Märkte & Kurse

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Original-Research: ZEAL Network SE - from NuWays AG

08.08.2025 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
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Classification of NuWays AG to ZEAL Network SE

     Company Name:                ZEAL Network SE
     ISIN:                        DE000ZEAL241

     Reason for the research:     Update
     Recommendation:              BUY
     from:                        08.08.2025
     Target price:                EUR 64.00
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Henry Wendisch

Q2 in line, guidance confirmed at upper end

ZEAL released solid Q2 results with sales and margin expansions despite a
weaker jackpot environment. In detail:

Q2 sales grew by 24% yoy to EUR 50.4m in line with expectations (eNuW: EUR
50.6m), mainly driven by lottery sales (EUR 45.7m, +27% yoy) which benefitted
particularly from the price increase imposed in July '24 (ARPU: EUR 10.02,
+15% yoy) and a higher lottery user base (MAUs: 1.52m, + 10% yoy). Mind you,
these figures contain the positive effects from the new product
"Traumhausverlosung" launched a year ago, which already contributed EUR 7-8m
sales (eNuW) in H1 explaining 12pp of the H1 lottery sales growth of 34%
yoy, whereas the remaining 22pp yoy sales growth stemmed from the classical
lottery brokerage business.

"Traumhausverlosung" in high demand: ZEAL shared KPIs for all three draws
since the launch, showing emerging trends. Monthly ABPU (average billings
per user) ranges between EUR 20-22, reflecting solid spending. Although this
figure is below that of classical lottery brokerage (EUR 58-60), the strong
43% billings margin, should lead to monthly ARPU (average revenue per user)
for Traumhausverlosung between EUR 8.60 - 9.50 (eNuW), in line with
traditional lottery brokerage (~EUR10). Monthly active users (MAUs) ranged
from 410-470k for the first two draws (Q4'24 and Q1'25) but fell to 350k in
the third (Q2'25). This decline likely reflects weaker cross-selling, as
Q4'24 and Q1'25 benefited from exceptional jackpot-driven spillover to
"Traumhausverlosung". As a result, D2C billings (directly via
traumhausverlosung.de) rose to 49% of total Traumhausverlosung billings in
the third draw, up from 40% at launch.

Games also developed nicely with 43% yoy higher sales of EUR 3.3m in Q2 (eNuW:
EUR 3.7m) on the back of a higher user base (+42% yoy), following the rapid
expansion of the Games portfolio. However, this also implies that the ARPU
at Games has saturated at an extremely high level (ARPU: EUR 40.90, -1% yoy,
i.e. 4x that of the lottery business).

EBITDA margin expanded by 8.8pp yoy to 35% translating into EUR 17.6m EBITDA
(eNuW: EUR 17.6m), on the back of operating leverage with OPEX only expanding
by 10%. Particularly noteworthy is, that despite a weaker yoy jackpot
environment in Q2, ZEAL increased marketing by 12% yoy to EUR 13.6m. This is
the result of a ongoing shift towards brand awareness campaigns (not jackpot
dependent) and away from jackpot dependent performance marketing. This
strategy seems to pay off, as ZEAL acquired 252k new users in Q2, which is
relatively high for a low-jackpot environment.

ZEAL reaffirmed its FY'25 guidance, with CFO Behrendt indicating the upper
end is now more likely. Strong user inflow and continued demand for
"Traumhausverlosung" support ou expectations of sequential sales growth in
H2, placing us above the EUR 195-205m sales guidance (eNuW: EUR 212m). Ongoing
hiring and the remaining marketing budget (EUR 29m spent in H1 vs. EUR60-70m
FY'25 budget) should result in a figure only slightly above EUR 55-60m EBITDA
guidance (eNuW: EUR60.5m).

Against this backdrop, we reiterate our BUY recommendation with unchanged PT
of EUR 64.00, based on DCF.



You can download the research here:
https://eqs-cockpit.com/c/fncls.ssp?u=d0705c3b0d85970d43cb35d98a549364
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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.
++++++++++

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2181324 08.08.2025 CET/CEST

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