Wanda Sports Group Company Limited (the “Company”, and together
with its consolidated entities, “Wanda Sports”, the “Group” or
“we”) (NASDAQ: WSG), a leading global sports events, media and
marketing platform, today announced its unaudited financial results
for the third quarter ended September 30, 2019.
Third Quarter 2019
Highlights:
- Total revenue was €245.2 million
(US$267.4 million), representing an increase of 8% year-over-year.
Excluding the impact of reimbursement revenue1, total revenue was
€242.5 million (US$264.5 million), a 33% increase over the third
quarter of 2018.
- Loss for the period was €31.2
million (US$34.0 million), compared to a profit for the period of
€13.1 million for the third quarter of 2018. Our performance was
impacted by stock-based compensation expenses, the remaining
IPO-related costs and the financing costs.
- Adjusted EBITDA was €39.3 million
(US$42.8 million) in the third quarter of 2019, substantially
similar to the third quarter of 2018.
- The number of mass participation
events expanded from 102 events in the third quarter of 2018 to 120
events in the third quarter of 2019. The number of gross-paid
athletes also showed significant year-over-year growth of 37.5%,
from 448,000 in the third quarter 2018 to 616,000 in the third
quarter of 2019.
- The Group established a long term
strategic partnership with the International Association of
Athletics Federations (IAAF), including a new Diamond League media
rights for five years from 2025, a ten-year international media
rights agreement for a second international tour - a series of
one-day meetings around the world from 2020; the future
organization of an annual Diamond League meeting in China by the
Group as well as the creation of a new annual IAAF event in China
to be organized by the Group.
- Host broadcast productions for the FIFA Women's World Cup 2019
™ in France and for the Rugby World Cup 2019 in Japan have been
successfully delivered.
- The Group successfully delivered
the commercial program of the FIBA Basketball World Cup 2019,
serving as the exclusive partner for their worldwide sponsorship,
merchandising, licensing and hospitality.
- A 10-year media, marketing, digital
and merchandising rights prolongation has been extended with the
International Ice Hockey Federation (IIHF), the governing body of
international ice hockey organizing the annual IIHF Ice Hockey
World Championship, through to 2033.
- Our net leverage ratio improved
from June 30, 2019, which preceded our IPO and the use of proceeds
to reduce leverage, to 4.2x at September 30, 2019.
Mr. Hengming Yang, Chief Executive Officer of
Wanda Sports, commented, “We delivered solid operating results in
the third quarter driven by the strong activity in our Spectator
Sports segment, the addition of popular new events in our Mass
Participation segment and our continued ability to leverage
technology across our global platform to deliver a differentiated
experience for our athletes, fans and partners. However, our
near-term profitability has been impacted by the expenses in
stock-based compensation, the remaining IPO-related costs and the
financing costs, as we have previously mentioned. Notwithstanding
these factors, we remain confident in the outlook of our business
and our ability to continue to execute our strategy to create
lasting shareholder value.”
Mr. Brian Liao, Chief Financial Officer of Wanda
Sports commented, “Despite the cyclicality, we have delivered
robust like-for-like revenue growth year-on-year, thanks to the
expansion of our sports rights and event offerings in the third
quarter. Our focus remains on reducing our debt, improving
synergies across our group and taking full advantage of our asset
light model and strong cash flow generation as we position Wanda
Sports for long-term growth.”
Third Quarter 2019 Business Highlights
Core Business Segments
Mass Participation
In the third quarter, we operated 120 events,
compared to 102 events in the same period last year. Through the
end of the third quarter, we completed 282 of the 347 events
scheduled for 2019, including owned, managed and licensed
events.
Triathlon
- We held the IRONMAN 70.3 World Championship in Nice, France for
the first time, on September 7-8 with a record 5,706 athletes from
105 nations registered to compete in the two-day event.
- We operated four inaugural triathlon events - IRONMAN
Vitoria-Gasteiz in Spain, the IRONMAN 70.3 in Traverse City,
Michigan as well as in Xian, China and an IRONMAN/IRONMAN 70.3/5i50
multirace event in Emilia Romagna in Italy.
