Earnings Call: Q2 2021

Aug 25, 2021

Thank you very much. Good morning, everyone. Appreciate you joining us to talk about Kata Media and appreciate your interest in the organization. I'm Michael Daly, the Chief Executive Officer and I have with me today Peter Mesner, our group's CFO. Today, we're going to Talk through our interim report for January to June focusing on our Q2 and talk about our future expectations. Next slide please. In the presentation, we'll go through the highlights. I will then talk about our Q2 acquisition of lineups. In North America, Peter will then go in further into the financials of Q2. We will then talk through the strategy and outlook for the company for the remainder of the year years to come and then we'll go into questions and answers. Next slide please. Q2, we saw solid revenue growth and absolutely forward momentum of the business. Revenues were $30,400,000 in the quarter. That's up 9% over last year's comparable quarter. Now I need to take a moment to remind everyone of what last year's comparable looked like. Q2 last year was container media's strongest quarter of of the year. That was due to while North America was in its low sports season, which is low sports season is really Q2 and most of Q3, all around the world, we've seen sports delayed or canceled due to the COVID restrictions going on. So sports was off track. However, Catena Media was very well positioned globally for the casino surges we saw As land based casinos and entertainment venues of all types around the world closed due to COVID and players or potential players went online looking for opportunity to play in online casinos, etcetera. We had an exceptionally strong quarter, thanks to that positioning. So the fact that we're 9% above that quarter In this quarter, this year in revenues, to me speaks very highly of the potential for this organization going forward. This will not be our strongest quarter of the year. It already is not and Q1 was even stronger than Q2. So given that this was our strongest Quarter last year, I think the comparable, that's what one should take away from that. Also organic growth was 9%, Excluding 17% excluding the now regulated German market, that 9% growth is the same store sales, let's say. So that's removing Lineups which was only part of the quarter anyways and is in again the low sports season of North America we acquired for future looking potential, which we'll talk about lineup in a moment. And without Germany in there, which I think like every operator and affiliate out there that is in the German market in any way shape or form, we're all experiencing the changes of the now regulated market, which Again, I have great expectations for it in the coming years, as it is now regulated, as of July, As operators start to become comfortable with the regulations and start to invest marketing dollars, we'll start to see that market become a good market for affiliation. We continue to do what we can there, which is to have the products that the operators need when they are ready for those. Whether that is It's not going to be a 24 hour or a 24 day turnaround of the German market. But over the next 24 months, I expect This becomes a strong market for many of us in that space who can work within a regulated environment. Speaking of regulated environments, North American iGaming for us was up 37%, now an equivalent of 41% of our total Q2 revenues. Strong growth in both casino, which again speaks to the strength there considering last year's casino spike and sports, partially due to the negative effect of COVID last year in sports. We also in North America as well as more importantly globally saw events in sports have a positive impact in the quarter such as the Euros 2020, which happened in 2021. We saw impact on that in the North American business where we were able to Bring in European sport interest, we also saw that, of course, in our sports business in Europe, which is a smaller portion of our business in Europe. We are Stronger in casino, as our numbers will show, but this shows me the great potential as we grow in the sports business globally. Our new depositing customers were up significantly 34% year on year, again speaking to great forward momentum of this business. Next slide please. Adjusted EBITDA growth was up 1%, again despite a strong Q2 2020 as well as things we are doing now that we probably were not doing quite so much last year at this time due to the COVID pandemic. We are heavily investing in North America as our results show and I think as you will see our future growth will show. It's a transformation program we've announced in Europe. We're working on our casino products, working on the German reregulation, working on areas where we see to optimize our business as markets have changed through regulations and markets haven't shifted in maturity. So Not what one might expect in terms of a giant EBITDA growth number, but being over a very strong quarter last year and a much Stronger business of casino, which has a higher margin and thanks to the pandemic was driven up considerably. I am very happy with having EBITDA growth in this