Good morning. My name is Mathias Lundberg , analyst at SEB, I wish you a warm welcome to Catena Media's Result Presentation for the Fourth Quarter of 2018. Presenting today will be CEO Per Hellberg and Interim CFO Erik Edeen. The floor is yours.
Thank you very much. Once again, a very good morning to this Year-end 2018 Presentation. As introduced, myself is going to present, but also our Interim CFO, Erik Edeen, who I thought should be given the opportunity to present himself a bit. Please go ahead.
Good morning. Entering the role as Interim CFO for Catena Media here at the 7th of January. Prior to that, I've been working as a consultant for about 12 years, primarily within the Big Four Deloitte, I have quite a broad experience for driving global projects as well as holding several Interim CFO positions over the years in public traded and private-owned companies.
After 30 days on board, he of course knows everything about the company and this exciting industry. Let's go into the numbers. Numbers that I believe a lot of companies will be very happy to see, not us. We had higher expectations about this quarter, there are particularly one thing in three different versions that happened to the business that we all believe will have no long-term impact to the business, it impacted the quarter. Once running through the financials in general, I will go in and spend some time in that to explain to you why it impacted us and how we see that we have taken actions not for it to follow going forward. As you see, we're growing the business. Of course, the least growth number here was the profit, but still EUR 12 million.
We have a really interesting EPS growth number, but also here is because we have done some adjustments to the bond value, which Erik will tell you later. Still it's growing here. For those who are new into this broadcast and maybe in this room, a bit about us. The company is a bit more than six years old. We are about 360 employees now in a lot of different locations. Those locations have been built up during the year because of a lot of acquisitions, but also strategically positions based on future growth opportunities. We are, as most of you know, listed on the Nasdaq Stockholm Stock Exchange at the Mid Cap. As we mentioned, we have a lot of locations. I think the core locations currently is, of course, Malta, where we have the headquarters.
We have a small office here in Sweden to represent us well into the stock exchange. Also big site currently being spoken a lot about is our efforts in the U.S., which operates from Las Vegas, and sports, mainly driven from our U.K. office. Interesting, we mention a bit about Japan as well because we see good trends in that part of the world, which we invested a bit in as well to start to grow. The business model, complex site, basically what we do as a company is that we, via different search engines, connect with customers who want to have information in order to make some kind of purchase decisions. They have a question about something, they want to be helped to create content to make a decision. That's what we do.
When people search something on Google, where can I find a casino I can trust? I want to learn how to trade stocks, et cetera. You do that search, and you immediately are given a lot of websites to click at. Our job is to run those sites and have the top position, so people click on our sites to get helped. On that site, we promote a lot of offers from various business partners, and if we, by the content on the site, intrigue the customer to click one of those links, and the customer starts spending money at that operator or a customer of ours, we get paid by them for sourcing that lead to them. We do all the work. The marketing manager then on the other side, only pay for a new customer once they become a customer and spend money.
It's like the ideal work of a marketing responsible because we do all the job for them. Doing this well, you have a lot of traffic, meaning that not only the fact we can take charge for and charge for the lead as such, but today we also start to do more and more of our business based on traditional advertising on our sites based because of the high volume. It's a very efficient model. We estimate that about maybe 30% of most gaming operators there have the traffic inflow arriving from affiliation. In U.S., much less yet, but are definitely programmed to be so. We run today about 1,200 brands globally, but it's about 30 remaining the bulk of the business, and those are the ones that we're building a lot around. We're using all the ones as supporting brands to the big ones.
We serve more than 1,000 different clients out there with traffic every month. It's a quite complex operation, but rightly managed over time, you can actually run a very efficient business out of this, which is what we're trying to do every day. The people running this business are the ones you see here for myself and Erik Edeen, also we have dedicated resources to look into business development and especially acquisitions. We have IR, which is with us today, plays a big role. We have operations that are running all our business into the group, of course, we have a lot of legal activities because we want to stay compliant, we want to operate in regulated markets, that means that they have a lot of legal team and expertise on board to make sure that we are compliant with rules and regulations.
With that said, I think I should hand over to Erik Edeen, who will go through the main financing topics of the company. I will come back with the business update, where I dive in a bit more into the actions and happenings of Q4, also a bit future-looking. Okay?
Thank you. Looking into the revenue growth and revenue development for the full year 2018, we ended at EUR 105 million in revenue, a year-over-year growth of 55%. Looking into the quarter isolated, we ended up with EUR 27.3 million in revenue, indicating a growth of 36% year-over-year. Looking into the numbers, more into details, we had a search revenue of EUR 24 million, slight increase from the third quarter, as well as an increase in subscription in the quarter, a small decline in paid revenue related to less spend within PPC. Breaking down into our revenue streams, we continued to have a good performance in the U.S. according to plan. We also increased the subscription in the quarter.
