FL Entertainment: 9M 2022 results
Press Release
Paris – November
30th, 2022
9M
2022 RESULTS
STRONG REVENUE
GROWTH,HIGH PROFITABILITY
AND CASH FLOW
CONVERSION
9M 2022
FIGURES
- Revenue growth: €2,713m, up +15.0%
on a reported basis and +12.0% at constant exchange rates
- Adjusted EBITDA1: €446m, up +17.5%
versus 9M 2021, leading to 40bp margin increase to 16.5%
- Adjusted net income: €210m up
+15.4% versus €182m for the first 9M 2021
- Net income: -€75m (9M 2021: -€2m)
due to one-off impact from Group re-organization and listing
- Adjusted free cash flow1: €369m,
representing a cash flow conversion of 83%
- Net financial debt / Adj. EBITDA2
ratio: improved to 3.4x as of September 30, 2022 versus 3.7x
as at December 31, 2021, in line with 2022 guidance
9M 2022 HIGHLIGHTS
- Content production &
distribution
- Revenue up +13.8%3 with a return to
normalized pre-covid seasonality in Q3 2022
- 11 bolt-on acquisitions4, support
growth of international footprint and attract new clients
- Content catalog: +25% increase in
hours in catalog versus 9M 2021
- Online sports betting & gaming
- Revenue from continuing
operations5: +12.9% with a strong recovery in Q3 2022 following
quieter sports calendar in H1 2022 vs H1 2021
- Unique Active Players up +11% in 9M
2022 versus 9M 2021
- Targeting highest responsible
gaming standards, launched major campaign in France
- Group balance sheet strength:
- Liquidity position: €547m
- Financial debt at fixed rate with
no maturity before 2025
- S&P credit rating on Banijay6
upgraded to B+ in September 2022
François Riahi, CEO
of FL Entertainment,
said:
“FL Entertainment delivered strong Group revenue
growth for the first nine months of 2022, demonstrating continued
high profitability and cash generation.
In Content production & distribution, we saw
a return to normalized seasonality in Q3 2022 with strong activity
across existing and new unscripted formats, as well as attractive
new scripted programming including Marie-Antoinette in France and
SAS Rogue Heroes in the UK. Distribution revenues were also up
across both broadcaster and streaming platforms. We also
successfully executed 11 bolt-on acquisitions this year so far,
which will continue to drive performance and business development
going forward.
Our Online sports betting & gaming business
performed very well also, with an outstanding earnings growth,
driven by its appealing digital platform and lean cost structure.
With an 11% growth in unique active players year on year, Betclic
is well placed to capitalize on opportunities from the football
world cup, underpinned by its robust commitment to the highest
standards of responsible gaming.
In an inflationary environment with several
macroeconomic challenges, FL Entertainment is focused on driving
productivity gains, particularly in content production, to protect
margins and strong cash generation levels. The positive momentum
seen in the year to date, combined with our leading positions in
attractive and growing segments of the entertainment industry, puts
us in a strong position to maintain continued sustainable growth in
line with our 2022 guidance and mid-term outlook.”
*****
FL Entertainment invites you to its first 9M 2022 results
conference call on:
Wednesday,
November 30th
2022, at 6:00pm CET
Webcast live:You can watch the
presentation on the following
link:https://edge.media-server.com/mmc/p/7symqgxu
Dial-in
access telephone numbers:You need
to register to the following
link:https://register.vevent.com/register/BI47798600cde24daaac9dc0b432e7a3f7
Slides related to 9M 2022 results are available
on the Group’s website, in the “Investor relations” section:
https://fl-entertainment.com/investor-relations/
On 29 November 2022, the board of directors approved the
financial report and the unaudited condensed financial statements
for the first nine months 2022.
Accounts are presented under IFRS standards,
unless explicitly mentioned
KEY FINANCIALS IN
9M 2022
€m |
9M 2021 |
9M 2022 |
% change |
% constant currency |
|
|
|
|
|
Group
revenue |
2 359.3 |
2 712.9 |
15.0% |
12.0% |
Adjusted
EBITDA |
379.8 |
446.4 |
17.5% |
|
Adjusted EBITDA
margin |
16.1% |
16.5% |
|
|
|
|
|
|
|
Net income |
(1.8) |
(75.4) |
|
|
Adjusted net
income excl. one-off items related to the transaction |
181.8 |
209.8 |
15.4% |
|
|
|
|
|
|
Adjusted
free cash-flow |
303.3 |
368.9 |
21.6% |
|
Free cash flow
conversion rate |
80% |
83% |
|
|
|
|
|
|
|
For the twelve-month period ended |
31-Dec-21 |
30-Sep-22 |
% change |
|
|
|
|
|
|
Net financial
debt (reported) |
2 268.8 |
2 271.8 |
0.1% |
|
Net financial debt / Adjusted EBITDA |
3.7x |
3.4x |
|
|
FIRST 9M
2022 – KEY EVENTS
Business combination
On 10 May 2022, F.L. Entertainment N.V.,
announced that it had entered into a definitive business
combination agreement with Pegasus Entrepreneurial Acquisition
Company Europe B.V., a special purpose acquisition company, to
become a listed company on Euronext Amsterdam.
