Cineworld — FY2019 Earnings Presentation
36 slides from Cineworld's earnings presentation, Mar 12, 2020
Slide 1: Cineworld Group FY 2019
Cineworld Group FY 2019 12 March 2020 0
Slide 2: Key highlights of 2019
Key highlights of 2019 $4.4bn $1,033m 275m $190m Revenue EBITDA Admissions Regal synergies 787 300,000+ 386 10 Sites Members Premium Formats 2019 major refurbishments Note: Unless stated all figures are presented under IAS 17 to provide comparability following the adoption of IFRS 16 leasing standar
Slide 3: Cineworld Today – 787 sites and 9,500 screens
Cineworld Today – 787 sites and 9,500 screens Transformative acquisition with operations in 10 countries with 787 sites and 9,500 screens UK & Ireland Poland United States 128 1,180 Czech 35 381 546 7,178 Republic Slovakia 13 124 3 29 Hungary Romania 18 158 26 237 Bulgaria 7 77 x sites x screens Isr
Slide 4: Financial Review
Financial Review
Slide 5: Financials at a Glance
FINANCIALS AT A GLANCE Admissions Revenue Adj. EBITDA Adj. PBT 275m $4.4bn $1,033m 475m -10.8% -6.2% 23.6% (+0.8%) +13.8% Free Cash Flow Net Debt Adj. EPS Full year Dividend pre growth Capex $821m $3.5bn 28.0c 15.5c 3.4x ND/EBITDA +8.9% +3.3% Note: Unless stated all figures are presented under IAS 1
Slide 6: 2019 Performance by Segment
2019 Performance by Segment United States UK & Ireland ROW Revenue: $3,210m -9.0% $648m -2.7% $512m +10.0% ATP $10.5 +1.6% $8.4 +0.3% $5.5 +3.4% SPP $5.4 +9.1% $3.3 +4.8% $2.6 +9.6% Adj. EBITDA: $776m -5.0% $117m -7.3% $140m +8.5% EBITDA margin: 24.2% +1.1% 18.0% -% 27.4% +1.0% Note: Unless stated a
Slide 7: Delta Regal vs. Industry Box Office
Improvement in Regal market share North American Market Share: Delta Regal vs. Industry Box Office 5% Avengers: Endgame Frozen 2 Jumanji 3% Delta Regal vs. Industry Box Office 1% (1%) (3%) (5%) (7%) (9%) (11%) (13%) (15%) Weeks 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47* 49 5
Slide 8: Group Profit and Loss – Pre IFRS 16
Group Profit and Loss – Pre IFRS 16 Statutory $m 2019 2018 Cost of sales Revenue 4,369.7 4,119.1 Cost of sales (3,280.9) (3,125.4) Gross profit 1,088.8 993.7 30% G&A (105.8) (100.5) $3.3bn Cash generated from JV 49.6 32.2 70% Adjusted EBITDA 1,032.6 925.4 D&A1 (321.3) (295.5) Variable Fixed Adj. Ope
Slide 9: 2019 Free Cash Flow
2019 Free Cash Flow Free cash flow generation of $821m excluding growth capex $1,402m $613m $43m $23m $22m $877m $56m $821m $371m $449m Operating Cash Rental cost Cash received Exceptional costs Cash to be Adj. cash flow Maintenance Free Cash flow Growth Net Free Cash flow Flow from JV received from
Slide 10: 2019 Capex
2019 Capex FY normalised Cash flow of $351m 2018 Capex Theatre Maintenance & Digital $m New Sites Refurbishment Other Recognised in Total Enhancement Equipment Projector 2019 US 72 64 51 39 49 10 30 315 UK 49 44 4 12 - 2 6 117 ROW 2 8 2 5 - 3 3 23 Landlord contribution - (28) - - - - - (28) Total 12
Slide 11: Capital allocation
Capital allocation 1 Maintenance Capital Expenditure 2 Deleveraging 3 Dividend 4 Growth Capital Expenditure 10
Slide 12: Strong focus on deleveraging post acquisitions
Strong focus on deleveraging post acquisitions 2017 PF for 2019 PF for Regal Cineplex acquisition acquisition 2013 PF for Cinema City acquisition 4.1x 4.1x 3.4x Towards 3.0x 2.4x 1.2x 2013 PF 2017A 2017 PF 2019A 2019A PF 2021E 4.8x Note: Pre IFRS16 impact and excluding $202m of dissenting shareholde
Slide 13: 2020 Outlook
2020 Outlook Solid performance year to date Additional $40m synergies from the Regal acquisition to be achieved No material impact so far from coronavirus with robust contingency plans in place across our business Group to maintain historical dividend policy1 Proposed acquisition of Cineplex for $2.
