26/03/2024 - CTS Eventim AG & Co. KGaA: Annual financial report 2023

Annual Report 2023

KEY GROUP FIGURES

2023	2022	2021	2020
[EUR'000]	[EUR'000]	[EUR'000]	[EUR'000]
Revenue	2,358,552	1,925,803	407,821	256,840
EBITDA3	493,959	375,108	1	203,082	-7,116
EBITDA margin	20.9%	19.5%	1	49.8%	-2.8%
EBIT	402,324	314,419	1,2	147,581	-62,933
EBIT margin	17.1%	16.3%	1,2	36.2%	-24.5%
Normalised EBITDA	501,422	380,065	1	207,982	-2,940
Normalised EBIT before amortisation and impairment
from purchase price allocation	440,536	329,391	1,2	164,566	-46,185
Normalised EBITDA margin	21.3%	19.7%	1	51.0%	-1.1%
Normalised EBIT margin before amortisation and
impairment from purchase
price allocation	18.7%	17.1%	1,2	40.4%	-18.0%
Non-recurring items4	7,463	4,957	4,899	4,175
Amortisation and impairment resulting from purchase
price allocation	30,749	10,015	2	12,085	12,573
Earnings before taxes (EBT)	409,104	341,197	2	141,104	-102,028
Net result attributable to shareholders of CTS KGaA	274,641	203,748	2	87,909	-82,259
[EUR]	[EUR]	[EUR]	[EUR]
Earnings per share5, undiluted (= diluted)	2.86	2.12	0.92	-0.86
[Qty.]	[Qty.]	[Qty.]	[Qty.]
Internet ticket volume (in million)	82.9	69.3	32.0	17.4
Number of employees6	4,060	3,503	2,813	2,409
Of which temporary	(525)	(477)	(250)	(153)

• 1 Regarding the change in the disclosure of foreign currency effects and impairment of loans and other financial assets, see point 1.2 in the notes to the consolidated financial statements

• 2 Adjusted previous year's figures due to the final purchase price allocation of BPC Tours LLC, Wilmington, USA, see point 2.2 in the notes to the consolidated financial statements

• 3 EBITDA: Earnings before financial result, taxes, depreciation and amortisation, impairment and reversals

• 4 Detailed information of non-recurring items in chapter 4.1.2 Earnings performance

• 5 Number of shares: 96 million

• 6 Number of employees at end of year (active workforce)

CONTENT

1.	LETTER TO THE SHAREHOLDERS	1
2.	REPORT OF THE SUPERVISORY BOARD	4
3.	CTS EVENTIM SHARES	8
4.	COMBINED MANAGEMENT REPORT	10
1.	Preliminary statements	10
2.	Explanation of corporate and organisational structure of CTS KGaA	10
3.	Business and macroenvironment	11
3.1	Business operations and corporate structure	11
3.2	Corporate management	20
3.3	Research and development	21
3.4	Overview of the course of business	22
4.	CTS Group: Earnings performance, financial position and cash flow	29
4.1	Earnings performance	29
4.2	Financial position	39
4.3	Cash flow	45
5.	CTS KGaA: Earnings performance, financial position and cash flow	47
5.1	Earnings performance	47
5.2	Financial position	51
5.3	Cash flow	55
6.	Appropriation of earnings by CTS KGaA	56
7.	Dependency report for CTS KGaA	56
8.	Risk and opportunity report	57
8.1	Structure and operation of the risk management system	57
8.2	Major risk areas	59
8.3	Opportunity management	70
8.4	Assessment of the Group's opportunity and risk exposure	71
9.	Internal control system	72
9.1	Operational ICS	72
9.2	Accounting related ICS	73
10.	Outlook	74
10.1	Future macroeconomic environment	74
10.2	Expected business performance	74
10.3	Expected cash flow	75
10.4	General assessment of the prospective development of the Group and CTS KGaA	75
11.	Disclosures required under takeover law	77
12.	Corporate Governance declaration	80

5.	CONSOLIDATED FINANCIAL STATEMENTS 2023	81
Consolidated balance sheet	81
Consolidated income statement	83
Consolidated statement of comprehensive income	84
Consolidated statement of changes in equity	85
Consolidated cash flow statement	86
Notes to the consolidated financial statements	87
6.	INDEPENDENT AUDITOR'S REPORT FOR THE GROUP	186
7.	FINANCIAL STATEMENTS OF CTS KGaA	195
Balance sheet of CTS KGaA	195
Income statement of CTS KGaA	197
Notes to the financial statements for the 2023 financial year	198
8.	INDEPENDENT AUDITOR'S REPORT FOR CTS KGaA	217
Forward-looking statements	225
Contact	226

1.

