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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 EQ

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.

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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 month

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 draw

since the launch, showing emerging trends. Monthly ABPU (average billing

per user) ranges between EUR 20-22, reflecting solid spending. Although thi

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, a

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 i

the result of a ongoing shift towards brand awareness campaigns (not jackpot

dependent) and away from jackpot dependent performance marketing. Thi

strategy seems to pay off, as ZEAL acquired 252k new users in Q2, which i

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

For additional information visit our website:

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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

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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschlu

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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