As you can see here, the breakdown, the split between Revenue Share, CPA, and flat fees, we had about 10% in flat fees, 39% in cost per acquisition, and 49% in the Revenue Share, as well as a small piece of subscription increasing from 1%-2% in the fourth quarter compared to the third quarter. Looking down into our search revenue, in particular, we grew that by EUR 7 million between the third and the fourth quarter, a year-over-year increase of 41%. Our organic growth traditionally rose to 11% and 15% over the year. We also indicate our growth, including acquisitions, ending up at 14.8% in the quarter. As Per said, we prefer to operate on regulated markets. We rose the percentage to 76% during the quarter, as Sweden is not yet in this number. The market, as you know, became regulated here at January 1st, 2019.
Moving forward, we expect this number to increase in the coming quarters. One of our key figures indicators we look at is new depositing customers. We were, during the quarter, focusing at increasing the value, the revenue per NDC. What you can see here in the graph down on the left-hand side is the pure CPA revenue per NDC. For those of you who followed us during the Capital Markets Day in the third quarter, you could see that we rose total revenue per NDC to EUR 200. The same number, as you can calculate in the material, rose to EUR 213 per NDC in the fourth quarter. We were really focusing at increasing revenue per NDC. The NDC, as such, in total declined somewhat during the quarter, ended up at 128,000, approximately. Continue to look at our EBITDA development in terms of percent.
In the fourth quarter, we came out with 43.8%, going from a margin of 49.1%. As we said during the third quarter, we had a one-time payment of EUR 0.5 million in that quarter, affecting the Q3 percentage positively. Taking away that adjustment, we have added a dotted line just to indicate the actual change in the quarter looking at the EBITDA. We came up with 3.4% as the deviation between the two quarters, primarily explained by a small decrease in pay-per-click costs. We had increased personnel costs due to the building of infrastructure in our financial vertical in the U.S. market. Looking at our other operating expenses, the increase, which is quite small, looking at the exact numbers, were primarily driven by sales and marketing activities related to our financial vertical.
I will also say that looking into this number, we had increased provision in the fourth quarter for bonuses, and according to new regulations for bad debts according to IFRS, affecting with approximately EUR 0.4 million in the quarter isolated. Moving forward to the movement year-over-year, looking at the development from 2017 to 2018. We went from a margin of 53% to 48%, partly explained by the happenings in Q4. Adding up as well, looking at especially, I think, the operating expenses, has been some large focus during the year to really build our infrastructure and build our future related to the financial vertical and the U.S. market, where we made some major investments during the year. Briefly looking into our balance sheet, total assets amounted to about EUR 379 million year-end 2018. Primarily consists of intangible assets related to acquisitions on the asset side.
Looking into the debt side, we have our borrowings, we have the bond, currently EUR 144 million. During Q4, December, we made a fair value assessment of the bond, resulting in an effect of EUR 5.25 million in fair value adjustment on the bond affecting EPS positively. We also have up to approximately 50% that can be settled when it comes to amounts committed in acquisitions settled in shares, which means we can choose whether we prefer to pay by shares or cash. Looking at our operating cash flow, it remained positive, and we're really strong over the year. We had a positive cash flow of EUR 40.7 million in 2018. We have, from a financing point of view, our revolver, which we haven't used so far, and we have our unsecured bond facility, where we currently utilize EUR 150 million out of a framework of EUR 250 million.
Going a little bit further, looking into our vertical performance in the quarter, we ended up at 6% of revenue in our financial vertical, still building that one, and had a revenue of EUR 1.8 million, resulting in an EBITDA of EUR 0.3 million in the quarter. Looking at our iGaming segment, casino consisted of 57% and sports and betting of 37% in the quarter, giving us a revenue of EUR 25.6 million, resulting in an EBITDA of EUR 11.6 million in the quarter.
Looking below EBITDA on our financial costs, we did, as I said, have a quite strongly positive effect from the fair value of the bond, which is not affecting the cash flow. However, it gives a positive effect on the EPS, which grew with 83% in the quarter. Other major numbers below the EBITDA is, of course, the interest on the borrowings, primarily related to the bond. Over to you, Per.
Thank you. That was the summary. The question is, what was around there to create these numbers? I guess that most people want to know, A, what happened to the revenue? Of course, with the cost basis, Erik explained you have an EBITDA coming out of that. Let's focus now a bit on the quarter itself, what happened to the revenue immediately, we look into actions we have done in the quarter, some actions we do going forward. A big part of the reduction from where we wanted to be relates to U.K. in two ways. It relates to U.K. in form of that U.K. market as such, but also operators located in the U.K. having a worldwide presence.
