Kinepolis Group Nv · EURONEXT:KIN
Kinepolis Group Nv — Investor Day (April 2024)
84 slides from Kinepolis Group Nv's investor day presentation, Apr 22, 2024
Slide 1: Value creation in cinema business
Value creation in cinema business Capital Markets Day Lomme, 22 April 2024
Slide 2: Agenda
Agenda Capital Markets Day 1. Intro - Kinepolis at a glance 2. State of the industry • Hollywood & content market • Exhibition market 3. Kinepolis’ core strategy 4. Kinepolis’ expansion strategy 5. What’s next…?
Slide 3: Management present today
Management present today • Eddy Duquenne, CEO Kinepolis Group (speaker) • Joost Bert, President Kinepolis Group • Jeroen Mouton, CFO Kinepolis Group • Eric Meyniel, Chief Box Office Officer (speaker) • Tom De Vos, Chief HR Officer (speaker) • Wim Willems, CIO • Erik Vanden Berghe, General Manager Re
Slide 4: Intro: Kinepolis at a glance
Intro Kinepolis at a glance Eddy Duquenne, CEO
Slide 5: Market complexes in ownership
Market Complexes in Ownership Countries Complexes *** Screens *** Share # % Visitors Belgium 11 138 0% 10 98% France 18 +2 199 +23 4% 11 78% Canada 36 -2 299 -13 13% 3 1% Spain 10 157 6% 3 29% The Netherlands 19 -1 144 -3 11% 13 67% United States 10 164 0% 7 72% Luxembourg 3 22 82% 1 65% Switzerland
Slide 6: Summary financial results FY 2023
Summary financial results FY 2023 Record year 2023: Record-high revenue: +21,1% vs 2022 Record-high EBITDAL: +32,8% vs 2022 Record-high net result: +103,7% vs 2022 Visitors: +20,6% vs 2022 (+16,9% like-for-like); 73,5% vs 2019 like-for-like Record-high sales per visitor, resulting from h
Slide 7: Visitors & revenue per market
Visitors & revenue per market Kinepolis Group, 2023 vs 2019 like-for-like 2023 2019 Country 2023 Visitors 2019 Visitors Variance BO+ITS+B2B BO+ITS+B2B Variance Sales Sales Belgium 6.389.424 8.116.847 -21,3% 137.030.674 135.680.595 1,0% France 5.499.128 7.319.759 -24,9% 69.820.848 72.120.198 -3,2% Sw
Slide 8: Leverage
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Leverage 2,97 2,45 1,54 1,01 1,07 1,22 1,18 1,60 1,78 1,80 2,15 2,33 2,93 -36,71 12,32 3,72 2,50
Slide 9: Earnings per Share
Earnings per Share 3 2 1 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 -1 -2 -3
Slide 10: State of the industry
State of the industry Source: Global Cinema Federation, April 2024 Eric Meyniel, Chief Box Office Officer
Slide 11: Global cinema industry showed important recovery in 2023
THE GLOBAL CINEMA INDUSTRY SHOWED AN IMPORTANT RECOVERY IN 2023, WITH MORE MOVIES RELEASED Growth Recovery Global Box Office 2023 vs 2023 vs 2017 – 2023, billion USD 2022 17–19 Avg GLOBAL CINEMA FEDERATION $41 $42 $42 International Domestic 31% 82% $34 $30 $31 $26 $30 $21 $25 35% 83% $18 $12 Resp: $
Slide 12: 8 countries achieved revenue > 80% of 2019
8 COUNTRIES ACHIEVED REVENUE > 80% OF 2019 Box Office in 2023 vs 2019 level %, USD, selected countries GLOBAL CINEMA FEDERATION 99% 93% 92% 91% 86% 85% 83% 83% 79% 79% 77% 77% 76% 75% 75% 72% 65% 62% 60% 58% 52% 12
Slide 13: 2023 box office had increased variety, volume and quality of blockbusters
2023 BOX OFFICE HAD INCREASED VARIETY, VOLUME AND QUALITY OF BLOCKBUSTER FILMS JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER GLOBAL CINEMA FEDERATION 13
Slide 14: Number of wide releases not yet recovered to pre-pandemic levels
HOWEVER, THE NUMBER OF WIDE RELEASES HAS NOT YET RECOVERED TO PRE-PANDEMIC LEVELS… Number of Studio wide releases by year Box Office GLOBAL CINEMA FEDERATION 2019 – 2023, North America 2023 vs 2019 86 87 -23% -21% 81 67 60 59 2017 2018 2019 2021 2022 2023 14 Source: The Numbers
Slide 15: Due to strikes, recovery is delayed beyond 2024
…AND NOW DUE TO STRIKES, RECOVERY IS DELAYED BEYOND THE 2024 YEAR… Brazil 7% UK+Ireland 5% Australia -4% GLOBAL CINEMA FEDERATION Mexico -11% Japan -17% Spain -17% USA -18% Germany -19% Peru -28% Chile -43% Argentina -54% IMPACT 1 OF THE DUAL STRIKES LACK 2 OF BLOCKBUSTERS IN FIRST 2 FILMS PUSHED FR
