Major losses for start-ups burdened the year; Moving forward, our focus must be on realizing the Group’s full potential
YEAR-END REPORT 1 January – 31 December, 2018
JANUARY – DECEMBER 2018
Pro rata – sales: SEK 938.1 million (789.1)
Net sales: SEK 1,101.0 million (1,023.3)
Operating loss before depreciations (EBITDA):
SEK -14,2 million (44.3)
Operating profit/loss EBIT SEK -34,4 million (29.4)
Operating margin, pro rata: -3.7% (3.7%)
Operating margin: -3,1% (2.9%)
Earnings per share: SEK -2,55 (1.53)
A WORD FROM THE CEO
Major losses for start-ups burdened the year; Moving forward, our focus must be on realizing the Group’s full potential
We’ve been busy, during the year, in the industry with further acquisitions, continued growth, a bond issue and a listing on Nasdaq Stockholm, Main Market. Meanwhile, operations in the Group’s two major growth projects with start-ups in Germany (2Entertain) and Gothenburg (Wallmans Group) were charged with expenses that were higher than anticipated, which overshadowed the year’s positive trends in other parts of the Group. The EBIT operating profit for the fourth quarter amounted to SEK 14,2 million (54.0) and an operating loss of SEK -34,4 million (29.4) for the full year. If we exclude the above-mentioned investments and other non-recurring items (listing expenses and severance pay), operating profit for the full year amounted to SEK 28.5 million, which is equivalent to the Group’s operations at the beginning of the year. This is the level we will set out from in 2019 and in the ongoing consolidation of the Group moving forward. When I summarize Moment Group’s year, it therefore gives two different pictures.
Setting up in Germany has been terminated
One important activity during the autumn was addressing the future effect on earnings by the new set-ups. With hindsight, it’s easy to see that the 2Entertain investment in the German-speaking markets under our own auspices failed due to insufficient ticket sales. Total ticket sales during the autumn were just north of 60,000, when the goal was 90,000 tickets. Following an evaluation of the autumn’s outcome, we decided to discontinue efforts under our own auspices. We learned a number of lessons from the German market and we’re currently investigating if there is any possibility of pursuing the investment further, at limited risk, through collaboration with one of Germany’s biggest production companies. During the fourth quarter, a loss of SEK 10.5 million attributable to the investment in Germany was charged to 2Entertain’s earnings.
Fourth quarter operations and comments on the full year
Together, operations in the Event business area showed a strong year, and accumulated operating profit amounted to SEK 16.4 million (7.5), which was however burdened by SEK 5.8 million in respect of adjustments to the purchase sum for Minnesota, as the company's operating profit/loss was stronger than anticipated in the original acquisition analysis. Adjusted for this, the operating profit in the Event business area is SEK 8.9 million higher than the previous year. Hansen successfully completed the extensive Volvo Ocean Race assignment during the year and Minnesota grew by winning yet more major customer projects. However, at SEK 0.9 million (6.1), operating profit for the fourth quarter was SEK 5.2 million lower than the previous year. The decline during the fourth quarter is attributable to Hansen, which was unsuccessful in fully achieving selling-in or dealing with the size of the organization immediately after the end of the Volvo Ocean Race. Nevertheless, at year-end Hansen’s organization was adapted to suit anticipated demand in 2019, and the workforce has been halved in comparison with the same date one year earlier.
The year 2018 can be summarized as weak in the Live Entertainment business area. In addition to the unsuccessful, now terminated investment in Germany, 2Entertain experienced a fourth quarter with lower-than-anticipated seat occupancy rates. I addressed this issue in the previous interim report when we noted a slow start to sales following an extremely hot summer and continued low sales and seat occupancy in the quarter. The operating loss for the quarter for 2Entertain amounted to SEK ‑14.0 million (9.3), which is an improvement of SEK 23.3 million compared to the previous year. The accumulated operating loss amounted to SEK ‑17.2 million (13.5), which is a decrease of SEK 30.7 million. Operations in Germany impacted accumulated earnings by SEK ‑17.8 million. For 2Entertain’s part, 2019 will mean that the company will return to more “normal operations” without extensive investments in Germany, but with a number of premières that received good reviews at the beginning of the year. What’s more, the show Så som i Himmelen [As it is in Heaven], which was fully sold out during the autumn, will continue to be performed at Oscarsteatern during 2019.
Operating profit for the quarter in our Venues in Wallmans Group amounted to SEK 41,1 million (41.3). The accumulated operating loss amounted to SEK -13.5 million (17.5). The business area’s earnings were charged with non-recurring expenses of SEK 1.2 million for the quarter and accumulated SEK 15.3 the full year, most of which is attributable to Kungsportshuset in Gothenburg. The established cabaret venues and the newly acquired activity arenas performed in line with expectations during the year, while Hamburger Börs delivered lower earnings than the previous year. During the year, the recently established Kungsportshuset in Gothenburg burdened earnings even into the fourth quarter. In November we announced a change of CEO within Wallmans Group, for which recruitment is in progress and anticipated to be concluded during the spring. In the meantime, the undersigned is acting as interim CEO for the business.
2019 will be a year of full operations across all business areas
We can now look forward to a year where we can focus on the development of our existing operation in order to realize our full potential. Our position as one of the leading players in the experience industry has developed over the year, especially since Moment Group is now listed on Nasdaq Stockholm, Main Market. Our exciting network of many kinds of stakeholders means we can look forward to continue being one of the driving forces influencing our industry based on our brand promise – Shaping the experience industry.
Gothenburg, 8 February 2019
Pelle Mattisson
CEO/Group CEO
pelle.mattisson@momentgroup.com
This disclosure comprises information that Moment Group AB is obliged to disclose according to the EU market abuse regulation. The information was submitted through the auspices of the above-mentioned contacts, for publication on 08 February 2019 at around 08:30 CET.
Moment Group is one of the leading players within the Scandinavian experience industry. The Group creates experiences for more than 2 million guests every year. Moment Group operations are conducted in four business areas from offices in Gothenburg, Stockholm, Copenhagen, Oslo, Hamburg, Falkenberg and Växjö. Moment Group is listed on Nasdaq Stockholm, Main Market.
Hansen and Minnesota Communication operate in the business area Event, and together they are the largest operator in the Nordic events industry. Hansen plans, develops and implements events that are firmly established in the client’s business strategy. Minnesota works with brand engagement, which means it helps customers create arenas for dialogues and participation through meetings, experiences and digital solutions.
In the Immersive Experiences business area, experiences are created where guests participate in activities based on games and competitions in combination with food & beverages. Within the business area two modern activity centres are run – Ballbreaker in Stockholm and STAR Bowling in Gothenburg.
In the Live Entertainment business area, 2Entertain produces musicals, theatre, shows and concerts. It creates special-order entertainment, arranges artists for corporate customers and runs five theatre venues and one venue for dinner & show. 2Entertain also runs the ticket booking site SHOWTIC.se.
The Wallmans Group operates in the Venues business area. Wallmans Group runs five venues in Scandinavia – Wallmans in Stockholm, Copenhagen and Oslo, Golden Hits in Stockholm and Kungsportshuset in Gothenburg. Wallmans Group also produces its own concepts; Wallmans, Golden Hits and The Concept. Kungsportshuset in Gothenburg also hosts KPH Matbar – a Scandinavian dining experience with flavours from around the world.