Press release

ZEAL reports a solid performance for Q1 2016

- Total operating performance rose by 7% to EUR 38.6 million (2015: EUR 36.1 million)

- EBIT in the period amounted to EUR 14.2 million (2015: EUR 14.1 million)

- ZEAL acquired the remaining shares of Geonomics Global Games Limited

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

(London, 13 May 2016) ZEAL Group continued to build on its strong performance in 2015 with a solid first quarter in 2016. The Group expects continued growth in its core customer facing business. The strategy for the business-to-business offering remains in line with plan.

In March 2016, ZEAL completed the acquisition of the non-ZEAL held interests in Geonomics Global Games Limited (GGGL) and its joint venture, Geo24 UK Limited (Geo24). The technical capabilities and expertise of the personnel employed by GGGL and Geo24 fit well with ZEAL Group's wider growth aspirations.

Consolidated revenue and total operating performance during Q1 2016 rose to EUR 37.6 million (Q1 2015: EUR 34.9 million) and EUR 38.6 million (Q1 2015: EUR 36.1 million) respectively. These increases were largely driven by the successful rollout of the Group's instant win games since February 2015, increases in the level of activity of its existing customer base and registration of new users. Consolidated "normalised" revenue* in the first three months of 2016 increased by 11% to EUR 35.6 million (Q1 2015: EUR 32.1 million).

EBIT in Q1 2016 amounted to EUR 14.2 million and exceeded that generated in the same period in 2015 (Q1 2015: EUR 14.1 million). The increase in total operating performance was offset by a non-recurring charge of EUR 1.3 million attributable to the acquisition of GGGL and Geo24, period on period adverse exchange rate movements of EUR 1.8 million partly compensated by savings of EUR 0.7 million in other operating costs compared to the same period in the prior year.

Dr Helmut Becker, Chief Executive Officer of ZEAL: "Our first quarter results underline the strength of our business model; evidenced particularly by the sustained level of growth shown in all areas of our consumer facing business. We continue to lay foundations for future strategic development through investments in marketing, product improvements and in our business-to-business offering.

Earnings per share in the first three months of 2016 contracted slightly year on year from EUR 1.13 to EUR 1.04.

ZEAL is pleased with the core underlying profitability of the Group and confident that adherence to the strategic objectives set out in the 2015 Annual Report will result in sustained EBIT growth for the rest of the year.

In accordance with its dividend policy, ZEAL Network paid out the first interim dividend of 2016 amounting to EUR 0.70 per share at the end of Q1 2016. The Group intends to pay three more instalments of EUR 0.70 per share in 2016 and continue quarterly payments of at least that amount in 2017 and future years. The dividend policy is subject to periodic review and possible amendments depending on future earnings and financial position.

Outlook for 2016 confirmed

The strategic outlook remains unchanged with attractive growth opportunities in ZEAL's target markets. The Group has made progress towards its strategic goals. The new instant win games attract new target groups who demand a more exciting gaming experience. There is high potential in this growing market. The Group remains well positioned to capitalise on opportunities arising from changes to regulatory conditions and relatively low internet penetration of the lottery industry.

Zeal expects full year total operating performance to be EUR 140-150 million and full year EBIT to be EUR 40-50 million.

Selected Financials:

		Q1 2016	Q1 2015
Revenue	EUR '000	37,574	34,902
Total operating performance	EUR '000	38,634	36,063
EBIT	EUR '000	14,244	14,097
Net profit	EUR '000	8,695	9,459
Earnings/share	EUR	1.04	1.13

*Consolidated "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 Q1 2016 report.
 

***
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 is a holding company specialised 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 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).