Bumper jackpots pull in customers for Zeal

| By contenteditor
Zeal Network has credited a string of bumper jackpots for helping to drive a sharp 66% increase in net profit and pull in more than half a million new registered customers in the first nine months of 2022.

In a financial update Zeal said that a flurry of big prizes earlier this year – including multiple record-breaking jackpots in the Lotto 6aus49 and Eurojackpot lotteries – had led to a spike in new customers.

After “the number of bigger jackpots… back on statistical average” in comparison with 2021, transaction volume increased by 10% to €544.4m (£476m/$542m) in the first three quarters of this year, driving a 14% increase in revenue to €74.5m.

With 501,000 sign-ups in the first three quarters, marking a 12.3% year-on-year increase, Zeal is bullish about the “resilience” of the lottery sector amid a broader ecommerce landscape buffeted by inflation and declining purchasing power.

The provider also recently announced a public buyback offer, set to run until 29 November 2022, for up to about 3.2% of the business’ share capital, in an effort to further strengthen its financial outlook.

“We are proud of our continued growth trajectory, which proves that we have also taken the right measures in the first nine months of 2022 to improve even further both in terms of customers and results,” said Jonas Mattsson, Zeal’s chief financial officer.

“With the share buyback offer, we want to further optimise the capital structure of Zeal Network SE. In addition, we look forward to continuing to make our products accessible to more and more new target groups through targeted partnerships, thus systematically further expanding our reach.”

Zeal’s net profit grew from €7.3m to €12.1m on the back of a 25% increase in earnings before tax and deductions to €22m in the first three quarters.

This was despite margins being mitigated by a 32% rise in customer acquisition costs – labelled as “cost per lead” – to €36.42 on the back of a 29% increase in marketing costs to €24.1m, with a special offer for the freiheit+ social lottery cited as a primary cause. The provider also described a 22% rise in other operating expenses to €40.6m as a slight increase in the context of “intense marketing activities”.

Based on average jackpot projections Zeal expects revenue to hit at least €105m in 2022, with earnings reaching at least €30m.

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