Good day, and welcome to the ZEAL Q1 Results 2022 conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jonas Mattsson. Please go ahead, sir.
Thank you very much, and good morning, everyone, and welcome to ZEAL's earnings call for the first quarter. I hope you have received the email, including the presentation, and if you haven't, it's also, of course, accessible on our webpage in the investor relations section. If we go to slide 2, you will find the content slide, and there we have outlined today's agenda. What we'll do is to start off with a summary of the first three months. We'll be followed by a financial update, and after that, we'll move on to our guidance and planned dividend for the year before we're finishing off with the key takeaways. After the presentation, we'll give you the opportunity, as always, to ask questions. I will now hand over to our CEO, Helmut Becker.
Thanks, Jonas, and good morning, everybody. Let me summarize our first quarter. That we grew. We grew our business. Billings and revenue are up 11% year-over-year. Our profitability continues to rise due to scale effects in our business model and good cost control. We've launched our second charity lottery product, the German Dream House Lottery or Deutsche Traumhauslotterie. It's early days, but we hope to attract a slightly younger, slightly more female target group with this product. Now on the next page, let me go straight to the two licenses that we are expecting to receive in Q2. The first one is a games license or virtual slot machines license. The regulator has issued the first and so far only games license on May fifth. That is good news because we know that they have started to issue licenses.
We expect them to now swiftly work through the other license applications. We're confident to receive our games license in Q2. We will offer games that are tailored to the needs of our customers, and we know from past experience as well as from international lottery markets that this is a good growth opportunity for us. The second license is an extension of our brokerage permission. We expect to receive the extension of our brokerage permission also in Q2 this year. Back to you, Jonas.
Thank you, Helmut. Let's now move to page six, and I will start describing the jackpot situation for the first quarter since it has such an impact on our business performance. On this slide, you will see the development for our two main products: six out of forty-nine and EuroJackpot. The development has been better than last year, but more in line with what we expect for a normal year. Comparing with last year, we see that the average jackpot for Lotto six out of forty-nine is actually 3.5 times higher, and we had two peak jackpots in the beginning of this year. As I have explained before, it's in the peaks we acquire the most customers and where the billings are outperforming the predictions. Regarding EuroJackpot, it's actually slightly worse than last year with no peak jackpots.
In summary, slightly better jackpot than last year, but more in line with an average year so far. Just to repeat what I've explained before, high jackpot is attracting new customers and acquisition becomes easier with increased volume as an outcome, which then leads to higher future growth rates. The old customers, but also the new ones, they all start to spend or spend more those weeks when the jackpot is high and our billings increases as a consequence. The opposite is of course true for low jackpots. Let's now move to the income statement that you will find on next slide 7. As Helmut already said, we grew revenue by 11%, which was a consequence of the higher billings that was boosted by the higher jackpot, situation versus the terrible last year.
At the same time, we have continued to be very careful with our spending and total costs are down by 20%. Even if this may not reflect the full year, I'm satisfied with what we have been able to manage the cost side so well despite the situation with inflation and where we are in. Personnel cost is down 20% or EUR 1 million in the quarter, but this is mostly driven by the low share price and which is the base when accounting for employee long-term incentive plan. Marketing expenses are slightly higher, and it was in late January we did a big push when Lotto had its peak. Direct operating expenses are positively impacted by the lower credit losses and efficiency in the entire payment processes. Indirect expenses are also down by 15%, thanks to lower consultancy fees and the use of external staff.
Combined, this has led to an EBITDA that is double versus last year and is now at EUR 8.9 million. This equals to a 35% EBITDA margin. You may note that we have removed the word adjusted simply because we have no more adjustments, and we don't foresee any adjustments in the near future. Finally, EBIT is up almost 200%, and net profit after tax is now at EUR 5 million, twice as much as last year. Quite successful first quarter. In the coming 3 slides, we'll look closer at some of the KPIs. Let's move to slide 8. Our billings grew to EUR 181 million or by 11%, which is, by the way, the same as our revenues.
