Features
German High Court Decision Causes CTS Eventim Stock To Drop Despite Solid Half-Year Figures
– CTS Eventim
CEO Klaus-Peter Schulenberg
A decision by Germany’s Federal High Court in Karlsruhe against CTS Eventim caused the live entertainment giant’s stock to plummet this afternoon, despite boasting solid first-half earnings and revenues.
The court ruled against CTS Eventim’s print-at-home fee, which charged customers €2,50 ($2.90) for printing out their own tickets.
The decision is final, seeing that it was made by Germany’s most supreme court, after Eventim had appealed two lower courts’ decisions, the first one made in 2016.
Eventim isn’t the only ticket agent charging a print-at-home fee, but it is the company the consumer advice center of the German state of North Rhine-Westphalia sued in 2016.
No ticket agency is therefore allowed to charge customers for printing their own tickets in Germany. A CTS Eventim spokesperson said the company would cease charging the print-at-home-fee at once.
The court also declared CTS Eventim’s “premium shipping fee” undue. Eventim had charged ticket buyers for Eventim 2015 Germany tour euro 19.90 for the shipment of two tickets, and euro 29.90 for three to four tickets.
After the court decision was made public today, Aug. 23, CTS Eventim’s stock plummeted by up to 10 percent, reaching €34.36 at its lowest, according to Wirtschaftswoche.
It stood at €36.44 again at press time. It had reached its record value of €44 in June, after enjoying a successful start into the year, when CTS Eventim was valued at more than €4 billion ($5 billion).
That news was eclipsed only two months later, when the company announced it had surpassed the billion-euro revenue mark for the first time in its history in 2017.
Today’s half-year financials aren’t too bad either, and may keep shareholders happy in the long run, despite today’s court decision.
CTS Eventim’s group revenue rose 24.2 percent year-on-year to €606.6 million ($703 million), breaking the half-billion barrier for the first time in this reporting period.
Normalised EBITDA climbed 12.5 percent to €94.1 million, compared to €83.7 million in the first half of 2017.
CTS Eventim’s live entertainment segment, which includes its concert and festival business, achieved double-digit growth, reaching “record figures” in both revenue and earnings, according to the report.
While revenue rose by 36.0 percent to €429.1 million ($497 million), normalised EBITDA improved by a whooping 57.4 percent and reached €28.5 million in the first six months of this year.
According to CTS Eventim, “both figures were driven, among other factors, by a greater number of tours and events involving large audiences and high sales revenue. The new ‘Holiday on Ice’ tour and acquisitions of concert and festival promoters also had positive impacts.”
CTS Eventim’s most recent acquisition was a 63.5 percent stake in Spanish promoter Doctor Music. In April the company bought a majority stake in Italian concert promoter Vivo Concerti, closing its fourth acquisition in the Italian live entertainment market in less than eight months.
Earlier this month, CTS Eventim had announced the acquisition of Scandinavian ticketing company Venuepoint from its former joint partner, Nordisk Film.
CTS Eventim’s ticketing revenue rose 3.1 percent to €183.4 million (€212.5 million) in the first six months of 2018, even though there were fewer pre-sales for major tours with higher ticket price levels than the year before.
Normalised EBITDA stood at €65.6 million, which was slightly higher than last year’s €65.5 million, “despite expenses for implementing the General Data Protection Regulation,” as stated in the earnings report.
CTS Eventim said it sold a total of 22.4 million tickets via its own web shops in the first six months of 2018, a year-on-year growth rate of 9.4 percent. “Hence, the market-induced lower number of tours and events with particularly high margins was more than offset by the growth of CTS Eventim’s digital and mobile ticketing platforms – in terms of both revenue and earnings,” the report states.
CEO Klaus-Peter Schulenberg said, “CTS Eventim has maintained its strong growth in the first half of 2018. In addition to our strong Live Entertainment business, our online ticketing operations played a major role here.
“Even though, also due to the FIFA World Cup, in many countries there were fewer pre-sales for major tours than in 2017, we improved our web ticketing volume by almost ten percent. This is a clear indication that we are well-equipped for further growth – not only in our present markets, but also beyond.”