Running
- In Sydney, Australia, our recently acquired Sun Herald
City2Surf presented by Westpac, also known as “the World’s Largest
Fun Run,” drew a sold-out field of more than 84,000 participants in
August.
- The Group won the exclusive rights to organize the Rome
Marathon, one of the top 10 European marathons, from 2020 to 2023.
The agreement includes operational management of the event as well
as all marketing, commercial TV and media rights.
Cycling
- The Deloitte Ride Across Britain took place in September with
nearly 1,000 cyclists participating in the 980-mile ride over nine
days. It was the 10th edition of the event and the first time the
Group has been involved following its acquisition of UK-based event
organizer Threshold in April.
Spectator Sports
The Spectator Sports business in the third
quarter reflected the Group’s delivery of a number of world
championships and large-scale regional events.
Key events
- The FIBA Basketball World Cup, FIBA’s flagship competition in
2019 which achieved a world record audience, was held in China for
the first time, from August 31 to September 15. The Group
successfully delivered the commercial program of the FIBA
Basketball World Cup 2019, serving as the exclusive partner for
their worldwide sponsorship, merchandising, licensing and
hospitality.
- The CEV Men's and Women's European Volleyball Championships
took place in August and September. The Group, as the CEV's
long-standing exclusive media rights partner, secured broadcasters
in over 150 territories globally.
- TOTAL BWF Badminton World Championships 2019, which was held
from August 19-25 in Basel, Switzerland. This was the 25th edition
of the Badminton World Championships, which welcomed top players
from around the world to Switzerland. The Group, BWF's exclusive
media and marketing partner, was responsible for a variety of
deliverables, including sponsorship, media sales, client and
broadcaster services.
Major Prolongations
- A 10-year media, marketing, digital and merchandising rights
prolongation with IIHF, the governing body of international ice
hockey which organizes the annual IIHF Ice Hockey World
Championship, has extended its partnership with the Group until
2033, starting in 2024 (at the end of our current agreement)
through 2033 was unanimously ratified by the IIHF Congress.
- A five-year agreement with Scottish Professional Football
League (SPFL) media rights until 2024/25 has been extended, another
addition to our world’s leading football portfolio. The
extended agreement also covers the development of a dedicated
e-sports league for SPFL.
Key New Business Wins
- The Group established a long term strategic partnership with
the International Association of Athletics Federations (IAAF),
including a new Diamond League media rights for five years from
2025, a ten-year international media rights agreement for a second
international tour - a series of one-day meetings around the world
from 2020; the future organization of an annual Diamond League
meeting in China by the Group as well as the creation of a new
annual IAAF event in China to be organized by the Group.
- A partnership with the NBA covering the sale of the NBA’s
sponsorship rights in Italy has been established. This marks the
NBA’s first agreement where a sports marketing company will
represent NBA sponsorship inventory in Italy.
- A marketing agreement with Formula 1 team Alfa Romeo Racing has
been secured until the end of 2020.
- A marketing agreement covering hospitality packages of
Roland-Garros and the Rolex Paris Masters has been secured until
2021.
Digital, Production, Sports Solutions (DPSS)
- IGBS, a joint venture between HBS and IMG Media, was the host
broadcaster for the Rugby World Cup 2019 in Japan. The tournament
sets new standards in rugby broadcast production with the first 8K
production, the use of augmented reality graphics and Hawk-Eye
Smart Replay technology.
- We were the host broadcaster for the FIFA Women's World Cup
2019 ™, which was held from June 7 to July 7 in France. HBS
had more than 1,000 staff on site and six production teams per
match.
- 5G production has been successfully
tested at the BMW Berlin-Marathon, part of the Abbott World
Marathon Majors, a series of the six world's largest and most
renowned marathons.
