Wanda Sports Group Company Limited (“Wanda Sports”, or “we”)
(NASDAQ: WSG), a leading global sports events, media and marketing
platform, today announced its unaudited financial results for the
second quarter ended June 30, 2019.
Second Quarter 2019 Financial
Highlights:
- Total revenue
reached €283.8 million (US$322.8 million), a decrease of 30%
year-over-year. Excluding the impact of reimbursement revenue1,
total revenue would have been €256.1 million (US$291.3 million),
representing an increase of 4% year-over-year.
- Gross profit was
€104.4 million (US$118.7 million), compared with €108.2 million in
the second quarter of 2018. The slight decrease was mainly
attributable to event cyclicality related to the 2018 FIFA World
Cup Russia™.
- Net profit attributable to
ordinary shareholders was €23.4 million (US$26.6 million),
up 39% year-over-year.
- Adjusted EBITDA
was €58.8 million (US$66.9 million), compared with €65.4 million in
the second quarter of 2018.
- Basic and diluted net
income per American Depositary Share (“ADS”)2 were
both €0.17(US$ 0.19), compared with basic net income per ADS of
€0.14 and diluted net income per ADS of €0.13 in the second quarter
of 2018.
Mr. Hengming Yang, Chief Executive Officer of
Wanda Sports, commented, “We are pleased with our second quarter
performance, which reflects the strong business momentum across our
three key segments. Compared with the second quarter of 2018, we
delivered steady revenue growth and achieved solid profits,
excluding the impact of event cyclicality due to the FIFA World
Cup. As a leading global sports events, media and marketing
platform, Wanda Sports is capitalizing on the tremendous
opportunities in the growing sport market globally. Looking ahead,
we remain focused on our strategy of adding compelling events in
desirable markets, expanding our diversified portfolio of
world-class IP rights, embracing digital innovation in the sports
industry, making selective acquisitions that have strong synergies
with our existing businesses and capturing the significant
opportunities in the high-growth Chinese market. We are confident
that continued execution of this strategy will drive growth and
create value for our shareholders.”
Mr. Honghui (Brian) Liao, Chief Financial
Officer of Wanda Sports commented, “In the second quarter, we
achieved solid financial performance, with a 4% year-over-year
increase in revenues (excluding the impact of reimbursement
revenues) and Adjusted EBITDA of €59 million. Our asset-light
business model and strong cash flow from operations give us the
financial flexibility to invest in new growth initiatives. In
August, we used the proceeds from our U.S. IPO as well as cash on
hand to pay down short-term debt by US$200 million and reduced our
net leverage ratio to 4.2. We remain focused on executing our
strategy while working to reduce our leverage as we position Wanda
Sports to deliver long-term value for our athletes, business
partners and shareholders.”
Second
Quarter 2019 Financial
Results
Total revenue was €283.8
million (US$322.8 million), a decrease of 30% from the second
quarter of 2018, primarily attributable to decreased revenue from
the Digital, Production, Sports Solutions (DPSS) segment. Excluding
reimbursement revenue, total revenue was €256.1 million (US$291.3
million), up 4% year-over-year, mainly due to increased revenue
from our Mass Participation segment.
Revenue in our Mass Participation segment was
€90.9 million (US$103.4 million), up 21% year-over-year. The growth
was primarily driven by increases in the number of gross-paid
athletes and average revenue per gross-paid athlete. The number of
gross-paid athletes increased from 449,000 in the second quarter of
2018 to 466,000 in the second quarter of 2019 attributable to the
contribution from recently acquired events. Average revenue per
gross-paid athlete increased to €118 from €96 in the second quarter
of 2018.
Revenue in our Spectator Sports segment was
€138.1 million (US$157.1 million), down 6% year-over-year. The
decrease was primarily due to the decline in revenue from our
football portfolios, reflecting the event cyclicality of the 2018
FIFA World Cup Russia™. The decrease was also partially offset by
stronger contributions from summer and winter sports this
year.
Revenue in our DPSS segment was €54.8 million
(US$62.3 million), down 70% year-over-year. The 2018 FIFA World Cup
Russia™ took place during the second and third quarters of 2018 and
the FIFA Host Broadcast production project generated significant
revenue for the DPSS segment. Excluding reimbursement revenue, DPSS
revenue would have been €27.1 million (US$30.8 million), up 15%
year-over year, primarily driven by the change of portfolio
mix.
Cost of sales was €179.4
million (US$204.0 million), a decrease of 39% year-over-year,
primarily due to the reduction in cost from our DPSS segment
relating to the reimbursement cost from media production services
in 2018.
