Six Flags Entertainment Corporation · NYSE:FUN
Six Flags Entertainment — Investor Presentation (November 2016)
29 slides from Six Flags Entertainment's investor presentation, November 2016
Slide 1: Investor Presentation November 2016
Investor Presentation November 2016 November 2016 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 Ongoing Growth Opportunity • Exceptional brand & business 750 foundation • Substantial growth opportunities – Base business 520 532 477 – International licensing 444 416 379 • Strong, recurring cash flow 323 – Industry-leading EBITDA and
Slide 4: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry – Stable in a weak economy – High barriers to entry • Exceptional brand and business foundation – Focused strategy – Expansive array of entertainment & services • Substantial growth opportunities – 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 – Consumers focused on experiences • High recurring revenue • High barriers to entry – $400MM+ investment; 3+ years develop
Slide 6: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry – Stable in a weak economy – High barriers to entry • Exceptional brand and business foundation – Focused strategy – Expansive array of entertainment & services • Substantial growth opportunities – Innovative products an
Slide 7: A Focused Strategy
A Focused Strategy Delivering excellence in all we do November 2016 7
Slide 8: Strategically Located Parks
19 Strategically Located Parks Prime locations; economic and weather diversity; limited direct competition • $1.3 billion revenue • 29 million guests • 42,000 employees • $1.3 billion revenue - 1,900 full-time • 29 million guests • 830 rides / 135 coasters • 42,000 employees - 1,900 full-time • 830
Slide 9: Top-Rated Rides
Top-Rated Rides Home to many of the top coasters and rides in North America Twisted Colossus Zumanjaro Justice League World’s Industry’s tallest Best New drop ride Attraction 2015 World’s longest hybrid 41 story coaster drop at 90 Immersive miles per interactive hour ride Goliath Batman the Ride Tex
Slide 10: Expansive Array of Entertainment
Expansive Array of Entertainment More than coasters… we provide thrills and entertainment for all ages Water Parks Games Concerts & Shows Family Coasters Animals Events November 2016 10
Slide 11: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry – Stable in a weak economy – High barriers to entry • Exceptional brand and business foundation – Focused strategy – Expansive array of entertainment & services • Substantial growth opportunities – Innovative products an
Slide 12: Innovation
Innovation Introducing news in every park, every year Thrills for all ages • Guest-centered attractions • Mix of family, teen and tween thrills • 5-year plan Capital Spending: 9% of revenue Asset Maintenance New rides and attractions 25% 60% 15% In-Park November 2016 12
Slide 13: Innovation: Coming in 2017
Innovation Coming in 2017 – Something new for every park Six Flags Magic Mountain Six Flags New England Six Flags Great Adventure Six Flags Great America Six Flags Fiesta Texas Six Flags Over Georgia Six Flags Over Texas Thunder Rapids JUSTICE LEAGUE: The Joker • North America’s first rocket BATTLE
Slide 14: Virtual Reality Coasters
Virtual Reality Coasters This Changes Everything! • First VR coasters in North America • Introduced in 12 parks in 2016 • Fully immersive riding experience – The New Revolution VR Coaster – Superman VR Coaster – Rage of the Gargoyles • Perfectly synced to drops, loops and turns of coaster • Minimal
Slide 15: Substantial Growth Opportunities
Substantial Growth Opportunities Effective execution of our strategy Total Revenue ($MM’s) • Improving ticket yields 1,298 1,264 • Season Pass / 1,176 Membership penetration 1,110 1,070 1,013 • In-park initiatives 976 913 • International licensing (1) 2009 2010 2011 2012 2013 2014 2015 2016 Q3 LTM (
Slide 16: Ticket Yield Management
Ticket Yield Management A multi-year approach to improve ticket yields Admissions Revenue ($MM) 688 700 • Increase ticket prices 642 602 577 542 511 483 • Execute dynamic pricing • Continue to raise guests’ value-for- 2009 2010 2011 2012 2013 2014 2015 2016 the-money ratings Q3 LTM 2015 Admissions P
