DGAP-News: Lotto24 AG

Lotto24 reaches targets for 2017 despite weak jackpot trend and strong competition

- Billings and revenues up by more than 10 percent

- Break-even reached

- Market leadership expanded as online market continues to grow

- Guidance for 2018

(Hamburg, 1 February 2018) 2017 was an exciting year for Lotto24 AG (Lotto24.de), Germany's leading online provider of state-licensed lotteries: not only did the company continue its growth and exceed the 1.5 million customer mark, it also reached break-even for the first time.

Billings and revenues up by more than 10 percent
Despite the exceptionally weak jackpot situation in the second half of 2017 - especially compared to the high jackpots of the previous year - and stronger competition, Lotto24 AG succeeded in raising billings by 10.1% to EUR 220.7 million in 2017 (prior year: EUR 200.5 million) and revenues by 10.8% to EUR 25.2 million (prior year: EUR 22.8 million), according to preliminary calculations. By contrast, billings and revenues in the fourth quarter of 2017 were down 4.8% to EUR 56.2 million (prior year: EUR 59.0 million) and by 9.7% to EUR 6.5 million (prior year: EUR 7.1 million), respectively, according to preliminary estimates. The gross margin improved to 11.4% in 2017 (prior year: 11.3%).
With a preliminary total of 291 thousand new customers in fiscal year 2017 (prior year: 399 thousand) - of which just 75 thousand in the fourth quarter (prior year: 113 thousand) due to the weak jackpot trend - the total number of customers registered with Lotto24 rose by 22.7% to 1,573 thousand (prior year: 1,282 thousand), according to preliminary estimates. Thanks to efficient marketing activities - which Lotto24 adapts to the prevailing jackpot trend - the company was able to reduce its cost per lead (CPL) to EUR 27.32 in 2017 (prior year: EUR 32.99), according to preliminary figures.

Break-even reached
The encouraging revenue trend and lower marketing expenses of EUR 7.9 million (prior year: EUR 10.8 million) had a particularly positive impact on EBIT and net profit: according to preliminary calculations, there was a strong improvement in both KPIs to EUR 1.0 million (prior year: EUR -3.9 million) and EUR 2.5 million (prior year: EUR -2.3 million), respectively. The company thus reached break-even on an annual basis for the first time. Thanks to its brokerage activity, Lotto24 AG contributed around EUR 84 million to important social projects and public services in 2017.

Market leadership expanded as online market continues to grow
According to information published by the German Association of State Lottery Companies (DLTB) and the German Lottery Association, total revenues of DLTB (including »Lotto 6aus49« and »EuroJackpot«) fell by 3.6 percent to around EUR 7.1 billion in 2017 (prior year: EUR 7.3 billion). According to the figures available, stakes generated online by state-owned companies and private lottery brokers with permits rose by 7.6 percent to around EUR 700 million (2016: EUR 650 million). As a result, the online segment now accounts for around 10 percent of total stakes (prior year: 9 percent).
Lotto24 AG expanded its share of the online lottery market to 32% in fiscal year 2017 (prior year: 31%) and thus remains Germany's leading online provider of state-licensed lotteries by far.

"The market potential online and via mobile devices is still huge: according to a representative online survey commissioned by Lotto24 in January 2018, around 76 percent of interviewees had firm plans to play lotto online in future", states Petra von Strombeck, CEO of Lotto24 AG.

Guidance for 2018
Lotto24 AG plans to increase its marketing investment in 2018 in order to extend its position as the leading online provider of state-licensed lotteries. The company anticipates an increase in billings of 15% to 20%, with a growing number of new customers and a rise in CPL. Lotto24 also expects a slight improvement in gross margin compared to the previous year. Depending on external conditions - especially the jackpot trend - and marketing investments to attract new customers, both EBIT and net profit will remain above the break-even mark.

About Lotto24 AG: Lotto24 is Germany's leading provider of state-licensed lotteries via the Internet (Lotto24.de). 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. 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.: +49 40 82 22 39 - 501
E-mail: ir@lotto24.de
Internet: Lotto24-ag.de
Lotto24.de