Enjoy S.a. · BCS:ENJOY
Enjoy — Investor Presentation (October 2010)
45 slides from Enjoy's investor presentation, October 2010
Slide 1: Capital Increase
Capital Increase Santiago, October 2010 Arranger and Placement Agent Antofagasta Coquimbo Santiago Viña del Mar Colchagua Pucón Puerto Varas Mendoza
Slide 2: Contents
Contents • Investment considerations • Enjoy Santiago • Financials • Characteristics of capital increase 2
Slide 3: Executive summary
Executive summary Enjoy: Leader in the Chilean gaming industry, with a successful track record dating back over 35 years Comprehensive casino, hotel, restaurant, bar, event, show and tour operator, with gaming as its core business Significant diversification and atomization of revenues (market
Slide 4: Contents
Contents • Investment considerations • Enjoy Santiago • Financials • Characteristics of capital increase 4
Slide 5: Chilean gaming industry backed by a solid regulatory framework
Chilean gaming industry backed by a solid regulatory framework … • New regulatory framework (law 19995 enacted in 2005) lays the groundwork for the stable, transparent and profitable development of this industry • Maximum number of licenses Expanded from 7 to 25 (7 municipal and 18 under new law)
Slide 6: Harboring vast potential for growth
… harboring vast potential for growth • Recent industry makeover with the enactment of Gross gaming revenues ($ k millions1) new gaming law • Very appealing, draws investors’ interest: 250 • Proposals exceed US$ 4.5 billion 200 • Investments exceed US$ 1 billion 150 • Opportunities: 100 • Potential
Slide 7: Enjoy is the gaming industry leader in Chile
Enjoy is the gaming industry leader in Chile… • Enjoy is Chile’s leading casino operator, with over 35 years’ experience • The Company presently operates a chain of 8 casinos (1 in Argentina), with 5,444 slot machines, 258 gaming tables, 33 restaurants and over 1,000 bingo positions • Alongside thes
Slide 8: The leading entertainment chain in the country
… and is the leading entertainment chain in the country 1 Antofagasta Coquimbo Viña del Mar Santiago Mendoza Colchagua Pucón Puerto Varas Chiloé 8
Slide 9: Enjoy has a proven, successful business model
Enjoy has a proven, successful business model… With gaming its core business, this one-stop model allows it to: • Meet a large number of entertainment needs in a single location: gaming, restaurant, hotel, tourism, events, congresses, children’s games, night clubs and spa • More patrons, longer perm
Slide 10: Allowing it to rely on diversified revenues
… allowing it to rely on diversified revenues… • Atomized revenues leveraged by slot-machine gamers • Cross-selling between products / services • Markets diversified through multiple licenses / operations • Premier-quality licenses in main population centers and areas with high tourism potential Rev
Slide 11: Originating from profitable businesses
… originating from profitable businesses… • All of Enjoy’s businesses are profitable and generate Evolution of FF&BB revenues synergies, significantly leveraging traffic flows 2010 2009 2008 • Vast array of food and beverage varieties and points of sale 2.100 (FF&BB) 33 restaurants 1.800 CLP$ mill
Slide 12: Growing and stable in the face of business cycles
… growing and stable in the face of business cycles Evolution of IPSA ($) 4.000 3.000 Asian Crisis Argentine Crisis 2.000 1.000 Fall of Lehman Brothers 0 Gross gaming revenues evolution and mix1 in casinos operated by Enjoy ($ millions) 90% 90.000 80% 70% 60% 60.000 50% 40% 30.000 30% 20% 10% - 0% 1
Slide 13: Highly diversified licenses in main urban and tourist hubs
Enjoy’s licenses are also highly diversified, located in the main urban and/or tourist hubs … License Number of Effective Enjoy Target Start of End of type licenses term license population operations concession Chile 31/12/2015 Coquimbo 201,000 1994 Dec. 2015 31/12/2015 Viña1 1,500,000 1975 Dec. 201
Slide 14: In-depth knowledge of its customers
… it possesses in-depth knowledge of its customers… • Developing the Enjoy brand, which consolidates the Company’s operations, allowed it to rally its marketing efforts and launch programs addressed directly to its customers • “Enjoy Club” loyalty program • Knowledge of where 45% of Enjoy’s revenues
Slide 15: Solid Corporate Government
