HolidayCheck Group AG publishes first quarter results for 2021

Munich, Germany, 10 May 2021 – Demand for holidays – both packages and hotel bookings with independent travel arrangements – remained extremely subdued over the first three months of 2021 in light of the global spread of COVID-19 and the continued imposition of stringent travel restrictions by many countries in response to the pandemic.

Since the beginning of the financial year, however, as vaccination rates increase, holiday bookings have crept back up slightly compared with the last quarter of 2020, although the overall volume remains low. Our hope is that this positive trend will be maintained over the coming months and that booking volumes will gradually increase.

Given the ongoing tremendous uncertainty created as a result of the exceptional pandemic situation and the high level of dependence on unforeseeable political decisions affecting the travel sector as a whole, it is not possible to provide a reliable estimate of cancellation rates for booked holidays with departure dates after 31 March 2021. As a precautionary measure, these holiday bookings have not been shown as revenue in the first quarter of 2021. As at 31 March 2021, the Group's potential entitlement to commission revenue from existing bookings was over EUR 6 million. Any future holiday cancellations would of course reduce this figure.

Excluding this entitlement to commission revenue, HolidayCheck Group AG’s revenue for the first quarter of 2021 increased to EUR 1.7 million compared with minus EUR 6.7 million in the same period of 2020.

The first-quarter figure for cost of goods sold was minus EUR 0.2 million in 2021 and minus EUR 1.5 million in 2020 (advance purchases of holiday services, such as expenses for hotels, flights and transfer services, by the Group’s in-house tour operator HC Touristik).

Gross margin for the first quarter was EUR 1.4 million in 2021 compared with minus EUR 8.3 million in the previous year. Gross margin is defined as sales revenue less cost of goods sold (COGS).

In 2020, the company implemented a series of comprehensive cost-saving measures in every area. This helped HolidayCheck Group AG to achieve a sustained year-on-year improvement in quarterly earnings and therefore protect the liquidity position.

Marketing expenses in the first quarter of 2021 fell to minus EUR 0.1 million compared with minus EUR 7.6 million in the same quarter of the previous year. The main factors here were lower voucher costs and the almost complete suspension of marketing activities.

Personnel expenses for the first quarter declined from minus EUR 9.2 million in 2020 to minus EUR 5.1 million in 2021.

At minus EUR 2.6 million, other expenses in the first quarter of the current year were down from minus EUR 5.7 million in 2020.

First-quarter EBITDA (earnings before interest, taxes, depreciation and amortisation) showed a year-on-year improvement from minus EUR 29.0 million in 2020 to minus EUR 5.5 million in 2021.

First-quarter operating EBITDA (operating earnings before interest, taxes, depreciation and amortisation) improved from minus EUR 29.2 million in 2020 to minus EUR 5.9 million in the current financial year.

EBIT (earnings before interest and taxes) in the first quarter of 2021 stood at minus EUR 7.1 million, an improvement on the figure of minus EUR 30.9 million for the same period in 2020.

EBT (earnings before interest and taxes) in the first quarter of 2021 improved to minus EUR 7.2 million compared with minus EUR 31.0 million in the same quarter of 2020.

Consolidated net profit/(loss) from continuing operations in the first quarter of 2021 was minus EUR 6.5 million compared with minus EUR 30.9 million for the first three months of 2020.

Diluted and basic earnings per share from continuing operations for the first quarter improved from minus EUR 0.54 in 2020 to minus EUR 0.09 in the current financial year.

As at 31 March 2021, cash and cash equivalents stood at EUR 58.8 million, and at EUR 33.7 million as at 31 December 2020.

Outlook

At present, given continued uncertainty over the likely course of the COVID-19 pandemic in the coming months, it is not yet possible to offer a quantitative forecast for gross margin and operating EBITDA.

Instead, based on our forward plans, we have drawn up two scenarios – one negative and one positive – for the financial year 2021. These stand at each end of the range within which our actual results will probably lie on the basis of the information currently available. Each makes different assumptions about the impact of COVID-19 in terms of duration and intensity. Both will be continuously updated. For each of these scenarios, the Management Board has prepared qualitatively comparative assessments of the likely impact on gross margin and operating EBITDA.

The following Management Board assessment for the financial year 2021 reflects both the underlying assumptions set out above and, based on our current knowledge, the two scenarios at each end of the range for the potential impact of COVID-19.

In the positive scenario, the Management Board expects the HolidayCheck Group’s gross margin (sales revenue less cost of goods sold) to at least double compared with the figure for 2020. Even so, it is likely that gross margin will remain significantly below the pre-crisis level of 2019.

In the negative scenario, the Management Board expects the HolidayCheck Group’s gross margin for 2021 to be roughly on a par with the figure for 2020. In financial 2020, the HolidayCheck Group achieved a gross margin of EUR 7.3 million compared with EUR 131.2 million in 2019.

With regard to operating EBITDA, the Management Board anticipates a year-on-year improvement whichever of the scenarios proves to be more accurate. The figure for operating EBITDA in 2020 was minus EUR 35.8 million.

Given the current uncertainty, we are unable to provide reliable forecasts of increases in gross margin and operating EBITDA.

The Management Board believes that the desire to travel will return quickly once the coronavirus pandemic is behind us. As such, over the medium and long term, there is enormous potential for growth in holiday sales across the Central European market, especially online. The current upward trend in bookings and increasing vaccination rates both support this view. In the opinion of the Management Board, the HolidayCheck Group is ideally positioned, from both an operational and financial perspective, to achieve above-average growth based on this trend.

Note

The German version of the interim statement for the first quarter of 2021 will be published during the course of the day on the company’s website at www.holidaycheckgroup.com under the heading ‘Investor Relations’. Publication of the translation in English will follow shortly.

About HolidayCheck Group AG:

HolidayCheck Group AG (ISIN DE005495329), Munich, Germany, is one of Europe’s leading digital firms for recreational holiday. With a total workforce of around 300, HolidayCheck Group AG comprises HolidayCheck AG (which operates hotel review and travel booking portals by the same name), HC Touristik GmbH (which operates the tour operator HolidayCheck Reisen), and Driveboo AG (which operates the car rental portals MietwagenCheck and Driveboo). HolidayCheck Group’s vision is to become the world’s most holidaymaker-friendly company in the world.