HIGHLY PROMISING START TO 2017

Transcription

1 Quarterly Statement

2 2 HIGHLY PROMISING START TO 2017 REGISTERED CUSTOMERS BILLINGS REVENUES EBIT in thousand (accumulated, ) in EUR thousand in EUR thousand in EUR thousand -2,139 Q. I 2016 Q. I 2017 Q. I 2016 Q. I 2017 Q. I 2016 Q. I Q. I 2016 Q. I ,377 41,432 58,200 4,420 6, % + 40% + 51% PERFORMANCE OF THE LOTTO24 SHARE Lotto24 AG SDAX = 100 opening price 9, points (SDAX) EUR 7.70 (Lotto24 AG) closing price 10, points (SDAX) EUR 9.24 (Lotto24 AG) Opening price Lowest price Highest price Publication of Annual Report Closing price Ad-hoc news

3 3 KEY FIGURES OF LOTTO24 AG Q. I 2017 Q. I 2016 in EUR thousand Revenues 6,663 4,420 EBIT ,139 Net profit for the period -1, Cash flow from operating activities 614-2,015 Equity as of 31 March 2017 and 31 December ,993 22,091 Employees as of 31 March (FTE) 1) ) not including members of the Executive Board and student helpers Subscribed capital equals the Company s capital stock and is fully paid. SHAREHOLDER SERVICE WKN ISIN 2) Ticker symbol Reuters code Bloomberg code Stock exchange Market segment Designated sponsor LTT024 DE000LTT0243 LO24 LO24G.DE LO24:GR Frankfurt Regulated Market, Prime Standard ODDO SEYDLER BANK AG 2) International Securities Identification Number KEY SHARE FIGURES Q. I 2017 Q. I 2016 Number of shares on reporting day 24,154,890 24,154,890 Highest price (EUR) Lowest price (EUR) Share price on reporting day (EUR) Market capitalisation on reporting day (EUR million) Average daily trading volume (Xetra) 44,844 16,648 Earnings per share (EUR) SHAREHOLDER STRUCTURE 3) in % Günther Group Working Capital Group 6.55 Jens Schumann 24,154,890 Number of shares 5.20 Fidelity 0.59 Management Free float 3) according to voting rights notifications and Directors Dealings disclosures received up to 9 May 2017

4 4 01 FOREWORD LADIES AND GENTLEMEN, Lotto24 AG got off to a very encouraging start once again in the new fiscal year 2017: at EUR 58.2 million, billings in the first quarter of 2017 were up 40.5% on the previous year (EUR 41.4 million), while revenues climbed by as much as 50.7% to EUR 6.7 million (prior year: EUR 4.4 million). This positive trend is due in part to the strong early jackpots of the»6aus49«and»eurojackpot«lotteries. As we only launched lotto clubs in February 2016 and their positive impact on the prior-year quarter was thus correspondingly shorter, our gross margin of 11.4% in the reporting period was also up on the previous year (10.7%). With 95.1 thousand new customers in the first quarter of 2017 (prior year: 106 thousand new customers), the total number of registered customers grew by 39.2% to 1,377 thousand (prior year: 989 thousand). Thanks to efficient marketing measures which we tailor to the prevailing jackpot trend we were able to reduce cost per lead (CPL) from EUR in the previous year to EUR The strong revenue trend and reduction in marketing expenditure from EUR -2.7 million to EUR -2.3 million played a particularly important role in the improved EBIT result of EUR -0.1 million (prior year: EUR -2.1 million). Due to a technical tax effect, net profit for the period of EUR -1.1 million was slightly down on the previous year (EUR -0.8 million). In addition to these successful figures, we are delighted that we have also maintained our excellent team spirit: in January 2017, we were once again among the winners in the contest»hamburg s Best Employers«an accolade for outstanding HR work based on staff ratings which we already received when we last participated in Ladies and gentlemen, dear shareholders, we have made a successful start to fiscal year 2017 and are well on track to reaching our targets. We hope you will continue to accompany us when we take our next steps towards profitable growth! Hamburg, 9 May 2017 Petra von Strombeck Magnus von Zitzewitz Kai Hannemann Chief Executive Officer Member of the Executive Board Member of the Executive Board

