Six Flags Entertainment Corporation · NYSE:FUN
Six Flags Entertainment — Investor Presentation (May 2018)
32 slides from Six Flags Entertainment's investor presentation, May 2018
Slide 1: Investor Presentation May 2018
Investor Presentation May 2018 May 2018 1
Slide 2: Disclaimer
Disclaimer Presentation is subject to safe harbor laws • Presentation includes forward looking statements about events and financial results • Actual events or results may be materially different • Risks are described in the company’s filings with the SEC • Statements are made subject to “safe harbo
Slide 3: Overview of Six Flags
Overview of Six Flags Global leader in an attractive industry • Exceptional brand & business Ongoing Growth Opportunity foundation 750 • Substantial growth opportunities o Base business 558 574 o International licensing 520 545 477 444 • Strong, recurring cash flow 379 416 o Industry-leading EBITDA
Slide 4: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry o Stable in a weak economy o High barriers to entry • Exceptional brand and business foundation o Focused strategy o Expansive array of entertainment & services • Substantial growth opportunities o Innovative products an
Slide 5: Attractive Industry
Attractive Industry Stable industry with high barriers to entry • Stable in normal economy – resilient in a weak one • Compelling value relative to other forms of entertainment o Consumers focused on experiences • High recurring revenue • High barriers to entry o $500MM investment; 3+ years developm
Slide 6: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry o Stable in a weak economy o High barriers to entry • Exceptional brand and business foundation o Focused strategy o Expansive array of entertainment & services • Substantial growth opportunities o Innovative products an
Slide 7: A Focused Strategy
A Focused Strategy Delivering excellence in all we do May 2018 7
Slide 8: Strategically Located Parks
20 Strategically Located Parks Prime locations; economic and weather diversity; limited direct competition • $1.4 billion revenue • 31 million guests • 48,000 employees o 2,000 full-time • 850 rides / 140 coasters * May 2018 8
Slide 9: Top Rated Rides
Top Rated Rides Home to many of the top coasters and rides USA Today Best New Attraction World’s tallest, fastest roller coaster Industry’s Best New Attraction 2015 41 story drop at 91 miles per hour Immersive interactive ride World’s tallest and steepest World’s First 4D Free Fly Coaster World’s Ta
Slide 10: Expansive Array of Entertainment
Expansive Array of Entertainment More than coasters… we provide thrills and entertainment for all ages Waterparks Games Concerts & Shows Family Coasters Animals Events May 2018 10
Slide 11: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry o Stable in a weak economy o High barriers to entry • Exceptional brand and business foundation o Focused strategy o Expansive array of entertainment & services • Substantial growth opportunities o Innovative products an
Slide 12: Substantial Growth Opportunities
Substantial Growth Opportunities Five strategic growth initiatives driven by industry-leading innovation Total Revenue ($MM’s) 1,389 • Season Pass / 1,319 1,359 Membership penetration 1,264 • Improving ticket yields 1,176 1,110 1,070 • In-park initiatives 1,013 976 • International licensing 913 • No
Slide 13: Innovation
Innovation Leading the industry in innovation Recent Innovations o First of Kind Rides o All Season Dining o News in Every Park, Every Year o Virtual Reality Rides Disciplined Capital Spending: 9% of Revenue Asset Maintenance New rides and 25% attractions 60% 15% In-Park May 2018 13
Slide 14: 2018 Ride Innovation
2018 Ride Innovation 2018 will bring something new in every park and 5 record-breaking rides May 2018 14
Slide 15: Season Pass & Membership Penetration
Season Pass & Membership Penetration Growing Active Base of season pass holders and members – up 10% as of March 31, 2018 • Generate more annual revenue and cash flow than single day visitors • Build recurring revenue • Visit during off-peak periods • Provide weather hedge • Only about 40% of our un
Slide 16: Focus on New Membership Program
Focus on New Membership Program Grows contractual, recurring revenue stream • Offers up to 50 new, never-before- offered benefits • Creates Members, our most loyal and profitable guests – Higher retention rates – Double lifetime revenue of Season Pass holder • Provides three revenue sources – Higher
Slide 17: Ticket Yield Management
Ticket Yield Management A multi-year approach to Admissions Revenue ($MM) improve ticket yields 741 757 715 688 642 • Increase ticket prices 577 602 542 511 483 • Execute dynamic pricing 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 • Continue to raise guests’ Q1 LTM value-for-the-money ratings