First of the thing was that we saw a reduced demand in October 2018, from one of the big operators we have, because they have spent too much money during the World Cup, they held back on investments into affiliation in October. It restarted again in November, it is now doing full speed. That is obviously not a long-term issue. Once again, reliability on operators like that could potentially going forward, mean that you have swings between the quarters. What we have done, as always, we work with long time, is to make sure that we don't put too much of our revenues into one big operator. We've been working with that quite some while to start to spread that kind of revenue allocation per operator, not to have these impacts going forward. That is work we continuously do.
As you know, we're also building up new markets with new operators, that also heals a bit itself. Summary, it will not have a continuous impact into Q1. Other thing, operator churn. I think everybody following this industry know that there's a lot of discussions about U.K. and the tightened regulations there. It become more difficult for people to conduct the business they used to do. I think the regulations are good because it's for the best of the consumer. For some operators, this becomes too difficult for them to follow and manage, they decide to focus on other markets. We had a couple of smaller ones that decided to leave the U.K. market in the quarter. Of course, it has an immediate impact, over time, we can renegotiate deal with other operators and send the traffic to them instead.
We don't believe that is an ongoing issue either. I think the last thing is what I think is most significant, and that is the cost for pay-per-click advertising and what that means. We are also in some part, about 10%-15% of our business are generated by advertising we buy on Google. We buy a search word, we transform it into lead, and then we sell it on. To do the business there, we need a certain margin in between. If the price of this cost goes up too much, we cannot do the margin, hence we cannot sell that NDC to someone and gain money on it.
We saw in Q4 a quite drastic increase about the cost for search words, especially in the U.K., in sports, triggered by a lot of the sports event there, and at the same time triggered by that a lot of operators cannot do advertising in a lot of other marketing channels. They started to buy more digital advertising, which on the long term is fantastic news because we sell digital marketing. If cost and demand requirements goes up, we can do a better business. In Q4, when it holds back, we had to deduct that from our revenue because we don't want to sell traffic with loss. Let me explain. Therefore, we believe that that is probably going to continue in heavily regulated markets that been a long, long time. I think U.K. is an example.
You can probably think that the same will happen in Sweden in the long term going forward, et cetera. In U.K. for sure. Our future look is that this will happen also in Q1. Therefore, we start to reprogram our investments to other markets and/or other business verticals, not to be dependent on that. We still believe U.K. is going to be a growing business for us, but not with the same trend as we've seen previously. About PPC, because it's something people hear about, but do you really know how it works? I put this slide together for this. PPC is when you put the search word, you have four slots under the search word field that says Ad.
If you're not really good on what we trying to do to have sites ranking very good, you can buy yourself in front of the queue and buy an ad. That's what you pay for. You just pay to be there on a certain word. If you pay casino, you can buy a spot on top spot there. It's a bidding on those. It's a real-time bidding. The one pays the highest price gets the top spot. In Q4, the prices were up. What happens is that it is not good for your business, because if you look here, typically, if we pay EUR 2 for one click, and we can convert 1% into lead, the cost per lead is EUR 200. Simple math. If we can then sell that click for EUR 250, we can have a margin between. If cost goes up, no margin left.
If cost goes up above EUR 250, we lose money. My team is instructed that as long as you can have margin, spend as much as you can. If you don't have the margin, go along with the threshold, cut immediately because no reason setting fire to money. Traditionally in U.K., a lot of acquisitions we have done has been based on traffic generated by pay per click. Meaning if it shut off, they have very little traditional search traffic coming in. We must start to rebuild that and reprogram so those sites will not be solely dependent on pay per click. When it hits, it hits hard. Now we're starting to make them rank without having to pay for it. This is exactly what happened. With no margin, we hold back investments.
We look if we can spend that money elsewhere to mitigate the losses and going forward. That's what we do, and you see how this impact work. On the long run, this is good news, because cost for marketing, digital marketing goes up every day. If in that field, you can also charge more and more over time for your traffic. Obviously had a hit on Q4. Another thing people ask me a lot about is, "What about U.S.?" If you try to summarize it, yes, we did a higher revenue in Q4 than Q3, but bear in mind, Q3 was one month, Q4 was three months. Each individual month in Q4 had a lower revenue for us than September had. That is something that we planned to happen, because in September, we know it kicked off.