5 5 02 DEVELOPMENT OF BUSINESS AND MATERIAL EVENTS IN THE REPORTING PERIOD BUSINESS AND ECONOMIC CONDITIONS COMPELLING BUSINESS MODEL Lotto24 AG is Germany s leading online provider of state-licensed lotteries (Lotto24.de) and is attractively positioned in the value chain of the lottery business: we broker lottery products via the Internet and receive brokerage commissions from the lottery operators. We can therefore generate income without bearing the bookmaking risk ourselves. We offer our customers the possibility to participate in the state-licensed lottery products»lotto 6aus49«,»Spiel 77«,»Super 6«,»EuroJackpot«,»GlücksSpirale«,»Keno«, lotto clubs and»deutsche Fernsehlotterie«. On behalf of, and in the name of, our customers, we enter into gaming agreements with the respective lottery operator. Following our foundation in 2010 and IPO in 2012 on the Frankfurt Stock Exchange (Prime Standard), we are now the market leader. As a fast-growing company with a strong service and customer orientation, we aim to provide our customers with the most convenient, secure and modern game experience possible both online and mobile. CORPORATE MANAGEMENT Lotto24 AG is headed by Petra von Strombeck (CEO), Magnus von Zitzewitz (Executive Board) and Kai Hannemann (Executive Board). Ms von Strombeck is responsible for Corporate Strategy and Development, Marketing, Sales, the B2C (Business-to-Customer) and B2B (Business-to-Business) business fields, as well as Investor Relations, Human Resources and Organisation. Mr von Zitzewitz is responsible for the divisions Legal Affairs and Regulation, Finance, Accounts, Taxes, Controlling, Compliance, Risk Management and Communication. Mr Hannemann has assumed responsibility for IT Strategy, IT Systems, IT Processes and IT Operation, as well as Process and Innovation Management, and the B2G (Business-to-Government) business field. EMPLOYEES Marketing IT Corporate Services Total 1) Number of student helpers, mostly in the call centre ) full-time equivalents: not including members of the Executive Board and student helpers, rounded according to department

6 6»Hamburg s Best Employers«accolade received again in 2017 At an award ceremony held on 27 January 2017, we were once again named one of»hamburg s Best Employers«with the top score of five stars. We already received this special accolade in 2015 for our outstanding HR work. 256 Hamburg-based companies took part in the contest, which is run annually by Hamburg s Helmut Schmidt University, the Institute for Management and Economic Research»IMWF«, the radio station»alsterradio 106.8«and local newspaper»hamburger Abendblatt«. ECONOMIC REPORT LEGAL AND POLITICAL CONDITIONS Decision on German Money Laundering Act (GWG) With its decision of 17 January 2017, the Ministry of the Interior for Lower Saxony exempted us from the application of various GWG obligations this includes, for example, internal safeguards within the risk management system, obligations to acquire customer data, identification and information requirements. The Ministry of the Interior rejected our application for exemption from further obligations. However, we believe that the remaining obligations will not significantly affect our business and will apply equally to all online lottery providers. Nevertheless, we are reviewing the extent to which we can appeal against the decision especially with regard to the imminent revision of the GWG to implement the Fourth EU Money Laundering Directive. Advertising permit extended The German authority responsible for advertising standards, the District Government of Düsseldorf, last prolonged the advertising permit we received in March 2013 on 26 January The prolongation is initially tied to the remaining term of the brokerage permit until 23 September 2017 and will be extended after the new brokerage permit has been granted until 12 March 2019 in accordance with the usual two-year validity period. The advertising permit authorises us to advertise the online marketing of state lotteries throughout Germany via the Internet and TV, thus driving the further expansion of Lotto24 s customer base. The renewal of the advertising permit and the resulting legal certainty it continues to provide form the basis for the planned expansion of our business and Lotto24 s market share. Second revision of German State Treaty on Games of Chance signed On 17 March 2017, the Minister Presidents of Germany s federal states signed the second revision of the State Treaty on Games of Chance (»Glücksspielstaatsvertrag«GlüStV), which is set to come into force in early 2018 after it has been ratified by the country s 16 state parliaments. The amendments only concern the issuing of sports betting licences and are a reaction to the court rulings of the past few years which declared the licencing process to be illegal. The previously valid quantitative restriction to 20 licences has been dropped and qualitative criteria are now decisive for the issuing of licences. The amendments may provide increased legal certainty for gaming regulations and thus allow stricter enforcement with regard to offerings not permitted in Germany or illegal advertising. The latter may have positive effects for commercial gaming brokers. In addition to the legal conditions already described in detail in the Annual Report 2016, there were no further new developments in the reporting period.

