UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of September 2020
Commission File Number: 001-38975



Wanda Sports Group Company Limited
(Name of Registrant)



9/F, Tower B, Wanda Plaza
93 Jianguo Road, Chaoyang District
100022, Beijing
People's Republic of China
+86-10-8558-8813
(Address of principal executive office)
 

 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F Form 40-F ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
 


EXHIBIT INDEX
 
Exhibit No.
 
Description
99.1





SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


  Wanda Sports Group Company Limited  
       

By:
/s/ Honghui Liao  
    Name: Honghui Liao  
Date: September 1, 2020
  Title: Chief Financial Officer  
       





EXHIBIT 99.1

Wanda Sports Group Company Limited Reports Second Quarter 2020 Results
BEIJING, September 1, 2020 (PRNEWSWIRE) – Wanda Sports Group Company Limited (the “Company” and, together with its consolidated entities, “Wanda Sports Group,” the “Group” or “we”) (Nasdaq: WSG), a leading global sports events, media and marketing platform, today announced its unaudited financial results for the second quarter ended June 30, 2020.
As the sale of The IRONMAN Group was completed in July, The IRONMAN Group was treated for purposes of the Group’s results for the second quarter of 2020 as an asset held for sale and its historical results were reflected in those results as discontinued operations.  In addition, The IRONMAN Group’s results and operating data were excluded from the comparative second quarter 2019 results and operating data.  Unless otherwise indicated, the financial statement line items and non-IFRS financial measures are presented on a continuing operations basis.

Second Quarter 2020 Highlights:

Total revenue from continuing operations for the second quarter of 2020 was €51.8 million (US$58.2 million), representing a decrease of 75% year-over-year, primarily attributable to a decrease in revenue from the Spectator Sports and DPSS segments due to the broad effects of COVID-19 mitigation efforts. Excluding reimbursement revenue,1 total revenue was €51.4 million (US$57.8 million), a decrease of 72% over the second quarter of 2019.

Net Profit for the period from continuing operations was €5.5 million (US$6.2 million), compared to €19.0 million in the second quarter of 2019.

Adjusted EBITDA from continuing operations was €20.9m million (US$23.5 million), compared to €41.2 million in the second quarter of 2019.

The Group’s liquidity position remained solid in the second quarter of 2020.  The Group had total cash and cash equivalents of €167.5 million (US$188.3 million), as of June 30, 2019.

The German Ice Hockey Federation extended its exclusive media and marketing agreement with the Group until the 2023/2024 season. The Group expanded the scope of the renewed agreement and will also be responsible for all German women’s and men’s national ice hockey team merchandise across all age groups.

The Group extended its exclusive international media rights partnership with the Czech Republic Ski Federation from 2026 to 2031, and the Norway Ski Federation from 2021 to 2026, respectively, to cover all FIS World Cup events including men’s and women’s alpine skiing, cross-country skiing, ski jumping and Nordic-combined.

____________________________
1 Reimbursement revenues represent revenue that has associated costs of a similar, generally matching, amount (reimbursement costs), thereby resulting in a negligible gross margin impact.
1

 
The Group recently reached an agreement with mobile network provider Verizon for four separate deals to support new Verizon 5G technology for multi-camera features for some larger US sports associations (including the NBA), consumer entertainment (including Fox’s “The Masked Singer”) and motor sports (NASCAR, IndyCar).

There were no mass participation events reflected in the continuing operations in the second quarter of 2020 due to event cancellations as a result of the COVID-19 pandemic.  Despite that, the Group used new, innovative formats and hosted several mass participation events virtually in Europe and China.

Mr. Hengming Yang, Chief Executive Officer of Wanda Sports Group, commented, “As expected, the entire second quarter was affected by the global spread of the pandemic and the related severe impact on business activity, travel and personal routines.  However, given the diversity of our business model with long-term contracts, and our employees’ ability to adapt to uncertainties and new norms of working, we were able to continue to focus on business development, delivering alternative sports service solutions, while effectively managing our costs and liquidity.  Despite our revenue of €51.8 million in the second quarter being much lower than the previous year, our gross margin was significantly enhanced.  Looking forward, although visibility is still unclear in terms of public health and macroeconomic conditions, we remain positive about our partnerships with clients and our business opportunities.  We are confident in the ability of our global workforce to persevere and navigate the challenges ahead. We will remain vigilant in managing our operations and in investing in our future, so that we can be well-positioned to return to revenue and profit growth once the markets recover.”

Mr. Brian Liao, Chief Financial Officer of Wanda Sports Group commented, “Despite the expected contraction in our revenue and profitability, our personnel expenses and selling, office and administrative expenses in the second quarter of 2020 decreased by approximately 28% year-over-year, mainly driven by our cost reduction efforts from the start of the pandemic.  Several cost categories will continue to decrease throughout the year as we continue to respond to the crisis, such as personnel costs, office and travel expenses, and marketing expenses.  In addition, regrettably we had to reduce the number of employees by 13% since the first quarter 2020, but will continue to invest in core capabilities.  We will continue to further streamline our operations in order to preserve cash and protect our profitability. In terms of liquidity, after the IRONMAN transaction, as of July 31, 2020, we have a €208.7 million cash balance.  We intend to use the balance of the net proceeds of the IRONMAN transaction, subject to business conditions, to return capital to its shareholders (either through a special dividend or a share repurchase program; in either case, subject to shareholder approval), and/or for general corporate purposes.  Meanwhile, we are intensely focused on positioning our company optimally to return to revenue growth as we weather the unprecedented uncertainty of the COVID-19 crisis.”

Second Quarter 2020 Business Highlights
Core Business Segments:
Spectator Sports
In the second quarter, the Spectator Sports business leveraged its digital ecosystem innovation and resources by successfully delivering a number of virtual events.  These virtual events attracted a wide range of coverage, while expanding new business wins, despite the uncertainty of the operating environment.

