CTS Eventim AG & Co. KGaA (EVD) Earnings Call Transcript & Summary

Thank you very much. Welcome, everyone, to our Q2 H1 2025 earnings call today. Your hosts today are Holger Hohrein, CFO of CTS Eventim and myself, Marco Haeckermann. Holger will now present the Q2 results followed by the Q&A session. And with this, I hand over to Holger.

Thanks, Marco. Hello, everyone. Warm welcome also from my end. Let's start right away with the first slide and with the key takeaways for the first 6 months of this year. We have seen a solid first 6 months of this year as expected. In ticketing, we have seen growth mainly filled by acquisitions, but also organically we are seeing both higher revenues and higher EBITDA. In terms of profitability, we've also seen integration costs for our latest acquisitions. Those are only temporary effects in nature. Once the integration is completed, we will benefit from synergies going forward and from a higher margin in the ticketing segment. In life, we have seen growth year-on-year for the first 6 months, especially in the international portfolio. Profitability has been a challenge due to continuous cost pressure, especially in the festival portfolio. And therefore, our festival portfolio is under-revenue right now. On the other hand, the venue business, which is also part of this segment, is very strong and continues to be a strong consumer. Coming from our guidance. Despite this mixed picture, we confirm our guidance for the group KPIs and for ticketing, especially. When it comes to our life segment, we are somewhat more cautious as profitability in this segment will be a challenge also for the remainder of this year. Let's talk at the KPIs for the first 6 months of this year on next slide. Group revenue came out just under EUR 1.3 billion, almost 8% increase year-on-year. Adjusted EBITDA on previous year level was EUR 200.5 million. Also previously increase year level EBIT was on EUR 51.4 million. Retail tickets account for almost 79%, which is an increase of 36.6%. And growth in tickets outside of our home market, outside of Germany grew even stronger by 56% to EUR 54 million. The 12-months rolling GDV, the gross transaction volume increased to EUR 8.7 billion, which is a 5% -- 5.4% increase quarter-on-quarter. Let's compare those numbers -- group numbers in more detail with the previous years. As said, revenue up by 8%, driven primarily by ticketing, well above previous year for both year-on-year as well as for quarter-on-quarter. Segment Live slightly above year-on-year, but below previous year or previous year's quarter, Q2. EBITDA came out at EUR 200.5 million, as already mentioned, on the same level as previous year. And as a reminder, we had seen a very strong first 6 months last year with our major own sales, AC/DC, ALDA, which also -- which impacted last year first 6 months, which we have not seen this year again. On the other hand side, we have seen some impact of migration of integration efforts and respective costs of our newly acquired businesses and cost inflation in the Live Entertainment segment as well, and we come to this in a minute. Overall, EBITDA margin subsequently declined somewhat to 15.5%, a level which is within a historic range. So nothing unusual here. On the next chart, this portrays the quarter review a little bit more in detail. On a group level, the second quarter is more or less on previous year level, both in terms of revenue and EBITDA. More detail for both segments will follow in a second. But again, as a reminder, in our business, we have a very strong and typical seasonality with the strongest quarters still to come, especially in ticketing. So before jumping into both segments, a few words on the net result. Here, you can see the bridge from EBITDA to the net result for our shareholders. And here, you can see the bridge from EBITDA to net result and the change year-on-year. What spikes out here is the financial result, which came to minus EUR 6 million for the first 6 months of this year. This is considerably less than the previous year, and the main effects are listed here on the right-hand side, which is mostly attributable to the FX effects. Last year, we had in the same period, we had a gain of roughly EUR 5 million. This year, we have a loss of around EUR 17 million so far due to the turmoil in the -- especially the U.S. dollar environment. Also as a reminder, last year, same period, we had some -- still some dividends coming from our joint venture AutoTicket. This was the [ Carto ] project where we got some compensations back in 2023, which then resulted in some dividends being paid out in the first quarter of last year. As this company is being wind down, we have no more dividends from this joint venture coming. And also, we have a different interest environment this year than last year, which results also in lower interest income this year of around EUR 10 million. There's also another effect, slightly lower than EUR 10 million rather than the single-digit -- mid-single-digit number, which is coming from our former participation or equity participation in France Billet, which is now fully consolidated and therefore, shown in the numbers above the financial results, and all accounts to the almost EUR 50 million change year-on-year when it comes to the financial results. But now back to the operating business. We will then will start with ticketing. In ticketing, we have seen the highest revenues for a first half year ever. Revenue grew by 16% year-on-year. The growth, as mentioned, was driven both by organic business and by our latest acquisitions, See Tickets and France Billet. And as you know, See Ticket was being consolidated since June last year. So it's now included for 6 months instead of just one month last year. And France Billet is being consolidated since end of last year. So it's been now in the numbers included for the first time for a first half of the year. EBITDA grew by 7% year-on-year. Again, the starting point was already high last year with a very strong -- especially first quarter last year with the onset of AC/DC and ADLA and the like, which we haven't seen this year in a similar fashion. In addition, we have all the integration efforts for our newly acquired businesses. While we expect synergies in the future and margin improvements, we now have to bear the costs for all the integration work, which has to be done. And with all integrations or our acquisitions, the work only begins after the deal is closed. So nothing surprising actually here. Let's now have a closer look at the value drivers behind our ticketing results. the retail tickets. After EUR 40 million retail tickets in the first quarter, we have now seen EUR 38 million in the second quarter. So similar amount. Again, the strongest quarter in ticketing are yet to come. On the right-hand side, you can see the distribution by regions. The share of international markets has increased and is continuously increasing as a consequence of our latest acquisition in See Tickets and -- of See Tickets in France Billet. So we have seen strong growth outside of Germany, while we still see growth within Germany. But again, we have also seen organic growth for the German market. Let's now move on to the second segment, our segment Live Entertainment. Year-on-year, we have seen growth in revenue as well, while we have seen a decline in revenues for the second quarter compared to second quarter last year. We have seen strong performance in international portfolio, especially in Italy and in the U.S. And also our venue business is contributing positively to this segment. Although major festival went well like Rock am Ring and Rock im Parks or signature events or signature festivals, other festivals had some challenges. And as a consequence of this, our festival portfolio is currently under value. And what we hope with the measures taken here in this segment, we will see improvement here for the remainder of the year and also for next year. As said, venue business continues to be a strong contributor, both in terms of revenue as well as for EBITDA. Venue business is included in this segment and this number. And yes, looking at the EBITDA, we can see that we have a challenge here in the second quarter, especially which went down by -- EBITDA went down by 26% and 40% for the second quarter, especially. Again, there is some ongoing cost pressure here in Life and Entertainment in general with some -- within our festival portfolio. But again, with the measures taken, we are confident to be back on track for the remainder of this year and also for this segment in the future. Nevertheless, in terms of guidance, we are somewhat cautious when it comes to profitability in the Live Entertainment segment, only for this segment to restate again, for the group as a whole and especially for the Ticket segment, we confirm our guidance for the year 2025. With this key message, I hand back and look forward to your questions.

