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German lottery provider ZEAL Network has raised its fiscal year guidance after posting better than expected preliminary results for Q3 2020.

Supported, among other things, by the good jackpot development of the German lottery Lotto 6aus49 in Q3 2020, the continued high marketing investments led to a growth in billings, revenue and new registered customers that exceeded expectations.

Due to the increased marketing investments of €25.3m (2019: €17.9m) to acquire new customers, ZEAL was able to gain 787,000 new registered customers in the German segment in the first nine months of 2020 alone, with a preliminary CPL of €27.58.

According to preliminary calculations, billings increased by around 42% to €471.8m in the first nine months of 2020 (2019: €332.6m). The German segment contributed a preliminary €470.9m to this.

In a year-on-year comparison, it should be noted that ZEAL 2019 offered additional products in the secondary lottery business which were discontinued in October 2019 due to the business model change. Moreover, Lotto24’s online lottery brokerage business has only been part of ZEAL Group since 14 May 2019. The Lotto24 billings up to that date were, therefore, not included in the previous year’s figures.

Due to the expected revenue dis-synergies in connection with the business model change, revenue decreased by a preliminary 31% to €63.9m (2019: €93.2m). Similar to billings, revenue in the first nine months of 2019 still included the secondary lottery business, but not Lotto24’s online lottery brokerage business up to 14 May 2019. Revenue in the German segment amounted to a preliminary €57.8m in the first nine months of 2020.

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