Slide 16: Weaker release calendar in 2024
…MAINLY DUE TO A WEAKER RELEASE CALENDAR IN 2024, WHICH PRESENTS A CHALLENGING YEAR AHEAD Number of Studio wide releases by year 2019 – 2023, 2024 Est., North America GLOBAL CINEMA FEDERATION 86 87 81 67 64 60 59 2017 2018 2019 2021 2022 2023 2024E Source: The Numbers 16
Slide 17: Research shows customers want to see films in theaters
RESEARCH SHOWS THAT CUSTOMERS WANT TO SEE FILMS IN THEATERS... GLOBAL CINEMA FEDERATION 7 in 10 75% 1 in 3 U.S. consumers enjoy the experience of of U.S. consumers intended to go to U.S. consumers say they would go to going to the movie theater movie theaters more often than they did the movies more
Slide 18: Return of all segments when there is a film they want to see
… DATA IS ALSO PROVING THE RETURN OF ALL SEGMENTS WHEN THERE IS A FILM THEY WANT TO SEE What customers are SAYING What customers are DOING 90% 74% GLOBAL CINEMA FEDERATION 98% pick movies as their opt to watch a film Attended Cinema by Age (2019 v 2023) believe movies can go-to option when in the th
Slide 19: What's happening in Hollywood
What’s happening in Hollywood New entrants
Slide 20: In the Grey / Guy Ritchie / Conclave
IN THE GREY GUY RITCHIE CONCLAVE
Slide 21: Venom: The Last Dance
sre Oa Beep Cory AQUIET PLACE VENOM THE LAST DANCE sLAqiATOR SPIDER-MAN: BEYOND THE SPIDER-VERSE UNTITLED SONY / MARVEL,
Slide 22: On top of the line-up
On top of the line-up • Importance of ‘experience’ – quality & comfort / success of premium formats • Emerging success of World Cinema • Event cinema – exclusive events/ direct distribution • Loyalty subscription programs
Slide 23: No evidence of cannibalisation between cinema and streaming
No evidence of cannibalisation between cinema and streaming (source: Market update BNP Paribas Fortis, June 2023) • Recent market analyses demonstrated limited cannibalisation between streaming and cinema • Frequent moviegoers are largely exposed to and high consumers of streaming opportunities • He
Slide 24: Theatrical release remains the driver for ROI of a movie
Theatrical release remains the driver for ROI of a movie
Slide 25: Exhibition industry demonstrated stable long-term growth
Exhibition industry demonstrated stable long-term growth
Slide 26: Exhibition landscape: Kinepolis vs peers
Exhibition landscape Kinepolis vs peers
Slide 27: Exhibition landscape per market - Europe
Exhibition landscape per market - Europe France Belgium Luxembourg Circuit # Locations Market Share Circuit Marketshare Circuit Marketshare Pathé Cinémas 78 21,9% Kinepolis 41,48% Kinepolis 82,55% Independent: FR 578 15,6% Pathé 15,86% CDAC 16,33% Cgr 73 11,9% UGC 14,24% Caramba 1,13% Ugc-france 51
Slide 28: Exhibition landscape per market - Europe
Exhibition landscape per market - Europe Netherlands Spain Circuit Marketshare Circuit Marketshare Cinesa 7,54% Pathé 44,88% Kinepolis 6,40% Vue 12,33% Yelmo 3,00% Kinepolis 11,04% Ocine 2,65% Movie Unlimited 0,60% Pechuan 1,57% Other 31,15% Independents 1,28% Total 100% Mk2 1,08% Odeon 0,94% ACEC 0
Slide 29: Exhibition landscape per market Canada/US
2023 Gross Market 2023 Gross Market Canada Box Office ($MM) Share United States Box Office ($MM) Share Cineplex 652 74,5% AMC Theatres 2.124 26,9% Landmark Cinemas 114 13,1% Regal Cinemas 1.409 17,8% Cinema Guzzo 16 1,8% Cinemark Theatres 1.319 16,7% Cinema RGFM 11 1,3% Marcus Theatres 244 3,1% Cine
Slide 30: EBITDA per visitor: Kinepolis vs peers
EBITDA per visitor Kinepolis vs peers 6,00 5,00 4,00 3,00 2,00 1,00 0,00 €5,28 €2,57 €1,62 EBITDA per visitor €5,13 €2,99 €0,92 2023 @Kinepolis mAMC m Cinemark © Cineplex Film Ent. €1,82 €0,79 €0,22 2022 Marcus Theatres €2;24
Slide 31: Evolution leverage ratio
