^
Original-Research: ZEAL Network SE - from NuWays AG

07.01.2025 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

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

Classification of NuWays AG to ZEAL Network SE

Company Name: ZEAL Network SE
ISIN: DE000ZEAL241

Reason for the research: Update
Recommendation: Buy
from: 07.01.2025
Target price: EUR 60.00
Target price on sight of: 12 months
Last rating change:
Analyst: Henry Wendisch

Strong market share gain in 2024

Topic: The state lottery (DLTB) released its 2024 lottery data with details
about the on- and offline distribution channels, which implies a strong
market share gain for ZEAL. In detail:

More lottery spending: lottery spending increased by 4.4% yoy to EUR 8.56bn in
2024. As there were no price increases throughout the year, the increase
should strem from a higher user activity. The main products remained Lotto
6aus49 (EUR 3.5bn, -8% yoy) and a strong Eurojackpot (EUR 2.6bn, +30% yoy).

Online growth and offline decline: in 2024, lottery players spent EUR 2.59bn
(+28% yoy) via the online channel on lottery products (eNuW, based on DLTB
data). On the other hand, this implies a 4% yoy decline to EUR 5.97bn in the
offline channel. Consequently, the online penetration increased by 5.5pp yoy
to 30.3% (eNuW)

Large jump in market share: Based on our estimate of ZEAL's FY'24 bilings
incl. own products of EUR 1.19bn (+ 34% yoy) and the published EUR 1.4bn (+ 17%
yoy) in online billings from the state lottery, ZEAL should show a market
share jump by +4.6pp yoy to 46% in 2024 (eNuW). This clearly shows that ZEAL
is able to outperform the state lottery's online offering as a result of its
highly specialized and efficient online marketing operations.

Outlook for 2025: following a superb 2024, ZEAL should have an easy to reach
comparable base in H1'25e, thanks to the strong user intake of the past and
the price increase as of H2'24. Going into H2'25e, the positive base effect
of the price increase will be gone and a similarly strong H2'25 lottery
environment like in H2'24 is not predicatble. Therefore, we expect a tough
comparable base for H2'25e. Nevertheless, the company will remain on a
growth path in FY'25e (eNuW: +7% yoy sales growth). Moreover, the increasing
fix cost coverage allows for a better cost mix towards the high-return
marketing spendings, further sustaining growth.

All in all, ZEAL remains in the driver seat of the German online
transformation of lottery by outperforming the state and also by creating a
market outside the state lottery with its own and well received products
such as games, freiheit+ and the dream house raffle 'Traumhausverlosung',
that all come in at higher margins and show large growth potentials.
Therefore, we recommend to BUY with unchanged PT of EUR 60.00, based on DCF.

You can download the research here: http://www.more-ir.de/d/31587.pdf
For additional information visit our website:
https://www.nuways-ag.com/research-feed

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
++++++++++
Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
++++++++++

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

The EQS Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.eqs-news.com

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

2062291 07.01.2025 CET/CEST

°