2

Key events

The Group, as the International Ice Hockey Federation’s (or IIHF) long-standing exclusive media and marketing rights partner, launched the IIHF Esports Fan Championship on May 15. Fans from the 16 nations which had qualified for the 2020 IIHF Ice Hockey World Championship were given the chance to represent their countries in the digital tournament, which was hosted on a new IIHF esports online platform.

The Group acted as the promoter, producer and organizer of an alternative online esports tournament for the Italian football league’s eSerie A TIM clubs after the suspension of the tournament due to the pandemic.  Fans were able to watch exclusive live content on eSerie A TIM's YouTube channel.

The Coppa Italia Coca Cola final, Italy's top football knock-out tournament, celebrated a broadcast reach of over 10 million viewers with the match distributed to almost 220 territories globally. Virtual overlay technology provided by the Group covered the empty stands which were decorated with the clubs’ colors, the competition logo and the Italian flag.

The Group jointly supported the launch of the first digital pro-cycling race series – the Digital Swiss 5, which saw professional cyclists competing across five digital races as an alternative to the cancelled Tour de Suisse. The event achieved strong coverage on major public broadcast networks across almost 30 countries.

The Group launched a new digital ecosystem for the European Handball Federation (EHF), which is designed to amplify the outreach and awareness of handball across all platforms of TV, OTT, digital and social media.  All of the digitally-optimized, high-quality content is created by experts from the Group and its partners through more than 5,000 pieces of video content for all major EHF competitions, in order to connect, interact and entertain fans globally.

Major Prolongations

The Group successfully arranged for the renewal of a commercial agreement between Nike and Top 14 rugby club Stade Toulousain. The sports apparel company will continue its role as the French club's official supplier until the end of the 2025 season.

The German Ice Hockey Federation extended its exclusive media and marketing agreement with the Group until the 2023/2024 season. The Group expanded the scope of the renewed agreement and will also be responsible for all German women’s and men’s national ice hockey team merchandise across all age groups.

The Group extended its exclusive international media rights partnership with the Czech Republic Ski Federation from 2026 to 2031, and the Norway Ski Federation from 2021 to 2026, respectively, to cover all FIS World Cup events including men’s and women’s alpine skiing, cross-country skiing, ski jumping and Nordic-combined.

3

 
The Group successfully extended the partnership between LGT and the World Curling Federation (WCF), securing the Liechtenstein-based financial group as the official sponsor for the 2022 European Curling Championships and official title sponsor for the World Women’s Curling Championship 2024.

German door manufacturer Hörmann extended its agreement with the International Biathlon Union (IBU) in a deal signed by the Group. The prolonged partnership will run for four more years covering all IBU World Cup events until the end of the 2023/2024 season.

Finland Biathlon also extended its long-running agreement with the Group for exclusive marketing rights for all IBU events until the 2029/30 season.

Key New Business Wins

Broadcaster Pragosport reached an agreement covering 15 different media properties for a period up to 2028 in the territories of Czech Republic, Slovakia and Hungary, with the Group serving as the exclusive media rights partner for all clients.

Besiktas Sports Club, one of Turkey’s top football, basketball, volleyball, handball and esports clubs reached an exclusive marketing and sales agreement with the Group for all sports as well as all relevant venues from 2021 to 2024.

The Group completed media agreements for the Scottish Premier Football League (SPFL) in over 30 countries. These contracts will run through until at least the conclusion of the 2022/23 season.

Digital, Production, Sports Solutions (DPSS)

As sports events and games such as the German Bundesliga football matches proceeded without spectators, the Group developed additional venue advertising including installing extra rows of LED boards in place of empty seats in order to provide more visibility and increased exposure for sponsors and advertisers.

The Group has renewed its contract with France’s Ligue Football Professional (LFP) for the next four seasons continuing a long-running and successful partnership.

The Group obtained a project mandate with the Professional Golf Tour (PGAT) to release the API Live Scoring and the TourCast, which enables shots to be viewable virtually in real time.

An agreement was reached with mobile network provider Verizon for four separate deals to support new Verizon 5G technology for multi-camera features for some larger US sports associations (including the NBA), consumer entertainment (including Fox’s “The Masked Singer”) and motor sports (NASCAR, IndyCar).

English Premier League club Chelsea FC extended its partnership with the Group until 2021, with new products including a subscription-based paid video production that is currently being developed.

The Group signed a new three-year agreement with the Badminton World Federation (BWF). The Group will be working with the federation on new content for its digital platforms.

4

 
The Group extended its relationship with video game developer Activision Blizzard to work on its esports platforms, including a new proprietary platform that integrated with Activision Blizzard’s existing website. This has enabled Activision Blizzard to develop a modern and efficient site infrastructure and completely upgrade the website for the popular esports Overwatch league and 20 Overwatch League team sites.

IGBS, a joint venture between HBS and IMG, won the “Outstanding Production Achievement –Event” award category for its production of the Rugby World Cup Japan 2019 by the SVG (Sports Video Group) Europe TV Awards, one of the most prestigious bodies for sports broadcasting and production across Europe. The tournament set new standards in rugby broadcast production with the first 8K production, the use of augmented reality graphics and Hawk-Eye Smart Replay technology.

Mass Participation
In the second quarter, although many mass participation events were cancelled or postponed due to the global pandemic, the Group still hosted a few successful events to provide participants with a stimulating outlet during the pandemic.

Group company Megamarsch launched the #Wirgehenweiter (“we go further”) challenge that took place from June 20-21. The virtual event covered several walking distances and was sold out in two weeks. This initial success led to the launch of further editions in August and September.