Evolution Leverage Ratio: NFD Excl. Lease Liabilities / EBITDAL* 20,00 12,32 10,00 5,04 3,99 3,72 3,3 2 2,15 2,67 2,33 2,5 2,93 2,5 0,00 Covid-19 Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec 2017 2018 2019 2020 2021 2022 2023 -10,00 -13,16 -20,00 -30,00 -36,71 -40,00
Slide 32: Debt maturity profile
€ 250 000 000 Priv. Plac. 7,5Y 225 000 000 225 000 000 200 000 000 175 000 000 150 000 000 RCF* 120 000 000 125 000 000 Priv. Plac. 8Y (Dec) 100 000 000 Bullet loan (Jan) 60 000 000 80 000 000 Priv Plac. 10Y 75 000 000 65 000 000 50 000 000 25 000 000 Priv Plac. 10Y (Jan) 34 600 000 0 2024 2025 2026
Slide 33: Management style and strengths
• Facts & figures-driven management style • Continuous optimisation of break-even point (5% exercise since 2008) • Entrepreneurship & Star plans • Improvement potential in M&A • Real Estate position / no backlog in maintenance • Debt ratio • Investment capacity (premium formats)
Slide 34: Kinepolis' core strategy
Kinepolis’ core strategy
Slide 35: Market growth trend
Historical decline in Cinema attendance But year-over-year Market growth Box Office Growth Trend Premium Higher average More consumption moviegoing ticket prices of food experiences and beverages
Slide 36: Best cinema operator, best marketer, best real estate manager
core strategy 3 pillar strategy Best cinema operator Best marketer Best real estate manager
Slide 37: Self-learning organisation based on business ownership
core strategy 3 pillar Best cinema operator strategy Self-learning organisation based on Business ownership Customer Employee Financial Satisfaction Satisfaction KPIs (CSI) (PSI) ESG KPIs
Slide 38: Local organisation structure
L Theatre Manager O C Human Experience Manager ITS Manager BO Manager B2B Account A Resources complex complex complex Manager L Functional Cooperate 23/04/2024
Slide 39: National organisation structure
N Country Manager Operations A Management T Operations Support Assistant I Manager O N A Controller HR Manager Nat. Manager Experience NTM (only LUX) Nat. Manager In-Theater Sales B2B Sales Manager L L Theatre Manager O C Human Experience Manager ITS Manager BO Manager B2B Account A Resources comple
Slide 40: National organisation structure
N Country Manager Operations Country Manager B.O. Sales & Marketing A Management T Operations Support Assistant Marketing Manager Content Manager I Manager O N A Controller HR Manager Nat. Manager Experience NTM (only LUX) Nat. Manager In-Theater Sales B2B Sales Manager L L Theatre Manager O C Human
Slide 41: Corporate organisation structure
CEO Business Intelligence Studio / R&D Remodeling/refresh & Support (internal and external) CBOO Concept and planning Business intelligence Execution and refresh Support MRF/CSI/PSI/TSI Head of CRM & Digital International Head Forecasting BO Marketing Manager of Event Cinema System contr
Slide 42: Group organisation chart
Int. auditor DPO CEO Personal CBOO CFO CIO Assistant BOSM F&A R&C ICT Legal HR Comm. Real Estate KFD DCS (*) Brightfish • Dealerships • Sales Cinema • Concessions • Projects • Construction • Maintenance • Subdealerships • Tax sheltering • Repair & Maintenance Screenadvertising operations • Developme
Slide 43: Lowering the break-even point
core strategy Lowering the break-even point Yearly improvement exercise proportionate to (a hypothetical) -5% visitors more customer revenue-boosting efficiency experience innovations measures
Slide 44: Empowering employees and business ownership
Empowering employees Business ownership to actively contribute to the stimulates development of the company entrepreneurship and its results Innovation Lab Talent factory all employees are encouraged to high internal think out of the box and come mobility rate up with new ideas (1 in 3 vacancies fil
Slide 45: Employee survey response rate 87%
• Response rate was never higher: 87% Highest PSI scores Lowest PSI scores “I’m able to provide friendly “My suggestions are taken into customer service” (90,86) account for purposes of improving customer service and/or the “I know what is expected of me” organisation” (74,69) (88,19) “I am satisfie