To me, this shows that we successfully can grow our business in a situation where we either have a normal or a good jackpot situation. The 11% is also in the range where we aspire to be, namely a double-digit growth company. Gross margin has also improved thanks to more sales of high-margin products, meaning a more favored product mix in the quarter. On the next slide, we have highlighted net cash and new registered customers. Net cash is up by 15% and now stands at EUR 78 million. This increase is mainly coming from the strong operating performance in the quarter. We have no news about the pending VAT case, but as I said before, we are confident to ultimately win the VAT case. In line with previous quarter, we continue to report a contingent liability of EUR 23 million.
Let's now talk about acquisition of new customers. With approximately the same amount of spending, we acquire the same amount of new registered customers, 154,000. This is indeed good. Not great, but still good. With improved peak jackpots, we should be able to increase this further. Moving on to slide 10, you will find some additional KPIs. The CPL is showing 5 EUR increase, but you should not worry about this. The increase is fully attributable to a phase, to a freiheit+ campaign that we had to expense, but we will reap the effect in the coming months. If you exclude this campaign, which you should when you calculate in the CPL, it's on last year's level. Still, we do see increase in pricing, especially in social media and search.
Our business model is quite tolerant since our customer loyalty is still remarkably high, and we will expect better margins over time. Hence, we could in fact easily swallow this effect. Whether this price increase is lasting price effect, this is too early to tell, but I can say that the whole online industry reports similar dynamics. The MAUs, the monthly active users, have improved and are now north of 1 million. The drive is the better jackpot situation, especially the peak jackpot in Lotto that we had in late January. Average billing per user are still very high and then further increased by EUR 2 in the quarter to more than EUR 58 in the average spend per customer. Don't forget, this is the average, so a lot of our customers spend significantly more than the EUR 58 per month.
Allow me to reiterate the dividend proposal for this year, which you will find on slide 12. We presented this with a full year's number, but let me remind us what would we propose and why. As you may know, I'm keen to optimize the capital structure, and with this proposal, we are taking further steps to improve it. We're planning to shift out even more cash, in fact, more than double versus the year before. The reason is to reduce excess cash of the company, but without harming the growth initiatives. We are proposing to dividend EUR 1 as a basic dividend, and on top EUR 1.10 as a special dividend. This will lead to EUR 2.10 per share, or EUR 47 million that is returned to our shareholders.
Of course, management undertakes to constantly review its dividend policy in line with the financial performance, and we will talk about this in the coming quarters, and we'll give you a 2023 policy later this year. Let me also confirm the outlook for the years that you will find on slide 14. As you can see on this slide, we're quite optimistic about the future, and you see double-digit growth. The guidance for this year, as we explained in the full year, is that the billings of at least EUR 750 million, which is at least 14% increase versus previous year. Revenues of at least EUR 105 million, which then is at least 21% increase versus last year. EBITDA of at least EUR 30 million, which is then equivalent to an 8% increase.
However, if you would normalize for one-offs and the underspending and marketing that we had last year, this would actually equal to 60% increase versus last year. Then you see the economies of scale effect also taking place in this number. All of this is based on the average output for the rest of the year and marketing investments around EUR 30 million. With this, over to you, Helmut, to bring this home.
Thanks, Jonas. What are the key takeaways? We continue to grow profitability. In fact, we've doubled our profitability compared to the first quarter last year. We're gonna pay out to shareholders EUR 47 million in dividends, and we've launched a new lottery product, a charity lottery product, the German Dream House Lottery.
Thank you. We can start with the Q&A session, please.
Thank you. Ladies and gentlemen, to ask a question today, please signal by pressing star one on your telephone keypad. Please ensure that the mute function on your telephone is switched off to allow your signal to reach our equipment. Again, to ask a question today, please signal by pressing star one on your telephone keypad. We will pause for just a moment to allow everyone an opportunity to signal for questions. We will take our first question now from Marius Fuhrberg from Warburg Research. Please go ahead. Yeah. Hi. Hope you can hear me well. Couple of questions from my side. The first one with regard to the freiheit+
The third one on your guidance or on your spending, more specifically, you guided for or you still guide for EUR 30 million of EBITDA, and also your marketing investments are of EUR 30 million or roughly in line with what we saw in Q1. However, Q1 had a quite good EBITDA, and multiplying this by four would probably be too easy. Yeah, where do you see the difference in the cost? Is it that you expect more personnel costs or what is your assumption on this?
