ANNUAL REPORT 2023
In 2023, Catena Media continued its transformational journey towards a streamlined business, delivering high-quality leads in our core markets through data-driven and sophisticated technological solutions.
Comments from the Interim CEO
"For Catena Media, 2023 was a year of transformation and strategic recalibration. We accelerated the pivot towards a lean, agile organisation focused on leveraging our core strengths in the stable, regulated markets of the Americas. Sales of non-core assets allowed us to streamline the business and achieve net-debt-free status. This process created headroom for investments into technological and data-based innovations that will be foundational for a new phase in our history. We also continued the work of embedding a more predictable revenue model geared to delivering a sustainable income inflow for years to come and a return to growth in the second half of 2024."
Pierre Cadena, Interim CEO
Completing our strategic reVIEW
The completion in November 2023 of the strategic review originally announced by the board of directors In mid-2022 marks a new phase in our history – and our future. The strategic review will raise around EUR 76m once all assets sold have been fully paid. These proceeds are being used for debt reduction, technology investments and the implementation of a more balanced revenue model featuring a higher mix of revenue-share-based contracts and reduced dependence on cost-per-acquisition (CPA) deals. Advances in data and technology solutions are changing the landscape for affiliate marketing in online sports betting and casino gaming. We intend to be at the forefront of this process of change. Regulatory developments and increased demand for personalised content will raise barriers to entry and demand a greater focus on delivering value to both operators and consumers.
Our priorities for 2024
- Update technology by rolling out a new technical platform with improved scalability and future artificial intelligence (AI) integration
- Further evolve our minimum viable product (MVP) created under a strategic joint venture to develop a generative AI application dedicated to online sports betting and gaming affiliation
- Maintain top rankings through products that enrich the user experience, leveraging informative content that creates organic growth
- Expand our reach by growing our portfolio of partnerships with established news organisations to increase traffic volume in current and future markets
- Accelerate the expansion into new verticals to support business growth
2023 in numbers*
77
Revenue (EURm)
25
Adjusted EBITDA (EURm)
33%
Adjusted EBITDA margin
184
New depositing customers (thousands)
*Continuing operations exclude all assets divested between Q3 2022 and Q4 2023. These are classified as “discontinued operations” and comprise European grey-market performance marketing assets, AskGamblers and related brands, the Financial Trading segment, UK and Australian sports betting brands and Italian sports and casino assets.
HIGHLIGHTS OF 2023
Deeper expertise and a broader offer
TECH-DRIVEN INITIATIVES
Catena Media integrates technology to the core of its business. With the help of data-driven technology, we will advance the development of products that cater to the complex and changing needs of our end-users. In Q1 2024, the company successfully rolled out a single and coherent tech infrastructure, improving robustness and scalability.
PIONEERING ARTIFICIAL INTELLIGENCE
At Catena Media, we believe that AI constitutes a force that will empower our teams, and that, coupled with their knowledge, can help create more attractive content further driving our growth. During Q4 2023, the first steps to introducing artificial intelligence into the organisation were taken.
MULTICENTRIC ORGANISATION
We are transitioning into a multichannel business with a more diverse offering to sit 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.
A GROWING FOOTPRINT IN NORTH AMERICA*
*Includes 2024 launches of Vermont and North Carolina
North America
North America is Catena Media’s largest market, accounting for 87 percent of group revenue in 2023. During the year, group revenue North America decreased by 21 percent to EUR 67.1m (84.5). This decline was due to multiple factors, including lower marketing spending by online sportsbook and casino operators and our strategic transition to a more balanced revenue model, with a higher mix of revenue-share contracts than in the past. It also reflected an increase in competition from both traditional and non-traditional affiliates. Our largest state markets by revenue today are Michigan, New Jersey and Pennsylvania. We provide content for sports bettors and casino and poker players in each of these. Alongside state launches, Catena Media seeks to drive organic revenue growth in established states and provinces. We leverage our market- leading expertise in search engine optimisation to ensure we remain the go-to affiliate for would-be players interested in online sports book or casino.
Projected US online gross gaming
revenue 2023-2027¹
¹Source: Eilers & Krejcik Gaming Estimates, January 2023. Projections in 2023 USD.
Untapped potential in North America's online betting and gaming industry
Despite a relative lull in the launch calendar due to the approach of the 2024 US general election, four US states – Ohio, Massachusetts, Kentucky and Maine – legalised sports betting during the year, raising to 29 the number of US states and federal districts that allow regulated online sportsbooks. Several have also regulated casino gaming. In addition, the Canadian province of Ontario has legalised both online sports betting and casino gaming. The three most populous US states – California, Texas and Florida – have yet to approve online sports betting or casino gaming.
Market penetration¹
The charts display the current percentages of the adult population¹ in North America with access to legal online sports betting or casino. These figures highlight the market’s substantial untapped potential. Many states have yet to license these activities, indicating significant long-term growth opportunities.