LETTER TO THE SHAREHOLDERS

Klaus-Peter Schulenberg

Chief Executive Officer

Ladies and gentlemen,

Since 2023 at the latest, live entertainment has once again been the driving force behind the cultural and creative industries. People are attending concerts, festivals and theatres as they did before the pandemic, and demand is rising continuously. Catch-up effects like those seen in 2022 are barely noticeable, and all signs point to growth.

As a result, 2023 was another record year for the CTS Group. Our annual revenue broke through the EUR 2 billion barrier for the first time, and normalised EBITDA also exceeded half a billion euros for the first time. Although the considerable increase in procurement prices had a negative impact on our Live Entertainment segment in particular, it was possible to control this well through active cost management, partially passing on costs to the market, and significant revenue growth. We expect the recent significant drop in inflation to provide new, consumption-driven impetus for growth in the future.

We continued to drive forward our international expansion strategy during the year under review. In our Ticketing segment, we acquired the providers Punto Ticket (Chile) and Teleticket (Peru), together with our joint venture partner Sony Music Latin Iberia. That investment has made the CTS Group the market leader in two more of South America's largest entertainment markets since November 2023. The agreed majority takeover of the French market leader France Billet will also strengthen our market presence in Central Europe. Furthermore, our entry into the US ticketing market will gain additional momentum thanks to our recently announced ticketing partnership with the 2028 Olympic and Paralympic Games in Los Angeles.

The U.S. was also one of the CTS Group's focal points in our Live Entertainment segment during the year under review. Thanks to partnerships with the renowned concert and tour organisers MAMMOTH, INC. and AG ENTERTAINMENT, we were able to further expand our presence in North America, and have also become an efficient provider of national and international touring projects for renowned artists on the other side of the Atlantic. By jointly founding THE TOURING CO., we have entered into a close partnership with the young, up-and-coming U.S. promoter Walter McDonald. At the end of the reporting year, the EVENTIM LIVE Group also united 39 promoters worldwide under one strong umbrella.

In addition to our traditional concert and touring business, our Immersive Touring Exhibitions division is also developing into a real crowd-puller with exhibitions such as "Harry Potter: The Exhibition" and "DISNEY100".

We intend to expand our Venue Management division - which already includes iconic venues such as the EVENTIM Apollo in London, the LANXESS arena in Cologne, and the Waldbühne in Berlin - into a third pillar of the CTS Group.

In November 2023, the official ground-breaking ceremony for the ARENA FOR MILAN took place together with Milan's mayor Giuseppe Sala and star architect Sir David Chipperfield. Upon completion in autumn 2025, it will not only be the largest and most innovative, but also the most sustainable multi-purpose arena in Italy. Following the 2026 Milano-Cortina Olympic and Paralympic Winter Games, whose ice hockey competitions will be held in the arena, CTS EVENTIM will take over its subsequent operations.

Our complementary business areas also developed extremely well in 2023: our cosmetics brand KESS, launched as an online brand, is about to make the leap into bricks-and-mortar retail. In addition, our hotel booking service EVENTIM.Travel was able to significantly increase its booking figures. Both are successful examples of the extension of our value chain, which also includes traditional retail, and of the success of our ongoing diversification strategy.

Our objective is to continue to grow dynamically, both organically within the scope of our existing business activities and through new acquisitions and partnerships, and to consistently expand the synergies within our Group. We will continue to develop our technologies and internal processes in order to remain the benchmark for performance and reliability in the future. We will also strive to strengthen the protection of fans against fraud and abuse, and effectively combat the unauthorised secondary market in the interests of all market participants.

In addition, we will expand our initiatives to transform our extensive and high-quality data pool into new sales potential, both in existing and new business areas. Thanks to the almost complete digitalisation of our processes and the use of innovative AI technologies, we are now able to gain valuable insights even faster and identify target groups and products with even greater accuracy. AI is also playing a key role in customer interaction, and will take both our product range and service to a whole new level.