Slide 14: Business Update
Business Update
Slide 15: 2019 Operational highlights
2019 Operational highlights • Synergies upgraded from $100m at the time of the acquisition to $190m • Refurbishment plan on track – 87 landlord agreements achieved • Strengthened our partnership with NCM • Enhanced concession offering in the US: Lavazza coffee bars and alcohol bars (+35 locations) C
Slide 16: 2020 Priorities
2020 Priorities To be “The Best Place to Watch a Movie” Continue to expand and enhance our estate 1 Generate return on investment from refurbishments 2 Continue to provide the best cinema experience 3 Continue to be a innovating operators Continue to deliver on synergies 4 Integration of Cineplex 15
Slide 17: Refurbishments
1 Refurbishments Continued investment in our US asset Key assumptions Key Targets post refurbishment per site • Admissions: +5% to +10% 20 sites to be refurbished in 2020 Over 60 • ATP: +10% 100 sites over next 3 yearsAgreed and Signed • SPP: +10% • Other savings: Maintenance Renovations 87 agreemen
Slide 18: Refurbishments
1 Refurbishments BEFORE AFTER Union Square, NY - April 2020 17
Slide 19: Refurbishments
1 Refurbishments BEFORE AFTER Union Square, NY - April 2020 18
Slide 20: Expansion
1 Expansion Expand our estate in 2020 with 12 new sites and 127 screens United States UK & Ireland ROW 7 90 2 19 3 18 sites screens sites screens Site screens Essex, NY York, UK Mammut, Hungary 19
Slide 21: Provide the best cinema experience
2 Provide the best cinema experience Further expansion of concession offerings >120 >120 >100 > 50 Lavazza Coffee shops B.Fresh Bars Starbucks 20
Slide 22: Be Innovating Operators
3 Be Innovating Operators Continued investment in premium formats driving volume and ticket price growth December 2019 135 118 83 50 Medium ~150 ~150 ~150 ~150 Term Plans 21
Slide 23: Be Innovating Operators
3 Be Innovating Operators Roll out of laser projectors across the estate Energy saving of up to 30% Brighter picture significant operating cost savings 22
Slide 24: Execution of synergies
4 Execution of synergies $150m synergies achieved in 2019 – additional $40m to be achieved in 2020 Post-show advertising 300,000+ members Platinum spot Online penetration: 40% EBITDA and margin accretive $10-15m EBITDA Impact Online booking +14% 23
Slide 25: Integration of Cineplex
4 Integration of Cineplex We upgraded synergy guidance… … increased US profitability…. … and reduced leverage Regal acquisition Target combination benefits ($m) US Adj. EBITDA margin Net debt (US$bn) +200bps (0.5bn) +$90m $190m $4.0bn 24.2% $3.5bn $100m 22.2% Mar-18 Dec-19 2017 PF 2019 Mar-18 Dec-19
Slide 26: Integration of Cineplex
4 Integration of Cineplex Subscription program Online US$130m synergies Double-digit accretive Concessions to earnings and free cash flow Cinema advertising Cost efficiency 25
Slide 27: 2020 film slate
2020 film slate WEST SIDE STORY HALLOWEEN KILLS’
Slide 28: 2021 and beyond
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Slide 30: Appendix
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Slide 31: Sites and Screens
Sites and Screens Sites Screens 01/01/2019 Opening Closing 31/12/2019 01/01/2019 Opening Closing 31/12/2019 Slovakia 3 - - 3 29 - - 29 Romania 26 - - 26 237 - - 237 Poland 34 1 - 35 377 4 - 381 Israel 11 - - 11 136 1 (1) 136 Hungary 17 1 - 18 153 5 - 158 Czech 14 - (1) 13 133 - (9) 124 Bulgaria 6 1
Slide 32: IFRS 16 Update
IFRS 16 Update No impact on No impact on No impact on INCREASE Operations Economics Cash Flow Elected “modified retrospective” approach with no restatement of prior year results Impact on financial statements: Debt and assets increase as operating leases are brought onto the balance sheet Adjusted E
Slide 33: IFRS 16 – Income Statement Impact
IFRS 16 – Income Statement Impact Income Statement on a adjusted basis 2019 2019 2018 2019 After IFRS 16 $m IFRS 16 (statutory Before IFRS 16 (statutory impact accounts) accounts) Revenue 4,369.7 - 4,369.7 4,119.1 Cost of sales (3,280.9) 545.0 (2,735.9) (3,125.4) Gross profit 1,088.8 545.0 1,633.8 9
Slide 34: IFRS 16 – Income Statement Impact
IFRS 16 – Income Statement Impact Income Statement on a statutory basis 2019 Profit Related 2019 2019 $m IFRS 16 to sale and Before IFRS 16 After IFRS 16 impact leaseback Revenue 4,369.7 - - 4,369.7 Cost of sales and other costs (3,342.4) 547.3 - (2,795.1) Other income 5.3 0.4 - 5.7 Adjusted EBITDA
Slide 35: Disclaimer
Disclaimer This presentation contains forward-looking statements that may or may not prove accurate. Forward-looking statements are statements that are not historical facts; they include statements about Cineworld’s beliefs and expectations and the assumptions underlying them. For example, statement
Slide 36: itn
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