It was the NFL kickoff, et cetera. Traditionally in Q4, there are less sports events going on in the U.S. More or less, almost exactly on where we programmed Q4 to be, we came in. For us, U.S. delivered exactly what we planned for. Here's the interesting part, is one state, there's actually two states up and running, but you cannot make an affiliation business in West Virginia right now. In New York, you can. We expect that so far, about 5% of all new customers that are generated in sports betting comes from affiliation. Reason why most operators on board so far has been the so-called DFS, digital fantasy sports operators, that has a big database that they convert from.
We see that a lot of more operators coming into the market that are traditional operators that don't have that database of customers. They will then start to acquire traffic from traditional means. That 5% should be compared with a traditional European market of maybe 25%-35%. As market grows, established, more operators come in, more fight for the same customer, you will have increased ratio of affiliation going forward. We have a team in place. Q3, we had 18 people. We're up to 24. The reason why is that we can see there are things happening in more states. We're preparing the sites to be ready for that. Once they open up, we can immediately go in there.
We're also spending more time on creating content like video productions, that stuff, to make sure that we drive a lot of traffic into our sites in that sense. The core focus is continue to optimizing the sites we have that four states are about to launch, but also make sure that the ones we have up and running are doing the best they possibly can. For us, U.S. is exactly according to plan. A lot of questions I get is about, what do you think about new states to come? I prepared this for you. It's a lot of bars and stuff here, but what I wanted to mention here is that this is how we see U.S. On the top, you have casino. It says forecasted.
That means that when we have planned our financial forecast, we have based it on states that we have some kind of knowledge about the day we'll go live. When we did that, Delaware was up and running. It's a very small state, but it's still possible. We know that New York is open, actually in Q3. That is live now for the entire period. We know that Pennsylvania will open. Some say February, some say May, but not too much advance. We say that during Q2, it will go up. This we knew, and this we have in our numbers. For sports betting, same thing there. Only difference there is that we have SMS in West Virginia up and running, but otherwise the same. That is the bulk of our financial forecasting. There are things, what we call non-forecasted.
We know the bill has been passed. They're pushing to run it, but when it happens, it's very unsure. We know that most likely Rhode Island will pop up first. Timing, we don't know yet. We know that Michigan will be fourth, but if it happens in the beginning of 2020 or in the end, difficult, but definitely, and we believe. We have Mississippi also, but we have New York. New York is pushing to have income from sports betting already in 2019, but it's a bit undefined what to do with online. It's reasonable to think that any of these states definitely will pop up during 2020, and those are this incremental thing we cannot plan at this stage, but most likely to happen.
If you look at this, otherwise it will mean that from Q2 this year, for six quarters, not one single state will open up, and we don't believe that. We don't know when, and we don't know what state. The most important thing is the lead time, because you pass a bill. Then the state needs to tell casinos, "You should now issue licenses." Licenses should be issued. Operators should take the licenses, and operators should then launch into the market. There's a lead time, and therefore, we don't know those lead times. We don't want to put them in our forecast yet, but things will happen. I think the bottom thing here, those are things that nobody thought even be a discussion now, but a lot of states pushing to try to get the bills up and running.
There is positive momentum, but it's hard to set the timing for it, we will basically get helped. Remember, most of the growth in U.S. is still projected to happen after 2020, still we can see a nice potential increase even before that. We are very prepared. We have the team, the sites to run all of this that you see in front of you here. What obstacles can hinder us? There's been a discussion lately, that is about various kind of legislative issues in U.S., especially this called Wire Act, which is more or less a 50-year-old act that has been around. Our take on this with our advisors is that as we are structured now and how we conduct business in what verticals on a long-term base, this will not have an impact on our business.
This Wire Act is predominantly there to prevent gambling between states. As we, as you see, are rolling out by state and controlling very much that we don't breach local legislations by selling to states behind, we are controlled by that. Poker, difficult because they used to pool pots between a lot of players in the country, big lottery and design. Big lotteries needs a lot of people. Your jackpot in EUR compared with lotto, the normal fund that you can win is much larger because more countries are included. That's how you build pools across states. The Wire Act is there to prevent this. We don't run big pool games. We don't run big jackpots. We don't do that stuff. For our case, we don't believe that is an issue. What could have an issue quickly is on payment processing.
Can you ensure that the money stays within the states all the time? Not every payment provider will be able to do that, some will definitely do that. All in all, we don't believe that this poses any kind of threat to our long-term strategy in the U.S. This summer, we continue unchanged. We are positive about the development there. We respect the timing to roll out and what is needed to do so, it's definitely going to help us to grow this company substantially going forward. Focus the past six months, what have we done? A bit text here for those who cannot join so they can read later. Basically, we've been focusing on a couple of things. A, we want to strengthen and improve our core brands. Nothing new, just to let you know a couple of things.
