T4F Entretenimento S.A.

Transcription

1 T4F Entretenimento S.A. T4F Entretenimento S.A. B3: SHOW3 Quotation Closing on 09/30/2017: R$8.68 3Q17 Average Volume: thd (0.51% of the free float) Price on 11/08/2017: R$8.10 Market Cap: R$546.7 million Presentation through webcast Date: 11/09/2017 English 09:00 a.m. (US ET) 12:00 p.m. (BR) Portuguese 08:00 a.m. (US ET) 11:00 a.m. (BR) Investor Relations + 55 (11)

2 Sao Paulo, November 8, 2017 T4F Entretenimento S.A. ( T4F or Company ) (B3: SHOW3), leading live entertainment company in South America, announces the revised results for the third quarter of 2017 (3Q17). The financial and operational information herein were prepared according to International Financial Reporting Standards (IFRS) and the accounting practices adopted in Brazil. 3Q17 Highlights Net revenue of R$133.3 million (+33% vs. 3Q16); Gross profit of R$34.6 million (+42% vs. 3Q16), with margin gain of 1.7 p.p.; Expenses of R$13.6 million (-14% vs. 3Q16); EBITDA of R$21.2 million (+89% vs. 3Q16), with margin gain of 4.8 p.p.; Net income of R$13.4 million (+120% vs. 3Q16), with margin gain of 4.0 p.p.; and Net cash of R$192.9 million (+172% vs. 3Q16 and +36% vs. 2Q17). Financial Indicators (R$ million) 9M16 9M17 Chg. % 3Q16 3Q17 Chg. % Net Revenue % % Events Promotion % % Live Music % % Family Events and Theater % % Sports Events % % Ticketing, F&B and Venues Operation % % Sponsorship % % Events Promotion % % Ticketing, F&B and Venues Operation % % Cost (554.5) (343.4) -38% (76.1) (98.7) 30% Gross Profit % % Gross Margin (%) 15.7% 22.2% 6.5 p.p. 24.3% 25.9% 1.7 p.p. SG&A (59.5) (51.1) -14% (15.9) (13.6) -14% EBITDA % % EBITDA Margin (%) 8.0% 11.8% 3.8 p.p. 11.2% 15.9% 4.8 p.p. Financial Result (7.5) % % Net Income % % Net Margin (%) 3.0% 6.0% 3.0 p.p. 6.1% 10.0% 4.0 p.p. Operational Indicators 9M16 9M17 Chg. % 3Q16 3Q17 Chg. % Live Music Events Promoted % % Tickets Sold (000) 1,786 1,018-43% % Average Ticket Price (R$) % % Family Events and Theater Events Promoted % % Tickets Sold (000) % % Average Ticket Price (R$) % % Total Events Promoted % % Tickets Sold (000) 2,030 1,347-34% % Average Ticket Price (R$) % % 2

3 We report below comments on the financial statements related to the quarter ended on September 30, 2017 (3Q17). We recommend reading this material together with the Quarterly Financial Statements ( ITR ). Comments on the Consolidated Financial Performance 3Q16 3Q17 +27% % 85 +7% % 56 # Events Tickets Sold (000) # Events Tickets Sold (000) Live Music Family Events & Theater Operating Indicators In 3Q17, we promoted 176 live music, theater and family events with 369 thousand tickets sold. Compared to 3Q16, the number of events and tickets sold increased respectively 11% and 14%. In live music, we promoted 85 concerts with 313 thousand tickets sold. The increase in the number of concerts and tickets sold reflects a significant growth in indoor concerts in our venues and third party, mainly among local/latin artists, of which we highlight: Marc Anthony, Maluma, Tini, Soy Luna, Nicky Jam, Trinca de Ases (Gal Costa, Gilberto Gil and Nando Reis), Roupa Nova, Maria Bethânia, Marília Mendonça, among others. In family and theater, we held 91 shows with 56 thousand tickets sold. The reduction of 27% in tickets sold is a result of the lower demand this quarter for the musical Les Misérables in comparison to the musical Wicked presented in 3Q16. 3

