Results below ABGSC estimates

Kungsportshuset continues to pressure the group

Restructuring to lower fixed costs in ’19 & ‘20

Reported vs. ABGSCe
Moment reported their Q1’19 today which came in considerably below our estimates. The quarter was pressured by 2Entertains cancelled independent venture in German speaking countries and by Kungsportshuset in Gothenburg, which continues to pressure the group’s profitability. Pro rata sales was SEK 175m, which was 25.4% below our estimate of SEK 234.6m, and corresponded to a negative y-o-y growth rate of 24.9%. Reported EBIT was SEK -20m, corresponding to a negative EBIT margin of 11.4%. We had estimated an EBIT of SEK 5.4m and EBIT margin of 2.3%.

Moment launches efforts to restructure 2Entertain
Moment is undergoing changes in order to address the pressured profitability in 2Entertain. 2Entertain’s operations in German speaking countries will now continue through a partnership with BB Promotion, which is one of Germany’s largest promoters and producers of musicals and shows. This will limit Moment’s overall exposure. A restructuring program has been launched in order to lower fixed costs, specifically personnel and premises costs. This is expected to cut fixed costs by SEK 6m, or 14% of 2Entertains total fixed costs, and will be realised in ’19-’20. Lastly a new program for managing 2Entertain’s risk exposure has been launched, as to limit the risk in future musicals, theatres and show productions.

Funding secured through preferential rights issue
Moment’s Board of Directors decided on the 1st of April 2019 to implement a preferential rights issue of SEK 55m, fully guaranteed by investors. However, an additional SEK 10m has also been raised through bank loans in order to facilitate funding until the rights issue is completed.

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