Original-Research DEAG Deutsche Entertainment AG (von Montega AG): Buy
Original-Research: DEAG Deutsche Entertainment AG - von Montega AG
Einstufung von Montega AG zu DEAG Deutsche Entertainment AG
Unternehmen: DEAG Deutsche Entertainment AG
Anlass der Studie: Update
Kursziel auf Sicht von: 12 months
Letzte Ratingänderung: -
Analyst: Henrik Markmann
DEAG coming closer to achieving annual goals after good Q3 figures
At the end of last week, DEAG published 9M figures and confirmed its annual goals following the positive operating development in Q3.
Sales growth of approx. 70% yoy: As part of its H1 reporting, DEAG had already guided for a sales level of EUR 55m in Q3 due to a shift in revenue caused by a couple of major events (Ed Sheeran, Böhse Onkelz amongst others). Generating Q3 sales of EUR 59.2m (+69.7% yoy) the company has even been able to slightly exceed this guidance. Although DEAG's 9M sales still fall short of the prior-year basis (-19.5% yoy), management expects a strong final quarter based on the forthcoming high number of events and massive advance booking.
Significant margin improvement continues: EBITDA has improved significantly in Q3 from EUR 0.9m to EUR 4.9m. We believe this can be put down to an increasing focus on higher-margin events and a growing share of tickets sold via the company's own MyTicket ticketing platform. Furthermore, DEAG is expected to have effectively reduced the platform's cost base thanks to the cooperation with SecuTix that started early in Q3.
Since some events of the new shareholdings have developed successfully, but the existing tax-loss carry-forwards included in consolidation cannot be offset to some extent, tax expenses have increased substantially in Q3 (EUR 1.4m vs. EUR 0.1m yoy). However, net income prior to minorities still has increased significantly from EUR -0.6m in the previous year to now EUR 1.0m. Driven by the good development of some majority stakes, however, minorities have increased significantly as well (EUR 2.2m vs. EUR 0.2m yoy). For this reason, net income after minorities is EUR -1.2m which is below the prior-year basis (EUR -0.8m). On the other hand, investment pay-outs were lower than we had anticipated (EUR -6.2m vs. MONe EUR -10.7m) which had a positive impact on the cash flow. We have revised our valuation model on the basis of the slight changes in the group structure for 2019 et seq.