[Operator Instructions] We're coming to the first question. It is Gerhard Orgonas from Berenberg.

My first question would be on the integration costs for the new entities. I mean some of them you've consolidated for a while, such as See Tickets and it's almost in your portfolio for a year now and France Billet also for 6 months. Why do you have these integration costs now? Maybe can you give us an idea of the amount that you're spending here and the type of integration costs you're having?

Yes, happy to do so. Yes, you're right. See Tickets has been -- the closing was at the beginning of June last year. So it's been consolidated for a year now and France Billet since end of last year. Nevertheless, in terms of integration work, there are a couple of things to do when it comes to exchanging the ERP system, for instance, exchanging the IT landscape, migrating the ticketing platforms. I mean, from A to settle , there are tons of things to do, which typically take a couple of months, if not years. And as you know, bankers and you know this as well, IT resources are scarce, and it's always a question of priorities. We also had some acquisitions the year before in South America. Also, there are ongoing integration projects running. So it's always a question of priorities, order of things and tons of things to do. France Billet, for instance, was part of a bigger group, Fnac Group, they have used tons of systems within the Fnac Group and to carve this out from a large group in terms of purchasing software, accounting software, HR software. All those things need to be handled and this takes -- it can't be done within 6 months. It's not realistic. I would say a more realistic time frame would be 18 to maybe 24 months. And then again, it's a question of priorities and order and maybe there are sometimes some external constraints, which define the order. In terms of amount, well, as a rule of thumb, I would say, for any acquisition, a low to midsized single-digit percentage of the acquisition cost typically would be integration costs. So if we take, for instance, a EUR 300 million acquisition, it wouldn't be a surprise to end up with acquisition or integration costs in the range of somewhere between, whatever, EUR 12 million, EUR 13 million, EUR 14 million, EUR 15 million, something in this range is -- shouldn't be a surprise. And it's certainly not equally distributed over the said 18 months, but maybe in one quarter a little bit more than in the other. I hope this gives some indication.