Slide 46: Best marketer
core strategy 3 pillar Best marketer strategy Continuously investing in the relationship with our visitors to provide an offer that meets their wishes and needs. Active Digital Experience programming marketing
Slide 47: Multi-year Star Plan
Multi-year Star Plan To boost attendance & Box Office Content Push blockbusters nie -B- 1 Enlarge (value seekers - world cinema - alternative content) Preshow Centralized preshow ao [e0\ Cane] Gamification Movie Now Loyalty a Loyalty program i Movie card Digital marketing = Renew website 3B Retentio
Slide 48: Best real estate manager
core strategy 3 pillar strategy Best real estate manager Committed to continuing the optimal management, use and management of our unique real estate portfolio.
Slide 49: Long-term real estate strategy
Long-term real estate strategy • Real estate value going concern • Real estate value non-going concern • Real estate optimisation • Capacity ‘intra-muros’ and ‘extra-muros’ • Capital underemployed or unemployed • New concepts and traffic generators • Real estate development
Slide 50: Landmark Waterloo, Ontario
Visitors & EBITDA In ‘000 Revenue Landmark Waterloo, Ontario
Slide 51: Kinepolis' expansion strategy
Kinepolis’ expansion strategy
Slide 52: Improvement potential: from 23 to 109 cinemas
Based on Improvement potential Derived from core strategy Integration of Kinepolis’ way of working and management structure From 23 to 109 Cinemas to date (Europe and North-America)
Slide 53: Main target: from 23 to 111 cinemas
Based on Improvement potential Main target Derived from core strategy Without excluding a once in a lifetime opportunity From 23 to 111 1 2 Cinemas to date (Europe and North-America Family-held,Integration mid-size of Preference to have businesses real estate Kinepolis’ way in macro- on board 3 of w
Slide 54: Acquisition and expansion timeline
Covid-19 2015 Takeover Utopolis 2016 2016 2019 2020-2022 cinemas in The Reopening Opening of 5 new- Takeover MJR Opening of Netherlands, Lux IMAX build cinemas Digital 5 new- & France Brussel (Dordrecht, Breda, Cinemas (US) builds (FR Entrance Lux (BE) Granada, Fenouillet, 10 multi- and (2), NL (2),
Slide 55: Start expansion: Landmark Waterloo, Ontario
Start expansion Visitors & EBITDA In ‘000 Revenue 190.000 650.000 180.000 600.000 170.000 160.000 550.000 150.000 140.000 500.000 130.000 450.000 120.000 110.000 400.000 100.000 90.000 350.000 80.000 300.000 70.000 60.000 250.000 50.000 40.000 200.000 30.000 150.000 20.000 10.000 100.000 2009 2010 2
Slide 56: What's next…? Key elements for future growth
What’s next…? Key elements for future growth
Slide 57: Internal expansion
Internal expansion
Slide 58: Roll-out of premium formats
sustainable future growth Roll-out of premium formats and new product development Internal expansion For a state-of-the-art experience Supported by the newest cinema technologies premium formats & products Supported by market demand for more experience Premium formats & products IMAX 4DX Laser Ultra
Slide 59: Roll-out of premium formats: two-fold strategy
sustainable future growth Roll-out of premium formats and new product development Internal expansion premium formats & products Two-fold strategy Supported by market demand for more experience Adding premium Roll out Kinepolis product capacity concepts in in Europe Canada & US
Slide 60: ScreenX, 270° viewing experience
ScreenX, 270° viewing experience 60
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Slide 62: Laser ULTRA
Laser ULTRA combines the unique image quality of Barco’s 4K laser projector with immersive Dolby Atmos sound
Slide 63: 4DX movie experience
4DX – 4D movie experience with moving seats, weather simulations and scent effects, perfectly synchronised with the on-screen action.