- We finalized our investment in the Level 99, an eSports
creative agency that services major eSports publishers such as
EA, leagues like ESL and teams such as OG. We believe this
investment is important to our strategic expansion and that eSports
will complement our spectator business and digital
offerings.
China Business Highlights
In the third quarter, we continued to add
premium mass participation sports events in China to our
portfolio.
- IRONMAN 70.3 held its first event in Xian, China on September
15, providing athletes with new racing opportunities.
- The Group secured the operating rights for the Shenyang
International Marathon, which hosted 20,000 athletes from 18
countries on September 8. The race’s top 100 qualifiers will
represent China in the Abbott WMM Wanda Age Group World
Championships 2020, which will be held as part of the London
Marathon Majors.
- We were host broadcaster for the 18th edition of the Tour of
Qinghai Lake International Road Cycling Race in Qinghai province in
July.
Third
Quarter 2019 Financial
Results
Revenue
Total revenue was €245.2 million (US$267.4
million), representing an increase of 8% year-over-year, primarily
attributable to increase in revenue from our mass participation and
spectator sports segments. Excluding reimbursement revenue2, total
revenue was €242.5 million (US$264.5 million), a significant
increase of 33% over the third quarter of 2018.
The following table sets forth a breakdown of
our revenue by segment for the periods indicated:
|
Three Months Ended September 30, |
|
2019 |
2018 |
(in millions, except percentages) |
USD |
EUR |
% of Revenue |
EUR |
% of Revenue |
YoY Change |
Core segments: |
|
|
|
|
|
|
Mass Participation |
123.7 |
113.4 |
46% |
99.6 |
44% |
14% |
Spectator Sports |
115.4 |
105.8 |
43% |
58.7 |
26% |
80% |
DPSS |
28.3 |
26.0 |
11% |
69.1 |
30% |
(62%) |
Total
Revenue |
267.4 |
245.2 |
100% |
227.4 |
100% |
8% |
DPSS excluding reimbursement
revenue |
25.4 |
23.3 |
|
23.6 |
|
(1%) |
Total Revenue excluding
reimbursement revenue |
264.5 |
242.5 |
|
181.9 |
|
33% |
- Mass Participation: The increase in revenue was principally
driven by the increase in our total number of events, to 120 events
for the third quarter of 2019 from 102 events for the third quarter
of 2018. The number of gross-paid athletes also increased to
616,000 for the third quarter of 2019 from 448,000 in the same
period last year.
- Spectator Sports: The increase in revenue was primarily due to
the expansion of our summer sports portfolio, mainly the FIBA
Basketball World Cup 2019, FIM MXGP Motocross World Championship
races and the CEV EuroVolley 2019.
- DPSS: The decrease in revenue was due to event cyclicality
relating to the 2018 FIFA World Cup Russia™. Excluding
reimbursement revenue, DPSS revenue was €23.3 million (US$25.4
million) for the third quarter of 2019, approximately the same as
the third quarter of 2018.
Gross profit
The following table sets forth a breakdown of
our gross profit and our gross margin by segment for the periods
indicated:
|
Three Months Ended, September 30, |
|
2019 |
2018 |
(in millions, except percentages) |
USD |
EUR |
Gross margin |
EUR |
Gross margin |
YoY Change in Gross Profit |
Core segments: |
|
|
|
|
|
|
Mass Participation |
47.6 |
43.6 |
38% |
37.9 |
38% |
15% |
Spectator Sports |
35.3 |
32.4 |
31% |
29.8 |
51% |
9% |
DPSS |
9.6 |
8.8 |
34% |
13.5 |
20% |
(35%) |
Total Gross Profit |
92.5 |
84.8 |
35% |
81.2 |
36% |
4% |
- Mass Participation: The increase in gross profit was
principally driven by the increase in the number of
events.
- Spectator Sports: The increase was primarily due to a higher
profit contribution from the FIM MXGP Motocross World Championship
races.
- DPSS: The decrease was primarily due to the event cyclicality
of the 2018 FIFA World Cup Russia™ relating to the media production
business.