Gross profit was €104.4 million
(US$118.7 million), compared with €108.2 million in the second
quarter of 2018. The slight decrease was mainly attributable to
event cyclicality due to the 2018 FIFA World Cup Russia™.
Gross profit in our Mass Participation segment
was €35.9 million (US$40.8 million), compared with €28.4 million
for the second quarter of 2018. The increase is mainly attributable
to higher revenue of the segment.
Gross profit in our Spectator Sports segment was
€55.4 million (US$63.1 million), compared with €63.9 million for
the second quarter of 2018. The decrease was primarily due to the
event cyclicality from high gross margin commission model sales
mainly in relation to the 2018 FIFA World Cup Russia™.
Gross profit in our DPSS segment was €13.1
million (US$14.8 million), compared with €15.9 million for the
second quarter of 2018. The decrease reflected the event
cyclicality resulting from the 2018 FIFA World Cup Russia™, for
which some of our services incurred relatively lower direct
cost.
Gross margin, or gross profit
as a percentage of revenue, was 37%, compared with 27% in the same
quarter of 2018. Excluding the impact of reimbursement revenue and
costs, gross margin would have been 41%, compared with 44% in the
same quarter of 2018.
Personnel
expenses were €35.9 million (US$40.8 million), an
increase of 2% year-over-year, primarily driven by the increase in
employees compared with the same period last year.
Selling, office and administrative
expenses were €17.8 million (US$20.2 million) for the
second quarter of 2019, an increase of 50% year-over-year,
primarily driven by the professional fees incurred for our initial
public offering (“IPO”) as well as the completion of a number of
small acquisitions during the second quarter of 2019 that led to an
increase in overall general administrative expenses.
Depreciation and amortization
expenses were €8.4 million (US$9.6 million), compared with
€9.3 million in the second quarter of 2018.
Other operating expenses, net
were €0.6 million (US$0.7 million) compared with €12.0 million in
the second quarter of 2018. In the second quarter of 2018, we
recognized a one-time credit loss in trade account receivable due
to the MP & Silva insolvency.
Finance costs were €16.2
million (US$18.4 million), a decrease of 11% year-over-year,
primarily due to the one-off impact of the termination in the
second quarter of 2018 of a cross-currency swap entered into in
connection with some financing agreements, partially offset by the
interest expenses related to the senior 364-day term loan facility
entered in March 2019 at the holding company level.
Finance income was €0.3 million
(US$0.3 million), a decrease of 93% year-over-year, also primarily
due to the cross-currency swap termination in the second quarter in
2018.
Income tax expenses were €1.2
million (US$1.4 million), compared with €7.9 million for the second
quarter of 2018. The decrease was mainly due to a release of an
income tax provision during the second quarter of 2019.
Profit was €24.6 million
(US$28.0 million), representing an increase of 33% from €18.5
million for the second quarter of 2018.
Adjusted EBITDA was €58.8
million (US$66.9 million), compared with €65.4 million in the
second quarter of 2018.
Net profit attributable to ordinary
shareholders was €23.4 million (US$26.6 million), compared
with €16.8 million for the second quarter of 2018.
Basic and diluted net income per
ADS were both €0.17 (US$ 0.19), compared with the basic
net income per ADS of €0.14 and diluted net income per ADS of €0.13
in the second quarter of 2018.
Cash and cash equivalents
As of June 30, 2019, we had cash and cash
equivalents of €186.5 million (US$212.1 million).
Business Updates
Mass Participation
We continued to take advantage of favorable
global conditions in the mass participation events industry. In the
second quarter of 2019, we operated 104 events. In the first half
of 2019, we operated a total of 133 of the 322 owned and managed
events scheduled for the full year.
Triathlon:
- We operated five inaugural events in France (Les Sables
d’Olonne), Greece (Costa Navarino), Ireland (Cork), and United
States (Connecticut and Virginia). Other key events included the
Hamburg Wasser World Triathlon Series, one of the world’s largest
short distance triathlons, as well as IRONMAN and IRONMAN 70.3
Regional Championships in Australia, Denmark, Germany, South Africa
and the United States.
- In May, St. George, Utah won a competitive bid to host the 2021
IRONMAN 70.3 World Championship. St. George will be the first
IRONMAN 70.3 event to rotate to a full-distance event in 2020,
providing athletes with new opportunities to race in a highly
popular event location.
