Zeal Network stated that it expects to report an increase of 21% in revenue year-over-year for its 2022 financial years. The company’s sustainable investments have helped the German lottery group grow.
Zeal announced preliminary results and said that it had experienced “strong” growth despite the ongoing uncertainty in global markets.
Jonas Mattsson, chief financial officer, stated that continued investment in all areas will not only help the company in 2022, but also allow it to grow in 2023 and beyond.
Mattsson stated, “We are proud to our strong development despite ongoing global uncertainty and resilience in the lottery products during these times.” “The positive growth of our business figures in nearly all areas shows that we have sustainedly invested in our own development with our measures for 2022.
“In 2023 we will not only continue expanding our base business but also drive innovation to extend our market leadership.”
Zeal announced that its revenue for the 2022 financial year is EUR105.2m (PS92.7m/$111.5m). This would represent a 21% increase over the EUR86.8m reported in previous years.
The total group billings, which include all stakes from customers through Zeal, are expected to rise 16% to EUR758.4m. However, the group was able acquire 29% more customers than the previous year.
This increase in customers was due to increased marketing activities during high-stakes phases. It is expected that marketing costs will rise by 52% to EUR34.1m and operating expenses will rise 39% to EUR57.0m.
Zeal however stated that earnings before interest tax, depreciation, amortisation and amortization (EBITDA), will be EUR3.9m due to increased business volume. Market share will likely increase to 41% from 39% the previous year.
Zeal noted key events in the preliminary results announcement, including Lotto24 and the securing of a license for lottery brokerage in Germany for seven years. This will run until June 2029.
Zeal also highlighted that the German Federal Fiscal Court rejected an appeal by the Hanover North Tax Office in August against the November 2019 Hanover Fiscal Court decision in favor of MyLotto23 Ltd. The tax office refunded a down payment of EUR54.0m to MyLotto24, and an additional repayment of EUR2.0m of associated interest.
Zeal stated that it plans to expand its market leadership in 2023 by introducing new products, including online slot machines under the virtual slot machine license the group company applied to.
Based on general conditions and an average jackpot growth, Zeal expects billings to range between EUR800.0m to EUR830.0m in the Germany segment. Revenue will be between EUR110.0m to EUR120.0m.
EBITDA for the year is expected to range between EUR30.0m to EUR35.0m. With plans to invest more in new customers acquisitions, it will likely result in marketing expenses of EUR34.0m to EUR39.0m.