Gross margin, or gross profit
as a percentage of revenue, was 35%, compared with 36% in the same
quarter of 2018.
Personnel
expenses were €53.3 million (US$58.1 million), an
increase of 35% year-over-year, primarily driven by stock-based
compensation incurred during the period for €21.7 million (US$23.6
million), which reflected the impact of the IPO on the valuation
awards and the acceleration of vesting on outstanding grants in our
subsidiary businesses.
Selling, office and administrative
expenses were €15.0 million (US$16.4 million) for the
third quarter of 2019, compared with €11.7 million in the third
quarter in 2018, primarily driven by IPO related expenses, higher
third party service fees as well as additional travelling expenses
for various international events.
Depreciation and amortization
expenses were €7.7 million (US$8.4 million), compared with
€7.7 million in the third quarter in 2018.
Other operating expenses, net
was €2.0 million (US$2.2 million) compared with other operating
income, net of €0.4 million in the third quarter of 2018, primarily
due to the absence of other investment income during the current
period.
Finance costs were €28.5
million (US$31.1 million), compared with €9.8 million in the third
quarter in 2018, primarily due to interest expense and make-whole
amount during the period for the unsecured senior 364-day term loan
facility which was entered in March 2019.
Income tax expenses were €10.3
million (US$11.2 million), compared with €3.8 million for the third
quarter of 2018. The increase was mainly due to additional
tax expense arising from newly acquired companies in the current
year, additional tax expenses related to prior year operating
income as well as an increase in expenses that were not tax
deductible such as share-based compensation expenses, or were
unable to be recognized as deferred tax asset such as interest
expense.
Loss for the period was €31.2
million (US$34.0 million), compared to a profit for the period
€13.1 million for the third quarter of 2018 primarily attributable
to finance cost relating to our unsecured senior 364-day term loan
facility; the stock-based compensation for our Management Equity
Incentive Plan arise from IPO and the increase in income tax
expenses.
Adjusted EBITDA was €39.3
million (US$42.8 million) in the third quarter of 2019,
substantially similar to the third quarter of 2018.
Net loss attributable to ordinary
shareholders of Wanda Sports Group Company Limited was
€31.3 million (US$34.1 million), compared to a net profit
attributable to ordinary shareholders of Wanda Sports Group Company
Limited of €12.9 million for the third quarter of 2018.
Basic and diluted net loss per American
Depositary Share (“ADS”) were both €0.23 (US$0.25),
compared to basic net income per ADS of €0.09 and diluted net
income per ADS of €0.08 in the third quarter of 2018.
Cash and cash equivalents
As of September 30, 2019, the Group had cash and
cash equivalents of €122.8 million (US$133.9 million).
Fourth Quarter and full year 2019
Guidance
For the fourth quarter, we currently expect:
Total revenue to be in the range of €245 million
to €260 million, or down 7% to 1% year-over-year.
Excluding reimbursement revenue, total revenue
to be in the range of €242 million to €257 million, or down 7% to
1% year-over-year.
Adjusted EBITDA to be in the range of €44
million to €49 million, or down 9% to up 1% year-over-year.
For the full year 2019, we currently expect:
Total revenue to be in the range of €1,020
million to €1,035 million, or down 10% to 8% from 2018.
Excluding reimbursement revenue, total revenue
to be in the range of €987 million to €1,002 million, or up 8% to
10% from 2018.
Adjusted EBITDA to be in the range of €167
million to €172 million, or down 15% to 12% 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 aforementioned guidance reflects our
expectations for the fourth quarter and full year 2019 as of
November 18, 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.