Throughout the Covid-19 lockdown, HYROX, the World Series of Fitness (in which the Group currently has a minority investment), sought new ways to provide fitness competitions for its worldwide community. After the success of the Home Series, its first initiative, which attracted 5,000 participants from 51 countries, HYROX launched the Virtual Championships of Fitness, which began on July 3 and includes a bodyweight and equipment division comprising five workouts over three weeks.

China Business Highlights
In the second quarter of 2020, almost all sports events were cancelled or postponed across China as a result of the COVID-19 pandemic.


The 2020 Chengdu Double Heritage Marathon was held online from May 1 to May 31, as an alternative solution for one of the largest annual road races in Western China – the Chengdu Double Heritage International Marathon. There were more than 6,500 runners registered for the online race’s three categories, including 6km, half-marathon, and marathon.

5


Second Quarter 2020 Financial Results

Revenue
Total revenue for the second quarter of 2020 was €51.8 million (US$58.2 million), representing a decrease of 75% year-over-year, primarily attributable to a decrease in revenue from the Spectator Sports and DPSS segments. Excluding reimbursement revenue2, total revenue was €51.4 million (US$57.8 million), a decrease of 72% over the second quarter of 2019.

The following table sets forth a breakdown of revenue by segment for the periods indicated:
   
Three Months Ended June 30,
 
   
2020
   
2019
 
(in millions, except percentages)
 
USD
   
EUR
   
% of Revenue
   
EUR
   
% of Revenue
   
YoY Change
Core segments:
                                   
Spectator Sports
   
43.2
     
38.4
     
74
%
   
138.1
     
66
%
   
(72
%)
DPSS
   
14.7
     
13.1
     
25
%
   
54.8
     
26
%
   
(76
%)
Mass Participation
   
0.3
     
0.3
     
1
%
   
16.9
     
8
%
   
(98
%)
Total Revenue
   
58.2
     
51.8
     
100
%
   
209.8
     
100
%
   
(75
%)
DPSS excluding reimbursement revenue
   
14.3
     
12.7
             
27.1
             
(53
%)
Total Revenue excluding reimbursement revenue
   
57.8
     
51.4
             
182.1
             
(72
%)

   
Six Months Ended June 30,
 
   
2020
   
2019
 
(in millions, except percentages)
 
USD
   
EUR
   
% of Revenue
   
EUR
   
% of Revenue
   
YoY Change
Core segments:
                                   
Spectator Sports
   
200.1
     
178.1
     
83
%
   
332.2
     
77
%
   
(46
%)
DPSS
   
40.5
     
36.0
     
16
%
   
76.3
     
18
%
   
(53
%)
Mass Participation
   
1.5
     
1.3
     
1
%
   
21.2
     
5
%
   
(94
%)
Total Revenue
   
242.1
     
215.4
     
100
%
   
429.7
     
100
%
   
(50
%)
DPSS excluding reimbursement revenue
   
39.3
     
35.0
             
48.7
             
(28
%)
Total Revenue excluding reimbursement revenue
   
241.0
     
214.4
             
402.1
             
(47
%)


2 Reimbursement revenues represent revenue that has associated costs of a similar, generally matching, amount (reimbursement costs), thereby resulting in a negligible gross margin impact.
6


Spectator Sports: The decrease in revenue was primarily due to postponement or cancellation of events as a result of the COVID-19 mitigation efforts. For example, the IIHF Ice Hockey World Championships were cancelled, and the Italian football events were suspended in April and May this year.

DPSS: The decrease in revenue was primarily driven by the cyclicality effect, as the Women’s FIFA World Cup took place in 2019.

Mass Participation: The decrease in revenue was due to the cancellation of all scheduled events as a result of the COVID-19 mitigation efforts. The number of events was nil and 50 in the second quarter of 2020 and of 2019, respectively. The number of gross-paid athletes was nil and 225,000 in the second quarter of 2020 and of 2019, respectively.

Gross profit

The following table sets forth a breakdown of gross profit and the corresponding gross margin by segment for the periods indicated:
   
Three Months Ended June 30,
 
   
2020
   
2019
 
(in millions, except percentages)
 
USD
   
EUR
   
Gross margin
   
EUR
   
Gross margin
   
YoY Change in
Gross Profit
Core segments:
                                   
Spectator Sports
   
32.7
     
29.0
     
76
%
   
55.4
     
40
%
   
(48
%)
DPSS
   
6.7
     
6.0
     
46
%
   
13.1
     
24
%
   
(54
%)
Mass Participation
   
(0.6
)
   
(0.5
)
   
(189
%)
   
8.0
     
47
%
   
(106
%)
Total Gross Profit
   
38.8
     
34.5
     
67
%
   
76.5
     
36
%
   
(55
%)

   
Six Months Ended June 30,
 
   
2020
   
2019
 
(in millions, except percentages)
 
USD
   
EUR
   
Gross margin
   
EUR
   
Gross margin
   
YoY Change in
Gross Profit
Core segments:
                                   
Spectator Sports
   
85.9
     
76.5
     
43
%
   
99.4
     
30
%
   
(23
%)
DPSS
   
18.2
     
16.2
     
45
%
   
22.4
     
29
%
   
(28
%)
Mass Participation
   
(0.4
)
   
(0.4
)
   
(31
%)
   
8.3
     
39
%
   
(105
%)
Total Gross Profit
   
103.7
     
92.3
     
43
%
   
130.1
     
30
%
   
(29
%)


Spectator Sports: The decrease in gross profit was primarily due to the cancellation of the IIHF World Championships and the cancellation or postponement of the summer sport events.

7

 
DPSS: The decrease in gross profit was primarily driven by cyclicality effect, as the Women’s FIFA World Cup took place in 2019.