4 Net Revenue Net Revenue (R$ million) 9M16 9M17 Chg. % 3Q16 3Q17 Chg. % Events Promotion % % Live Music % % Family Events and Theater % % Sports Events % % Ticketing, F&B and Venues Operation % % Sponsorship % % Events Promotion % % Ticketing, F&B and Venues Operation % % TOTAL % % Net revenue in 3Q17 totaled R$133.3 million, up 33% from 3Q16. Net revenue in event promotion amounted to R$77.4 million, growth of 39% compared to 3Q16. This important progress is a result mainly of the increase in the number of indoor concerts, with occupancy rate 9% higher. In addition, the average ticket price increased 8% and 19% in live music and family and theater events, respectively. Events Promotion R$ mn 55,6 3Q16 77,4 3Q17 Net revenue of ticketing, F&B and venues operations increased 25% in 3Q17, reaching R$32.0 million due to the higher activity of concerts in our venues, with positive impact in verticalization, in addition to the recognition of convenience fee on tickets sold for future own and third party concerts. Ticketing, F&B and Venues R$ mn 25,7 32,0 3Q16 3Q17 Net revenue of sponsorship totaled R$23.9 million in 3Q17, up 24% from 3Q16. We concluded the negotiation of naming rights for our proprietary theater in Argentina, and we have felt that pre-sale sponsorship, which provides benefits to sponsors customers (priority, discounts, etc.) at ticket sales, has been taking up. Sponsorship R$ mn 19,2 23,9 3Q16 3Q17 4

5 Gross Profit Gross Profit (R$ million) 9M16 9M17 Chg. % 3Q16 3Q17 Chg. % Events Promotion % % Ticketing, F&B and Venues Operation % % Sponsorship % % Gross Profit % % Gross Margin (%) 15.7% 22.2% 6.5 p.p. 24.3% 25.9% 1.7 p.p. Gross profit amounted to R$34.6 million in 3Q17, up 42% from 3Q16 with margin gain of 1.7 percentage point due to the better performance in all business lines. In 9M17, gross profit decreased only 5% year-on-year even with net revenue 33% lower, which can be explained by the improvement in the segment of ticketing operation. In 2016, the largest events (Rolling Stones 7 shows, Maroon 5 9 shows, and Coldplay 5 shows) atypically took place at the beginning of the year, being sold out in 2015, when the convenience fee of these 21 outdoor concerts was recognized. In 2017, there was no such atypicality, we started with only three sold out concerts of Justin Bieber in 2016, so the recognition of both convenience fee and costs of major events remained in Operating Expenses (Revenue) SG&A (R$ million) 9M16 9M17 Chg. % 3Q16 3Q17 Chg. % Sales (2.1) (1.0) -53% (0.6) (0.4) -36% General and Administrative (47.0) (46.3) -1% (13.7) (14.1) 3% Management Compensation (7.0) (6.7) -4% (1.5) (1.7) 12% SG&A (56.0) (54.0) -4% (15.7) (16.1) 3% Other Operating Revenues (Expenses) (3.4) 2.9 n.a. (0.1) 2.5 n.a. Total (59.5) (51.1) -14% (15.9) (13.6) -14% % Total/Net Revenue 9.0% 11.6% 2.5 p.p. 15.8% 10.2% -5.6 p.p. SG&A expenses and management compensation were in line with inflation in the period. Total expenses decreased 14%. EBITDA EBITDA Reconciliation (R$ million) 9M16 9M17 Chg. % 3Q16 3Q17 Chg. % Net Result % % (+) Income Tax and Social Contribution % % (+) Net Financial Result 7.5 (1.5) n.a. (0.3) (1.9) 460% (+) Depreciation % % =EBITDA % % EBITDA Margin (%) 8.0% 11.8% 3.8 p.p. 11.2% 15.9% 4.8 p.p. As a consequence of the aforementioned reasons, EBITDA in 3Q17 totaled R$21.2 million, with EBITDA margin of 15.9%, up 4.8 percentage points from 3Q16. 5

