“FULL ENTERTAINMENT” STRATEGY PAYING OFF

RECORD REVENUE AND EBITDA PERFORMANCE

REVENUE: €197.2M (UP 17%) - EBITDA: €61.8M (UP 15%)

OBJECTIVES FOR 2023/24 RAISED

REVENUE OF €420M TO €440M (VS. €400M TARGETED PREVIOUSLY)

EBITDA OVER €100M

Lyon, 11 February 2020

On 11 February 2020, the Board of Directors of OL Groupe approved the financial statements for the first half of the 2019/20 financial year[1].

OL Groupe is reporting a considerable improvement in its financial performance in the first half of 2019/20, leveraging an effective business model that has delivered strong and consistent growth for the past four years. Its revenue and EBITDA reached record levels for the first half, even though on-pitch performance fell short of its targets during the first part of the French Ligue 1 championship, with the large number of injuries suffered by the men's professional squad taking their toll.

1 – STRONG REVENUE AND EARNINGS GROWTH

REVENUE UP 17% AT €197.2 MILLION (€28.8 MILLION INCREASE)

Revenue reached an all-time high for the first half of the year. It totalled €197.2 million in H1 2019/20 (vs. €168.4 million in H1 2018/19).

Revenue from sales of player registrations set a new record in H1 2019/20 of €69.1 million (increase of €31.0 million, or 81%). The largest transfers featured Tanguy Ndombelé, who moved to Tottenham for a €47.6 million fee and Nabil Fékir, who joined Real Betis for €19.8 million.

This excellent performance again demonstrated that OL's strategy, based on a top-notch academy, on the recruitment of talented young players and on its ability to unlock their sporting and economic potential, is an effective one.

The Events business continued to expand at a rapid clip. It posted growth of 70% in the first half of 2019/20, with its revenue reaching €5.5 million (vs. €3.2 million in H1 2018/19). Its top-line performance was boosted by revenue from the Women's World Cup semi-final and final matches played in July 2019 at Groupama Stadium, whereas no major events were held in H1 2018/19.

Media and marketing rights held up at a high level of €77.8 million in H1 2019/20 (vs. €82.1 million in H1 2018/19). Once again this season, the club has made it through to the group stages of the Champions League (for the fourth time in the past five years), but the men's team's provisional position in the French Ligue 1 championship was disappointing (12^th position as of 31 December 2019 vs. 3^rd one year earlier).

RECORD EBITDA: €61.8 MILLION (UP €7.9 MILLION OR 15% VS. H1 2018/19)

EBITDA totalled €61.8 million, the highest first-half figure the Group has ever recorded, reflecting robust growth in the business. The EBITDA/revenue ratio stood at 31% (vs. 32% in H1 2018/19).

The Other external purchases and expenses/revenue and personnel costs/revenue ratios remained firmly under control at respectively 23% (identical to H1 2018/19) and 40% (vs. 38% in H1 2018/19), in line with the Group's objective (below 50%).

OPERATING PROFIT: €26.7 MILLION (UP €0.4 MILLION OR 2%)

Operating profit rose by 2% in H1 2019/20 to €26.7 million (vs. €26.3 million in H1 2018/19), with higher depreciation and amortisation expense reflecting the increase in player registration assets.

Net financial expense totalled €8.1 million (vs. €7.1 million in H1 2018/19), and pre-tax profit came to €18.5 million, compared with €19.2 million in H1 2018/19.

Net profit, Group share was stable compared with H1 2018/19, totalling €14.9 million (vs. €14.8 million in H1 2018/19).

2/ AN EVEN STRONGER BALANCE SHEET

Shareholders' equity recorded another increase to €281.8 million as of 31 December 2019 (including non-controlling interests), up from €266.4 million as of 30 June 2019.

Total debt net of cash (excluding player registration payables and receivables and excluding the impact of IFRS 16) fell back €14.3 million with the increase in gross cash and contractual repayments of stadium borrowings (€4.1 million repaid over the first half).

