Catena Media plc Year-end Report January - December 2023

• Revenue from continuing operations was EUR 14.5m (24.5), a decrease of 41 percent.
• Revenue in North America decreased by 43 percent to EUR 12.3m (21.5), equivalent to 85 percent (88) of group revenue from continuing operations.
• New depositing customers (NDCs) from continuing operations totalled 32,032 (56,040), a decrease of 43 percent.
• Adjusted EBITDA from continuing operations decreased by 88 percent to EUR 1.5m (11.8), corresponding to an adjusted EBITDA margin of 10 percent (48).
• EBITDA from continuing operations, including items affecting comparability of EUR 1.0m (-0.5), totalled EUR 0.5m (12.3), corresponding to an EBITDA margin of 3 percent (50).
• During the quarter an impairment charge of EUR 34m (0.3) was recognised on intangible assets relating to the European business following the completion of the strategic review.
• Earnings per share from continuing operations totalled EUR -0.47 (0.15) before dilution and EUR -0.47 (0.10) after dilution.
• Cash and cash equivalents were EUR 38.5m (24.6) on 31 December.
• Outstanding shares totalled 78,773,374 and outstanding warrants totalled 27,022,988 on 31 December.

• Revenue from continuing operations was EUR 76.7m (98.6), a decrease of 22 percent.
• Revenue in North America decreased by 21 percent to EUR 67.1m (84.5), equivalent to 87 percent (86) of group revenue from continuing operations.
• New depositing customers (NDCs) from continuing operations totalled 184,257 (228,601), a decrease of 19 percent.
• Adjusted EBITDA from continuing operations decreased by 47 percent to EUR 25.4m (48.4), corresponding to an adjusted EBITDA margin of 33 percent (49).
• EBITDA from continuing operations, including items affecting comparability of EUR 1.9m (1.6), totalled EUR 23.6m (46.8) corresponding to an EBITDA margin of 31 percent (47).
• Earnings per share from continuing operations totalled EUR -0.37 (0.46) before dilution and EUR -0.27 (0.31) after dilution.
• Cash and cash equivalents were EUR 38.5m (24.6) on 31 December.
• Outstanding shares totalled 78,773,374 and outstanding warrants totalled 27,022,988 on 31 December.

• On 24 October Catena Media announced the appointment of Pierre Cadena as Vice President Corporate Strategy.
• The group repurchased 312,600 ordinary shares during October 2023.
• On 7 November Catena Media announced the completion of its share buyback programme. From 17 July to 31 October 2023, the group purchased 2,510,116 Catena Media shares for SEK 54,970,745. As of 7 November 2023, Catena Media held 3,124,309 of its own ordinary shares. The total number of shares in Catena Media plc is 78,773,274.
• The group launched online sports betting affiliation in Maine, with an adult population of 1.1m, on 3 November.
• On 21 November the group announced agreements to sell its Italian online sports betting and casino assets for EUR 19.8m. The sale completed the strategic review begun by the board of directors in May 2022.
• On 19 December the group initiated a written procedure under its outstanding bond loan 2021/2024.

• On 10 January the group received consent from bondholders regarding the written procedure for its outstanding bond loan 2021/2024.
• The group launched online sports betting affiliation in Vermont, with an adult population of 0.5m, on 11 January.

CEO Michael Daly's comments

Rapid technological developments and the emergence of artificial intelligence (AI) are reshaping the media industry. For the online sports betting and casino gaming sector, the changes will be huge. At Catena Media we are determined to be a leading force in this new landscape. We are currently implementing a wide-ranging internal investment programme - including large investments in both tech and AI - to fast-track our ambition to be the data- and technology-driven leader of online affiliate marketing in the sports betting and casino gaming space. These projects are significant in the context of our Q4 figures, which were disappointing and with which I am not satisfied. Planned and initiated earlier in 2023, the investments have since been accelerated. They are designed to position us for the future and also to restore the group to a sustainable long term growth trajectory. As a first step, we expect a resumption of organic growth in the second half of 2024 and to generate full-year adjusted EBITDA in the range of EUR 20-30 million.

The cornerstone of our transformation is a new technical platform that will launch in Q1. Once fully rolled out in Q2, this will be the first time Catena Media focuses affiliation activities on a single, coherent tech infrastructure. Creating this new backbone is a step change that will make us technically far more robust across all products and make it easier to deploy new verticals.

Platform benefits and ground-breaking AI venture

The new platform will facilitate the introduction of new tools to improve our organic search competence and will better enable us to leverage data and product development innovations rapidly across the organisation. Built for scalability, the new platform will enable fast rollouts of coming innovations in multiple areas, including AI and subaffiliation.