… with solid Corporate Government Ownership structure Board of Directors Others Chairman Antonio Martínez Seguí 11.0% Celfin Pier-Paolo 2,0% Director Antonio Martínez Ruiz Zacarelli 3.5% Director Darío Calderón González Habitat Director Ignacio González Martínez 6,1% Director Leonidas Vial Echeverrí
Slide 16: Investment plan to consolidate leading industry position
Enjoy implemented an investment plan to consolidate its leading industry position… • Between 2006 and 2009, Enjoy implemented an Investment projects (CLP$ millions) ambitious investment plan totaling more than CLP 150 billion in seven projects Enjoy licenses Percentage Total completed investment • W
Slide 17: Significant diversification in markets and licenses
… achieving significant diversification in its markets and licenses EBITDA by business unit 100% 90% 80% Santiago 70% Mendoza 60% Puerto Varas 50% Pucón 40% Viña 30% Coquimbo 20% Antofagasta 10% 0% 2009 2010P 2011P 2012P 2013P 2014P Source: Enjoy 1 Considers 50% of Puerto Varas and Mendoza 17
Slide 18: Enjoy's steadily growing consolidated operations: Puerto Varas and Coquimbo
Enjoy’s steadily growing consolidated operations Puerto Varas case Coquimbo case Revenues EBITDA Revenues EBITDA CLP$ millons 12.000 24.000 CLP$ millons 8.000 16.000 4.000 8.000 0 0 1994 1996 1998 2000 2002 2004 2006 2008 1997 2000 2003 2006 2009 • After achieving initial stability, Enjoy Puerto Var
Slide 19: Enjoy's steadily growing consolidated operations: Pucón and Viña
Enjoy’s steadily growing consolidated operations Pucón case Viña case1 Revenues EBITDA Revenues EBITDA 16.000 60.000 CLP$ millons CLP$ millons 12.000 45.000 8.000 30.000 4.000 15.000 0 0 1996 1998 2000 2002 2004 2006 2008 1994 1997 2000 2003 2006 2009 1 Considers Total Revenues and EBITDA for Viña •
Slide 20: New markets offering vast potential
And new markets offering vast potential… Antofagasta case Mendoza case 2.500 Revenues 1.600 Revenues CLP$ millons CLP$ millons 2010 2010 1.400 2.000 2009 2009 EBITDA 1.200 EBITDA 1.500 2010 2010 2009 1.000 2009 1.000 800 (*) EBITDA for December includes 600 500 one-timer effects from retroactive 400
Slide 21: Growth strategy along two complementary lines
Growth strategy along two complementary lines Deepen the business model Turnaround from unprofitable operations Delightful experience - Includes skiing, tourism, etc. - One-stop entertainment offering Hotel – Casino - Hotel, spa, restaurants and casino - Acquiring unprofitable operations - Changing
Slide 22: Contents
Contents • Investment considerations • Enjoy Santiago • Financials • Characteristics of capital increase 22
Slide 23: Enjoy Santiago
\ os Enjoy Santiago
Slide 24: Investment Considerations
Investment Considerations • Casino nearest to Santiago, the country’s largest market • Longer duration of Enjoy’s concessions • Consolidates the Enjoy chain and contributes additional synergies in marketing, customer loyalty, etc. • In-depth knowledge of the market in central Chile – a well-position
Slide 25: The casino nearest to Santiago
The casino nearest to Santiago… Shorter travel time than the In vicinity of largest Multiple access roads most direct competitor target market Enjoy operations Enjoy Santiago Competing operations 25
Slide 26: Consolidating the Chain and contributing additional synergies
… consolidating the Chain and contributing additional synergies… More than 116,000 members in Enjoy Club in Santiago 26
Slide 27: Generating immediate cash flows
… generating immediate cash flows… Effect of the entry of Enjoy WIN1 in Enjoy Santiago ($ millions, monthly) 2.000 1.800 1.600 1.400 1.200 6 times 1.000 800 600 400 200 0 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 1Gross Gaming Revenues WIN av
Slide 28: Generating immediate cash flows
… generating immediate cash flows… Average weekly spending per visitor ($) 80.000 60.000 40.000 20.000 0 5-11 jul 19-25 jul 2-8 ago 16-22 ago 30 ago -5 sep 13-19 sep 27 sep-3 oct Weekly patronage 12.000 3 times 8.000 4.000 0 5-11 jul 19-25 jul 2-8 ago 16-22 ago 30 ago -5 sep 13-19 sep 27 sep-3 oct A
Slide 29: Sensible, focused and effective business strategy for target public
… with a sensible, focused and effective business strategy for its target public… • Based on customer knowledge • Plan began progressive deployment starting the 2nd week of September Sectors with high purchasing power Selective media presence Ambassadors and promotions 29
Slide 30: With vast growth potential
