Coast Entertainment Holdings Ltd · ASX:CEH
Coast Entertainment — FY2020 Earnings Presentation
40 slides from Coast Entertainment's earnings presentation, Aug 27, 2020
Slide 1: FY20 Results Presentation
Ardent Leisure Group Limited FY20 Results Presentation 27 August 2020
Slide 2: FY20 Group Overview
FY20 Group Overview GW ARDENT ~’
Slide 3: FY20 – Key messages
FY20 – Key messages FY20 statutory results were significantly impacted by COVID-19 and the adoption of AASB 16 Leases1 Total revenue of $398.3 million reduced by $85.0 million due to all Main Event centres and Theme Parks being closed on 17 March and 23 March respectively; 38 Main Event centres
Slide 4: FY20 – Key messages (Cont’d)
FY20 – Key messages (Cont’d) During the pandemic both businesses successfully focused on cash preservation and the development of flexible reopening plans tailored to the current uncertain environment Significant capital was brought in to support the recovery of the businesses from the pandemic
Slide 5: FY20 – Key messages: snapshot of Group performance
FY20 – Key messages A snapshot of Group performance Revenue EBITDA excluding Specific Items1 600.0 80.0 Pre COVID-19 Pre COVID-19 70.0 500.0 60.0 67.1 50.0 400.0 54.5 40.0 74.2 50.6 A$'m A$'m 300.0 48.3 30.0 47.1 20.0 42.3 200.0 416.2 343.8 10.0 19.3 300.4 270.1 100.0 - (2.5) (7.8) (5.7) (10.0) (4.7
Slide 6: FY20 results: Reported vs pro forma
FY20 results: Reported vs pro forma FY20 statutory results were adjusted to remove the impact of AASB 16 Leases Consolidated Reported AASB 16 Pro forma Pro forma results: FY20 Leases FY20 A$m adjustment Current year results were impacted by the adoption of AASB 16 Leases. The new accounting standa
Slide 7: Current vs prior corresponding period
Current vs prior corresponding period Consolidated Reported Pro forma Reported Key factors driving pro forma results: A$m FY20 FY202 FY19 Variance Revenue 398.3 398.3 483.3 (17.6%) Revenue declined 17.6% due to closure of Main Event centres and Theme Parks in mid-late March 2020 Business unit EBIT
Slide 8: Specific Items impacting results
Specific Items impacting results Consolidated A$m FY20 FY19 Specific Items impacting results: Specific Items impacting segment EBITDA: Valuation and impairment losses on assets (17.4) (17.6) The most significant Specific Items in the current period relate to the change in lease accounting standard
Slide 9: Main Event Entertainment
Main Event Entertainment iS ARDENT
Slide 10: Main Event key results overview
Main Event key results overview Strong revenue growth prior to COVID-19 offset by shutdowns and cautious consumer trading; 38 of 43 centres reopened as at 30 June 2020 Reported Pro forma Reported Main Event performance: US$m FY20 FY202 FY19 Variance Revenue declined by 21.7% due to COVID-19 with a
Slide 11: Revenue performance
Revenue performance Constant centre¹ sales up 1.9%3 YTD pre COVID-19 reflecting success in strategic initiatives Constant centre2 annual revenue trend 3 1.9% Constant centre performance: 1.6% Year-to-date revenue performance prior to the onset of COVID-19 was up 1.9%3; last six months were up 4.3%
Slide 12: Key accomplishments during FY20
Key accomplishments during FY20 Significant progress across all aspects of the business Brand & Strategy Guest Experience • Launched new brand identity • Increased guest metric scores to historical highs • Refreshed creative across all channels • Late Night daypart enhancements • Replaced several ag
Slide 13: COVID-19 impact
COVID-19 impact Company acted quickly to address the pandemic, manage cash and secure capital for the near-term Overview of Key Events / Impact Significant sales decline began in late February to Company was burning ~US$0.8 million of cash a week early March during the time of closure All centres sh
Slide 14: Post-COVID financial performance
