ZEAL Continues to Grow in the First Half of 2022

August 16, 2022 | Financial
  • ZEAL achieves milestone with subsequent authorization for lottery brokerage in Germany until 2029
  • Significant growth in business volume
  • Profitability continues to rise significantly
  • Focus on further modernizing player protection

HAMBURG, Germany (August 11, 2022) — ZEAL Network SE, the leading German online provider of lottery products, was able to record constant growth and significantly improved profitability in the first half of 2022. While many e-commerce industries have faced headwinds from declining purchasing power and the effects of inflation, the lottery market has been little impacted and has instead benefited from a positive jackpot environment.

Increase in transaction volume, revenue and gross margin 

The transaction volume of the ZEAL Group increased by eight percent to EUR 358.3 million in the first half of 2022 (2021: EUR 332.9 million). At the same time, sales grew by eleven percent to EUR 49.4 million (2021: EUR 44.5 million). At 12.8 percent, the gross margin in the Germany segment also increased by four percent (2021: 12.3 percent) due to a high-margin product mix.

The market environment for lotteries in Germany was positive in the first half of 2022, which can be attributed to the partially more stable jackpot environment compared to the previous year. In the LOTTO 6aus49 lottery, for example, the EUR 45 million mark was reached in two consecutive draws, which triggered a compulsory payout in each case. In the first half of 2022, the European lottery Eurojackpot hit an unprecedented record jackpot of EUR 110 million and was won by a LOTTO24 lottery syndicate from North Rhine-Westphalia.

In the first half of 2022, ZEAL gained 292 thousand registered new customers (2021: 291 thousand). The increased acquisition costs per registered new customer (cost per lead, CPL) of EUR 37.61 (2021: EUR 32.85) are primarily based on a special offer for the freiheit+ social lottery in January 2022. Without this effect, the CPL would have € 34.34 increased significantly less. At EUR 13.9 million, marketing costs in the first half of 2022 were slightly above the previous year’s figures (2021: EUR 13.8 million) due to the stronger jackpot situation.

Profitability significantly improved 

At EUR 10.3 million and EUR 24.5 million, personnel expenses and other operating expenses increased slightly compared to the previous year (2021: EUR 10.2 million and EUR 23.7 million). EBITDA thus increased by 54 percent to EUR 16.5 million (2021: EUR 10.7 million). At EUR 12.1 million and EUR 9.4 million, EBIT and the result for the period were also well above the previous year’s figures (2021: EUR 6.3 million and EUR 5.7 million).

“Our continuous growth course makes us proud and shows us that we took the right measures in the first half of 2022 to further improve both customer and result-oriented,” says Jonas Mattsson, CFO of ZEAL Network SE. “We will continue to live up to our market leadership in the future through targeted investments and an attractive product portfolio. In addition, we are proud to have reached an important milestone with the receipt of the follow-up license for lottery brokerage in Germany from LOTTO24 AG, which represents the first license of this kind for us under the new State Treaty on Gaming”

forecast confirmed 

For the 2022 financial year, ZEAL plans to further expand its market leadership as an online provider of state and other permitted lottery products. Depending on the general conditions – in particular the jackpot development – ​​the company continues to expect a transaction volume of at least EUR 750 million for the Germany segment. This forecast is based on an average jackpot development, resulting in a higher growth rate than in the previous year. In addition, ZEAL continues to assume that sales in the 2022 financial year will be at least EUR 105 million. ZEAL expects the adjusted EBITDA to be at least EUR 30 million.

About ZEAL Network SE:    

ZEAL Network SE is the leading German provider of lotteries on the Internet. Via the LOTTO24  and Tipp24 portals of the subsidiary LOTTO24, the company brokers customer lottery tickets to the state lottery companies and organizers of social lotteries. The offer includes LOTTO 6aus49, Spiel 77, Super 6, Eurojackpot, GlücksSpirale, syndicates, keno, the German TV lottery, scratch games as well as the German dream house lottery and freiheit+.

Founded in Germany in 1999, ZEAL started out as a German lottery agent under the name Tipp24. In 2005, the company went public on the Frankfurt Stock Exchange (Prime Standard) as one of the most successful IPOs in Germany at the time. In 2019, ZEAL took over LOTTO24 AG.

SOURCE:    ZEAL Network SE .