Running:
- We continued to develop our global running brand – the Rock ‘n’
Roll Marathon Series. We launched two inaugural events in Shanghai
and Jixi, China in the second quarter.
- We strengthened our market leading position in Oceania through
the acquisition of Nine’s Events & Entertainment division,
adding four events, highlighted by The Sun Herald City2Surf
presented by Westpac – one of the world’s largest fun runs.
- In May, Chengdu Marathon of China was recognized as a candidate
race for the Abbott World Marathon Majors. This is the first and
only candidate race in China for the Abbott World Marathon Majors
series. The Abbott World Marathon Majors is the world’s largest and
most renowned Marathon series, consisting of the world’s six
premier marathons.
Others:
- We completed the acquisition of London-based Threshold Sports,
organizer of unique events such as a 9-day 1,500 km cycling
challenge, and Germany-based hundert24, organizer of 14
non-competitive extreme hiking challenges. We had also acquired the
Vienna Business Run, a popular annual 4.1-km road race.
Spectator Sports
In the second quarter, we made good progress in
further diversifying our portfolio of sports rights with a number
of new agreements signed with IP holders.
- In May, we and the English Premier League agreed a new
partnership for free-to-air rights across sub-Saharan Africa for
three years commencing with the 2019/20 season.
- In May, the 83rd IIHF World Championship in ice hockey was held
in Slovakia. Over 470,000 fans attended the event with 1.3 billion
people watching on TV. We were the exclusive media and marketing
partner of the IIHF.
- In June, a new agreement was signed with the International
Olympic Committee (IOC) that includes the media rights to
Sub-Saharan Africa for all Olympic properties through 2024.
DPSS
- In May, we launched iX.co, an entity aimed at becoming a world
leading digital media and solutions company that connects brands
and sports rights holders to global fan audiences.
- For the 83rd IIHF World Championship in ice hockey held in
Slovakia, we also provided media production and digital solutions
services.
- 2019 FIFA Women’s World Cup France™ took place across 11 cities
in France in June. As the host broadcaster, Infront was on-site
with more than 1,000 staff and six production teams per match. A
maximum of 29 cameras captured the action on the pitches and
delivered spectacular images.
Recent Developments
- In July 2019, we completed our IPO of 23.8 million ADSs at
a price of US$8 per ADS. Every two ADSs represent three
ordinary shares. We received approximately US$190.4
million in gross proceeds. We now have a total of
approximately 205 million ordinary shares issued and
outstanding.
- In August 2019, we repaid US$200 million (€175.8 million)
principal amount of the US$400 million unsecured senior 364-day
term loan facility that was entered into on March 15, 2019 at the
holding company level and also paid the related interest and
make-whole amount of US$17.6 million (€15.4 million). We used the
net proceeds from the IPO as well as cash on hand to fund the
repayment.
- In August 2019, World Triathlon Corporation (“WTC”), a Group
company, refinanced its existing credit facility, which includes a
term loan that matures on August 15, 2026 and a revolving line of
credit that matures on May 15, 2024. The term loan portion of the
credit facility is US$275 million (€241.8 million), and the
revolving line of credit is US$25 million (€22.0 million). Interest
on the term loan and revolving line of credit is the alternate base
rate or LIBOR plus the applicable margin that falls between 2.75%
and 4.25%. The other key terms remain materially the same as the
existing credit facility.
- In August 2019, FIBA, the world governing body of basketball,
and Wanda Group, our parent company, signed a strategic partnership
agreement. Wanda Group will continue as a global partner for the
next 12 years, covering the next three World Cup cycles. We,
through Infront, have global marketing rights to the next three
cycles of the FIBA Basketball World Cups and World Cup Qualifiers,
the Women’s Basketball World Cups, the FIBA Continental Cups and
also the FIBA Youth World Cups.
Third Quarter and Full Year 2019
Guidance
For the third quarter, we currently expect:
Total revenue to be in the range of €239 million
to €253 million, or up 5% to 11% year-over-year.
Excluding reimbursement revenue, total revenue
to be in the range of €236 million to €251 million, or up 30% to
38% year-over-year.
Adjusted EBITDA3 to be in the range of €39
million to €41 million, or down 1% to up 6% year-over-year.
For 2019, we currently expect:
Total revenue to be in the range of €1,008
million to €1,070 million, or down 11% to 5% from 2018.
Excluding reimbursement revenue, total revenue
to be in the range of €976 million to €1,036 million, or up 7% to
14 % from 2018.
Adjusted EBITDA3 to be in the range of €167
million to €177 million, or down 15% to 9% from 2018.
