Ladies and gentlemen, welcome to the Net Gaming Europe Q4 Report 2019. Today, I'm pleased to present CEO Marcus Teilman and CFO Gustav Vadenbring. For the first part of this call, all participants will be in listen-only mode, and afterwards, there will be a question-and-answer session. Lucas, please begin.
Thank you very much. Good morning, everyone. My name is Marcus Teilman, and I'm the CEO of Net Gaming Europe. With me today, I have our CFO, Gustav Vadenbring. Looking at the agenda for today's presentation of the fourth quarter and for the full year, I will start off with giving new listeners and also the listeners that have been following us for some quarters now a brief introduction to what Net Gaming Europe is.
Then, I will go through some highlights that we had in the fourth quarter. I will then hand over to Gustav, who will go through the financials for the fourth quarter 2019. Then, I will make a summary of the full year and Q4, and then also give you an outlook, and we will round off this call and presentation with a Q&A session. Let's start with Net Gaming Europe in brief, and we'll move on to Slide four.
Net Gaming Europe is a lead generation company, and we are primarily active in the iGaming affiliation industry. Our core competence lies within sending traffic to our partners, just like Booking.com, Hotels.com, and Expedia Inc. is doing in the travel industry. We are doing that in the iGaming affiliation, where we guide and inspire our users and end consumers to make the right decisions when they are choosing operators to play on and different promotions.
Let's move on to the next Slide, Slide five. We are a global scalable company that has been operating for 17 years now. We are operating in over 30 countries, and we have over 20 nationalities in our office. During these 17 years, we have built up structured capital and know-how with focus on technology and data, which is hard to copy.
We have developed our in-house technical platform, which is scalable both with existing brands but also with new brands. T hanks to this technical platform, we are also increasing our efficiency and decreasing our time to market. With business intelligence and data-driven analysis, we can make informed decisions in which directions we want to take in different strategic questions.
Thanks to our core competence, our core competence lies within SEO, and together with the data analysis and business intelligence system, we are increasing the high-value leads. O f course, also to add high-quality content to our brand that we are operating. Thanks to this, again, we are delivering high-value leads to our partners, and we currently have over 200 active partners. A lso, the market entry barriers are growing thanks to our operational platform. Let's move on to the next Slide, please, Slide six.
We have three growth pillars, and our main growth pillar and our, let's say, our core market is, of course, the European online casino affiliation, where we have seen quite a significant increase in quite a significant growth if we look over the past few years. However, now in 2019, we have been affected by regulations, but also some strategic shifts that I will be coming back to later on in the presentation.
However, we still see a significant growth potential in the European online casino affiliation, and currently, we're having approximately 1.5% of the market share, but we're confident that we can, over time, increase this market share further. For the future, our second growth pillar is the U.S. iGaming affiliation market, where we are well positioned for the iGaming regulation that is happening now in the U.S. and will happen over the coming years.
We have PokerListings.com, which is a domain that was launched in 2003 already, so it has a long domain history, and we have several niche brands and strong domain names. I'll get back to you with more information about the U.S. market on the next Slide, and sports betting is the third growth pillar. It's sports betting both in Europe but also in the U.S. We have established and built up a sports betting operation now, and it is growing quite significantly.
Now, our sports betting vertical comprises 11% of our revenues, and it's growing. If we look at the iGaming market in general or in total, sports betting amounts to almost 50% of the total revenue, so for us, this is a natural step and also a natural step to make further investments in order to grow this sports betting business for the future.
Let's move on to the next Slide. If you look at our U.S. expansion strategy, I'd like to highlight some of our most important strategic points that we're seeing in the U.S. First of all, in order to grow on the U.S. market, and confident we will see, we will come back to growth on the U.S. market in 6 to 18 months, we will do the following. First of all, we will further develop PokerListings.com.
We will continue to monetize our 17 years of strong SEO and strong domain history. During the fourth quarter of 2019, we launched a casino section on PokerListings.com, and we will also launch a new betting section now in 2020 on PokerListings. We believe that this will also drive the growth going forward. In addition to PokerListings, we have several strong domain names.