Conference Call Information
Wanda Sport’s management will host an earnings
conference call at 8:30 AM U.S. Eastern Time on November 18, 2019
(9:30 PM Beijing/Hong Kong Time on November 18, 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: |
5380899 |
Additionally, a live and archived webcast of the
conference call will be available on the Company's 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 November 26 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: |
5380899 |
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 World Triathlon Corporation (IRONMAN), 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 this non-IFRS financial
measure because it is used by our management in evaluating our
operating results and for financial and operational decision-making
purposes. We define Adjusted EBITDA as net income excluding
share-based compensation and other non-recurring expenses. We
also believe that this non-IFRS financial measure provides useful
information to investors and others in understanding and evaluating
our consolidated results of operations in the same manner as our
management and in comparing financial results across accounting
periods and to those of our peer companies.
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. Dollar (“$”) at specified
rates solely for the convenience of readers. Unless otherwise
noted, all translations from Euro to U.S. dollar were made at the
exchange rate of €0.9170 to US$1.00, the exchange rate on September
30, 2019 set forth in the H.10 statistical release of the Board of
Governors of the Federal Reserve System.
Change in accounting policy relating to
the parent Company’s functional
currency
Prior to July 31, 2019, the functional currency
of the Company (the Group’s parent company) was Euro.
Effective as of July 31, 2019, the Company changed its functional
currency from Euro to the U.S. Dollar. Management believes
the U.S. Dollar better reflects the more relevant economic
environment of the Company, as it incurs and services its external
debt mainly in U.S. Dollars. Meanwhile, the Group's presentation
currency for its consolidated financial statements has been, and
will remain, the Euro.
Safe Harbor Statement
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 Wanda Sports management quotes and the Group’s 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. Wanda Sports may also make
written or oral forward-looking statements in its periodic reports
to the U.S. Securities and Exchange Commission, in its 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: the Group’s goals and strategies;
growth of the Chinese e-commerce market; Chinese governmental
policies relating to the Group’s industry and general economic
conditions in China; 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 the Company’s
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
the Company’s annual report on Form 20-F for the year ending
December 31, 2019 and other filings that the Company makes from
time to time with the SEC. In addition, any forward-looking
statements contained in this press release are based on assumptions
that the Company believes to be reasonable as of this date. The
Company undertakes 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 Edith Kwan Tel: +86 (10) 8558
7456 E-mail: ir@wsg.cn
In the U.S.:Sard Verbinnen & CoPaul
ScarpettaE-mail: WandaSports-SVC@SARDVERB.com
_______________________
1 See revenue discussion below for a description