Mass Participation: The decrease in gross profit was due to the cancellation of all scheduled events as a result of the COVID-19 mitigation efforts.
Gross margin, or gross profit as a percentage of revenue, was 67%, compared with 36% in the corresponding quarter of 2019, primarily reflecting a higher weight of commission-model based business in football, which commands a higher gross margin.
Personnel expenses were €22.8 million (US$25.6 million), compared with €27.4 million in the second quarter in 2019, primarily attributable to the Group’s strict cost control measures during COVID-19 outbreak, such as a hiring freeze, salary reductions and reduced hours. In addition, the Group received “reduced working time” compensation from local authorities which partially offset personnel expenses in the second quarter of 2020.
Selling, office and administrative expenses were €6.2 million (US$7.0 million), compared with €12.8 million in the second quarter in 2019, mainly resulting from the cost saving actions as well as the absence of IPO-related expenses incurred in 2019. The cost savings were due to, among others, strict travel restrictions and reductions of marketing expenses.
Depreciation and amortization expenses were 5.9 million (US$6.6 million), compared with €5.4 million in the second quarter in 2019.
Other operating income, net was €15.1 million (US$17.0 million) compared with nil in the second quarter of 2019, primarily reflecting insurance payments for events that were cancelled and a positive fair value adjustment of liabilities from acquisition of companies.
Finance costs were €10.3 million (US$11.6 million), compared with €12.2 million in the second quarter in 2019, primarily due to interest expense savings under the senior 364-day term loan facility entered into in March 2020, which was partially offset by an increase in foreign exchange loss.
Income tax was0.2 million (US$0.2 million), compared with €0.2 million in the second quarter of 2019.
Profit for the period from continuing operations was €5.5 million (US$6.2 million), compared to €19.0 million in the second quarter of 2019, mainly due to the decreased gross profit, which was partially offset by savings in overhead expenses and finance costs.
Adjusted EBITDA from continuing operations was €20.9 million (US$23.5 million), compared to €41.2 million in the second quarter of 2019, principally resulting from the decreased gross profit, which was partially offset by savings in overhead expenses.
Net loss for the Group (inclusive of discontinued operations) attributable to ordinary shareholders of Wanda Sports Group Company Limited was €30.0 million (US$33.7 million), compared to a net profit of €23.4 million in the second quarter of 2019.
Basic and diluted net loss for the Group (inclusive of discontinued operations) per American Depositary Share (“ADS”) were both €0.22 (US$0.24), compared to basic and diluted net profit per ADS of both €0.17 in the second quarter of 2019.

8

Cash and cash equivalents
As of June 30, 2020, the Group had total cash and cash equivalents of €167.5 million (US$188.3 million) from continuing operations.

Indebtedness
As of June 30, 2020, the Group had total interest-bearing liabilities of €685.2 million (US$770.0 million) from continuing operations.
The following table sets forth a breakdown of interest-bearing liabilities at period end.
   
June 30, 2020
 
(in millions)
 
USD
   
EUR
 
Wanda Sports Group Company Limited
   
239.0
     
212.7
 
Infront Group
   
531.0
     
472.5
 
Total
   
770.0
     
685.2
 

COVID-19 Business Operation & Outlook

As the global COVID-19 pandemic continues beyond the second quarter, the Group’s top priority remains to ensure the safety and well-being of its athletes, employees, clients and key partners. In response to the outbreak, the Group closed its corporate offices and requested that all employees either work remotely or work at office premises in shifts for limited periods of time during the second quarter.  Currently, selected employees have returned to workplaces in compliance with the heightened hygiene protocols as required by the respective public health authorities.  In response to the pandemic, the Group undertook a number of actions to mitigate the impact, including reducing headcount by 13% since the first quarter of 2020, resulting in approximately 1,100 employees as of June 30, 2020, excluding discontinued operations.
Almost all sports events were cancelled or postponed on a global basis in the second quarter.  The Group’s current priority is meticulous planning for the resumption of sports events in different markets (even if without spectators at venues). Infront is one of approximately 30 underwriters of the #Sport4Recovery initiative, which launched an international campaign to encourage policymakers to safely re-open organized sports. In addition to communicating with policymakers, this campaign aims to collaborate with the scientific community to highlight the importance of sport for mental and physical health recovery as well as to mobilize athletes and sports fans.
Despite the challenging environment, the Group continues to adopt creative sports solutions by innovating within its business on multiple fronts.  Examples of this innovation include the IIHF virtual world championship, the newly developed digital ecosystem for EHF and the esports tournament for the Italian football league’s eSerie A TIM clubs.

9

To mitigate further potential risks to the Group’s financial performance and better align its cost structure with client demand, management continues to implement a comprehensive set of short-term cost reduction and cash flow improvement actions.  Looking ahead and mindful of the challenges the industry faces, the Group has initiated a comprehensive review with the goal of further streamlining its business, in order to create a leaner organization with greater flexibility that will continue to be highly focused on delivering value for all its stakeholders. Overall, the review aims to enable the Group to realize its full potential over the mid- to long-term and to achieve a sustainable and healthy base for its future.

Other Developments
On Jun 24, 2020, the German Football Association (DFB) informed the Group that it would end its longstanding partnership with Infront and terminate or discontinue all existing contracts based on allegations of “potentially damaging activities.” Infront responded in a public statement, among other things, challenging the validity of the cancelation.  Infront and the DFB remain in discussions to resolve the matter between them.

Liquidity

The Company had total cash and cash equivalents of €167.5 million (US$188.3 million) excluding discontinued operations at the end of the second quarter.  As of July 31, 2020, post the completion of the IRONMAN Group sales, the Company had total cash and cash equivalents of €208.7 million (US$ 234.5 million).  As previously reported, the Company intends to use the balance of the net proceeds of the IRONMAN transaction, subject to business conditions, to return capital to its shareholders (either through a special dividend or a share repurchase program; in either case, subject to shareholder approval), and/or for general corporate purposes.
Management is confident of the Group’s strong liquidity position and its disciplined approach in managing the ongoing capital requirements.

