RECORD 9-MONTH REVENUE: €265.7 MILLION (UP 19% VS 2018/19)
ACTIVITIES CURRENTLY SUSPENDED BY THE COVID-19 PANDEMIC
COVID-19 IMPACT ON Q3 2019/20 REVENUE: CA. €-9 MILLION
Lyon, 12 May 2020
Revenue for the first nine months of the 2019/20 financial year reached a new record high of €265.7 million, up €41.9 million (19%) from €223.8 million in the nine months to 31 March 2019. This performance came about in particular because the proceeds from the sale of player registrations rose sharply during the period, but at the same time there was already an impact from the Covid-19 crisis, estimated at €-9 million in the nine months to 31 March 2020.
1/ TOTAL REVENUE: €265.7M, UP €41.9M (19%)
|From 1 July to 31 March (in € m)||31/03/2020 |
(in € m)
|of which French Ligue 1 and other matches||23.2||24.7||-1.5||-6%|
|of which European competitions||12.0||10.2||+1.8||+17%|
|MEDIA AND MARKETING RIGHTS||99.5||109.9||-10.4||-9%|
|of which LFP-FFF||30.7||39.4||-8.7||-22%|
|of which UEFA||68.7||70.5||-1.7||-2%|
|SPONSORING - ADVERTISING||22.7||23.2||-0.5||-2%|
|of which derivative products||7.1||7.7||-0.5||-7%|
|of which image/video and other||4.2||4.1||+0.1||+2%|
|REVENUE FROM SALE OF PLAYER REGISTRATIONS||90.6||38.9||+51.7||+133%|
|of which seminars and stadium tours||4.3||4.6||-0.3||-7%|
|of which major events||2.3||0.7||+1.6||+245%|
In the first nine months of the 2019/20 financial year, revenue from sales of player registrations set a record of €90.6 million (increase of €51.7 million, or 133%). The principal transfers were Tanguy Ndombele, who went to Tottenham for a €47.6 million fee (IFRS basis), Nabil Fékir, who joined Real Betis for €19.8 million (IFRS basis), both during the summer transfer window, and more recently Lucas Tousart, who was transferred to Hertha Berlin for €21.1 million (IFRS basis) during the January 2020 winter transfer window.
This excellent performance again demonstrated that OL Groupe's strategy, based on a top-notch academy, on the recruitment of talented young players and on its ability to unlock their sporting and economic potential, is an effective one.
The Events business grew by 24% in the first nine months of 2019/20, with revenue reaching €6.5 million (vs. €5.2 million in the first nine months of 2019/20). This business was boosted by revenue from the Women's World Cup semi-final and final matches played in July 2019 at Groupama Stadium, vs. one Coupe de France match in 2018/19.
During the first nine months of 2019/20, the Groupe posted high ticketing revenue (€35.1 million, up 1%) and media rights (€99.5 million, down 9%), as it participated in the final phase of the Champions League (round of 16 against Juventus) and had an excellent run in the Coupe de France (semi-final) and in the Coupe de la Ligue (qualified for the final, which remains to be played). The Groupe achieved a new matchday revenue record during the round of 16 Champions League fixture against Juventus (more than €6 million). These revenue categories have nevertheless been impacted, because the club ranked 7th in Ligue 1 as of end-March 2020 (vs 3rd a year earlier) and because it played fewer Ligue 1 matches at home than in 2018/19, as the Covid-19 public health crisis caused the competition to be suspended in mid-March. LFP media rights for the first nine months of 2019/20 were also curtailed, because Canal+ and BeIN suspended payments to the LFP related to broadcasting contracts, notwithstanding a settlement reached with Canal+. Sponsoring-Advertising revenue, which has also been hurt by the suspension of activities since mid-March, remained virtually stable (down 2%).
Brand-related revenue was virtually stable at €11.3 million, vs €11.7 million in 2018/19.
*Note on media rights in the nine months to 31 March 2020:
LFP media rights for the first nine months of 2020 were calculated based on our estimates of the breakdown of the remaining Ligue 1 media rights payments for the 2019/20 season, following the recent agreements between the LFP and Canal+.
UEFA media rights for the first nine months of 2019/20 were estimated on the basis of UEFA's current objective, which is to finish the European competitions currently underway during the month of August. Should these competitions not be completed, UEFA media rights might have to be revised between now and 30 June 2020.
With the exception of e-commerce and merchandising, all of OL Groupe's activities have been suspended since mid-March. This is the result of the unprecedented, worldwide Covid-19 public health crisis and the decisions of the sports authorities to suspend all competitions, followed by the French president's announcements on Monday 16 March 2020. The opportunity loss this represents for the second half of the month of March 2020 is estimated at around €9 million in revenue.
Since the start of the crisis, we have taken all measures possible to protect everyone's health and to reduce the impact of the crisis on financial performance during 2019/20. These measures include partial unemployment for players and some administrative staff, postponement of social security contributions, tax remittances and loan payments. We have also applied for a government-guaranteed “PGE” loan (prêt garanti par l'État). Authorisation and implementation procedures are currently underway with our lenders. In addition, our revolving credit facility (RCF) was temporarily increased in mid-April 2020 to €130 million until 31 August 2020 and then to €115 million until 31 January 2021.
As of 30 April 2020, the Group had €60 million in cash, plus undrawn RCF availability of €30 million, i.e. overall available cash of €90 million.
In accordance with the government's measures prohibiting large gatherings, the Group was forced to cancel all of the many summer events scheduled for Groupama Stadium. The first “Felyn” summer music festival has been postponed to 18 & 19 June 2021, while the Monster Jam scheduled for 27 June 2020 and the Paul McCartney concert scheduled for 7 June 2020 have been cancelled. Other major events, such as the private concert for Groupama (5 June 2020) and the Rammstein concert (9-10 July 2020) have also been cancelled or postponed.
