Die SPORTTOTAL AG drives internationalization strategy forward and hits earning targets. Revenues set to increase by over two-thirds by 2020. EBIT margin of over 10% targeted. Furthermore sporttotal.tv plans to add more types of sport.
CN: SPORTTOTAL AG hits revenues and earnings targets
Düsseldorf/Cologne, March 29, 2018.
SPORTTOTAL AG achieved its revenues and earnings targets for the 2017 financial year and confirmed its medium-term growth guidance. Revenues are to increase by more than two-thirds by 2020, rising to over € 100 million, with an EBIT margin of over 10%. In 2017, the company posted EBIT of € 1.5 million (2016: € -6.2 million) – of which € 0.3 million came from operating business and € 1.2 million from earnings from divested operations – with revenues coming in at € 60.3 million (2016: € 59.6 million). In the continued operations, revenues rose from € 50.8 million to € 55.7 million and EBIT climbed from € -3.6 million to € +0.5 million. Equity capital increased from € 7.5 million to € 19.2 million after two successful equity capital increases and the equity capital ratio came in at 55.9% (2016: 33.9%). The full financial report published today.
Business areas enable strong growth on solid footing
CEO Peter Lauterbach remarked:
„We have divested all operations where we didn’t believe we were the best owner. We have also developed a new business model which has significantly increased SPORTTOTAL’s value and will continue to do so in future. We’ve performed extremely well in terms of revenues and earnings in a year of transformation.“
Following the transformation last year, the SPORTTOTAL Group is a technology and media company operating in the rapidly scalable digital business with video platforms and communities (DIGITAL), in the high-margin national and international project business (VENUES) and in the live events business (LIVE). All business areas are profitable.
„Our DIGITAL business with sporttotal.tv provides enormous growth opportunities with extremely attractive margins and highly predictable cash inflows over long periods. In 2018, we aim to use sporttotal.tv as the basis for expansion into other types of sport and to drive forward our internationalization strategy,”
The company will invest heavily in launching various pilot projects and carrying out tests. SPORTTOTAL AG is seeking to establish itself as the largest video platform for amateur sport in Europe through sporttotal.tv – including supplementary features (analytics), interactive functions and a continually growing community. SPORTTOTAL possesses unique expertise in the VENUES sector – a project business with low fixed costs and very attractive margins. SPORTTOTAL continues to win invitations to tender against large international groups. The LIVE business provides secure, predictable revenues. Even though the returns and net earnings achievable in this area are negligible, it remains attractive due to the extremely low capital intensity and low risk. Return on investment is considerable in this sector.
„Thanks to its new structure, SPORTTOTAL combines rapidly scalable revenues and earnings with high fixed cost degression and structurally profitable and predictable revenues and earnings,“
Guidance – management aims to achieve strong growth in revenues and earnings
SPORTTOTAL anticipates revenues of € 50 to 70 million and an EBIT of between € -3 million and € 3 million for the 2018 financial year. The revenues from operations which have now been divested (€ 14 million in 2017) should be offset by organic growth. On one hand, the range is explained by the special characteristics of the international project business. The large-scale Nalschik project planned for 2018 has been secured on a pre-contract basis. There is nevertheless uncertainty here – as with the other projects at the stage of promising negotiations – with regard to the scheduling of the final conclusion of contract and, consequently, the earliest possible start date for project work. The nature and scope of the project work which could be implemented in 2018 and its expected impact on the Group’s earnings cannot be assessed definitively even where negotiations are at an advanced stage (as in the case of the Nalschik project). On the other hand, sporttotal.tv gmbh, which has tremendous potential, will continue to focus on developing range, additional features and monetization in 2018. It may be expedient to accept short-term expenses here to ensure the value of the company increases over the long-term. The anticipated fundamental and long-term increase in value is the decisive factor for the management. In light of this, there are greater ranges than usual for both revenues and EBIT. For 2019, the management currently anticipates revenues of € 70 to 80 million with an EBIT margin of 7 to 9%. The € 100 million revenues threshold is set to be exceeded in 2020 from a current perspective – with an EBIT margin of at least 10%. Considering the enormous market potential, particularly in the DIGITAL sector, this estimate is conservative in the management’s view.