The business combination was completed on July
1, 2022 and provided the Group with additional capital of around
€608m after deduction of the fees and expenses of the Business
Combination, estimated at approximately €35m. The first day of
trading on Euronext Amsterdam took place on 1st July 2022.
Group reorganization
The Group conducted reorganization between
entities within Financière Lov group and with minority interests in
order to achieve the transaction described above. For more details,
please refer to Note 3.1.2 to the Condensed Financial Statements
for the 9-month period ended 30 September 2022.
Liquidation of Bet-at-home Entertainment
Ltd
On 22 December 2021, Bet-at-home Group announced
the liquidation of Bet-at-home Entertainment Ltd, a Maltese entity
operating casino activities under license by the Malta Gaming
Authority, consolidated at 53.9% as of December 2021, which took
effect in the first half of 2022.
Content production & distribution
acquisitions
Banijay maintained its acquisition strategy in
2022, realizing 11 bolt-on acquisitions7 of well-known production
companies in the year to date across both non-scripted and scripted
content. The strategic objective is to enrich Banijay’s content and
geographical footprint, permanently increasing value to its
customers thanks to its enlarged high-quality catalog. This
strategy also creates economies of scale and contributes to
long-term performance.
Companies acquired during the period strengthen
Banijay’s exposure in 8 countries - the US, Australia, Israel, the
UK, Germany, Italy, Spain and France - and adds expertise across
unscripted, kids & family and premium scripted activities:
- Légende Films
(renamed Montmartre Films) is a high-profile filmmaker in
France;
-
Znak TV, an
entity created by famous showrunner and executive producer on Fox's
"MasterChef" amongst other large-scale entertainment brands, which
operates in the US and the UK;
-
Groenlandia, an Italian premium
scripted producer;
- Tooco a specialist
in the creation, development and management of new formats for the
French and international markets;
- Pookepsie Films is
one of the most unique scripted production companies in Spain
focused on the fantasy, thriller, and horror space;
- UK young adult and family drama
specialists, Kindle Entertainment;
- Movimenti, an
Italian production company and animation focused creative hub;
- SONY Pictures
Film-und Fernsehen GmbH in Germany is a home for
high-quality, standout entertainment formats and scripted
productions.
POST-CLOSING EVENTS
Content production & distribution
acquisitions
Banijay realized 3 new acquisitions post-9M
2022, as it continued to expand its footprint:
- Mam Tor is a
high-end original television drama producer from the UK;
- Beyond
International8 is a leading
Australian producer of media content with more than 8,000 hours of
scripted and non-scripted in-house and third-party acquired English
content across multiple territories and genres including factual
entertainment, premium documentary and drama; and
- MoviePlus
Production an independent Israeli production company specializing
in drama series, documentaries and feature-length films.
Pursuing the highest standards
for responsible
gaming
As part of its relentless commitment to ensuring the highest
levels of player protection, Betclic ran a major responsible gaming
education campaign in France in October 2022:
- Educate players via the Betclic app as well as large-scale
marketing campaign focused on playing with control
- Increase public awareness to prevent underage gambling
- Deepen the prevention of risky behavior with all the Betclic
employees
- Innovate with a safer gaming “lab sprint” made up of 100
Betclic experts including engineers, product managers and
responsible gaming experts. Betclic also invests in the latest
artificial intelligence technology to develop and improve its own
algorithm for detecting behaviour patterns.
Betclic signed two partnerships with reference
Associations:
- E-Enfance, the
first website for parents to help them prevent together their
teenagers’ gambling
- GamCare, a
recognized expert in the prevention and treatment of gambling
problems
FIRST 9M
2022 - PROFIT & LOSS
STATEMENT
9M 2022 “Normalized P&L” highlights the
underlying performance of the Group by removing the impact of
one-off items related to reorganization and business combination
(refer to page 9).
