Six Flags Entertainment Corporation · NYSE:FUN
Six Flags Entertainment — Cedar Fair — Investor Presentation (November 2021)
42 slides from Six Flags Entertainment's investor presentation, Nov 17, 2021
Slide 1: Investor Presentation November 2021
Investor Presentation November 2021
Slide 2: 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 Company's expectations, belief
Slide 3: FUN Overview
FUN Overview 3
Slide 4: Industry Savvy Executive Team
4 Industry Savvy Executive Team Richard Zimmerman CEO Tim Fisher COO Brian Witherow CFO Kelley Ford CMO Craig Heckman CHRO Dave Hoffman CAO Brian Nurse CLO
Slide 5: Our Purpose: To Make People Happy
5 Our Purpose “To Make People Happy” 5
Slide 6: Key Statistics and Parks Portfolio
KEY STATISTICS Entertained 28M visitors in 2019 841 rides and attractions 124 roller coasters 2,300+ hotel rooms PARKS PORTFOLIO Own and operate 11 amusement parks 9 outdoor water parks (in‐park) 4 outdoor water parks (unique gates) 1 indoor water park resort 6
Slide 7: Compelling Investment Rationale
Compelling Investment Rationale 1 2 Best‐in‐class parks and brands with loyal, high‐repeat customer base 3 High barriers to entry 4 Resilient operating performance through economic cycles 6 Industry‐experienced management with history of delivering results High quality assets and significant real es
Slide 8: Record 2019 Followed by COVID-19 Disrupted 2020
Record 2019 Followed by COVID‐19 Disrupted 2020 2019 Results Record net revenues of $1.47 billion, up 9%; same park up 6% Record attendance of 27.9 million visits, up 8%; same park up 5% Record in‐park per capita spending of $48.32, up 1%; same park up 1% Record out‐of‐park revenues of $169
Slide 9: 2019 Operating Results
3% 4% 2019 Operating Results 1% Net Revenues $1.47B Ended 12/31/19 Lift from prior year Adjusted EBITDA 8%$505M 9% Attendance 8%27.9M In‐Park Per Capita Spending 1%$48.32 Out‐of‐Park Revenues 11%$169M 9
Slide 10: 2021-Q3 vs. 2019-Q3 Results
3% 4% 2021‐Q3 vs. 2019‐Q3 Results 1% Ended 09/26/21 Ended 09/29/19 Net Revenues $753M $715M Adjusted EBITDA $355M$333M Attendance 13.2M10.8M In‐Park Per Capita Spending $49.94$64.26 Out‐of‐Park Revenues $76M$83M 10
Slide 11: Oct 2021 vs. Oct 2019
Oct 2021 vs. Oct 2019 5‐Week Period Ended 10/31/2021 5‐Week Period Ended 11/3/2019 11 Operating Days 166176 Attendance 2.9M3.2M In‐Park Per Capita Spending $48.94$64.96 Out‐of‐Park Revenues $15M$19M Net Revenues $155$219
Slide 12: Strong Long-Term Growth and Recession Resilient
Strong Long‐Term Growth and Recession Resilient Acquisitions: 1992 – Dorney Park 1995 – World of Fun 1997 – Knott’s Berry Farm 2001 – Michigan’s Adventure 2004 – Geauga Lake 2006 – Paramount Parks (five parks) 2019 – Schlitterbahn (two water parks) – Sawmill Creek Resort & Conference Center $0 $100
Slide 13: 2021 Outlook
2021 Outlook 13
Slide 14: Balance Sheet and Liquidity Update
Balance Sheet and Liquidity Update • Liquidity position totaled approximately $922 million as of Sept. 26, 2021 • At the end of the third quarter, cash on hand was $563 million with $359 million available under the revolver, net of $16 million of letters of credit • Deferred revenues totaled $211 mi
Slide 15: Business Optimization Program
Business Optimization Program • Enterprise‐wide initiative designed to drive growth in the business, improve profitability, rationalize cost structure and produce a better guest experience • Capture cost efficiencies and drive incremental revenues through more data‐driven decision making • Deploy ne
Slide 16: Business Optimization Initiative - Areas of Opportunity: Revenue
Business Optimization Initiative ‐ Areas of Opportunity Revenue • Expand business intelligence capabilities to drive more data‐driven decisions • Improved pricing practices to drive revenue lift • Optimization of in‐park revenue streams, such as Food & Beverage and Merch & Games • Greater focus and
Slide 17: Business Optimization Initiative - Areas of Opportunity: Procurement
Business Optimization Initiative ‐ Areas of Opportunity Procurement • Represents the optimization initiative’s highest cost‐savings category ‐ could take several years to fully mature • Named Chief Procurement Officer in March 2021 • Responsible for building a centralized capability across our 13 pr
Slide 18: Business Optimization Initiative - Areas of Opportunity: Seasonal Labor
Business Optimization Initiative ‐ Areas of Opportunity Seasonal Labor • Seasonal/part‐time labor has historically represented approximately one‐third of operating expenses • New Workforce Management System implemented in 2021 across all but Texas water parks • Tailored Kronos‐based software providi
Slide 19: Business Optimization Initiative - Areas of Opportunity: Marketing
Business Optimization Initiative ‐ Areas of Opportunity Marketing • Offers near‐term cost savings opportunity • Shift weighting to more cost‐efficient and flexible digital advertising platforms • Look to reduce the use of traditional, higher‐cost options such as broadcast or print media • Increase u
Slide 20: Business Optimization Program – Target Benefits
