Zeal hails German opportunity as 2018 revenues rise 15%
London-headquartered operator reports an 85% increase in adjusted EBIT after “taking control” in German lottery market
Zeal Network this morning reported a 15% rise in full-year revenues to €154.8m as part of its 2018 financial results.
The lottery specialist also reported an adjusted EBIT increase of 85% to €46.6m, while ticket sales hit a total of €296.3m following growth of 6%.
A strong customer acquisition strategy was cited as the key driver behind the revenue growth after the group registered more than 600,000 new customers last year, marking an increase of 49%.
Notable highlights for the period included the imminent acquisition of German lottery brokerage firm Lotto24 amid a drawn-out saga with Lottoland, which Zeal said substantially de-risked operations in its core market.
Zeal CFO Jonas Mattsson said the operator had “reduced financial risk, improved cost structure and increased the efficiency of marketing” in 2018.
This was reinforced up by Zeal CEO Dr Helmut Becker, who told EGR Intel the prospective Lotto24 purchase will give the firm greater flexibility for German marketing activity and inspire future growth.
Zeal CEO Dr Helmut Becker
“Strategically we are changing [in Germany] before we have to,” said Becker. “We are taking control and we are doing that while we are strong and while we have options.
“It’ll change our German business in the sense that we are de-risking that business because we face regulatory risks in the market.
“We will also gain access to additional marketing channels in Germany and increasingly we have not been able to use the full range of marketing that we can in other markets,” he added.
After the Lotto24 deal completes, Zeal will be able to utilise Google and Facebook advertising in Germany as a lottery tender business – it is currently prohibited for lottery betting operators.
“We are growing the company but we could do it a lot faster,” Becker added. “Lotto24 has grown their business 27% over the last three years and actually even more last year,” said Becker.
“We have a growth opportunity in Germany because online penetration is still very low and we can now access new marketing channels which will make a huge big difference.”