… with vast growth potential… • Vast market potential in Santiago and prospects of Enjoy Santiago Comparable capturing market share from competitors CAPEX US$ 130 million US$ 247 million • Study prepared by The Innovation Group1 in relation to the new facility adjoining the Metropolitan Region: Supp
Slide 31: Development Plan Stage I: 2Q 2010
Development Plan Stage I: 2Q 2010 200 slot machines 13 gaming tables, bingo 2 Bars, 1 Restaurant, 1 Cafeteria 1-shift operation: 8pm to 4am Remodeling work Personnel training Improved service and operations Integration of Enjoy systems and processes Development of road connection
Slide 32: Development Plan Stage II: Q3 and Q4 2010
Development Plan Stage II: Q3 and Q4 2010 Expansion to almost 1,000 slot machines 50 gaming tables, VIP Hall, Bingo Enjoy Club Refurbished Bars, Restaurant, Cafeteria and Gaming Rooms Road connection with overpass 1.400 parking spaces 2-shift operation Completion of construction wo
Slide 33: Development Plan Stage III: Q1 2011
Development Plan Stage III: Q1 2011 Incorporation by: 50 gaming tables, VIP Hall, Bingo Bars, Restaurants 5-star 120-room hotel Convention Center Spa, Outings 1,400 parking spaces Operations 24/7 Entertainment leader in the Metropolitan Region 33
Slide 34: Master Plan for potential development of Enjoy Santiago
Master Plan for potential development of Enjoy Santiago allows for expanded supply 34
Slide 35: Contents
Contents • Investment considerations • Enjoy Santiago • Financials • Characteristics of capital increase 35
Slide 36: Financing for Enjoy Santiago
Financing for Enjoy Santiago • Rinconada casino received fixed asset investments at March 31, 2010, totaling USD 57.3 million and app. USD 90 million at September 30 • Additional investment in remodeling and expanding the Gaming Casino plus the construction of the Hotel, Convention Center, Parking S
Slide 37: Evolution of main P&L accounts
Evolution of main P&L accounts Evolution of quarterly P&L accounts Revenues EBITDA Net Income 26.000 20.000 CLP$ millons 14.000 8.000 2.000 -4.000 Effect of “Profit from higher value of -10.000 investment” 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010* Source: Enjoy *2Q 2010 based on IFRS Starting
Slide 38: Financial strengthening plan
Financial strengthening plan Net Indebtedness1 Total Short Term Long Term 7 6,42 6 5 4,47 3,88 4 3,43 3,08 2,88 3 2,66 2,07 1,94 1,78 1,75 2 1,36 1,00 1,01 0,99 0,78 1 0,42 0,74 0 2005 2006 2007 2008 2009 Jun 2010 Source: Enjoy 1 (Liabilities-Cash on Hand) / (Owner’s Equity+ Minority Interest) 38
Slide 39: Financial strengthening plan
Financial strengthening plan • During 2009, shareholders capitalized loans previously made to Enjoy and totaling CLP 11 billion. • In July 2009, the IPO was launched, placing 30% of the shares in the capital market, raising CLP 23.1 billion, which proceeds were used to pay off debts • In October 200
Slide 40: Financial strengthening plan
Financial strengthening plan Enjoy amortization profile Initial 1st Bond 2nd Bond 30.000 CLP$ millones 20.000 10.000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Source: Enjoy Financial Covenants under Enjoy Bonds 2010 2011 2012 2013 onward Leverage (Net Financial Deb
Slide 41: Contents
Contents • Investment considerations • Enjoy Santiago • Financials • Characteristics of capital increase 41
Slide 42: Characteristics of capital increase
Characteristics of capital increase Purpose: Financing of acquisition of and investment in Enjoy Santiago Capital increase Current number of subscribed-for and paid-up 1,540,015,942 shares Number of shares to be subscribed for and paid up 242,857,142 Number of shares post capital increase 1,782,873,
Slide 43: Tentative placement timetable
Tentative placement timetable September October November L M W J V S D L M W J V S D L M W J V S D 1 2 3 4 5 1 2 3 1 2 3 4 5 6 7 6 7 8 9 10 11 12 4 5 6 7 8 9 10 8 9 10 11 12 13 14 13 14 15 16 17 18 19 11 12 13 14 15 16 17 15 16 17 18 19 20 21 20 21 22 23 24 25 26 18 19 20 21 22 23 24 22 23 24 25 26
Slide 44: Capital Increase
Capital Increase Santiago, October 2010 Arranger and Placement Agent Antofagasta Coquimbo Santiago Viña del Mar Colchagua Pucón Puerto Varas Mendoza
Slide 45: Disclaimer
Disclaimer The contents of this document are based on financial information provided to LarrainVial by the Company and LarrainVial has not verified its consistency with the Company’s actual results, nor whether it accurately reflects the present market values of the assets or liabilities. This docum