Original-Research: ZEAL Network SE (von NuWays AG): BUY

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Original-Research: ZEAL Network SE - from NuWays AG

01.07.2025 / 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

Target price: EUR 64.00

Target price on sight of: 12 months

Last rating change:

Analyst: Henry Wendisch

Q2 lottery spending remains at high levels

Yesterday, we analyzed the Q2 lottery data published by the DLTB (German

state lottery) for the two most popular lottery products "Eurojackpot" and

"Lotto 6aus49". Here's our takeaway:

Eurojackpot spending at high levels. With 2x peak jackpots, EUR 1.17bn were

spent on Eurojackpot tickets in Q2. This corresponds to a 8% yoy a decline

(Q2'24: 2x peak jackpots, but with two separate run-ups instead of two peaks

successively like in Q2'25) but a 3% qoq increase against Q1'25 (0x peak

jackpots, but strong spill-overs from the exceptional Q4'24). All in all,

the spending remains high, as in Q2'25 spending was only 4% below the high

LTM average. Also, this indicates a shifting demand towards the Eurojackpot

and away from Lotto 6aus49.

Lotto 6aus49 continues its weakness. The jackpot situation remained

unexciting, continuing its streak of no peak jackpots for almost two years

(7 quarters). However, Q2'25 pushed the bar even lower with an average

jackpot size of only EUR 4.6m (vs. EUR 15m in 2023 or EUR 10m in 2024). However,

the fact that the average spending per draw of EUR 31.2m remained relatively

constant (only -4% yoy and -7% qoq), shows the relatively stable and

recurring demand for this lottery product. Nevertheless, the demand in

general for Lotto 6aus49 has declined continuously, with Q2'25 showing the

lowest spending on this product since 2018.

The shift in demand away from Lotto 6aus49 towards Eurojackpot should have

no notable effect at ZEAL, as customers simply substitute one lottery ticket

for another, which ZEAL brokers to the state lottery. Nevertheless, the Q2

lottery data serve as a helpful indicator for ZEAL's Q2 performance, given

that ZEAL accounts for a 44% market share of the online market (29% online

penetration).

Q2 to show disproportionate sales growth. Given the fact, that overall

lottery spending remained relatively stable qoq, but also that ZEAL acquired

247k new users in Q1 (of which 25% on average become active users), we

expect 1.55m MAUs coupled with an ABPU of EUR 60 (,4% qoq due to 2x peak

jackpots) for Q2. This should translate into lottery billings of EUR 280m (%

yoy, % qoq) and a disproportionate rise in lottery sales by 34% yoy (%

qoq) to EUR 48m (eNuW), due to price increases introduced in Q3'24. Adding the

also rising sales from Games (eNuW: EUR 3.7m up 62% yoy), ZEAL should report

total Q2 sales of EUR 54m sales (% yoy, % qoq), according to our

estimates. On the back of higher expected marketing expenses (eNuW: EUR 18.5m,

up 19% qoq) during the peaking jackpot phase, Q2 EBITDA is seen at EUR 17m

(31% margin, up 5pp yoy and down 3.6pp qoq).

Against this backdrop, we are positioned 6% above the sales guidance and 16%

above the EBITDA guidance. Consequently, a guidance upgrade should be in the

cards, especially in the event of strong jackpots in H2. Therefore, we

reiterate our BUY recommendation with unchanged PT of EUR 64.00, based on DCF

You can download the research here: http://www.more-ir.de/d/32936.pdf

For additional information visit our website:

https://www.nuways-ag.com/research-feed

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 Abschluss

bestimmter Börsengeschäfte.

Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

analysierten Unternehmen befinden sich in der vollständigen Analyse.

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