DGAP-Ad hoc: Lotto24 AG

Lotto24 adjusts guidance for 2017 following exceptionally weak jackpot trend in the third quarter of 2017

(Hamburg, 19 October 2017) According to preliminary calculations, Lotto24 AG continued to grow profitably in the first nine months of 2017 - despite the exceptionally weak jackpot trend in the third quarter and the continuing strong competition: At EUR 164.6 million provisionally, billings exceeded those of the previous year (EUR 141.6 million) by 16.3 %, while revenues rose by a provisional 20.2 % to EUR 18.8 million (previous year: EUR 15.6 million). Compared to the same period of the previous year, in which the jackpot trend was particularly strong both at the »Lotto 6aus49« and »EuroJackpot« lotteries, however, billings and revenues in the third quarter of 2017 dropped by 9.2 % to EUR 51.8 million (previous year: EUR 57.0 million) and by 9.3 % to EUR 5.8 million (previous year: EUR 6.4 million), respectively. The gross margin of 11.4 % in the first nine months of 2017 exceeded the previous year's figure (11.0 %), as the positive effect of the lotto clubs introduced in February 2016 was shorter in the previous year. The third quarter contributed to this with a stable gross margin of 11.2 % (previous year: 11.2 %).

At a preliminary number of 216 thousand new customers in the first nine months of 2017 (previous year: 286 thousand), of which only 55 thousand were acquired in the third quarter, due to the weak jackpot trend (previous year: 111 thousand), the number of customers registered with Lotto24 grew by 28.0 % to 1,497 thousand (previous year: 1,169 thousand). Due to efficient marketing measures - which the company tailors to the prevailing jackpot trend - the company was able, according to preliminary calculations, to reduce the marketing costs per registered new customer (cost per lead, CPL) in the first nine months of 2017 to EUR 26.63 (previous year: EUR 27.24). In the third quarter, CPL increased accordingly to EUR 30.97 (previous year: EUR 24.90).

In particular, the increase in revenues and the reduction of marketing costs from EUR 7.8 million to EUR 5.8 million, according to preliminary calculations, had a positive impact on EBIT and net profit: EBIT in the first nine months of 2017 amounted to EUR 0.5 million (previous year: EUR -3.7 million) and net profit amounted to EUR 1.3 million (previous year: EUR -1.3 million).

In 2017, Lotto24 plans to extend its market leadership as an online provider of state-licensed lotteries and to continue its sustainable growth strategy. However, given the exceptionally weak jackpot trend in the third quarter of 2017, the previously expected billings for the full year 2017 could only be achieved on the condition of strong jackpot effects in the fourth quarter of 2017. The company therefore now expects an increase in billings for the full year of 10 % to 15 % (previously: 15 % to 20 %) and a consistent gross margin. Based on the unchanged assumption of significantly reduced marketing costs and a significantly lower number of new customers, CPL will, from today's perspective, remain at the previous year's level (previously: higher than in the previous year). Depending on external conditions - in particular the jackpot trend - and marketing investments to attract new customers, Lotto24 continues to assume that EBIT will slightly exceed break-even and that net profit will be well above break-even.

The quarterly statement as of 30 September 2017 will be published on 8 November 2017.