Second question on the Live Entertainment portfolio. Can you elaborate a little bit what the cost pressures are? So when we talked in Q3 last year, there was a negative surprise and you had said that See Tickets was a business that made most of its money in Q2 with the festivals, where we don't really see an effect from that. So what's going on with festivals in particular?

Yes. Maybe I'll start and then Marco can follow on. We have -- as part of the See Ticket transaction or Vivendi transaction, we have also acquired a number of festivals from Vivendi. And there are some which are running well and others are currently loss-making or were loss-making last year. In general, we have currently problems with our Live -- with our festival portfolio. We have -- in total, we have 35 to 40 festivals in our group. And there are big festivals like Rock am Ring and Rock im Park, which are very successful also this year, especially this year with the 40 years. But some of the festivals which we have acquired together with this transaction, but also other festivals in our portfolio are currently loss-making. And to me, it seems we have kind of oversupply in festivals and maybe the demand for festivals is declining a little bit. And that's why we are currently reviewing our portfolio. And there seems to be -- there's a long tail of festivals, which maybe not all of them are really profitable and worth continuing. I don't know, Marco, if you want to...

I think -- I mean, one thing is very important and not to pin this just exclusively to our festivals. I mean this is something we've been seeing for quite some time that the challenge for festival organizers has been as they were hunting top acts and as, of course, the negotiation power for artists, particularly after COVID has been strengthened that for artists, the opportunity cost to either attend the festival or to do a show on their own has become significant, right? Because if they do a show on their own, they know what they can get. And of course, on the other side, sharing this with a broader festival is something where as a festival promoter, you either accept the price you have to pay for a good lineup. And as we all know, artists are the most expensive element in the festival, plus, of course, other OpEx having seen some inflation there as well, which is then a challenge, particularly when you run a broad portfolio where the top IP has no problem with those higher costs because they can roll it over on to a higher ticket price. And we've seen very good initial feedback after our big franchises concluded this year that right the next day or within the week after that, we already sold a very big chunk of next year's tickets even without having announced a headliner, which is why it is not a sluggish consumer environment or something. But on the other side, if you have then a long tail of festivals, where you see costs going through the roof and which you have sold maybe at 80% or 90% in the past and now you're only selling 60% of that, this really hits you on the bottom line. And this is why structurally, I would say definitely nothing that is exclusive to CTS, but for the broader industry. And on the other hand, top IP won't have a challenge with this as we continue to see ticket price inflation on the large festival tickets. And this is very important. And last bit, of course, I mean, overall, when we look at these numbers and maybe in general, we talk about integration costs, which is obvious that it's a bit more complex than just patching 2 actual spreadsheets together. And on the second thing is, of course, whether it's in ticketing or in live, the timing is the integration cost in ticketing hit us in a seasonally weak quarter, right? Q2 is the quarter where your organic ticketing revenue is the lowest, which is why it's very hard to hide this impact -- if it would have happened in the Q4, it would become less of an issue, of course. And in Live Entertainment, as we continue to restructure the portfolio, which we have acquired within See, we gave it another go. And I think this is a very strong committed business decision to hold on to that instead of just shutting down what you've acquired. But for now, it continues to be loss-making and which affects the numbers.

I think I've got one more question. Just on the guidance. I think on the last call, we talked about 5% to 15% EBITDA growth. Is that your guidance that you're confirming?

Well, the range of 5% to 15%, it's a big range, and we certainly are not guiding closer to the 14 -- to the upper end 14%, but rather to the lower end, I would say.

Yes, but that's what I meant. So 5% is kind of -- is still the low end of your growth.

