ZEAL Network SE: Adjustment of EBIT Guidance

As the following forecasts are prepared on the basis of assumptions about future events and actions, it naturally entails substantial uncertainties. The forecasts constitute the forecasts for the financial year 2018 of Earnings Before Interest and Tax (the "ZEAL Profit Forecast") and of Total Operating Performance (the "ZEAL Revenue Forecast"). Because of these uncertainties it is possible that the actual revenue and/or profit of the ZEAL Network SE ("ZEAL") group may differ materially from the forecasted numbers.

Based on the following factors and assumptions and associated uncertainties, ZEAL expects for the financial year 2018 that Earnings Before Interest and Tax (EBIT) will range between EUR 33 million and EUR 38 million, and Total Operating Performance (TOP) between EUR 150 million and EUR 160 million. This is not a statement about facts and should not be interpreted as such by potential investors. Rather, it is a statement about the expectations of ZEAL's management in respect of EBIT and TOP of the ZEAL group.

ZEAL defines EBIT as Earnings Before Interest and Tax and Total Operating Performance as the sum of revenue and other operating income. In this context, ZEAL considers EBIT to provide a measure of the ZEAL group's ability to increase the economic value of its operating activity over a period of time and TOP to provide a measure of the statutory revenue and other operating income (including income from hedging activities) of the ZEAL group.

The ZEAL Profit Forecast is based on the assumptions set out below made by ZEAL's Executive Board for the development of the influencing factors of EBIT and TOP of the group. The assumptions used in the ZEAL Profit Forecast relate to factors which (i) cannot be influenced by the ZEAL group and those which (ii) can, even if only to a limited extent, be influenced by the ZEAL group. Even if ZEAL believes that these assumptions are reasonable at the time of the estimate of EBIT and TOP by ZEAL's management, they may prove erroneous or unfounded. If one or more of these assumption(s) prove(s) to be erroneous or unfounded, the actual result could deviate materially from the ZEAL groups' current EBIT and TOP.

The members of the Executive Board of ZEAL confirm that the ZEAL Profit Forecast is valid, has been properly compiled on the basis of the assumptions stated and that the basis of accounting used is consistent with ZEAL's accounting policies.

These forecasts relate to EBIT and TOP in line with guidance previously provided by ZEAL and as a means of evaluating the financial performance of the ZEAL Group. Generally ZEAL releases profit forecasts annually. When ZEAL released its preliminary results for the financial year 2017, it released its first profit forecast for 2018 - of EBIT between EUR 33 million and EUR 43 million, and Total Operating Performance (TOP) between EUR 150 million and EUR 160 million. The profit forecast was confirmed in each case when ZEAL released its results for the first three, six and nine months of 2018.

The adjustment of the upper end of the EBIT forecast range for the financial year 2018 in the ZEAL Profit Forecast in comparison to the previously released and confirmed profit forecasts for 2018 from EUR 43 million to 38 million, while maintaining the lower end of the range of EUR 33 million, includes the impact of transaction costs in connection with the announced intention of ZEAL to make a public takeover offer for Lotto24 AG as well as restructuring expenses in connection with an internal cost savings programme initiated on the date of the announcement.

Except for the narrowing of the previously forecasted EBIT range, the Executive Board of ZEAL confirms its previously published guidance and expects the ZEAL group to generate Total Operating Performance (TOP) of EUR 150 million to EUR 160 million in the financial year 2018.

Explanatory notes to the ZEAL Profit Forecast

Basis of Preparation

The ZEAL Profit Forecast was prepared on the basis of management forecasts of the results of ZEAL for the financial year ending 31 December 2018.

The accounting policies applied in the preparation of the forecast are consistent with the accounting policies applied in the preparation of the ZEAL's annual report for the year ended 31 December 2017 which are explained in pages 77 to 90 of ZEAL's annual report for the year ended 31 December 2017.

The intended takeover offer for Lotto24 AG is not expected to complete until after the end of the period covered by the ZEAL Profit Forecast and so, with the exception of transaction costs of EUR 3.5 million, the impact of the intended takeover offer has not been included in the ZEAL Profit Forecast.