quarter. Lineups was added during this quarter. Lineups.com Should add significant value for the NFL season, which starts late Q3 this year and for many years to come. And we'll talk again further about that in a moment. We also saw a successful completion of our refinancing this quarter, replacing old bonds of $88,500,000 and reissuing new bonds at $55,000,000 Peter Mesner will talk more about our financial position later in the presentation. Our operating cash flow down slightly from $16,400,000 again relates to those investment activities, refinancing, etcetera. We have a solid financial position, providing a strong foundation for future growth and flexibility and efficient capital usage. It is our intention to commence some share buybacks this autumn. And we also intend to be able to use capital for strategic acquisitions, which remain a key growth tool in our toolbox of opportunities. Next slide please. Speaking of opportunities, lineups.com We view as a perfect strategic fit with our North American business. We added the lineups.com seeing as a second national sports website alongside the lines.com. As we know in this business, it is often about positioning within the search engines And having number 1 and number 2 position instead of competing for number 1 with the other strongest, what we view as the strongest sports product In North America outside of those container already owned, adding lineups to our portfolio makes us that much stronger and gives us that much more potential upside As we go into the NFL season, which is still the key affiliation season for the North American sports betting market. Dayton Wireless is also a key player for upcoming markets. We have a number of states we'll talk about later, which are poised for Entry in this year or early next year, and Wyom sits very well and where it was positioned for those alongside Kettina's own positioning prior. The integration was completed during Q2 to get us ready for the sports season, which is why you acquire during now and Q2 to be ready for the start and Exceptional start to the NFL season and any new states that may launch in September, October, November, etcetera. Required at the beginning of May, contribution was only for 2 months. It is 100% sport focused. So Q2 is traditionally the slowest quarter for revenues, Q3 also very slow until the very end of it. That's what makes This lineup is not a major contributor to this quarter and that's the organic growth. You didn't see anything outside really to organic growth. So mine is not a contributor really in this quarter, but expect it in next quarter and beyond. Next slide please. After the period significant events, we received from a Board, Investor Extend AGM and in EGM authorization to acquire our own shares, required 2 majorities which were received. The Board has moved forward with plans to start a share buyback program during the autumn of 2021. Precise timing remains under consideration. We will look for what is in the best interest of our investors and execute accordingly. Current trading for July. To give comparables, organic revenues grew 2% in July Or 11% excluding the non regulated German market or the now regulated German market, excuse me. Again, July is a low season. July August, probably some of the slower parts of Q3 for us, As you have a lull in sports globally, we've come out of the euros, we're heading towards U. S. And Premier League. So expect later in the quarter, we should see those sports kick off and thus one might expect a stronger segment of the quarter. But I am very happy again to be on a constantly growing trajectory. I will now turn it to Peter Messner to talk more specifically about the financials. Thank you very much, Michael, and good morning and welcome to our Q2 earnings call also from my end. Let's turn to the next slide and then to the next slide, so that we can take a look at revenues and our new depositing customers and the continued revenue growth. So as Michael mentioned, total revenue was at almost €13,500,000 and grew 9% compared to last year. The organic growth was likewise 9% or 17% when we exclude the German iGaming markets that Started in a regulated setup now in the beginning of July. In line with the previous quarters, the majority or 93% now during the Q2 of our total revenue is organic search revenue, which grew 10% as compared to last year. The other part is paid revenue and that increased by 25%, and it's mainly attributable to the sports segment and the COVID impact that we have seen last year during the Q2. The new depositing customers are very key indicator that news Increased by 34% year on year and that is also mainly driven by the sports segments and likewise the COVID impact that we have seen during the last year. The casino NDCs have been pretty much on the same level as last year and that despite the surge in the casino segment last year due to the COVID impact and Michael talked about that before as well. As one can see, all the KPIs show a decline versus the previous The Q1 this year and that was fully expected on our end. Q1 had a spike due to the market launches in Michigan and Virginia In the