Catena Media plc Interim Report January - September 2024

• Revenue from continuing operations was EUR 10.7m (15.9), a decrease of 33 percent.
• Revenue in North America decreased 29 percent to EUR 9.5m (13.3), equivalent to 89 percent (84) of group revenue from continuing operations.
• New depositing customers (NDCs) from continuing operations totalled 27,342 (40,104), a decrease of 32 percent.
• Adjusted EBITDA from continuing operations decreased 58 percent to EUR 1.3m (3.2), corresponding to an adjusted EBITDA margin of 13 percent (20).
• EBITDA from continuing operations totalled EUR -1.4m (2.9), equivalent to an EBITDA margin of -13 percent (18).
• Earnings per share from continuing operations totalled EUR -0.55 (-0.02) before dilution and EUR -0.54 (-0.02) after dilution.
• Cash and cash equivalents were EUR 11.7m (33.5) on 30 September.
• Outstanding shares totalled 78,774,442 on 30 September.

• Revenue from continuing operations was EUR 39.5m (62.3), a decrease of 37 percent.
• Revenue in North America decreased 36 percent to EUR 35.0m (54.8), equivalent to 89 percent (88) of group revenue from continuing operations.
• New depositing customers (NDCs) from continuing operations totalled 102,894 (152,225), a decrease of 32 percent.
• Adjusted EBITDA from continuing operations decreased 84 percent to EUR 3.9m (24.0), corresponding to an adjusted EBITDA margin of 10 percent (38).
• EBITDA from continuing operations totalled EUR -1.0m (23.1), equivalent to an EBITDA margin of -3 percent (37).
• Earnings per share from continuing operations totalled EUR -0.62 (0.09) before dilution and EUR -0.61 (0.07) after dilution.
• Cash and cash equivalents were EUR 11.7m (33.5) on 30 September.
• Outstanding shares totalled 78,774,442 on 30 September.

• Manuel Stan assumed his position as CEO on 1 July. Pierre Cadena was appointed COO.
• A total of 1,020 warrants were used to subscribe for the same number of new ordinary shares in Catena Media during the 18th and final warrant exercise period. As of 30 September, the number of shares and voting rights in Catena Media had increased from 78,773,422 to 78,774,442 and share capital had risen to EUR 118,161.66.
• On 18 September, Theodore Bergqvist announced his intention to step down from his role as non-executive director with immediate effect.

• On 22 October, Catena Media announced further measures to streamline the company's content production and content marketing teams, as part of the transition to a leaner, product-led organisation. The programme will generate an estimated annual cost saving of EUR 2.2m, effective from 1 November 2024.
• On 22 October, Catena Media announced a non-cash impairment charge of EUR 40.0m in line with IAS 36. The charge relates to a writedown in the book value of specific sports and casino assets, following the transition to a product-led operating model.

CEO Manuel Stan comments

From a top-line perspective, Q3 was a challenging quarter in which we saw revenue decline by 33 percent, driven by continued underperformance in online sports betting. Lower revenue also reflected the ending of certain media partnerships and changes made to other partner agreements.

The flipside was that these cost-side measures lifted the adjusted EBITDA margin from 1 percent in July to 18 percent in September and double adjusted EBITDA quarter-over-quarter. Alongside this bottom-line improvement, we also saw a like-for-like increase in North American Casino revenue and incremental gains in our key organic search rankings, despite higher-than-usual volatility due to Google's core updates.

Right teams and strategy in place

In late October we completed the process of finalising our organisational structure, implementing a flatter content production function that creates a foundation for future growth led by a leaner, product-oriented organisation with clear accountability at all levels.

The streamlining of the content production and content marketing teams involved the difficult decision to part ways with 29 employees. This rightsizing will create closer alignment with our product goals and will generate an annual cost saving of around EUR 2.2m, starting in November.

We also completed our new executive management team with the recruitment of Liv Biesemans as Chief Legal & Compliance Officer. When Liv joins us on 1 January, all five members of the executive management team will be new in their roles.

With the right teams and strategic priorities in place and a clear focus on our core products, we now have a strong base to tackle our next challenge: delivering profitable growth.

Cleaning up the balance sheet

It is essential that our balance sheet reflects current realities. Alongside cost reductions, we also announced an impairment charge in October related to both sports and casino, primarily reflecting a decrease in the book value of the Lineups product acquired in May 2021. This balance sheet adjustment will help provide a stable and realistic financial base for the company as we move forward.

Despite consecutive quarters of disappointing results and low cash flow from operations, we have adequate cash reserves and incoming proceeds from previously divested assets to cover our current debt.

We have successfully negotiated an early release from certain long-term capitalised contracts. Although settling these impacted Q3 EBITDA negatively, the long-term outcome will be EUR 1.4m of savings.  We plan to use these savings to pay down debt and reduce the principal on the senior bond due in June 2025.

Stable underlying casino revenue in North America

In North American casino, the drop in revenue from EUR 8.6m to EUR 7.6m primarily reflected a recognition in Q3 2023 of EUR 1.3m of casino revenue related to prior quarters. Excluding this, casino revenue rose slightly during the period, maintaining the year-over-year trend observed in Q2.

A highlight for the quarter was the evolution of Bonus.com, one of our top-performing casino products, into a global asset. The Spanish-language version, www.bonus.com/es, launched in North America in Q2, started to rank well, and we launched www.bonus.com/mx in Mexico at the end of Q3. In November, we also launched https://www.bonus.com/br/ in Brazil. These rollouts illustrate our strategy to maximise the organic growth potential of our most authoritative brands in existing and new markets.

We made further progress incorporating social sweepstakes casino into most of our casino offerings. Social sweepstakes casino continues to form part of our long-term casino strategy, capitalising on the immediate revenue opportunity while also building our brands and databases in preparation for future regulation, especially as online casino gaming is yet to regulate in the majority of US states.

Further underperformance in sports

In sports betting, it was disappointing that we did not see the usual boost from the start of the NFL season in September. This reflected our underperformance as well as past misinvestment in the sports portfolio. While we are working hard to address these issues, we appreciate it will take some time to get back on track.

We have been operating at a loss in sports for an extended period due to products that have not been optimally managed. In addition, the organisation was scaled for a faster rate of new state launches than we have seen in recent periods.  We have adapted the organisation to these realities, and in Q3 continued to take actions to return to profit by adjusting the cost base.

In summary, while Q3 did not deliver the revenue growth we are striving for, I am pleased with our progress in improving margins and optimising the business. The steps we have taken to reduce costs, reset agreements and focus on core products give us a solid platform to build on. As we head into Q4, we remain focused on executing our strategy and returning to profitable growth.

Presentation of Catena Media's results

CEO Manuel Stan and CFO Michael Gerrow will present the Q3 2024 report in a combined webcast and teleconference on 7 November 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-q3-report-2024

Teleconference

Via teleconference you are able to ask questions verbally. If you wish to participate in the call, 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=50048940

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

Manuel Stan, CEO
Email: manuel.stan@catenamedia.com

Michael Gerrow, CFO
Email: michael.gerrow@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 7 November 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 150 people globally. The share (CTM) is listed on Nasdaq Stockholm Mid Cap. For further information see catenamedia.com.