Zeal Network SE — Interim / Quarterly Report 2021

May 7, 2021

Investor Call Quarterly Statement as of 31 March 2021

7 May 2021

Content

• 1. Summary
• 2. Financial Update
• 3. Guidance 2021
• 4. AGM 2021
• 5. Key Take-Aways

Summary

• ➢ Good start to the new fiscal year despite corona and a comparatively weak jackpot situation
• ➢ Billings and revenue up
• ➢ Strong gross margin achieved
• ➢ Profitability significantly improved
• ➢ LOTTO24 in the Google Play Store

Financial Update

ZEAL Income Statement 3M 2021 - condensed

in € thousand	3M 2021	3M 2020	Change in %
Revenue	22,620	19,024	+18.9
Personnel expenses	(5,161)	(4,954)	+4.2
Other operating expenses	(12,882)	(11,761)	+9.5
Marketing expenses	(7,053)	(6,554)	+7.6
Direct operating expenses	(2.774)	(1.987)	+39.6
Indirect operating expenses	(3.055)	(3.220)	(5.1)
Adjusted EBITDA1)	4.567	2.832	+61.3
Amortisation and depreciation	(2.205)	(2.682)	(17.8)
Non-recurring income and expenses	-	(108)	n.a.
EBIT	2.362	42	+5,523.8
Net profit after taxes	2.484	152	1,534.2

	Comments
➢	Revenue: − Strong revenue increase of 19% driven by billings growth and a favorable product mix
➢	Total costs of operations: − An 8% increase compared to previous year
	➢ Personnel expenses: − Stable level of employees of 164 FTE's (2020: 165) − The slight cost increase is mainly due to normal salary increases
	➢ Marketing expenses: − Continued investment in customer acquisition despite the low-jackpot situation
	➢ Direct operating expenses: − Due to the change of payment service provider, direct costs have increased disproportionately − The change enabled optimisations in the areas of processing effort, chargebacks and fraud cases
	➢ Indirect operating expenses: − Decrease in indirect costs driven primarily by savings in office costs
➢	Adjusted EBITDA: − EBITDA increased due to good revenue development and the scaling effect of the business model

Other performance indicators I

Other performance indicators II

New registered customers (Germany segment)

Other performance indicators III

• 1) MAU (monthly average active users is the number of unique users who have either purchased a ticket or participated in a draw in a given month (incl. free bets)) provides a measure of the Company's ability to retain and attract new customers.
• 2) ABPU (average billings per user per month is the average net billings received from each active customer in a given month. It is calculated by dividing monthly net billings by average monthly active users) and provides a measure of the Company's ability to increase loyalty and value from our customers.

Guidance 2021

in €m	2021 Guidance	2020 Actual
Billings (Germany segment)	At least 700	651.8
Revenue	At least 95	87.0
Adjusted EBITDA1)	At least 20	12.7

1) Earnings before interest, taxes, depreciation, amortisation and non-recurring expenses

In fiscal year 2021, we plan to further expand our market leadership as an online provider of state lottery and other lottery products with the LOTTO24 and Tipp24 brands.

Depending on the general conditions, in particular the jackpot development, we expect billings of at least €700 million for the Germany segment. Following an exceptionally strong jackpot development in the previous year, we have assumed an average jackpot development, resulting in a lower growth rate than in the previous year.

Moreover, we expect revenue to be at least €95 million in fiscal year 2021. With similarly high marketing investments as in the previous year of €32 million to acquire new registered customers, adjusted EBITDA is expected to reach at least €20 million.

