Six Flags Entertainment Corporation · NYSE:FUN
Six Flags Entertainment — Cedar Fair — Investor Presentation (June 2020)
37 slides from Six Flags Entertainment's investor presentation, Jun 1, 2020
Slide 1: Investor Presentation June 2020
Investor Presentation June 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the information in this presentation that is not historical in nature constitutes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements as to the Com
Slide 3: FUN Overview
FUN Overview 2
Slide 4: Cedar Fair Executive Team
Cedar Fair Executive Team Brian Witherow Duff Milkie CFO GC Tim Fisher COO Kelley Semmelroth CMO Richard Zimmerman Dave Hoffman CEO CAO Craig Heckman HRO 3
Slide 5: Our Vision and Mission
OUR VISION TO BE THE PREFERRED CHOICE for regional entertainment. OUR MISSION TO MAKE PEOPLE HAPPY by providing them fun, dynamic and memorable experiences they can share with their family and friends year after year. 4 4
Slide 6: Parks Portfolio Key Statistics
PARKS PORTFOLIO KEY STATISTICS Own and operate Entertain 11 28M amusement parks visitors annually 9 outdoor water parks 841 (in-park) rides and attractions 4 124 outdoor water parks roller coasters (unique gates) 2,300+ 1 hotel rooms indoor water park (hotel feature) 5
Slide 7: 2019 Operating Results
Ended 12/31/19 Ended 12/31/19 2019 Operating Results w/ Schlitterbahn Same-park Basis $1.47B $1.43B Net Revenues 3% 4% 9% 6% Net Revenues Growth 1% 8% 5% Attendance 1% 1% In-Park Per Capita Spending 11% 8% Out-of-Park Revenues 6
Slide 8: Record 2019, Strong Start to 2020 prior to COVID-19
Record 2019, Strong Start to 2020 prior to COVID-19 TOTAL REVENUE ADJUSTED EBITDA(a) ($ in millions) ($ in millions) 1,600 550 1,500 $1,475 $505 500 $481 $479 $468 1,400 $1,349 $459 $1,322 $1,289 450 $431 1,300 $1,236 $425 $1,160 $391 1,200 $1,135 400 $375 $1,068 1,100 $1,028 350 1,000 900 300 2011
Slide 9: Strong Long-Term Growth and Recession Resilient
Strong Long-Term Growth and Recession Resilient Financial Crisis $600 2009 = (11.0%) 2010 = 13.2% Acquisitions: Early 2000’s 1992 – Dorney Park $500 Early 1990’s Recession 1995 – World of Fun Recession 2001 = (6.1%) 2002 = 11.4% 1997 – Knott’s Berry Farm $400 2001 – Michigan’s Adventure $300 2004 –
Slide 10: Compelling Investment Rationale
Compelling Investment Rationale 1 Best-in-class parks and brands with loyal, high-repeat customer base 2 High quality assets and significant real estate holdings (and underlying asset value) 3 High barriers to entry 4 Strong business model and steady growth in revenues and free cash flow 5 Resilient
Slide 11: COVID-19 Measures
COVID-19 Measures 10
Slide 12: COVID-19 – Senior Secured Notes Offering Completed
COVID-19 – Senior Secured Notes Offering Completed • Secured $1.0 billion of 5.5% senior secured notes due 2025 • $463 million used to repay a portion of senior secured term loan • Credit facility amended, suspends total leverage ratio financial maintenance covenant after Q1 2020 • Total leverage ra
Slide 13: COVID-19 – Measures Taken to Reduce Monthly Cash Burn
COVID-19 – Measures Taken to Reduce Monthly Cash Burn • Proactive steps taken to reduce operating expenses during the COVID-19 pandemic: • Eliminated nearly all of our seasonal and part-time labor costs until the parks prepare to reopen • Suspended all advertising and marketing expenses, and reduced
Slide 14: COVID-19 – Liquidity Outlook
COVID-19 – Liquidity Outlook • Based on the measures taken to date, we anticipate our cash burn rate during the time park operations are fully suspended will be approximately $30-40 million per month on average including: • A reduced level of operating costs for as long as the parks remain closed th
Slide 15: COVID-19 – Customer Initiatives
COVID-19 – Customer Initiatives • Extended 2020 season pass privileges through the end of 2021 season • Extension represents effort to proactively manage demand for the 2021 season • Helps to compensate passholders for any lost operating days during 2020 due to the effects of the pandemic • Paused c
Slide 16: Long-Range Plan
Long-Range Plan 15
Slide 17: CAPEX – Long-Term Strategy
CAPEX – Long-Term Strategy Capital investment in new attractions and infrastructure needs migrating toward 9% of revenues over the long • Maintain position as the leader in world- term, before investment in adjacent development class thrill rides and attractions • Broaden park offerings, improve gue
Slide 18: Consumer Insights Research
Consumer Insights Research We’ve held numerous Focus Groups to explore which types of entertainment experiences are most likely to motivate visitation. Key Findings: • Something for everyone - consumers are seeking entertainment options that can accommodate all types of people, ages and interests •
Slide 19: Consumer Insights Research: Top Reasons to Visit
Consumer Insights Research Rides and events remain top reasons for visiting our parks, with high-park-interest guests driven by water parks and family coasters. Top Reasons to Visit Parks: • Family Rides • Thrill Coasters • Water Rides • Seasonal Events • Anniversary Celebrations 18
