Strong growth in billings and revenues, market leadership almost doubled, new customer target narrowly missed, 2015 guidance
(Hamburg, 20 January 2015) According to preliminary figures, Lotto24 AG achieved growth rates of 168% and 180% in its fiscal year 2014 with billings of almost EUR 82 million (prior year: EUR 30.5 million) and revenues of around EUR 8 million (prior year: EUR 2.8 million), thus fully reaching its forecast of strong growth for both KPIs. At 9.5%, gross margin easily exceeded both the prior-year figure (9.1%) and the respective forecast.
Online lotteries experienced strong growth in Germany during 2014 and Lotto24 played a major role in this trend. Although total revenues of the German Association of State Lottery Companies (»Deutscher Lotto- und Totoblock, DLTB«) were down slightly by -0.7% in 2014 (prior year: +10%) due to a comparatively poor jackpot situation, the online revenues of state-owned companies and private brokers rose by more than 50% to around EUR 390 million (prior year: EUR 253 million), according to calculations of the German Lottery Association (»Deutscher Lottoverband«). According to these figures, the online revenues of the 16 state-owned lottery companies grew in total by 30% to around EUR 285 million (prior year: EUR 219 million). With billings of almost EUR 82 million, the market share of Lotto24 AG almost doubled from around 12% to about 21%. This provides strong confirmation of Lotto24 AG’s business model and strategy.
Due to the lack of jackpots for Germany’s »Lotto 6aus49« lottery, the preliminary calculation of 284 thousand new customers in 2014 fell just short of the targeted 300 thousand (dependent on the jackpot situation). The preliminary total number of registered customers as of 31 December 2014 was therefore around 521 thousand (prior year: 237 thousand). With marketing expenditure of around EUR 13 million (prior year: EUR 7.3 million), cost per lead (CPL) amounted to approximately EUR 45 (prior year: EUR 35.25). As forecast, preliminary earnings from operating activities (EBIT) and net profit for 2014 amounted to around EUR -14 million and almost EUR -16 million, respectively (prior year: EUR -11.3 million and EUR -10.5 million) due to investment in further expansion of the company’s market leadership.
In 2015, Lotto24 AG plans to stabilise its market leadership with moderate growth in market share. As part of this strategy, the company will focus more strongly on optimising CPL in combination with a significant year-on-year reduction in marketing expenditure. Depending on the jackpot situation, this is expected to result in much slower new customer growth. Lotto24 will continue to invest consistently in the expansion of its business and market shares while at the same time placing greater strategic emphasis on improving earnings. At the same time, the company will continue the insourcing of its strategically important IT division started in 2014 in order to achieve greater long-term independence, pave the way for further cooperation agreements in the field of B2B and business services, and implement its own development needs more flexibly, quickly and easily in future. Assuming that the regulatory environment remains unchanged, and depending on the jackpot situation, Lotto24 AG therefore expects a strong increase in billings of up to 50% and a slight year-on-year improvement in gross margin for its fiscal year 2015. Moreover, losses of the two KPIs EBIT and net profit are expected to be lower than in the previous year.
The Annual Report 2014 is to be published on 26 March 2015.