beginning of the quarter and overall was a strong sports quarter in North America due to the NFL's Super Bowl in February and Also the college basketball's March Madness during March. The second quarter is traditionally the lowest quarter in North America from a sports calendar perspective and that is simply reflected in the overall performance here. Let's go to the next slide then please and take a closer look at our revenue Segmentation and how that developed over time. The share of sports was lower during the Q2 as Compared to the Q1 as a natural consequence of the lower sports season in North America and also North America's increased share of our total business, which was 41% during this quarter. The Financial Trading segment represented again a stable 3% of total revenue And that's in line with the previous quarters. As compared to last year, that share decreased due to the divestment of the Hemastone subscription service during the last quarter of 2020. This also meant that there was no more subscription related revenue during the quarter to be shown. From a sourcing perspective, revenue from CPA cost per acquisition was down versus the previous quarter As likewise expected to due to the aforementioned reasons of the channel trend from Q1 to Q2 And also the strong performance in the Q1 with the launches in Michigan and Virginia. CPA's share is Nevertheless higher than in previous quarters with the exception of Q2 last year and that is all due to the increased share of the North American Business where revenues are only CPA based for us for the time being. All in all, from a sourcing perspective, as you see, There is a continuous healthy balance of revenue share versus CPA and versus our fixed fees. Let's turn to the next slide and delve into our various segments, starting with the biggest one, which is casino. Casino has historically been our biggest segment and represented 69% of group revenue and 89% of the group's adjusted EBITDA during the Q2. As said before, Q2 last year was a particularly strong Casino quarter due to the COVID impact. Casino North America still showed a very solid growth, also because of Michigan having launched earlier this year, Not only in sports but also as a casino market. For the European part of casino, We have seen and witnessed relaxation of COVID restrictions all over the continent and that those have shifted some players offline. And likewise, it is still too early to see the results of our transformation program, which very much focused on the European facing casino brands. Also there are continuous headwinds in Germany, which particularly affect casino products In that market. Let's turn to the next slide and the 2nd biggest segment, which is our Sports segment. Sports represented 28% of total group revenue and 9% of our group's adjusted EBITDA. And revenue has increased by 65% and adjusted EBITDA by even above 100% with 105%, And new depositing customers with 151%. And that again is all or a part of that is, of course, the result of Sports have been particularly low during the Q2, the comparable quarter last year due to the COVID-nineteen impact. We saw a very strong performance in North America year on year as well, boosted by the recent launches in Michigan and Virginia and of course, Overall, the return of sports as compared to last year, despite that it was a low season in North America. As Michael mentioned before, the recent acquisition lineups only contributed now roughly 2 months during the quarter. We made this acquisition in the early days of May. And due to its 100% sports and very NFL heavy focus as well, the contribution was as expected And we expect much, much more in the coming months when the NFL season starts in September. European Sports showed A very solid growth, when we exclude the German eye gaming market that is now regulated. And as with casino, there are Certain headwinds that still exist because the regulated market still shows certain uncertainty for our customers, for the operators in terms of what is happening there. Let's go to the next slide and our 3rd segment, Financial Trading. That is our smallest segment. As said before, represented 3% of total group revenue and 2% of our group's adjusted EBITDA. For a like for like comparison, when we exclude the divested Hemosome business, that revenue decreased by 16%. And that was also a result of the COVID induced The demand that really surged during the Q2 last year due to the uncertainty and the volatility in the trading markets. Also, a strong crypto related trading in the Q1 due to the market developments ebbed out a bit during this quarter with the market movements or following those market movements. The flagship brand in that segment is really Ask Traders and that had a very solid performance And showed very positive momentum with an uptick in traffic. These are our segments. Let's turn to the next page then and Follow the path through our costs and investment into our products and staff to explain our results and also in the adjusted EBITDA. So the total cost for the Q2 when we exclude items that have been affecting our comparability was 15,400,000 And that