ZEAL Network has announced strong financial results and record new customer acquisition for 2018, as it moved closer towards completion of its acquisition of Lotto24 AG.

The Group delivered an 85% increase in Adjusted EBIT to EUR 46.6 million, generating Statutory EBIT of EUR 38.3 million (2017: EUR 25.2 million). The adjustment accounts for one-off costs primarily associated with the Lotto24 transaction and restructuring. Billings and revenue grew for the third consecutive year. Billings were up 6% to EUR 296.3 million (2017: EUR 280.5 million) while revenue increased 15% to EUR 154.8 million (2017: EUR 134.3 million). Total Operating Performance (TOP) was EUR 159.7 million, an increase of 13% year-on-year (2017: EUR 141.2 million).

ZEAL also acquired a record number of new customers for the Group and its partners, while significantly reducing its acquisition costs. The 614,000 new registered customers represent a 49% increase on the previous year (2017: 411,000), while the cost per lead in the lottery betting business reduced by 42% in 2018.

Jonas Mattsson, CFO, ZEAL, said: “ZEAL delivered a very strong performance in 2018. We reduced our financial risk, improved our cost structure and increased the efficiency of our marketing – delivering a record number of new customers and excellent financial results. We achieved this while also preparing to adapt for the future as we initiated our plan to reunite with Lotto24 – a strategic move that protects our core business, reduces shareholder risk, and creates strong platform for growth. This, combined with our excellent financial performance makes ZEAL a highly attractive long-term investment proposition.”

Building on the progress made in 2017, ZEAL continued to lay the groundwork for its international diversification. During the year, it became the first foreign lottery operator to be awarded a licence in the Czech Republic and acquired its third and fourth stakes in external lottery-related start-ups, Wshful (Cloud Canyon Limited) and The Dream Makers (De Integro Limited).

In November 2018, ZEAL announced its intention to reunite with Germany’s largest digital lottery broker, Lotto24, and transform its core German business model to locally-licensed digital lottery brokerage. ZEAL shareholders approved the all-share transaction in January 2019 and, to date, nearly 74% of Lotto24 shareholders have accepted ZEAL’s offer. Completion is anticipated in May 2019.

Dr. Helmut Becker, CEO, ZEAL, said: “2018 was a pivotal year for ZEAL. We delivered excellent financial results, continued to lay the groundwork for international diversification, and made ourselves more efficient. Through our plan to acquire and reunite with Lotto24 we created a sustainable growth path for our core German business. Online penetration in the global lottery market remains low and the opportunity is as exciting as ever. I believe we have positioned ZEAL exceptionally well for the future and the sector’s digital shift.”