Zeal Lottery reported a revenue of €22.6m in the first quarter, experiencing an 18.9% increase compared to €19.0m year-on-year.
The majority of the revenue, €21.1m, was generated by operations in Germany, indicating a rise of 23.5% from €17.0m in the previous year’s first quarter.
Despite the growth in revenue, Zeal also witnessed an increase in expenses. In Q1, they gained 156,000 new customers in Germany, which is a decrease of 24.2% year-on-year.
To attract more customers, Zeal increased their acquisition costs per customer from €26.0 in Q1 2020 to €33.48 this year. Consequently, marketing expenses rose by 7.5% to €7.1m in comparison to €6.6m in the previous year.
Zeal attributed the rise in adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) to the increase in revenue and the absence of non-recurring expenses or income. The EBITDA for the quarter grew by 64.2%, reaching €4.6m, compared to €2.8m year-on-year.
Out of the total earnings, €4.1m came from operations in Germany, more than double the amount in Q1 2020.
Zeal experienced adjustments in its results due to the discontinuation of lottery betting services, marking the first year-on-year comparison for the lottery brokerage business.
This change in the business model occurred following Zeal’s merger with lottery broker company Lotto24 in May 2019. The process began with Zeal’s bid to acquire Lotto24 in January 2019, following an announcement of their intention in November 2018.
Jonas Mattson, Zeal’s chief financial officer, acknowledged that the business is still adapting to the new business model. He stated, “We already demonstrated in the past year that we are capable of exploiting market opportunities, adapting to dynamic environments, and continuously fine-tuning our business model. We are consistently continuing along this path.”
