Lotto24 improves profitability in the first half of 2019 despite comparatively weak jackpot development

- Successful completion of the takeover by ZEAL Network SE

- Billings and revenues below previous year as expected

- EBITDA and EBIT doubled

(Hamburg, 14 August 2019) The first half of 2019 was once again an exciting period for Lotto24 AG (), Germany's leading online provider of state lotteries: following the successful completion of the takeover by ZEAL Network SE ("ZEAL"), the company has been a member of the ZEAL Group since 14 May 2019. Due to the exceptionally strong EuroJackpot trend in the first half of 2018 with a total of eight jackpots of EUR 90 million, Lotto24 was unable to achieve year-on-year growth for the first time in the first half of 2019 but succeeded in significantly improving profitability - in spite of the one-off expenses incurred in connection with the takeover.

With just one EUR 90 million EuroJackpot (prior year: six), billings and revenues were down in the second quarter of 2019 in particular - by 7.6% to EUR 81.2 million (prior year: EUR 87.9 million) and by 13.7% to EUR 9.4 million (prior year: EUR 10.9 million), respectively. At 11.6%, the gross margin also fell just short of the prior-year figure (prior year: 12.4%) due to the jackpot-related lower share of lotto clubs. With 104 thousand new customers in the second quarter of 2019 (prior year: 198 thousand), marketing expenses per registered new customer (cost per lead, CPL) amounted to EUR 29.96 (prior year: EUR 25.55).

In the first six months of 2019, the company therefore achieved billings of EUR 157.1 million (prior year: EUR 161.2 million, -2.5%), revenues of EUR 18.0 million (prior year: EUR 19.4 million, -7.4%) and a gross margin of 11.5% (prior year: 12.1%). With 190 thousand new customers in the first six months as a whole (prior year: 378 thousand), the total number of customers registered with Lotto24 grew by 20.9% to 2,359 thousand (prior year: 1,951 thousand). In line with the comparatively weak jackpot trend, marketing expenses were reduced to EUR 5.4 million (prior year: EUR 9.7 million), resulting in a CPL of EUR 28.66 (prior year: EUR 25.54). Due in particular to these lower marketing expenses, EBITDA and EBIT more than doubled to EUR 2.8 million (prior year: EUR 1.3 million) and EUR 1.5 million (prior year: EUR 0.7 million), respectively. Before one-off expenses of EUR 0.6 million, EBIT even reached EUR 2.1 million and thus tripled compared to the prior-year figure (prior year: EUR 0.7 million). Due to a strongly positive technical tax effect in the first six months of 2018, however, net profit of EUR 1.6 million was down on the previous year (prior year: EUR 2.3 million).

After bringing the employees together and defining the new organizational structure, ZEAL and Lotto24 have reached another milestone with the agreement of the road map. The measures outlined herein to leverage the intended synergies will be implemented in the coming weeks and months. The companies are now planning to negotiate the relevant contracts and transfer Tipp24.com's customers to the brokerage business in October 2019.

"We are aware that the first steps towards an efficient and sustainable company merger in particular require a great deal of patience on the part of all those involved. Nevertheless, we look forward to combining the strengths of both companies - such as a significantly larger customer base or a common online platform with the opportunity to make our product range even more interesting - in the coming months in order to become even more attractive for our customers, employees and shareholders in the future," states Petra von Strombeck, CEO of Lotto24 AG.

About Lotto24 AG: Lotto24 AG is Germany's leading online provider of state-licensed lotteries (). Lotto24 brokers customers' tickets to the state lottery companies and the »Deutsche Fernsehlotterie«, for which it receives a commission. The offerings include among others »Lotto 6aus49«, »Spiel 77«, »Super 6«, »EuroJackpot«, »GlücksSpirale«, lotto clubs, »Keno« and the »Deutsche Fernsehlotterie«. After its foundation in 2010 and IPO in 2012 on the Frankfurt Stock Exchange (Prime Standard), Lotto24 is now the market leader. In 2019, ZEAL Network SE acquired a majority shareholding in Lotto24, which now belongs to the ZEAL Group. As a fast-growing company with a strong service and customer orientation, Lotto24 aims to provide its customers online as well as mobile with the most convenient, secure and modern game experience possible.

Contact:
Lotto24 AG
Vanina Hoffmann
Manager Investor & Public Relations
Tel.: - 501
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