7 7 ECONOMIC CONDITIONS We reported extensively on the economic conditions, the development of the overall lottery market and its online segment in the Annual Report Moreover, as the German Association of State Lottery Companies (»Deutscher Lotto- und Totoblock, DLTB«) only provides information on market figures for the online segment once at the beginning of each fiscal year, we did not receive any new information on this matter during the reporting period. Good jackpot situation We expect strong increases in the number of registered customers especially when potential players have greater expectations of exceptional winnings in other words, whenever there are large jackpots. Such jackpots are comprised of stakes submitted by players who did not meet the conditions for winning prizes and which are then paid out to the winners on top of regular prizes in a subsequent draw. In the German»6aus49«lottery, this relates in particular to the combination of six correct numbers and the super number. In the first quarter of 2017, the German lottery»6aus49«reported two jackpots of over EUR 20 million (prior year: none) of which one was a guaranteed jackpot payout after the 13th draw the so-called mandatory payout (prior year: none). The European lottery»eurojackpot«reached the 90 million-euro limit right at the beginning of the year in the draw on 6 January 2017 and thus also performed better in the first quarter of 2017 than in the prior-year period, during which»only«the 75 million-euro limit was reached. Nevertheless, based on statistical probability, we continue to expect lower jackpot effects in fiscal year 2017 as a whole compared to JACKPOT DEVELOPMENT in EUR million January 31 March 2017 EuroJackpot Lotto 6aus EuroJackpot Lotto 6aus49

8 8 BUSINESS DEVELOPMENT POSITION Unless stated otherwise, all key performance indicators (KPIs) are disclosed in thousands of euros (EUR thousand), which may lead to rounding differences in certain cases. INCOME STATEMENT in EUR thousand Q. I 2017 Q. I 2016 Change % Billings 58,200 41, Stakes to be remitted (less revenues) -51,537-37, Revenues 6,663 4, Personnel expenses -2,606-1, Other operating expenses -3,905-4, less other operating income Operating expenses -6,498-6, EBITDA 166-1, Amortisation and depreciation EBIT , Financial result Earnings before taxes , Income taxes , Net profit -1, Breakdown of other operating expenses Marketing expenses -2,288-2, Direct operating expenses Indirect operating expenses , Other operating expenses -3,905-4,

9 9 KEY FIGURES Q. I 2017 Q. I 2016 Number of registered customers as of 31 March (in thousand) 1, Number of new customer registrations in Q. I (in thousand) Average number of registered customers (in thousand) 1) Average number of active customers (in thousand) 1) Average activity rate (%) 1) Average billings per active customer (in EUR) 1) Cost per lead (CPL, in EUR) Gross margin (%) Direct operating expenses as a proportion of billings (%) Number of employees (31 March) 2) ) figures only disclosed on annual basis 2) not including members of the Executive Board and student helpers Registered customers: customers who have successfully completed the registration process on our website. This number is disclosed after adjustment for multiple registrations and deregistrations. Average number of registered customers: the arithmetic mean of the month-end figures for registered customers in the period under review. Active customers: customers who complete at least one transaction per month. Average activity rate: the relationship between the average number of active customers and the average number of registered customers in one year. Average number of active customers in one year: the arithmetic mean of the number of active customers in each month of a year. Average billings per active customer: the relationship between total billings of Lotto24 AG (incl. B2B and business services) and the average number of active customers. Further improvement in KPIs At EUR 58,200 thousand, billings in the first quarter of 2017 were 40.5% up on the previous year (EUR 41,432 thousand), while revenues rose by as much as 50.7% to EUR 6,663 thousand (prior year: EUR 4,420 thousand). This positive trend is due in part to the strong early jackpots of the»6aus49«and»eurojackpot«lotteries. Revenues resulted mainly from commissions received from the state lottery companies for the brokerage of lottery products, additional fees and ticket fees incurred in connection with the brokerage of stakes. We offer IT and marketing services to major online portals for the operation of their own online lottery services (B2B and business services). In 2012, we already recruited two major partners as multipliers for these integrated services with WEB.de and GMX.net. The billings from these cooperations and the corresponding revenues are included in our figures, but not disclosed separately for contractual reasons. Customers generated via these partners are also not included in the»number of registered customers«. This must be considered when assessing the respective figures. As we only launched lotto clubs in February 2016 and their positive impact on the prior-year quarter was thus correspondingly shorter, our gross margin of 11.4% in the reporting period was also up on the previous year (10.7%). With 95 thousand new customers in the first quarter of 2017 (prior year: 106 thousand new customers), the total number of registered customers grew by 39.2% to 1,377 thousand (prior year: 989 thousand). Thanks to efficient marketing measures which we tailor to the prevailing jackpot trend we were able to reduce cost per lead (CPL) from EUR in the previous year to EUR