represented a cost ratio of 51% of revenue. The direct costs increased mainly as a result of Sports having returned as compared to the Q2 last year. The personal expenses, as we have shown during the previous quarters, They have been pretty stable as compared to Q1 this year and increased by roughly €900,000 versus Last year and most of that is due to our continued head investment in North America where the total personnel and other operating Expenses altogether increased by more than 50% year on year. So you understand the cost transformation that is built into our overall cost picture with a very strong investment into our growth areas. Else, all other operating expenses have been below the previous quarter, But they have been really up versus the last year. Last year we've been particularly cognizant about cost spending in the very beginning of the pandemic. We, as every other company, didn't know what is that going to mean for the world, for our industry and for us as a company. We have since then Went back to a more normalized view and as a consequence also invested more into in particularly SEO and ICT. ICT relates mostly to technology, business intelligence, AI and development services, and It's a function simply of our increased product investments. The extraordinary expenses, the items that affect our comparability and Hence, are treated as adjustments for the adjusted EBITDA were €2,300,000 and that mostly related to refinancing costs in relation to our new bond issuance and the replacement and redemption of the old one, as well as restructuring and reorganization Cost is a function of our transformation program. Let's turn to the next slide. And the result of The revenues and the cost is reflected in the adjusted EBITDA. So adjusted EBITDA was €14,900,000 in the 2nd quarter, which is an increase 1% year on year and a margin of 49% as compared to 53% last year. And again, this reflects our continued growth investments, in particular in of America. The last 12 months of adjusted EBITDA show now a trend of Yes. In the middle of €60,000,000 to €70,000,000 and that's a very good trend. Let's go to the next slide and a short summary of the profit For the quarter, so the operating profit was €10,400,000 and increased by 5% with a margin of 34%. The interest payment as we have previously also shown were significantly reduced as an effect of our refinancing from last year where we issued the hybrid capital securities, which do come with an interest payment, but that one is accounted directly in equity and therefore not affecting our profit for the period. With a strong financial performance, the company has quite some flexibility in relation to more efficient capital usage and Michael mentioned that before as well, Opening up in our toolbox for various alternatives. The earnings per share were €0.09 before dilution And that would be €6 after dilution. I will talk about the outstanding warrants in the market in a few slides. Let's turn to the next slide and our cash development. The cash development is or the cash flow is one of the strongest Areas really in our business. Catena Media has historically shown a very strong cash flow and a very solid cash conversion. The operating cash flow decreased by 6% and was €16,400,000 which represented a cash conversion of 130% and that is in line with Trends that we also saw last year, if you take a look at the chart, we had peaked in the 2nd quarter at 134%. Why a decrease? Well, that was due to the slight decrease in EBITDA. EBITDA decreased by 3% as an effect of the items that affected our comparability. And then, of course, had a cash outflow related to that. During the quarter, we had Overall, a cash outflow of €20,800,000 and that was in relation to the initial purchase price consideration of lineups, which again we acquired in the early days of May. So as a result, the cash and cash equivalents balance at the end of the quarter was at €29,100,000 Let's turn to the next slide and look at the company's improved capital structure as A result of our strong deleveraging, which has been going on for quite a while. So as you see on the Graph on the right, we have been on a journey of significant debt reduction since pretty much the start of last year. The key element in that journey has been the successful refinancing and the issuance of the hybrid capital securities during the summer last year, which exchanged parts of debt into equity. Since then and as a result of the continued strong cash generation in the business, we have further deleveraged From a net debt to adjusted EBITDA ratio of 1.68 at the end of the second quarter last year to 0.79 at the end of this 2nd quarter. The slight increase versus the Q1 is the effects of the line ups acquisition on the cash balance, of course. During this quarter, we have replaced the previous outstanding bonds of €88,500,000 in nominal value with Newly issued bonds of €55,000,000 in nominal value. Those new bonds have a tenor of 3 years. And we also signed a new bank Term loan agreement with an amount of €25,000,000 which is repayable in the current installments over 3 years or 12 quarters until the end of