Given higher net financial liabilities linked to player registrations (rise of €54 million) as a result of acquisitions made in summer 2019, debt net of cash (including net receivables and payables on player registrations) moved up €64.9 million (impact of €5.4 million from first-time adoption of IFRS 16) to €222.6 million as of 31 December 2019 (vs. €157.7 million as of 30 June 2019).

On the assets side, the net book value of player registrations rose €66.9 million to €156.4 million owing to summer 2019 player transfer activity, up from €89.5 million as of 30 June 2019.

As of 31 December 2019, the market value of the men's professional team posted another increase. It now stands at over €500 million (€507.3 million*, vs. €436.5 million as of 30 June 2019, up 16%), with a very high level of potential capital gains on player registration assets estimated at over €350 million.

*OL market value, based on Transfermarkt and CIES

3/ RECENT EVENTS AND OUTLOOK FOR H2 2019/20

On 5 February, a top-level partnership agreement was sealed with Emirates, a prestigious global brand that reflects positively on OL Groupe's own image. Emirates will be the exclusive shirt front sponsor for the men's team, both in the Ligue 1 championship and in European matches, for a five-year period from 1 July 2020 until 30 June 2025. This is the largest sponsorship deal the Group has ever signed.

In addition, discussions concerning naming rights from 2020/21 onwards are underway with several potential partners.

In H2 2019/20, OL Groupe's on-pitch performance will get a boost from new talents who have joined the club, including Bruno Guimaraes, Karl Toko Ekambi and Camilo Reijers. Their arrival supports the ambitions of Olympique Lyonnais, which is still competing on four fronts. It aims to perform at the highest possible level in second half of the season and put the men's team back on track to meet its targets in the French Ligue 1 championship. The club has qualified for the 4 April final of the Coupe de la Ligue against PSG.

The Group will also enjoy the benefit of its participation in the knock-out rounds of the Champions League (round of 16 against Juventus), automatically generating additional European ticketing and UEFA media rights revenue. A new matchday revenue record is anticipated from the match against Juventus.

Another boost will come from the busy line-up of events scheduled at Groupama Stadium over the summer. The first annual "FELYN" music festival will be staged on 19-20 June 2020 by OL Production (a 50-50 joint venture between OL Groupe and Olympia Production, a Vivendi subsidiary). The stadium will also host a friendly international match between France and Finland on 31 March 2020 as part of the French national team's preparations for UEFA Euro 2020, a private concert for Groupama on 5 June, a Paul McCartney concert on 7 June, a Monster Jam on 27 June 2020 and the Rammstein band on 9-10 July 2020.

The Group also anticipates a revenue contribution from further sales of player registrations, following on from a record level of €69.1 million in H1 2019/20. Lucas Tousart joined Hertha Berlin for a €25 million fee (gross) in the winter transfer window, but was loaned back to OL for the remainder of the season. By the end of winter transfer window at the end of January 2020, the Group had recorded revenue from sales of player registrations in excess of €90 million (vs. €88.2 million generated over 2018/19 as a whole).

4/ STRATEGIC PLAN COVERING THE PERIOD TO 2023/24

OBJECTIVES: REVENUE OF €420 MILLION TO €440 MILLION, EBITDA OVER €100 MILLION

Under its growth strategy based on a full entertainment concept focused on its core business – football – and also on the development, repeat scheduling and diversification of its event programme, the Group is today raising its revenue target for 2023/24 to a total of between €420 million and €440 million. By the same target date, the Group aims to generate EBITDA in excess of €100 million.

This 2023/24 revenue target is underpinned by:

MAJOR REVITALISATION OF OL GROUPE'S PARTNERSHIPS FROM THE 2020/21 SEASON

The entry into force from 2020/21 of the new and exclusive “shirt front” agreement sealed with Emirates on 5 February 2020 will give Sponsoring - Advertising revenue a real lift. It will also get a boost from a new naming rights deal currently under discussion. 

The Group aims to raise its Sponsoring - Advertising revenue by around €12 million to €15 million p.a. from the 2020/21 season (vs. €31.3 million in 2018/19). The annual Sponsoring - Advertising revenue target for 2023/24 stands at €47 million and €50 million.