Slide 64: Premiere Seats, Landmark Waterloo
Premiere Seats, Landmark Waterloo 64
Slide 65: Experience it in Premiere Seats
EXPERIENCE IT IN Premiere/Seats Heated Seats | Power Headrests | Side Tables Coat Hooks | Storage Space | Private Enclosure ® = for MOVIE LOVERS
Slide 66: MJR Theatres Premier VIP Seats
MJR. THEATRES Premier R VIP SEATS UNSEAT YOUR EXPECTATIONS * Enjoy more personal space + Heated reclining seats * Side tables » Coat hooks + Storage space ALL WITHIN A PRIVACY ENCLOSURE Reserve Now at Select Locations
Slide 67: Cosy Seats Plus, Kinepolis Leidschendam
Cosy Seats Plus, Kinepolis Leidschendam (NL) 67
Slide 68: Pilot testing LUX Loungers, MJR Theatres
Pilot testing LUX Loungers, MJR Theatres (US)
Slide 69: Concession experience
Concession experience
Slide 70: Content drives attendance, experience drives revenue
C O N T E N T D R I V E S A T T E N D A N C E E X P E R I E N C E D R I V E S R E V E N U E
Slide 71: External expansion
External expansion
Slide 72: Mergers and acquisitions
Mergers and acquisitions Smaller, family-held businesses We combine a lower Supported by Kinepolis than average risk outperforming the market profile, with a higher than average return.
Slide 73: Value creation as driver for M&A
Value creation as driver for M&A Targetting family-held mid-size businesses M&A opportunities will derive from different Mergers and acquisitions market scenarios, depending on market recovery Supported by Kinepolis outperforming the market Break-even 200% EBITDA in case of M&A at attractive point l
Slide 74: Key elements for future growth
Further recovery visitor numbers driven by Hollywood offering expected to be fully recovered by 2025/2026 Key elements Internal expansion (premium concepts) for future growth External expansion 74
Slide 75: Jo De Wolf and Els De Keukelaere
Jo De Wolf Els De Keukelaere CEO Montea NV CFO Ekopak NV, Experienced corporate auditor Extensive Real Estate Particular interest in ESG domain expertise
Slide 76: ESG update
ESG update Anneleen Van Troos, Corporate Communication Mgr Erik Vanden Berghe, General Manager Real Estate
Slide 77: ESG focus areas
ESG Focus areas Best cinema operator Best marketer Best real estate manager Development & Employee well-being, Customer Experience Green and resilient building Responsible waste empowerment of employees diversity and inclusion excellence & infrastructure management
Slide 78: ESG governance and double materiality analysis
• ESG governance • Double materiality analysis • Overview ESRS data requirements • Data collection processes & reporting
Slide 79: Absolute emissions value (tCO2e)
2021* 2022 2023 (atypical year) Absolute 19 867.77 27 485.14 25 442.88 value (tCO2e) tCO2e/M EUR 74.58 54.98 42.02 turnover
Slide 80: Towards net zero emissions
Roll out of intelligent building management systems save up to 50% energy led by International Efficiency Engineer for Towards consumption technical installations net zero emissions Ongoing investments in transition to laser projection by 2050 77% of Kinepolis’ 60% at European screens Group level la
Slide 81: Towards net zero emissions
Roll out of intelligent building management systems Ongoing investments in Towards transition to laser projection net zero emissions Reduce emissions from car fleet by 2050 Step up waste management practices
Slide 82: Creating value for employees, customers, shareholders and partners
Creating value for employees, customers, shareholders and partners as well as the environment and communities Kinepolis is part of.
Slide 83: Ready for the future
READY F O R T H E F U T U R E
Slide 84: Thank you
KINEPOLIS