Zeal targeting Netherlands and Australia after 19% revenue rise
UK-headquartered lottery operator is also considering Swedish launch following 31% annual increase in registered customers
Zeal Group today reported a 19% year-on-year annual revenue increase to €134.3m as the lottery betting operator prepares to launch in several new markets including the Netherlands and Australia.
Zeal has a charity lottery product in beta stage ready to go in the Netherlands, a brand new product that differs from the firm’s UNICEF-partnered product in Norway, with official launch expected in Q218, while the launch of a lottery-betting product is also likely soon in Australia.
Jonas Mattsson, ZEAL Group CFO, also revealed the operator was looking closely at Sweden, with reregulation imminent and the country’s licensing window set to open in July.
The operator said FY17 results exceeded guidance and were delivered in spite of an exceptionally weak jackpot environment during Q3, higher hedging costs after rule changes to EuroMillions, and significant pay-outs, including a single €15m prize in Q1.
The lottery firm delivered EBIT of €25.2m, down from €38m in 2016 and total operating performance (TOP) of €141.2m. Total billings for the year were steady year-on-year at €280.5 million.
Mattsson told EGR: “EBITDA is not like-for-like this year and last, there were different rule changes to the Euro Millions so the annual difference is not a totally fair comparison.”
Meanwhile, Q4 2017 billings rose 21% from Q3 to €78.8m, driven by the launch of new products Powerball, Mega Millions and strong performance on the Spanish Christmas lottery, El Gordo, as the company established itself in markets including Norway, the UK and Ireland.
“The launch into new markets hasn’t yet had a significant result, it has contributed a small part but we should see more of an impact next year,” said Mattsson.
“The quarterly rise was mostly driven by the product launches of Mega Millions and Powerball, which have been successful because players want big jackpots.
“Ten years ago, €5m was seen as a big jackpot, but now customers are not as happy if the prize is less than €20m,” he added.
Ramped up marketing costs of between €5m and €8m in 2017 and a further focus on customer acquisition delivered an annual increase of 31% for newly registered customers to 411,000