10 10 EBIT improved again The strong revenue trend and reduction in marketing expenditure from EUR -2,707 thousand to EUR -2,288 thousand played a particularly important role in our improved EBIT result of EUR -127 thousand (prior year: EUR -2,139 thousand). Due to a technical tax effect, net profit for the period of EUR -1,097 thousand was slightly down on the previous year (EUR -798 thousand). In the reporting period, the effects influencing income from changes to deferred tax assets on loss carryforwards were taken into account. Due to the positive forecast for the years 2018 to 2022 and the resulting additional use of existing tax loss carryforwards, we expect a net increase in deferred tax assets of approximately EUR 3.7 million in 2017 with the corresponding tax income even though our projections indicate a profit for the fiscal year 2017 as a whole. According to IAS 34, the income tax expense of each interim reporting period is to be recognised based on the best estimate of the weighted average annual income tax rate expected for the year as a whole. This constellation leads to a negative tax rate of -376% for the year as a whole. Taking this tax rate into account, the tax expense for the first quarter of 2017 amounts to EUR -867 thousand, due to a negative result (change of sign). In the case of positive results in the remaining quarters, there will be a corresponding tax income. The financial result of EUR -104 thousand (prior year: EUR -18 thousand) includes financial income from interest received on investing liquid funds not immediately required as well as interest paid on loans taken out. Earnings per share amounted to EUR (prior year: EUR -0.03). Development of key income statement items At the end of the reporting period on 31 March 2017, Lotto24 AG had 82 employees (full-time equivalents, excluding the three Executive Board members, prior year: 73). Most employees were in the Marketing (40%; prior year: 36%) and IT (39%; prior year: 45%) departments. In addition, Lotto24 AG employed 8 student helpers (prior year: 15) mainly in customer service. In this area in particular, we are now focusing more on recruiting salaried employees in order to give our good service for customers more stability and continuity. Due mainly to higher expenses for the long-term remuneration programmes of Executive Board members consisting of phantom shares pegged to share performance and KPI-based compensation (revenues and EBIT) as well as the year-on-year increase in headcount, personnel expenses rose to EUR -2,606 thousand (prior year: EUR -1,981 thousand). Compared to the same period last year, other operating expenses fell from EUR -4,388 thousand to EUR -3,905 thousand: In view of further favourable external conditions with high jackpots for»lotto 6aus49«and»EuroJackpot«, marketing expenses of EUR -2,288 thousand in the first quarter 2017 were below the prior-year figure of EUR -2,707 thousand due in part to reduced CPL. Direct costs of operations (mainly costs for billings-related payment transactions as well as B2B and business services) rose slightly to EUR -656 thousand (prior year: EUR -587 thousand). We expect that the remaining direct costs will increase in future, as they develop in proportion with billings. Indirect operating expenses fell from EUR -1,095 thousand to EUR -961 thousand. The decreased use of external management and consultancy services due to IT insourcing was a major factor in the decline of consultancy expenses to EUR -439 thousand (prior year: EUR -562 thousand). The increase in depreciation/amortisation of tangible and intangible assets to EUR -292 thousand (prior year: EUR -215 thousand) resulted mainly from the scheduled depreciation of investments in our IT infrastructure and acquired office and communication technology, as well as the amortisation of our smartphone and tablet apps.

11 11 FINANCIAL POSITION Financial analysis Our financial situation is mainly dominated by equity and short-term liabilities, although the proportion of long-term liabilities has risen as a result of increased provisions for long-term compensation components of the Executive Board members. As of 31 March 2017, equity of EUR 20,993 thousand comprised the following items: EQUITY in EUR thousand Subscribed capital 24,155 24,155 Capital reserves 41,012 41,012 Other reserves -6-6 Retained earnings -44,167-43,070 Total 20,993 22,091 Subscribed capital equals the Company s share capital and is fully paid. As of 31 March 2017, trade payables comprised the following items: TRADE PAYABLES in EUR thousand Trade payables 1,540 1,957 Total 1,540 1,957 Trade payables mostly comprise open payment obligations as of the balance sheet date for marketing services already received, as well as for legal and technical consultancy. All trade payables have remaining terms of up to one year.