No, we cannot change the metric during the review.

Next up is Olivier Calvet from UBS.

Just one follow-up on the last one because acoustically, I couldn't hear it so well. You said you confirmed the full range of 5% to 15% at group level. I just wanted to confirm that. And then -- sorry, go ahead.

Sorry, I just want to answer right away. I confirmed the term moderate growth means 5% to 15%. This is correct. So we stick to our metric. But in terms of guidance, we rather see -- we are not at the 14% to 15% upper end of the range, but rather to the lower end of the range.

Okay. So pointing to the low end. Okay. Makes sense. I wanted to ask on any impact you have from the current ARENA under construction in MILAN. Does that impact at all the LE segment profitability? And any thoughts as to your expectation into year-end and with the launch of that arena?

No, it doesn't impact not at all because it's still under construction. So every CapEx is obviously going into the balance sheet and doesn't impact the P&L at all. And as will be opened end of the year, it won't impact the P&L this year at all.

Okay. That's clear. And then just a follow-up. I agree with your comments on festivals. We see minor around closing, but just wanted to get a better sense you disclosed, I think, about 90% of your Live Entertainment sales in the entertainment services, which is a wide bucket. How much of that is festivals? And maybe how much of that is your organic portfolio? How much of that is the See Tickets, the Vivendi acquisition-related festivals?

I would say in general, we have 35 to 40 festivals within our group. And in terms of revenue, I would say the festivals account for roughly 10% of the Live Entertainment revenues. The contribution of the See Tickets portfolio, was it EUR 30 million...

EUR 30 million on a full year basis.

EUR 30 million...

What we've acquired.

Right, right. I think we disclosed it also in the press release, which we released in summer last year. EUR 100 million Ticketing and EUR 30 million live portfolio. Yes, exactly. Exactly. So in general, overall, 10%, which is around EUR 200-plus million and EUR 30 million of this coming from the Life and Entertainment portfolio from See Ticketing.

Okay. Sorry, just to confirm, organic is EUR 200 million and then EUR 30 million is on top? Or is the EUR 30 million included within the EUR 200 million?

No, the latter one, I would say.

Okay. Got it. And then I just wanted to better understand the organic performance of See Tickets year-over-year in the quarter in ticketing specifically. If you could go back to that ex integration costs, were there some customer losses or anything like this that you would like to point out?

Marco, do you want to take this one?

Of course. Let's talk about how those integrations work, right? I mean what you basically do is you try to merge cultures. And the complexity, I would say, in the See Tickets transaction, I mean, it's different having an ongoing integration in one country and now adding 5 other geographies, which in itself was a project that was working on integrating, for example, their U.S. business and merging it to the U.K. platform. So we acquired an ongoing integration. And of course, this is what we now change to our platform, and this is why we have the great synergy potential with this deal and why it fully makes sense for us to strengthen the position in Europe to expand our product portfolio with great products, whether it's the PayLogic Festival solutions, which we have acquired or the full-service white label solutions, which come out of See. So this is something which we can tremendously leverage. On the other side, I mean, when you have markets that operate a little bit differently, for example, like the U.S., when an acquisition like this happens and maybe 1 or 2 salespeople decide to leave the company, then you might leave one or the -- lose one or the other client temporarily. We've seen this over many years. And so we can confirm that these are temporary effects because in the end, when the integration is done, we usually win them all back and even get back more because then they are part of our platform and they take advantage of every development which we have. Again, it, of course, hits hard if we look at it through a very Q2 sharp lens. And this is what happens in the beginning because the integration costs, the ballpark numbers Holger referred to, I would say, if we talk about a 2-year integration period, 2/3, if not 3/4 of the to expected -- to be expected costs hit during the first year. And this is really only the integration costs. And I would add to that these integration effects that you have some customer fluctuation, not to a meaningful extent. So this is nothing to be worried about. But the work of snow and the amount of snow and maybe a little bit of melting temporarily at its edges, and this is what it is.

If I may add also some severance payments and change management. Also just as a reminder, I think it's also been communicated during the press release last year, we have acquired with See Tickets 27 legal entities. So it's quite a bit -- it's not just one legal entity, it's 27 in a number of countries and not all of them were on the same ticketing platform. They also had different ticketing platforms, adding up to the complexity. So it's been a bigger acquisition, and there's more work to do for us, which results in higher cost and a little bit more effort.