Compared with 2018, total revenue and Adjusted
EBITDA of 2019 are expected to be lower mainly due to event
cyclicality in 2018.
The guidance aforementioned reflects our
expectations for the third quarter and full year 2019 as of
September 9, 2019. Our results are based on assumptions that we
believe to be reasonable as of this date, but may be materially
affected by many factors, as discussed below in the Forward-Looking
Statements.
________________1 Cyclicality driven by the
timing cycle of sports events has a significant impact on the
comparability of our results from one period to the next. In 2018,
both total revenue and total cost of sales were impacted due to
media production activities in connection with the 2018 FIFA World
Cup Russia™, which is accounted for in our DPSS segment. These
activities are undertaken pursuant to our cost-plus contractual
model under which both revenue and costs are fully accounted for in
our consolidated statement of profit or loss, including
reimbursement revenues and reimbursement costs. Reimbursement
revenues represent revenue that has associated costs of a similar,
generally matching, amount (reimbursement costs), thereby resulting
in a negligible gross margin impact. The negligible gross margin
impact from reimbursement revenues and reimbursement costs (as
opposed to a zero gross margin impact as may be otherwise expected)
is due to temporary timing differences mainly resulting from
foreign exchange effects on invoice settlements.
2 Basic and diluted earnings per share and
profit attributable to ADS holders of the parent for the three
months ended June 30, 2019 and 2018 were computed in the assumption
that we had issued 23.8 million ADS, and had approximately 205
million ordinary shares issued and outstanding as at June 30, 2019
and 2018.
3 A reconciliation of our Adjusted EBITDA
guidance to the most directly comparable IFRS financial measure
cannot be provided because of the inherent difficulty in
forecasting and quantifying certain amounts and in reliance on the
“unreasonable efforts” exception provided for in Regulation G. Our
Adjusted EBITDA guidance for the third quarter of 2019 reflects
adjustments that exclude estimated stock-based compensation of
approximately €24 million to €26 million and estimated depreciation
and amortization of approximately €8 million to €9 million. Our
Adjusted EBITDA guidance for the full year 2019 reflects
adjustments that exclude estimated stock-based compensation of
approximately €40 million to €43 million and estimated depreciation
and amortization of approximately €33 million to €35 million. We
are unable to forecast the timing or magnitude of other items that
we expect will impact our IFRS profit/(loss) for the period and
which we expect to adjust for in our Adjusted EBITDA, such as those
included in the reconciliation table included at the end of this
release, due to the nature of these items, being inherently
unpredictable and not reliably quantifiable. These items could
significantly impact, either individually or in the aggregate, our
IFRS profit/(loss) for the period in the future.
Conference Call Information
Wanda Sports’ management will host an earnings
conference call at 8:30 AM U.S. Eastern Time on September 9, 2019
(8:30 PM Beijing/Hong Kong Time on September 9, 2019).
The dial-in details for the live conference call
are as follows:
United States: |
+1 866 519 4004 |
International: |
+65 6713 5090 |
Hong Kong: |
+852 3018 6771 |
China: |
4006 208038 |
Conference ID: |
9269765 |
Additionally, a live and archived webcast of the
conference call will be available on Wanda Sports’ investor
relations website at investor.wsg.cn.
A replay of the conference call will be
accessible approximately two hours after the conclusion of the live
call until September 17, 2019, by dialing the following telephone
numbers:
United States: |
+1 855 452 5696 |
International: |
+61 2 8199 0299 |
Hong Kong: |
800 963 117 |
China: |
4006 322 162 2 |
Replay Access Code: |
9269765 |
About Wanda Sports Group
Wanda Sports Group (Nasdaq: WSG) is a leading
global sports events, media and marketing platform with a mission
to unite people in sports and enable athletes and fans to live
their passions and dreams. Through our businesses, including
Infront and The IRONMAN Group, we have significant intellectual
property rights, long-term relationships and broad execution
capabilities, enabling us to deliver unrivalled sports event
experiences, creating access to engaging content and building
inclusive communities. We offer a comprehensive array of events,
marketing and media services through three primary segments: Mass
Participation, Spectator Sports and Digital, Production, Sports
Solutions (DPSS). Our full-service platform creates value for our
partners and clients as well as other stakeholders in the sports
ecosystem, from rights owners, to brands and advertisers, and to
fans and athletes.
Headquartered in Beijing, China, Wanda Sports
Group has more than 60 offices and 1,600 employees around the
world.
For more information, please visit
investor.wsg.cn.