Our combination of the greatest possible marketing and sales power for event organisers, maximum reliability, and an outstanding fan experience, remains the basis of our continued success.

Together with our experienced team of experts, our unique artists, our business partners, and you, our shareholders, we will continue to vigorously drive the growth of the CTS Group in 2024.

Stay tuned!

Your sincerely,

Klaus-Peter Schulenberg

Chief Executive Officer

EVENTIM Management AG,

general partner of

CTS Eventim AG & Co. KGaA

2.

REPORT OF THE SUPERVISORY BOARD

Dr. Bernd Kundrun

Chairman of the Supervisory Board

REPORT OF THE SUPERVISORY BOARD OF CTS EVENTIM AG & CO. KGaA (HEREINAFTER: CTS KGaA OR COMPANY) ON THE ANNUAL FINANCIAL STATEMENTS, THE CONSOLIDATED FINANCIAL STATEMENTS AND THE COMBINED MANAGEMENT REPORT FOR THE COMPANY AND THE GROUP FOR THE FINANCIAL YEAR FROM 1 JANUARY 2023 TO 31 DECEMBER 2023.

I. During the entire period under review, the Supervisory Board comprised Dr. Bernd Kundrun (Hamburg/Germany), Dr. Cornelius Baur (Munich/Germany) and Mr. Philipp Westermeyer (Hamburg/Germany) as well as Dr. Juliane Schulenberg (Hamburg/Germany).

Dr. Kundrun chaired the Supervisory Board during the entire period under review and Dr. Baur was Vice Chairman. Dr. Kundrun and Dr. Baur were members of the Supervisory Board's Audit Committee, which was chaired by Dr. Baur. On 15 May 2023, the Supervisory Board established a Personnel and Nomination Committee, with Dr. Schulenberg as Chairwoman and Dr. Kundrun as a member.

II. During the reporting year, the Supervisory Board fulfilled its responsibilities under the law, the Company's articles of association and rules of procedure. It was regularly, promptly, and extensively informed by the Executive Board of CTS KGaA's general partner, EVENTIM Management AG, Hamburg, Germany - (hereinafter: the "Management Board" or general partner) - both in writing and verbally, about all issues related to corporate planning and strategic development, about the course of business, and about the situation of the Group. The reports to the Supervisory Board also included information on the risk and opportunity situation and risk and compliance management at the Company.

The Supervisory Board regularly provided the Management Board with advice concerning the management of the Company and monitored the management of the Company and the Group. It ensured itself that corporate governance at the Company was in compliance with the law and was involved in all decisions of fundamental importance for the Company. After thorough review and discussion, the Supervisory Board voted on the Management Board's reports and proposals for resolutions whenever required by law or by the provisions of the articles of association. Resolutions were also adopted by written procedure whenever necessary.

During the reporting year, the Supervisory Board met on 16 March 2023 (the "financial statements meeting"), 15 May 2023, 21 August 2023, and 14 November 2023. The Management Board also took part in those meetings and had the opportunity to discuss matters of importance to the Company. On 14 November 2023, an additional, dedicated strategy meeting was also held between the Supervisory Board and the Management Board. Where necessary, the Supervisory Board met without the presence of the Management Board and also coordinated internally whenever necessary. The Supervisory Board was kept informed by the Management Board not only at Supervisory Board meetings, but also outside of the meetings, for instance in the case of matters of special importance or urgency.

All members of the Supervisory Board took part in all meetings held during the year under review, with the exception of the meeting on 14 November 2023, at which Dr. Schulenberg was unable to take part due to illness.

The Supervisory Board reviewed the general business trend of the Company and its Group companies on the basis of the reports submitted to it by the Management Board, among other things, thereby placing special focus on meeting the targeted key performance indicators for revenue and earnings as well as on the performance of cash flows and significant projects of the Company and the Group.

The Supervisory Board's Audit Committee met four times during the reporting period. All Committee members took part in the meetings.

The Personnel and Nomination Committee of the Supervisory Board met once during the reporting period. All members of the committee took part in the meeting at which an adjustment to the compensation system for the Executive Board was decided.

III. KPMG AG Wirtschaftsprüfungsgesellschaft, Hamburg, (hereinafter: auditor) was appointed to audit the annual financial statements as at 31 December 2023 and the consolidated financial statements as at 31 December 2023 at the Company's Annual Shareholders' Meeting, which was held on 16 May 2023. The audit mandate was duly awarded by the Chairman of the Supervisory Board on behalf of all members of the Supervisory Board.