Additionally, the ZEAL Profit Forecast for EBIT in the range between EUR 33 million and EUR 38 million includes restructuring and severance costs of approximately EUR 4.5 million which will also be treated as Exceptional Items in ZEAL's results for the year ended 31 December 2018.

Assumptions

The ZEAL Profit Forecast is based on the following assumptions:

Factors outside ZEAL's influence or control

The ZEAL Profit Forecast is subject to certain factors outside the influence or control of ZEAL. The relevant assumptions are described below:

While preparing the forecast, ZEAL's Executive Board assumes that no significant unforeseeable results will occur that could lead to significant constraints in its ongoing business operations. In particular, ZEAL's Executive Board assumes that no or only insignificant changes will occur in respect of current legal and regulatory framework as it pertains to ZEAL.

- It is assumed that there will be no material changes in legislation or regulatory requirements impacting on ZEAL's operations or its accounting policies.

- It is assumed that the market for secondary lotteries, especially in Germany, will not suffer any negative developments, and that ZEAL will be able to retain its current competitive positions in the markets in which it operates.

- It is assumed that the occurrence and size of jackpot prize events in the markets in which the ZEAL group operates will be in line with long term trends.

- The ZEAL Profit Forecast is susceptible to the level of pay-outs won by customers. In preparing the ZEAL Profit Forecast, ZEAL's Executive Board assumes that statistically expected pay-out levels will be incurred in the forecast months.

- It is assumed in the ZEAL Profit Forecast that no individually-significant jackpot prize wins will be borne by ZEAL group in the forecast months before the end of 2018.

- It is assumed that no financial or economic crisis will occur that affect Europe and specifically Germany, and that the economic conditions in Germany will not suffer any negative developments.

- It is assumed that there will be no other material changes to the conditions of the markets in which ZEAL operates.

- It is assumed that the principal exchange rates to which ZEAL's results are exposed to fluctuations will remain materially unchanged from the prevailing rates.

- It is assumed that there will be no material change to the competitive environment leading to an adverse impact on customer preferences.

Factors within ZEAL's influence or control

Other factors that can be influenced or controlled by ZEAL affect the ZEAL Profit Forecast. The relevant assumptions are described below:

- It is assumed that there will be no material change in ZEAL's ability to negotiate new business, and that there will be no material change to the ZEAL's customer base or the ability or willingness of the customer base to meet its obligations to ZEAL.

- It is assumed that there will be no material change in ZEAL's go-to-market approach, and that historic trends of customer retention and acquisition will remain materially unchanged.

- It is assumed that the scale and type of marketing activity to retain existing customers and acquire new customers will not materially change.

- With the exception of the exceptional transaction and restructuring costs described above, it is assumed that the level of cost incurred by ZEAL will not materially change over the remainder of the financial year 2018.

Examination and Reporting Accountant's Report of the ZEAL Profit Forecast

The Reporting Accountant's Report by Ernst & Young of the examination of the ZEAL Profit Forecast for the financial year 2018, which is available for inspection at the Company's offices, reads as follows:

The Directors
ZEAL Network SE
5th Floor - One New Change
London
EC4M 9AF

Lazard & Co. Limited
50 Stratton Street
London
W1J 8LL

19 November 2018

Dear Sirs

We report on the profit forecast comprising forecast of EBIT of Zeal Network SE (the "Company") and its subsidiaries (together the "Group") for the year ending 31 December 2018 (the "Profit Forecast"). The Profit Forecast, and the material assumptions upon which it is based, are set out in the announcement titled "ZEAL Network SE: Adjustment of EBIT Guidance" released by the Company on 19 November 2018 pursuant to Article 17 MAR of the Regulation (EU) No 596/2014 (the "Announcement"). This report is required by Rule 28.1(a)(i) of The City Code on Takeovers and Mergers (the "City Code") and is given for the purpose of complying with that rule and for no other purpose.

Save for any responsibility that we may have to those persons to whom this report is expressly addressed, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with, this report or our statement, required by and given solely for the purposes of complying with Rule 23.2 of the City Code by consenting to its inclusion in the Announcement.