In € million |
9M 2021 Reported |
9M 2022 Reported |
9M 2022 NormalizedP&L |
% change vs 9M
2021 |
Revenue |
2 359.3 |
2 712.9 |
2 712.9 |
15.0% |
External
expenses |
(1 155.2) |
(1 308.5) |
(1 308.5) |
|
Personnel
expenses excluding LTIP & employment-related earn-out &
option expenses |
(815.9) |
(940.4) |
(940.4) |
|
Other operating
income (loss) excl. restructuring costs & other non-recurring
items |
(8.3) |
(15.8) |
(15.8) |
|
Depreciation and
amortization expenses related to D&A fiction |
(0.1) |
(1.7) |
(1.7) |
|
Adjusted EBITDA |
379.8 |
446.4 |
446.4 |
17.5% |
Adjusted EBITDA
margin |
16.1% |
16.5% |
16.5% |
|
|
|
|
|
|
Restructuring
costs and other non-recurring items |
(37.4) |
(99.5) |
6.2 |
|
LTIP &
employment-related earn-out and option expenses |
(127.3) |
(104.7) |
(71.7) |
|
Depreciation and amortization (excl. D&A fiction) |
(81.3) |
(88.2) |
(88.2) |
|
Operating profit/(loss) |
133.9 |
154.1 |
292.8 |
2.2x |
|
|
|
|
|
Cost of net
debt |
(99.5) |
(106.4) |
(106.4) |
|
Other finance income/(costs) |
(18.9) |
(81.1) |
15.3 |
|
Net
financial income/(expense) |
(118.4) |
(187.5) |
(91.1) |
-23.1% |
Share of net
income from associates & joint ventures |
(1.3) |
(1.7) |
(1.7) |
|
Earnings before provision for income taxes |
14.2 |
(35.1) |
200.0 |
14.1x |
|
|
|
|
|
Income tax
expenses |
(16.0) |
(40.3) |
(40.3) |
|
Profit/(loss) from continuing operations |
(1.8) |
(75.4) |
159.7 |
|
Net income/(loss) for the period |
(1.8) |
(75.4) |
159.7 |
|
Attributable to: |
|
|
|
|
Non-controlling
interests |
(4.8) |
3.9 |
3.9 |
|
Shareholders |
3.0 |
(79.3) |
155.8 |
|
Restructuring costs and other non-recurring items |
37.4 |
99.5 |
(6.2) |
|
LTIP &
employment-related earn-out and option expenses |
127.3 |
104.7 |
71.7 |
|
Other finance income/(costs) |
18.9 |
81.1 |
(15.3) |
|
Adjusted
net income |
181.8 |
209.8 |
209.8 |
15.4% |
CONSOLIDATED REVENUE
Group revenue increased by +12.0% at constant
exchange rates to €2,712.9m over the first 9M 2022, with robust
growth of Content production & distribution business in
particular. In absolute terms, consolidated revenue grew by +15.0%
over the period (the difference mainly came from US$ and £
currencies).
The performance in 9M 2022 reflects, as
expected, distinct growth pattern between first half and third
quarter in the two business lines. This is attributable to the
impact of covid lockdowns, a busier sports calendar in 2021 for
Online sports betting & gaming, and a return to normalized
pre-covid seasonality in Q3 2022 for Content Production &
distribution.
This is reflected as follows by business:
In € million |
Q3 2021 |
Q3 2022 |
% change |
|
9M 2021 |
9M 2022 |
% change |
% constant currency |
Production |
570.0 |
575.9 |
1.0% |
|
1 499.4 |
1 744.2 |
16.3% |
|
Distribution |
82.3 |
107.6 |
30.8% |
|
192.8 |
267.2 |
38.6% |
|
Other |
42.0 |
34.1 |
-18.7% |
|
108.1 |
110.4 |
2.2% |
|
Content production & distribution |
694.2 |
717.6 |
3.4% |
|
1 800.2 |
2 121.8 |
17.9% |
13.8% |
|
|
|
|
|
|
|
|
|
Sportsbook |
111.8 |
154.8 |
38.5% |
|
445.6 |
477.1 |
7.1% |
|
Casino |
26.9 |
25.3 |
-5.7% |
|
76.9 |
71.8 |
-6.5% |
|
Poker |
10.5 |
11.7 |
11.4% |
|
32.1 |
34.9 |
8.7% |
|
Other |
1.4 |
2.6 |
87.1% |
|
4.6 |
7.2 |
56.8% |
|
Online sports betting & gaming |
150.4 |
194.4 |
29.3% |
|
559.1 |
591.0 |
5.7% |
5.8% |
|
|
|
|
|
|
|
|
|
TOTAL REVENUE |
844.6 |
912.1 |
8.0% |
|
2 359.3 |
2 712.9 |
15.0% |
12.0% |
Content
production &
distribution:
After a strong recovery in H1 2022 in comparison
with H1 2021 that was still heavily impacted by Covid effects, the
business returned to a normalized pre-covid seasonality pattern in
Q3 2022. Revenue totaled €2,122m, up +17.9% in absolute terms and
+13.8% at constant currency over the first 9M 2022.
Content production revenue rose by +16.3% over
9M 2022, driven by a dynamic production cycle, with the
recommission of successful well-known programs (“Star Academy” and
“Masterchef” in France), the development of new shows delivered for
local and international markets across both non-scripted (“Blow-up”
in Germany, Australia and New Zealand, “Starstruck” in the UK), and
scripted (“SAS Rogue Heroes” for BBC in the UK and
“Marie-Antoinette” for Canal+ in France) and to a lessor extent the
positive impact from bolt-on acquisitions.
Distribution: revenue increased by +38.6% driven
by both linear TV and streaming platforms for key non-scripted and
scripted content such as “You” for Sky and “Peaky Blinders” for
Netflix in the UK.
Overall, the number of content hours at the end
of September 2022 reached about 146,000 hours9, up +25% versus 9M
2021.