Look at the brand AskGamblers. We have opportunity to really put a lot of efforts in. They almost double the business in run rate base in one year, that's quite significant amount of money. Twelve months ago, we launched in Germany with just a skeleton of the big site. All the core benefits of AskGamblers, which is the big consumer forum and that stuff, we could not launch due to technical issues. Still it's the third largest traffic generator today. Soon we will be able to launch the entire site and therefore we will also benefit from that big traffic to convert into customers. U.S. is now the second largest traffic generator, almost all traffic coming from states that are not regulated. That helps also when states regulate, we will immediately have a boost traffic from there.
That is by hardly not doing that much work yet. It's there, it's great traffic, and we use it for link users to other sites we have to make them grow. JohnSlots, a lot of questions I received from them about the traffic there. Let me tell you one thing, traffic to the site and revenue does not correlate. Depends all what kind of search word you want to have. During the summer, we got update from Google where they changed some algorithms. Suddenly, we were starting to hit on search word that create a lot of traffic, but very difficult to convert business from, like free spins, et cetera. In October, it was another change from Google, brought down our figures a lot, back to levels, but also hit us in a bit.
Those are now adjusted, we're now back to levels where we can grow the traffic again. This sounds alarming to people, but that's our daily life. It happens every day to sites as soon as Google does something. That is what it's about, being an operator living on traffic on Google. You need to play with their rules. If something happen, you need to reprogram and sort it. Okay, also some interesting example. Slotsia, it's a brand we have. We launched it some time ago in Japan, starting to work on it. Now we're ready, and we could see in queue for a quite nice growth from that brand. It's a brand we run centrally, but we apply local knowledge and content and local sales team, and it starts to boom quickly.
Historically, we haven't had that because we have spent all the time on integrating acquisitions. Now we do, and immediately we see positive results. Financial vertical, we mentioned many times, but remember when we bought them, the key peak of revenues in all of them was cryptocurrency and binary, which we had to cut. Crypto went down, binary we cannot do. We've now been spending the six months to restructure and reprogram, and now we started to see that the sites we want to focus on are starting now to deliver. We are looking for a positive outcome there. We talked about cost efficiency. We talked about things going forward. To do that, you need efficient systems. Operating 1,200 brands requires a lot of people, especially if you need to look into every brand every day to make sure that it is optimized for Google.
You cannot do that. You cannot sit and position different operators' offers to 1,200 different brands every day. It's just too much. I believe that AskGamblers have more than 2,000 sites in itself that we need to watch, pages, it becomes quite a big thing. What you want to have is one control tower with one button you push and everything updates. That is what we call Catena Press. That's a system that holds things together so that we do an update, we can do it on as many sites as possibly can. We've been working a lot to make that happen, and it's almost complete now. What we do is that we integrated larger sites into that all the time so we can control everything from one thing.
Means that we need less people to run these sites, and we can focus on what we have to improve the quality and thereby growing. That is a lot of work we have done. As Erik showed, we've been working very hard to make sure that we don't send traffic through to the operators that won't generate revenue or too low revenue, that we send indices through that will generate good stuff. As you know, we have done no acquisitions. We grow what we have and make better that, and then we acquire when we believe we have something really good to acquire further on. Of course, geographic U.S., no news about that. If we've done that, what will then be the focus going forward for the coming quarter and six months?
If we worked a lot to have a system that can manage more brands easily, and if we worked a lot to push people in the right way to start to grow, it's really time now to start launching these brands into more markets. To do that, we want to have a clear structure in the company. We're now starting to change to be more vertical-focused company, meaning that we have a lot of people focusing on the sports vertical only and think about ROI and product management for that vertical. Same thing for casino, same thing for finance. It's been a little bit unstructured based on the acquisitions we made, because most acquisitions when we bring them in, we cannot touch them until the earn-out is done.
We're coming to end of that now, and now we can start to build those verticals to really have very good ROI management within them. That is something we're structuring. We're not planning to change much roles. It's just the way we operate and report so we can be more clear about where to deploy most cash to for best ROI. I think when it comes to brands, as I mentioned, the big brands we have, we want to make sure that they can scale into any market, and that work continues. AskGamblers, JohnSlots, LeapRate, all these and a lot of others are now being built so we can easily scale them into a lot of different markets. In terms of tech, interesting thing that will be launched here in the first half, and that is what we call a dynamic CMS.
CMS stands for content management system. It's the thing we put up to make sure that you see something on the webpage. If I have a customer coming into my webpage that is a customer of a casino operator, today, he might click on that operator again, and as we already established that customer, we won't get paid. This system is more that if the customer comes in, we check his history, and offers that are not interested for, the system automatically moves away and only show the things that the customer will be interested of. In that case, we can maximize the revenue per customer. It basically mean a site that adjusts it after you to only show you what is best. I think that will, in the long run, helps also to increase the margin. To do so, you need data.
