Q4 2019 Earnings Call
Baird remarks, there will be a few in a session today's conference call is being recorded.
If you have any objections you may disconnect at this time.
I would now like to turn the conference over to your host for todays conference call Mr., Edith Kwan head of Investor Relations at one.
The sports. Please go ahead.
Thank you Rachel Hello, everyone. Thanks for joining the fourth quarter and full year 20.
Hi, Good earnings call with Us today, I, Helen Yang CEO of wireless bars, Indiana, Chen our Chief Accounting officer. Unfortunately.
Lee our CFO Brio had to deal with his family matter any unable to join us today.
A replay of the.
The call will be available on our website. Later today, we have also posted a slide presentation on our website, which.
Yes, we'll review doing her remarks now let me quickly cover the Safe Harbor today's discussion will contain forward looking statements. These forward looking statements involve inherent risks and.
Certainties that could cause actual results to differ materially from those expressed or implied broking statements and consequently goods the effect of side the answer and unprecedented impact of cobot 19 on our business in operations and their related.
Impact on that liquidity needs for discussion of these risks and uncertainties. Please refer to our earnings release.
Form one registration statement, so will the USSTC as other filings that we may from time to time with the SEC and importantly, looking statements that we make on this call are based on assumptions as of today.
No undertakes no obligation to update these statements except as required under applicable law. Please note that this certain financial measures that we use on call such as adjusted EBIDA expressed on a non.
Per se.
As a result, and reconciliation of address a non address measures can be found in our earnings release.
I'll now turn call over Tassio Hanmi Yang Henning. Please proceed.
Thank you and thanks to everyone joining today today's call and I Hope you and your family.
After you say in this very difficult time.
So today I will discuss our 2019.
Performance.
The impact of Colby to 19, having our business.
And how we are just responding to the pandemic.
And how we are positioning although sports for long term growth.
As you would have seen from our press.
Release, 2019 was it's noteworthy that year.
A number of important achievements that we believe positioning us well for the future.
For fiscal 2019 for total revenue was 1.03 billion euros.
And the total revenue excluding the impact of reimbursement revenues wasn't 996.6 million euros, which increased 10% year on year.
We delivered encouraging revenue gross physical to the 19.
I'd like for like basis.
And our adjusted EBITA was 106 to 7.4 million euros.
Overall this results were backed by our solid business operations.
Despite of the entire year event cyclicality.
Impact, particularly regarding the FIFA World Cup, where 2019 cause of the first year of new cycle is traditionally is below the previous forthcoming here.
So now.
Let me discuss each of our business.
Through the lens of how we are positioning for the future.
First on must participation business.
We delivered a significant growth in 2019.
For example, we're proud of that or tend to Marisol was recognized as a candidate arrays.
Fourth World microphone majors. This is the first and only candy did raise in China for the world's largest and most reload MRO some series.
The tender Microsoft tooling 19 was a huge success with the number of registrations close to 100000, almost a double compare to the previous year.
We are confident that the excellent effort and fairly experience from operations will further post the commercial value and the word eventually be beneficial to us we strongly believe if huge population basins.
China creates a perfect synergy to or mass participation business segments.
Internationally.
During 2019, we diversified our mass participate in business with several strategic acquisitions all sports event.
Again from.
For example, we added London based.
Shoulder schools, which hosts popular events like right across Britain and make a mouse Ajay.
From a company that owns and operates a series of long distance hiking events across the country.
We have added hi rocks tore portfolio, it's a German based winter indoor Friesen is competition for amateur and professional athletes.
And we also made any investment into the district race, APTP, which enables raises through virtual checkpoint Alan challenges escalated Cds.
Overall, we expect to the continue benefiting from or diversified IP portfolio and the targeted acquisitions that we've made two at attractive events in desirable markets.
Well.
Hello last month that we have entered into an agreement to sell the arm and group to advance.
All cash transaction with the enterprise value.
Yes, dollar 730 million.
The transaction is expected to unlock significant shareholder value.
And a strengthening our balance sheet, while allowing us to continue carrying out our growth strategy.
Due to focus on markets with high potential and a strategic value for further expansion such as existing P to run corporate you're running series the academics challenge and multi Andrew runs obstacle causes which are events with our own IP and proven.
The success.
In China.
We have an existing portfolio of 15, vericels such as trend to my Russell, So young International My Russell and or Sony My Russell series.
We will combine that with or multiple year exclusive license agreement with the arm and group, which will allow us to continue hosting and putting their popular races across the country such as the Ironman, even serious rock'n'roll running theories and hip.
Eric Mountain biking event series.
So combined.
We will continue organize manage and a lot.
Hi, since a broader portfolio of events, which includes running hiking recycling business competition.
And shale running.
An obstacle course racing and so forth.
Our spectator sport business.
We continue to demonstrate its caliber as a leading sports marketing platform.
Last year, we delivered approximately 3111 days include.
Things come over the largest sporting event.
The world.
