CATENA MEDIA INTERIM REPORT Q2 2016


SECOND QUARTER OF 2016
• Revenues totalled EUR 9.58 million (3.02), an increase of 217 percent compared
with the same quarter for the previous year and an increase of 28 percent when
compared to the previous quarter.
• Adjusted operating profit excluding non-recurring IPO expenses amounted to EUR
5.01 million (2.28), corresponding to an adjusted operating margin of 52 percent
(75). Operating profit increased to EUR 5.07 million (2.24) corresponding to an
operating margin of 53 percent (74).
• Profit before tax amounted to EUR 4.87 million (2.24) and excluding non
-recurring IPO expenses totalled EUR 4.94 million (2.28).
• New depositing customers (NDC) totalled 47,530 (15,326), an increase of 210
percent compared with the same quarter for the previous year and an increase of
47 percent when compared to the previous quarter.
• Earnings per share amounted to EUR 0.08913 (0.04755).

FIRST SIX MONTHS OF 2016
• Revenues totalled EUR 17.04 million (4.98), an increase of 242 percent
compared with the same period for the previous year.
• Adjusted operating profit excluding non-recurring IPO expenses amounted to EUR
9.17 million (3.46), corresponding to an adjusted operating margin of 54 percent
(70). Operating profit increased to EUR 8.25 million (3.42) corresponding to an
operating margin of 48 percent (69).
• Profit before tax amounted to EUR 8.70 million (3.43) and excluding non
-recurring IPO expenses totalled EUR 9.61 million (3.47).
• New depositing customers (NDC) totalled 79,851 (25,176), an increase of 217
percent compared with the same period for the previous year.
• Earnings per share amounted to EUR 0.16401 (0.07520).

SIGNIFICANT EVENTS DURING THE SECOND QUARTER
• On 3 April 2016, Catena Media acquired the acknowledged and highly regarded
affiliate website AskGamblers.com for a consideration of EUR 15 million. The
transaction is the largest in Catena Media’s history. AskGamblers operates one
of the markets’ most highly visited web portals for player reviews and rankings
of online casinos. The company also provides players with the unique opportunity
of trying online casino-related disputes via the portal. Players across Europe
utilise AskGamblers.com with the UK being the company’s largest market. The
transaction comprises all affiliate accounts, domains, mobile apps and social
media accounts.
• On 2 June 2016, Catena Media acquired the player accounts and domains of one
of the leading iGaming affiliates in Germany. The purchase price, maximised at
EUR 6.5 million, comprises an upfront payment of EUR 3.5 million and an earn
-out, based on the first-year revenue performance, of a maximum of EUR 3.0
million. To achieve the maximum earn-out, the seller needs to generate
substantial revenue growth.
• On 19 June 2016, with an effective date of 1 July 2016, Catena Media continued
to pave the way in becoming the leading iGaming lead generation group through
the acquisition of the player accounts and domains of a Swedish sportsbook
affiliate Spelbloggare.se. The purchase price amounted to EUR 2.50 million, with
an additional earn-out of a maximum of EUR 2.50 million. For the maximum earn
-out to be reached, the seller needs to generate substantial revenue growth.
• Catena Media has in recent weeks also launched its own sportsbook affiliate
product in the UK. Through this launch and the acquisition of Spelbloggare.se,
Catena Media made an entry into the sportsbook segment – a new vertical for the
Group.
• During the quarter, Catena Media also recruited key expertise to the Board of
Directors. Kathryn Moore Baker, with extensive experience in building successful
companies from an active board and Chairperson position, has taken over as
Chairperson, while Mathias Hermansson, CFO with MTG Group for many years, has
been elected to the Board. After the quarter, the management team was further
strengthened through the recruitment of Owe Laestadius (CTO). Owe Laestadius has
15 years of experience in the iGaming industry, mainly in leading engineering
roles at Betsson Group. Other recruitments were Anne Rhenman Eklund as Head of
IR/Communication, Louise Wendel as Head of Legal and Nikola Teofilovic as the
new General Manager for Serbia.
• Furthermore, Catena Media has begun preparations for a move from Nasdaq First
North Premiere to the Stockholm Stock Exchange’s main list (Mid Cap). The work
is proceeding according to plan.

CEO COMMENT

We grow bigger and stronger, day by day

Continued aggressive expansion and successful integration of acquisitions
generated strong growth and solid second quarter results.

During the second quarter of 2016, the focus has been on further expanding
Catena Media, both in terms of geographies and products. It has been an exciting
and eventful period that included several new acquisitions, a new venture in the
sportsbook segment, entry into the large German market and further reinforcement
of both the management team and the Board of Directors. The high growth rate
that has distinguished the company since its start in 2012 continues to be
evident, with the normal second quarter negative seasonal effect – mainly within
Paid revenue – only barely notable. In the second quarter, sales grew 217
percent compared to the same period in 2015 and 28 percent compared with the
first quarter this year.

From a market perspective, the second quarter mirrored the European Football
Championship, where casino was somewhat overshadowed by sports betting – a
vertical where we are currently, a small but fast-growing player. In Paid
revenue, particularly in sports betting, we have increased the amount of players
on revenue share giving an inherent delayed effect, with the result of our
efforts remaining to be seen moving forward. Regarding the development in the UK
(Brexit), with a weakening of the pound sterling, we have noted no impact on our
revenues but some positive effects on our operating profit.

Strategically important acquisitions
During the quarter, we made several strategic acquisitions that have broadened
Catena Media’s offering, and thus opened up substantial, new opportunities for
growth. The acquisition of AskGamblers.com, a major international brand with a
strong community, comprises our biggest acquisition to date and a strategically
important step for Catena Media. AskGamblers.com has a strong mobile platform
and creates considerable possibilities for us to build a development centre with
an attractive cost base. Furthermore, we have entered the sizeable sports
betting segment through the acquisition of Spelbloggare.se, which was
consolidated on the 1 July. We also launched our own sportsbook affiliate
product in the UK. In addition, we have acquired the essential assets of a
German affiliate company, which means that we have established ourselves in the
large and important German market. These initiatives have enabled us to further
strengthen our position as one of the leading players in lead generation in
iGaming. We are pleased to note that the acquisitions we have made during the
year have been integrated according to plan, with a clear revenue boost
generated by the Catena technical platform. We will continue to work toward our
vision through our proven model of acquisition with rapidly realised synergies
combined with organic expansion.

Growth ahead, top recruitments and preparation for the main list
The Catena Media growth story remains solid. We have a positive outlook for the
third quarter, with indications of growth in line with our financial targets. As
we grow, we also have an increasing need for talented and experienced people, as
well as additional capital, that can help Catena Media take advantage of the
opportunities ahead and to the next step in our development. We are therefore
pleased with the recently announced new recruitments to the Board and to
management. These appointments have an added dimension as Catena Media has begun
preparations for moving to the Stockholm Stock Exchange’s main list (Mid Cap) in
2017, for which the work is proceeding according to plan. In addition, we have
started review the possibility to raise capital through a bond issue to continue
to support the long term strategy of the Group.

Robert Andersson, CEO

Attachments

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