In Q4, we established a joint venture with a specialist AI partner to develop a generative AI application exclusively dedicated to content production for online betting and casino gaming affiliation. This initiative will embed AI in our brands and offers exciting potential as we seek to diversify and personalise our content production. This project is progressing at high speed. In less than three months it has delivered a minimum viable product (MVP) that we have already introduced to the business. The focus now and in the months ahead will be on refining and adapting the MVP for multiple brands as its impact on our content production evolves from quantitative driver to qualitative enabler. We will update the market with our progress as we reach different milestones.

Harnessing the tech-driven opportunities ahead

We see AI as a positive force that will empower our teams and leverage their knowledge, leading to better and more attractive products and higher revenue over time. Thanks to the new technical platform, we will be able to integrate the AI joint venture and other large language models rapidly in the business. The same applies to paid media, a largely new vertical that will expand our reach and market exposure and reduce our dependence on state launches, especially in sports betting. We are also working with early partners to develop new revenue streams in our affiliation business that we envisage will become operational in the first half of this year.

The completion in Q4 of the strategic review and associated divestments enabled us to undertake the future-facing investments we are currently making. The strategic review has narrowed our geographic spread and streamlined the organisation. Most importantly, it has allowed us to diversify the channels in which we want to specialise going forward. We are now transitioning into a multichannel business that operates media partnerships, paid media, subaffiliation and other verticals alongside our core expertise in organic search. We firmly believe this new multicentric structure and our core focus on regulated markets in the Americas will deliver sustainable revenue growth over time.

In parallel with these initiatives, we are also working at speed in different areas of the current business where we see growth opportunities. In Q4 we again saw impressive growth in esports, an area where we have been investing for several years to build brand authority and traffic and where we are now beginning to reap rewards in terms of meaningful income, even if the figures remain small in proportion to total group revenue.

Challenging reporting environment until second half of 2024

We anticipate a challenging reporting environment until the investments I have outlined gain traction in the second half of this year. In Q4, market headwinds caused revenue and EBITDA declines in our core North American market. Lower cost-per-acquisition (CPA) rates paid by operators again impacted revenue, as did stiffer competition directed against us as the established market leader. As mentioned above, we are responding to this competition to minimise the impact on market share. As in Q3, a pullback in marketing spend by operators led to lower user searches for sports betting and casino terms and a reduction in new depositing customers (NDCs). We also faced difficult comparatives due to the absence of a large state launch to offset Maryland in Q4 last year.

The conversion of some operator deals from CPA to revenue share continued during the period. This rebalancing will bring greater stability and sustainability to revenue inflow over time. The short-term drawback is that foregoing CPA in favour of revenue share reduces upfront income, and we felt this impact in Q4. In Q1, the start of regulated online sports betting in North Carolina on March 11 will likely see us recruit a higher ratio of players under revenue-share arrangements than in previous state launches. This will benefit long-term revenue but will produce a smaller one-off revenue boost than a CPA-only launch.

The picture is similar in Latin America, where the regulation process took a stride forward in the largest market, Brazil, during Q4. We continue to grow at small volumes as we build traffic and authority there and in our other selected markets in the region. In Japan, we have struggled of late and in Q4 streamlined the organisation and adapted the business to align with regulatory developments. We still see strong underlying player interest in the market and are confident we now have the fundamentals in place to expand the Japanese business from its low post-covid starting point.

A strategic reboot on the scale that we have undertaken can take time and test the patience of employees and shareholders. Q4 was a difficult quarter, but I believe we are now turning the corner. My message today is that our goal is in sight: a leaner, nimbler multichannel Catena Media with the knowledge and technical infrastructure to thrive in our core regulated markets and to deliver a return to growth in the second half of this year.

Presentation of Catena Media's results

CEO Michael Daly and Interim Group CFO Erik Edeen will present the Q4 2023 report in a combined webcast and teleconference on 13 February 2024 at 09:00 CET.

Webcast

Via the webcast you are able to ask written questions. If you wish to participate via webcast, please use the following link:
https://ir.financialhearings.com/catena-media-q4-2023

Teleconference

Via teleconference you are able to ask questions verbally. If you wish to participate via teleconference, please register on the link below. After registration you will be provided phone numbers and a conference ID to access the conference:

https://conference.financialhearings.com/teleconference/?id=5008630

The presentation will be available on the website:

https://www.catenamedia.com/investors/financial-reports-and-presentations

Contact details for further information:

Investor Relations
Email: ir@catenamedia.com

Michael Daly, CEO
Email: michael.daly@catenamedia.com

Erik Edeen, Interim Group CFO
Email: erik.edeen@catenamedia.com

This information is information that Catena Media plc is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons, on 13 February 2024 at 07:00 CET.

About Catena Media

Catena Media is a leader in generating high-value leads for operators of online casino and sports betting platforms. The group's large portfolio of brands guides users to customer websites and enriches the experience of players worldwide. Headquartered in Malta, the group employs over 250 people globally. The share (CTM) is listed on Nasdaq Stockholm Mid Cap. For further information see catenamedia.com.