The group is built on two pillars. On the one hand, the Live Entertainment division, which organizes events across Europe. This business generates over 70% of revenue, although has little impact on EBITDA due to very low margins. On the other hand, ticket sales generate less revenue although are significantly more profitable, with a margin of 40%, representing the bulk of earnings.
This model has the advantage of a knock-on effect: the more events are organized, the more tickets are sold.
Before the publication, Barclays mentioned two scenarios: a share price of €150 if ticket sales outperformed and margins improved; or a decline to €80 in the event of a slowdown in demand and cost pressures. It turns out that the second scenario has occurred after a fall of almost 20%.
Revenue in the event organization segment fell 5% this quarter, although it is profitability that is particularly worrying, with EBITDA down nearly 40%. The CEO is maintaining his annual forecasts for now, but analysts believe that this segment could weigh on the year's performance.
Ticket sales are acting as a buffer, but they are also under pressure.
In addition to a challenging pricing environment, the integration of recent acquisitions is weighing heavily on the group's accounts. While CEO Klaus-Peter Schulenberg considers them strategic for consolidating the group's position in Europe, they come at a cost. The absorption of See Tickets and France Billet is impacting ticket sales, while the integration of U-Live is proving particularly burdensome for the events division.
Clarification on these integrations during the conference call on the results would be welcome in an attempt to halt the share price's fall. It is easy to forget that the group is enjoying its best half-year ever in terms of revenue.