12 12 As of 31 March 2017, other liabilities comprised the following items: OTHER LIABILITIES in EUR thousand Liabilities from gaming operations 8,950 14,950 Interest-bearing loans 3,424 3,206 Amounts due in connection with taxes (VAT/payroll and church taxes) and social security Holiday obligations Interest liabilities Other 6 75 Total 12,913 18,821 As of 31 March 2017, other liabilities fell to EUR 12,913 thousand (prior year: EUR 18,821 thousand). The year-on-year decline in liabilities from gaming operations to EUR 8,950 thousand was particularly pronounced (prior year: EUR 14,950 thousand). A very large EuroJackpot at the end of last year generated strong billings, which in turn resulted in a high level of liabilities due to the state lottery companies for tickets as well as to customers for their comparatively high winnings. This item, which is expected to increase further as billings grow, comprises obligations from invoicing our customers and the state lottery companies. It also includes small winnings which customers leave on their gaming accounts and use later to pay for tickets. Interest-bearing loans include current payments, due within one year, for the loan in connection with IT insourcing (EUR 3,000 thousand; prior year: EUR 3,000 thousand) and the payments due within twelve months for IT equipment at our new data centres (hire purchase agreements: EUR 424 thousand; prior year: EUR 206 thousand). As a result of reporting date effects, there was a decline in amounts due in connection with taxes mostly from sales activities (EUR 194 thousand; prior year: EUR 246 thousand) and payroll obligations (EUR 119 thousand; prior year: EUR 100 thousand). Holiday obligations (EUR 131 thousand; prior year: EUR 140 thousand) were down slightly, due to reporting date effects. Interest obligations disclosed at the end of the reporting period (EUR 86 thousand; prior year: EUR 102 thousand) resulted from loans taken out. Investment analysis In the reporting period, we invested a total of EUR -521 thousand (prior year: EUR -127 thousand), mainly in software and hardware needed for operations as well as in the development of our own apps as part of our enlarged product range.

13 13 Liquidity analysis KEY CASH FLOW ITEMS in EUR thousand Q. I 2017 Q. I 2016 Cash flow from operating activities 614-2,015 Cash flow from investing activities thereof financial investments 1,000 thereof operative investments Cash flow from financing activities Change in available funds 299-1,296 Available funds at the beginning of the period 10,178 5,073 Available funds at the end of the period 10,477 3,777 Available-for-sale financial investments (available >3 months and <1 year) 3,585 Held-to-maturity financial investments Available funds 10,477 7,362 Due to the positive development of earnings in the first three months of 2017, cash flow from operating activities also improved to EUR 614 thousand (prior year: EUR -2,015 thousand). Cash flow from investing activities amounted to EUR -521 thousand (prior year: EUR 874 thousand), as net payments received from the sale of financial assets in the reporting period did not exceed disbursements for capital expenditure. Net cash flow from financing activities of EUR 206 thousand (prior year: EUR -155 thousand) includes the new hire purchase loan. As of 31 March 2017, other assets and prepaid expenses comprised the following items: OTHER ASSETS AND PREPAID EXPENSES in EUR thousand Receivables from gaming operations 3,478 10,149 Deposits Prepaid expenses Tax receivables 3 7 Total 4,984 11,669