6 In 9M17, EBITDA was in line, but with margin gain of 3.8 percentage points year-on-year, reaching EBITDA margin of 11.8%. Financial Result Financial Result (R$ million) 9M16 9M17 Chg. % 3Q16 3Q17 Chg. % Financial Income % % Interest Income % % Income over Financial Investments % % Others (0.1) 0.2 n.a. (0.1) 0.1 n.a. Financial Expenses (17.2) (10.5) -39% (4.5) (2.6) -43% Interest Cost (6.2) (2.9) -53% (2.0) (0.8) -63% Interests with Borrowings - Debentures (4.7) (3.5) -24% (0.7) (0.9) 37% Losses with Swap Operations (0.5) (0.7) 46% - - n.a. Tax on Financial Transactions (5.0) (2.3) -55% (2.1) (0.8) -63% Taxes and Others (0.9) (1.2) 33% 0.3 (0.1) n.a. Exchange Variance (7.9) 1.5 n.a % Net Financial Result (7.5) 1.5 n.a % In 3Q17, net financial result was positive in R$1.9 million versus R$334 thousand in 3Q16. The improvement in the net financial result is a consequence of the lower indebtedness and of a better result with the exchange variation of our hedging instruments. Net Income Net Income (R$ million) 9M16 9M17 Chg. % 3Q16 3Q17 Chg. % Result Before Taxes % % (-) Income Tax and Social Contribution (Current) (6.5) (10.3) 59% (1.3) (4.8) 271% (-) Income Tax and Social Contribution (Deferred) (10.3) (12.0) 16% (1.5) (4.7) 219% Net Income % % Net Margin (%) 3.0% 6.0% 3.0 p.p. 6.1% 10.0% 4.0 p.p. As a consequence of the aforementioned reasons, the quarter ended in September 30, 2017 posted net income of R$13.4 million, up 120% from 3Q16 and gain of 4.0 p.p. in net margin. In 9M17, net income grew 33% with an improvement of 3.0 percentage points in margin. Working Capital Working Capital (R$ million) 3Q16 2Q17 3Q17 Chg. % (3Q17/2Q17) Assets % Accounts Receivable % Inventories % Advances to Suppliers and Anticipated Costs % Liabilities % Accounts Payable (Suppliers) % Advances from Clients % Net Working Capital (24.2) (29.0) (39.6) 37% 6

7 In 3Q17, we posted negative working capital of R$39.6 million versus R$29.0 million in 2Q17 and R$24.2 million in 3Q16. The maintenance of negative working capital is due mainly to our business model in which we present sales of tickets and sponsorship in advance (registered in advances from clients), while payments to suppliers are mostly concentrated on dates closed to the related events. Cash and Indebtedness Cash and Indebtedness (R$ million) 9M16 9M17 Chg. % 3Q16 3Q17 Chg. % Operating Cash Flow (105.3) n.a % Investment Cash Flow (3.2) 12.0 n.a. (0.8) 5.8 n.a. Financing Cash Flow (23.4) (25.0) 7% (8.3) (11.7) 40% Exchange Variance % % Increase (Reduction) in Cash and Equivalents (126.1) 94.9 n.a. (8.1) 48.5 n.a. Balance in Cash and Financial Investments % % Borrowings and Financing - Short Term % % Borrowings and Financing - Long Term % % Total Indebtedness % % Net Cash (Debt) % % We ended 3Q17 with R$218.0 million in cash (R$223.4 million including restricted cash) versus R$113.0 million in 3Q16 and R$176.1 million in 2Q17: Operating cash: we generated R$53.5 million in 3Q17. The conversion of operating cash equivalent to 2.8 times EBITDA in the period is a result of advanced sponsorship and ticket sales to own and third party events, which will be promoted in 4Q17 and 1Q18. Investments: we generated R$5.8 million due to (i) withdrawal of R$6.6 million in financial investments and (ii) maintenance capex of R$744 thousand. Financing: we consumed R$11.7 million through (i) debentures amortization (R$8.3 million) and (ii) interest payment (R$2.1 million), in addition to R$1.3 million in related parties. We concluded the quarter with: (i) total indebtedness of R$25.1 million (-40% vs. 3Q16 and -27% vs. 2Q17) and (ii) net cash of R$192.9 million (+172% vs. 3Q16 and +36% vs. 2Q17). Events Pipeline Live Music Outdoor In stadiums: in October we promoted 4 Paul McCartney s concerts in Sao Paulo, Porto Alegre, Belo Horizonte and Salvador, in addition to the Villa Mix Festival in São Paulo. In arenas: in December we will promote the tour of Deep Purple & Lynyrd Skynyrd (5x) in the cities of Sao Paulo, Rio de Janeiro, Curitiba, Buenos Aires and Santiago, and Jamiroquai s tour (2x) in Buenos Aires and Santiago. 7