Online sports
betting &
gaming:
The Online sports betting & gaming business
recorded +5.7% revenue growth in absolute terms over the first 9M
2022 (+5.8% at constant currency) with a strong rebound in Q3 2022
(+29.3%) following a first half that saw a quieter sports calendar
compared with H1 2021 (including the Euro 2020 football tournament
held in June / July 2021). These figures also reflect the
discontinued Bet-at-home activities.
At constant exchange rates and excluding
discontinued Bet-at-home operations in certain jurisdictions,
revenue was up +13% over 9M 2022, driven by the solid continued
performance of Betclic entity (+15%), offsetting the -11% decline
at Bet-at-home.
Unique Active Players increased sharply by +11%
in 9M 2022 versus 9M 2021, illustrating the appeal of the Betclic
platform.
ADJUSTED EBITDA
Adjusted EBITDA amounted to €446.4m, up +17.5%
over 9M 2022, on revenue up +15.0%. This was driven by a strong
+23.4% rise to €297.2m for Content production & distribution
and +8.4% to €150.8m for Online sports betting & gaming.
Overall, this led to a 40bp improvement in
Adjusted EBITDA margin to 16.5% for the first 9M 2022, with
improved profitability across both business lines thanks to revenue
growth and a higher proportion of Distribution revenue for Content
production & distribution as well as a strong operational
leverage for Online sports betting & gaming.
The increase in external and personnel expenses
was mainly driven by Content production & distribution, in line
with the increase in production revenue.
In € million |
|
9M 2021 |
9M 2022 |
% change |
|
|
|
|
|
Content
production & distribution |
|
240.8 |
297.2 |
23.4% |
Online sports
betting & gaming |
|
139.1 |
150.8 |
8.4% |
Holding |
|
(0.1) |
(1.5) |
|
Adjusted EBITDA |
|
379.8 |
446.4 |
17.5% |
|
|
|
|
|
Content
production & distribution |
|
13.4% |
14.0% |
|
Online sports
betting & gaming |
|
24.9% |
25.5% |
|
Adjusted EBITDA margin |
|
16.1% |
16.5% |
|
NORMALIZED P&L: FROM ADJUSTED
EBITDA TO ADJUSTED NET INCOME
Normalized P&L highlights the underlying
performance of the group for the first 9M 2022 without one-off
items related to reorganization and business combination.
Comments thereafter analyze the “Normalized
P&L” over the first 9M 2022 compared to the first 9M 2021
reported P&L.
In € million |
9M 2021 Reported |
9M 2022 Reported (1) |
Transaction impact(2) |
9M 2022 Normalized P&L(1) -
(2) |
Revenue |
2 359.3 |
2 712.9 |
|
2 712.9 |
External
expenses |
(1 155.2) |
(1 308.5) |
|
(1 308.5) |
Personnel
expenses excluding LTIP & employment-related earn-out &
option expenses |
(815.9) |
(940.4) |
|
(940.4) |
Other operating
income (loss) excl. restructuring costs & other non-recurring
items |
(8.3) |
(15.8) |
|
(15.8) |
Depreciation and
amortization expenses related to D&A fiction |
(0.1) |
(1.7) |
|
(1.7) |
Adjusted EBITDA |
379.8 |
446.4 |
|
446.4 |
Adjusted EBITDA
margin |
16.1% |
16.5% |
|
16.5% |
|
|
|
|
|
Restructuring
costs and other non-recurring items |
(37.4) |
(99.5) |
(105.7) |
6.2 |
LTIP &
employment-related earn-out and option expenses |
(127.3) |
(104.7) |
(33.0) |
(71.7) |
Depreciation and amortization (excl. D&A fiction) |
(81.3) |
(88.2) |
|
(88.2) |
Operating profit/(loss) |
133.9 |
154.1 |
(138.7) |
292.8 |
|
|
|
|
|
Cost of net
debt |
(99.5) |
(106.4) |
- |
(106.4) |
Other finance income/(costs) |
(18.9) |
(81.1) |
(96.4) |
15.3 |
Net
financial income/(expense) |
(118.4) |
(187.5) |
(96.4) |
(91.1) |
Share of net
income from associates & joint ventures |
(1.3) |
(1.7) |
- |
(1.7) |
Earnings before provision for income taxes |
14.2 |
(35.1) |
(235.1) |
200.0 |
|
|
|
|
|
Income tax
expenses |
(16.0) |
(40.3) |
- |
(40.3) |
Profit/(loss) from continuing operations |
(1.8) |
(75.4) |
(235.1) |
159.7 |
Net income/(loss) for the period |
(1.8) |
(75.4) |
(235.1) |
159.7 |
Attributable to: |
|
|
|
|
Non-controlling
interests |
(4.8) |
3.9 |
- |
3.9 |
Shareholders |
3.0 |
(79.3) |
(235.1) |
155.8 |
Restructuring costs and other non-recurring items |
37.4 |
99.5 |
105.7 |
(6.2) |
LTIP &
employment-related earn-out and option expenses |
127.3 |
104.7 |
33.0 |
71.7 |
Other financial income/(costs) |
18.9 |
81.1 |
96.4 |
(15.3) |
Adjusted
net income |
181.8 |
209.8 |
- |
209.8 |
One-off items related
to the transaction:
FL Entertainment recorded one-off items from the
Group re-organization and listing transaction:
- Restructuring and other
non-recurring items:
€106m related to
listing and transaction fees and costs incurred to realize the
transaction. Under IFRS, the merger with the SPAC is considered as
an equity-settled share-based payment for a service rendered by the
SPAC to list the Group. This service is valued at €86m and is
recorded as a listing fee.