At its meeting on 14 November 2023, the Supervisory Board's Audit Committee held detailed discussions with the auditor on the subject of the audit, the audit schedule, the audit scope, and key audit areas with respect to the audit of the annual financial statements and the consolidated financial statements as at 31 December 2023.

The 2023 annual financial statements, the 2023 consolidated financial statements, and the combined management report were prepared by the general partner in compliance with the statutory regulations and were provided with unqualified audit opinions by the auditor. The Management Board submitted the financial statements and the combined management report to the Supervisory Board along with the corresponding audit reports in a timely manner.

The Supervisory Board's Audit Committee examined the 2023 annual financial statements, the 2023 consolidated financial statements and the corresponding audit reports from the auditor, upon which it recommended that they be approved by the Supervisory Board at its meeting of 13 March 2024. At the Supervisory Board meeting held on 13 March 2024, the Supervisory Board and the Management Board held detailed discussions on the annual financial statements and the consolidated financial statements for 2023, the combined management report, and the general partner's proposal for appropriation of net profit. The Audit Committee and the Supervisory Board were able to confer with the auditors, who were also present at the meeting.

Based on its final review, the Supervisory Board raised no objections to the annual financial statements prepared by the general partner for financial year 2023 and hereby recommends that they be approved by the Annual Shareholders' Meeting. The Supervisory Board has moreover approved the consolidated financial statements prepared by the general partner for the 2023 financial year, to which it raised no objections either. The Supervisory Board reviewed and concurred with the general partner's proposal for the appropriation of net profit as it finds that the proposal appropriately reflects the interests of the Company and its shareholders.

IV. The remuneration report for the financial year 2023 pursuant to § 162 of the German Stock Corporation Act (AktG) was duly prepared by the Management Board and the Supervisory Board and was examined by the auditor. The note on the audit of the remuneration report was attached to the remuneration report. The remuneration report for the financial year 2022 was approved by the Company's Annual Shareholders' Meeting on 16 May 2023 in accordance with § 120a (4) German Stock Corporation Act.

V. The general partner prepared a report on related parties pursuant to § 312 of the Stock Corporation Act for the financial year from 1 January to 31 December 2023. The report states that on the basis of the circumstances known to the general partner at the time of undertaking legal transactions requiring disclosure, the Company had received adequate consideration in each case and that no measures requiring disclosure were either undertaken or omitted at the behest of, or in the interest of, related parties within the meaning of § 312 of the Stock Corporation Act during the financial year 2023.

The auditor issued an unqualified audit opinion regarding the findings from its audit of the report on related parties. The Supervisory Board also examined the report on related parties and has concurred with the audit findings. Based on the Supervisory Board's final review, it has no objections to the closing statements made by the general partner in the report.

VI. The CTS Group prepares a separate report on its non-financial activities based on implementation in Germany of the CSR Directive in the form of an Act intended to improve non-financial reporting at companies (Gesetz zur Stärkung der nichtfinanziellen Berichterstattung der Unternehmen). In accordance with its legal options, the Company decided to prepare a separate non-financial corporate report for the Group outside of the combined Management Report pursuant to § 315b and § 315c of the German Commercial Code (HGB) in conjunction with § 289c-289e of the Commercial Code. The non-financial corporate report is published on the Company's website.

In December 2023, the Supervisory Board engaged the auditor to perform a limited assurance audit of the Group's non-financial corporate report. Based on its audit, the auditor issued an unqualified audit opinion. This means that on the basis of the audit procedures performed and the evidence obtained, the auditor did not become aware of any circumstances that would lead it to believe that the Group's non-financial corporate statement for the period from 1 January to 31 December 2023 had not been prepared in compliance with § 315b and 315c of the Commercial Code in conjunction with § 289c-289e of the Commercial Code.

The non-financial corporate report for the Group and the audit opinion issued by the auditor were submitted in a timely manner to the members of the Supervisory Board. In its meeting of 13 March 2024, the Supervisory Board examined the Group's non-financial corporate report, discussed it in detail, and approved it. It found no indications of any grounds for objecting to the non-financial corporate report issued by the Group or to the assessment of the audit findings of the auditor.

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CTS Eventim AG & Co. KGaA published this content on 26 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 March 2024 06:43:27 UTC.