I think I can jump in here and take some of the questions. The freiheit+ campaign is a campaign that we think we will reap the benefits in the coming couple of months. I can't give you a precise revenue forecast on those, but typically the cost for acquiring customer that this will be included in will be slightly higher than normal. But because that's what we do when we acquire a customer into freiheit+, they come slightly higher because the margins are much higher, so they are quite beneficial for us. I don't have any precise revenue numbers for this one. On the EuroJackpot impact, the entire industry has always said that the second draw will add a 20% volume increase. We think that is believable, and we see similar numbers.
Question is, does this cannibalize any other product? We haven't seen any material cannibalization, so we have seen uplift. Then obviously, since this has been known for a long period of time, this has been part of our guidance, of course. We would argue this is good for the industry. This is good for the product because it builds up the jackpot situation much quicker. We see now we are above EUR 80 million in jackpot. I think this is good for the industry. To your third question about the guidance of spending, you're absolutely right. When you take 9 million times four, that will be the 36 million. If you go into your P&L, what you can see that the personnel cost is quite low, and this is share price related.
Every month or every quarter, we adjust our provision for long-term incentive plans in line with the share price, and the share price has gone down. If that is flat, then you will not have this positive effect in the future months. You could actually have the opposite one. In addition, we have fewer consultancy costs that I think will happen in later quarters. I think this quarter was a super strong quarter. Don't get me wrong. Maybe the cost side was better than the average quarter. That's why we still keep the guidance of +EUR 30 million.
Okay. Got it. Nevertheless, I think, keeping in mind the scalability of the business model. However, we will see during the remainder of the year. One follow-up, if I may. Could you remind us really quickly how the split in the stakes between EuroJackpot and Lotto 6 out of 49 was in Q1?
In Q1, I don't have the exact number in front of me right now. I can give it to you later.
General.
Lotto is the bigger product, and especially this quarter it was even bigger because we had the peak in end of January and EuroJackpot has suffered, as I explained. I think the product split is favorable, clearly favorable to six out of 49 this quarter.
Okay. Thank you very much. Thank you. We'll now go to our next question from Henrik Paganini
Yes. Thanks for taking my question. My question is also on the cost side. You reduced personnel costs by 20%, direct operating costs by 11%, and indirect operating expenses by 15%. Could you say that again, like how much of that is sustainable and for what kind of expenses we should see a bounce back in the other quarters? If you could like elaborate on that a bit, that would be super helpful.
Let's start talking about the personnel expenses. As you see, it's coming down with roughly EUR 1 million for the first quarter, and that is predominantly driven by the lower share price. There are some inflation and of course, there are slightly fewer headcounts, so we have realized even further synergies. The majority of this is coming from the share price. I would say that the personnel expenses will jump up in the coming quarter, assuming a constant share price. For the other one, it's minor, but if you take everything into account, it's probably EUR 200,000 that we have spent less this quarter that is planned to come in the other quarters. Of course, if we can reduce a consultancy fee, freelancer cost even further, we will continue doing this one.
I would say a normalized cost structures is probably EUR 500,000-EUR 1 million higher.
Super helpful. Thank you very much.
Thank you. As a reminder, ladies and gentlemen, to ask a question today, please signal by pressing star one on your telephone keypad. That's star one to ask a question. It appears we have no further questions at the moment.
Okay. I want to thank everyone that participated in our earnings call and if you have any further questions, please reach out to us. We're more than happy to help you with any further answers. Thank you so much and have a great day.
Thank you. That will conclude today's conference call. Thank you for your participation. You may now disconnect.