8 For March 2018, we have already hired the following concerts with ongoing sales. Indoor 3 days of the 7 th edition of Lollapalooza Brazil Festival at the Interlagos Circuit, which will feature more than 70 attractions, including: Red Hot Chilli Peppers, Pearl Jam, The Killers, LCD Sound System, Chance the Rapper, Imagine Dragons, Lana Del Rey, among others. 1 Pearl Jam s concerts at Maracanã Stadium in Rio de Janeiro; and 1 Gorillaz s concert at Jockey Club in Sao Paulo. In indoor music, we have already scheduled around 100 concerts for the 4Q17, including important international and local artists like: David Garrett, Culture Club, The Wailers, Fifth Harmony, Ricardo Arjona, Roupa Nova, Maria Bethânia, Jorge & Mateus, Marília Mendonça, among others. Family Events and Theater In October, we promoted 7 performances of the Harlem Globetrotters in the cities of Sao Paulo, Rio de Janeiro and Belo Horizonte; and In 4Q17, we will continue to promote in Sao Paulo the musicals (i) Les Misérables at Teatro Renault and (ii) 2 Filhos de Francisco at Teatro Cetip. Sports Events In 4Q17, we will promote the final stages of Stock Car s Brazilian Championship (4x), Copa Petrobras de Marcas (3x), Mercedes-Benz Challenge (3x) and Campeonato Brasileiro de Turismo (3x). 8

9 SHOW3 Performance Closing price of SHOW3 on November 8, 2017 was R$8.10, which represents growth of 46.8% YTD and 38.2% in the last 12 months Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Volume '000 SHOW3 IBOV 9

10 Income Statement (R$ 000) NET OPERATING REVENUE 100, ,266 COST OF SERVICES PROVIDED AND PRODUCTS SOLD (76,109) (98,701) GROSS PROFIT 24,377 34,565 OPERATING INCOME (EXPENSES) Sales (565) (361) General and administrative (13,676) (14,117) Management compensation (1,494) (1,667) Other operating income (expenses), net (139) 2,521 OPERATING PROFIT (LOSS) BEFORE FINANCIAL (EXPENSES) INCOME 8,503 20,941 FINANCIAL RESULT Financial expenses (4,524) (2,595) Financial income 4,447 3,798 Net exchange rate and monetary variation OPERATING PROFIT (LOSS) BEFORE INCOME TAX AND SOCIAL CONTRIBUTION 8,837 22,810 INCOME TAX AND SOCIAL CONTRIBUTION Current (1,294) (4,799) Deferred (1,460) (4,658) NET RESULT 6,083 13,353 3Q16 3Q17 NET OPERATING REVENUE 658, ,691 COST OF SERVICES PROVIDED AND PRODUCTS SOLD (554,483) (343,427) GROSS PROFIT 103,526 98,264 OPERATING INCOME (EXPENSES) Sales (2,084) (979) General and administrative (46,982) (46,343) Management compensation (6,981) (6,695) Other operating income (expenses), net (3,430) 2,871 OPERATING PROFIT (LOSS) BEFORE FINANCIAL (EXPENSES) INCOME 44,049 47,118 FINANCIAL RESULT Financial expenses (17,184) (10,547) Financial income 17,577 10,515 Net exchange rate and monetary variation (7,903) 1,536 OPERATING PROFIT (LOSS) BEFORE INCOME TAX AND SOCIAL CONTRIBUTION 36,539 48,622 INCOME TAX AND SOCIAL CONTRIBUTION Current (6,513) (10,349) Deferred (10,313) (11,957) NET RESULT 19,713 26,316 9M16 9M17 10

