ZEAL records double-digit revenue growth in 2023 but profit falls 17%
Revenue and EBITDA grow 10% and 4% YoY respectively amid a slump in customers and a weaker jackpot environment
ZEAL Network has reported double-digit growth in revenue for full-year 2023 to €116.1m (£99.1m) thanks to “increased customer activity and intensifying marketing measures”.
The German lottery firm noted a 10% year-on-year (YoY) leap in revenue as a strong increase in billings led to improved top-line figures.
Total lottery billings rose 11% YoY from €758.4m to €843.3m.
In addition, EBITDA reached a five-year high of €32.9m, representing a 3.8% YoY rise from €31.7m in 2022, which ZEAL said was achieved despite a “weak jackpot environment”.
Revenue from lotteries rose 8% to €105.7m, having been adjusted for two major wins in the charity lottery Freiheit+. ZEAL said there were no major wins in 2022.
However, ZEAL saw a decline in customers, from 703,000 in 2022 to 597,000 in 2023, which was attributed to the “significantly worse jackpot situation”.
Additionally, net profit after tax dropped 17.2% to €13.7m.
Marketing expenses rose 6% YoY to €36m owing to the strategic decision to increase TV advertising.
Elsewhere, the lottery operator launched online gaming in June 2023 through its LOTTO24 subsidiary and achieved billings of €41.6m in H2.
Revenue generated from online games stood at €3m and EBITDA came in at €1.4m.
Helmut Becker, Zeal CEO, said that the previous 12 months showed the firm was on the right track.
“In 2023, we further expanded our position as market leader,” he said. “We are benefiting from our strong brands. LOTTO24, for example, has developed into a winner’s factory, producing more record winners last year than any other lottery provider in Germany.
“Our strong top and bottom-line results and our market share, which has grown to 41.4%, show that we are on the right track. We are therefore looking to the future with determination and confidence.”
Sebastian Bielski, ZEAL CFO, added: “The strong growth in our billings and revenue shows that we inspire our customers with our attractive and innovative product range.
“Our continuously growing customer base also proves that we have expanded our marketing activities in a targeted manner. At the same time, our successful start in the online games business clearly shows that we are in a position to successfully develop new business areas.”
Looking ahead to the remainder of 2024, ZEAL expects full-year revenue to be in the range of €140m to €150m while EBITDA is expected to be in the range of €38m to €42m.