Zeal Achieves Double-Digit Growth in 2023 and Raises Earnings to a Five-Year High

Zeal Network SE (Zeal), the leading German online provider of lottery products, today published its annual report for 2023 and once again presented strong top and bottom-line results. In the past financial year, the company increased its billings in the lottery sector by double digits to €843.3 million (2022: €758.4 million). Revenue also saw double-digit growth to €116.1 million (2022: €105.2 million). EBITDA reached a new five-year high of €32.9 million (2022: €31.7 million) despite a week jackpot environment. In addition, Zeal successfully launched its online games offering, thereby strengthening the basis for further business growth.

• Core business and customer base expanded, market share increased
• Billings and revenue increase by 11% and 10% respectively in 2023 compared to the previous year
• New online games business successfully launched – billings of around € 42 million already achieved

“In 2023, we further expanded our position as market leader,” the Chief Executive Officer for Zeal, Helmut Becker, 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.”

“The strong growth in our billings and revenue shows that we inspire our customers with our attractive and innovative product range,” the Chief Financial Officer for Zeal, Sebastian Bielski, said. “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.”

Double-digit increase in revenue and billings in core business:

By increasing customer activity and intensifying marketing measures, the Zeal Group was able to increase lottery billings by 11% to €843.3 million in 2023 (2022: €758.4 million). Revenue from lotteries also rose accordingly by eight percent to €105.7 million (2022: €98.2 million). Adjusted for two major wins in the charity lottery freiheit+ (there were no major wins for this lottery in 2022), revenue from lotteries amounted to €105.7 million. At 12.8%, the gross margin from lotteries adjusted for major winnings was thus almost unchanged from the previous year (2022: 12.9%).

Successful start for online games:

In June 2023, Zeal went live with its online games offering via the web stores of its subsidiary Lotto24 AG and achieved billings of €41.6 million in its first year. Revenue generated with online games amounted to €3.0 million and EBITDA to €1.4 million.

Strong EBITDA despite investment in future growth:

Zeal acquired 597 thousand customers in the past financial year (2022: 703 thousand). The decline compared to the previous year can be attributed to the significantly worse jackpot situation. Due to the company’s strategic decision to invest in brand development through increased television advertising, marketing expenses of €36.0 million (2022: €34.1 million) were six percent higher than in the previous year.

Despite the increased investment in brand development and the launch of online games, EBITDA rose by 4% to €32.9 million (2022: €31.7 million).

The Executive Board and Supervisory Board will propose the payment of a dividend of €1.10 per share (2022: basic dividend of €1.00 per share plus special dividend of €2.60) to the Annual General Meeting on May 28, 2024.

Outlook for 2024:

For the 2024 financial year, Zeal continues to plan to expand its market leadership as an online provider of lottery products, accelerate the growth of the newly-launched games offering and introduce new products in the charity lottery segment. The company expects revenue to be in the range of €140 million to €150 million in the 2024 financial year, assuming average jackpot development. Zeal expects EBITDA to be in the range of €38 million to €42 million.