Responsibilities

It is the responsibility of the directors of the Company to prepare the Profit Forecast in accordance with the requirements of the City Code.

It is our responsibility to form an opinion as required by the City Code as to the proper compilation of the Profit Forecast and to report that opinion to you.

It is the responsibility of Lazard to form an opinion as required by, and solely for the purpose of, rule 28.1(a)(ii) of the City Code as to whether the Profit Forecast has been prepared with due care and consideration and to report that opinion to you.

Basis of preparation of the Profit Forecast

The Profit Forecast has been prepared on the basis stated in the Announcement and is based on the unaudited interim financial results for the six months ended 30 June 2018, the unaudited management accounts for the four months ended 31 October 2018 and a forecast to 31 December 2018. The Profit Forecast is required to be presented on a basis consistent with the accounting policies of the Group.

Basis of opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included evaluating the basis on which the historical financial information included in the Profit Forecast has been prepared and considering whether the Profit Forecast has been accurately computed based upon the disclosed assumptions and the accounting policies of the Group. Whilst the assumptions upon which the Profit Forecast are based are solely the responsibility of the Directors, we considered whether anything came to our attention to indicate that any of the assumptions adopted by the Directors which, in our opinion, are necessary for a proper understanding of the Profit Forecast have not been disclosed and whether any material assumption made by the Directors appears to us to be unrealistic.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Profit Forecast has been properly compiled on the basis stated.

Since the Profit Forecast and the assumptions on which it is based relate to the future and may therefore be affected by unforeseen events, we can express no opinion as to whether the actual results reported will correspond to those shown in the Profit Forecast and differences may be material.

Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in Germany or other jurisdictions and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion

In our opinion, the Profit Forecast has been properly compiled on the basis stated and the basis of accounting used is consistent with the accounting policies of the Group.

Yours faithfully

Ernst & Young LLP

Report on profit forecast by ZEAL Network SE for purposes of Rule 28.1(a)(ii) of the City Code on Takeovers and Mergers

The Executive Board
ZEAL Network SE
5th Floor - One New Change
London EC4M 9AF
United Kingdom

19 November 2018

Dear Sirs,

Report on profit forecast by ZEAL Network SE for purposes of Rule 28.1(a)(ii) of the City Code on Takeovers and Mergers

We refer to the profit forecast comprising a forecast of EBIT of ZEAL Network SE (the "Company") and its subsidiaries for the year ending 31 December 2018 (together, the "Profit Forecast") for which the Executive Board of ZEAL (the "Directors" or "you") are solely responsible under Rule 28 of the City Code on Takeovers and Mergers (the "City Code").

We have discussed the Profit Forecast and the bases and assumptions on which it has been prepared and the accounting policies and basis of calculation for the Profit Forecast with the executive officers of the Company and with EY as auditors of the Company and reporting accountants whose responsibility it is to form an opinion as required by Rule 28.1(a)(i) of the City Code that the Profit Forecast has been properly compiled on the basis stated and that the basis of accounting used is consistent with the Company's accounting policies. We have considered EY's letter dated 19 November 2018 addressed to you and us on this matter

You have confirmed to us that all financial and other information relevant to the Profit Forecast has been disclosed to us. We have relied upon the accuracy and completeness of all such information and have assumed such accuracy and completeness for the purposes of providing this letter to you. Our work did not involve an independent examination of any of the financial or other information underlying the Profit Forecast. We do not express any opinion on the achievability of the Profit Forecast.

This letter to you is solely in connection with Rule 28.1(a)(ii) of the City Code and for no other purpose. We accept no responsibility to the Company or its shareholders or any person other than the Directors in respect of the contents of this letter. We are acting exclusively as financial adviser to the Company and no one else in connection with the transaction in connection with which the Profit Forecast has been produced and it was solely for the purpose of complying with Rule 28.1(a)(ii) of the City Code that you requested us to prepare this letter. No person other than the Directors can rely on the contents of this letter and accordingly, to the fullest extent permitted by law, we exclude all liability (whether in contract, tort or otherwise) to any other person in respect of this letter, its contents or the work undertaken in relation to this letter, or any of the results or conclusions that can be derived from this letter or any written or oral information provided in connection with this letter, and in relation to any loss suffered by any such person as a result of, or in connection with, this letter.

