Marketing unlocks more growth potential, chg.

ZEAL exceeded the implied Q4 guidance upper range on both sales (€ 55.9m, vs guided € 52.4m) and EBITDA (€ 14.7m, vs. guided € 13.9m; see p. 2 for details). We attribute this to strong marketing efficiency, as the jackpot environment offered no support (0 jackpots in Q4). Cost per lead remained roughly stable at c. € 46 compared to other low jackpot phases (e.g. 9M’25 or FY’23), despite costlier in-house raffle ads for Traumhausverlosung (eNuW), pointing to continued capacity to deploy higher spend efficiently.

Importantly, higher marketing spend should be value accretive, in our view, as it enables ZEAL to acquire customers early in the ongoing online migration and further consolidate its leadership. Marketing spend remains disciplined by internal KPIs such as a 2-3 year payback period and customer lifetime values. With c. 60% of billings subscription based, each newly acquired customer strengthens the recurring revenue base and supports meaningful margin upside once growth spending normalises.

The FY’26 guidance implies c. 17% yoy sales growth at mid-point, well ahead of consensus (11% yoy). Growth should be supported by the structural shift of lottery demand into online channels, new partnerships and a broader acquisition mix beyond Google and Meta. The EBITDA guidance conservatively reflects these growth investments and still points to a healthy margin of c. 27-30% (new eNuW: 28.8%). More importantly, the new mid-term ambition suggests that mid-teens growth should extend into 2029e, supported by the same structural tailwinds, the ramp-up of Traumhausverlosung and Games, as well as further expansion initiatives that have yet to be disclosed.

ZEAL’s earnings quality remains excellent. FY’25 FCF of € 59.5m exceeded net profit of € 41.7m by a wide margin (143% conversion), reflecting non-cash PPA amortisation (€ 7.4m) and favourable working capital effects. At the same time, net cash of c. € 31m at year-end leaves room for additional capital returns, with further share buybacks as potential catalyst in 2026e (eNuW).

In sum, very few European quality growth names combine mid-teens mid-term sales growth, >30% EBITDA margins and further margin upside. Fewer still are available at only 22x PPA-adjusted 2026e earnings, in our view.

That is why Zeal remains a high-conviction BUY, PT raised to € 80 (old: € 67), based on DCF.