of the reimbursement revenue and its impact.
2 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 also impacted due to media production
activities in connection e.g. with the 2018 FIFA World Cup Russia™
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.
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 |
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
|
$ |
€ |
|
€ |
Revenue |
|
267,364 |
|
245,175 |
|
|
227,380 |
|
Cost of sales |
|
(174,859 |
) |
(160,348 |
) |
|
(146,230 |
) |
Gross profit |
|
92,505 |
|
84,827 |
|
|
81,150 |
|
Personnel expenses |
|
(58,111 |
) |
(53,288 |
) |
|
(39,432 |
) |
Selling, office and
administrative expenses |
|
(16,389 |
) |
(15,029 |
) |
|
(11,744 |
) |
Depreciation and
amortization |
|
(8,414 |
) |
(7,716 |
) |
|
(7,698 |
) |
Other operating (expense)/income,
net |
|
(2,153 |
) |
(1,974 |
) |
|
373 |
|
Finance costs |
|
(31,104 |
) |
(28,522 |
) |
|
(9,822 |
) |
Finance income |
|
312 |
|
286 |
|
|
413 |
|
Share of profit of associates and
joint ventures |
|
563 |
|
516 |
|
|
3,634 |
|
(Loss)/Profit before tax |
|
(22,791 |
) |
(20,900 |
) |
|
16,874 |
|
Income tax expense |
|
(11,231 |
) |
(10,299 |
) |
|
(3,769 |
) |
(Loss)/Profit for the period |
|
(34,022 |
) |
(31,199 |
) |
|
13,105 |
|
Attributable to: |
|
|
|
|
|
Equity holders of the parent |
|
(34,093 |
) |
(31,264 |
) |
|
12,868 |
|
Non‑controlling interests |
|
71 |
|
65 |
|
|
237 |
|
|
|
(34,022 |
) |
(31,199 |
) |
|
13,105 |
|
Earnings per share3: |
|
|
|
|
|
Basic (loss)/profit for the
period attributable to ordinary equity holders of the parent |
|
(0.17 |
) |
(0.15 |
) |
|
0.06 |
|
Diluted (loss)/profit for the
period attributable to ordinary equity holders of the parent |
|
(0.17 |
) |
(0.15 |
) |
|
0.06 |
|
Basic (loss)/profit for the
period attributable to ADS holders of the parent |
|
(0.25 |
) |
(0.23 |
) |
|
0.09 |
|
Diluted (loss)/profit for the
period attributable to ADS holders of the parent |
|
(0.25 |
) |
(0.23 |
) |
|
0.08 |
|
______________ 3 Basic and diluted earnings per share and profit
attributable to ADS holders of the parent for the three months
ended September 30, 2019 and 2018 were computed in the assumption
that, the Company had issued 23.8 million ADS, and the Company had
approximately 205 million ordinary shares issued and outstanding as
at September 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 |
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
|
$ |
€ |
|
€ |
(Loss)/profit for the period |
|
(34,022 |
) |
(31,199 |
) |
|
13,105 |
|
Other comprehensive income: |
|
|
|
|
|
Other comprehensive income/(loss)
to be reclassified to profit or loss in subsequent periods (net of
tax): |
|
|
|
|
|
Net gain/(loss) on cash flow hedges |
|
249 |
|
229 |
|
|
(31 |
) |
Exchange differences on translation of foreign operations |
|
28,685 |
|
26,304 |
|
|
(8,700 |
) |
Net other comprehensive
income/(loss) income to be reclassified to profit or loss in
subsequent periods |
|
28,934 |
|
26,533 |
|
|
(8,731 |
) |
Other comprehensive income not to
be reclassified to profit or loss in subsequent periods: |
|
|
|
|
|
Net remeasurement on defined benefit plans |
|
14 |
|
12 |
|
|
- |
|
Other comprehensive income/(loss)
for the period, net of tax |
|
28,948 |
|
26,545 |
|
|
(8,731 |
) |
Total comprehensive income for
the period, net of tax |
|
(5,074 |
) |
(4,654 |
) |
|
4,374 |
|
Attributable to: |
|
|
|
|
|
Equity holders of the parent |
|
(5,187 |
) |
(4,757 |
