Zeal Network SE — Earnings Release 2024

May 8, 2024

EARNINGS CALL

Quarterly Statement Q1 as of 31 March 2024 08 May 2024

(2) Tipp24 ZEAL BERIA (ZEAL WWW ZEAL

CONTENT CONTENT CONTENT CONTENT CONTENT

• Summary
• Financial Update
• Progress and Guidance
• Key Take-Aways

SUMMARY

SUMMARY Q1 2024

STRONG START INTO THE NEW YEAR

• × Exceptionally efficient and extensive new customer acquisition
• ✈ Strongly accelerated growth of billings and revenue
• Gross margin significantly improved
• & Squeeze-out request submitted to LOTTO24 AG

FINANCIAL UPDATE

VERY GOOD JACKPOT ENVIRONMENT - 4 PEAKS IN Q1 2024 VS. 0 PEAKS IN Q1 2025

ZEAL INCOME STATEMENT Q1 '24 - CONDENSED

INCOME STATEMENT	01 '24 (in €k)	01 23 (in €k)	CHANGE (in %)
REVENUE	36,100	26,699	+35.2
- Lotteries	31,974	24,913	+28.3
- Games	2,187
TOTAL COSTS OF OPERATIONS	-27,137	-17,579	+54.4
Personnel expenses	-6,203	-5,078	+22,2
Other operating expenses	-20,967	-12,516	+6745
Marketing expenses	-13,390	-7,001	+91.3
Direct operating expenses	-4,011	-2,730	+46.9
Indirect operating expenses	-3,566	-2,784	+28,1
EBITDA	9,405	9,320	+09
Amortisation and depreciation	-1,869	-2,194	-14.8
EBIT	7,537	7,126	+5.8
NET PROFIT AFTER TAX	21,085	4,374	+382.1

p REVENUE

Revenue increased by 35% due to a strong increase in MAU and gross margin

X COST OF OPERATIONS

Personnel expenses:

Personnel expenses increased by 22% driven by an 11% increase of the average number of employees rose from 169 to 187., higher holiday accruals and salary increases

Marketing expenses:

Marketing expenses increased by 91% as marketing activities were significantly increased during periods of high jackpots. New customer acquisition increased by 124% with a 10% lower CPL compared to the previous year

Direct operating expenses:

Direct operating expenses increased by 47% due to increased use of Paypal, higher cost for customer identification, costs for impaired customer receivables and commissions to external games developers

Indirect operating expenses:

Indirect operating expenses were up by 28%, mainly driven by increased costs for external service providers and personnel recruitment costs

EBITDA 0

EBITDA increased by 1% despite significantly increased customer acquisition costs and brand investment as well other investments in growth. Adjusted for a "big win" at Traumhauslotterie which reduced revenue by €0.8m EBITDA would have amounted to €10.2 million (+9%)

× NET PROFIT AFTER TAX

Net profit rose by 382% to €21.1 million mainly due to the initial recognition of deferred tax assets on tax loss carry-forwards of ZEAL Network SE following the announcement of its squeeze-out request to LOTTO24 AG

COST PER LEAD BELOW Q1 '23 AND Q4 '23

In €	01	Q2	Q 3	Q 4	Full Year
2024	33.04
2023	36.77	50.83	50.40	37.11 -	45.52

	Q2 '23 Temporary increase in competitive pressure in online marketing during a high jackpot
	Q3 23 - Launch of major advertising campaign for LOTTO24 to increase brand awareness
Q4 '23	• Brand campaign is already leading to positive contributions to new customer acquisition Disciplined and targeted acquisition activity in high media cost environment (Christmas)
	Q1 24 - Further increase in efficiency in marketing measures and benefit from increased brand awareness