April 2024. And in addition, I have secured a revolving credit facility of €10,000,000 which for And that all in all led us to a net interest bearing liability balance of €60,900,000 at the end of the second quarter and as I mentioned the leverage ratio of 0 point 79, well in line with our target range. Let's switch then to my final slide, summarizing The balance sheet and certain changes that we can see there. So total assets were 37 €2,900,000 at the end of the second quarter. On the equities and liabilities side, our total equity It was €263,100,000 and that included the hybrid capital securities of €44,800,000 The outstanding nominal value there, a nominal amount there is €53,300,000 The balance is net of Certain insurance costs, which essentially have been the guarantees to the guarantors, mainly in part of in warrants. Approximately 34,700,000 warrants were outstanding at the end of the quarter and these warrants expire During the exercise window after the 2nd quarter's interim report in 2024. So those can be exercised until then. And they are responsible for the EPS after dilution, so they will further dilute our share capital accordingly. What you see in our balance as compared to the balance you see on the right hand side at the end of the Q1 is that we also now considered amounts That are committed on acquisition of €11,700,000 and that's the dual equivalent of the remaining U. S. Dollar Commitment that has been agreed and is a deferred purchase price consideration for the lineups acquisition that we did. The borrowings, as mentioned on the previous slide, consist now of the new bonds and the bank term loan and other liabilities So, comprise in particularly the trade and other payables. And with that view on our strong balance sheet, we can switch to the next slide and I hand Thank you, Peter. Next slide, please. I think Peter used the word journey during his discussion of our quarter. And I think journey is the right word for container media. We are on a journey. We continue on that journey and we continue with our strategic growth focus. We remain consistent with this and that is an important part of our strategy is to be focused on how and where and when we grow the business. So we focus on organic growth. Organic growth is the highest margin business. It is the most Regulated regulatory acceptable, it is manageable and controllable by ourselves and limited on the outside influence. Organic growth is our business. We will of course Take advantage of market opportunities where there are performance marketing and other types of opportunities, but organically remain our focus for this company. Geographic expansion of our existing products is also a major focus. We are continuing to look at how to take products we have that are doing well in the U. S. Into places like Canada and how we take products like that are doing very well in Europe into Asia, Latin America, Africa, etcetera, there is a lot of opportunity for expansion of those current products, as well as adding additional products where they make sense in niches that exist. Cost efficiency improvements. This is particularly important in those more mature markets and that is the efforts we go through in places such as The UK and Sweden and Germany where there is opportunity to optimize our business and to improve the margins through cost efficiency and increase our niches within those areas. And then there is strategic M and A. Lineups is a clear example of that. There are opportunities that are going to exist globally that are good for Containment Media. It is not the key, it is not the number one item here that is organic growth, but Strategic M and A will be a tool in our toolbox. So talking through the markets really quickly, you've got the growth markets, which are our U. S. Business, Japan, Central and Southern Europe. And then you've got the mature markets still, which are the UK and Sweden and Germany, where regulations are changing how those markets exist. Everyone's talked about Germany. Germany will continue to be the talk and the focus for many months to come as everyone is figuring out exactly what the market will look like post regulation. We expect it to be a good market for those that can work in a regulated environment, which is Kata Media. There is opportunity there. We Tech to exploit those opportunities as they exist. And then we have our incubation, which we're going to talk more about in the next few slides. Incubation is The future business growth opportunities of the globe. That is the U. S, the new state, that is Canada, that is Latin America, That is Asia Pacific. Also probably added to that, there are areas within Europe that are incubation, places like the Netherlands and other areas that are starting to open up in Europe. Those are long term potential that we are doing investment this quarter and future quarters to be ready for the when and not the if of them to come. Next slide please. Speaking about the when versus the if, North America, incredible opportunity for those companies like ourselves that are well positioned within this market. We are the leader in affiliation in eye gaming