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

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Original-Research: ZEAL Network SE - from NuWays AG

07.01.2025 / 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: 07.01.2025

Target price: EUR 60.00

Target price on sight of: 12 months

Last rating change:

Analyst: Henry Wendisch

Strong market share gain in 2024

Topic: The state lottery (DLTB) released its 2024 lottery data with details

about the on- and offline distribution channels, which implies a strong

market share gain for ZEAL. In detail:

More lottery spending: lottery spending increased by 4.4% yoy to EUR 8.56bn in

2024. As there were no price increases throughout the year, the increase

should strem from a higher user activity. The main products remained Lotto

6aus49 (EUR 3.5bn, -8% yoy) and a strong Eurojackpot (EUR 2.6bn, % yoy).

Online growth and offline decline: in 2024, lottery players spent EUR 2.59bn

(% yoy) via the online channel on lottery products (eNuW, based on DLTB

data). On the other hand, this implies a 4% yoy decline to EUR 5.97bn in the

offline channel. Consequently, the online penetration increased by 5.5pp yoy

to 30.3% (eNuW)

Large jump in market share: Based on our estimate of ZEAL's FY'24 bilings

incl. own products of EUR 1.19bn ( 34% yoy) and the published EUR 1.4bn ( 17%

yoy) in online billings from the state lottery, ZEAL should show a market

share jump by .6pp yoy to 46% in 2024 (eNuW). This clearly shows that ZEAL

is able to outperform the state lottery's online offering as a result of its

highly specialized and efficient online marketing operations.

Outlook for 2025: following a superb 2024, ZEAL should have an easy to reach

comparable base in H1'25e, thanks to the strong user intake of the past and

the price increase as of H2'24. Going into H2'25e, the positive base effect

of the price increase will be gone and a similarly strong H2'25 lottery

environment like in H2'24 is not predicatble. Therefore, we expect a tough

comparable base for H2'25e. Nevertheless, the company will remain on a

growth path in FY'25e (eNuW: % yoy sales growth). Moreover, the increasing

fix cost coverage allows for a better cost mix towards the high-return

marketing spendings, further sustaining growth.

All in all, ZEAL remains in the driver seat of the German online

transformation of lottery by outperforming the state and also by creating a

market outside the state lottery with its own and well received products

such as games, freiheit and the dream house raffle 'Traumhausverlosung',

that all come in at higher margins and show large growth potentials.

Therefore, we recommend to BUY with unchanged PT of EUR 60.00, based on DCF.

You can download the research here: http://www.more-ir.de/d/31587.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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2062291 07.01.2025 CET/CEST

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