LOTTERY BILLINGS GROW FASTER THAN MARKET DRIVEN BY GROWTH IN USER BASE AND HIGHER BILLINGS PER USER

STABLE LOTTERY GROSS MARGIN

Tipp24 ZEAL BERIA ZEAL WAND ZEAL

1 Negative impacted of one large win in "Die Deutsche", including this effect the gross margin in Q1 24 was 13.0%

PROGRESS AND GUIDANCE

UPDATE ON PROGRESS TOWARDS STRATEGIC GOALS FOR 2024

Our Strategic Goals for 2024

Improve billings margin in lottery brokerage business

Increase brand awareness, marke-ting efficiency, customer retention

Grow Games business

Launch new charity lottery

• · Optimization of billings margin by increased share of high-margin products and expansion of service fees
• than 15% in H2 2024
• · Continue successful brand campaigns for LOTTO24
• · Increase marketing efficiency in brand and performance marketing
• · Further improve customer retention through early engagement, higher subscription rates and expanded lottery club offerings
• Increase number of available games on our platform
• · Broaden type of games to include instant-win-games
• •
• · Charity lotteries enable product innovation
• · Attractive product margins, improved independence from high jackpots
• · Launch will require investment in H2 2024 (marketing, product development, prizes, etc.)

Our Progress in Q1 2024

• · Billings margin already improved by to 13.3% (excl. big win)
• · Further measures are expected to be rolled out in coming months which will lift billings margin for lotteries to more than 15% in H2 2024
• Mix of "campaign bursts" and "always on" for brand marketing working well
• Highly successful customer acquisition during January peak jackpots
• · Increased billing share from lottery clubs and "play with friends" to 7.4% (5.7% in Q1 '23)
• Received approval for 64 new games
• · Received approval for 8 "instant win games" with lower RTP and higher appeal to our user base
• · More proactive offering still hampered by relatively low total number of available games and license restrictions
• Team in place
• · Product and tech development well advanced
• Working on regulatory setup (new subsidiary formed) and marketing
• · Launch expected in H2 2024

HIGHER LOTTERY BILLINGS MARGIN IN Q1 '24 DRIVEN BY IMPROVED PRODUCT MIX AND ROLL-OUT OF PRICE OPTIMIZATION

BILLINGS MARGIN

11 Excluding €0.8m effect from big win at "Die Deutsche Traumhauslotterie"

• •
• •
• •

GAMES BUSINESS CONTINUES TO SHOW ATTRACTIVE METRICS AND GROWTH

ABPU

BILLINGS

TEAL

in € millions

ARPU

in €

Tipp24 ZEAL IBERIA IBERIA ZEAL GAMES

Games business successfully started in Q2 '23

New Games offer is well received full business roll-out still in progress

Continuous expansion of games portfolio

We received regulatory approval to publish further 64 games - taking approved total to >100 games

4 Key customer engagement metrics developing well

Ongoing quarterly growth of pay-ins and billings

� Eight instant win games approved by regulator for the first time

TEAL

New games have a lower RTPs of 65-80% (current average is c. 88%) and game-designs have higher appeal for our core lottery customers

GUIDANCE 2024 CONFIRMED

In €m	2024 GUIDANCE	2074 Actuals
Revenue 1)	140-150 (+21 - 29%)	116.1
EBITDA 27	38-42 (+16 - 28%)	329

1) Including income from jackpot insurance;

22 Excluding transaction costs in relation to planned squeeze-out transaction at Lotto24

• Guidance for FY 2024 based on a average jackpot environment
• Expected revenue growth of 21-29% and EBITDA growth of 16-28% versus 2023
• margin optimization measures
• · ZEAL will continue to invest into marketing (c. €40-45m for German brokerage business)
• •
• Planned investment into launch of new charity lottery in H2 2024
• · Expected mid-term revenue growth in mid-tohigh teens (CAGR 2023-2026)

Tipp24 ZEAL BERIA ZEAL "ZEAL "ZEAL

KEY TAKE-AWAYS

KEY TAKE-AWAYS

• 8 ZEAL with very strong start to the new year
• ¢ Customer acquisition performed very well
• & Further expansion of investment into brand building
• Games on track X

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 forvard-looking to the businesses, financial performance and results of the industry in which the Companies operate. Such forward-looking assumptions, opinions and views of the Companies and statements from third parties, are uncertain and subject to risks. A multitude of factors to differ significantly from any anticipated development. The Companies do not guarantee that the assumptions underlying statements are free from errors, nor do they accept any responsibility for the future accuracy of the opinions expressed in this presentation or the actual occurrence of the forecasted developments.