We have already launched some of them on several markets, but we will continue to successively roll out new niche brands and also new products on the U.S. market. Like I said, we have developed our own technical platform, which allows us to scale our business and to roll out new brands, but also roll out new features within the iGaming industry, but especially for the U.S. market.
It's easy to, now with that foundation that we've set, to increase the efficiency and, like I said, also to decrease the time to market. F ourth thing, the fourth thing I'd like to highlight here is that we're also looking into strategic partnerships on the U.S. market or other types of joint ventures.
So all in all, these are the main activities that we're seeing that will help us to return to growth for the U.S. market within six to 18 months. Let's move on to the highlights and Slide nine. If we look at Q4 2019 highlights, as you know, 2019 as a whole was a challenging year, and I'm not at all pleased with our performance. However, I'd like to highlight some development that we're seeing from the previous quarter, meaning Q3 2019 compared with Q4 2019.
Revenues amounted to EUR 3,285,000, which was down 5% quarter on quarter. The organic growth, which is a comparison year on year, was down 31% Q4 2019 compared to Q4 2018, however, up 2 percentage units from last quarter, previous quarter. EBITDA amounted to EUR 1,915,000, which was up 3% from previous quarter. EBITDA margin was up from 54% in Q3 to 58% now in Q4.
Our EPS was down 47% from previous quarter. Gustav will come back to that later on in the presentation, but the EPS was mainly affected negatively by translation effects on our bonds from Swedish Krona to euros, and we're still operating with a high cash conversion. The cash conversion now in Q4 2019 was 83%, up 10 percentage units from Q3 previous quarter.
I'm happy to see that we continue to accumulate cash every month and quarter, and thanks to high operating margins and strong cash conversion. That's good and will give us more opportunities in the future. Let's move on to the next Slide. Significant events. During Q4, as I said, we relaunched PokerListings.com on this new technical platform. That was quite a massive work to migrate PokerListings to the new technical platform, and we also launched a new casino section.
Later on, now in 2020, we will launch a betting section that will enable further growth on PokerListings. We also launched CasinoGuideNJ.com in New Jersey in the U.S., and we also made a repurchase of our bonds at the nominal amount of SEK 67 million. That's thanks to our high cash conversion and that we are accumulating cash every month. I'll get back to you, or Gustav will get back to you later on in the presentation about our refinancing plans that we're currently having. After the quarter, we also launched BettingGuideNJ.com in New Jersey, which is another niche brand that we launched on the U.S. market, and that's thanks to our new technical and scalable platform. Let's move on to the next Slide, Slide 11.
So to summarize 2019, we have seen a challenging year both for us and for the industry with a lot of regulation effects that have affected several European markets. For us, we were also affected by two important strategic shifts, one from CPA to revenue share and phase-out of paid media and instead focus on our core business, which is SEO, driving traffic from organic search.
I'll get back to you with some more insights about this strategic shift from CPA to revenue share in the next Slide. We have also seen that our EBITDA level started to stabilize now in the second half of 2019. So although I'm not happy with the 2019 results, I'm still committed that we will return to growth in the future and also so that I also strongly believe that we will increase our EBITDA in 2020 compared to 2019.
Important step for us is also that we're seeing strong growth for our betting vertical, now amounting to 11% of our revenues in Q4 2019. That was an important strategic initiative that we did now in 2019, and I'm happy to see that we are now growing rapidly on the betting vertical. We have implemented our technical scalable platform, which will be important for us in the future for future growth, both when it comes to existing brands, to roll out new features, to continue with geographical expansion on existing brands, or also launch new brands. So this new technical platform will be key for us in the future, and like I already mentioned, the relaunch of PokerListings.com on this new technical platform with a new design and with this new casino section. That's the summary of 2019. Let's move on to the next Slide, Slide 12.