- LTIP
& employment-related earn-out and
option expenses: €33m
mainly driven by the change in fair value of financial instruments
explained by the LTIP following the upward reassessment of the
Banijay Group’s shares.
- Other finance income /
loss: €96m attributable
mainly to the change in fair value of financial instruments. This
includes re-evaluation and the change in fair value of Vivendi’s
convertible bond derivatives following the upward assessment of the
Banijay Group’s shares. This bond was paid back as part of the
transaction.
Exceptional income from the
deconsolidation of Bet-at-home
Entertainment Ltd
FL Entertainment recorded a net exceptional
income of +€6m mainly coming from the deconsolidation of
Bet-at-home Entertainment Ltd in H1 2022.
Net financial result
Net financial result amounted to -€91.1m over 9M
2022 compared to -€118.4m in 9M 2021. Of this amount:
- Cost of
net debt totaled -€106.4m in 9M 2022 vs -€99.5m in 9M
2021, mostly attributable to a higher level of interest charges
explained by a timing effect of interest charges related to Betclic
loan issued on 13 December 2021.
- Other financial income and
expenses as of September 2022 amounted to +€15.3m,
compared to - €18.9m for 9M 2021 mainly explained by
derivatives during 9M 2022.
Income tax expenses
The tax charge in 9M 2022 totaled -€40.3m
compared to -€16.0m in 9M 2021, representing an effective tax rate
of 17.2% compared with 12.5% respectively.
The change is mostly explained by a particularly
low effective income tax interest rate in over 9M 2021 due to the
use of significant loss carry-forward in 2021 for Online sports
betting & gaming business.
Adjusted net income
Adjusted net income rose by +15.3% to €209.8m in
9M 2022 from €181.8m in 9M 2021.
FREE CASH FLOW AND NET FINANCIAL
DEBT OVER 9M 2022
FREE CASH FLOW
CONVERSION
Adjusted free cash flow (after lease payments)
reached €369m, up +66m yoy (+21.6%), driven by the business
performance as well as a tight control of cash expenses and
capex.
The change in working capital mainly derived
from Content production and distribution. The third quarter
traditionally has the highest requirements, reflecting the
seasonality of the activity and the timing of deliveries.
The rise in income taxes paid was attributable
to greater use of tax loss carry-forward in 9M 2021.
Adjusted free cash flow conversion after capex
and leases payment amounted to 83%.
€m |
9M 2021 |
9M 2022 |
% change |
Adjusted
EBITDA |
379.8 |
446.4 |
17.5% |
Capex |
(43.0) |
(43.2) |
|
Total cash
outflows for leases that are not recognized as rental expenses |
(33.6) |
(34.3) |
|
Adjusted free-cash
flow |
303.3 |
368.9 |
21.6% |
|
|
|
|
Change in
working capital* |
(108.9) |
(101.1) |
|
Income tax
paid |
(28.6) |
(48.6) |
|
Adjusted operating free cash flow |
165.8 |
219.1 |
32.2% |
*Excludes LTIP paid and exceptional items
cash-out
SOLID FINANCIAL
POSITION AND DE-LEVERAGING
The Group’s net financial debt as of September
30, 2022 stood at €2,272m, compared to €2,269m as of 31 December
2021. It is at fixed rate with no maturity before 2025.
The stability in net financial debt reflected
the seasonality of the Content production & distribution
business and negative exchange rates impact.
Net financial debt came mainly from an increase
in adjusted free cash flows of the period for -€219m and cash
proceeds received following the transaction (-€121m), partly offset
by LTIP paid & exceptionals for €139m, net acquisitions for
€68m and €106m interests recognized during 9M 2022.
The financial leverage ratio was 3.4x as of
September 30, 2022, compared to 3.7x as of December 31, 2021.
Agenda
FY 2022 results: 16 March 2022
Investor Relations
Caroline Cohen – Phone: +33 1 44 95 23 34 –
c.cohen@flentertainment.com
Press Relations
Anne-France Malrieu - afmalrieu@image7.fr
About FL Entertainment
Founded by Stéphane Courbit, a 30-year
entertainment industry pioneer and entrepreneur, FL Entertainment
Group is a global leader in multimedia content and gambling,
combining the strengths of Banijay, the world’s largest independent
producer distributor, with Betclic Everest Group, the
fastest-growing online sports betting platform in Europe. In 2021,
FL Entertainment recorded through Banijay and Betclic Everest
Group, a combined revenue, and adjusted EBITDA, of €3.5bn and €609m
respectively. FL Entertainment listed on Euronext Amsterdam in July
2022.ISIN: NL0015000X07 - Bloomberg: FLE NA - Reuters: FLE.AS
Forward-looking statementsThis
communication contains information that qualifies as inside
information within the meaning of Article 7(1) of the EU Market
Abuse Regulation.