11 Balance Sheet (R$ 000) ASSETS 3Q16 2Q17 3Q17 CURRENT Cash and Cash Equivalent 112, , ,042 Financial Investments - 6,581 - Restricted Cash 2,110 3,346 5,337 Accounts Receivables 74, , ,582 Inventories 2,059 1,717 1,061 Recoverable Taxes 31,911 23,933 24,136 Advances to Suppliers 15,883 38,160 37,192 Anticipated Costs 27,910 40,841 40,035 Other Receivables 14,996 13,279 15,564 Total Current Assets 282, , ,949 NON-CURRENT Deferred Income Tax and Social Contribution 77,049 65,827 61,306 Judicial Deposits 24,885 25,033 24,272 Related Parties 4,577 1,719 3,476 Total Long Term Assets 106,511 92,579 89,054 Fixed Assets (Property, Plant and Equipment) 33,251 29,121 21,226 Intangible: Goodwill on investments acquisition 113, , ,255 Other intangibles 5,740 4,710 4,335 Total Non-Current Assets 259, , ,870 TOTAL ASSETS 541, , ,819 LIABILITIES AND SHAREHOLDERS' EQUITY 3Q16 2Q17 3Q17 CURRENT Suppliers 70, ,797 73,874 Borrowings, financing and debentures 16,856 17,874 16,753 Payroll, Provisions and Social Contributions 5,154 6,911 7,248 Taxes Payable 15,386 12,584 13,313 Advances from Clients 73, , ,586 Sponsorships - Culture Incentive Law (Rouanet Act) 931 1,739 4,437 Dividends Payable Other Payables 14,286 32,680 53,327 Total Current Liabilities 197, , ,538 NON-CURRENT Borrowings, financing and debentures 25,093 16,696 8,341 Provision for Tax, Civil and Labor Contingencies 22,159 24,136 23,568 Deferred Income Tax and Social Contribution Taxes Payable 6,516 6,026 5,830 Other Payables 1,846 6,565 3,372 Total Non-Current Liabilities 56,128 53,808 41,599 SHAREHOLDERS' EQUITY Capital Stock 243, , ,022 Costs with Shares Issuance (9,665) (9,665) (9,665) Capital Reserve 3,538 4,079 4,377 Revaluation Reserve 1, Earnings Retention Reserve 35,578 51,016 63,824 Treasury Stocks - (37) (46) Comprehensive Results 11,193 11,408 10,834 Controlling Shareholders' Stake 284, , ,801 Non-controlling Interests in Equity of Subsidiaries 3,619 1,233 1,881 Total Consolidated Shareholders' Equity 288, , ,682 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 541, , ,819 11

12 Cash Flow (R$ 000) 3Q16 2Q17 3Q17 CASH FLOWS FROM OPERATING ACTIVITIES Net profit for the period 6,083 7,156 13,353 Adjustments to reconcile profit for the period to net cash provided by (used in) generated by operating activities: Depreciation and amortization 2,702 2, Residual value of property, plant and equipment written-off ,042 Deferred income tax and social contribution 1,460 5,475 4,624 Financial charges and and exchange differences on balances with subsidiaries, financing, borrowings and taxes payable 925 1,704 (126) Share-based payments Recognition (reversal) of tax, civil and labor contingencies (634) Constitution (reversal) of allowance for doubtful accounts (130) (Increase) Decrease in operating assets and liabilities: Trade accounts receivables (5,957) (59,573) 26,102 Inventories Financial Investment Recoverable taxes (1,809) 3,544 (1,102) Advances to suppliers 3,116 (26,633) 947 Other receivables (8,145) 2,314 (2,648) Escrow deposits (190) Prepaid expenses , Trade payables (16,217) 57,431 (63,074) Taxes payable 3,959 (3,155) 736 Accrued payroll and related taxes (2,182) (436) 403 Advances from customers 7,533 9,083 45,866 Payments of tax, civil and labor lawsuits Other payables 8,411 27,730 18,386 Payments of income tax and social contribution Cash generated by (used in) operating activities ,486 53,478 CASH FLOWS FROM INVESTING ACTIVITIES Financial Investments - (3,166) 6,581 Goodwill on acquisition of investments (832) (949) (744) Capital increase in subsidiaries Net cash generated y (used in) investing activities (832) (4,115) 5,837 CASH FLOWS FROM FINANCING ACTIVITIES Aquisition of own shares - (37) (9) Related parties 4,053 3,826 (1,271) Payment of dividends - (6,315) - Issuance of Debentures Borrowings and financing Payment of borrowings and financing Payment of debentures - principal (8,333) - (8,334) Payment of debentures - interests (4,087) - (2,056) Net cash generated by (used in) financing activities (8,320) (2,526) (11,670) Exchange Variance on Cash and Cash Equivalents 539 1, INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (8,106) 47,206 48,500 CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of period 121, , ,542 Cash and cash equivalents at end of period 112, , ,042 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (8,106) 47,206 48,500 12