If we look at our full-year revenue development, we saw a decrease in our total revenues from EUR 18.6 million to EUR 14.3 million, which is a decline of 23% year on year. We have made our own analysis, and that shows that the strategic shift that we ourselves set to move towards a higher share of revenue share, where we see now a revenue share amounted to 64% in the fourth quarter of 2019 compared to 35% in the fourth quarter of 2018.
Our analysis shows that this shift from CPA to rev share led to a drop or decrease in revenues of approximately 8%, or corresponding to around EUR 1.5 million. On top of this, we also made this strategic shift that we stopped with paid media and instead focused more on SEO, which is our core competence and to drive organic traffic through search results.
And that was a decline that led to a decline in total revenues by 2.5% year on year, approximately EUR 400,000-EUR 500,000. So these were two important strategic shifts that we did. So out of the 23%, approximately 12.5% came from these strategic shifts that we did. With this, I'd like to hand over to Gustav Vadenbring, who will go through the financials.
Thank you. And we switch to Slide 14, please. The graph on the Page illustrates the quarter-on-quarter financial development during 2019 and the correlation to our strategic shifts. In the revenue graph to the left, to the lower left, we see clearly that our revenue started to be impacted in Q1 2019.
In Q1 2019, the regulation effects in Europe impacted industry, and also in Q1 2019 was the quarter when paid media was fully phased out simultaneously as the strategic shift from the CPA rev share started to increase quarter-on-quarter from 35% to 64%, as illustrated in the graph to the lower right. So this is clearly linked together.
Our revenues have consequently stabilized in Q2 to Q4 2019 simultaneously as EBITDA stabilized around EUR 1.9 million as a new foundation for growth. In Q4 2019, we see an uptake in EBITDA margin to 58%, which is a result of working continuously and very closely with our cost base. We'll switch to Page 15. We see a continued diversification of our revenues by vertical, and we are pleased to see that betting is gaining ground, reaching 11% in Q4 2019.
The strong betting development is mainly related to the Nordics, Europe, and rest of the world, while these region shares increasing relation-wise. We look on the NDCs that depositing customers have stabilized also in the second half of 2019. The sequential NDC decrease, which is somewhat decreased in Q4 compared to Q3, is related to that Q3 was very strong within sports betting, mainly related to the start of the Premier League. We switch to Slide 16.
Revenues declined 23% in 2019, excluding strategic shifts. Excluding strategic shifts, revenues would have declined by 12.5%, driven by regulation effects. 2019 was a very challenging year for us and the industry, and it's not really comparative year on year, while we compare in this presentation also to some extent quarter-on-quarter. Relating to our cost base, our cost base mainly comprises other external costs and personnel costs.
It is mainly within main personnel costs we have decreased quarter-on-quarter, which results in our EBITDA margin increasing to approximately 58% in Q4. Our financial net quarter-on-quarter is impacted by translation effects related to the revaluation of our bond from SEK to euro, as Marcus mentioned at the beginning of the presentation. I would like to highlight two items impacting the financial net in Q4.
There's a positive impact of EUR 306,000 related to the redemptions of bonds in Q4 2019. There's also a negative impact related to the revaluation of the bond of EUR 673,000 in Q4. Switch to Page 17. We show a continued strong cash conversion and a business model that enables us to generate cash rapidly. However, the KPI trend, net debt to EBITDA, increased due to the decrease of EBITDA year on year, as you can see in the graph.
Regarding the bond, it matures in September 2020, and the refinance process has been initiated where legal and financial advisors have been appointed by the board of directors. In Q4 2019, repurchases of bond have been done thanks to our strong cash generation, and this has not impacted the ratio net debt to EBITDA. Switch to Page 18.
As you can see in the table, we continue to deliver a very strong and stable operating cash flow through our business model, reaching EUR 1,765,000 in Q4 2019. We also operate with a limited need of tying up capital in net working capital and a very limited CapEx, which enables us to convert 83% of our EBITDA to cash, and this is enabling us to deliver very fast. Move to the balance sheet on Page 19. We operate also with our balance sheet, which mainly comprises intangible assets, equity, and borrowings.