And the next question comes from Annick Maas from Bernstein.

My first question is again on festivals. So if we take the festival portfolio and we exclude anything which came from See Tickets, how many of those festivals that you had before See Tickets were actually profitable? My second one is on the net financial result. If you could give us -- I mean, you clearly have explained the impact in the first half. If you could give us an indication of how you think about it for the full year? And then I guess another one on festivals again. So if you take all of the festivals, the top 5, actually, how much of revenues are they making? I guess it's very much -- this portfolio is very much biased to the top festivals only. So if you could give a bit more explanation around the top festivals, what they are making up and the loss-making ones, yes.

To be honest, for the last question, I do not have the answer at the top of my mind. I said we have 35 to 40 festivals and there's a long trend. Obviously, there are a couple of bigger ones and also in terms of distribution. I mean, in general, it's a portfolio -- it's like in a portfolio. You always have 2/3 running well and 1/3 with some problems. Maybe we can in parallel look for the numbers here, but I don't know if Marco has some numbers. Maybe we will have to come back to you with this answer because honestly, I don't have the distribution in our mind. In terms of the net results and what happens below EBITDA, that's basically your question, right? So in terms for the financial results, well, the U.S. dollar might have an impact, maybe we see a reversal this year. I wouldn't expect bigger -- I cannot predict the future. I cannot predict interest rate environment. I cannot predict FX rates, of course. But I do not expect major changes here or bigger changes here. That's why we have shown this one slide here to you to explain to you that we had some one-off effects actually or some effects last year, which we did not see this year like the dividend distribution from order ticket. But for the remainder of this year, I do not see -- for the moment, at least, I do not see bigger impacts in the financial results. So like in the past, we haven't seen big things here. Marco, do you have some numbers?

Yes. While Holger was elaborating on the financial results, we had a look at the numbers. And then you can say that if you look at the top 5 festivals of that portfolio, that comes very close to 50% of the festival revenue we were alluding to.

Okay. So basically, I guess my question, the first one on the loss-making part. I guess when you bought See Tickets, it was pretty clear that their Garorock is probably the only one that is profitable in that mix. So the fact that the festivals are loss-making was known before. And so I'm just a bit surprised. I kind of want to understand the dynamics of the -- what is really dragging it down here in the second quarter. So if you have anything for that, that would really be helpful.

Yes. Well, I can take this on my desk. Of course, when we acquired it and when you look at it from a transactional team, it sounds very easy than when you prepare an integration to say, okay, there are loss-making festivals, so let's cut them. But of course, when this integration happens, you hand this over to the people who have much more expertise in that business. And our Live Entertainment team, our other festival promoters, you get to know the team a little bit better. And you might see the chance that with a little bit of tweaks here and there, you might incur another year of losses, but then you can turn it around or work it into a broader routing scheme to then cut the losses by continuing with the business. And this is something which is probably -- it's easy to say when you're coming out of an M&A transaction and clear the initial path for an integration. But when you then hand over the responsibility to the experts, I think this is a decision which can be backed because they are all managing based on the profitability overall. So there is incentive to turn this around. And the expertise in our company thinks that they can turn it around, and this is the situation why you carry on with these things.

And we're coming to the next question. It is Andreas Riemann from ODDO BHF.

Two topics, maybe one by one. Again, on Live Entertainment, I'm also trying to understand the performance here. So how is actually the visibility for the Live Entertainment business? Are there areas within Live Entertainment where you have no real visibility? And linked to that, was Live Entertainment actually also below your own plans? Any comments here would be appreciated.

I mean for the last question, definitely, for sure, to end up with EUR 30 million in 6 months. So definitely well, well below our expectations and our plans. In terms of visibility, well, we have a broad portfolio of promoters and festivals and brands. And in terms of governance, we have a -- we give a high degree of freedom to those entrepreneurs and those portfolio companies. And we'd rather have a portfolio view on them. So from a headquarter, we are not too much or too deeply involved in individual festivals or individual events. In total, within our Live Entertainment segment, we perform more than 10,000 events a year, of which, as I said, 40 festivals are part of them. But in total, we run more than 10,000 events a year or more than 10,000 with more than 20 million visitors. So this is a -- and we do not have -- we do not from a headquarter manage on the individual basis, but have entrepreneurs, which all typically all have a skin in the game or have participations in our portfolio companies themselves, therefore, also keen making the business profitable. They are incentivized accordingly. Yes, but they are to a large part, entrepreneurs themselves.