) |
|
4,213 |
|
Non‑controlling interests |
|
113 |
|
103 |
|
|
161 |
|
|
|
(5,074 |
) |
(4,654 |
) |
|
4,374 |
|
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 (“$”))
|
September 30, 2019 |
|
December 31, 2018 |
|
$ |
€ |
|
€ |
ASSETS |
|
|
|
|
CURRENT ASSETS |
|
|
|
|
Cash and cash equivalents |
133,897 |
122,785 |
|
177,048 |
Trade and other receivables |
258,620 |
237,157 |
|
299,898 |
Accrued income |
13,547 |
12,423 |
|
6,474 |
Contract assets |
62,750 |
57,542 |
|
39,714 |
Inventories |
10,782 |
9,887 |
|
5,935 |
Income tax receivables |
8,975 |
8,230 |
|
8,816 |
Other assets |
94,409 |
86,574 |
|
81,561 |
|
582,980 |
534,598 |
|
619,446 |
NON‑CURRENT ASSETS |
|
|
|
|
Long‑term receivables |
11,036 |
10,123 |
|
6,271 |
Investments in associates and
joint ventures |
1,950 |
1,788 |
|
5,551 |
Property, plant and
equipment |
27,878 |
25,564 |
|
26,048 |
Right of use assets |
36,749 |
33,699 |
|
35,789 |
Intangible assets |
484,737 |
444,509 |
|
423,488 |
Goodwill |
920,308 |
843,932 |
|
677,326 |
Contract assets |
11,306 |
10,368 |
|
9,077 |
Deferred tax assets |
20,608 |
18,898 |
|
24,562 |
Other assets |
66,095 |
60,609 |
|
54,953 |
|
1,580,667 |
1,449,490 |
|
1,263,065 |
TOTAL ASSETS |
2,163,647 |
1,984,088 |
|
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 (“$”))
|
September 30, 2019 |
December 31, 2018 |
|
|
$ |
€ |
€ |
|
LIABILITIES |
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Trade and other payables |
173,556 |
|
159,153 |
|
816,451 |
|
|
Interest‑bearing liabilities |
221,921 |
|
203,504 |
|
25,487 |
|
|
Lease liabilities |
11,869 |
|
10,884 |
|
9,863 |
|
|
Accrued expense |
88,097 |
|
80,786 |
|
83,516 |
|
|
Deferred income |
5 |
|
5 |
|
7 |
|
|
Contract liabilities |
163,828 |
|
150,232 |
|
185,681 |
|
|
Other liabilities |
19,634 |
|
18,005 |
|
17,097 |
|
|
Income tax payable |
18,458 |
|
16,926 |
|
31,009 |
|
|
Provisions |
6,763 |
|
6,202 |
|
3,419 |
|
|
|
704,131 |
|
645,697 |
|
1,172,530 |
|
|
NON‑CURRENT LIABILITIES |
|
|
|
|
Interest‑bearing liabilities |
704,796 |
|
646,305 |
|
535,630 |
|
|
Lease liabilities |
29,088 |
|
26,674 |
|
28,841 |
|
|
Accrued expenses |
6,868 |
|
6,298 |
|
4,941 |
|
|
Deferred income |
- |
|
- |
|
10 |
|
|
Contract liabilities |
15,554 |
|
14,263 |
|
13,485 |
|
|
Deferred tax liabilities |
93,069 |
|
85,345 |
|
82,941 |
|
|
Provisions |
4,095 |
|
3,755 |
|
8,576 |
|
|
Long‑term payroll payables |
14,520 |
|
13,315 |
|
12,770 |
|
|
Other liabilities |
58,984 |
|
54,090 |
|
31,802 |
|
|
|
926,974 |
|
850,045 |
|
718,996 |
|
|
TOTAL LIABILITIES |
1,631,105 |
|
1,495,742 |
|
1,891,526 |
|
|
EQUITY |
|
|
|
|
Share capital |
1,658,450 |
|
1,520,816 |
|
1,520,816 |
|
|
Reserves |
(885,141 |
) |
(811,684 |
) |
(1,321,685 |
) |
|
Accumulated deficit |
(244,538 |
) |
(224,244 |
) |
(207,566 |
) |
|
Equity/(deficit) attributable to
equity holders of the parent |
528,771 |
|
484,888 |
|
(8,435 |
) |
|
Non‑controlling interests |
3,771 |
|
3,458 |
|
(580 |
) |
|
TOTAL EQUITY/(DEFICIT) |
532,542 |
|
488,346 |
|
(9,015 |
) |
|
TOTAL LIABILITIES AND EQUITY |
2,163,647 |
|
1,984,088 |
|
1,882,511 |
|
|
WANDA SPORTS GROUP COMPANY
LIMITED
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 |
|
September 30, 2019 |
|
September 30, 2018 |
|
$ |
€ |
|
€ |
NET CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
|
|
(Loss)/profit for the period |
(34,022 |
) |
(31,199 |
) |
|
13,105 |
|
Total non-cash adjustments |
49,804 |
|
45,672 |
|
|
20,958 |
