Quarterly Report January - March 2021 Everysport Media Group AB (publ.)
Acquisitions and strong underlying development creates a basis for continued growth
Summary of the first quarter 2021
- Net sales*: 25,5 mkr (20,8 mkr) − which corresponds to an increase of 23%
- EBITDA: 1,6 mkr (0,8 mkr)
- Profit after tax: 0,5 mkr (−0,4 mkr)
- Earnings per share: 0,12 kr (0,01 kr)
- Cashflow from operating activities: 1,9 mkr (1,6 mkr)
*Including acquisition of Trav- och Galopp Nytt and Hesteportalen, which contruibuted to the increase of revenues with SEK 1,7 million.
CEO, Hannes Andersson, comments:
The beginning of the year has been very eventful for Everysport Media Group (ESMG) and has above all been marked by exciting strategic acquisitions. On March 1, we completed the acquisition of the Norwegian companies Trav- og Galoppnytt and Hesteportalen and during March we also signed an agreement for a major acquisition consisting of 50% of the shares of Every Padel (formerly Klövern Padel). These important strategic initiatives, combined with a strong development of the underlying business during the first quarter, means that the group's position has strengthened considerably compared with a year ago.
When the pandemic came in both a second and a third wave, restrictions hit the sports world. Although most professional leagues and events have been able to continue to be arranged, grassroots and youth sports in most countries have continued to be affected. Despite this, ESMG delivered a record quarter with 23% growth compared to the same period last year. Sales in the first quarter of SEK 25.5 million (SEK 20.8 million) is the highest achieved during a quarter in the Group's history.
Our growth strategy has been successful, while we continue to focus on achieving our profitability goals. The EBITDA result of SEK 1.6 million (SEK 0.8 million) is primarily driven by growth in the B2C area, where our margins are higher. The B2C segment grew by 44% compared to the same period last year and by 15% compared to the fourth quarter of 2020. In total, the segment accounted for 38% of the Group's total sales, which is in line with the group's strategy. The product that continues to stand out in the segment is Eliteprospects, where the number of subscribers has exceeded 9,000.Trav- og Galoppnytt AS and Hesteportalen AS in Norway contributed with sales of SEK 1.7 million since the acquisition on March 1, and with a result close to zero. From April, we expect clear improvements in results in Norway driven by the recently signed framework agreement for content delivery with Norsk Rikstoto. This is according to plan and we feel that the integration of the business is going as expected.
The acquisition of 50% of the shares in Every Padel was signed in the end of March, and completed on April 1st. The business has developed very well during the year and the company is well positioned for a continued growth journey both in Sweden and internationally. The company has an extremely profitable B2C business with over 30,000 active customers who consume booking of the facilities, equipment, events, travel and more. ESMG is now well exposed in one of the fastest growing sports in the world and is one of the largest players there. A good example of an exciting initiative within Every Padel is the recently announced collaboration with the 16-time world number one, Fernando "Bela" Belasteguín, regarding a number of joint projects. Among other things, "Bela" will be an ambassador for Every Padel globally, a joint Bela Padelcenter will open in Sweden, and Bela Concept will be an integrated part of all Every Padel's facilities and products
Outlook
Our strong focus on innovation, driven by competent personnel, is an important driving force for profitable growth, which is why we will continue to invest in both development and marketing. Although we have not recovered from the ongoing pandemic, the group's assessment is that the strategy and the forward-leaning investment rate is a key to continue to be well positioned and deliver long-term shareholder value. Even under rapidly changing market conditions. As of the second quarter, the group will have fully consolidated the recently acquired operations Trav og Galoppnytt, Hesteportalen and Every Padel. The group's growth, including the acquired companies, is expected to increase sharply in both sales and earnings on a quarterly and full-year basis in 2021 compared with 2020. Otherwise, no forecast is provided.
Significant events during and after the end of the period
Everysport Media Group has during the reporting period communicated that the Group has completed the acquisition of the Norwegian company Trav- og Galopp-Nytt AS, which is Norway's largest media around horse racing. The acquisition also includes Hesteportalen AS. In January, a long-term framework agreement on content production was also signed with Norsk Rikstoto.
On March 25, the company announced that it had entered into an agreement to acquire 50% of the shares in Klövern Padel AB. The other 50% of the company is owned by the real estate company Klövern, whose ownership remains unchanged. Together, the owners have launched a joint strategy for continued expansion, and at the same time a name change on Klövern Padel to Every Padel has been implemented. ESMG completed the acquisition on April 1st.
At the Extraordinary General Meeting on March 17, 2021, a decision was made on a directed issue of shares to the CEO, which was fully subscribed, as well as warrants to the CEO and employees. Details about this can be found in the section "Share and shareholders" below.After the end of the period, on April 7, it was announced that the company had launched two new hockey sites within the editorial concept EP Rinkside, aimed at target groups in Germany and Finland.On April 24, the Nomination Committee's proposal for the Annual General Meeting was announced, which will be held on May 24. The Nomination Committee proposes the election of Mernosh Saatchi as a new Board member. Board members Charlotte Gustafsson and Göran af Klercker reject re-election.
Net Sales, earnings and financial position during the period
Net Sales
Net sales for the first quarter amounted to SEK 25,5 million (SEK 20.8 million). An increase of 22,8 % compared with the same quarter last year.
