DGAP-News: ZEAL Network SE

DGAP-News: ZEAL Network SE: ZEAL delivers increased billings and strong profitability in first nine months of 2016

DGAP-News: ZEAL Network SE / Key word(s): 9-month figures ZEAL Network SE: ZEAL delivers increased billings and strong profitability in first nine months of 2016

11.11.2016 / 07:30 The issuer is solely responsible for the content of this announcement.

---------------------------------------------------------------------------

Press release

ZEAL delivers increased billings and strong profitability in first nine months of 2016

- Billings increased to EUR 204.1 million (prior year: EUR 195.2 million)

- Total operating performance in the first nine months amounted to EUR 101.2 million (EUR 91.9 million)

- EBIT increased to EUR 23.3 million (EUR 20.7 million)

- Earnings per share rose by 90% to EUR 1.84

- Pay-out of the third interim dividend for 2016 amounted to EUR 0.70 per share

(London, 11 November 2016) ZEAL Group delivers a strong set of results for the third quarter, continuing the positive performance achieved in the first half of 2016. Through the period, ZEAL has delivered ongoing growth in its business-to-consumer (B2C) segment, with high average levels of customer spend. Meanwhile in the business-to-business (BBG) segment, the BBG platform is now launch-ready and licence applications are progressing.

Billings, which comprises all stakes from customers, totalled EUR 204.1 million for the nine-month period ended 30 September 2016. This represents an increase of EUR 8.9 million (5%) compared to the same period in 2015 (EUR 195.2 million), highlighting an underlying growth in the Group's B2C segment. Total operating performance in the period amounted to EUR 101.2 million, representing an increase of EUR 9.3 million (10%). Besides sustained growth, attributable to the roll out of seven new instant win games throughout 2016, higher investments in marketing activities supported total operating performance. The increased marketing investment of EUR 1.9 million relates to a multi-media campaign launched during Q2 2016 with the objective of growing the Group's customer base.

Along with total operating performance, EBIT for the nine months increased by 13% to EUR 23.3 million (EUR 20.7 million) despite adverse movements in exchange rate differences of EUR 2.3 million due to the volatility of EUR against GBP.

"Normalised" revenue[1] in the reporting period amounted to EUR 106.3 million (EUR 104.5 million), an increase of EUR 1.8 million despite this year's Euro Championship, which usually causes a decrease in levels of customer activity.

Earnings per share in the reporting period increased by 90% to EUR 1.84 (EUR 0.97).

Dr Helmut Becker, Chief Executive Officer of ZEAL: "We are very satisfied with the Group's performance for the first nine months of 2016. We have delivered an increase in Billings and EBIT, driven by a strong performance in our B2C segment. We successfully launched seven new instant win games, launched a new and improved webshop and increased marketing investments. Our approved licence application in Ireland represents an important step towards the internationalisation of our B2C offering. We intend to launch in this market during the first quarter of 2017. In the BBG segment, we have made great progress with our specialised platform, whilst we continue to explore new markets and are making progress with licence applications."

In accordance with its dividend policy, ZEAL Network paid out the third interim dividend amounting to EUR 0.70 per share at the end of Q3 2016. The Group intends to pay one more instalment of EUR 0.70 per share in 2016. ZEAL Network's dividend policy is subject to periodic review and possible amendments depending on future earnings and financial position.

ZEAL has a strong cash position and is continually seeking opportunities to drive value for the Group.

ZEAL confirms outlook for 2016

The strategic outlook remains unchanged with attractive growth opportunities in ZEAL's target markets. The Group made significant progress in reaching its strategic goals. ZEAL has taken advantage of recent favourable rulings in the European Courts to increase its marketing footprint and plans further investment in marketing to execute the growth strategy and build on the Group's existing customer base. As in the first half of the year, the popular instant win games continued to be one of the main drivers in attracting new target groups and increasing the average billings generated from the Group's customers. ZEAL remains well positioned to capitalise on opportunities arising from additional changes to regulatory conditions and growth potential by continuously innovating the online lottery market.

When reviewing the principal business risks prior to signing off the Q3 2016 Interim Financial Report, the Board concluded that the 'Brexit' EU Referendum result was not a principal business risk.

As announced on 17 May 2016, ZEAL expects full-year total operating performance to be EUR 125-135 million and full-year EBIT to be EUR 25-35 million.

Selected Financials:



Q1-3 2016 Q1-3 2015 Billings EUR '000 204,116 195,239 Revenue EUR '000 75,338 51,869 Total operating EUR '000 101,248 91,891 performance EBIT EUR '000 23,255 20,686 Net profit EUR '000 15,439 8,161 Earnings/share EUR 1.84 0.97



*** Press contact: ZEAL Network SE Press Office Tel.: +44 (0)20 3739-7000 E-mail: media@zeal-network.co.uk Internet: www.zeal-network.co.uk

About ZEAL Network SE ZEAL Network SE and its consolidated companies specialise 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 SE. 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 2.5 billion euros and has thus contributed over 650 million euros in taxes and duties.

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 secondary lottery products (www.tipp24.com).

[1] "Normalised" revenue represents gross revenue generated adjusted for differences between actual and expected prize pay-outs. Further explanation is included on page 6 of the Interim Financial Report as of 30/09/2016.

---------------------------------------------------------------------------

11.11.2016 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.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de

---------------------------------------------------------------------------

Language: English Company: ZEAL Network SE 5th Floor One New Change EC4M 9AF London United Kingdom Phone: +44 (0)20 3739-7000 Fax: +44 (0)20 3739-7099 E-mail: office@zeal-network.co.uk Internet: www.zeal-network.co.uk ISIN: GB00BHD66J44 WKN: TPP024 Indices: SDAX Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange End of News DGAP News Service ---------------------------------------------------------------------------

519749 11.11.2016