The scenes of the world are replayed, the music scene is revived. At the share price of CTS Eventim (WKN: 547030) you don’t see this recovery yet. Since the beginning of the year, the stock has lost almost 29% and is now at EUR 45.92 (all data as of October 17, 2022).
The ticket seller is all the better off operationally. In the first six months of the current year, CTS Eventim had a turnover of more than EUR 734 million. This is more than eleven times as much as in the first half of the lockdown year 2021. Back then it was 65.3 million euros. Overall, the group had a turnover of 407.8 million euros in 2021 against the background of bans and restrictions on events due to the corona pandemic. For comparison: In 2019, i.e. before the outbreak of the pandemic, sales amounted to more than 1.4 billion euros. More than half of this has already been achieved this year. Sales in the first half of 2019 were EUR 696.6 million.
So we fools see: CTS Eventim has almost reached its old operating temperature again.
The business model is fantastic
You know it yourself: there are concerts that are sold out after just a few hours. As Europe’s leading ticket provider, CTS Eventim generates gigantic sales in a very short time. Exactly how high the share of the ticket price is that gets stuck with Eventim is a well-kept secret of the company to this day. But I assume the proportion is at least 10 to 15%. We know this very well: In the ticket segment, sales in the first half of 2022 were 201.5 million. EUR.
And that’s not all. Apart from ticket sales, the company generates high revenues in the live entertainment segment. CTS Eventim works here as an organizer of major festivals such as Rock am Ring, Rock im Park, Hurricane and Southside. The group often does not appear by name at all. The organizer acting externally is often a subsidiary.
In addition, the group operates a number of very popular event venues throughout Europe, such as Lanxess Arena in Cologne, KB Hallen in Copenhagen, Berlin Waldbühne and Apollo in London. In the Live Entertainment segment, sales rose to EUR 541.5 million in the first six months of 2022. For comparison: the first six months of 2021 brought in only EUR 18.3 million. And even in 2019 it was only 505 million euros.
The Olympics can come!
In the field of ticketing, CTS Eventim was able to secure a high-profile deal: the company will provide the ticketing software and related services for the Paris 2024 Olympic and Paralympic Games in a consortium. The management around CEO Klaus-Peter Schulenberg expects sales in the tens of millions from the project. And at best, this could lead to long-term cooperation with the International Olympic Committee.
Mr. Market is still skeptical about CTS Eventim
In my opinion, the strength of the company is not really recognized in the stock market. The share price has fluctuated wildly in recent months. The strong half-year figures caused the price to rise slightly. After that, it dropped significantly again.
But I am sure: Regardless of how the event industry develops in the short term, CTS Eventim will remain a company that is more than well positioned for any scenario in the long term. Although the current price-to-sales ratio of 4.1 and price-to-earnings ratio of 34.7 look high, I am seriously considering an investment.
The article Mr. Market is terribly wrong about this stock! first appeared on The Motley Fool Germany.
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Henning Lindhoff owns none of the shares mentioned. The Motley Fool owns shares in and recommends CTS EVENTIM KGAA.
Motley Fool Germany 2022