A word from the CEO – from 26 July 2019

An improved sales position in the run-up to autumn, an action programme that is now taking effect and the completed rights issue have together created good conditions for recovery during the year’s remaining quarters.

Moment Group’s second quarter is characterised by seasonal variations in the Group’s annual cycle with gradually decreasing activity levels in its operations. Net sales for the quarter totalled SEK 168 million (262), a decrease of SEK 94 million. This is in line with our expectations as the reduction in sales is largely attributable to Hansen in the Event business area, which during the corresponding period in the previous year carried out the Volvo Ocean Race mega assignment with its major sales volumes.

Prepaid ticket revenues as of June totaled SEK 102 million (66), which is SEK 36 million higher than the previous year. This stems primarily from 2Entertain’s reversal of its negative trend and their achieving sales according to plan in the run-up to the summer and autumn, and Wallmans also enjoyed a higher balance than the previous year and is showing stronger sales performance.

Operating loss for the quarter was SEK -31 million under current rules. To enable year-on-year comparisons, the impact of IFRS 16 has been adjusted, giving a loss of SEK -32 million (-19), which is a reduction of SEK 13 million compared to the same period for the previous year. Here too, the majority of deviations – around SEK 10 million – are attributable to Hansen and the final effects of 2Entertain’s negative sales trends for the 2018/2019 season.

The group-wide action programme currently in progress to achieve annual savings of just over SEK 20 million will provide a boost for the business during the remainder of the year as the majority of the measures include personnel reductions and a corresponding fall in personnel costs during the summer break. Thus by the end of the third quarter the major part will be achieved with full annual effect moving forward. The average number of employees in the Group after the first six months amounted to 374 (394) and we continue to pursue streamlining efforts to boost the Group’s operating margin.

Extensive work has taken place in Wallmans Group’s investment in Kungsportshuset in Gothenburg where cost rationalisations equivalent to approx. SEK 10 million were carried out during the second quarter as part of the above-mentioned action programme. The organisation in the building has been slimmed down significantly and adapted to a more limited business than originally planned. Only the restaurant business at Kungsportshusets Matbar will operate over the summer, and there are plans for a show entitled Christmas by Wallmans to be staged for a shorter period (Nov–Dec) than in other arenas, and with a focus on the high demand for Christmas buffets during the season. To sum up, this will mean a significant reduction in KPH’s risk profile in the run-up to the autumn, and work moving forward will be able to focus on creating balance in KPH’s various parts based on lower business volumes.

In order to further streamline the Group, its cabaret and activity arenas will be merged to form the joint business area Immersive Venues. This is part of our effort to conduct operations from an arena perspective with a focus on customer experience, the effective use of resources and profitability.

The partnership in Germany between 2Entertain and BB Promotion is proceeding as planned and a complete agreement will be signed shortly. This agreement will be based entirely on the LOI signed in March and will also include the detailed tour plan and further specify the cooperation in the operational parts of the execution.

Also, a rights issue carried out in May brought in SEK 54 million for the Group before issue expenses, enabling us to declare the effects from the very weak outcome in 2018 on the balance sheet to be remedied, and that the Group is now well-equipped to support the businesses in their efforts to boost operating margins during the autumn and to continue realising the Group’s full potential.

As for me, I have decided to continue my career with assignments outside Moment Group. I will continue in my role of CEO/Group CEO through the third quarter until 30 September, following which I will assist the Group with specific issues until the end of the year. Recruitment of a new CEO/Group CEO has begun, with the aim of appointing a replacement during the fourth quarter.

In conclusion, I would like to wish you all a continued pleasant summer, and if you’re in the neighbourhood why not drop into Falkenberg Outdoor Theatre in Falkenberg or Kungsportshusets Matbar in central Gothenburg and take the opportunity to visit us for a glorious summer souvenir experience.

Gothenburg 26 July 2019

Pelle Mattisson