Interactive
Germany – Zeal enjoys ‘good start’ to 2021 with 156,000 new German customers
By Phil - 7 May 2021
German online operator ZEAL said it has made a ‘good start’ to its fiscal year 2021 with ‘increased billings and revenue’ and ‘strong gross margin achieved’ meaning its profitability is ‘significantly improved.’
Although the coronavirus continues to hold the world firmly in its grip, the ZEAL Group has made a good start to its fiscal year 2021 thanks to the stability of the business model – based on the loyalty of the customers and the unbroken popularity of online lotteries.
In the first quarter of 2021, billings rose by 17 per cent to €163.31m, of which the Germany segment accounted for almost the entire amount at €163.3m. Revenue increased by as much as 19 per cent to €22.6m, of which €21.1m was attributable to the Germany segment. At 12.7 per cent, the gross margin in the Germany segment was above the prior-year level.
The market environment for lotteries in Germany during the first quarter of 2021 was comparatively weak: at just €5.7m, the average jackpot of the German lottery ‘LOTTO 6aus49’ was even lower than in the previous year and failed to exceed the €20m mark even once. At €35m, the average jackpot of the European lottery ‘Eurojackpot’ was also well below the prior-year figure and reached the €90m mark just once.
Despite this market environment, the company gained 156,000 new registered customers in the Germany segment. The increase in acquisition costs per new registered customer (cost per lead, CPL) of €33.48 was also a consequence of the enhanced marketing strategy: even though customer acquisition is naturally more difficult in low jackpot phases, such as the first quarter of 2021, correspondingly higher CPLs are justified by the fact that it is precisely those lottery players won during these periods who generally exhibit higher long-term activity and thus a better customer lifetime value (CLV). As a result, the payback periods of new customers are only slightly longer. At €7.1m, total marketing expenses in the first quarter of 2021 were above the prior-year level.
Due to the positive development of revenue, adjusted EBITDA rose to €4.6m, there were no non-recurring expenses or income. The Germany segment accounted for €4.1m of this amount. EBIT and net profit of €2.4m and €2.5m, respectively, were also well above the prior-year figures.
Jonas Mattsson, CFO of ZEAL Network, said: “We are pleased that, following the LOTTO24 takeover, the business model change and the organisational adjustments, we will again be able to publish truly comparable figures in the current and previous reporting periods with the first quarter of 2021. In addition, we already demonstrated in the past year that we are capable of exploiting market opportunities, adapting to dynamic environments and continuously fine-tuning our business model. We are consistently continuing along this path.”