The equity ratio is continuing to be strengthened quarter-on-quarter, now reaching 45% in Q4 2019. The goodwill is related mainly to the Highlight Media Group acquisition in 2016, and what we can conclude as well is that we operate with a net working capital level around 8%-10%, which is relatively low. Switch to Page 20. Regarding our financial targets, they remain unchanged, and they should be reflected over a midterm period, as we communicated earlier, meaning on a two to three years' time. Leave over to Marcus.
Thank you, Gustav, and let's move on to summary and outlook on Page 22. So to summarize Q4 2019 and also 2019 as a whole, we have seen the revenue development impacted by, of course, regulatory changes in the European landscape, but also that we did these important strategic shifts.
The largest impact was the shift from 35% rev share to 64% rev share year on year. Q4 itself was in line with our expectations and also in line with the previous quarter where we have stabilized our EBITDA level. We have also stabilized our NDC development now during the second half of 2019. In the fourth quarter, we also launched a new operational organization with a more focus on our core brands and a more specific approach on our most best-performing brands and a more forward-looking organization. We have made some relaunches of our core brands on a new technical platform, one being PokerListings, but we've also made several other launches. I believe that all these launches will have a good effect on our stability and growth in 2020 as a whole.
Betting reached an all-time high in revenues and also in share of our total revenues, now comprising 11% of our total revenues. I think this is really important now for the future, especially now in 2020 when we see the Euros 2020 coming up and also the Olympics. Another thing that I'd like to highlight here and summarize Q4 2019 is that we're still operating with a strong cash conversion and a strong cash position that enabled repurchase of our bonds, where we repurchased bonds at a nominal amount of 67 million SEK now in the fourth quarter. Let's move on to Slide 23 and the outlook for 2020 and going forward. We will continue to execute on our growth plan within betting, odds, and casino in Europe.
Casino in Europe is our core market where we have significant growth potential, but we will continue to prioritize organic growth on existing markets. U.S. and betting is our future, and important steps to grow on both these two growth pillars is the launch of PokerListings on the new technical platform, and we will also launch a new betting section now in 2020. We will continue to roll out new brands on the U.S. market. That will help us to grow on the long term once new markets and states will become regulated. I'm also happy to announce, which Gustav already told you about, that we have engaged financial and legal advisors in order to evaluate refinancing options.
Our existing bonds mature in September 2020, so we have started this work in good advance, and we are exploring different refinancing options, and we will come back with more information about this later on during this year. Going forward, I'm not at all happy with the performance, like I said, in 2019. However, I'm really committed that we will return to growth in 2020. I also believe that we will increase our EBITDA in 2020 compared to 2019, as we've seen now our EBITDA in Q4 and the second half of 2019 stabilizing. What I can say is that we will continue to operate the company with high margin and strong cash conversion, as we've done during 2019 and in the previous quarters. With that, I'd like to hand over to the operator for a Q&A session. Thank you.
Ladies and gentlemen, if you have an audio question for the speakers, please press zero one on your telephone keypad and you will enter the queue. After you're announced, please ask your question. One moment, please, for the first question. We haven't received any audio questions so far. So once again, as a reminder, if you would like to ask a question via the telephone, please press zero one on your telephone keypad. There are no questions in the teleconference, so I hand back to the speakers.
Thank you. I'd like to thank everyone for listening in. Like I said, we have stabilized our EBITDA levels in the second half of 2019 now and in the fourth quarter of 2019. We're still operating the company with a high cash generation, which is important now going forward in 2020.
I'm committed to deliver growth in 2020 for the full year compared with 2019, and I really believe that we will increase our EBITDA levels now in 2020. With that, I'd like to thank everyone for listening in, and we'll get back to you later on this year with more information about our refinancing plan. Thank you.
Ladies and gentlemen, thank you for your attendance. This call has been concluded.