Slide 18: In-Park Revenue Initiatives
In-Park Revenue Initiatives Highly profitable businesses In-Park Revenue ($MM) within the business 525 536 500 • More than 2,000 locations 460 449 437 414 • New products and programs 401 375 o All Season Dining Pass o Broader offerings o Enhanced venues 2009 2010 2011 2012 2013 2014 2015 2017 2018 Q
Slide 19: International Licensing
International Licensing Nanjing Theme Park, Waterpark, & Adventure Park Zhejiang Theme Park, Saudi Theme Waterpark & Park Kids World Chongqing Theme Park, Dubai Waterpark, Kids Theme World & Park Adventure Park Long-term strategy to license brand outside North America • Twelve parks signed in China,
Slide 20: North American Expansion Strategy
North American Expansion Strategy Seeking to own or operate waterparks in markets adjacent to our theme parks • We are already one of the largest waterpark operators in the world • Dozens of potential targets • Strategy will: o Expand season pass reach to adjacent markets o Create demand for season
Slide 21: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry o Stable in a weak economy o High barriers to entry • Exceptional brand and business foundation o Focused strategy o Expansive array of entertainment & services • Substantial growth opportunities o Innovative products an
Slide 22: Strong Recurring Revenue
Strong Recurring Revenue Higher ticket pricing and strong attendance fuel revenue Attendance / Guest Spending Per Capita Revenue ($MM) 1,389 42.97 1,359 41.60 41.79 40.18 41.07 41.61 1,319 39.33 39.41 30.9 1,264 36.84 37.55 30.1 30.4 28.6 1,176 1,110 26.1 25.7 25.6 1,070 24.3 24.3 1,013 23.3 976 913
Slide 23: Cost Discipline
Cost Discipline Continued focus on costs and effective management of capital investment Cash Operating Costs(1) as a % of Revenue Cash Capex as a % of Revenue 11% 75.6% 10% 10% 9% 9% 9% 9% 9% 9% 67.4% 8% 62.8% 61.2% 129 135 60.0% 59.4% 58.9% 58.7% 58.9% 58.6% 108 114 98 98 102 91 79 (2) (2) 2009 201
Slide 24: Strong EBITDA
Strong EBITDA Growing earnings with industry-leading margin Adjusted EBITDA ($MM’s)(1) and Modified EBITDA Margin(1)(2) 41% 41% 41% 40% 41% 39% 37% 439 481 507 519 383 404 33% 350 295 31% 32% 32% 31% 24% 30% 31% 28% 25% 197 14% 2009 2010 2011 2012 2013 2014 2015 2016 2017 Adjusted EBITDA Modified EB
Slide 25: Strong Cash Flow
Strong Cash Flow Industry-high Modified EBITDA less CAPEX margin 31% 31% 32% 32% 31% 28% 30% 25% 14% 2009 2010 2011 2012 2013 2014 2015 2016 2017 Six Flags Other theme park operators May 2018 25
Slide 26: Capital Allocation
Capital Allocation Eight consecutive years of dividend increases; excellent dividend yield ~5% Quarterly Dividend Cumulative Distributions ($ Millions) $3.12 annualized dividend ~$3.3 Billion excess cash returned Yield >2.5X S&P 500 to shareholders $3,283 $3,136 $0.78 $0.70 +11% $2,409 $0.64 +9% $0.
Slide 27: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry o Stable in a weak economy o High barriers to entry • Exceptional brand and business foundation o Focused strategy o Expansive array of entertainment & services • Substantial growth opportunities o Innovative products an
Slide 28: Project 750
Project 750 Aspirational goal to deliver $750MM of Modified EBITDA by 2020 Ongoing Growth Opportunity • Will create significant 750 shareholder value 558 574 520 545 • Represents ~10% Adjusted 477 444 416 EBITDA CAGR 379 323 223 • Closely aligns employees with shareholders (1)(2) 2009 2010 2011 2012
Slide 29: Project 750 Cash Flow
Project 750 Cash Flow Sufficient cash flow to maintain and grow dividend annually; Tax reform added $40-50MM to the bottom line $MM’s By 2020 2017 Project 750 Modified EBITDA 558 750 Minority Interest (39) (40-45) Adjusted EBITDA 519 705 – 710 CAPEX (135) (135 – 145) Cash Interest (95) (100 – 110) C
Slide 30: Summary
Summary Delivering shareholder value + Delighting our guests + Building brand equity + Leveraging brand outside of North America + Maximizing revenue and cash flow + Generating strong returns for our shareholders May 2018 30
Slide 31: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 2018 ($MM; Share amounts in 000's) 2009(1) 2010 2011 2012 2013 2014 2015 2016 2017 Q1 LTM Net (Loss) Income (196) 634 13 403 157 114 193 157 313 308 Loss (Income) from Discontinued Operations 34 (9) (1) (7) (1) (1) - - - - Income Tax Expense (Benefit) 3 124 (8) (1
Slide 32: Disclaimer
Disclaimer Note About Forward-Looking Information • The information contained in this presentation, other than purely historical information, contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements may involv
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