Arena Events Group plc

FY21 Interim Results

Agenda

Overview

FY21 Interim Results Snapshot

Financial Review

COVID-19 - changed the landscape Conclusion & Outlook Appendices

Disclaimer

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FY21 Interim Results - six months dominated by COVID-19

FY21 Interim Results - Financial Highlights

Steve Trowbridge, Chief Financial Officer

FY21 Interim Results - financial highlights: six mths to Sept-20 vs six mths to Sept-19

• Revenue decreased by £45.5m (52%)
• Adjusted EBITDA(1) decreased by 50% to £4.4m
• Operating loss of £3.3m (6m Sept 19: profit of £3.8m)
• Adjusted EPS(2) loss of 2.2p (6m Sept 19: profit of 1.1p per share)
• Period end cash £15.5m (Sept 19: £3.3m, Mar 20 £5.8m )
• No interim dividend proposed to maintain balance sheet strength
• 1. Adjusted EBITDA is defined as earnings before interest, tax, depreciation, intangible amortisation, exceptional items share option costs and acquisition costs
  2. Adjusted Earnings Per Share is calculated using Adjusted Earnings divided by the average number of shares in issue for the year. Refer to reconciliation in appendices

Cash flow and net debt - operational cashflow positive for six month period

Note: Net debt as per above is covenant definition which includes net bank debt, shareholder loans, finance leases and deferred consideration.

10

£11.3m £1.0m

• With UK Government "furlough" support, the staff cost base could be quickly matched to workload, however Arena has been unable to access any business rates support schemes
• In June 2020 management of the region was merged with that of the MEA region, further reducing overhead costs and streamlining customer relationships
• The region delivered a positive EBITDA at a 8.8% margin

11

12

KPIs - six months to Sept-20 vs six months to Sept-19

• Gross profit margin improved to 34.6% in part due to geographic mix as the US region delivered over 40% of Group revenues
• Adjusted EBITDA % margins improved slightly to 10.3% as the cost base was rapidly reset. With some of these changes now permanent, future operating leverage should be enhanced
• Adjusted EPS turned negative, mainly as the lower level of absolute EBITDA did not cover depreciation charges, combined with the dilutive effect of the April 2020 equity fund raising
• Net debt leverage of 2.8x reflected lower levels of net debt, tested against lower LTM EBITDA. Leverage will increase in H2, but access to £15.6m of CLBILS lending ensures sufficient liquidity headroom

COVID-19 - changed the landscape

Greg Lawless, Chief Executive

14

Stony Brook Temporary Hospital, New York, April 2020

Impact on business

• Impact of pandemic first experienced in February with cancellation of events in Asia and Middle East. FY20 EBITDA impact around £0.3m
• Subsequent widespread cancellations of mass gathering events for the these six months
• These included Olympics 2020, Ryder Cup, US PGA and US Open golf, Seoul Formula E, Vietnam F1, Wimbledon, The Open
• Swift change of focus with significant success in securing COVID-19 related work, covering:
• • Structures for temporary hospitals
  • Drive through testing centres
  • Other health facilities
  • Temporary facilities for US and UK Military
  • Extension of schools, restaurants and other public venues
  • Expansion of industrial facilities to ensure social distancing

•

COVID-19: Impact - six months to Sept-20 (H1 FY21)

• Other decisive actions taken by senior management team, included:
• • Cost reduction programme
  • Permanent, temporary lay-offs (unpaid leave)
  • Full and partial salary reductions including reduced working weeks
  • EMEA merger
  • Accessed government support programmes where available: furlough and tax payment deferrals (e.g. VAT)
  • Discretionary expenditure has been cancelled
  • Rental deferrals have been achieved on a number of property leases
  • Fixed overheads reduced by c.30% compared to 2019
  • Capital expenditure scaled back except for contracts already underway and equipment necessary for equipment maintenance or health and safety matters

Stakeholder support

• Decisive action taken by senior management team:
• • Share placing raising £9.3m net proceeds in April 2020
  • TasHeel became the largest single shareholder as part of placing
  • Extension of Lombard Odier £2m facility to March 2021
• Significant ongoing support from HSBC:
• • Secured £15.6m of additional lending under the UK Government CLBILS programme - decision to cancel unused £4.5m Arena overdraft facility
  • Covenant waiver agreed for June and September tests. Reassessment of covenant structure underway for December 2020 tests and beyond

Stony Brook Temporary Hospital, New York, April 2020

Conclusion & outlook

Greg Lawless, CEO

18

Conclusion and outlook

• The issue is "when will major periodic events return to normal?"
• As of today, any major events taking place for the next 5/6 months will be without mass gatherings
• We are therefore not expecting a return to mass gatherings at sporting events until mid 2021
• In the meantime, the focus is on cost control and cash management
• Fixed costs have been reduced by over 30% and continue to be reviewed
• Some cost reduction programmes will be permanent
• • Significant senior executive reductions in the US and UK
  • Focus on permanent reduction of historic fixed overheads by over £2 million
• EMEA merger to drive a new design led approach in the UK with a view to improving customer offering
• The overall objective is to:
• • Extend the cash runway of the business well into 2021
  • Use the cost reduction programmes to deliver permanent savings on a return to normal
  • Be aware of potential distressed acquisition opportunities - already seeing stress in the system

Substantial shareholdings >3% as of 29 October 2020

FY20 financial highlights: adjusted earnings