|
Total working capital
adjustments |
(36,221 |
) |
(33,216 |
) |
|
(16,535 |
) |
Tax paid |
(6,270 |
) |
(5,750 |
) |
|
(8,108 |
) |
Net cash flows (used in)/provided
by operating activities |
(26,709 |
) |
(24,493 |
) |
|
9,420 |
|
|
|
|
|
|
NET CASH FLOWS FROM INVESTING
ACTIVITIES |
|
|
|
|
Acquisition of subsidiaries, net |
(849 |
) |
(779 |
) |
|
(791 |
) |
Contingent consideration and liabilities from business combination
paid |
(3,968 |
) |
(3,639 |
) |
|
(1,270 |
) |
Purchases of property, plant and equipment and intangible
assets |
(3,239 |
) |
(2,970 |
) |
|
(4,145 |
) |
Proceeds from sale of property, plant and equipment and intangible
assets |
245 |
|
225 |
|
|
46 |
|
Others |
306 |
|
281 |
|
|
(479 |
) |
Net cash flows used in investing
activities |
(7,505 |
) |
(6,882 |
) |
|
(6,639 |
) |
|
|
|
|
|
NET CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
|
|
Proceeds from borrowings |
268,331 |
|
246,062 |
|
|
- |
|
Repayment of borrowings |
(464,369 |
) |
(425,831 |
) |
|
(550 |
) |
Repayment of the principal portion of the lease liability |
(3,274 |
) |
(3,002 |
) |
|
(2,645 |
) |
Proceeds from IPO, net |
177,374 |
|
162,654 |
|
|
- |
|
Payment of restricted stock |
(11,652 |
) |
(10,685 |
) |
|
- |
|
Payment of debt issuance cost |
(3,330 |
) |
(3,054 |
) |
|
- |
|
Others |
(202 |
) |
(186 |
) |
|
- |
|
Net cash used in financing
activities |
(37,122 |
) |
(34,042 |
) |
|
(3,195 |
) |
|
|
|
|
|
NET DECREASE IN CASH AND CASH
EQUIVALENTS |
(71,336 |
) |
(65,417 |
) |
|
(414 |
) |
Cash and cash equivalents at
beginning of the period |
203,384 |
|
186,505 |
|
|
145,370 |
|
Effect of foreign exchange rate
changes, net |
1,849 |
|
1,697 |
|
|
(3,413 |
) |
CASH AND CASH EQUIVALENTS AT END
OF PERIOD |
133,897 |
|
122,785 |
|
|
141,543 |
|
|
|
|
|
|
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
|
September 30, 2019 |
|
September 30, 2018 |
|
$ |
€ |
|
€ |
(Loss)/profit for the period |
(34,022 |
) |
(31,199 |
) |
|
13,105 |
Income tax expense |
11,231 |
|
10,299 |
|
|
3,769 |
Net interest expenses |
24,744 |
|
22,690 |
|
|
6,297 |
Depreciation and
amortization |
8,414 |
|
7,716 |
|
|
7,698 |
EBITDA |
10,367 |
|
9,506 |
|
|
30,869 |
|
|
|
|
|
Share-based compensation(1) |
23,638 |
|
21,676 |
|
|
3,416 |
Expenses or charges relating to
acquisition(2) |
1,232 |
|
1,130 |
|
|
494 |
Expenses or charges relating to
IPO or financing(3) |
98 |
|
90 |
|
|
884 |
Restructure and disposal of
investments / subsidiaries(4) |
- |
|
- |
|
|
56 |
Profit or loss from termination
of customers(5) |
- |
|
- |
|
|
469 |
Change in fair value of
investments(6) |
57 |
|
52 |
|
|
22 |
Bad debt expenses relating to
specific customer(7) |
- |
|
- |
|
|
2 |
Losses on foreign exchange and
derivatives, and other financial charges(8) |
6,048 |
|
5,546 |
|
|
3,112 |
Estimated client compensation
relating to fraudulent activities(9) |
1,384 |
|
1,269 |
|
|
- |
Adjusted EBITDA |
42,824 |
|
39,269 |
|
|
39,324 |
|
|
|
|
|
- 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 the strategic acquisitions of the
Group.
- Represents professional fees of legal counsel, auditors, due
diligence experts, consultants, and related expenses for our IPO
and 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 the net investment loss on investments.
- 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 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 September
30, 2019.
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