And my second one, I mean, reading your press release implies that the difficult macro environment had a negative impact on the Live Entertainment business, but not on the ticketing business, if I'm not mistaken, if I've read your release properly. So how is that possible? Maybe you can provide any insight here.

Not sure if I got the twist correct. So is that in our press release, what did you see...

Yes. So in the Live Entertainment section, it was mentioned that macro in a few countries is a bit more challenging. That was in the Live Entertainment part, but it was not mentioned in ticketing. So I just wonder whether you experienced macro headwinds in Live Entertainment, but it was not mentioned in ticketing. So I just wanted to hear your thoughts on macro and how it affects both segments.

I'm not sure if we refer to the same thing here. Marco, maybe we wanted to express that we see some challenges with regard to when it comes to the festival environment that I mentioned earlier. It seems there's a little bit oversupply in terms of festivals. And now we have been -- we have seen 2 years coming out of the pandemic. We have seen strong demand also for festivals, but now it looks a little bit that the demand is not there anymore, at least not for an increasing number of festivals and the number of festivals is still increasing industry-wide. And there seems to be a changing environment in this regard. And Marco gave a little bit more insight in the economics of the festival earlier. I think the comments in this section in our press release refer to this effect, I think. And therefore, it's relatively independent to the ticketing segment.

Yes. And in ticketing, of course, you have a much broader diversification of the content you're selling, right? I mean when we compare a single show and you can sell a relatively high-priced ticket and let's say, you have 20,000 tickets there, looks good. On the other side, on the ticketing side, you continue to sell a growing portfolio of, say, exhibitions, where you have something that is now in the city of Hamburg for 8 months. You set up the ticketing platform, you continue to sell, you market it. And then once Hamburg is done, it moves to whatever to Munich. And although the ticket price might be less over the entire cycle of that tour -- of that exhibition, it's a very lucrative business. And this is, of course, something where, for example, from the Live Entertainment side, we barely to literally have no exposure at all, no meaningful.

And now we have time for a last questioner, and it is Craig Abbott from Kepler Cheuvreux.

I'll follow up with 3 more from my side as well. First of all, turning to ticketing. Could you maybe give us an update on your pipeline for the remainder of the year for on sales, particularly in the all-important Q4 and here, obviously, with a view looking ahead to next year. And I'll come to my 2 questions after that.

Craig, it's Marco. I think -- I mean, of course, if we would now start announcing which on sale date, we would see for which act, everyone will go crazy. But anyway, I think what underlines it best is that we are reiterating our outlook for the full year. And that we -- as we've said, this year is a year which finally brought seasonality back to a normal pattern with no weird outliers in the Q1 or Q2 as we might have seen over the last couple of years. So this year will be probably year-end loaded, as it has always been with a good content coming through and as well with decent shows for next year, which we're going to be selling in Q3 and Q4. So underlining that, the reiteration of our guidance in ticketing is the statement that combines basically what you want to see there.

Okay. I wasn't expecting obviously specific acts just overall in general. Second question, just -- I'm sorry, to come back on Live Entertainment yet again. I do hope, of course, that you do move swiftly and pretty forcefully in terms of consolidating your festival portfolio because I think it's clear that a lot of this is -- there is an oversupply in Europe in the midsized festival space. So a lot of this is more structural rather than some in-house issues. But you also mentioned in the presentation that you see live entertainment already getting back on track the rest of the year, which is encouraging. But I was wondering if maybe you could elaborate on this, please? And then I have my third question.

Yes. Back on track, I as said, the revenue of the Live Entertainment or the festival portfolio is already well underway. So we have already discussions. We do already -- we have already actually taken some decision for next year's festival portfolio. There are already decisions being made. Will this have a P&L impact already this year? Yes, partially, of course, and we do not expect the same weak second or half year for the remainder of this year than we have seen in the first half year and back on track then refer more to next year, where we hope with a streamlined festival portfolio, we will then be back on track in terms of profitability. For the remainder of this year, we will -- yes, the first measures will be then also have impact already in Q3 and Q4.

