Event Bans & Restrictions Cause CTS Eventim Stock To Crash

CTS Eventim
– CTS Eventim
Took a hit due to the event bans imposed after the Covid-19 outbreak

Unsurprisingly, the event restrictions imposed in reaction to the Covid-19 virus have cause CTS Eventim’s earnings and revenues to plummet when compared with the first quarter of 2019.

In the last month of the reporting period, various official bans and conditions imposed on events across Europe in reaction to the Covid-19 crisis, resulted in a “virtual standstill in live entertainment in Germany as well as in all the core international markets in which CTS Eventim operates,” according to the companies Q1/2020 earnings release.
In the first quarter of 2020, this meant a 34.7% year-on-year drop in group revenue to €184.6 million ($201.8 million). At this point in time last year, group revenue, i.e. revenue generated by CTS Eventim’s promotion and ticket businesses, stood at €282.7 million ($309 million). 
Normalised EBITDA was €13.5 million ($14.8 million) at the end of Q1/2020,
and thus 76.3% less than in the previous year (€57.1 million). The normalised EBITDA margin for the group as a whole in the first quarter was 7.3% (previous year: 20.2%).
Looking at both segments individually, ticketing revenue fell 24.4% to €79 million ($86 million). Normalised EBITDA was €16.9 million in the first quarter, a 59.8% drop year-on-year (previous year: €41.9 million). 
The normalised EBITDA margin in CTS Eventim’s ticketing segment was 21.3% (previous year: 40.1%).
Live entertainment revenue amounted to €108.6 million ($118.7 million), 40.4% less than the first-quarter figure of last year: €182.2 million. Normalised EBITDA dropped into the negative and stood at minus €3.3 million after the first three months of 2020. This marks a 121.9% drop year-on-year (previous year: EUR 15.2 million).
The normalised EBITDA margin, at -3.1%, suffered a sharp decline compared to the first quarter of the previous year (8.3%).
CTS Eventim
– CTS Eventim
CEO Klaus-Peter Schulenberg

Klaus-Peter Schulenberg, CEO of CTS Eventim, emphasized that the group’s good cash flow would allow it to cope with this challenging situation over a longer period of time, and “even to emerge stronger from this phase afterwards.” 

Schulenberg said, “We got off to a very strong start in 2020 – we grew our Live Entertainment business internationally even further by acquiring majority shareholdings in Gadget Entertainment AG and wepromote Entertainment Group Switzerland AG, by completing our takeover of a majority stake in the Barracuda Group in Austria and by entering a new joint venture with Michael Cohl, the well-known US promoter. 
“In March 2020, the entire live entertainment industry and its fans were hit hard by the spread of the COVID-19 pandemic and the associated measures implemented by government and local authorities. However, we actively adjusted to the new situation and responded immediately and rigorously with internal measures to minimise costs and maximise efficiency.”
In key European markets in which CTS Eventim operates, policymakers responded to the dramatic situation in the event promotion industry and enshrined ‘voucher solutions’ in law, e.g. in Germany, Austria and Italy.
Similar solutions are currently being discussed by politicians in many other European countries. The schemes allow promoters to issue vouchers instead of refunding tickets. 
The company already revoked its forecast for 2020 back in March. “The CTS Group will quantify the expected future development of revenue and earnings as soon as a reliable forecast is possible,” the group informs investors in its earning statement.
Just in January this year, CTS Eventim’s stock had reached its highest evaluation in company history, standing at €61,55 per share.