Use of Non-IFRS Financial
Measures
To supplement our consolidated financial
statements which are presented in accordance with International
Financial Reporting Standards as issued by the International
Accounting Standards Board (“IFRS”), we also use Adjusted EBITDA as
a non-IFRS financial measure. We present Adjusted EBITDA because it
is used by our management, in evaluating our operating results and
for financial and operational decision-making purposes. We believe
that this measure helps identify underlying trends in our business
that could otherwise be distorted by the effect of certain expenses
that we include in our profit/(loss) from operations and net
profit/(loss). We believe that Adjusted EBITDA provides useful
information about our results of operations, enhances the overall
understanding of our past performance and future prospects and
allows for greater visibility as to key metrics used by our
management in its financial and operational decision-making.
Non-IFRS financial measures should not be
considered in isolation or construed as an alternative to
profit/(loss) from operations and net profit/(loss) or any other
measure of performance, or as an indicator of our operating
performance. Adjusted EBITDA may not be comparable to similarly
titled measures presented by other companies. Other companies may
calculate similarly titled measures differently, limiting their
usefulness as comparative measures to our data. We encourage
investors and others to review our financial information in its
entirety and not rely on a single financial measure. Reconciliation
of Adjusted EBITDA and EBITDA, another non-IFRS financial measure,
to the most directly comparable IFRS financial measure is set forth
at the end of this release.
Exchange Rate Information
This press release contains translation of
certain EURO amounts into U.S. dollars at specified rates solely
for the convenience of readers. Unless otherwise noted, all
translations from EURO to U.S. dollars were made at the exchange
rate of €0.8792 to US$1.0, the noon buying rate in New York for
cable transfers of EURO as certified for customs purposes by the
Federal Reserve Bank of New York in effect as of June 30, 2019.
Forward-Looking Statements
This announcement contains forward-looking
statements. These statements are made under the “safe harbor”
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements include but are not limited
to management quotes and our financial outlook. These
forward-looking statements can be identified by terminology such as
“will,” “estimate,” “project,” “predict,” “believe,” “expect,”
“anticipate,” “intend,” “potential,” “plan,” “goal” and similar
statements. We may also make written or oral forward-looking
statements in our periodic reports to the U.S. Securities and
Exchange Commission, in our annual report to shareholders, in press
releases and other written materials and in oral statements made by
its officers, directors or employees to third parties. Such
statements involve certain risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
in the forward-looking statements. These forward-looking statements
include, but are not limited to, statements about: our goals and
strategies; the expected growth in our industry; our expectations
regarding our ability to attract rights-in partners and monetize
their rights through rights-out arrangements; our future business
development, results of operations and financial condition;
competition in our industry; general economic and business
conditions; and assumptions underlying or related to any of the
foregoing as well as risks, uncertainties, and other factors
described in “Risk Factors” and elsewhere in our registration
statement on Form F-1, which is available on the SEC’s website at
www.sec.gov. Additional information will be made available in our
annual report on Form 20-F for the year ending December 31, 2019
and other filings that we make from time to time with the SEC. In
addition, any forward-looking statements contained in this press
release are based on assumptions that we believe to be reasonable
as of this date. We undertake no obligation to update any
forward-looking statements to reflect events or circumstances after
the date of this press release or to reflect new information or the
occurrence of unanticipated events, except as required by law.
