Zeal Group reports 11% rise in revenue for H1

The German online lottery operator has reported H1 revenue of €49.4m.

Germany.- The Germany-facing online lottery operator Zeal has reported revenue of €54.8m for H1 2023. That’s an 11 per cent increase from the same six months last year.

It highlighted the impact of marketing campaigns in high jackpot phases leading the number of new customers to increase by 20 per cent year-on-year to 349,000. However, acquisition costs rose due to higher media costs, with marketing expenses up 44 per cent year-on-year to €20m. Other operating expenses rose 29 per cent to €31.6m, causing profit to fall 40 per cent to €5.6m.

Outgoing Zeal CFO Jonas Mattsson said: “The growth of our transaction volume in the second quarter of 2023 was near record-breaking and a whopping 18.8 per cent 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.

“We pursue a focused marketing strategy and invest disproportionately in high-jackpot phases. The short-term decline in earnings at high jackpot phases is a perfectly normal development that will settle down again in the course of the fiscal year.” 

Zeal has maintained its guidance for the full year, forecasting revenue of between €110m and €120m. The operator said it plans to invest “significantly more” in new customer acquisition, which will see marketing expenses for the year reach between €34m and €39m.

Zeal Group has named Sebastian Bielski as its new group chief financial officer for an initial three years. He will replace Mattsson starting October 1.

Bielski joins Zeal from the solar power business Energiekonzepte Deutschland, where he has been CFO since December 2022. He previously spent seven years as CFO of the loan business Smava. Meanwhile, Andrea Behrendt, currently vice-president for group controlling, will become CFO of Lotto24.

In June, Zeal launched online gaming in Germany after its subsidiary Lotto24 AG gained an online gambling licence from Germany’s gambling regulator in April. Zeal says it intends to increase the number of games by up to 200 by the end of the year. In April, Zeal joined the World Lottery Association.