Financial Guidance

Due to the significant uncertainties relating to the scope, duration and impact of COVID-19, the Company currently is unable to reasonably estimate its 2020 financial performance and, accordingly, is not providing any updated guidance.
Management continues to believe that the Company’s long-term growth prospects remain promising and that Wanda Sports Group is well positioned to play a leading role in the global sports media and events industry into the future.

10

Conference Call Information

Wanda Sport’s management will host an earnings conference call at 8:00 AM U.S. Eastern Time on September 1, 2020 (8:00 PM Beijing/Hong Kong time on September 1, 2020).
Participants can join the earnings conference call by completing online registration at: http://apac.directeventreg.com/registration/event/7083268. Upon registration, all participants will be provided with participant dial-in numbers, passcodes and unique registrant IDs to access the conference call.
Additionally, participants can join the call via a live webcast of the earnings conference call at: http://investor.wsg.cn/. An archived webcast will be available through the same link.
A telephonic replay will be available after the conclusion of the conference call, from 11:00 a.m. U.S. Eastern Time on September 1 to 09:59 a.m. U.S. Eastern Time on September 9, 2020 by dialing +61 2 8199 0299 and entering passcode 7083268.

About Wanda Sports Group

Wanda Sports Group is a leading global sports events, media and marketing platform with a mission to unite people in sports and enable athletes and fans to live their passions and dreams. Through its businesses, Infront and Wanda Sports China, Wanda Sports Group has significant intellectual property rights, long-term relationships and broad execution capabilities, enabling it to deliver inspiring sports event experiences, creating access to engaging content and building inclusive communities. Wanda Sports Group offers a comprehensive array of events, marketing and media services through its three primary segments: Spectator Sports, Digital, Production, Sports Solutions (DPSS) and Mass Participation. Wanda Sport Group's full-service platform creates value for its partners and clients as well as other stakeholders in the sports ecosystem, from rights owners, to brands and advertisers, and to fans and athletes.
Headquartered in China, Wanda Sports Group has more than 49 offices in 17 countries with over 1,100 employees around the world.  For more information, please visit http://investor.wsg.cn/investor-relations.

Use of Non-IFRS Financial Measures

To supplement our consolidated financial statements which are presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), we also use Adjusted EBITDA as a non-IFRS financial measure. We present this non-IFRS financial measure because it is used by our management in evaluating our operating results and for financial and operational decision-making purposes.  We define Adjusted EBITDA as net income excluding share-based compensation and other non-recurring expenses. We also believe that this non-IFRS financial measure provides useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as our management and in comparing financial results across accounting periods and to those of our peer companies.

11

Non-IFRS financial measures should not be considered in isolation or construed as an alternative to profit/(loss) from operations and net profit/(loss) or any other measure of performance, or as an indicator of our operating performance. Adjusted EBITDA may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. 
Reconciliation of Adjusted EBITDA and EBITDA, another non-IFRS financial measure, to the most directly comparable IFRS financial measure is set forth at the end of this release.
Exchange Rate Information
This press release contains translation of certain Euro (“€”) amounts into U.S. Dollar (“$”) at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Euro to U.S. dollar were made at the exchange rate of €0.8899 to US$1.00, the exchange rate on June 30, 2020 set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to management quotes and the Company's financial outlook. These forward-looking statements can be identified by terminology such as “will,” “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “intend,” “potential,” “plan,” “goal” and similar statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (“SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements and, consequently, could be affected by the uncertain and unprecedented impact of the COVID-19 pandemic on the Company's business and operations and the related impact on its liquidity needs. These forward-looking statements include, but are not limited to, statements about: the impact of the pandemic and related mitigation efforts on the Company’s business, operations and operating results; the Company's goals and strategies; the expected growth in the Company's industry; the Company's expectations regarding its ability to attract rights-in partners and monetize their rights through rights-out arrangements; changes in consumer behavior and consumer and corporate spending, in particular as a result of the pandemic; the Company's ability to reach acceptable levels of engagement with its athletes following in the context of current public health concerns; the Company's future business development, results of operations and financial condition; competition in the Company’s industry; general economic and business conditions, including as a result of the pandemic; the outcome of discussions with rights owners and lenders to mitigate the impact of the effects of the pandemic on the Group; and assumptions underlying or related to any of the foregoing as well as risks, uncertainties, and other factors described in ”Risk Factors” and elsewhere in the Company’s annual report on Form 20-F for the year ended December 31, 2019, which is available on the SEC’s website at www.sec.gov. Additional information will be made available in future filings that the Company makes from time to time with the SEC.

12

In addition, any forward-looking statements contained in this press release are based on assumptions that the Company's believes to be reasonable as of this date. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

For investor and media inquiries, please contact:
Wanda Sports Group
Edith Kwan
Tel:  +86 (10) 8558 7456
E-mail:  ir@wsg.cn


13

WANDA SPORTS GROUP COMPANY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(Amounts in thousands of Euro (“€”) or, for convenience translation, thousands of U.S. Dollar (“$”), except for number of shares and per share data)
   
For the three months ended
   
For the six months ended
 
   
June 30, 2020
   
June 30, 2019
   
June 30, 2020
   
June 30, 2019
 
   
$
     
     
     
$
     
     
   
Continuing operations
                                               
Revenue
   
58,193
     
51,786
     
209,812
     
242,101
     
215,446
     
429,719
 
Cost of sales
   
(19,419
)
   
(17,281
)
   
(133,300
)
   
(138,375
)
   
(123,140
)
   