The outbreak of Covid-19 had a significant impact on sales during the latter part of the same quarter last year. We are seeing an increase in revenue linked to the resumption of sporting events during the latter part of 2020 and the fact that the advertising market is increasing and thus revenue has gradually recovered. The acquisition of Trav- och Galopp Nytt accounts for SEK 1.7 million of the increase in sales compared with the same quarter last year
B2B
The Covid-19 pandemic has had a negative impact on sales in the B2B segment. In this segment, it is mainly the advertising business that has been affected as the demand for advertisements has decreased when corporate customers have reduced their marketing campaigns. During the first quarter of 2021, the advertising market has begun to recover, which is also reflected in other revenue areas within the segment. A growth of 13% in the B2B segment was achieved compared with the same quarter last year. Of the growth, the newly acquired company Trav- och Galopp Nytt accounts for SEK 0.4 million.
B2C
There is continued strong growth in the B2C segment and we saw an increase in sales of 44% compared with the corresponding quarter last year. The increase in sales is the result of a long-term effort to find new income in the form of subscription income, per-unit income and other income directly linked to consumers. Subscription revenues increase by 58% compared with the corresponding quarter last year. Of the growth, the newly acquired company Trav- och Galopp Nytt accounts for SEK 1.3 million. The transfer of revenues from the B2B to B2C segment is important from a strategic long- term perspective as they are more stable over time and have a better margin.
EBITDA and EBIT
EBITDA for the first quarter amounted to SEK 1,6million (SEK 0.8 million). An increase of 100 % compared to the same quarter last year.
The increase in EBITDA result compared with the same quarter last year is linked to the recent recovery and growth in revenue, which is primarily attributable to the B2C segment. Personnel costs have increased, as they are part of our investment strategy and are linked to the intensive period of sporting events that is now beginning. An increase in other external costs can be attributed to costs in connection with the implementation of previously mentioned acquisitions.
EBIT for the first quarter amounted to SEK 0,3million (SEK -0.1million). An increase of 308 % compared to the same quarter last year.
EBIT during the first quarter of 2021 is affected by depreciation by SEK -1,3 million (SEK -0.9 million). The increase in depreciation is linked to the investments made during the previous year.
Capitalized work on own account during the quarter amounts to SEK 0,0 mkr (0.9 mkr).
Financial position
At the end of the period, Everysport Media Group AB (publ.) has equity of SEK 22,6 million (SEK 21,9 million) and an equity ratio of 32% (42%)
Cash and cash equivalents at the end of the period were SEK 5,2 million (SEK 1,9 million).
In addition to cash and cash equivalents, Everysport Media Group has access to additional banking facilities that strengthen the financial position
Share and shareholders
As of the date 31st of March, 2021, 4 542 496 shares were issued. All shares have equal rights to the company's profit and assets.
In accordance with the resolution on the extraordinary general meeting on 17th of March 2021, ESMG's CEO Hannes Andersson has subscribed for 90,850 class A shares, which is the maximum number of shares according to the general meeting's resolution, at a subscription price of SEK 17.27 per share. The number of shares in the company following the new issue and registration with the Swedish Companies Registration Office will amount to 4,633,346 class A shares and the votes will amount to 46,333,460.At the end of the quarter, Everysport Media Group AB had 1 208 (766) shareholders.
Employees
The average number of full time equivalents during the quarter was 89 (68).
Accounting principles
This interim report includes the Swedish parent company Everysport Media Group AB (publ), corporate ID 556739-8143, and its subsidiaries. The Group’s main operations are divided into Content and Media. Within Content the Group is a leasing provider of results data, game tips and sports tips. Within Media the Group owns and runs digital sites like, EliteProspects, Svenska Fans, Fotboll Direkt, HockeySverige, Travtjänsten and Sporttjänsten which acts as engines for the products offered within the Group.The parent company is limited liability company registered in Stockholm, Sweden. The adress for the headquarters is Gamla Brogatan 11, 111 20 Stockholm.
The interim report for the Group has been prepared in accordance with International Reporting Standards (IFRS) as adopted by the EU. The interim report complies with IAS 34 Interim Financial Reporting and applicable parts of the Annual Accounts Act (1995: 1554) (ÅRL) and RFR 1.
The interim report regarding the parent company has been prepared in accordance with the Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities issued by the Swedish Financial Reporting Board.
Audit
This report has not been reviewed by Everysport Media Group’s auditors.
Further reporting dates
The quarterly report for the period April - June 2021 will be published on the 19th of August 2021.
The quarterly reports for Everysport Media Group are published on the company’s website www.esmg.se
Interim Report January-June 2021: 19th of August 2021
Interim Report July - Sep 2021: 28th of October 2021
Year-end report 2021: 17th of February 2022
Stockholm 2021-05-11
Hannes Andersson
CEO
For further information, please contact:
Hannes Andersson
CEO
Phone: +46 707 36 56 25
E-mail: hannes.andersson@esmg.se
This information is such information that Everysport Media Group AB (publ.) Is required to publish in accordance with the EU Market Abuse Regulation. The information was provided, through the agency of the above contact person, for publication on May 11th, 2021.