$0 $10 $20 $30 $40 $50 Jan '21 Jul '21 Jan '22 Jul '22 Jan '23 Jul '23 Jan '24 Jul '24 Business Optimization Program – Target Benefits M illions 20 Fixed Cost Reductions Variable Cost Savings & Revenue Enhancements Revenue enhancements • Centralized Procurement • Seasonal Labor • Marketing/Advertisi
Slide 21: Long-Range Plan
Long‐Range Plan 21
Slide 22: Long-Range Plan: Core Strategies
Long‐Range Plan: Core Strategies • Broaden the Guest Experience • Aimed at driving more visits from existing guests and incremental visits from new, unique guests • Traditional rides, such as roller coasters and water attractions, still play an important role • Expanded use of limited‐duration event
Slide 23: 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 24: 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/Festivals • Anniversary Celebrations 24
Slide 25: "Seasons of FUN" Model: Creates Urgency to Visit
25 “Seasons of FUN” Model: Creates Urgency to Visit
Slide 26: Offer Guests Immersive Experiences
Offer Guests Immersive Experiences 26
Slide 27: 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 28: The Changing Landscape of Food & Beverage
The Changing Landscape of Food & Beverage 28
Slide 29: Popular 4th Quarter Events Extend Calendar, Add Growth
Popular 4th Quarter Events Extend Calendar, Add Growth • 2016 – first year for WinterFest (one park with approximately 140,600 guests in attendance) • 2019 – six WinterFest events (parks) with a combined attendance of approximately 1.2 million • Canada’s Wonderland – extraordinary 1st year in 2019 •
Slide 30: Season Pass Channel Growth Strong
Season Pass Channel Growth Strong • Company has sold more than 1 million 2022 season passes since early August 2021, a record pace o Average 2022 season pass price up 5% through Oct. 31, 2021 • As of August 1, 2021, approximately 2.9 million season passes are outstanding and valid through for 2021 s
Slide 31: Loyalty Program: Evolution of the Season Pass
Loyalty Program: Evolution of the Season Pass Objectives: • Address affordability concerns for value‐oriented guests while maintaining admissions price integrity • Drive higher unit sales through “stickier” retention • Increase the average visitation of our season passholder base Goal: Transition pr
Slide 32: PassPerks Loyalty Program – Mutually Beneficial
PASSPERKS Loyalty Program – Mutually Beneficial Good for the Passholder Surprise our most highly engaged guests with unexpected discounts, offers and chances for exclusive prizes and experiences • Earn rewards with each park visit • Create anticipation among passholders to expect the unexpected • In
Slide 33: SP Payment Plan + Loyalty Program Meet Objectives
SP Payment Plan + Loyalty Program Meet Objectives CEDAR FAIR SEASON PASS PROGRAM Key Objectives Payment Plan Loyalty Program Subscription Model Affordability YES NO YES Retention NO YES YES Visitation NO YES NO Pricing Power YES YES NO Purchase Urgency YES NO NO + 33
Slide 34: Market Sizing Study
Market Sizing Study 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 • Lowest penetration among groups
Slide 35: Evolution of the Accommodations Channel
Evolution of the Accommodations Channel • Substantial growth of accommodations portfolio last 8 years: • Total hotel rooms grew to more than 2,300 from 1,900 (includes Schlitterbahn and Sawmill Creek Resort) • Total luxury RV sites increased to more than 600 • Accommodations Revenue: • > $80 million
Slide 36: Adjacent Development – Accommodations
• Waterfront property at Cedar Point entrance • 237 rooms and suites with tropically themed indoor waterpark paradise • Resort property minutes from Cedar Point • 236‐room hotel and conference center, restaurants, Tom Fazio‐designed golf course Adjacent Development – Accommodations Property renovati
Slide 37: Cedar Point Sports Center
37 Cedar Point Sports Center Indoor Center • Opened January 2020 • 145,000 square feet • Court space accommodates 10 basketball courts and 20 volleyball courts • AAU basketball, JO volleyball, wrestling, cheer, gymnastics Outdoor Facility • Opened March 2017 • 10 multi‐use fields with clubhouse • Ba
Slide 38: Strategies for 2H-2021 and 2022
Focus on reestablishing growth in the core business Responsibly invest capital resources in three primary areas: Essential compliance and infrastructure needs Select projects that were paused in 2020 due to the pandemic, and Investments identified for the 2022 season that can start in 4Q‐2
Slide 39: Key Takeaways – Business Optimization Program
Objectives: 1) Enhance the guest experience 2) Realize cost savings across the enterprise 3) Create incremental revenue streams Focus: Pursue cost efficiencies in the big‐ticket areas of marketing, labor and procurement, and broaden the use of consumer technologies to increase throughput and cre
Slide 40: Appendix
Appendix 40
Slide 41: Capital Structure – Pro-Forma Debt Maturities
Capital Structure – Pro‐Forma Debt Maturities Amounts in Millions Total debt outstanding of ~$3.0B at 9/26/21 Pro‐forma total debt outstanding of ~$2.6B after redemption of 2024 bonds Cash on hand totaled $563M at 9/26/21 2020 cash interest payments totaled $130M Pro‐forma full‐year cash i
Slide 42: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 42