Zeal Network posts 23% revenue drop-off in 2020
Hamburg-based lottery brokerage impacted by business model changes despite profit increase
Online lottery brokerage business Zeal Network has posted a 23% year-on-year (YoY) decrease in revenue to €87m for 2020.
The German firm said “dis-synergies in the course of the business model change” led to the fall in revenue, which hit €113.5m in 2019.
The change relates to Zeal’s decision to discontinue its secondary lottery betting business, which included the EuroMillions and US Powerball lotteries, in October 2019.
Zeal also recorded a drop in EBITDA, falling from €29.4m in 2019 to €12.7m in 2020.
However, the group did post a much-improved net profit, rising from €1.7m in 2019 to €7.9m in 2020, due to a combination of improved financial results and a €6.6m reduction in tax charges.
Additionally, billings grew 40% YoY to €652.8m compared to €446.7m in 2019.
Elsewhere, Zeal confirmed it had increased both its number of newly registered customers and monthly active users in Germany.
The group secured 918,000 new customers in 2020, compared to 274,000 in 2019, while monthly active users leapt from 640,000 to 986,000.
Zeal also noted its charitable contributions to social and community projects leapt from €94m in 2019 to €246m in 2020.
Despite the difficulties faced in 2020 due to Covid-19, Zeal expects to rebound slightly in 2021, with revenue expectations set to hit €95m at least and EBITDA expected to reach at least €20m.
Dr Helmut Becker, Zeal CEO, said: “With our combination of commercially sensible marketing investments, high new customer growth, powerful technology and exciting product innovations, we have set the course for a highly promising future.”
Jonas Mattsson, Zeal CFO, added: “We have delivered on our promises and already fully realised the planned cost synergies in the fourth quarter 2020. At the same time we have grown our business and launched new products. We are delighted that all this is also reflected in our share price performance.”