German online lottery provider Zeal Network SE has posted revenue and profit growth for the first half of 2022, as more favourable market conditions and a focus on a high-margin product mix proved a winning formula.
Posting its H1 financial report, Zeal recorded revenues of €49.4m, up 11% on the previous year’s comparative of €44.5m. This was driven by an 8% uptick in transaction volume, which reached €358.3m up from €332.9m in 2021, hinting at increased player interactions and sales brought on by better market conditions.
Profitability was also improved during the first half of 2022 the gross margin of the German segment increased by 4% up to 12.8%, owing to the firm’s high-margin product mix.
Staff costs remained flat during the period at €10.3m, whilst other operating expenses increased slightly to €24.5m from €23.7m.
During H1, Zeal acquired 292,000 new registered customers, stable with the previous year’s 291,000. However, this came with an increased acquisition cost of €37.61 per new customer, up from H12021’s figure of €32.85, reflecting a special offer for the Freiheit and social lottery back in January.
The stronger jackpot situation also saw marketing expenditure increase to €13.9m.
Reflecting efficient operations in H1, Zeal posted a 54% uptick in EBITDA to €16.5m from 2021’s 10.7m.
Moreover, EBIT almost doubled from €6.3m in 2021 to €12.1m in H1 of 2022, whilst net profit also increased significantly to €9.4m from €5.7m.
Zeal detailed this was down to ‘positive’ market conditions in the German lottery industry, with more stable jackpots compared to last year enticing more players. The firm noted that e-commerce trading faced headwinds throughout H1 but that the lottery industry managed to navigate around them due to positive jackpots.
Strong jackpot periods were displayed in the LOTTO 6aus49 The €45m maximum jackpot was triggered twice, which activated a mandatory payout. Meanwhile, Eurojackpot experienced a €110m jackpot during the period, causing a wave of extra sales.
“Our continuous growth path makes us proud and shows us that we have also taken the right measures in the first half of 2022 to improve even further in terms of both customers and results,” commented Jonas Mattsson, CFO of ZEAL Network SE.
“We will continue to live up to our market leadership through targeted investments and an attractive product portfolio. We are furthermore proud to have reached an important milestone with the receipt of the follow-up license for lottery brokerage in Germany by LOTTO24 AG, which is the first permit for LOTTO24 AG under the new State Treaty on Gaming.”
Concluding its update to investors, Zeal reaffirmed its guidance for the full fiscal year, expecting revenues of around €105m with adjusted EBITDA to be at least €30m.