Six Flags Entertainment Corporation · NYSE:FUN
Six Flags Entertainment — Cedar Fair — Investor Presentation (November 2020)
38 slides from Six Flags Entertainment's investor presentation, Nov 12, 2020
Slide 1: Investor Presentation November 2020
Investor Presentation November 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 Entertained 11 28M amusement parks visitors in 2019 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 resort 5
Slide 7: 2019 Operating Results
Ended 12/31/19 Ended 12/31/19 2019 Operating Results w/ Schlitterbahn Same-park Basis $1.47B $1.43B Net Revenues 3% 4% 9% 6% Net Revenues Growth 1% 8% 5% Attendance 1% 1% In-Park Per Capita Spending 11% 8% Out-of-Park Revenues 6
Slide 8: Record 2019 Followed by COVID-19 Disrupted 2020
Record 2019 Followed by COVID-19 Disrupted 2020 TOTAL REVENUE ADJUSTED EBITDA(a) ($ 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 2012
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 – Impact on 2020 Park Operations
COVID-19 – Impact on 2020 Park Operations Park Name Location Opening Date Current Status Schlitterbahn Waterpark & Resort New Braunfels New Braunfels, Tex. Opened June 13 Closed for Season Schlitterbahn Waterpark Galveston Galveston, Tex. Opened June 13 Closed for Season Worlds of Fun (1) Kansas Cit
Slide 13: COVID-19 – Amended Credit Facility
COVID-19 – Amended Credit Facility • Successfully amended credit facilities which: • Suspend and revise certain financial covenants by an additional year • Obtained agreement to extend the tenor on $300 million of the Company’s revolving credit facilities through Dec. 31, 2023 • Under terms of the a
Slide 14: COVID-19 – Recent Notes Offerings
COVID-19 – Recent Notes Offerings • Secured $300 million of 6.5% senior unsecured notes due 2028 (completed in October 2020) • Market conditions were attractive to further improve liquidity and provide the Company with additional financial flexibility • The bond offering, which closed in October, is
Slide 15: 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 seasonal and part-time labor costs at parks while closed • Suspended all advertising and marketing expenses, and reduced general and admini
Slide 16: COVID-19 – Liquidity Outlook
COVID-19 – Liquidity Outlook • Based on measures taken to date, anticipated net cash outflows will average $40-45 million per month over the next two quarters (through March 28, 2021), including: • Anticipated operating costs associated with current plans for reopening parks in 2021 • Interest payme
Slide 17: 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 • Certain
Slide 18: Long-Range Plan
Long-Range Plan 17
Slide 19: 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 20: 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 21: Consumer Insights Research
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 20
Slide 22: "Seasons of FUN" Model: Creates Urgency to Visit
“Seasons of FUN” Model: Creates Urgency to Visit 21
Slide 23: Offer Guests Immersive Experiences
Offer Guests Immersive Experiences 22
Slide 24: 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 25: The Changing Landscape of Food & Beverage
The Changing Landscape of Food & Beverage 24
Slide 26: 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 27: 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 28: 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 29: 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 30: 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 29
Slide 31: 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 32: 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 33: 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 • Rolling renovation paus
Slide 34: Cedar Point Sports Center
Cedar Point Sports Center Outdoor Facility • Opened March 2017 – prior to COVID-19, performance was pacing well ahead of the original pro-forma model • 10 multi-use fields with clubhouse • Baseball, softball, soccer, lacrosse Indoor Center • Opened January 2020 – initial bookings were very strong pr
Slide 35: Key Takeaways
Key Takeaways • COVID-19 Measures o Timely, proactive steps taken to further strengthen financial position if long-term disruption occurs o Completed two notes offerings and dramatically reduced cash burn o Suspended quarterly unitholder distribution payments until market visibility improves and per
Slide 36: Appendix
Appendix 35
Slide 37: Capital Structure – Debt Maturities
Capital Structure – Debt Maturities Amounts in Millions (1) . Pro-forma total debt $1,200 Revolver Capacity outstanding of ~$3.0B at Term Debt Senior Notes 09/27/20 $900 . Pro-forma cash on hand totaled $517M at 09/27/20 . Projected full-year 2020 cash $600 interest costs of approximately $450 $1,00
Slide 38: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 37