Forward Looking StatementsSome
statements in this press release may be considered “forward-looking
statements”. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on
circumstances that may occur in the future. These forward-looking
statements involve known and unknown risks, uncertainties and other
factors that are outside of our control and impossible to predict
and may cause actual results to differ materially from any future
results expressed or implied. These forward-looking statements are
based on current expectations, estimates, forecasts, analyses and
projections about the industry in which we operate and management's
beliefs and assumptions about possible future events. You are
cautioned not to put undue reliance on these forward-looking
statements, which only express views as at the date of this press
release and are neither predictions nor guarantees of possible
future events or circumstances. We do not undertake any obligation
to release publicly any revisions to these forward-looking
statements to reflect events or circumstances after the date of
this press release or to reflect the occurrence of unanticipated
events, except as may be required under applicable securities
law.
Alternative performance
measuresThe financial information in this release includes
non-IFRS financial measures and ratios (e.g. non-IFRS metrics, such
as adjusted EBITDA) that are not recognized as measures of
financial performance or liquidity under IFRS. The non-IFRS
financial measures presented are measures used by management to
monitor the underlying performance of the business and operations
and, have therefore not been audited or reviewed. Furthermore, they
may not be indicative of the historical operating results, nor are
they meant to be predictive of future results. These non-IFRS
measures are presented because they are considered important
supplementary measurements of FL Entertainment N.V.'s (the
"Company") performance, and we believe that these and similar
measures are widely used in the industry in which the Company
operates as a way to evaluate a company’s operating performance and
liquidity. Not all companies calculate non-IFRS financial measures
in the same manner or on a consistent basis. As a result, these
measures and ratios may not be comparable to measures used by other
companies under the same or similar names. Further information on
the non-IFRS measures can be found in our [reference to
report].
Regulated information related to this
press release is available on the
website:https://fl-entertainment.com/investor-relations/https://fl-entertainment.com/
APPENDIX
Glossary
Transaction: business combination with Pegasus
Entrepreneurial Acquisition Company Europe B.V., a special purpose
acquisition company to become a listed company on Euronext
Amsterdam as well as the Group’s re-organization
Adjusted EBITDA: for a period
is defined as the Operating Profit for that period excluding
restructuring costs and other non-core items, costs associated with
the long-term incentive plan within the Group (the "LTIP") and
employment related earn-out and option expenses, and depreciation
and amortization (excluding D&A fiction). D&A fiction are
costs related to the amortization of fiction production, which the
Group considers to be operating costs. As a result of the D&A
fiction, the depreciation and amortization line item in the Group's
combined statement of income deviates from the depreciation and
amortization costs in this line item.
Adjusted net income: defined as
net income (loss) adjusted for restructuring costs and other
non-core items, costs associated with the LTIP and employment
related earn-out and option expenses and other financial
income.
Adjusted free cash flow:
defined as adjusted EBITDA adjusted for purchase and disposal of
property plant and equipment and of intangible assets and cash
outflows for leases that are not recognized as rental expenses.
Adjusted
operating free cash flow: defined
as adjusted EBITDA adjusted for purchase and disposal of property
plant and equipment and of intangible assets, cash outflows for
leases that are not recognized as rental expenses, change in WC,
and income tax paid.
Net financial debt: defined as
the sum of bonds, bank borrowings, bank overdrafts, vendor loans,
accrued interests on bonds and bank borrowings minus cash and cash
equivalents, trade receivables on providers, cash in trusts, plus
players liabilities and escrow accounts plus (or minus) the fair
value of net derivatives liabilities (or assets) for that period.
Net financial debt is pre-IFRS 16.