(299,576
)
Gross profit
   
38,774
     
34,505
     
76,512
     
103,726
     
92,306
     
130,143
 
Personnel expenses
   
(25,611
)
   
(22,791
)
   
(27,443
)
   
(58,357
)
   
(51,932
)
   
(53,840
)
Selling, office and administrative expenses
   
(6,997
)
   
(6,227
)
   
(12,795
)
   
(17,505
)
   
(15,578
)
   
(19,787
)
Depreciation and amortization
   
(6,612
)
   
(5,884
)
   
(5,353
)
   
(13,137
)
   
(11,691
)
   
(10,368
)
Other operating income/(expense), net
   
16,959
     
15,092
     
(46
)
   
16,460
     
14,648
     
931
 
Finance costs
   
(11,579
)
   
(10,304
)
   
(12,194
)
   
(25,177
)
   
(22,405
)
   
(18,033
)
Finance income
   
1,121
     
998
     
258
     
1,324
     
1,178
     
848
 
Share of loss of associates and joint ventures
   
(30
)
   
(27
)
   
(147
)
   
(63
)
   
(56
)
   
(10
)
Profit before tax from continuing operations
   
6,025
     
5,362
     
18,792
     
7,271
     
6,470
     
29,884
 
Income tax
   
172
     
153
     
185
     
(5,904
)
   
(5,254
)
   
(7,519
)
Profit for the period from continuing operations
   
6,197
     
5,515
     
18,977
     
1,367
     
1,216
     
22,365
 
                                                 
Discontinued operations
                                               
(Loss)/profit after tax for the period from discontinued operations
   
(40,108
)
   
(35,693
)
   
5,588
     
(62,264
)
   
(55,409
)
   
(6,436
)
(Loss)/profit for the period
   
(33,911
)
   
(30,178
)
   
24,565
     
(60,897
)
   
(54,193
)
   
15,929
 
                                                 
Attributable to:
                                               
Equity holders of the parent
   
(33,664
)
   
(29,958
)
   
23,446
     
(60,248
)
   
(53,615
)
   
14,586
 
Non‑controlling interests
   
(247
)
   
(220
)
   
1,119
     
(649
)
   
(578
)
   
1,343
 
     
(33,911
)
   
(30,178
)
   
24,565
     
(60,897
)
   
(54,193
)
   
15,929
 

14

Earnings per share3:
                                   
Basic (loss)/profit for the period attributable to ordinary equity holders of the parent
   
(0.16
)
   
(0.14
)
   
0.11
     
(0.29
)
   
(0.26
)
   
0.07
 
Diluted (loss)/profit for the period attributable to ordinary equity holders of the parent
   
(0.16
)
   
(0.14
)
   
0.11
     
(0.29
)
   
(0.26
)
   
0.07
 
Basic (loss)/profit for the period attributable to ADS holders of the parent
   
(0.24
)
   
(0.22
)
   
0.17
     
(0.44
)
   
(0.39
)
   
0.11
 
Diluted (loss)/profit for the period attributable to ADS holders of the parent
   
(0.24
)
   
(0.22
)
   
0.17
     
(0.44
)
   
(0.39
)
   
0.11
 
                                                 
Earnings per share for continuing operations:
                                               
Basic profit for the period attributable to ordinary equity holders of the parent
   
0.03
     
0.03
     
0.09
     
0.01
     
0.01
     
0.10
 
Diluted profit for the period attributable to ordinary equity holders of the parent
   
0.03
     
0.03
     
0.09
     
0.01
     
0.01
     
0.10
 
Basic profit for the period attributable to ADS holders of the parent
   
0.05
     
0.04
     
0.13
     
0.01
     
0.01
     
0.16
 
Diluted profit for the period attributable to ADS holders of the parent
   
0.05
     
0.04
     
0.13
     
0.01
     
0.01
     
0.16
 




3 Basic and diluted earnings per share and profit attributable to ADS holders of the parent for the three months ended June 30, 2020 and 2019 were computed in the assumption that the Company had issued 23.8 million ADS, and the Company had approximately 208 million and 205 million ordinary shares issued and outstanding as at June 30, 2020 and 2019, respectively.

15

WANDA SPORTS GROUP COMPANY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Amounts in thousands of Euro (“€”) or, for convenience translation, thousands of U.S. Dollar (“$”))
    For the three months ended
    For the six months ended
 
   
June 30, 2020
    June 30, 2019
   
June 30, 2020
   
June 30, 2019
 
   
$
     
     
     
$
     
     
   
(Loss)/profit for the period
   
(33,911
)
   
(30,178
)
   
24,565
     
(60,897
)
   
(54,193
)
   
15,929
 
Other comprehensive income:
                                               
Other comprehensive income to be reclassified to profit or loss in subsequent periods (net of tax):
                                               
Net (loss)/gain on cash flow hedges
   
(660
)
   
(587
)
   
237
     
(7,520
)
   
(6,692
)
   
(96
)
Exchange differences on translation of foreign operations
   
(3,987
)
   
(3,548
)
   
(13,673
)
   
4,550
     
4,049
     
(8,469
)
Net other comprehensive loss to be reclassified to profit or loss in subsequent periods
   
(4,647
)
   
(4,135
)
   
(13,436
)
   
(2,970
)
   
(2,643
)
   
(8,565
)
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:
                                               
Net remeasurement on defined benefit plans
   
-
     
-
     
(12
)
   
-
     
-
     
(12
)
Net loss on equity instruments designated at fair value through other comprehensive income
   
(8,912
)
   
(7,931
)
   
-
     
(8,912
)
   
(7,931
)
   
-
 
Net other comprehensive loss not to be reclassified to profit or loss in subsequent periods
   
(8,912
)
   
(7,931
)
   
(12
)
   
(8,912
)
   
(7,931
)
   