For investor and media inquiries, please
contact:
In China Wanda Sports Group Eric Yuan Tel: +86
10-8558-8813 E-mail: ir@wsg.cn
In U.S.Paul ScarpettaTel: +1 212-687-8080E-mail:
WandaSports-SVC@SARDVERB.com
WANDA SPORTS GROUP COMPANY
LIMITED
INTERIM CONDENSED CONSOLIDATED STATEMENT
OF PROFIT OR LOSS
(Amounts in thousands of Euro (“€”) or,
for convenience translation, thousands of U.S. Dollar (“$”), except
for number of shares and per share data)
|
For the three months ended |
|
June 30, 2019 |
|
June 30, 2018 |
|
$ |
|
€ |
|
€ |
Revenue |
322,796 |
|
|
283,802 |
|
|
404,478 |
|
Cost of sales |
(204,047 |
) |
|
(179,398 |
) |
|
(296,242 |
) |
Gross profit |
118,749 |
|
|
104,404 |
|
|
108,236 |
|
Personnel expenses |
(40,846 |
) |
|
(35,912 |
) |
|
(35,196 |
) |
Selling, office and administrative expenses |
(20,231 |
) |
|
(17,787 |
) |
|
(11,928 |
) |
Depreciation and amortization |
(9,569 |
) |
|
(8,413 |
) |
|
(9,300 |
) |
Other operating expense, net |
(647 |
) |
|
(569 |
) |
|
(11,970 |
) |
Finance costs |
(18,384 |
) |
|
(16,163 |
) |
|
(18,209 |
) |
Finance income |
365 |
|
|
321 |
|
|
4,392 |
|
Share of profit/(loss) of associates and joint ventures |
(167 |
) |
|
(147 |
) |
|
345 |
|
Profit before tax |
29,270 |
|
|
25,734 |
|
|
26,370 |
|
Income tax |
(1,330 |
) |
|
(1,169 |
) |
|
(7,881 |
) |
Profit for the period |
27,940 |
|
|
24,565 |
|
|
18,489 |
|
Attributable to: |
|
|
|
|
|
|
|
|
Equity holders of the parent |
26,667 |
|
|
23,446 |
|
|
16,836 |
|
Non‑controlling interests |
1,273 |
|
|
1,119 |
|
|
1,653 |
|
|
27,940 |
|
|
24,565 |
|
|
18,489 |
|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic profit for the period attributable to ordinary equity
holders4 of the parent |
0.13 |
|
|
0.11 |
|
|
0.09 |
|
Diluted profit for the period attributable to ordinary equity
holders4 of the parent |
0.13 |
|
|
0.11 |
|
|
0.08 |
|
Basic profit for the period attributable to ADS4 holders of the
parent |
0.19 |
|
|
0.17 |
|
|
0.14 |
|
Diluted profit for the period attributable to ADS4 holders of the
parent |
0.19 |
|
|
0.17 |
|
|
0.13 |
|
|
|
|
|
|
|
|
|
|
________________4 Basic and diluted earnings per
share and profit attributable to ADS holders of the parent for the
three months ended June 30, 2019 and 2018 were computed in the
assumption that we had issued 23.8 million ADS, and had
approximately 205 million ordinary shares issued and outstanding as
at June 30, 2019 and 2018.
WANDA SPORTS GROUP COMPANY
LIMITED
INTERIM CONDENSED CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
(Amounts in thousands of Euro (“€”) or,
for convenience translation, thousands of U.S. Dollar
(“$”))
|
For the three months ended |
|
June 30, 2019 |
|
June 30, 2018 |
|
$ |
|
€ |
|
€ |
Profit for the period |
27,940 |
|
|
24,565 |
|
|
18,489 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
Other comprehensive income (loss) to be reclassified to profit or
loss in subsequent periods (net of tax): |
|
|
|
|
|
|
|
|
Net gain on cash flow hedges |
270 |
|
|
237 |
|
|
6,549 |
|
Exchange differences on translation of foreign operations |
(15,552 |
) |
|
(13,673 |
) |
|
(1,091 |
) |
Net other comprehensive (loss) income to be reclassified to profit
or loss in subsequent periods |
(15,282 |
) |
|
(13,436 |
) |
|
5,458 |
|
Other comprehensive income not to be reclassified to profit or loss
in subsequent periods: |
|
|
|
|
|
|
|
|
Net remeasurement on defined benefit plans |
(14 |
) |
|
(12 |
) |
|
- |
|
Other comprehensive (loss) income for the period, net of tax |
(15,296 |
) |
|
(13,448 |
) |
|
5,458 |
|
Total comprehensive income for the period, net of tax |
12,644 |
|
|
11,117 |
|
|
23,947 |
|
Attributable to: |
|
|
|
|
|
|
|
|
Equity holders of the parent |
11,707 |
|
|
10,293 |
|
|
21,889 |
|
Non‑controlling interests |
937 |
|
|
824 |
|
|
2,058 |
|
|
12,644 |
|
|
11,117 |
|
|
23,947 |
|
|
|
|
|
|
|
|
|
|
WANDA SPORTS GROUP COMPANY
LIMITED