Leverage: adjusted net
financial debt / Adjusted EBITDA
Number of Unique Active
Players: average number of unique players playing at least
once a month in a defined period
Content production
&
distribution: Key
indicators
Key indicators - In €m |
9M 2021 |
9M 2022 |
% change |
% constant currency |
Production |
1 499.4 |
1 744.2 |
16.3% |
|
Distribution |
192.8 |
267.2 |
38.6% |
|
Other |
108.1 |
110.4 |
2.2% |
|
REVENUE |
1 800.2 |
2 121.8 |
17.9% |
13.8% |
|
|
|
|
|
Adjusted EBITDA |
240.8 |
297.2 |
23.4% |
|
Adjusted EBITDA
margin (%) |
13.4% |
14.0% |
|
|
|
|
|
|
|
Capex |
(36.2) |
(36.8) |
|
|
Total cash
outflows for leases that are not recognised as rental expenses |
(31.1) |
(31.7) |
|
|
|
|
|
|
|
Adjusted Free-cash flow |
173.6 |
228.7 |
31.8% |
|
|
|
|
|
|
Change in
WC* |
(92.7) |
(105.8) |
|
|
Income tax
paid |
(17.7) |
(27.6) |
|
|
Adjusted Operating free cash flow |
63.3 |
95.4 |
50.7% |
|
Online sports betting
& gaming:
Key indicators
Key indicators - €m |
9M 2021 |
9M 2022 |
% change |
% constant currency |
Sportsbook |
445.6 |
477.1 |
7.1% |
|
Casino |
76.9 |
71.8 |
-6.5% |
|
Poker |
32.1 |
34.9 |
8.7% |
|
Other |
4.6 |
7.2 |
56.8% |
|
REVENUE |
559.1 |
591.0 |
5.7% |
5.8% |
|
|
|
|
|
Adjusted EBITDA |
139.1 |
150.8 |
8.4% |
|
Adjusted EBITDA
margin (%) |
24.9% |
25.5% |
|
|
|
|
|
|
|
Capex |
(6.8) |
(6.4) |
|
|
Total cash
outflows for leases that are not recognised as rental expenses |
(2.6) |
(2.6) |
|
|
|
|
|
|
|
Adjusted free-cash flow |
129.8 |
141.7 |
9.2% |
|
|
|
|
|
|
Change in
WC* |
(16.2) |
5.2 |
|
|
Income tax
paid |
(11.0) |
(21.0) |
|
|
Adjusted Operating free cash flow |
102.6 |
125.9 |
22.6% |
|
*Excluding LTIP and exceptional items payment
Interim consolidated statement of cash
flows
In € million |
30 Sept. 2021 |
30 Sept. 2022 |
Profit/(loss) |
(1.9) |
(75.4) |
Adjustments: |
363.5 |
487.5 |
Share of
profit/(loss) of associates and joint ventures |
1.3 |
1.7 |
Amortization,
depreciation, impairment losses and provisions, net of
reversals |
102.1 |
91.3 |
Employee
benefits LTIP & employment-related earn-out and option
expenses |
127.3 |
104.7 |
Change in fair
value of financial instruments |
6.8 |
76.9 |
Income tax
expenses |
16.0 |
40.3 |
Other
adjustments(1) |
9.3 |
63.8 |
Share of
profit/(loss) of associates and joint ventures |
100.7 |
108.7 |
Gross cash provided by operating activities |
361.6 |
412.1 |
Changes in
working capital |
(164.8) |
(205.6) |
Income tax
paid |
(28.6) |
(48.6) |
Net cash flows provided by operating
activities |
168.3 |
157.8 |
Purchase of
property, plant and equipment and intangible assets |
(43.0) |
(43.2) |
Purchases of
consolidated companies, net of acquired cash |
(22.3) |
(36.3) |
Increase in
financial assets |
(3.4) |
(4.6) |
Proceeds from
sales of consolidated companies, after divested cash |
7.5 |
3.8 |
Decrease in
financial assets |
0.5 |
163.5 |
Net cash provided by/(used for) investing
activities |
(60.7) |
83.2 |
Change in
capital |
|
364.8 |
Change in other
securities |
|
114.4 |
Dividends
paid |
(30.0) |
(0.2) |
Dividends paid
by consolidated companies to their non-controlling interests |
(43.2) |
(3.6) |
Transactions
with non-controlling interests |
(2.1) |
(3.4) |
Proceeds from
borrowings and other financial liabilities |
23.5 |
15.6 |
Repayment of
borrowings and other financial liabilities |
(51.1) |
(365.7) |
Repayment of
vendor loans |
|
(388.5) |
Other cash items
related to financial activities |
(0.8) |
(0.1) |
Interest
paid |
(106.9) |
(111.1) |
Net cash flows from/(used in) financing
activities |
(210.7) |
(377.7) |
Impact of
changes in foreign exchange rates |
(9.9) |
36.7 |
Net increase/(decrease) of cash and cash
equivalents |
(113.0) |
(100.1) |
|
|
|
Cash and cash
equivalents at the beginning of the period |
388.5 |
432.4 |
Cash and cash
equivalents at end of the period |
275.5 |
332.4 |
(1) Other adjustments include notably unrealized foreign
exchange gains on disposal and liquidation of subsidiaries
Interim consolidated statement of financial
position
In € million |
31-Dec-2021 |
30-Sep-2022 |