Slide 17: Season Pass and Membership Penetration
Season Pass and Membership Penetration Growing Active Base of season pass holders and members – up 15% as of September 30, 2016 Season Pass Holders / Members: Season Pass / Membership (1) Attendance % of Total • Generate more annual revenue and cash flow than single day visitors 56% 50% 48% • Build
Slide 18: In-Park Revenue Initiatives
In-Park Revenue Initiatives Highly profitable businesses within the business In-Park Revenue ($MM) 510 • Over 2,000 locations 449 460 500 437 401 414 375 • New products and programs – All Season Dining Pass – Broader offerings – Enhanced venues 2009 2010 2011 2012 2013 2014 2015 2016 Q3 LTM November
Slide 19: International Licensing
International Licensing Long-term strategy to license brand outside North America • Agreements in Dubai, China and Vietnam • Strong global brand recognition – seeking additional partners • Growing middle class, disposable income, and demand for entertainment • Fees related to design & development, l
Slide 20: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry – Stable in a weak economy – High barriers to entry • Exceptional brand and business foundation – Focused strategy – Expansive array of entertainment & services • Substantial growth opportunities – Innovative products an
Slide 21: Strong Recurring Revenue
Strong Recurring Revenue Higher ticket pricing and strong attendance fuel revenue Attendance / Guest Spending Per Capita Revenue ($MM) 1,298 1,264 42.97 41.60 41.74 39.33 39.41 40.18 29.0 1,176 36.84 37.55 28.6 1,110 1,070 26.1 1,013 25.7 25.6 976 913 24.3 24.3 23.3 (1) (1) 2009 2010 2011 2012 2013
Slide 22: Cost Management
Cost Management Continued focus on reducing costs and improving operating leverage Cash Operating Costs(1) as a % of Revenue Ongoing Initiatives: 75.6% • Optimize seasonal labor 67.4% • Implement purchasing efficiencies 62.8% 61.2% 60.0% 59.4% 58.9% 59.0% • Drive operational improvements 2009 (2) 20
Slide 23: Strong EBITDA
Strong EBITDA Growing earnings with industry-leading margin Adjusted EBITDA ($MM’s)(1) and Modified EBITDA Margin(1)(2) 40.0% 40.6% 41.1% 41.0% 38.9% 37.4% 481 493 439 33.1% 404 383 350 31.4% 32.1% 31.4% 24.4% 29.7% 30.8% 295 28.4% 24.9% 197 13.6% 2009 2010 2011 2012 2013 2014 2015 2016 Q3 LTM Adjus
Slide 24: Modified EBITDA less CAPEX Margin
Modified EBITDA less CAPEX Margin Industry-high Modified EBITDA less CAPEX margin 30.8% 31.4% 32.1% 31.4% 28.4% 29.7% 24.9% 13.6% 2009 2010 2011 2012 2013 2014 2015 2016 Q3 LTM* Six Flags Other theme park operators *Based on 2016 Q3 reported results for Six Flags and 2016 Q2 reported results for all
Slide 25: Capital Allocation
Capital Allocation Strong commitment to return cash to shareholders; excellent dividend yield Dividend Yield Cumulative Distributions ($MM) $2.56 dividend per share Excess cash returned Yield >2x S&P 500 $2,258 to shareholders $1,977 $1,531 1,376 5.9% 1,256 5.1% 4.8% $1,151 4.2% 4.3% 1,011 2.20% 1.9
Slide 26: Project 750
Project 750 Aspirational goal of $750MM of Modified EBITDA by 2020 2016 By 2020 $MM’s Q3 LTM Project 750 Modified EBITDA 532 750 Minority Interest (38) (40-45) Adjusted EBITDA 493 705 – 710 CAPEX (124) (135 – 145) Cash Interest (71) (80 – 90) Cash Taxes (20) (110 – 120) Adjusted Free Cash Flow 278 3
Slide 27: Summary
Summary Delivering shareholder value • Delighting our guests • Building brand equity • Leveraging brand outside North America • Maximizing revenue and cash flow • Generating strong returns for our shareholders November 2016 27
Slide 28: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 2016 (1) ($MM; Share amounts in 000's) 2009 2010 2011 2012 2013 2014 2015 Q3 LTM Net (Loss) Income (196) 634 13 403 157 114 193 157 Loss (Income) from Discontinued Operations 34 (9) (1) (7) (1) (1) - - Income Tax Expense (Benefit) 3 124 (8) (184) 48 47 70 59 Reorg
Slide 29: 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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