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Germany – Zeal maintains stability despite unfavorable market

By - 24 March 2022

ZEAL Network SE (LOTTO24, Tipp24) increased its billings slightly by one per cent to €656.5m in 2021.

Revenues remained stable at € 86.8m, down from €87m a year earlier. At 12.2 per cent, the gross margin remained at the previous year’s level. Despite unfavourable market development due to few attractive jackpots, ZEAL managed to keep the business volume stable and gain 544,000 new registered customers. ZEAL has thus built a good foundation to grow further as soon as the jackpot environment becomes more attractive.

As ZEAL’s marketing activities are designed in line with the respective jackpot development, lower expenditures in turn led to an increase in profitability. The adjusted EBITDA of €27.7m therefore significantly exceeded the previous year’s figure of €12.7m. EBIT, at €19m, was also significantly above its previous year’s value (2020: €5.4m), as was the net profit, which rose to € 11.4m (2020: € 7.9m) despite the € 4.8m decrease in the financial result and the €5.3m increase in the tax burden.

“In 2021 we have proven that we can be successful even in a difficult market environment,” says Jonas Mattsson, CFO of ZEAL Network SE.

Due to the weak jackpot situation, opportunities to acquire a higher number of new customers while maintaining good advertising effectiveness were limited. In this respect, total marketing expenses were significantly lower than the previous year at €22.4m in the 2021 financial year (2020: €32.2m), with a comparable CPL. As soon as the jackpot environment becomes more attractive, ZEAL plans to invest more in marketing measures again. At the same time, ZEAL has also succeeded in achieving cost savings in other areas, as a result of which personnel costs and other operating expenses (including marketing) together fell by €18m to € 60.2m in 2021 (2020: € 78.2 million).

ZEAL has reached important milestones for the further development of its business: On the one hand, the Group has successfully converted its German internet portals to the legal and technical requirements of the new Gambling State Treaty and is thus well prepared for an expansion of its offering into other gambling segments such as virtual slot machines. On the other hand, ZEAL has launched a second new charity lottery in the German market after “freiheit+” with the “German Dream House Lottery”, thus strengthening its position as the largest provider of online lotteries in Germany

“Overall, we see ourselves well equipped to successfully continue ZEAL’s growth in the future,” says Helmut Becker, CEO of ZEAL Network SE.

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