ASSETS |
|
|
Goodwill |
2 493.9 |
2 557.3 |
Intangible
assets |
236.7 |
219.6 |
Right-of-use
assets |
171.1 |
155.1 |
Property, plant
and equipment |
55.3 |
59.3 |
Investments in
associates and joint ventures |
11.1 |
12.6 |
Non-current
financial assets |
83.0 |
131.3 |
Other
non-current assets |
29.6 |
20.6 |
Deferred tax
assets |
47.6 |
27.1 |
Non-current assets |
3 128.3 |
3 182.9 |
Inventories and
work in progress |
676.7 |
882.7 |
Trade
receivables |
463.6 |
518.8 |
Other current
assets |
264.2 |
324.0 |
Current
financial assets |
75.2 |
36.3 |
Cash and cash
equivalents |
434.1 |
335.8 |
Current assets |
1 913.7 |
2 097.6 |
TOTAL
ASSETS |
5 042.0 |
5 280.5 |
|
|
|
EQUITY
AND LIABILITIES |
|
|
Share
capital |
- |
8.0 |
Share premium
and retained earnings |
73.6 |
47.8 |
Net
income/(loss) - attributable to shareholders |
(43.0) |
(79.3) |
Shareholders' equity |
30.6 |
(23.5) |
Non-controlling
interests |
(36.7) |
0.7 |
Total equity |
(6.2) |
(22.8) |
|
|
|
Other
securities |
- |
135.7 |
Long-term
borrowings and other financial liabilities |
2 457.8 |
2 535.5 |
Long-term lease
liabilities |
143.2 |
124.5 |
Non-current
provisions |
22.0 |
23.8 |
Other
non-current liabilities |
291.7 |
391.5 |
Deferred tax
liabilities |
3.2 |
9.4 |
Non-current liabilities |
2 917.9 |
3 220.5 |
|
|
|
Short-term
borrowings and bank overdrafts |
306.2 |
158.2 |
Short-term lease
liabilities |
40.2 |
41.9 |
Trade
payables |
511.2 |
558.6 |
Current
provisions |
39.1 |
12.5 |
Customer
contract liabilities |
776.9 |
912.3 |
Other current liabilities |
456.8 |
399.4 |
Current liabilities |
2 130.3 |
2 082.9 |
TOTAL
EQUITY AND LIABILITIES |
5 042.0 |
5 280.5 |
IFRS consolidated net financial debt
In € million |
31-Dec-2021 |
30-Sep-2022 |
Bonds |
1 461.5 |
1 362.6 |
Bank
borrowings |
1 232.5 |
1 176.3 |
Bank
overdrafts |
1.7 |
3.4 |
Accrued
interests on bonds and bank borrowings |
32.7 |
14.3 |
Vendor
loans |
- |
137.2 |
Total bank indebtedness |
2 728.4 |
2 693.8 |
Cash and cash
equivalents |
(434.1) |
(335.8) |
Trade
receivables on providers |
(24.8) |
(10.2) |
Players'
liabilities |
41.7 |
40.8 |
Cash in
trusts |
(22.4) |
(22.0) |
Net cash and cash equivalents |
(439.5) |
(327.1) |
|
|
|
Net debt before derivatives effects |
2 288.8 |
2 366.7 |
Derivatives -
liabilities |
6.1 |
- |
Derivatives -
assets |
(26.2) |
(94.8) |
Net debt |
2 268.8 |
2 271.8 |
Content production &
distribution: net financial debt as at 30
September 2022
Net financial debt - In €m |
31-Dec-2021 |
31-Mar-2022 |
30-Jun-2022 |
30-Sep-2022 |
At
Banijay level: |
|
|
|
|
Total
Secured Debt (OM definition) |
1 805 |
1 809 |
1 871 |
1 914 |
|
|
|
|
|
Other debt |
296 |
279 |
313 |
314 |
SUN |
409 |
402 |
409 |
402 |
Total Debt |
2 510 |
2 490 |
2 593 |
2 630 |
Available
financial assets |
|
|
|
(78) |
Net Cash |
(342) |
(312) |
(353) |
(230) |
Total net financial debt |
2 168 |
2 178 |
2 240 |
2 322 |
|
|
|
|
|
EO &
PUT |
100 |
114 |
116 |
115 |
Total net financial debt (incl EO & PUT) |
2 268 |
2 292 |
2 355 |
2 437 |
|
|
|
|
|
At FL
Entertainment level: |
|
|
|
|
Transaction
costs amortization |
|
|
(48) |
(44) |
Lease debt (IFRS
16) |
|
|
(156) |
(155) |
Total net financial debt at FL Entertainment
level |
2 035 |
2 122 |
|
|
|
|
|
Derivatives |
|
|
(49) |
(90) |
Total net financial debt at FL Entertainment
level |
1 987 |
2 032 |
|
|
|
|
|
Ratios
at Banijay level: |
|
|
|
|
Leverage Ratio,
as presented |
4.85 |
4.66 |
4.60 |
4.55 |
Adjusted
Leverage Ratio, as presented |
5.07 |
4.91 |
4.84 |
4.78 |
Senior secured
net leverage ratio |
3.50 |
3.45 |
3.35 |
3.37 |
1 Adjusted EBITDA and adjusted free cash flow: refer to the
Appendix for definition2 Net debt: pre-IFRS 163 At constant
exchange rates4 2022 YTD5 Excluding discontinued operations at
Bet-at-home6 Content production & distribution7 Of which one
acquisition is signed, not yet completed8 Acquisition signed, not
yet realized9 Including all the bolt-on acquisitions signed and/or
completed
- FL Entertainment_PR_9M 2022 Results
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