Zeal Network SE has posted €65.1m ($74.7m) in revenue for the first nine months of 2021, up from €64.5m last year.

The Hamburg-based lottery provider has published its results for 9M 2021, noting modest 1% revenue growth. This was driven almost entirely by its German business, which brought in €61.5m for the year up to 30 September.

When compared to 9M 2020, which saw revenues amounting to €58.4m, Zeal’s Germany segment has increased by approximately 5%. However, at 12.2%, the company’s gross margin for this segment remained relatively stable, with only .1% difference from the prior year’s 12.3%.

Zeal attributes this to a poor market environment for lotteries in Germany during the first nine months of 2021. The jackpot of the European lottery only reached the €90m mark three times, half as often as in 2020. Meanwhile, the mandatory €45m pay out mark for the ‘LOTTO 6aus49’ was not reached at all.

Despite a comparatively poor jackpot performance, Zeal gained 446,000 new customers, though this is still down from last year’s 787,000. But an area that did see significant improvement was profitability.

Personnel expenses came in at €14.5m while other operating expenses sat at €33.2m for a 12.6% and 22.7% decrease respectively. And due to a lower jackpot, Zeal saw its marketing expenses drop from €25.3m to €18.6m.

Adjusted EBITDA for 9M 2021 rose sharply from €6.9m in 2020 to €17.6m, with the Germany segment again accounting for the lion’s share, boasting €16.6m.

“The fact that we have managed to continue to grow with a significantly weaker jackpot development compared to the previous year, and at the same time significantly improve the profitability, makes us proud,” remarked Jonas Mattsson, CFO of Zeal Network SE.

“It furthermore demonstrates that we have taken the right measures by adjusting marketing investments and implementing strong cost discipline to match the market reality.”