FURTHER RAPID EXPANSION IN EVENTS AT GROUPAMA STADIUM AND THE INDOOR ARENA PROJECT

The Group is actively working on a property extension plan including a new events venue near the stadium with a capacity of 12,000 to 16,000 people. This new arena requiring an investment of around €115 million by the Group (target date for delivery: during the second quarter of 2023) would complement the existing Events line-up. Concerts, as well as seminars and large-scale trade fairs, could then be held throughout the year. The plan is also for the new venue to stage sports events, such as LDLC ASVEL's prestigious EuroLeague basketball matches and international esports competitions. The annual Events revenue target for 2023/24 stands at €42 million to €45 million.

AN AMBITIOUSLY HIGH LEVEL OF PLAYER TRANSFERS

Amid relentless growth in the global transfer market (it rose 5.9% in 2019, source: FIFA January 2020 report), OL Groupe is ideally placed to create value through its Academy, which ranks among the best training academies in Europe, and the Club continues to recruit and nurture the development of high-potential young players. 

The revenue target for player transfers stands at an annual average of between €90 million and €110 million over the period (2020/21-2023/24).

HIGH-PERFORMANCE TICKETING SYSTEM MAXIMISING REVENUE

The Group aims to increase the number of season ticket holders with and without hospitality in the lower and middle stadium tiers to fill 100% of seating capacity in both these areas (vs. 77% at present in both these categories).

The Ticketing revenue target for 2023/24 is in excess of €52 million on an annual basis.

CONSIDERABLE INCREASE IN LIGUE 1 MEDIA RIGHTS FROM 2020/21

Starting from the 2020/21 season, the Group anticipates a considerable increase in Ligue 1 media rights following the award of these rights to the Mediapro group for the 2020-24 period for €1.16 billion p.a. (overall rise of 60%, vs. €726.5 million p.a. for the 2016-20 period). How these new media rights will be divided up between broadcasters is currently being discussed.

INTERNATIONAL DEVELOPMENT, A MEDIUM-TERM VALUE DRIVER

Under the June 2019 agreement with ASVEL, the Group's international development will benefit from the image and reputation of Tony Parker, particularly in the United States and in China.

Concurrently, following the acquisition completed on 24 January 2020 of US-based women's football club Reign FC, renamed OL Reign for the start of its new season on 9 March, the Group will continue to pursue the development of the OL brand in the United States by raising its profile, unlocking B2B revenue enhancement synergies and harnessing staffing synergies between the two professional women's teams based in Lyon and Seattle.

Under the 5-year strategic plan and with the objectives presented in February 2019, the Group is now back in the Top 20 European clubs from a business perspective. It ranks in 17^th position in the January 2020 Deloitte Football Money League standings, its first appearance since 2011/12.

The slideshow of the 12 February 2020 information meeting will be available for download at the following address: investisseur.olympiquelyonnais.com.

“This document contains indications about OL Groupe's goals. Known and unknown risks, uncertainties and other factors may affect the achievement of these goals, and consequently, OL Groupe's future results, performance and achievements may differ significantly from implied or stated goals. These factors could include changes to the economic and business environment, regulations, and risk factors detailed in OL Groupe's 2018/19 Universal Registration Document.”

Next press release: 3^rd quarter 2019/20 revenue on 12 May 2020, after the close of Euronext markets.

APPENDICES

SPORTING PERFORMANCE AS OF 31 DECEMBER 2019 (men's professional team)

REVENUE

CONDENSED CONSOLIDATED INCOME STATEMENT

CONDENSED BALANCE SHEET

1. Of which €5.4 million related to the impact of IFRS 16 applicable from 1 July 2019 and €4.7 million reclassified in H1 2019/20 in respect of leases recognised under property, plant and equipment as of 30 June 2019
2. Of which €4.3 million related to the impact of IFRS 16 applicable from 1 July 2019 and €6.1 million reclassified in H1 2019/20 in respect of leases recognised under Other borrowings and financial liabilities as of 30 June 2019

SPORTING PERFORMANCE AS OF 10 FEBRUARY 2020

[1]The Statutory Auditors have completed their limited review of the first-half 2019/20 financial statements, and their report is in preparation.