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

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Original-Research: ZEAL Network SE - from NuWays AG

06.10.2025 / 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:                        06.10.2025
     Target price:                EUR 65.00
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Henry Wendisch

Q3 lottery spending: EJ strong, Lotto 6/49 declines again

Topic: Following the end of Q3, all lottery data are in the books and allow
for a detailed analysis:

The most important brokered product at ZEAL, the Eurojackpot (EJ), has
improved significantly yoy and qoq. Total spending rose by 28% yoy and 15%
qoq to EUR 1.35bn, also due to one more draw than usual (27 vs. 26).
Nevertheless, average spending per draw rose by 23% yoy and 11% qoq to EUR 50m
which was the second highest figure since Q3'21. The main reasons behind
this development were (1) two strong jackpot runs (from EUR 10m minimum to a
large jackpot of EUR 113 and EUR 120m respectively) and (2) two consecutive peak
jackpots of EUR 120m towards the end of Q3. Given the fact, that this Q3's
spending was the second highest in recent history, despite quarters with
more peak jackpots, indicates a general demand shift towards this product.

Another highly popular product in Germany is the classic Lotto 6/49. Here,
the development remains unfavorable for quite some time. It did not reach a
peak jackpot since Q3'23 and jackpot runs are currently over very quickly,
preventing high jackpots. Mind you, that this development is entirely based
on probabilities, therefore a recovery can come any time. For players,
however, this development lowered the product's appeal, which shows in
decreasing demand. Total (average) spending for Lotto 6/49 declined again by
5% yoy to EUR 812m (EUR 31.2 per draw).

For ZEAL, this development comes in favorably, as the lottery brokerage
business remains the largest and most important for now and the EJ is its
most important product. Q3'25 is also the first quarter, where the positive
effects of the price increase (introduced in Q3'24) are bottoming out.
Growth is therefore dependent on past customer intake, but also again more
dependent on the jackpot development, which influences spending behavior.

In sum, we therefore expect a strong Q3 with yoy and qoq improving KPIs.
More specifically, Q3 sales are seen at EUR 55m (+24% yoy and + 9% qoq),
whereas EBITDA is expected at EUR 14m (25.1% margin, -8.6pp yoy) on the back
of very high marketing expenses of EUR 20m (+80% yoy). Mind you, Q3'24 did not
see any peak jackpots, thus explaining the easy comparable base for sales
and the strong comparable base for marketing expenses.

Based on Q4 estimates being only incrementally higher than Q3e, the recently
raised guidance should be well in reach, in our view. Against this backdrop,
we reiterate our BUY recommendation with an unchanged PT of EUR 65.00, based
on DCF.



You can download the research here:
https://eqs-cockpit.com/c/fncls.ssp?u=3b364952c474dade1f6b95f69b136b6d
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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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2208270 06.10.2025 CET/CEST

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