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- Total revenue for Q2 2020 drops to US$58.2m
- Spectator Sports division sees income fall 72% YoY
- 13% of global workforce laid off since Q1 2020
Wanda Sports Group (WSG) has posted its second straight quarter of significant revenue declines due to heavy, pandemic-related losses across the Chinese company’s various business divisions.
Total revenue generated by the Beijing-based sports events, media and marketing firm in Q2 2020 stood at €51.8 million (US$58.2 million), representing a decrease of some 75 per cent year-over-year.
Net profits for the three-month period ending 30th June 2020 also dropped €5.5 million (US$6.2 million), compared to €19 million (US$22.4 million) in the second quarter of 2019, while adjusted EBITDA from continuing operations fell from €41.2 million (US$48.6 million) to €20.9 million (US$23.5 million).
Revenue generated by WSG’s Spectator Sports division, which accounts for nearly three quarters of the group’s overall income, totalled US$43.2 million, representing a 72 per cent year-over-year decline. That drop was attributable to the cancellation of several events, including May’s IIHF World Championship in Switzerland.
Meanwhile the company’s Digital, Production, Sports Solutions (DPSS) division saw a 76 per cent year-over-year decline in revenue to come in at US$14.7 million, while income for its Mass Participation unit fell by 98 per cent to just US$300,000.
All told, WSG’s revenues for the first half of 2020 totalled €215.4 million (US$242.1 million), which represents a 50 per cent decrease compared to the same period in 2019.
For accounting purposes, the Ironman Group was treated as ‘an asset held for sale’ and its historical results filed under ‘discontinued operations’ because the endurance triathlon event operator’s US$730 million takeover by Advance Publications was not completed until July.
The sale of Ironman meant that, as of 31st July, WSG had a cash balance of €208.7 million, up from €167.5 million (US$188.3 million) at the end of June. The company said it intends to use net proceeds from that transaction to pay shareholders, either through a special dividend or a share repurchase programme.
WSG’s latest filing comes after a quarter in which no mass participation events were reflected in its continuing operations due to widespread event cancellations as a result of the Covid-19 pandemic. With almost all live events either cancelled or postponed, the group instead hosted virtual events in Europe and China.
While overall revenues have taken a substantial hit, personnel, travel and administrative expenses in Q2 2020 dropped by approximately 28 per cent year-over-year, largely owing to cost-control measures such as 13 per cent reduction in workforce size.
As of 30th June, WSG employed approximately 1,100 people but, according to chief financial officer Brian Liao, the company plans to ‘further streamline our operations in order to preserve cash and protect our profitability’.
The company said a ‘comprehensive review’ is now underway with the goal of creating ‘a leaner organisation with greater flexibility that will continue to be highly focused on delivering value for all its stakeholders’.
“As expected, the entire second quarter was affected by the global spread of the pandemic and the related severe impact on business activity, travel and personal routines,” WSG chief executive Hengming Yang said in a statement.
“However, given the diversity of our business model with long-term contracts, and our employees’ ability to adapt to uncertainties and new norms of working, we were able to continue to focus on business development, delivering alternative sports service solutions, while effectively managing our costs and liquidity.
“Despite our revenue of €51.8 million in the second quarter being much lower than the previous year, our gross margin was significantly enhanced. Looking forward, although visibility is still unclear in terms of public health and macroeconomic conditions, we remain positive about our partnerships with clients and our business opportunities.”
In addition to providing its financial results, WSG noted several renewed marketing contracts that occurred during Q2 2020, including prolonged agreements between the Infront agency and the German Ice Hockey Federation, the Czech Republic Ski Federation, and the Norway Ski Federation.
The group also noted that it had brokered media and marketing agreements on behalf of its other sports clients, including Top 14 rugby club Stade Toulousain, the Scottish Premier Football League (SPFL), and the International Biathlon Union (IBU).
Wanda Sports Group (WSG) has posted its second straight quarter of significant revenue declines due to heavy, pandemic-related losses across the Chinese company’s various business divisions.
Total revenue generated by the Beijing-based sports events, media and marketing firm in Q2 2020 stood at €51.8 million (US$58.2 million), representing a decrease of some 75 per cent year-over-year.
Net profits for the three-month period ending 30th June 2020 also dropped €5.5 million (US$6.2 million), compared to €19 million (US$22.4 million) in the second quarter of 2019, while adjusted EBITDA from continuing operations fell from €41.2 million (US$48.6 million) to €20.9 million (US$23.5 million).
Revenue generated by WSG’s Spectator Sports division, which accounts for nearly three quarters of the group’s overall income, totalled US$43.2 million, representing a 72 per cent year-over-year decline. That drop was attributable to the cancellation of several events, including May’s IIHF World Championship in Switzerland.
Meanwhile the company’s Digital, Production, Sports Solutions (DPSS) division saw a 76 per cent year-over-year decline in revenue to come in at US$14.7 million, while income for its Mass Participation unit fell by 98 per cent to just US$300,000.
All told, WSG’s revenues for the first half of 2020 totalled €215.4 million (US$242.1 million), which represents a 50 per cent decrease compared to the same period in 2019.
For accounting purposes, the Ironman Group was treated as ‘an asset held for sale’ and its historical results filed under ‘discontinued operations’ because the endurance triathlon event operator’s US$730 million takeover by Advance was not completed until July.
The sale of Ironman meant that, as of 31st July, WSG had a cash balance of €208.7 million, up from €167.5 million (US$188.3 million) at the end of June. The company said it intends to use net proceeds from that transaction to pay shareholders, either through a special dividend or a share repurchase programme.
WSG’s latest filing comes after a quarter in which no mass participation events were reflected in its continuing operations due to widespread event cancellations as a result of the Covid-19 pandemic. With almost all live events either cancelled or postponed, the group instead hosted virtual events in Europe and China.
While overall revenues have taken a substantial hit, personnel, travel and administrative expenses in Q2 2020 dropped by approximately 28 per cent year-over-year, largely owing to cost-control measures such as 13 per cent reduction in workforce size.
As of 30th June, WSG employed approximately 1,100 people but, according to chief financial officer Brian Liao, the company plans to ‘further streamline our operations in order to preserve cash and protect our profitability’.
The company said a ‘comprehensive review’ is now underway with the goal of creating ‘a leaner organisation with greater flexibility that will continue to be highly focused on delivering value for all its stakeholders’.
“As expected, the entire second quarter was affected by the global spread of the pandemic and the related severe impact on business activity, travel and personal routines,” WSG chief executive Hengming Yang said in a statement.
“However, given the diversity of our business model with long-term contracts, and our employees’ ability to adapt to uncertainties and new norms of working, we were able to continue to focus on business development, delivering alternative sports service solutions, while effectively managing our costs and liquidity.
“Despite our revenue of €51.8 million in the second quarter being much lower than the previous year, our gross margin was significantly enhanced. Looking forward, although visibility is still unclear in terms of public health and macroeconomic conditions, we remain positive about our partnerships with clients and our business opportunities.”
In addition to providing its financial results, WSG noted several renewed marketing contracts that occurred during Q2 2020, including prolonged agreements between the Infront agency and the German Ice Hockey Federation, the Czech Republic Ski Federation, and the Norway Ski Federation.
The group also noted that it had brokered media and marketing agreements on behalf of its other sports clients, including Top 14 rugby club Stade Toulousain, the Scottish Premier Football League (SPFL), and the International Biathlon Union (IBU).
