Eurojackpot cycles help Zeal Network record 70% customer increase in H1

Group revenue amounted to €76.8m (£66.1m/$83.9m) in H1. This is comfortably clear of the €54.8m reported by Zeal in the opening six months of 2023.

Revenue growth, Zeal said, was primarily down to a 70% rise in registered customers in the first half. In total, across lottery and games, Zeal welcomed 592,000 new players in Germany, with much of this driven by large jackpots within its lottery business.

Lottery growth continues for Zeal

Focusing on lottery, brokerage revenue jumped 33% to €68.0m, with €33.7m from ticket fees and €34.2m commissions. Monthly active users (MAU) for the segment increased 21% to just under 1.4 million, a new record for the group.

The jackpot situation was generally “favourable”, helping draw in more players, Zeal said. The Eurojackpot reached its maximum level of €120m in just the second draw of the year and again in April and June. Marketing surrounding these jackpots was increased, which incurred more costs but aided customer growth.

However, the situation was more mixed for Lotto 6aus9. After hitting a record €48.0m jackpot in early H1, the average remained at a lower level for the rest of the period and was lower year-on-year.

Billings from lottery – which comprise stakes from players, including brokerage stakes and associated VAT net of bets – increased 23% to €508.1m.

Analysing the impact of slot launch 

Turning to Zeal’s games business, revenue amounted to €4.5m. Zeal only launched the business in June 2023, allowing customers in Germany to play slots online.

Zeal said the new segment continued to make good progress in H1, adding that it was able to “significantly” expand and diversify its games offering. By the end of the period, players had access to 107 different games.

Monthly active users for games in H1 stood at 21,000, while billings topped €61.3m. 

Looking outside the core German market, Zeal also made reference to its other activities, primarily its ONCE business in Spain. Zeal generated €2.8m in revenue, an increase of 7% from last year, from operations in other countries.

Higher costs fail to halt growth in H1

With an increase in marketing to drive customer acquisition, this led to a rise in costs. Spend on marketing across the business was up 28% to €25.5m, while direct and indirect operating costs were also higher.

Zeal also noted higher staff costs, although amortisation and depreciation was lower year-on-year. As such, it was left with an operating profit of €16.1m, some 73% higher than last year despite higher spending.

After noting €1.3m in non-operating expenses, pre-tax profit stood at €14.9m, up 70% year-on-year. The group paid €7.6m in tax but also deferred €29.7m, meaning it had a positive tax impact of €22.1m for H1.

This meant it ended H1 with a net profit of €36.9m, an increase of 561%, while EBITDA was up 46% to €20.1m.

“The very strong development of revenue and EBITDA reflects our excellent operating performance,” Zeal CFO Sebastian Bielski said. “We are particularly pleased that we have been able to acquire over half a million new customers since the beginning of the year. 

“The acquisition of new customers has not only been exceptionally successful this half year, but also particularly efficient thanks to the significant reduction in acquisition costs per registered new customer. We are thus benefiting from the continuous investment in brand development in recent years.”