To have data, we make sure that we invest in more business intelligence stuff to run that and structure that. That is also on the way. I think in that case, we have a lot of interesting things going on. When it comes to then other things like cost, funneling, and acquisitions, I think that when it comes to funnel, we continue. When it comes to acquisitions, the focus is unchanged. We sit here, we repair the debt levels, and when we see something good, we will acquire. We will do so definitely within the period until we should hit our large targets. Geographic-wise, we are definitely focused on the U.S., but also the international expansion. Coming back to cost efficiency, what we have said is that the past three years, the company has reduced its margin. It is because of two things.
A, cost has increased. B, sportsbook has taken a larger part of the business, and sportsbook traditionally have less margin than casino. That's how it works. Sportsbook, you could say cut it because increase margin, but Sportsbook global is a much larger business than casino, we want to have that in because it generates profit. We won't have that in, but it increased. On the other hand, our U.S. business is having much higher margins, we believe we can mitigate and maintain a good margin from the general revenue. What can we do about costs? It is simple. If we don't need to spend a lot of money on bringing people on board in acquisitions, we can take time now and make sure that we focus on what we have with the staff we have.
We obviously see a journey where this year is going to change from a decline in general cost efficiency to improve it. We're going to turn around and starting now in the first half to make sure that we settle down, we don't increase costs as much as before, slow it down to make sure the margin is starting to repair to the better. That's the core plan for this year. Build with what you have and invest where you can have immediate impact to improve your bottom line. That's the stage. That, we explained in the Capital Markets Day, it doesn't change here. One thing then is it's a lot of actions, but another thing we said about is that about our targets going forward, about the EUR 100 million target, a key parameter there is, A, how much can U.S. grow?
I think we give you a nice overview that there's a potential to grow a lot. Can we acquire things? Yeah. With this cash generation, what we do when growing organically, we will generate cash together with the finance vehicles we have to acquire companies for sure. The question comes down to organic growth. What can we do there? I get a lot of questions and calls about how much of your business is really growing? How much is declining? I thought, why don't I show you? We are still very confident that we can grow the organic business with double digits. Make note that even in Q4, where we had a big turn downwards, we still generated 11% growth, pure organic growth. If that wouldn't have been there, we would have grown it much more.
I think it's important to understand how our business works. On one hand, we have parts of revenues that won't grow, either because we don't believe that that site can grow, it's not a good site. In many cases, it's because we have rev share accounts, Revenue Share accounts, where we get parts of the revenue each month what people do, that was created on a webpage one or affiliate site that does not exist anymore. That customer still have an account at a big operator, but there's no site allocated. It's just a Revenue Share account there sitting. If you don't fill up the Revenue Share account with new customers all the time, after time, it will start to decline. It churn. Every business churn after a while.
About 15% of our revenue today are from accounts or sites we don't believe we either can grow or we don't want to grow. That is programmed to have a steady decline over time. About 10% of our business are from sites where we believe we will have a steady growth or no growth at all. Stable. Just like this. The majority of the business today is actually growing, on market rate or higher. Actually, the majority of brand is growing far greater than the majority of market growth. Take brands like AskGamblers, almost 100% up, growth rate. I think pure revenues 2017 to 2018 was about 70%, but run rate about 100%. They have a very nice growth trend right now. Take other brands growing a lot. Why do they grow? Well, the big ones, we've been through it before.
The product is really good. We are focusing a lot to reach the right customer. Because of that, we can also grab market share in a lot of markets once we're launched in, hence geographical expansion is good. It all comes together. When you do this and do that, you see that those brands grow more than the average market. The majority of this business is growing fast, and bear in mind, this is not more than 30 brands we're talking about of the 1,200 we operate. Imagine bringing all the 362 fantastic leagues I have, just to say, in casino, focus on 10 brands globally rather than focus on 650 brands. You can imagine what happens to the focus. Where we done it, we have proof today that it works. Look at AskGamblers. Look at when we launched slots in Japan, what happens. It's there.
We just need to do it. By doing that, as I mentioned, the cost efficiency is there. We will definitely not grow cost percentage twice as high as revenue. U.S., as I mentioned, more states we launch. We have the current states in, that we had one year ago is in those numbers. More sports will happen, more states will come. As we mentioned, acquisitions. We will add that towards the EUR 100 million as well. I believe that the core question is here, can we grow organically? I would say yes, definitely that's the plan, and we are programmed for it. Conclusion. U.K. We like U.K. We like a little bit less in Q4. What we like is that the thing happening, we know what it was, and we can reprogram it for not happening in the future. U.S., exactly as planned.