(12
)
Other comprehensive loss for the period, net of tax
   
(13,559
)
   
(12,066
)
   
(13,448
)
   
(11,882
)
   
(10,574
)
   
(8,577
)
Total comprehensive (loss)/income for the period, net of tax
   
(47,470
)
   
(42,244
)
   
11,117
     
(72,779
)
   
(64,767
)
   
7,352
 
Attributable to:
                                               
Equity holders of the parent
   
(47,135
)
   
(41,946
)
   
10,293
     
(72,016
)
   
(64,087
)
   
5,536
 
Non‑controlling interests
   
(335
)
   
(298
)
   
824
     
(763
)
   
(680
)
   
1,816
 
     
(47,470
)
   
(42,244
)
   
11,117
     
(72,779
)
   
(64,767
)
   
7,352
 

16

WANDA SPORTS GROUP COMPANY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Amounts in thousands of Euro (“€”) or, for convenience translation, thousands of U.S. Dollar (“$”))
   
June 30, 2020
   
December 31, 2019
 
   
$
     
     
   
ASSETS
                       
CURRENT ASSETS
                       
Cash and cash equivalents
   
188,276
     
167,547
     
163,225
 
Trade and other receivables
   
232,804
     
207,172
     
264,041
 
Accrued income
   
841
     
748
     
10,498
 
Contract assets
   
50,343
     
44,800
     
53,541
 
Inventories
   
634
     
564
     
9,395
 
Income tax receivables
   
3,487
     
3,103
     
13,594
 
Other assets
   
81,846
     
72,836
     
81,001
 
     
558,231
     
496,770
     
595,295
 
Assets held for sale
   
933,618
     
830,827
     
8,125
 
     
1,491,849
     
1,327,597
     
603,420
 
NON‑CURRENT ASSETS
                       
Long‑term receivables
   
10,814
     
9,623
     
6,808
 
Investments in associates and joint ventures
   
4,152
     
3,695
     
3,277
 
Property, plant and equipment
   
15,234
     
13,557
     
26,294
 
Right of use assets
   
25,931
     
23,076
     
35,249
 
Intangible assets
   
73,929
     
65,789
     
486,933
 
Goodwill
   
263,686
     
234,654
     
537,585
 
Contract assets
   
12,332
     
10,974
     
10,268
 
Deferred tax assets
   
20,319
     
18,082
     
23,063
 
Other assets
   
67,423
     
60,000
     
63,164
 
     
493,820
     
439,450
     
1,192,641
 
TOTAL ASSETS
   
1,985,669
     
1,767,047
     
1,796,061
 

17


WANDA SPORTS GROUP COMPANY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Amounts in thousands of Euro (“€”) or, for convenience translation, thousands of U.S. Dollar (“$”))
   
June 30, 2020
   
December 31, 2019
 
   
$
     
     
   
LIABILITIES
                       
CURRENT LIABILITIES
                       
Trade and other payables
   
151,380
     
134,713
     
173,855
 
Interest‑bearing liabilities
   
768,774
     
684,132
     
204,583
 
Lease liabilities
   
7,877
     
7,010
     
10,041
 
Accrued expense
   
54,199
     
48,232
     
69,846
 
Deferred income
   
2
     
2
     
5
 
Contract liabilities
   
110,591
     
98,415
     
199,900
 
Other liabilities
   
10,036
     
8,930
     
19,208
 
Income tax payable
   
12,973
     
11,545
     
21,787
 
Provisions
   
2,822
     
2,511
     
9,234
 
     
1,118,654
     
995,490
     
708,459
 
Liabilities directly associated with the assets held for sale
   
584,082
     
519,775
     
6,975
 
     
1,702,736
     
1,515,265
     
715,434
 
NON‑CURRENT LIABILITIES
                       
Interest‑bearing liabilities
   
1,169
     
1,040
     
641,085
 
Lease liabilities
   
19,213
     
17,098
     
29,154
 
Accrued expenses
   
3,566
     
3,173
     
3,051
 
Contract liabilities
   
12,812
     
11,401
     
17,271
 
Deferred tax liabilities
   
20,443
     
18,192
     
99,202
 
Provisions
   
2,050
     
1,824
     
3,936
 
Long‑term payroll payables
   
18,029
     
16,044
     
15,336
 
Other liabilities
   
24,783
     
22,056
     
43,578
 
     
102,065
     
90,828
     
852,613
 
TOTAL LIABILITIES
   
1,804,801
     
1,606,093
     
1,568,047
 
EQUITY
                       
Share capital
   
1,708,974
     
1,520,816
     
1,520,816
 
Reserves
   
(928,267
)
   
(826,065
)
   
(813,300
)
Accumulated deficit
   
(603,243
)
   
(536,826
)
   
(483,211
)
Equity attributable to equity holders of the parent
   
177,464
     
157,925
     
224,305
 
Non‑controlling interests
   
3,404
     
3,029
     
3,709
 
TOTAL EQUITY
   
180,868
     
160,954
     
228,014
 
TOTAL LIABILITIES AND EQUITY
   
1,985,669
     
1,767,047
     
1,796,061
 

18

WANDA SPORTS GROUP COMPANY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Amounts in thousands of Euro (“€”) or, for convenience translation, thousands of U.S. Dollar (“$”))
   
For the three months ended
   
For the six months ended
 
   
June 30, 2020
   
June 30, 2019
   
June 30, 2020
   
June 30, 2019
 
   
$
     
     
     
$
     
     
   
NET CASH FLOWS FROM OPERATING ACTIVITIES
   
5,791
     
5,153
     
30,704
     
23,024
     
20,489
     
817
 
NET CASH FLOWS USED IN INVESTING ACTIVITIES
   
(923
)
   
(821
)
   
(41,991
)
   