and sports betting in North America and we intend to stay in that position. We right now, there's about 70,000,000 people in the U. S. Population in states that have access to Online gaming, sports betting mostly some casino. That's about 21% of the total Population of the states that will likely eventually have sports betting and or ID and casino. In the upcoming, which are Illinois, which is land based, went online for a little bit, went back offline end of this year or so, should go back online, Maryland, Arizona, Louisiana, South Dakota, Wyoming, Connecticut, also Ontario, the first Canadian province to bring on Online casino and then at some point we'll see some more in Canada on sports betting as well given laws passed there. Over the next couple of quarters, we're We're going to see those come online and that's about 15% more of that total addressable population. And then we've got The timing is still unknown, but more traction seen in the last few months in activity in New York and Florida And California and Texas thereafter, those 4 states alone make up 33%. So almost those 4 states alone would almost double The current and upcoming states in the total addressable population, states with population of the addressable markets we're expecting. And then larger but further out, you've got states like Ohio, Massachusetts, South Carolina, Missouri, etcetera. Very exciting, another 21% of the population, essentially the same size as the current. And then you get the remnants, Which might be discounted for their size because it stays in the 1,000,000 to 5,000,000 population. That's still bigger than some other population that we address globally. And that's still another 10% of the business that over some of this period, we'll start to see it come along, such as now in the upcoming Wyoming, which was probably in the remnants Prior, so less than an Indonesian ish people, but still adds to the bottom. And in each of these markets, we can be a high margin business with growth opportunity. If you look at this slide, you'll see what that growth opportunity means for Kata Media. North America in 2019 to 2020 grew 72%, 100 and 21% in 20 21 H1 compared to 2020 H1, it's becoming a larger portion of our business. We are focusing heavily on the opportunities in North America It is the largest and fastest growing market worldwide for iGaming and sports betting. And Catena Media It is and will continue to dominate in that space. Next slide please. I don't want to spend All right. Discounts the rest of the world's opportunities. While North America is by far the largest opportunity and we will maximize that, It is not our only focus. We are a global organization and we intend to be globally dominant as we grow in casino and sports outside of North America. Our European transformation program is expecting to start to show positive results towards the end of this year. Again, a transformation is a journey. It starts with an affiliation and Getting your traffic flows right, getting your SEO right, getting keyword positioning right, working on the fundamentals of the business, content, SEO, Traffic which leads to conversions, which leads to revenues. And if you set the business up right and you Start your journey correctly, it leads to a long and successful and prosperous journey ahead. And that is what Kata Media has embarked on in our Q1 this year. We will continue working on that transformation and optimizing our businesses around the world. We expect the now regulated German Idean market to return to growth. Timing is uncertain. It will grow as the operators become more certain of their regulations they're working within. We will see it grow like we've seen probably some states in North America where It starts slow and then momentum comes. As momentum comes, affiliation becomes more and more important, particularly important markets that are regulated where the operators have More rules and restrictions around how they can market, so they need to look to those that can help them maximize in those marketing channels. Kettina Media is an expert in this And we will be there for them in the German market as they are ready to start those marketing efforts. Latin America still in incubation, but showing positive results for us and globally for the overall opportunity for sports betting and casino online. Brazil in particular, Brazil is a massive market. Brazil has massive opportunity. It's not a this quarter opportunity, But we are there and we are positioning and building to be ready for that as future days when we're talking as much about Brazil as we are about some of the other markets globally. Asia Pacific region, significant growth driver for us was just Japan for the casino segment and recently Malaysia for the financial trading segment. Great opportunity in Asia Pacific. We're putting our focus on that part of the business. We're growing our Team there to focus on opportunities beyond Japan and looking at how that will work as they become more regulated and more, Let's say, safe markets for operating in the type of business Kakena Media intends to be. Next slide, please. So I think the key