Date: 11.08.2023

by Mateusz Mazur

ZEAL Network Achieves Remarkable Growth in H1 2023

Leading the charge in the German online lottery market, ZEAL Network SE has reported substantial increases in billings, revenues, and new customer acquisitions during the first half of 2023. Seizing the opportunity presented by high jackpot phases, the company executed successful marketing campaigns that not only attracted a surge in new customers but also set the stage for future business expansion.

Astonishing results

Jonas Mattsson, CFO of ZEAL, highlighted the impressive growth in transaction volume during the second quarter of 2023: “The growth of our transaction volume in the second quarter of 2023 was near record-breaking and a whopping 18.8 percent higher than in the second quarter of 2022 – in this respect, we even recorded the second-best quarter in the company’s history.

“Strategic growth in the e-commerce environment is becoming increasingly difficult, but with our attractive products and diverse marketing campaigns, we are confident that we will continue to impress in the market.”

The ZEAL Group witnessed a remarkable 15% surge in transaction volume, reaching 411.7 million euros in the first half of 2023, up from 358.3 million euros in 2022. Simultaneously, sales revenue grew by 11%, amounting to 54.8 million euros. The company’s gross margin remained steady at 12.5%, a figure comparable to the previous year’s performance.

The company’s success story was fueled by capitalizing on attractive jackpot phases, particularly in January, March, and June. These phases served as catalysts for new customer acquisition and business expansion. ZEAL’s strategic approach was exemplified in June when the Eurojackpot lottery hit a staggering jackpot of 120 million euros over two consecutive draws.

During this period, ZEAL set a new record with a transaction volume of 30.6 million euros within a single week. This surge was supported by robust marketing efforts, including a collaboration with Kürsat Yildirim, renowned in Germany as a multiple lottery winner known by the moniker “Chico.”

Market leader

The acquisition of 349 thousand new customers during H1 2023 marked a 20% increase year-on-year, with ZEAL strategically navigating intensified competition for new customers. This growth was accompanied by a rise in acquisition costs per registered new customer (CPL) to 45.09 euros, reflecting increased media expenses.

To support this expansion, marketing expenses surged by 44% compared to the previous year, totaling 20.0 million euros. Other operating expenses increased to 31.6 million euros. Despite these investments, EBITDA reached 13.8 million euros, EBIT amounted to 9.3 million euros, and net profit stood at 5.6 million euros.

ZEAL’s continuous expansion included the introduction of virtual slot machine games, or online games, following approval from the Joint Gambling Authority of the Federal States (GGL). The company plans to expand its game offerings and aims to offer up to 200 titles within the first year.

With a strong outlook for the remainder of 2023, ZEAL remains committed to its market leadership in the online lottery sector. The company projects billings in the range of 800 million euros to 830 million euros for the Germany segment and anticipates revenues between 110 million euros and 120 million euros. An EBITDA range of 30 million to 35 million euros is expected, with substantial investments earmarked for new customer acquisition and marketing expenses projected between 34 million euros and 39 million euros.

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