United Parks & Resorts Inc. · NYSE:PRKS
United Parks & Resorts — Q4 2023 Earnings Presentation
23 slides from United Parks & Resorts's earnings presentation, Feb 28, 2024
Slide 1: Q4 2023 Supplemental Materials
Q4 2023 Supplemental Materials
Slide 2: Cautionary Statements
Cautionary Statements This presentation contains “forward-looking statements” within the meaning of U.S. federal securities laws. All statements contained in this presentation other than statements of historical facts are forward-looking statements. You can identify forward-looking statements by the
Slide 3: Statement Regarding Non-GAAP Financial Measures
Statement Regarding Non-GAAP Financial Measures This presentation includes historical results prior to the Company’s initial public offering, including from periods prior to the Company being a standalone entity when it was included as a segment of its parent company at the time. These results inclu
Slide 4: Capital Allocation Strategy Focused on Maximizing Return on Capital
1. Capital Allocation Capital Allocation Strategy Focused on Maximizing Return on Capital Continue ongoing maintenance spend Invest in Core Continue cadence of new rides, attractions, shows and events in our parks creating new reasons to visit Business Identify and execute on high conviction,
Slide 5: Disciplined Capital Spend Strategy
2. Capital Spend Disciplined Capital Spend Strategy Spend to support Revenue and EBITDA Maintenance Capex Normalized growth in line with long- $150M - $175M Core Capex1 term base business New Rides & Attractions Capex expected growth rates2 High-conviction projects with 20%+ ROI (unlevered Nor
Slide 6: Capital Spend Update
2. Capital Spend Capital Spend Update Core Capex: $182M − Made the decision to spend more capital than normal on core projects Normalized Expansion / ROI Capex1: $50M Incremental Expansion / ROI Capex: $73M 2023 Capex − Made the decision to pursue more ROI projects and spend more capital than
Slide 7: Expansion / ROI Capital Case Studies
2. Capital Spend Expansion / ROI Capital Case Studies 2023 Expansion / ROI Capital Projects 2023 Expansion / ROI Capital Projects Illustrative 2024 Expansion / ROI Capital Projects (Opened On Time) (Delayed Opening) 42 total projects 35 total projects 61 total projects Waterway Grill (F&B Upgrade) R
Slide 8: Significant Discretionary Free Cash Flow Generation
3. Cash Flow Generation Significant Discretionary Free Cash Flow Generation ($ in Millions) $713 ~75 - 80% Cash ~60% Cash Conversion 5 Conversion 5 $538 - $563 ($150 - $175) $400+ ($138) FY 2023 Adj. EBITDA Normalized Normalized 2023 Unlevered Interest Normalized 2023 Levered 4 Core Capex 1 Free Cas
Slide 9: Hotel Update
4. Hotels Hotel Update Key Question United Parks & Resorts Response 1 Own ~400 acres of developable land adjacent to our parks Why hotels? Significant vacation / hotel demand from guests in our current markets Opportunity to generate significant incremental EBITDA and value from hotels at our
Slide 10: Significant International and Group Attendance Opportunity
5. Illustrative EBITDA Potential Significant International and Group Attendance Opportunity Group & International Attendance1 Attendance Excluding Groups & International (In Millions) (In Millions) 18.8 18.5 4.1 2.8 2019 2023 2019 2023 In 2023, group and international attendance Despite material imp
Slide 11: Meaningful Opportunity To Grow Attendance By Returning To Historical Levels
5. Illustrative EBITDA Potential Meaningful Opportunity To Grow Attendance By Returning To Historical Levels Total Attendance (In Millions) +18% vs +25% vs '23 '23 +5% vs '23 26.9 25.4 22.6 21.6 2023 2019 2008 Company All Parks At Attendance Peak1 1All Parks at Peak attendance is the combination of
Slide 12: Drivers of Future Attendance Growth