takeaways from our business for this quarter is the solid performance given that the comparable quarter last year It was heavily affected by a COVID related surge in Cateno and we are continuing now to grow and focus our investments and do growth focused investments For our future state and for this journey ahead, we have a strong balance sheet and cash generation for growth investments and financial flexibility. We will be looking at a share buyback program this autumn. We will continue to look at strategic acquisitions where they make sense like the lineups.com did to us. Strong season uptake expected in Q3 and Q4. North America is a growing portion of our business, the growing portion of the iGaming and sports betting business globally. That means that those cycles of those seasonality will affect us as we become more and more invested in the North American growth. NFL season starts at the end of Q3. We will expect to see some states start to launch in the end of Q3 and into Q4. Arizona is making the most Noise about being the first to launch, but there are other states behind that, there are other provinces behind that, there is a long road ahead of places that Catena Media is operating today being ready for the markets to open. And we have significant growth potential in North America in the coming 6, 12 months. Now I would say that it's well beyond 12 months into 20 4 and 30 6 and 48 as we see states talk about opening up sports betting. And then if you take an indication from what has happened in Michigan with Casino online being added to that state, there are So many more states that will come online in the coming years with online casino that the road ahead looks exceptionally bright For those that know how to manage and grow in the North American regulated environment, that is Catena Media. With that, I thank you for listening to our presentation. And now we will open up to questions. Thank Our first question comes from the line of Erik Molberg from ABG. Please go ahead. Good morning and thanks for taking my questions. To start off with the trading update here, you were up 2% organically in July. If I recall correctly, July last year, you were up 7%, but then you finished the quarter with a 5.8% year over year decline. So this indicates obviously a considerable easier comps from now on. But going forward, we're entering the peak season in the U. S. If you could Elaborate a bit on how we should see regarding the dynamics and the ramp up in growth there. Thanks, Eric. Yes, July is the start of Q3. The start of Q3, We see a tailing off in European sports for a period of time. We see the seasonality of Casino in Europe, we have the summer holidays, which go through July August. We have the low season in North American sports. The end of Q3 is where you start to see North American sports pick back up. Also being now a global Operation, we are looking at how to maximize traffic we have on other sites around the world for more interest in North American sports, How to take advantage of our AI investment our investments in AI content, etcetera. So, the end of Q3, one would expect to be stronger than the start. I don't know that I want to comment specifically on August September, but NFL starts in September and then it runs boringly through to Late January, early February of next year, so yes, end of quarter will be stronger than start. There is just not a lot of sports going on right now in the world for July early parts of August. Understood. And on the European side, you touched on Germany earlier. Obviously, it's hard to Yes, when this market will be come back to normalized levels. But would you say that we have seen the trough here here in July and that we will see improvements from now on. I think Eric, As I look at it, that's how I view Germany at this point. I think there is so much uncertainty that it's probably As you've expressed, you're putting your finger up in the window a little bit to try and judge the direction. It seems to make sense logically that this would be near The bottom of that is we are now operators are now at least able to understand the regulations and the tax implications and start to make their plan. The things that are unknown are how much and how fast they're going to invest in the various. We've seen the federal rules, it's down to the States within Germany who are regulating and so the rollout timing is unclear. But to me, it seems like The darkest days should be ending because there is at least now a stable Fundamental for the business is to start to operate and build their operation models within. And the next question comes from the line of Mikael Lasseigne from Carnegie. Please go ahead. Yes, good morning. A follow-up on Germany there. How much of your revenue came from Germany this quarter, Q2? And also can you say something about how that country developed in Q3 last year through the quarter if it started faster and ended Thank you. Peter, I'm not sure what we broke out on Germay, so I'll leave it to you to say what Specifically, what you're willing to say here? Well, if I may chip in. So what What we mentioned previously, Mikael, was that, I