INTERIM CONDENSED CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
(Amounts in thousands of Euro (“€”) or,
for convenience translation, thousands of U.S. Dollar
(“$”))
|
June 30, 2019 |
|
December 31, 2018 |
|
$ |
|
€ |
|
€ |
ASSETS |
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
Cash and cash equivalents |
212,130 |
|
186,505 |
|
177,048 |
Trade and other receivables |
273,384 |
|
240,359 |
|
299,898 |
Accrued income |
17,751 |
|
15,607 |
|
6,474 |
Contract assets |
36,440 |
|
32,038 |
|
39,714 |
Inventories |
10,464 |
|
9,200 |
|
5,935 |
Income tax receivables |
8,384 |
|
7,371 |
|
8,816 |
Other assets |
85,051 |
|
74,777 |
|
81,561 |
|
643,604 |
|
565,857 |
|
619,446 |
NON‑CURRENT ASSETS |
|
|
|
|
|
Long‑term receivables |
12,028 |
|
10,575 |
|
6,271 |
Investments in associates and joint ventures |
1,257 |
|
1,105 |
|
5,551 |
Property, plant and equipment |
30,266 |
|
26,610 |
|
26,048 |
Right of use assets |
37,509 |
|
32,978 |
|
35,789 |
Intangible assets |
485,104 |
|
426,504 |
|
423,488 |
Goodwill |
938,822 |
|
825,411 |
|
677,326 |
Contract assets |
11,341 |
|
9,971 |
|
9,077 |
Deferred tax assets |
26,640 |
|
23,422 |
|
24,562 |
Other assets |
70,378 |
|
61,876 |
|
54,953 |
|
1,613,345 |
|
1,418,452 |
|
1,263,065 |
TOTAL ASSETS |
2,256,949 |
|
1,984,309 |
|
1,882,511 |
|
|
|
|
|
|
WANDA SPORTS GROUP COMPANY
LIMITED
INTERIM CONDENSED CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
(Amounts in thousands of Euro (“€”) or,
for convenience translation, thousands of U.S. Dollar
(“$”))
|
June 30, 2019 |
|
December 31, 2018 |
|
$ |
|
€ |
|
€ |
LIABILITIES |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Trade and other payables |
160,245 |
|
|
140,887 |
|
|
816,451 |
|
Interest‑bearing liabilities |
422,450 |
|
|
371,418 |
|
|
25,487 |
|
Lease liabilities |
12,166 |
|
|
10,696 |
|
|
9,863 |
|
Accrued expense |
101,713 |
|
|
89,426 |
|
|
83,516 |
|
Deferred income |
6 |
|
|
5 |
|
|
7 |
|
Contract liabilities |
176,009 |
|
|
154,747 |
|
|
185,681 |
|
Other liabilities |
19,926 |
|
|
17,519 |
|
|
17,097 |
|
Income tax payable |
18,513 |
|
|
16,277 |
|
|
31,009 |
|
Provisions |
8,011 |
|
|
7,043 |
|
|
3,419 |
|
|
919,039 |
|
|
808,018 |
|
|
1,172,530 |
|
NON‑CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Interest‑bearing liabilities |
728,234 |
|
|
640,263 |
|
|
535,630 |
|
Lease liabilities |
29,440 |
|
|
25,884 |
|
|
28,841 |
|
Accrued expenses |
5,620 |
|
|
4,941 |
|
|
4,941 |
|
Deferred income |
- |
|
|
- |
|
|
10 |
|
Contract liabilities |
16,368 |
|
|
14,391 |
|
|
13,485 |
|
Deferred tax liabilities |
94,207 |
|
|
82,827 |
|
|
82,941 |
|
Provisions |
4,233 |
|
|
3,722 |
|
|
8,576 |
|
Long‑term payroll payables |
15,031 |
|
|
13,215 |
|
|
12,770 |
|
Other liabilities |
60,298 |
|
|
53,014 |
|
|
31,802 |
|
|
953,431 |
|
|
838,257 |
|
|
718,996 |
|
TOTAL LIABILITIES |
1,872,470 |
|
|
1,646,275 |
|
|
1,891,526 |
|
EQUITY |
|
|
|
|
|
|
|
|
Share capital |
1,729,773 |
|
|
1,520,816 |
|
|
1,520,816 |
|
Reserves |
(1,127,232 |
) |
|
(991,062 |
) |
|
(1,321,685 |
) |
Accumulated deficit |
(219,496 |
) |
|
(192,981 |
) |
|
(207,566 |
) |
Equity/(deficit) attributable to equity holders of the parent |
383,045 |
|
|
336,773 |
|
|
(8,435 |
) |
Non‑controlling interests |
1,434 |
|
|
1,261 |
|
|
(580 |
) |
Total equity/(deficit) |
384,479 |
|
|
338,034 |
|
|
(9,015 |
) |
Total liabilities and equity |
2,256,949 |
|
|
1,984,309 |
|
|
1,882,511 |
|
|
|
|
|
|
|
|
|
|
WANDA SPORTS GROUP COMPANY
LIMITED
SUMMARY OF INTERIM CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
(Amounts in thousands of Euro (“€”) or,
for convenience translation, thousands of U.S. Dollar
(“$”))
|
For the three months ended |
|
June 30, 2019 |
|
June 30, 2018 |
|
$ |
|
€ |
|
€ |
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES |
34,923 |
|
|
30,704 |
|
|
(9,725 |
) |
NET CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES |
(47,760 |
) |
|
(41,991 |
) |
|
(22,385 |
) |
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES |
14,059 |
|
|
12,361 |
|
|
(60,403 |
) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
1,222 |
|
|
1,074 |
|
|
(92,513 |
) |
Cash and cash equivalents at beginning of the period |
212,397 |
|
|
186,739 |
|
|
233,112 |
|
Effect of foreign exchange rate changes, net |
(1,489 |
) |
|
(1,308 |
) |
|
4,771 |
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
212,130 |
|
|
186,505 |
|
|
145,370 |
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-IFRS MEASURE – IFRS
Profit for the Period to Adjusted EBITDA (unaudited)
(Amounts in thousands of Euro (“€”) or,
for convenience translation, thousands of U.S. Dollar
(“$”))
|
For the three months ended |
|
June 30, 2019 |
|
June 30, 2018 |
|
$ |
|
|
€ |
|
|
€ |
|
Profit for the period |
27,940 |
|
|
24,565 |
|
|
18,489 |
|
Income tax |
1,330 |
|
|
1,169 |
|
|
7,881 |
|
Net interest expenses |
21,423 |
|
|
18,835 |
|
|
6,429 |
|
Depreciation and amortization |
9,569 |
|
|
8,413 |
|
|
9,300 |
|
EBITDA |
60,262 |
|
|
52,982 |
|
|
42,099 |
|
|
|
|
|
|
|
|
|
|
Share-based compensation(1) |
2,396 |
|
|
2,107 |
|
|
3,264 |
|
Expenses or charges relating to acquisition(2) |
1,289 |
|
|
1,133 |
|
|
1,415 |
|
Expenses or charges relating to IPO or financing(3) |
4,736 |
|
|
4,164 |
|
|
294 |
|
Restructure and disposal of investments / subsidiaries(4) |
430 |
|
|
378 |
|
|
(56 |
) |
Loss from termination of customer(5) |
- |
|
|
- |
|
|
1,365 |
|
Bad debt expenses relating to specific customer(6) |
- |
|
|
- |
|
|
9,601 |
|
Losses/(gains) on foreign exchange and derivatives, and other
financial charges(7) |
(3,404 |
) |
|
(2,993 |
) |
|
7,388 |
|
Estimated client compensation relating to fraudulent
activities(8) |
1,170 |
|
|
1,029 |
|
|
- |
|
Adjusted EBITDA |
66,879 |
|
|
58,800 |
|
|
65,370 |
|
|
|
|
|
|
|
|
|
|
________________
- Share-based compensation has been excluded as it is a non-cash
expense. Our adjustment removes all of the historical share-based
compensation for employees.
- Represents expenses incurred for professional fees such as
legal counsel, auditors, underwriters, valuation experts and
consultants in respect of strategic acquisitions in our mass
participation sports business, including Lagardere Unlimited Events
AG in 2016 and Competitor Group Holdings, Inc., or CGI, in
2017.
- Represents professional fees of legal counsel, auditors, due
diligence services experts, consultants, and related IPO expenses
or financing.
- Represents expenses or costs incurred in the restructuring and
disposal of investments and subsidiary companies. Following our
acquisitions of Infront and WEH, we went through a restructuring
process which involved divestment of certain investments and
subsidiaries. Following the acquisition of CGI in 2017, WEH
undertook a similar process. While event and contract performance
reviews are performed as a normal course of business, these larger
restructuring processes are considered non-recurring.
- Eliminates the impact from the extraordinary loss of certain
rights-in partners following their insolvency.
- Eliminates expenses reflecting expected credit losses in trade
account receivables that we had outstanding from a sports marketing
and media rights firm (MP & Silva) as well as contract assets,
as a result of the initiation of MP & Silva’s insolvency
process.
- Represents the losses/(gains) on foreign exchange, derivative
financial instruments at fair value through profit or loss,
termination of the cross-currency swap and other financial
charges.
- Represents the amount estimated to be paid by Infront as
compensation in connection with fraudulent activities presumably
undertaken by a former senior employee of Infront, for which we
have taken a revenue deduction in the three months ended June 30,
2019.
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