2/ OUTLOOK FOR THE END OF THE 2019/20 FINANCIAL YEAR AND THE STRAT OF THE 2020/21 SEASON
Following the announcements made by the French government on 28 April prohibiting all gatherings of more than 5,000 people before September, OL Groupe's principal activities remain suspended until the end of the financial year.
During the fourth quarter (1 April to 30 June 2020), there will be no revenue from ticketing, media & marketing rights or events, except, in the case of media & marketing rights, for residuals and the potential amount from the final breakdown under the LFP/Canal+ agreement, which should be validated in the coming weeks. The impact of the absence of these revenue streams between now and 30 June 2020 is estimated at €50 million (excluding player transfers and based on a 7th place finish in Ligue 1).
Depending on how the PGE/LFP measures* are ultimately accounted for, which is unclear as of this writing, the Group might recognise additional revenue of €20.4 million, which would compensate for the lost media rights on the unplayed Ligue 1 matches of the last part of the season.
Only sales of brand-related products will start up again, as stores gradually reopen beginning in mid-May. Player trading activities could benefit, too, if the summer transfer window reopens in June.
The Group has implemented the measures necessary to deal with the suspension of its activities since mid-March. These measures should generate a reduction in operating expenses (including payroll) in the region of €35-40 million between now and 30 June 2020.
We are collaborating with all of the sporting authorities and the French government to move towards restarting all of our activities under optimal public health conditions for all of our employees.
According to announcements made by the Minister of Sport, public health conditions permitting, it might be possible to schedule matches in August 2020, theoretically with a maximum of 5,000 people present.
As of today, according to the statements from the football authorities (LFP/FFF/UEFA), the club should in that case be able to play:
- the Coupe de la Ligue final against PSG. Should OL win the final, the club would potentially have access to the 2020/21 Europa League (if it wins the 3rd qualifying and playoff rounds).
- the second leg of the Champions League round of 16 against Juventus (1-0 victory in first leg),
- French Ligue 1 fixtures of the 2020/21 season, set to begin on the weekend of 22-23 August,
- the quarter-final of the Women's Champions League against Bayern,
- the semi-final of the women's Coupe de France (against Guingamp).
Two major events have already been scheduled: the France/Sweden match on 15 November 2020 and the Felyn festival on 18 & 19 June 2021, public health conditions permitting.
The “Seminars and stadium tours” business does not yet have a reopening date.
Media rights will be boosted when the contracts signed with Mediapro, beIN and Free come on stream. These contracts represent total revenue of €1.2 billion for the 2020-24 period, i.e. 60% more than during the previous period. The LFP has not yet finalised the breakdown by club.
In February, OL Groupe announced a target range for sponsorship revenue of €43-46 million starting in 2020/21 (vs. €31.3 million realised in 2018/19). Given the current public health crisis and the lack of sufficient visibility on the reopening of its businesses, OL Groupe is not reiterating this objective. Rather, we are targeting a significant increase in this revenue category (vs 2018/19 actuals) owing to the new five-year sponsorship contract with Emirates that begins with the coming season. A new naming contract beginning on 1 August 2020 is still in discussion with several partners.
On 30 April, the LFP officially closed the Ligue 1 and Ligue 2 seasons and validated the club rankings on the basis of the quotient of “number of points earned/number of matches played”. On this basis, Olympique Lyonnais ranked 7th in the Ligue 1 standings.
On 7 May 2020, OL appealed to the Paris Administrative Court (i) to obtain a suspension of the LFP's decision to close the Ligue 1 and Ligue 2 seasons and calculate the final standings via its quotient method and (ii) to require the LFP to re-examine the conditions under which the competitions could be reopened in August or if they cannot, to declare the season null and void.
* At its 4 May 2020 General Meeting, the LFP adopted a resolution enabling it to contract a €224.5 million government-guaranteed “PGE” loan from its bank. As of today, it is still very unclear how this amount will be accounted for (debt or revenue). The clubs will be free to apply for a PGE loan or not.
3/ 2023/24 ROADMAP
We remain confident in our ability to achieve the objectives we have set for the period from now until 2023/24, as presented last February, i.e. revenue of €420-440 million and EBITDA in excess of €100 million. This is based on our “full entertainment” growth strategy oriented around our core business – football – and also on the development, diversification and recurrent nature of our “Events” programming, which includes, in particular, the operation of a new arena.
“This document contains indications about OL Groupe's goals. Known and unknown risks, uncertainties and other factors may affect the achievement of these goals, and consequently, OL Groupe's future results, performance and achievements may differ significantly from implied or stated goals. These factors could include changes to the economic and business environment, regulations, and risk factors detailed in OL Groupe's 2018/19 Universal Registration Document.”
Next press release: Full-year 2019/20 revenue on 21 July 2020 after the market close.
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ISIN code: FR0010428771
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ICB: 5755 Recreational services
Sporting performance as of 13 March 2020 (date matches were suspended)
|MEN'S TEAM||WOMEN'S TEAM|
|FRENCH LIGUE 1||7th||1st|
|EUROPE||CHAMPIONS LEAGUE |
Round of 16 qualification
Juventus (1-0 victory in first leg / Second leg still to be played)
|CHAMPIONS LEAGUE |
Qualified for quarter-final
Bayern Munich (Initially scheduled for 25/03 & 01/04/2020)
|COUPE DE FRANCE||Defeated in semi-final (against PSG)||Qualified for semi-final |
Guingamp (initially scheduled for 21/03/2020)
|COUPE DE LA LIGUE||Qualified for final |
PSG/OL (initially scheduled for 04/04/2020)