mean, Germany historically had a share of total group revenues of above 15%, Right. And that's continuously declined towards the end of last year. And then as we reported with a 50% Decline of our German market, so that is roughly where we are in that quarter as well. And the Q3 Last year was exactly in that trend. It was right before the tolerance period started. I mean the tolerance period started, If I recall correctly by the middle of October or in the first half of October, so we have seen certain impacts during October, But then much, much more during the Q4 when the real impacts have been hitting, in particular, the casino operators in that market. Okay. So this quarter, the decline must have been much more than 50% year on year. For Germany, yes, it was a bit above that, correct. And can you say something about the performance in the rest of Europe, excluding Germany, how you're performing? It looks like it's Relatively stable sequentially. I don't know if you can talk about that more in detail, please. I think that's a fair assessment. It's relatively stable. Again, we're coming off of a period last year when Things were uncertain. We are investing in Europe. We're investing in our business globally. There is lots of opportunity in Europe as now as COVID At least become an understandable factor, let's say, to some level on how the business cycles are going to go. Sports have resumed and we see the opportunity for pushing further and harder into European sports. In In the Xena business there, the transformation work underway, we're not going for stable, we're going for growth. And that's what we're focusing on And we are in the first phases of that coming out of 2020. And we have a follow-up from Erik. Please go ahead. Yes. On Ask Gamblers, if you could perhaps give some more color regarding your performance here in Q2. I mean, you mentioned April was a new high, But did you still see year over year growth for the remaining parts of the quarter? And what should one expect for the remainder of the year? Ask Ambler's remains a very strong casino product for us both in Europe as well as extensions globally, Ask Ambulance It's into many products and types and so very happy with its year over year high At its all time high during this quarter in the early part of it, it has also got things in there that affected that are outside influences. Some of the operators we do business with are crypto based Operator, so as crypto cycles have fluctuated greatly, that impacts those operators and thus So rev share and amount of CPA, etcetera, those exceed those operators are paying us. So there are some fluctuation in that business based on outside It does continue to be a growth product for us and we'll continue that way for this year and also Going forward beyond that, I'm not sure we're willing to break it out specifically on specific expectations of just the one product. Got it. And then a follow-up on Netherlands as well. I mean, obviously, this will be a Tailoring for Q4, but if you could perhaps elaborate what you expect from this market both in terms of the underlying market as well as What sort of position you need to grab and whether or not this will be able to offset any year over year headwind from Germany? I think it is a tailwind in Q4. The other one is saying October is the start of that market. What will the start of that market mean in timing? I will be one to be probably a little glass half empty or concerned that It may be a little slow to start, often new markets are and as the regulators and the operators get comfortable. But it will Grow in its revenue stream. So we're not making any statements about what we expect to do in 2021 or even really yet Willing to say what it's going to do in 2022 for us, it is going to be additive to our business. It is going to grow and grow Well, over time, it looks like it's going to be a healthy market. Does that start a little fractured or a little slow with the operator and how many operators launched day 1? That's the part that we're unsure of. What we're sure of is we have a team there. We have products we have invested in that are for that market that are Built and running, not affiliating obviously because that's not allowed yet, but we are building up our base to be ready for the operator. So It will add to us. That will offset anything in Germany or add or help offset that. Germany was a very big business for us historically. Netherlands will grow into a good business and as will Germany. So that's all I can say at this point in the Netherlands. Got it. Thanks. And as there seems to be no further questions, I'll hand it back to the speakers for closing remarks. Thank you very much. Appreciate everybody's time and attention to Kakena Media. We are in a journey. We are in a very good journey and we see very, very strong days ahead. We are investing in ourselves. We are investing and working with our operators on how to grow globally. And we expect all of these things to Continue to show benefits that we reap in the coming months and coming years. So with that, I will say thank you to everyone and we'll talk to you again next quarter.