14 14 ASSET POSITION Compared to 31 December 2016, total assets decreased by EUR -6,956 thousand, from EUR 48,250 thousand to EUR 41,294 thousand as of 31 March This was due to a decline in receivables from gaming operations to EUR 3,478 thousand, which similar to liabilities from gaming operations were particularly high on the comparative date (prior year: EUR 10,149 thousand). A very large EuroJackpot at the end of last year generated strong billings, which in turn resulted in a comparatively high level of receivables due from the state lottery companies and customers. Moreover, there was a decrease in deferred tax assets from loss carryforwards due to a technical tax effect. Current assets mainly comprised cash and cash equivalents (EUR 9,781 thousand; prior year: EUR 9,481 thousand), as well as other assets and prepaid expenses (EUR 4,984 thousand; prior year: EUR 11,669 thousand). Non-current assets were dominated by goodwill (EUR 18,850 thousand; unchanged from last year) and net deferred tax assets (EUR 4,562 thousand; prior year: EUR 5,429 thousand). SUBSEQUENT EVENTS Mobile sales Lotto24 offers apps via the respective app stores for the two relevant mobile operating systems,»android«(google) and»ios«(apple), whose aggregated market share in Germany amounts to 97% (source: Kantar World Panel, 10/2016). These apps are specially designed to meet the needs of users and their respective devices whether smartphone or tablet. After our light version without the possibility to play was delisted from the»google Play Store«in the course of an update process by Google in March 2017, it is now available again in the Play Store as of April The background for this temporary rejection was a Google guideline for all gaming apps, which also affects our competitors. With reference to our official permit for lottery brokerage, we already applied to Google for the full release of our app in When and whether this will be granted, however, is currently unknown. The full version of the Android app can be downloaded at Lotto24-app.de. In the case of ios, we launched an additional app for the Apple Watch.

15 15 REPORT ON EXPECTED DEVELOPMENTS AND ASSOCIATED MATERIAL OPPORTUNITIES AND RISKS OPPORTUNITIES AND RISKS We reported in detail on expected developments and associated material opportunities and risks in the Annual Report There were no changes or new opportunities and risks in the reporting period. FORECAST REPORT In 2017, we plan to extend our market leadership as an online provider of state-licensed lotteries and continue our sustainable growth strategy. Despite the favourable start to the year, we still expect jackpots to be lower than in the previous year and anticipate a significant reduction in marketing expenditure with much lower new customer figures and higher CPL. We also continue to expect an increase in billings of 15% to 20% with a stable gross margin compared to the previous year. Depending on external conditions especially the jackpot trend and marketing investments to attract new customers, EBIT is expected to slightly exceed break-even; net profit will be clearly above the break-even point. Overall statement on the expected development of Lotto24 AG We have many years of sector and management experience, an attractive range of products and services, and are well positioned as market leader in the rapidly growing online lottery market. We believe we are therefore well prepared for the future and are confident that we can not only consolidate and extend our lead as Germany s No. 1 online provider of lottery products but also benefit from the great potential of the online lottery segment. Hamburg, 9 May 2017 The Executive Board Petra von Strombeck Magnus von Zitzewitz Kai Hannemann Chief Executive Officer Member of the Executive Board Member of the Executive Board

16 16 03 ECONOMIC FIGURES INCOME STATEMENT FROM 1 JANUARY TO 31 MARCH ACCORDING TO IFRS in EUR thousand Q. I 2017 Q. I 2016 Billings 58,200 41,432 Remitted stakes (less commissions) -51,537-37,011 Revenues 6,663 4,420 Other operating income Total performance 6,677 4,446 Operating expenses Personnel expenses -2,606-1,981 Amortisation/depreciation on intangible assets and property, plant and equipment Other operating expenses -3,905-4,388 Result from operating activities (EBIT) ,139 Revenues from financial activities 67 Expenses from financial activities Financial result Net profit before taxes ,157 Income taxes ,358 Net profit (after taxes) -1, Earnings per share (undiluted and diluted, in EUR/share) Weighted average of ordinary shares outstanding (undiluted and diluted, in shares) 24,154,890 24,154,890 Net profit after taxes is attributable solely to the owners of Lotto24 AG, Hamburg. STATEMENT OF COMPREHENSIVE INCOME FROM 1 JANUARY TO 31 MARCH ACCORDING TO IFRS in EUR thousand Q. I 2017 Q. I 2016 Net profit for the period -1, Other comprehensive income to be reclassified to the income statement in subsequent periods (+) Gains/(-) losses from the revaluation of available-for-sale financial assets -1 9 Income tax effects 0-3 Other comprehensive income after taxes -1 6 Total comprehensive income after taxes -1, Total comprehensive income after taxes is attributable solely to the owners of Lotto24 AG, Hamburg.

