Hollywood Bowl Group Plc · LSE:BOWL
Hollywood Bowl — FY2017 Earnings Presentation
40 slides from Hollywood Bowl's earnings presentation, Dec 11, 2017
Slide 1: Year ended 30 September 2017
Vear ended 30 September 2017 hollywood bowl
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Slide 3: Continued delivery of our growth strategy
Continued delivery of our growth strategy Outputs: Defivering vatue Hollywood Bow! GREAT CUSTOMER CaF EXPERIENCE BOWLPLEX MOTIVATED AND ENGAGED TEAM FINANCIAL PERFORMANCE AND KPI DELIVERY — = o = & > = I = coos INAWLSIANIY SHAREHOLDER RETURNS
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Slide 5: FY2017 Financial highlights
FY2017 Financial highlights ; Revenue LFL Revenue ye Record revenue in FY2017 Growth Growth EE 488% 435%” + LFL revenue growth driven by: £114.0m +3.5% * 3.1% games volume and Y2016: £104.8m") —_(FY2016: +6.5%") % 0.5% growth in spend per game yr Strong progress in investment programme Group Adjuste
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Slide 7: Bowlplex integration programme ahead of schedule
Bowlplex integration programme ahead of schedule 7 centres now rebranded, 4 in FY2017 Ongoing innovation of the customer proposition VIP lanes now in 40 centres New food menu launched Cashless amusements and Pins on Strings trial Continued investment in technology platform Driving improved e-commerc
Slide 8: Financial review
Financial review
Slide 9: Performance summary
Performance summary Total statutory revenue £m Total revenue* £m +8.8% +9.0% 114.0 116.2 104.8 106.6 84.6 = - FY2015 FY2016 FY2017 FY2015 FY2016 FY2017 * Review of key contracts and revenue recognition policy in anticipation of IFRS 15 adoption x Amusement revenue and cost of sales reclassification
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Slide 11: Performance summary continued
Performance summary continued Gross Profit %: +1.2ppts Group adjusted EBITDA £m: +£4.0m 86.5% 33.4 4 85.3% 29 20.6 FY2015 FY2016 FY2017 FY2015 FY2016 FY2017 Group adjusted EBITDA Margin %: +1.3ppts Normalised Earnings per share pence: +30.4% 29.3% 12.17 9.34 : a FY2015 FY2016 FY2017 FY2015 FY2016 FY
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Slide 13: EBITDA increased by 13.7%
EBITDA increased by 13.7% 0.0 %* Average LFL centre EBITDA up 8.9% to £786k (FY2016: £725k) 08 7 ZLOZAJ WGLLIGS paisnipy sIso9 eNU89 147 $]SO9 |eUZD, seujuag xXe|djmog FA4 Soq]U3D MON ube %d9 141 [| YMod5 enusrey 147 a 9LOZAd VOLS Peisnipy
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Slide 15: Income statement
Income statement (Sm) FY2017 FY2016 Revenue 114.0 104.8 +8.8% Gross profit 98.6 89.4 +10.3% Gross profit% 86.5% 85.3% +1.2%pts Administrative expenses/other income (76.4) (75.0) Operating profit / (loss) 22.2 14.4 +54.4% Depreciation 10.0 9.3 Amortisation 0.5 0.5 Fixed asset disposal 0.6 - Exception
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Slide 17: Adjusted EBITDA and strong cash generation
£m Adjusted EBITDA FY2017 Strong cash generation 2.6 6.4 || ° i o fn — 3.2 1.0 iz! zB x x = x o Re] z 3 s z z 2 a for & 2 & 5 & a 8 6 x 5 S = B a 5 & 8 i 8 3 2 8 6 8 - 3 é § z & D i= & 2 3 = S £ 5 3 s s 3 s 5 a $ a £ S & S a Qa Qa wi = 6 a e S Net cash flow * Group operating cash flow conversion of
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Slide 19: Capital allocation priorities
Capital allocation priorities Balance Sheet efficiency * 5d 5d * Net debt at £8.1m (FY2016: £20.8m) Ordinary final dividend 3.95 pence per share Special dividend 3.33 pence per share Total cash returned to shareholders 9.08 pence per share - £13.6m Total dividend yield* 5.7% Priorities for cash — 1x
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Slide 21: The year ahead
The year ahead xx 7-10 refurbishments expected to be completed in FY2018 yr 2 new centres - Dagenham already opened on 4 October 2017 xx Total expansionary capital expenditure expected to be £5.0m - £6.0m yx Maintenance capital expenditure expected to be £6.0m - £6.5m yr Effective tax rate expected
Slide 22: Sustainable profitable growth
= Sustainable profitable
Slide 23: Strong returns from refurbishments and rebrands
Strong returns from refurbishments and rebrands yk Game volumes up 5.4% vs non invested Return on investment estate 120% ° () yi LFL revenues continue to outperform at 100% 58 % 11.0% up vs non invested estate 80% ax Average spend £340k per centre 60% 40% te VIP lanesnowin40centres Lf. a a i — el 20
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Slide 25: Strategy in action - refurbishments and rebrands
Strategy in action - refurbishments and rebrands Hollywood Bowl refurbishment - Bentley Bridge AMF rebrand - Ashford #r Centre rebranded to Hollywood Bowl in FY2011 vr Refurbished and rebranded to Hollywood Bowl +r 24 generation refurbishment completed in at cost of £333k FY2017 at cost of £316k x A
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Slide 27: Technology-driven growth
Technology-driven growth Investment in platform xx V2 proprietary scoring system rolled out yr Core reservation and CRM system moved to cloud based infrastructure New innovations introduced xx Dynamic pricing supporting yield growth xx SPG impact over 2.5% %x Bowling market price position maintained
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Slide 29: Targeted marketing
668 Targeted 356 marketing 120 14
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Slide 31: Core focus on team and culture
Core focus on team and culture Training and Development yr Over £260k invested in developing our team %x 36 promoted to assistant managers xx 7 promoted to centre managers xr Senior leadership development programme generated 5 Regional Support Managers and 2 functional heads of department Reward and
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Slide 33: Successful openings as we partner with retail landlords
Successful openings as we partner with retail landlords Encouraging footfall data for landlords Providing a platform for further new centre openings Learnings from prior schemes and new innovations Southampton, Derby and London O2 trading ahead of expectations Dagenham has started well and will upda
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Slide 37: A positive outlook for the Group
A positive outlook for the Group +x Group continues to perform in line with the Board’s expectations for the current year xr Diversified revenue streams all in growth vr Refurbishment programme driving strong returns and excellent customer feedback yr Market leader with high quality, well invested e
Slide 38: Appendix
Appendix
Slide 39: Management
Management Stephen Burns - Chief Executive Officer Appointment xx Stephen joined the Group as Business Development Director in 2011. He was promoted to Managing Director in 2012 and became Chief Executive Officer in 2014 Skills and experience % Before joining the Group, Stephen worked within the hea
Slide 40: Ten-pin bowling market
Ten-pin bowling market A well established leisure sub-sector * te UK leisure market worth an estimated £85bn in 2016 Ten-pin bowling generated c 0.3% of leisure sales in 2016 and was fastest growing sector Bowling grew 6.7% in 2016 — the fourth consecutive year of growth xc Fastest growing sector of