CODERE, S.A. 9M 2021 Earnings Results
November 10, 2021
Table of Contents | |
Accounting Implications from the Financial Restructuring ........................................... | |
Consolidated Income Statement ...................................................................................... | 6 |
Revenue and Adjusted EBITDA ........................................................................................ | 8 |
Earnings per Share ............................................................................................................ | 8 |
Revenue and Adjusted EBITDA at Constant Currency................................................... | 9 |
Income Statement by Country | |
Mexico .................................................................................................................... | 10 |
Argentina ............................................................................................................... | 11 |
Spain ...................................................................................................................... | 12 |
Italy ......................................................................................................................... | 13 |
Other Operations................................................................................................... | 14 |
Consolidated Cash Flow Statement ............................................................................... | 15 |
Capital Expenditures and Acquisitions ......................................................................... | 17 |
Consolidated Balance Sheet........................................................................................... | 18 |
Net Working Capital......................................................................................................... | 19 |
Capitalization ................................................................................................................... | 20 |
Gaming Capacity by Venue............................................................................................. | 21 |
Gaming Capacity by Product .......................................................................................... | 22 |
Recent Events .................................................................................................................. | 23 |
Contact Information......................................................................................................... | 24 |
2
Accounting Implications from the Financial Restructuring
On April 22, 2021, the Company announced it had entered into a Lock Up Agreement with a group of its largest noteholders (the Ad Hoc Group) in relation to a proposed restructuring transaction. As a result, the operational part of the Company will be transferred to a new holding company (the "New Topco"), with 95% of the share capital of the New Topco being owned by Codere's bondholders and the remaining 5% of the share capital by the Codere S.A.. From the Parent Company's perspective, the future recovery of the businesses will not be carried out by their continued use, but by a transaction similar to a sale, the price of which will be established based on valuations that are being carried out by independent experts (such valuations confirm that the enterprise value of the Group falls below the value of its debt).
As such, the Company has applied IFRS 5, "Non-current assets held for sale and discontinued activities", for all of the Group's operations.
The actions to distribute the assets and liabilities are expected to take place within a year from the classification date of June 30, 2021 and will end with the loss of control by Codere, S.A. Consequently, all the assets and liabilities, which are going to be transferred, are grouped under the headings "Group of assets subject to change of control" and "Liabilities related to the Group of assets subject to change of control" in the Consolidated Balance Sheet as of September 30, 2021, while all 9M 2021 operations are presented under as "Discontinued operations" in the Consolidated Income Statement.
Simplified financial statements are provided below (please note that the financial information contained in this report is unaudited. A limited review of our 9M 2021 financial statements is being conducted and is expected to conclude before the end of November):
Income Statement
Figures in EUR mm, except where noted otherwise | Quarter | YTD | ||
Q3 2020 | Q3 2021 Var. % | 2020 | 2021 | Var. % |
Operating Revenue | 143.0 | 0.0 | n.a. |
Operating Expenses (excl. D&A) | (138.4) | 0.0 | n.a. |
Depreciation & Amortization and Other Operating Expenses | (56.7) | 0.0 | n.a. |
Operating Profit (Post-Inflation Accounting) | (52.1) | 0.0 | n.a. |
Interest Expense and Other Financial Expenses | (18.0) | 0.0 | n.a. |
Results from Discontinued Operations | 0.0 | (77.2) | n.a. |
Earnings before Corporate Income Taxes | (70.1) | (77.2) | (10.1%) |
Provision for Corporate Income Taxes and Minorities/ Affiliates | 8.0 | 0.0 | n.a. |
Net Income / (Loss) | (62.1) | (77.2) | (24.4%) |
460.6 | 0.0 | n.a. |
(432.0) | 0.0 | n.a. |
(164.0) | 0.0 | n.a. |
(135.3) | 0.0 | n.a. |
(114.7) | 0.0 | n.a. |
0.0 | (168.7) | n.a. |
(250.1) | (168.7) | 32.5% |
10.3 | 0.0 | n.a. |
(239.7) | (168.7) | 29.6% |
Cash Flow Statement
Figures in EUR mm, except where noted otherwise | Quarter | YTD | |||||
