINGS (in €m)		157.3	169.5	160.4	163.3	181.2	177.1 - 17.1	186.1
ABPU (in €)	54.9	61.3	56.3		54.4	58.3	58.2	58.9
MAU (in k)		954	966		982	1,036	1,015	1,053
CPL (in €)		28.96					37.07

FINANCIAL CALENDAR 2022 [ALTERNATIVE]

	9209292									2007年5
	Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Feb. Mar. Apr. May Jun.
Publication of Annual Report 2021					○:24 March 2022
Publication of Q1 Quarterly Statement						12 May 2022
Annual General Meeting									30: June 2022
Publication of Half-Year Report										11 August 2022
Publication of Q3 Quarterly Statement													10 November 2022
Publication of Annual Report 2022																	23 March 2023

Frank Hoffmann, CEFA

Senior Investor Relations Manager

T +49 (0)40 809 036 - 042 M +49 (0)175 267 3420 frank.hoffmann@zealnetwork.de www.zealnetwork.de

ZEAL

Straßenbahnring 11 20251 Hamburg