Post-COVID financial performance Recent sales trend currently exceeding 4-wall breakeven threshold Currently 41 of 44 centres are open Constant centre¹ revenue summary vs pcp for re-opening centres Revenue performance for the re-opened centres has demonstrated steady improvement Various centre
Slide 15: Management’s approach to FY21
Management’s approach to FY21 Maintaining flexibility to grow while prudently managing liquidity Focus Overview Manage through COVID-19 recovery Continue to deliver on industry-leading safety for our guests and team members, rebuild Event sales, and creatively find ways to drive traffic and diversif
Slide 16: RedBird Capital transaction
RedBird Capital transaction Strong equity sponsor to partner with Ardent to support Main Event growth strategy Summary terms of arrangement In June 2020, US$80 million investment in preferred shares for 24.2% of Main Event Entertainment 10% cumulative preferred return Option to acquire an addi
Slide 17: New centre growth and portfolio management
New centre growth and portfolio management Three new centres added during FY20; Growth paused, but ready to restart growth quickly National Footprint 44 operating centres / 16 states Three new centres opened during FY20 with one being in new market; capital costs all under budget and sales perfo
Slide 18: Theme Parks
Theme Parks iS ARDENT
Slide 19: Theme Parks key results overview
Theme Parks key results overview Positive trends and good momentum prior to the COVID-19 pandemic Reported Pro forma Reported Theme Parks performance: A$m FY20 FY202 FY19 Variance Revenue 54.5 54.5 67.1 (18.8%) Attendance and revenue for the division were down 21.0% and 18.8% respectively compared
Slide 20: COVID-19 impact
COVID-19 impact Cash preservation, generation and refinancing during the closure period has put the division in a better than expected position Dreamworld, WhiteWater World and SkyPoint temporarily close Our venues closed on 23 March 2020 and remained closed for the balance of FY20 and into FY21
Slide 21: COVID-19 impact
COVID-19 impact Cash preservation, generation and refinancing during the closure period has put the division in a better than expected position Financial assistance from the Queensland Government A three-year financial assistance package from the Queensland Government totaling $69.9 million was an
Slide 22: Reopening plan
Reopening plan The times call for a measured, disciplined and innovative approach Reopening dates SkyPoint reopened on 10 July 2020 and current trading is cash neutral including support from the JobKeeper scheme Subject to no further COVID-19 restrictions being imposed, Dreamworld and WhiteWater
Slide 23: Reopening plan
Reopening plan The times call for a measured, disciplined and innovative approach Economic environment calls for a focus on targeting the local SEQ drive market International markets may not return for two years and interstate markets are likely to be restricted for some time The only reliable m
Slide 24: Reopening plan
Reopening plan The times call for a measured, disciplined and innovative approach A detailed review of the ride and attraction usage has been carried out and the ride count at Dreamworld will be permanently reduced by two in order to remove duplication. The remaining ride count will be comparable
Slide 25: Summary
Summary The efforts made to preserve and generate cash and secure financing during the closure have positioned the division well to weather uncertainty in the short to medium term We will continue to focus on minimising cash burn by taking a measured and disciplined approach to reopening our ven
Slide 26: Corporate Costs & Capital Management
Corporate Costs & Capital Management
Slide 27: Net debt and cash flow
Net debt and cash flow Reported A$m FY20 As at 25 June 2019 A$m Net debt at 25 June 2019 (87.3) Debt (179.6) Operating cash inflows 52.7 Cash available to AU 68.8 Capital expenditure (cash outflow) (85.9) Cash available to US 23.5 Proceeds from sale of property, plant and equipment 3.9 Total cash fo