No representation or warranty (express or ino 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, ontained herein, and, accordingly, none of the Companies or any of their subsidiary undertakings or any of such personts any liability whatsever arising directly or indirectly from the use of this document.

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

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

This presentation is dated May 2024. Neither of this presentation nor any further discussions of any of the recipients, shall, under any circumstances, create any implication that there has been no change in the Companies since such date.

APPENDIX

CONSOLIDATED INCOME STATEMENT AND BALANCE SHEET IN €K

INCOME STATEMENT	Q1 '24 (in €k)	Q1 '23 - (in €k)	CHANGE (in %)		BALANCE SHEET	31/03/24 (in €)	31/12/23 (in €)	CHANGE (in %)
Revenue	36,100	26,699	+35.2		Current assets	106,044	92,634	+14.5
Total costs of operations	-27,137	-17,579	+54.4		Non-current assets	318,361	302,016	+5.4
EBITDA	9,405	9,320	+0.9		ASSETS	424,404	394,653	+7.5
EBIT	7,537	7,126	+5.8					Current liabilities	55,809	57,997	-3.8
Profit before taxes	6,921	6,795	+1.9		Non-current liabilities	84,021	71,897	+16.9
Income taxes	+14,164	-2,421			Equity	284,574	264,758	+7.5
Net Profit	21,085	4,374	+382.1	1	EQUITY & LIABILITIES 424,404		394,653	+7.5

BUSINESS UNIT SEGMENT REPORTING AS OF 31/03/24 IN €K

	GERMANY	OTHER	TOTAL
Revenue	34,703	1,397	36,100
Other operating income	442	0	442
EBITDA	8,876	230	9,405
Depreciation/amortisation			-1,869
EBIT			7,537
Financial result			-563
Share of loss from associates			-53
EBT		1	6,921
Income tax	-		. 14,164
NET PROFIT/LOSS		I	21,085

KPIS (LOTTERIES)

	01 2020	02 2020	03 2020	04 2020	01 2021	02 2021	OB 2021	Q4 2021	Q1 2022	02 2022	OR 2022	04 2022	@1 2025	Q2 2025	03 2025	Q4 2025	Q1 2024
Pay-in (in €m)	110.1	138.0	120.6	140.8	121.4	128.4	125.9	128.0	142.5	140.2	147.7	171.3	158.8	167.3	177.0	168.7	196.7
BILLINGS (in €m)	140.0	174.4	157.3	181.0	163.3	169.5	160.3	163.4	181.2	177.1	186.1	214.1	201.2	209.9	222.1	210.1	246.3
ABPU (in €)	49.46	54.48	54.90	61.30	56.36	58.40	54.40	58.00	58.31	58.18	58.90	60.73	60.99	61.42	60.73	62.31	61.59
ARPU (in €)	6.00	6.89	6.60	7.51	7.16	7.00	6:55	6.99	7.57	7.41	7.39	8.07	7.55	7.73	7.67	7,78	8.00
MAU (in k)	942	1,065	954	984	966	968	982	938	1,036	1,015	1,053	1,175	1,100	1,142	1,217	1,124	1.333
CPL (in €)	26.00	27.77	28.96	28.79	33.48	32.12	17.65	29.61	38.09	37.07	34.76	34.86	36.77	50.83	50.40	37.11	33.04

KPIS (GAMES)

			Q2 2023* Q3 2023 Q23 Q4 2024 QQ1 2024
Pay-in (in €m)	0.1	3.3	5.1	6.3
BILLINGS (in €m)	0.6	16.2	24.9	31.3
ABPU (in €)	58.74	306.14	449.1	480.98
ARPU (in €)	------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	22.02	32.89	33.57
MAU (in k)			18	22

* Games business started in June 2023.

FINANCIAL CALENDAR 2024

	20924								20925
															Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun.
Publication of Annual Report 2023					C: 20 March 2024
Publication of Q1 Quarterly Statement					8 May 2024
Annual General Meeting					C	28 May 2024
Publication of Half-Year Report									7 Auguist 2024
Publication of Q3 Quarterly Statement											6 November 2024

Contact

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