On the basis of the foregoing, we consider that the Profit Forecast, for which you in your capacity as Directors are solely responsible, has been prepared with due care and consideration by the Directors.

Yours faithfully,

For and on behalf of
Lazard & Co., Limited

Contact:
Frank Hoffmann, CEFA
Investor Relations

ZEAL
5th Floor - One New Change
London EC4M 9AF

T +44 (0) 20 3739-7123
F +44 (0) 20 3739-7199
frank.hoffmann@zeal-network.co.uk

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN PART) DIRECTLY OR INDIRECTLY IN, INTO OR FROM THE UNITED STATES OF AMERICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

Important note

This announcement is for information purposes only and neither constitutes an offer to purchase or exchange nor an invitation to sell or to make an offer to exchange, securities of Lotto24 AG ("Lotto24") or ZEAL Network SE ("ZEAL"). The final terms and further provisions regarding the public takeover offer will be disclosed in the offer document once its publication will have been approved by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht). ZEAL reserves the right to deviate in the final terms and conditions of the public takeover offer from the basic information described herein. Investors and holders of securities of Lotto24 are strongly recommended to read the offer document and all announcements in connection with the public takeover offer as soon as they are published, as they contain or will contain important information.

The offer will be made exclusively under the laws of the Federal Republic of Germany, in particular under the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz (WpÜG)). The offer will not be made pursuant to the provisions of jurisdictions other than those of the Federal Republic of Germany. Therefore, no other announcements, registrations, admissions or approvals of the offer outside of the Federal Republic of Germany have been filed, arranged for or granted.

The ZEAL shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or with any securities regulatory authority of any state or any other jurisdiction of the United States of America ("USA"). Therefore, subject to certain exceptions, ZEAL shares may not be offered or sold within the USA or in any other jurisdiction where to do so would be a violation of applicable law. There is no public offering of ZEAL shares in the USA.

To the extent this announcement contains forward-looking statements, such statements do not represent facts. Forward-looking statements include all matters that are not historical facts. They are characterised by the words 'expect', 'believe', 'estimate', 'intend', 'aim', 'assume', 'plan' or similar expressions. Such statements express the intentions, opinions or current expectations and assumptions of ZEAL and the persons acting in conjunction with ZEAL, for example with regard to the potential consequences of the takeover offer for Lotto24, for those shareholders of Lotto24 who choose not to accept the takeover offer or for future financial results of Lotto24. Such forward-looking statements are based on current plans, estimates and forecasts which ZEAL and the persons acting in conjunction with it have made to the best of their knowledge, but which do not claim to be correct in the future. Forward-looking statements are subject to risks and uncertainties that are difficult to predict and usually cannot be influenced by ZEAL or the persons acting in conjunction with it. Actual events or consequences may differ materially from those contained in or expressed by such forward-looking statements.

This announcement and any materials distributed in connection with this announcement are not directed to or intended for release, publication or distribution (in whole or in part) directly or indirectly into or from the USA or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction, nor are they directed to, or intended for use by, any person or entity that is a citizen or resident or located in the USA or in any locality, state, country or other jurisdiction where such release, distribution, publication, availability or use would constitute a violation of the relevant laws of such jurisdiction or which would require any registration or licensing within such jurisdiction.

The ZEAL Profit Forecast is a profit forecast for the purposes of Rule 28 of the City Code on Takeovers and Mergers (the "Code"). The ZEAL Profit Forecast, the assumptions on which the ZEAL Profit Forecast is based and the reports from ZEAL's reporting accountants, Ernst & Young, and its financial adviser, Lazard, as required by Rule 28.1 of the Code are set out in this announcement. Each of Ernst & Young and Lazard has given and not withdrawn its consent to the publication of its report in this Announcement in the form and context in which it is included.

Other than the ZEAL Profit Forecast, no statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for ZEAL or Lotto24 AG, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for ZEAL or Lotto24 AG, as appropriate.