(36,751
)
   
(32,705
)
   
(125,118
)
NET CASH FLOWS FROM FINANCING ACTIVITIES
   
8,684
     
7,728
     
12,361
     
67,595
     
60,153
     
131,999
 
NET INCREASE IN CASH AND CASH EQUIVALENTS
   
13,552
     
12,060
     
1,074
     
53,868
     
47,937
     
7,698
 
Cash and cash equivalents at beginning of the period
   
185,099
     
164,720
     
186,739
     
183,419
     
163,225
     
177,048
 
Effect of foreign exchange rate changes, net
   
512
     
455
     
(1,308
)
   
(953
)
   
(848
)
   
1,759
 
Transfer to assets held for sale
   
(10,887
)
   
(9,688
)
   
-
     
(48,058
)
   
(42,767
)
   
-
 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
   
188,276
     
167,547
     
186,505
     
188,276
     
167,547
     
186,505
 




19


WANDA SPORTS GROUP COMPANY LIMITED
RECONCILIATION OF NON-IFRS MEASURE – IFRS Profit for the Period and Year to Adjusted EBITDA (unaudited)
(Amounts in thousands of Euro (“€”) or, for convenience translation, thousands of U.S. Dollar (“$”))
   
For the three months ended
   
For the six months ended
 
   
June 30, 2020
   
June 30, 2019
   
June 30, 2020
   
June 30, 2019
 
   
$
     
     
     
$
     
     
   
Continued operations
                                               
Profit for the period from continuing operations
   
6,197
     
5,515
     
18,977
     
1,367
     
1,216
     
22,365
 
Income tax
   
(172
)
   
(153
)
   
(185
)
   
5,904
     
5,254
     
7,519
 
Net interest expenses
   
7,476
     
6,653
     
14,634
     
17,116
     
15,232
     
17,527
 
Depreciation and amortization
   
6,612
     
5,884
     
5,353
     
13,137
     
11,691
     
10,368
 
EBITDA from continuing operations
   
20,113
     
17,899
     
38,779
     
37,524
     
33,393
     
57,779
 
                                                 
Share-based compensation(1)
   
1,274
     
1,134
     
279
     
2,647
     
2,356
     
730
 
Expenses or charges relating to acquisition(2)
   
-
     
-
     
317
     
-
     
-
     
503
 
Expenses or charges relating to IPO or financing(3)
   
-
     
-
     
3,496
     
357
     
318
     
3,721
 
Restructure and disposal of investments/subsidiaries(4)
   
(1,123
)
   
(999
)
   
-
     
(1,123
)
   
(999
)
   
-
 
Loss/(gain) on foreign exchange and derivatives, and other financial charges(5)
   
2,982
     
2,653
     
(2,698
)
   
6,737
     
5,995
     
(342
)
Estimated client compensation relating to fraudulent activities(6)
   
-
     
-
     
1,029
     
-
     
-
     
7,029
 
Expenses or charges relating to Sarbanes-Oxley compliance(7)
   
284
     
253
     
-
     
500
     
445
     
-
 
Remeasurement of contingent consideration(8)
   
(100
)
   
(89
)
   
-
     
(100
)
   
(89
)
   
-
 
Net loss on disposal of assets (9)
   
4
     
4
     
-
     
99
     
88
     
-
 
Expenses relating to shareholder class action lawsuit (10)
   
89
     
79
     
-
     
160
     
142
     
-
 
Adjusted EBITDA from continuing operations
   
23,523
     
20,934
     
41,202
     
46,801
     
41,649
     
69,420
 
                                                 
Discontinued operations
                                               
Loss/(gain) for the period from discontinued operations
   
(40,108
)
   
(35,693
)
   
5,588
     
(62,264
)
   
(55,409
)
   
(6,436
)
Net interest expense, income tax, depreciation and amortization
   
30,024
     
26,718
     
8,615
     
27,067
     
24,087
     
14,149
 
EBITDA from discontinued operations
   
(10,084
)
   
(8,975
)
   
14,203
     
(35,197
)
   
(31,322
)
   
7,713
 
Adjustments (11)
   
(433
)
   
(385
)
   
3,395
     
11,662
     
10,378
     
6,140
 
Adjusted EBITDA from discontinued operations
   
(10,517
)
   
(9,360
)
   
17,598
     
(23,535
)
   
(20,944
)
   
13,853
 
                                                 
Adjusted EBITDA
   
13,006
     
11,574
     
58,800
     
23,266
     
20,705
     
83,273
 


1.
Share-based compensation consisted of share-based compensation and social insurance expenses. This item has been excluded as it is a non-recurring expense.
2.
Represents expenses incurred for professional fees such as legal counsel, auditors, underwriters, valuation experts and consultants mainly in respect of acquisitions.
3.
Represents professional fees of legal counsel, auditors, due diligence experts, consultants, and related expenses for our IPO and financing.
4.
Represents expenses or costs incurred in the restructuring and disposal of investments and subsidiary companies.
5.
Represents the loss/(gain) on foreign exchange, derivative financial instruments at fair value through profit or loss, termination of the cross-currency swap and other financial charges.
6.
Represents the amount estimated to be paid by Infront as compensation in connection with fraudulent activities presumably undertaken by a former senior employee of Infront.
7.
Represents Sarbanes-Oxley Act consulting charges paid to third parties.
8.
In 2020, remeasurement of contingent consideration represents fair value change of contingent consideration from business combination of Gsport.
9.
Represents net loss on disposal of property, plant and equipment and intangible assets.
10.
Represents legal fees related to shareholder class action, voluntarily dismissed on May 18, 2020.
11.
Represents change in fair value of investments amounting to €1.3 million, gains on foreign exchange amounting to €3.0 million and other non-recurring expenses amounting to €1.3 million.



20