HolidayCheck Group AG publishes second-quarter and first half-year figures for 2020 and announces sale of Dutch subsidiaries MeteoVista B.V. and Zoover B.V.

Munich, Germany, 10 August 2020 - The global spread of COVID-19, the stringent travel restrictions imposed by many countries in response to the pandemic and the worldwide travel warning maintained by Germany's Federal Foreign Office up to mid-June triggered a massive downturn in demand for holidays in the first half of 2020. Many bookings made in 2019 and in the first six months of this year for holidays in 2020 had to be cancelled. This had a significant impact on the revenue and earnings figures of HolidayCheck Group AG in the first half of 2020. From mid-June onwards, when the travel warning was lifted for several European countries, demand for hotels (with independent travel arrangements) and for package holidays recovered significantly, although bookings remained well below pre-crisis levels, especially for package holidays.

Over the past months, driven by the need to protect its liquidity position, HolidayCheck Group AG responded by introducing a series of comprehensive cost-saving measures in every area. These mostly began to take effect as early as in the second quarter of the year. As reported last week, they include the planned reduction of around 100 in the workforce. Some of these cuts have already been implemented.

Due to the various COVID-19-related unscheduled effects during the first quarter 2020, the company has decided to adjust the financial results for the first half 2020 to take significant exceptional items into account. In addition to the extraordinary impairment write-offs of the first quarter 2020, an adjustment has also been made for deferred revenues from 2019 and directly related costs for travel planned for the current year and expected to be cancelled. Adjusted figures are not shown for the second quarter of 2020 as no material adjustments were required.

The financial results for the first half-year and second quarter of the current year are summarised below.

Revenue for the first half of 2020 stood at EUR 0.8 million compared with EUR 74.9 million in the same period of 2019. Adjusted revenue for the first half of 2020 was EUR 16.0 million.
Second-quarter revenue for 2020 totalled EUR 6.0 million compared with EUR 32.7 million in the same quarter of 2019.

Gross margin for the first half of 2020 stood at minus EUR 0.8 million compared with EUR 74.9 million in the first six months of 2019. Adjusted gross margin for the first half of 2020 was EUR 14.4 million.
The second-quarter figure for gross margin was EUR 5.9 million compared with EUR 32.6 million in the same period of the previous year.
Gross margin is defined as sales revenue less cost of goods sold (COGS), i.e. advance purchases of holiday services (e.g. expenditure for hotels, flights and transfer services) by the Group's in-house tour operator HC Touristik.

Marketing expenditure in the first half of 2020 was EUR 8.5 million compared with EUR 37.5 million in the first six months of the previous year. Adjusted marketing expenditure for the half-year under review was EUR 13.4 million.
In the second quarter of 2020, marketing expenditure amounted to EUR 0.6 million and in the second quarter of 2019 to EUR 16.3 million.

Personnel expenditure for the first half-year declined from EUR 21.0 million in 2019 to EUR 19.5 million in 2020. At EUR 8.8 million, the corresponding figure for the second quarter of 2020 was down from EUR 10.3 million in the previous year.

At EUR 11.9 million, other expenses in the first half-year of the current year were down from EUR 12.8 million in 2019. The second-quarter figure also declined from EUR 6.6 million in 2019 to EUR 4.1 million in 2020.

As a result, half-year EBITDA (operating earnings before interest, tax, depreciation and amortisation) stood at minus EUR 33.5 million as at 30 June 2020 compared with the figure of EUR 5.3 million in the same period of 2019. Adjusted EBITDA for the first half-year of 2020 was minus EUR 23.7 million.
Second-quarter EBITDA came to minus EUR 4.0 million in 2020 and EUR 1.3 million in 2019.

Operating EBITDA (operating earnings before interest, tax, depreciation and amortisation) for the first six months of 2020 was minus EUR 32.9 million compared with the figure of EUR 5.8 million in the same period of 2019. Adjusted operating EBITDA for the first half of 2020 was minus EUR 23.1 million.
In the second quarter of the current year, operating EBITDA totalled minus EUR 3.2 million and EUR 1.5 million in the same period of the prior year.

EBIT (earnings before interest and tax) for the first half-year of 2020 was minus EUR 68.8 million compared with EUR 0.3 million in the first six months of 2019. Adjusted EBIT for the first half-year of 2020 was minus EUR 28.5 million.
Second-quarter EBIT was minus EUR 8.0 million in 2020 and minus EUR 1.3 million in 2019.