Q3 2020 | Q3 2021 | Var. % | 2020 | 2021 | Var. % | ||
Cash Flow from Discontinued Operations | 0.0 | (7.1) | n.a. | 0.0 | (24.3) | n.a. | |
Cash Flow from Continued Operations | 2.7 | 0.0 | n.a. | (8.1) | 0.0 | n.a. | |
Cash Flow from Investing | (3.7) | 0.0 | n.a. | (24.8) | 0.0 | n.a. | |
Cash Flow from Financing | 50.3 | 0.0 | n.a. | 60.0 | 0.0 | n.a. | |
Exchange Rate Impact on Cash Balances | (2.6) | 0.0 | n.a. | (10.4) | 0.0 | n.a. | |
Cash Flow | 46.7 | (7.1) | n.a. | 16.7 | (24.3) | n.a. | |
Cash & Equivalents | |||||||
Beginning of Period | 73.1 | 93.1 | 27.4% | 103.1 | 110.3 | 7.0% | |
Cash Flow | 46.7 | (7.1) | n.a. | 16.7 | (24.3) | n.a. | |
End of Period | 119.8 | 86.0 | (28.2%) | 119.8 | 86.0 | (28.2%) |
9M 2021 Earnings Results | 3 |
Balance Sheet
Figures in EUR mm, except where noted otherwise | As at | |||
Dec-20 | Sep-21 | Var. | Var. % | |
Assets | ||||
Other Current Assets | 257.3 | 0.0 | (257.3) | n.a. |
Group of Assets Subject to Change of Control | 0.0 | 1,305.7 | 1,305.7 | n.a. |
Current Assets | 257.3 | 1,305.7 | 1,048.4 | n.a. |
Non-Current Assets | 1,084.6 | 0.0 | (1,084.6) | n.a. |
Total Assets | 1,341.9 | 1,305.7 | (36.2) | (2.7%) |
Liabilities & Shareholders' Equity | ||||
Other Current Liabilities | 383.2 | 0.0 | (383.2) | n.a. |
Liabilities related to Group of Assets Subjecto to Change of Control | 0.0 | 1,738.8 | 1,738.8 | n.a. |
Current Liabilities | 383.2 | 1,738.8 | 1,355.6 | n.a. |
Other Non-Current Liabilities | 1,239.9 | 0.0 | (1,239.9) | n.a. |
Total Liabilities | 1,623.0 | 1,738.8 | 115.8 | 7.1% |
Minority Interests | 45.2 | 44.0 | (1.2) | (2.5%) |
Shareholders' Equity | (326.3) | (544.0) | (217.7) | (66.7%) |
Total Liabilities & Shareholders' Equity | 1,341.9 | 1,238.9 | (103.0) | (7.7%) |
In order to enable the adequate understanding of our financials, in the following pages we are providing proforma consolidated financial information priorto the application of the accounting implications derived from the financial restructuring. This reporting is intended to complement, not substitute, the financial statements above.
9M 2021 Earnings Results | 4 |
All figures included in this page are proforma priorto the application of the accounting implications derived from the financial restructuring (IFRS 5). Please refer to page 3 of this report for additional information.
Financial and Operating Overview
Herein, figures presented above Operating Profit (other than non-recurring items and impairment charges) are shown excluding the impact of non-recurring items as well as the impact resulting from the application of IAS 29. Adjusted EBITDA refers to EBITDA1 excluding all non-recurring items and not considering Argentine figures according to IAS 29 standards (inflation accounting). All figures are post the application of IFRS 16.
- 9M 2021 Operating Revenue increased by 8.5% to €499.6 mm as a result of the significant revenue growth achieved in the third quarter (€90.3 mm, 63.1% above that of last year). With Argentina reopening in July, it was the first quarter since the onset of the Covid-19 pandemic in which we have operated with a fully reopened portfolio.
- 9M 2021 Adjusted EBITDA reached €54.4 mm, 89.9% above 9M 2020, driven by the abovementioned reopenings and softening of operating restrictions. All markets except Italy contributed to this positive EBITDA generation.
- 9M 2021 Adjusted EBITDA margin reached 10.9%, 4.7 percentage points above 9M 2020 mainly driven by reopening of our entire portfolio and the implementation of significant cost savings and efficiency measures in the period.
- In 9M 2021 we generated a net loss of €243.4 mm, compared to a loss of €239.7 mm in 9M 2020, mainly as a result of the closings related to COVID-19 in the first half of the year, the €21.7 mm of impairment charges and the increase in interest expense, all of which were partially offset by the lower devaluation of our operating currencies vs. the USD which materially reduced our FX losses.
- Capex in 9M 2021 was €19.9 mm, 20.9% below 9M 2020, and was almost entirely related to maintenance projects.
- As of September 30, 2021, we had €86.0 mm in cash and equivalents down from €110.3 mm as of December 31, 2020. Our gross debt amounted to €1,194.0 mm and our net debt to €1,108.0 mm, or €1,385.9 mm and €1,299.9 mm, respectively, including capitalization of operating leases (as per IFRS 16).
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In terms of gaming capacity, our active number of slots by September 30, 2021, was 41,530, deployed across our entire retail footprint. In terms of venues, we had 137 gaming halls in operation, 1,131 arcades, 191 sports betting shops and 8,351 bars.
Despite being open across all markets, we are still operating under restrictions (capacity, opening hours, others). - Please refer to the Recent Events sections for further information regarding the implementation of the Financial Restructuring of Codere and the Online SPAC transaction.
1 EBITDA, as defined by the Company, is operating profit (EBIT) plus depreciation and amortization, variation in provisions for trade transactions, gains / (losses) on asset disposals, and impairment charges.
9M 2021 Earnings Results | 5 |
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Codere SA published this content on 10 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 November 2021 07:54:05 UTC.