Okay. My third question, again, just to kind of get back to the issue of integration costs. And I guess I'm just -- I apologize, it's a little bit more than just one question. So please give me a moment to split this up. But I'm just wondering, first of all, why -- since you introduced adjusted EBITDA reporting last year, why you wouldn't break these out so that we on the Capital Markets segment see how much is related to integration costs and what the underlying business is actually doing. And secondly, okay, I realize there's not a perfect time line. You said its priorities being shifted. But if you could kind of give us a feel for when you really expect to start seeing the benefits from these integration measures coming through at See Tickets and France Billet?

So maybe I'll start off and then Holger can take over. With the integration cost, it's -- of course, I would rather classify it as integration effects as we've been talking about the fact that you might budget for some costs, which initially you see at a level that is below what we would qualify as adjustable because there are clear rules from which scale and scope we can basically apply this. So this is how we started. And then particularly, if you look at, for example, business commitment, for example, as we've discussed it towards the acquired festivals within See Tickets where you now further are willing to incur some losses temporarily. This does not qualify as integration costs, but it's more like an integration effect or a consolidation effect. The same is, of course, that when you might lose one or the other customer on the other side. This is nothing -- I mean, it's a revenue effect, which is nothing you would then qualify as clear integration costs, right? So -- and all the integration effects, which have burdened basically the Q2 results a little bit, they're all temporary. But it's not like that it's just adviser fees, although advisers would love to bill us that way, which we just book as an expense item. So it's a combination of different factors. And of course, when you have revenue impact or continue to incur losses because you give it a chance, because you see the potential for the midterm and long term, this is nothing which we would then adjust.

And referring to the rule Marco was just mentioning. When we introduced the concept of adjusted EBITDA, we give a guidance with auditor, only effects which are bigger than 1% of the previous year's EBITDA can be adjusted. And every single effect would then have to be bigger than previous year -- 1% of the previous year EBITDA, which means EUR 5,420,000, which means EUR 5.4 million. Every effect would have to be bigger than EUR 5.4 million, which is not always the case when it comes to, I don't know, severance payments there and I don't know, a loss of customer in other country and all those things. We don't want to introduce a second accounting, bookkeeping.

Okay. I appreciate that. Okay. And the second -- the last part of that question was in terms of how we can kind of expect the synergy effect to kind of flow through. I know there's not going to be like a perfect time line, but if you can just kind of give us a feel.

I mean I would say, again, as I mentioned earlier, I would say 18 to 24 months is a reasonable time frame for an integration. On the other hand side, we have also other priorities and a lot of priorities always and key resources are always scarce. We have projects running for LA28, for instance, when ticketing will start beginning of next year. So it might be that one or the other project will take a little bit longer. Other things can be a little bit faster. It's not easy to say when the integration will be -- as of today, when the integration will be fully completed yet, but the plan is to have this completed within the 18 month time frame. And then the synergies will then play out and hopefully then result in a margin improvement.

And looking at this as a spreadsheet task, of course, as we try to underline that we are now really in the midst of that part of the integration where you cannot really cover the cost with Q4 ticketing revenues and where it was very visible to that. I mean, year-over-year, you can be sure that you have laid some very low basis for next year. So when we look at where we are from end of June here. So the costs will still be there throughout Q3, but they will fade. So the impact on an increasing business volume in Q3 and Q4 in ticketing will reduce the significance of this topic as we've seen it in Q2. And the second thing is then towards the end of the year, you will partially see synergies coming through. And ideally, you -- at a net level, the remaining cost there will be covered by early synergies before then towards next year and towards particularly the end of next year, the second half, you will see the synergies swinging through because, a, there are no integration costs anymore. And when you then look at these acquired entities year-over-year, of course, you compare it to the basis which we are discussing today.

Thank you very much. We then come to the end of the Q&A. We thank you very much for your attendance and wish you a good rest of the day.

Thank you very much, everyone. And yes, let's continue when we put out our Q3 numbers. Thank you.

Bye-bye.