• Due to the positive liquidity situation of the ZEAL Group and the expected further increase in profitability, we will propose a total pay-out of €20.2 million (2019: €17.9 million) to the Annual General Meeting on 1 June 2021
• This corresponds to a dividend of €0.90 (+12.5%) per share for the fiscal year 2020 (2019: €0.80)
• Depending on the economic development of the ZEAL Group, we have set ourselves the target of proposing a dividend of €1.00 per share to the shareholders at the Annual General Meeting in 2022

AGM 2021

The Annual General Meeting (AGM) of ZEAL Network SE will take place on 1 June 2021

OVERVIEW OF THE AGENDA

• 1. Resolution on the appropriation of the distributable profit for the 2020 fiscal year
• 1. Resolution on the ratification of the actions of the members of the Management Board for the 2020 fiscal year
• 1. Resolution on the ratification of the actions of the members of the Supervisory Board for the 2020 fiscal year
• 1. Resolution on the appointment of the auditors of the annual financial statements and consolidated financial statements for the fiscal year 2021
• 1. Resolution on a capital increase from company funds and a subsequent ordinary capital reduction
• 1. Resolution on the approval of the compensation system for the members of the Management Board
• 1. Resolution on the compensation and compensation system for the members of the Supervisory Board

Key Take-Aways

Good billings and revenue development despite comparatively low jackpots

Profitability increased significantly

Ratification of the State Treaty on Gambling in all Federal State Parliaments

LOTTO24 now also in the Google Play Store

Questions

Answers

The information contained herein must not be relied upon for any purpose and may not be redistributed, 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 statements relating to the businesses, financial performance and results of the Companies and/or the industry in which the Companies operate. Such forward-looking statements, including assumptions, 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-looking 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 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 Companies or any of their subsidiary undertakings or any of such person's officers, employees or 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 solely responsible for your own assessment of the market and 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 7 May 2021. Neither the delivery of this presentation nor any further discussions of any of the Companies with any of the recipients, shall, under any circumstances, create any implication that there has been no change in the affairs of any of the Companies since such date.

Appendix

Consolidated Income Statement and Balance Sheet in €k

t		3M 2021	3M 2020	Change in %
n e m	Revenue	22,620	19.024	+18.9
e at	Total costs of operations	(18,043)	(16,715)	+7.9
St	Adjusted EBITDA1)	4.567	2.832	+61.3
e m	EBIT	2.362	42	+5,523.8
o c	Profit before taxes	2.879	-188	+1,631.4
n I	Net Profit	2.484	152	+1,534.2

		31/03/21	31/12/20	Change in %
et	Current assets	103,380	104,432	(1.0)
e h	Non-current assets	387,895	389,902	(0.5)
S e	ASSETS	491,275	494,334	(0.6)
c n	Current liabilities	32.254	36,051	(10.5)
a al	Non-current liabilities	60.684	62,721	(3.2)
B	Equity	398.337	395,562	+0.7
	EQUITY & LIABILITIES	491,275	494,334	(0.6)

1) Earnings before interest, taxes, depreciation, amortisation and non-recurring expenses

	Germany	Other	Total
Revenue	21,120	1,500	22,620
Other operating income	176	1	177
EBITDA	4,101	466	4,567
Depreciation/amortisation	–	–	(2,205)
EBIT	–	–	2,362
Financial result	–	–	567
Share of loss from associates			(50)
EBT	–	–	2,879
Income tax	–	–	(395)
Net Profit/loss	–	–	2,484

Secondary lottery business			Broker Business
	Billings (in €m)	Q1 2019	Q2 2019	Q3 2019	Q4 2019	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021
		67.4	112.0	153.3	134.0	140.0	174.4	157.3	181.0	163.3
	ABPU (in €)	Q1 2019	Q2 2019	Q3 2019	Q4 2019	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021
		57.5	60.5	57.3	48.4	49.5	54.5	54.9	61.3	56.4
	MAU (in k)	Q1 2019	Q2 2019	Q3 2019	Q4 2019	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021
		375*	365	917	925	942	1,065	954	984	966

Publication of Annual Report 2020	25 March 2021
Publication of Q1 Report	7 May 2021
Annual General Meeting	1 June 2021
Publication of Half-Year Report	12 August 2021
Publication of Q3 Report	11 November 2021

Frank Hoffmann, CEFA

Senior Investor Relations Manager

ZEAL

Straßenbahnring 11 20251 Hamburg

T +49 (0)40 809 036 - 042 M +49 (0)175 267 3420

frank.hoffmann@zealnetwork.de www.zealnetwork.de