As you see, it has a bright future, so we're keeping our high market share, and we're developing the operational kind of connections we need to have there to do a good business. Double-digit, definitely. Even though the hit, we were at 11%. We are now starting to launch our brand into the market. We started with more markets already for finance in Q4, and we're going to continue that going forward. Yes, the plan is unchanged. The underlying business is good, but U.K. this month had a small tag in our growth plans. Thank you.
Thank you very much. I really appreciated the thorough business update as well. We will now commence with the questions and answer session. We will take questions here in the room and then also take questions from the web and telephone. I can start with a few questions of my own.
Then give the word to the audience. Yes, from my point of view, obviously, perhaps revenue-wise, it was, I wouldn't say poor growth, it's still double-digit organic growth. General seasonality would have suggested a bigger jump from Q3 from Q4. You mentioned the U.K. being a bit of struggle in the short term. Could you perhaps say something about how other markets performed? Like, you said Japan is an important market. Where is Italy going right now?
Italy is performing well. We don't see as a business on the whole, we don't see any declines in Italy. That is going on. I think the markets in general are progressing as we thought. We had planned a higher result with the nice growth rates, both in organic, both in revenue, both in profitability. When this happened, it immediately falls down to the bottom line. That's why you see this result. We don't have any particular market that's not performing according to what we thought, too.
Have you been able to draw any new conclusions from the Swedish market? Have you seen any changes there?
There's a lot of rumors, both up and downs. We look at our numbers, our trends. For your information, we don't get our numbers until about the 10th in a month, we don't really know what they are yet. How it works is that the operator do the numbers, and then they spend about 10 days to adjust that if there were bonuses paid, et cetera. On the dot, we open the book. We get the first glimpse around the 10th and conclude the numbers on the 14th, it's too early to say. So far, we don't see any dramatic change in any way, I would say. It's too early to say.
Do you have the ex monopolies among your clients, or can you say that?
I cannot say that, typically, they've been very clear that they will focus on their own business first. As everyone, we have a lot of meetings with them.
Great. Could you say anything about how much U.S. is for you in total revenues? Is it 3% or 5%?
No, we don't guide on that. I think we remain the same. It's been coming from being very small. With this plan, it still has the potential to be the largest market by the end of the year with the plan we see, but we cannot guide on anything. Going back to what we said before is that our aim is not to have any market above 10% of revenue. Coming from where we six years ago had almost every single penny coming out of Sweden, we now reduce that. Three markets so far are larger than 10%, Per said, which is U.K., Germany, and Sweden. Also, I'm actually standing here lying because I will not follow the 10% rule regarding U.S., because it will become much larger of a business than that, which I think you can agree that is okay.
We don't guide on specific market and how big it is. We see a very, very large growth area for them now, but they're not at all the largest market so far.
Okay, great. I'm also a bit curious to the finance vertical. Was it 18% EBITDA margin this quarter? Is that the level that should be expected on that type of business going forward or?
No, it should not. What we've done is that we made quite many acquisitions there. We have established a team in U.K. that is building all that and rebuilding those sites and the structure of what we want to do. If we wouldn't have that team, we would have a decent normal margin like we have in the other business, but we invest in a team in order to make them and scale them globally. The idea is that the team work, before the work is done, the margins will be low. Once they start to capitalize on what they've done, the margins will increase. No, the margin will not be 18% going forward.
Okay. As revenues pick up, the margin should follow.
Yes.
Great. We can see, do I have any questions here in the room? Yeah, sure.
Yeah. Maybe a question about U.K. You mentioned that one affiliate had stopped spending in Q4. How does that work? Do you cap that from your sites, or do they pay less CPA, or can you say?
Well, it depends all about how the structure works, but typically, you can have a dealer signed and suddenly they don't fulfill what they've done, et cetera. Normally, we get to know it quite late, because on some parts of the site, we just sell on traffic. If we source a lot of traffic to them, but they don't pick it up, there's reason. I cannot go into the detail structure how it works, but what we need then need to do is to resource it to other ones, and it takes a while. That's why you had an impact there during that month.
Okay, I see. Then on operational cost and personnel cost, you mentioned some bonuses in Q4. Is the level you mentioned here typical for Q4? I mean, historically, we haven't seen the seasonality in cost because you have grown so much, but is that typical?
Well, basically, no, I wouldn't say it's typical. Actually, I would say it's lower than typical what it should be. What the company hasn't done is that it hasn't accrued during the year for the bonus. That's why you have a higher hit here. Typically, we would accrue a bit each month to build it up, so you don't have this quarterly impact when you do it. That's why you have a bit larger impact here than we normally would.
