Features
DEAG Weathers Stormy Q2
DEAG Deutsche Entertainment Aktiengesellschaft (“DEAG”) saw its business develop positively in the first half of financial year 2024 – despite a weak overall economic environment in Europe, a serious market shakeout in the festival and open-air sector, weather-related event restrictions and significant investments in DEAG’s corporate structures and further growth.
Revenue in the reporting period rose by 8.2% from €122.7 million ($136.2m) to €132.7 million ($147.3m). At €3.1 million ($3.4m) (previous year: €5.1 million), EBITDA was largely in line with planning.
“This already includes expenses in connection with the reorganisation of the executive board in the first half of 2024 and integration costs for companies acquired. In addition, the executive board approved investments in future organic and inorganic company growth in the area of digitalization and modernization of DEAG’s IT infrastructure, particularly in the entire area of ticketing, and these were taken into account in the reporting period,” the press release summarizing DEAG’s Q2 financials states.
EBITDA adjusted for non-recurring effects amounted to more than €4 million ($4.4m). For the year as a whole, DEAG expects EBITDA to be at least at the previous year’s level despite the challenges mentioned above and additional expenses for ESG reporting.
DEAG expects a year-on-year increase in revenue for 2024 as a whole. Indicative of that is the high density of events in the remaining two quarters, which is reflected in contract liabilities, that stood at €103 million ($114.3m) as of June 30, 2024. That’s nearly 50% higher than the previous year’s figure of €69 million ($77m).
In Germany, the market, where DEAG launched more than 45 years ago, has experienced a “decline in economic output and restrained private consumer spending” in the reporting period.
The EUROs in June and July reduced demand for other leisure and entertainment offerings during the tournament. There has also been a market shakeout in the festival and open-air market across Europe, forcing hundreds of festivals to close, as has been widely reported.
Heavy rainfall and storms took across Germany and large parts of Europe in the summer, meant that many events had to be cancelled completely or could only go ahead at a reduced capacity, which also affected a number of DEAG events. Expenses for the insured events were incurred in full. The EDM festival segment, where DEAG is particularly active in Germany, held its own very well.
After 46 Years At The Helm: Schwenkow Hands Over DEAG Management
Outside of Germany, Sion sous les étoiles in Switzerland, and Belladrum Tartan Heart in the UK did well. Overall, DEAG expects more than 800,000 visitors between the end of June and the beginning of September at its festivals.
DEAG also invested in District Live, a booking agency, and tour promoter for up-and-coming, as well as established hip hop talent.
All in all, DEAG increased its revenue, further expanded its own event formats, successfully continued its “Buy & Build” strategy, and recorded strong ticketing business.
The company is optimistic for the second half of 2024, in particular thanks to “a high level of available liquidity of €97 million at the end of the first half of 2024, DEAG has a solid financial basis for a successful, expansive development.
DEAG entered Spain last year, and has already made several acquisitions in 2024, including in the festivals segment with the acquisition of a majority stake in black mamba Event & Marketing GmbH – organizer of Sputnik Spring Break, one of Germany’s largest open-air festivals.
DEAG’s leading position in the area of the spoken word and literary events in the UK was expanded with the acquisition of “How to Academy” and live entertainment activities were extended by acquiring event organizer “ShowPlanr” – deals done by DEAG subsidiary KMJ Entertainment.
DEAG intends to expand its M&A activities over the course of the year, and is currently “in promising talks with a number of companies,” according to the earnings release. Focus areas are ticketing and further expansion into other European countries.
In 2024, DEAG is aiming to generate around half of its consolidated revenue with its own event formats, for which an increasing share of tickets will be sold via the Group’s own ticketing platforms myticket.de, myticket.at, myticket.co.uk, gigantic.com and tickets.ie.
As of the end of June 2024, the number of tickets to concerts and events sold in 2024 and 2025 rose by 18% to 5.8 million. An increase to around 11 million tickets is expected for the year as a whole, compared to the more than 10 million tickets sold in 2023.
In the first half of the year, DEAG organized a number of concerts and tours by artists such as AC/DC, Andreas Gabalier, Alice Cooper and UB 40 as well as many events for the whole family such as Disney on Ice, the Harlem Globetrotters or, in the spoken word & literary segment, events like the international literature festival lit.COLOGNE, the event series “An Evening with…” or the new reading show “Letters Live.”
Highlights for the second half of the year include concerts by Craig David, Lenny Kravitz, James Blunt, Slipknot, Fontaines D.C., and Böhse Onkelz; new exhibitions such as “Tim Burton’s Labyrinth”; and, for the first time in Hamburg, the new ELB.lit literature festival, which will feature readings by stars of the literary and entertainment scene.
Detlef Kornett, Group CEO of DEAG, commented, “We defied the difficult market environment in the first half of the year. Unfortunately, the bad weather affected some of our events, which is also reflected in our key financial figures. However, we remain confident for the second half of the year and for 2024 as a whole. DEAG’s second half of the year will be strong, as expected, our event programme is diversified and our calendar of events is tightly packed. Visitors can look forward to hundreds of great events of all genres and sizes. We are also investing heavily in staff, new technologies and our platforms in order to further improve the customer experience and offer our customers first-class entertainment. Despite the challenges mentioned, we expect revenue to continue to rise and EBITDA to at least the previous year’s level for the year as a whole.”
The full half-year report 2024 will be published in the investor relations section of the company’s website over the course of Aug. 30.