EBT (earnings before taxes) for the first six months stood at minus EUR 69.0 million in 2020 compared with EUR 0.2 million over the same period of 2019. Adjusted EBT for the first half of 2020 was minus EUR 28.7 million.
Second-quarter EBT totalled minus EUR 8.2 million in 2020 and minus EUR 1.4 million in 2019.

Consolidated net profit/(loss) for the first six months of the current year was minus EUR 66.8 million compared with minus EUR 0.5 million in the same period of 2019. Adjusted consolidated net profit/(loss) for the first half of 2020 stood at minus EUR 28.3 million.
Consolidated net profit/(loss) for the second quarter of 2020 was minus EUR 7.9 million and minus EUR 1.5 million for the second quarter 2019.

Earnings per share for the first half of 2020 were minus EUR 1.16 compared with minus EUR 0.01 in the same period of 2019. Adjusted earnings per share for the first six months of 2020 were minus EUR 0.49.
In the second quarter, earnings per share were minus EUR 0.14 in 2020 and minus EUR 0.03 in 2019.

HolidayCheck Group AG sells Dutch subsidiaries MeteoVista B.V. and Zoover B.V.
HolidayCheck Group AG has agreed to sell its Dutch subsidiary MeteoVista B.V., which operates a number of weather portals in the Benelux region, to the Dutch company Infoplaza B.V. The shares will be transferred in mid-August.

WeerOnline has XX employees and in 2019 generated revenue of around EUR 4.9 million.

At the beginning of July, HolidayCheck Group AG sold MeteoVista B.V.'s Dutch sister company Zoover B.V., which operates a number of hotel ratings portals, to Vakanties.nl B.V. HolidayCheck Group will now be entirely focused on its core German-speaking region.

The total net cash inflows of around EUR 14 million generated by the two sales will help to strengthen the company's capital position.

As at 30 June 2020, the company had cash and cash equivalents of EUR 28.0 million (31 December 2019: EUR 27.5 million). This was mainly achieved by drawing down around EUR 20 million under existing credit lines in the first quarter of 2020. HolidayCheck Group AG is also exploring additional, longer-term financing options.
The company will also receive further cash inflows of around EUR 14 million following the sale of its Dutch subsidiaries once the transactions have been completed.

Outlook
At present, there are signs of a recovery in demand, above all for hotel bookings with independent travel arrangements. There is also renewed interest in package holidays, the company's biggest source of revenue, although the recovery here is very slow.
The Management Board expects overall demand for holidays, in particular package holidays, to remain subdued for the rest of the year. Equally, further regional outbreaks of COVID-19 in our holiday destinations are possible and could affect booking levels. The Management Board also anticipates that the trend towards 'last-minute' booking will continue and that the ongoing process of industry consolidation will lead to the exit of some competitors, especially among high-street travel agencies, potentially benefiting the remaining providers in the medium and long term.
Demand is not expected to pick up to a much more significant level until a vaccine is available, although a steady, gradual recovery is possible up to a certain point. In the long term, the Management Board believes that the holiday market remains extremely attractive and offers good prospects for growth.

In preparation for this scenario, HolidayCheck Group AG is implementing a wide range of measures to permanently reduce its costs and therefore ease the pressure on its liquidity.
As previously announced, one of those measures involves reducing the overall workforce by around 100. Some of these cuts have already been implemented. In addition, all costs have been and will be carefully reviewed to identify further potential for permanent savings. Marketing costs will be managed flexibly in response to current demand.

For 2020 as a whole, the Management Board of HolidayCheck Group AG anticipates both a substantial year-on-year decline in gross margin (sales revenue less COGS/advance purchases of holiday services) after adjusting for corporate acquisitions and disposals and a sizeable negative figure for operating EBITDA. Given the continued uncertainty and the absence of reliable facts and information, it is not currently possible to offer a definitive estimate of the scale of this anticipated downturn.

Note
The German version of the interim statement for the first half of 2020 will be published during the course of the day on the company's website at www.holidaycheckgroup.com under the heading 'Investor Relations'. The translation in English will be available some days later.

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 490, 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.

Media and Investor Relations contact:
HolidayCheck Group AG
Neumarkter Strasse 61
81673 München
Germany

Armin Blohmann
phone: +49 (0)89 357 680 901
fax: +49 (0)89 357 680 999
Email: [email protected]

Sabine Wodarz
phone: +49 (0)89 357 680 915
fax: +49 (0)89 357 680 999
Email: [email protected]

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