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DEAG Preps For ‘Complete Market Normalization From 2022’ In Q3 Results
– DEAG
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As DEAG’s Q3 results show, the German live entertainment giant continues to profit from being insured against a pandemic, significant cost reductions as well as the introduction of new event formats.
DEAG’s EBITDA after nine months stood at €0.3 million ($350,000), while sales reached €39 million ($46 million).
Last year at this point in time, EBITA stood at €8 million ($9.5 million), while sales had been €123.1 million ($146.6 million).
Looking at the third quarter of 2020 only, ie the period between July and September, EBITDA was €0.6 million ($714,000), sales stood at €7.4 million ($8.8 million) – compared to an EBITDA of €4.9 million ($5.8 million) and sales of €59.2 million ($70.5 million) in Q3/2019.
While DEAG’s Q3/2020 results represent a massive decline in revenues during a year that has seen virtually no ticketed live events, the overall blow to DEAG’s business has been softened by three things: new event formats, significant cost reductions and DEAG’s insurance coverage.
So far, DEAG has received insurance payments of €10 million ($11.9 million) for cancelled or postponed events.
Till Brönner – Prof. Peter Schwenkow
Founder and CEO of DEAG.
“Overhead costs were reduced once again in the third quarter and are now 48 percent below the original level,” the earnings statement reads.
The company assures shareholders, that is “has reacted quickly and consistently to changing market conditions in recent months by developing and successfully implementing new event concepts.
“The Group’s own ticketing platforms MyTicket and Gigantic.com, which handle a significant share of the ticket sales for its own events and third-party content, are becoming increasingly important.
“Additional sales potential of around 450,000 tickets per year is unlocked by the new, exclusive multi-year partnership between the Jahrhunderthalle in Frankfurt/Main, which is operated by DEAG, and MyTicket starting on Jan 1, 2021.”
The deal with the 4,800-cap arena includes an exclusive ticketing agreement with MyTickets as well as the naming rights sponsorship for Jahrhunderthalle.
DEAG is positioning itself for “the reopening of the entertainment market in the coming quarters and the complete market normalization from 2022 on.”
The company’s leadership expects earnings to “at least break even, despite the recent very significant COVID-19-related restrictions in its core markets,” and considers itself “well positioned for the future.”
DEAG already made sales worth over €100 million for 2021, and boasts solid liquidity of around €50 million.
DEAG CEO Prof. Peter L.H. Schwenkow, commented: “In view of the COVID-19 pandemic, we are comfortable with our results for the first nine months of 2020.
“Although large parts of our visible operational business are currently suspended, the DEAG team is working behind the scenes to continue our growth
course successfully as the pandemic ebbs away and finally comes to an end.
“The breakthrough in the development of vaccines in November brings tailwind for our entire industry. We have significantly reduced our cost base and are taking advantage of available promotion and support programs in our core markets. We are currently already planning for the opening of the market and a new start in live entertainment.
“In addition to our core markets of Germany, Switzerland and the UK, we are also present in Ireland through our joint venture ‘Singular Artists’. We are seeking contact with artists and management, preparing the expansion of our successful formats and developing new offers.”