Zeal Network Reports First-quarter 2022 Results

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The German lottery supplier Zeal Network has reported an increase in net profit of 101.6% compared to the previous year for the first quarter of its financial year 2022, following an increase in revenue and reduced operating expenses.

Revenue, including revenue from jackpot insurance, for the three months to 31 March 2022 was EUR 25.1 million, an increase of 11.0% from EUR 22.6 million during the same period last year.

The majority of the revenue (EUR 24.0 million) was generated through Zeal’s German operations, while the remaining EUR 1.1 million came from other operations, where both areas benefited from higher invoicing.

Total group invoicing, which includes all customer contributions through Zeal’s offering, increased by 10.9% to EUR 181.1 million due to better jackpot development and an increase in the number of customers.

Zeal was able to acquire 154,000 registered new customers during the quarter, slightly lower than the 156,000 last year, with acquisition costs per registered new customer up from € 33.48 to € 38.09.

In terms of costs, operating expenses were 9.8% lower at EUR 16.5 million, aided by a 20.2% reduction in staff costs as the total number of employees decreased from 164 to 156. Marketing costs were 3.3% higher at 7, EUR 3 million, but direct operating expenses decreased by 10.6% to EUR 2.5 million and indirect operating expenses decreased by 15.2% to EUR 2.6 million.

Higher income and lower expenses led to an increase of 95.6% compared to the previous year in profit before interest, tax, depreciation and amortization (EBTIDA), which reached EUR 8.9 million during the quarter, up from EUR 4.6 million last year. year.

Zeal also recorded EUR 2.1 million in amortization and depreciation expenses, a decrease of 2.9% compared to the first quarter of 2021, which resulted in an increase of 187.6% in profit before interest and tax (EBIT) to 6.8 million.

After also taking into account € 158,000 in financial expenses and a loss of € 43,000 from associated companies, the profit before tax was € 6.7 million. Zeal paid 1.6 million euros in income tax, which means that the quarter ended with a net profit of 5.0 million euros, more than twice as much as 2.48 million euros last year.

“We have had a good start to 2022 and were once again able to increase revenue and profitability; this gives us the momentum to invest in further growth this year, says Jonas Mattsson, CFO at Zeal.

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