Our ability to connect fence kind of consumers to the greatest the sporting events by delivering unmatched event.
Securities.
Creating easy access to engaging content and imputing inclusive communities is a key differentiator.
We believe this inheritance trends will continue to make us the partner of choice for rights holders sponsors and immediate organizations around the world.
The Best example of this is a number of agreements that we have extended with long term rights owner owners and a new contracts that we have one for example.
We signed the landmark deal with Ford F lives.
Previously long as the International Association of athletes federations.
This is the word federation flip chip and the food sports.
And granting us their right to organize and additional annual diamond leads to meeting in China.
And to bring new top class, Chuck and acuity events to China with the world's best efforts. We also won the international media rights for the Diamond lead for five years and New World Athletic Continental Tour event for 10 years. It is an important addition to the groups top class Chuck and a few.
The event portfolio.
About which we're very excited.
In winter sports.
Well we signed.
A 10 year media marketing digital and merchandising rights Prolongation agreement with International Ice Hockey Federation.
And and media rights agreement.
International skiing Union through the 2012.
The and tools.
Two Europe's top volleyball events.
And a six year media rights within touched on big companies.
See you access to having Africa fall Olympic events, including Olympic Games Tokyo.
Until 2024.
The prolongation acquisition of major writing business, we achieved in 2019 has solidified our position as a leading global sporting events media and marketing platform.
No I come toward PSS business.
We're significantly strengthened its digital capabilities through the long.
Michelle I ex Costco.
Our dedicated digital Brad.
Thank you for launch in May 2019, IMAX Startco has quickly become a preferred partner across many sports with clients such as French rockabilly Chelsea Football club NASCAR and FEIBA just to name a few its clients also includes leading Bu.
Developer Activision Blizzard.
The company mens.
Thank you interact with our core business pillars in front of that a new group company based in Tel Aviv will identify.
Hi start ups that can further enhance or 360 degree approach of connecting fans with rights holders through innovation.
All in all our extort cool you from them as well as of the several virtual support initiatives that started until the 19 are set to continue our transformation into a digital players.
Turning to our China business, which had a very successful year. Besides the mess participation the business achievement.
Operational update update.
So why of course 19 has tempered.
Clearly disrupt daily lives around the world.
We remain confident in one of sports long term outlook on sporting events resume.
We recognize thats to give and adjustments will be made.
In the coming month in the way people gather trouble and a generally engaged but to also believe we have a resilient and adaptable strategy that should enable us to emerge from the pandemic as a stronger competitor.
Our 2020 outlook changed in early January as governments began to taking begin taking aggressive steps to curtail the spread.
Of Colby to 19.
Protect our employees and their families. We took immediate steps such as implementing a remote working policy and helping or officers and employees around the world.
Obtained relevant benefits, depending on the country and a region.
They argue.
Our China business was the first to be impacted with the cancellation or postponement of sporting events and arrays as Scott in January and February.
During the same period races, and a sporting events in Europe, North America or infected however, as the pandemic continue to spread around the world sports federations and organizers postponed or canceled more events and entire seasons.
We are working closely with our partners.
Hi, coders sponsors and event organizers to assess the impact of Colby 19 on the timing.
Okay, and the protocols for the future events and to manage the finest impact across all value chain.
We are partnering with sports organizations to deliver innovative virtual training raising any event experiences to keep them.
Our efforts community.
Two and engaged.
We are also working closely with all partners to help them.
Scheduled events.
And determining how to host events onto the likely continuation of social distancing requirements.
In the near term this will likely me events with.
Hi, Russell lending online my Russell and we also working towards.
Slides part of the raising tried trails for use you see I work too.
Golf clung sheet.
We also being active discussion to per loan current outage agreements and we knew contracts as vice coders move forward with long term planning for their sports and events.
Furthermore, we are benefiting for a more strategic investment in new sports, which is seeing and increased interest from our clients or trusted relationships with rights holders.
Heavy labeled us to support the expansion into the fast growing industry.
For example, we're currently providing post to productions.
Service.
Delek us.
Hey, FIFA.
You.
So overall, we're pleased to be able to maintain more dialogue with banks.
Government federations partners and other stakeholders during the past few months, which helped us.
To carry out initiatives that were crucial to the company, we're thankful to that.
No we're standing coated 19, our strategy to build a leading global sporting events media and marketing platform is working.
Operational Foundation is a very sturdy.
And our long term fundamentals for each of our business.
Strong.
So with that I'm going to turn over to coal to Deanna Sienna. Please. Thank you call me Hello, everyone.
You May proceed.
My remarks in earnings conference call presentation.
Website.
As we previously mentioned the nature of our business has some cyclicality.
Good day on a tiny hardware race events, including entire year cyclicality. This means they're med, maybe Sal volatility CR financial results, which we experienced in the fourth quarter end of phase.
I will turn denied he.
If we will turn to slide five of the present.
Well 252.2 meeting new wells.