Yeah, you can say that's part of the effect. On the other side, you have the bad debt provision as well, which increased in the fourth quarter in December, and that is more driven by the regulations, I would say. We make that assessment every month. As the revenue is increasing and the receivables is increasing, we assess that currently moving forward. Expected to continue to grow d epending.
Okay, I see. This quarter you had a good cash flow, your balance sheet is gradually getting stronger. You're starting to talk about large acquisitions. How has the acquisition multiple changed in the last quarters? Has the availability of acquisitions been more or less? What do you see here?
Well, typically, if you look in Sweden, multiples pre-, post-regulation have changed quite a bit, logically. We're not focusing that much on Sweden, to be honest, because it's quite separated markets. If you look at U.S., there's not that much interesting thing to buy, because there was nothing around when the regulation started, and since that, we had a lot of sites there. There are interesting things. Should not say that, there's not a lot to buy. We're always looking into the fact, and we will not walk away from an acquisition that we believe will have an extremely nice value for the shareholders. To choose from what you can do by yourself with your own resources, rather than spending a lot of money and diluting to get the same kind of revenue is a quite easy choice.
It needs to be incremental and not decreasing in any way or form over time for the shareholders. We are looking. I think I got the question. We are looking at some 50, 60 cases a month still. There's a lot of inflow, we don't decide to act on a lot of them because we believe we want to be very picky about what we buy. Once again, we will most likely do acquisitions during the period of until the targets will be done. It's just that right now we are self-assessing ourselves for making ourselves more efficient.
Okay. That's all for me. Thanks.
Do we have any more questions in the room? Let's check the conference line.
There is no question.
Operator, are there any questions from the telephone conference?
If you do wish to ask a question, please press 01 on your telephone keypad. There'll just be a brief pause while any questions are being registered. We have a question from Anton Wester from Pareto Securities. Please go ahead.
Hello there, Per.
Hi.
Can you hear me?
I can.
Yeah. Good. Hi, Per. Can you quantify the adverse effect of the U.K. in the quarter?
We don't go in the specific numbers by any market. We have not guided on that, unfortunately I can't.
Okay. Can you give us some more color regarding the increase in personal expenses in the quarter, excluding the bonuses? It seems to be increasing sequentially.
Yes. Well, looking into the fourth quarter, as we said, we had some effects in the third quarter doping that number a little. Looking into the fourth quarter, what we mainly did was that we invested quite some, as Per said, especially in the financial vertical, to make sure to have a team in place in the U.K. to be able to grow that business globally. I would say that's the major increase in personal expense in the fourth quarter. As I said, some was bonus accruals, as well as some effects in Q3. That helped the margin up a little when it comes to personal expense.
Plus another six headcounts in the U.S.
Yes.
Yep. Thank you.
If I would continue on that track, actually. Catena Media had about 280 FTEs at the year beginning, end of the year at EUR 360. Approximately increase of the run rate of 30%. How many will you be next year? Is it the run rate that will continue, or will it slow down dramatically?
No. Run rate will slow down.
Dramatic slowdown?
You need to break that down. One is what we recruited, one is how many we got through acquisitions. Doing less acquisition, less people coming in, also recruited a lot, fantastic colleagues. No, we're not going to continue that run rate. Our idea is that we want to build what we have. We still have some people we want to recruit. As I mentioned, we're investing in business intelligence, we're investing in creating nice products and stuff, but those are only people that we believe we can have margin improvements from. No, the run rate will not be that high going forward.
Okay. For future growth, adding more headcount isn't necessarily a bottleneck or requirement, but you will still do necessary manpower.
We will add headcount, we will not have the same kind of a center as I've seen. Hence, we can also reduce cost.
Okay.
I have also a question regarding the balance sheet, perhaps to Erik. I noticed that the earn-outs increased quarter-to-quarter, but you have not made any acquisitions, so have you reassessed the position of any of your
Yes. We do that every quarter. We look at the underlying performance in the acquisitions, we reevaluate the earn-outs. That is made every quarter. Therefore you will see changes in the balance sheet quarter-by-quarter, even though we don't make acquisitions.
Essentially you turn more positive then.
Well, there is one other thing, and that is, as you know, we renegotiated the entire earn-out structure with our U.S. deal, where we're actually going to be able to get hold of the entire business earlier than planned. We have updated the balance sheet with those kind of numbers as well. Those renegotiations are also part of the thing
Any more questions from the audience? The conference line or the web? No.
Okay, great. I feel that I have also asked the questions I had in mind.
Thank you very much. Any concluding remarks?
Thank you.
Thank you very much.