Slide 20: Long-Range Plan: Core Strategies
Long-Range Plan: Core Strategies • Broaden the Guest Experience o Aimed at driving more visits from existing guests and incremental visits from new, unique guests o Traditional rides, such as roller coasters and water attractions, still play an important role o Expanded use of limited-duration event
Slide 21: "Seasons of FUN" Model: Creates Urgency to Visit
“Seasons of FUN” Model: Creates Urgency to Visit 20
Slide 22: Offer Guests Immersive Experiences
Offer Guests Immersive Experiences 21
Slide 23: Food & Beverage Playing A Key Role
Food & Beverage Playing A Key Role • Our research confirms food and beverage today play a critical role in the guest experience • Consumers want unique experiences, offerings they can’t get at home • We have enhanced existing F&B facilities, added more immersive dining experiences • Executive chefs
Slide 24: The Changing Landscape of Food & Beverage
The Changing Landscape of Food & Beverage 23
Slide 25: Popular 4th Quarter Events Extend Calendar, Add Growth
Popular 4th Quarter Events Extend Calendar, Add Growth • 2016 – first year for the event (one park with approximately 140,600 guests in attendance) • 2019 – six parks with a combined attendance of approximately 1.2 million • Canada’s Wonderland – extraordinary 1st year • Haunt’s popularity has incre
Slide 26: Season Pass Channel Growth Remains Strong
Season Pass Channel Growth Remains Strong 2019 • Season pass visitation comprised 53% of 2019 Retail / total attendance (same park), up from 27% in Other Season 2009 Pass Group • Season passes sold for 2019 exceeded 2.6 million Sales units, nearly double the number sold in 2009 Season Pass Group Sal
Slide 27: Evolution of the Season Pass Program
Evolution of the Season Pass Program Goal: Transition program to Long-term Relationship-based model (from Seasonal Transactional) . Loyalty Program builds lifetime value for guests Objectives: . Address affordability concerns for value-oriented guests while maintaining admissions price integrity . D
Slide 28: PassPerks Loyalty Program
PASSPERKS Loyalty Program Objective: Deliver surprises and provide incentives to our most engaged guests – the season passholder • Offer a program that resonates with season passholders • Play into our guest’s emotions by delivering the unexpected • Drive incremental visits from passholders througho
Slide 29: SP Payment Plan + Loyalty Program Meet Objectives
SP Payment Plan + Loyalty Program Meet Objectives CEDAR FAIR SEASON PASS PROGRAM Subscription Key Objectives Payment Plan Loyalty Program + Model Affordability YES NO YES Retention NO YES YES Visitation NO YES NO Pricing Power YES YES NO Purchase Urgency YES NO NO 28
Slide 30: Market Sizing Study
Market Sizing Study Performed to better measure the current penetration of markets feeding our parks and gain a better understanding of the consumer segments within those markets. Key Findings: • Strong attendance penetration among demographic groups in decline o Lowest penetration among groups with
Slide 31: Evolution of the Accommodations Channel
Evolution of the Accommodations Channel • Substantial growth of accommodations portfolio last 8 years: o Total hotel rooms grew to more than 2,300 from 1,900 (includes Schlitterbahn and Sawmill Creek Resort) o Total luxury RV sites increased to more than 600 • Accommodations Revenue: o > $80 million
Slide 32: Adjacent Development – Accommodations
Adjacent Development – Accommodations • Charlotte – adjacent to Carowinds • Sandusky – minutes from Cedar Point • Opened November 2019 • 236-room hotel and conference center, • 130 well-appointed suites restaurants, Tom Fazio-designed golf course • Year-round accommodations • Undergoing rolling reno
Slide 33: Cedar Point Sports Center
Cedar Point Sports Center Outdoor Facility • Opened March 2017 – performance is pacing well ahead of the original pro-forma model • 10 multi-use fields with clubhouse • Baseball, softball, soccer, lacrosse Indoor Center • Opened January 2020 • 145,000 square feet • Court space accommodates 10 basket
Slide 34: Key Takeaways
Key Takeaways • COVID-19 Measures o Timely, proactive steps taken to further strengthen financial position if long-term disruption occurs o Completed $1 billion notes offering and dramatically reduced cash burn; parks in state of readiness o Suspended quarterly unitholder distribution payments until
Slide 35: Appendix
Appendix 34
Slide 36: Capital Structure – Debt Maturities
Capital Structure – Debt Maturities . Pro-forma total debt Amounts in Millions outstanding of $2.7B at 1200 Revolver Capacity 03/29/20 Term Debt Senior Notes . Pro-forma cash on hand 900 totaled $532M at 03/29/20 . Pro-forma Consolidated Leverage Ratio at 03/29/20 of 600 5.6x (4.6x net) $450 $1,000
Slide 37: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 36