Zeal Network Growth: 70% Increase in Customers in H1
Date: 2024-08-08 Author: Leon Pierce Categories: PAYMENT SOLUTIONS
Zeal Network reported significant growth in revenue and customer registrations in the first half of the year (H1). The group’s revenue was €76.8 million, up 40% compared to the same period last year, when revenue was €54.8 million. The main driver of growth was a 70% increase in customer registrations, which attracted 592,000 new players in Germany.
Continued growth in lottery
In the lottery segment, brokerage revenues increased by 33% to €68.0 million. Of this, €33.7 million came from ticket fees and €34.2 million from commissions. The segment's monthly active users (MAUs) increased by 21% to almost 1.4 million, a new record for the group.
The increase in players was driven by large jackpots. Eurojackpot reached its peak of €120 million in just its second draw of the year and repeated this figure in April and June. Increased marketing spend to promote these jackpots also contributed to the growth in customers.
The situation with Lotto 6aus49 was less clear-cut. After a record jackpot of €48.0 million at the start of the first half of the year, the average jackpot level remained lower for the rest of the period and was down on last year.
Total lottery revenues, including player bets and VAT, increased by 23% to €508.1 million.
Slots launch impact analysis
The slots segment, launched by Zeal in June 2023, also showed positive developments. Slots revenues amounted to €4.5 million. Zeal actively expanded and diversified its game offering, giving players access to 107 different games by the end of the period.
The monthly active users in the games segment reached 21,000, and revenues amounted to €61.3 million.
Business outside Germany
Outside its core market of Germany, Zeal noted success in its operations, especially in Spain with the ONCE project. Revenues from operations in other countries amounted to €2.8 million, up 7% compared to the previous year.
Increased expenses did not hinder development
Increased marketing expenses for customer acquisition led to a 28% increase in total expenses to €25.5 million. Direct and indirect operating expenses also increased. Despite this, operating profit amounted to €16.1 million, up 73% compared to the previous year.
After taking into account non-operating expenses of €1.3 million, profit before tax amounted to €14.9 million, up 70% compared to the previous year. The group paid €7.6 million in taxes, but also deferred €29.7 million, resulting in a positive tax effect of €22.1 million for the first half of the year.
As a result, Zeal ended the first half of the year with a net profit of €36.9 million, up 561% year-on-year, while EBITDA grew by 46% to €20.1 million.
Zeal CFO Sebastian Belski said: "The very strong development of revenue and EBITDA reflects our excellent operational execution. It is particularly pleasing that we have acquired more than half a million new customers since the beginning of the year."