5. Illustrative EBITDA Potential Drivers of Future Attendance Growth Drivers of Future Attendance Growth 1 Population growth – addressable markets growing in excess of U.S. national average Improve marketing effectiveness – grow awareness, 2 increase conversion, optimize media spend Create new
Slide 13: Admissions Per Caps Are Sustainable and Have Clear Further Upside
5. Illustrative EBITDA Potential Admissions Per Caps Are Sustainable and Have Clear Further Upside Illustrative Future Targeting 2-5% Admissions Per Cap growth per year (+10% Growth) Initiatives $44.16 Inflation ( 1.1% CAGR) (4.5% CAGR)1 Take price every year in excess of inflation $35.49 Pricin
Slide 14: In-Park Per Caps Are Sustainable and Have Clear Further Upside
5. Illustrative EBITDA Potential In-Park Per Caps Are Sustainable and Have Clear Further Upside Illustrative Future Targeting 2-5% In Park Per Cap growth per year (+10% Growth) Initiatives $35.75 Inflation (3.5% CAGR) (4.5% CAGR)1 Take price every year in excess of inflation $26.32 ROI on capita
Slide 15: Substantial Cost Efficiency / Reduction Initiatives
5. Illustrative EBITDA Potential Substantial Cost Efficiency / Reduction Initiatives Leverage enhanced scheduling processes to drive labor efficiencies (including reduced overtime), flex labor staffing with attendance and venue volumes and improve the guest experience Labor Strategic investment
Slide 16: United Parks & Resorts Illustrative Adjusted EBITDA
5. Illustrative EBITDA Potential United Parks & Resorts Illustrative Adjusted EBITDA1 Significant Adjusted EBITDA Opportunity from Optimizing Our Business Illustrative Implied Adjusted EBITDA Return to 2019 Return to 2008 2019 2023 Cost Savings Attendance Peak Attendance Attendance2 22.6M 21.6M 22.6
Slide 17: United Parks & Resorts Valuation Overview
6. Valuation United Parks & Resorts Valuation Overview ($ and Shares in Millions, except per share metrics) Current Share Price (2/27/24) $48.81 (x) Diluted Shares Outstanding 65 Equity Value $3,151 (+) Debt (Q4 2023A) $2,126 (-) Cash (Q4 2023A) ($247) Net Debt $1,879 Total Enterprise Value $5,030 M
Slide 18: Trading at a Significant Discount Despite Outperformance
6. Valuation Trading at a Significant Discount Despite Outperformance 2017 – 20237 Adj. EBITDA CAGR 20237 Adj. EBITDA Margin 2024E Adj. EBITDA Multiple 41.3% Peer Average: 5.7% Peer Average: 21.9% Peer Average: 10.4x 13.8x 31.0% 11.2x 27.6% 9.6x 9.6x 9.7x 24.2% 15.5% 8.5x 14.5% 20.7% 17.7% 7.0x 9.9%
Slide 19: Implied Future Stock Price
6. Valuation Implied Future Stock Price ($ and Shares in Millions, except per share metrics) Implied share price 144% 173% 176% 208% Delta vs. current $150 $133 $135 $119 $49 Current 2x Discount to Theme Park Current Broad Comp Set 1x Discount to Theme Park Theme Park Peers 5-year pre- Peers 5-year
Slide 20: Key Takeaways
Key Takeaways 1 Capital allocation strategy focused on maximizing return for shareholders with a highly aligned Board 2 Disciplined capital spend strategy with ~$150M - $225M in normalized annual capex spend 3 Significant discretionary free cash flow generation ($400M+) 4 Thoughtful approach to hote
Slide 21: Appendix
Organic Growth Opportunities Appendix
Slide 22: Reconciliation of Non-GAAP Financial Metrics
Reconciliation of Non-GAAP Financial Metrics ($mm) 2023 Net income $234 Provision for income taxes 79 Interest expense 147 Depreciation & amortization 154 Equity-based compensation expense 18 Loss on impairment or disposal of assets and certain non-cash expenses 32 Business optimization, development
Slide 23: Reconciliation of Non-GAAP Financial Metrics
Reconciliation of Non-GAAP Financial Metrics ($mm) 2023 Net Cash Provided by Operating Activities $505 Normalized core capex1 (150) – (175) Nonrecurring cash costs3 52 Cash taxes4 6 Change in net working capital4 10 Interest (Normalized less actual) 2 8 Normalized 2023 Levered Free Cash Flow $406 -
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