Slide 28: Capital structure and funding
Capital structure and funding As at 30 June 2020, the Group has the following debt facilities: Facility limit Drawn Margin on Undrawn Amortisation (US$'m) (US$'m) Maturity drawn amount commitment fees of term loan Funded term debt 124.8 124.8 4 April 2025 6.50% 3.25% 1% per annum Delayed draw term
Slide 29: Corporate costs
Corporate costs Corporate costs and non-recurring significant items have continued to reduce Corporate Costs 20.0 19.2 2.7 15.1 15.5 15.1 15.0 3.5 5.1 10.0 16.5 $'m 15.1 5.6 12.0 5.0 10.0 5.9 - (0.3) (5.0) FY16 FY17 FY18 FY19 FY20 Recurring Corporate Costs Non-recurring significant items 28
Slide 30: Appendices
Appendices ARDENT y)
Slide 31: Appendix 1: Impact of adoption of AASB 16 Leases
Appendix 1: Impact of adoption of AASB 16 Leases On adoption of AASB 16 Leases, the impact on the balance sheet is as follows: Increase/(decrease) in A$m Main Event Theme Parks Corporate Total Assets Right-of-use (ROU) assets 311.1 0.2 0.2 311.5 Total assets 311.1 0.2 0.2 311.5 Liabilities Payable
Slide 32: Appendix 2: Specific Items by business unit – FY20
Appendix 2: Specific Items by business unit – FY20 Consolidated Main Theme Continuing Discontinued A$m Event Parks Corporate Operations Operations Total Specific Items impacting segment EBITDA: Valuation and impairment losses on assets (2.0) (15.4) - (17.4) - (17.4) Valuation gain on investment held
Slide 33: Appendix 2: Specific Items by business unit – FY19
Appendix 2: Specific Items by business unit – FY19 Consolidated Main Theme Continuing Discontinued A$m Event Parks Corporate Operations Operations Total Specific Items impacting segment EBITDA: Impairment of property, plant and equipment (17.6) - - (17.6) - (17.6) Provision for onerous lease contrac
Slide 34: Appendix 3: Reported vs Pro forma FY20 – Main Event
Appendix 3: Reported vs Pro forma FY20 – Main Event Consolidated Reported AASB 16 Pro forma FY20 Leases FY20 US$m adjustment Revenue 232.8 - 232.8 EBRITDA 51.3 - 51.3 Property costs (13.7) (32.4) (46.1) EBITDA1 37.6 (32.4) 5.2 Depreciation and amortisation (37.1) - (37.1) Amortisation of lease asset
Slide 35: Appendix 3: Reported vs Pro forma FY20 – Theme Parks
Appendix 3: Reported vs Pro forma FY20 – Theme Parks Consolidated Reported AASB 16 Pro forma FY20 Leases FY20 A$m adjustment Revenue 54.5 - 54.5 Government subsidies and grants2 5.9 - 5.9 Expenses (84.4) (0.1) (84.5) EBITDA1 (24.0) (0.1) (24.1) Depreciation and amortisation (9.8) - (9.8) Amortisatio
Slide 36: Appendix 4: FY20 capital expenditure and pre-opening expenses
Appendix 4: FY20 capital expenditure and pre-opening expenses Routine Other special Development Pre-opening A$m capex projects capex expenses Main Event 3.7 17.9 36.9 4.2 Theme Parks 8.4 - 14.5 - Total 12.1 17.9 51.4 4.2 35
Slide 37: Defined Terms
Defined Terms GW ARDENT S
Slide 38: Defined terms
Defined terms Defined Terms Description bps Basis points Discontinued Operations Comprised of Bowling & Entertainment, Marinas and Health Clubs DTA Deferred tax asset EBITDA Earnings before Interest, Tax, Depreciation and Amortisation EBITDAR Earnings before Interest, Tax, Depreciation, Amortisation
Slide 39: Defined terms
Defined terms Defined Terms Description Main Event impaired Comprised of Orlando (FL), Jacksonville (FL), Indianapolis (IN), Pittsburgh (PA), Warrenville (IL) and centres Lewisville (TX) PP&E Property, plant and equipment Pre COVID-19 Eight months up to and including February 2020 before COVID-19 be
Slide 40: Disclaimer
Disclaimer This information has been prepared for general information purposes only, is not general financial product advice and has been prepared by Ardent Leisure Group Limited (ABN 51 628 881 603) (ALG), without taking into account any potential investors’ personal objectives, financial situation
Coast Entertainment Holdings — FY2020 Earnings Presentation on 6ix