¹Total adult population based on management’s assessment. For Canada, only Ontario.
Latin America
Latin America is a region of considerable long-term potential. Processes to legalise online sports betting and casino gaming are ongoing in a number of countries. These include the biggest market, Brazil, where the formal launch of legal sports betting came a step closer in 2023. During the year we continued to expand our footprint in regulating markets like Brazil as well as in already-regulated markets including Colombia and Argentina. User traffic in Latin America is growing fast, as is revenue – albeit from a low base. In 2023 we saw some of our smaller projects grow in visibility and traffic in Argentina and Mexico, in particular, thanks to strategic optimisation and the implementation of high-value content.
Asia-Pacific
Our two Japanese brands, CasinoOnline.jp and Slotsia, experienced different trajectories in 2023. At CasinoOnline, we conducted a comprehensive technical rebuild and diversification process that involved a full migration from the previous website. These measures, intended to deliver upgraded functionality and an enhanced user experience, naturally caused some disruption to the organisation and brand operations. Slotsia recorded strong growth in 2023, its acceleration confirming the ongoing appetite for casino gaming among Japanese consumers. Underlying player interest in the market remains robust and we are confident the fundamentals are in place to expand the Japanese business in 2024. Casino gaming is the primary focus, but we are also building a presence in esports, a dynamic market segment with high potential.
We believe all companies share an obligation to conduct themselves as good corporate citizens.
For us, this involves going beyond ensuring the sustainability of our own business model. It also means addressing the wider operating environment – the sector we operate in, our key stakeholders such as our employees, and the natural environment and its resources.
Our sustainability areas
Catena Media sustainability strategy is based on three pillars: responsible business, responsible employer and environmental responsibility.
SUSTAINABILITY HIGHLIGHTS 2023
New intake at Catena Academy
Catena Academy, our proprietary leadership development programme, continued in 2023. Catena Academy fosters team members’ expertise with the goal of retaining and upskilling internal talent to support the business. Over six months, a cohort of employees participates in a series of workshops, mentoring sessions and coaching opportunities to enhance their leadership abilities. The programme represents a significant investment in team development and underlines our commitment to promoting a culture of continuous learning and growth. In 2023, 10 employees completed the training.
CSRD
In anticipation of the the European Union’s forthcoming Corporate Sustainability Reporting Directive (CSRD), Catena Media has started preparing to meet the higher standards of sustainability reporting. We initiated a double materiality analysis at the end of 2023 to identify our material topics accoding to the new requirements.
This undertaking will ensure that our reporting framework will meet the new requirements and also assesses the impact of our operations on sustainability topics and how surroundings affect our business and what financial risks or opportunities this might entail.
Formation of the Responsible Gambling Affiliate Association (RGAA)
In a pioneering move to uphold responsible gambling practices, Catena Media joined industry peers in launching the Responsible Gambling Aff iliate Association (RGAA) on 8 November 2023. The RGAA aims to be a beacon for responsible advertising and consumer protection within the gambling affiliate sector.
This coalition aims to foster responsible gambling marketing, advocate for sensible regulation, and safeguard consumer interests, establishing a balanced environment for gambling affiliates to effectively contribute to the market. The initiative underscores our collective commitment to promoting safe gambling experiences and elevating standards across the affiliate marketing industry.
Mental Health Awareness Month
We empowered our employees throughout May 2023 for Mental Health Awareness Month to take steps toward prioritising their well-being (body, mind, and spirit). This was achieved through an internal “Step Into Spring” Challenge in which the team “walked” across the globe. As a company, we walked 42,724,521 steps throughout the month of May.
During May, we also held a series of mental health training events to help normalise and discuss stress and how we manage it. The sessions were hosted by a professional third party and reinforced our commitment to health and wellbeing.
Key figures from continuing operations*
| (EUR ’000) |
2023 |
2022 |
Change |
|---|---|---|---|
| Revenue | 76,748 | 98,610 | -22% |
| Adjusted EBITDA | 25,447 | 48,382 | -47% |
| Adjusted EBITDA margin (%) | 33 | 49 | -16pp |
| EBITDA | 23,590 | 46,762 | -50% |
| EBITDA margin (%) | 31 | 47 | -16pp |
| Operating cash flow | 19,656 | 46,026 | -57% |
| Net interest-bearing liabilities | 18,356 | 52,950 | -65% |
| NIBL/adjusted EBITDA multiple | 0.66 | 0.90 | -27% |
| Earnings per share before dilution (EUR) | (0.37) | 0.46 | - |
| Earnings per share after dilution (EUR) | (0.27) | 0.31 | - |
| New depositing customers (NDCs) | 184,257 | 228,601 | -19% |
*Continuing operations exclude all assets divested between Q3 2022 and Q4 2023. These are classified as “discontinued operations” and comprise European grey-market performance marketing assets, AskGamblers and related brands, the Financial Trading segment, UK and Australian sports betting brands and Italian sports and casino assets.