Gross profit was 94.4 million euros, and our gross margin was 37%.
Adjusted EBITDA was 44.8, meaning youre well.
Slide six total revenue for the gold from the Nike was.
1000 30.1 media.
Excluding the impact of reimbursement revenue total revenue was 996.6 million euros.
Increase of 10% year over year.
Coffee luxury homes or the 43.7 million euros and all our gross margin was 33%.
Jeff TV Dot 167.4 main annual Ralph.
The decrease compared to a full year, Tony 18 reflect the event cyclicality between 20 AG and attorney Maggie.
In particular in connection with Dundee 18.
FIFA World Cup, Russia.
And also the increase in setting policies can administrative expenses to support business expansion, finishing Haiti.
The loss for the fourth quarter, often denied he and the full year attendee 19 was 258.6 media and a 273 point tape media.
We expect family.
Many attributable to a non cash impairment loss of 250 Paul.
Point 3 million related to the goodwill in Paramount group without either from impairment test.
Ed and often be Maggie.
Excluding the non cash impairment loss share based compensation there would have.
As being a profit.
6 million for trendy 19.
Overall, our fundamental operations believe ours.
Good morning.
Q4 and full year.
The increase in the number of growth paid Anthony.
Many attributable to the successful expansion of our when platform in China.
And the continued popularity all Barry Slifstein airmen and air.
And then six seven history with it.
We have seen very encouraged you revenue growth of 16% year over year.
Gross margin.
Also grew 30%, we the gross margin of 34%.
On Slide 10, you can see that full basecoat, Andy 19 mass participation revenue was 300 up 26.9 million euros.
15% increase year on year.
Gross profit also grew 16% with gross margin improved tool.
Thanks, Brett.
Slide 711 shows.
Number of gross pay the athletes and the men.
Well then be Maggie our number of wells paid athletes and a number of England increased 15% and 5% respectively.
Which contributed to a robust revenue growth seen Tony Maggie.
The goal with Wells Fargo P. Eight by does that fiscal expansion of Rami when seen no China maps.
Add acquisition, all by number of new international even under the continued momentum hobbies safety events.
Moving to our Spectator sport segment on slide 13.
In the fourth quarter revenue was 129.3 million euros.
The Queen up 13% year on year, many due to the event cyclicality driven by the Addison's called the yet you add European Championship game, Tony Malkin.
All right.
Do you still contribution from the FIFA related to project into any 19 as well as Phil the continuation of PSB National team business, which was partially offset by contributions from feedback will make it even.
Subsequent to the feedback you the bull calf held in the third quarter off to me 19.
Despite these gross profit increased 3% year over year.
In Queens, primarily reflects higher.
Coffee the contribution from FEIBA related you, Ben and organic growth of our football BNS.
Which.
Partially offset it does cyclicality SEC.
Our gross margin was 41%.
On slide 14, you can see that folded coal could you 19 spectators, Paul revenue was 500.
67.3 million.
And decreasing crave from Tony 18 say includes principles with flat.
Turning year, even cyclicality relating to these Gorbachev machine can you, maybe which called me okay. All the year.
As we will add the expansion of our summer thoughts portfolio such as though.
FEIBA capable work opportunity might be if I am annex GP mogul Krog works cenci with it under the CV Europeenne warning.
People.
By the entire year cyclicality impact.
Overall, our gross margin was 33%.
Looking at our Btss segment on slide 16.
Well the segment benefited from expansion of our digital business and the contribution from the rugby World Cup Tony lighting.
Results were largely impacted by the cyclicality effect Optum, the 18, Veeva bark cops, Russia.
For the fourth quarter revenue was 33.6.
Media euros.
You need the leasing and occupancy appealing previous year.
CBS as revenue you Cody.
Reimbursement revenue was 30.3 million euros.
Gross profit was 10.3 million euros.
Yes, again reflect the Addison called the media production Ben.
Related to 28.
Hey, FIFA World Cup relating to Russia.
As a result, all the different even portfolio between 28 and Anthony Nike gross margin was 31 person.
Let's move to slide 17.
The company 19, Cbss revenue was 100, and a 35.9 million euros.
Yes this revenue.
You'll save Clootie reimbursement revenue was 102.4 million.
Gross margin was 31%.
Turning now to our capital structure flies nice.
Now to the end of 2019, we had cash cash equivalents of 100 of 63.2 million euros.
We believe this paralyzed south will slowly the cash preservation Healive current environment.
I'd also note that we have implemented cost so with action and the management measures across color organization.
This includes a global hiring sweet eliminating some financial spending undertaking then initiated to preserve cash.
Entering the Nike, our Capex was 14.9 meta euros.
1.5% to total revenue, which reflects our asset light structure.
Let's turn to slide 30.
We are pleased the to achieve our goal to reduce our language. We ended the year with a net leverage ratio up from 4.1 time.
Which is down considerably from four point.
Time after our IPO in July.
As Tony mentioned earlier.
We reached agreement.