17 17 BALANCE SHEET AS AT 31 MARCH ACCORDING TO IFRS ASSETS in EUR thousand Current assets Cash and cash equivalents 9,781 9,481 Other financial assets Trade receivables Other receivables and prepaid expenses 4,984 11,669 Current assets, total 15,803 22,121 Non-current assets Goodwill 18,850 18,850 Intangible assets Property, plant and equipment 1,504 1,404 Deferred tax assets 4,562 5,429 Non-current assets, total 25,491 26,128 ASSETS 41,294 48,250 EQUITY AND LIABILITIES in EUR thousand Current liabilities Trade payables 1,540 1,957 Other liabilities 12,913 18,821 Short-term provisions 1,411 1,599 Current liabilities, total 15,864 22,377 Non-current liabilities Interest-bearing financial loans 2,246 2,257 Long-term provisions 2,191 1,525 Non-current liabilities, total 4,437 3,782 Equity Subscribed capital 24,155 24,155 Capital reserves 41,012 41,012 Other reserves -6-6 Retained earnings -44,167-43,070 Equity, total 20,993 22,091 EQUITY AND LIABILITIES 41,294 48,250

18 18 CASH FLOW STATEMENT FOR THE PERIOD FROM 1 JANUARY TO 31 MARCH ACCORDING TO IFRS Q. I 2017 Q. I 2016 in EUR thousand Net profit before tax ,157 Adjustments for: Amortisation/depreciation on non-current assets Financial income/financial expenditure Other non-cash expenses/income Changes in: Trade receivables Other assets and prepaid expenses 6, Trade payables Other liabilities -6, Short-term provisions Long-term provisions Interest received 67 Interest paid Taxes paid Cash flow from operating activities 614-2,015 Payments received (+)/disbursements (-) for financial instruments 1,000 Investments in intangible assets Investments in tangible assets Cash flow from investing activities Payments received (+) from taking out financing loans 206 Disbursements (-) for redeeming financing loans -155 Payments received from the capital increase for cash Disbursements for transaction costs of capital increase Cash flow from financing activities Change in available funds 299-1,296 Available funds at the beginning of the period 10,178 5,073 Available funds at the end of the period 10,477 3,777 Composition of cash, cash equivalents and securities at the end of the period 10,477 3,777 Cash 9,781 2,986 Available-for-sale financial investments (available <3 months)

19 19 STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM 1 JANUARY TO 31 MARCH ACCORDING TO IFRS Subscribed capital Capital reserves Other reserves Retained earnings Total equity in EUR thousand As of 1 January ,155 41, ,748 24,362 Capital increase for contribution in kind Capital increase for cash Transaction costs of capital increase Deferred tax relief for transaction costs Net profit Other comprehensive income 6 6 Total comprehensive income As of 31 March ,155 41, ,547 23,570 Capital increase for contribution in kind Capital increase for cash Transaction costs of capital increase Deferred tax relief for transaction costs Net profit -1,524-1,524 Other comprehensive income Total comprehensive income 44-1,524-1,480 As of 31 December ,155 41, ,070 22,091 As of 1 January ,155 41, ,070 22,091 Capital increase for contribution in kind Capital increase for cash Transaction costs of capital increase Deferred tax relief for transaction costs Net profit -1,097-1,097 Other comprehensive income -1-1 Total comprehensive income -1-1,097-1,098 As of 31 March ,155 41, ,167 20,993

20 20 KEY FIGURES in EUR thousand Q. I 2017 Q. IV 2016 Q. III 2016 Q. II 2016 Q. I 2016 Billings 58,200 58,968 57,043 43,077 41,432 Stakes to be remitted (less revenues) -51,537-51,824-50,657-38,270-37,011 Revenues 6,663 7,145 6,386 4,807 4,420 Other operating income Total performance 6,677 7,161 6,387 4,822 4,446 Personnel expenses -2,606-2,343-1,892-2,023-1,981 Amortisation/depreciation on intangible assets and property, plant and equipment Other operating expenses -3,905-4,675-4,388-3,800-4,388 Result from operating activities (EBIT) ,308-2,139 Revenues from financial activities 0 67 Expenses from financial activities Financial result Net profit before taxes ,391-2,157 Income taxes ,358 Net profit -1, Breakdown of other operating expenses Marketing expenses -2,288-3,026-2,773-2,319-2,707 Direct operating expenses Indirect operating expenses ,095 Other operating expenses -3,905-4,675-4,388-3,800-4,388

21 FINANCIAL CALENDAR 30 May 2017 Annual General Meeting 9 August 2017 Half-yearly financial report as of 30 June November 2017 Quarterly statement as of 30 September 2017 PUBLISHED BY Lotto24 AG Strassenbahnring Hamburg Germany Telephone +49 (0) Telefax +49 (0) Lotto24-ag.de CONCEPT, TEXT & DESIGN Impacct Communication GmbH