Kinepolis Group Nv · EURONEXT:KIN

Kinepolis Group Nv — FY2018 Earnings Presentation

57 slides from Kinepolis Group Nv's earnings presentation, Feb 21, 2019

  1. Slide 1: Kinepolis Group Results 2018

    Kinepolis Group Results 2018 February 21, 2019

  2. Slide 2: Business review 2018

    Business review 2018 CEO, Mr. Eddy Duquenne

  3. Slide 3: Executive Summary

    EXECUTIVE SUMMARY  Integration of Landmark Cinemas Canada on track  Solid contribution of Landmark to overall Group results  Further implementation of Group strategy and in particular premiumisation led to further increase in sales per visitor  Weaker visitor numbers in European countries due to

  4. Slide 4: Evolution REBITDA

    Results execution Long Term strategy Evolution REBITDA 140,0 119,0 120,0 104,3 100,0 94,1 91,0 80,0 74,0 74,6 74,3 71,7 66,5 58,1 60,0 52,7 46,7 40,0 20,0 0,0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 REBITDA 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 leverage 2,97

  5. Slide 5: Key Financials

    KEY FINANCIALS €m YE 2018 YE 2017 % Better / ‐Worse Revenue 475,9 355,4 33,9% Visitors (‘000) 35.591 25.290 40,7% EBITDAR 145,1 113,8 27,5% REBITDAR 146,9 114,9 27,9% REBITDAR Margin € 4,12/Vis 30,8% € 4,54/Vis 32,3% ‐154 bps EBITDA 117,2 103,2 13,6% REBITDA 119,0 104,3 14,1% REBITDA Margin € 3,34/V

  6. Slide 6: Strategy

    strategy  Results reflect Strategic Pillars set out in 2008  Best Marketer  Best Cinema Operator  Best Real Estate Manager  Further development and implementation of strategic pillars  Highlights 2018  Development arthouse concept KLUB  Remodeling Kinepolis Emmen, Oss, Den Helder, Rouen, Kir

  7. Slide 7: KLUB

    KLUB Video title

  8. Slide 8: KLUB

    Video title KLUB

  9. Slide 9: MarketPlace

    Video title MARKETPLACE

  10. Slide 10: MarketPlace

    "i st a we a cs wc + oe senswee et 4 Hess: a ee

  11. Slide 11: Major events

    Major events  Further steps in expansion strategy  January 2018: acquisition NH Bioscopen, the Netherlands  January 2018: announcement new project in CF Market Mall in Calgary, Canada  February 2018: opening St. Albert in Alberta, Canada  June 2018: opening Brighton Marketplace in East Saskatoo

  12. Slide 12: Major events: Belgian Competition Authority

    Major events  On 26 April 2018 the Belgian Competition Authority confirms the previous relaxation of the behavioral conditions, which means that the opening of new cinema complexes in Belgium is no longer subject to prior approval of the Competition Authority, but this will enter into force as of 2

  13. Slide 13: Kinepolis Group

    kinepolis group 11 3 Market Complexes in Ownership Countries Complexes Screens Share ** # %Visitors Belgium 11 138 0% 10 98% France 13 +2 145 +17 3% 9 94% Canada 45 +2 319 +17 12% 9 4% Spain 6 99 5% 2 45% The Netherlands 17 +2 121 +17 11% 11 74% Luxembourg 3 22 87% 1 63% Switzerland 1 8 1% 1 100% Po

  14. Slide 14: Planned greenfields

    planned greenfields Country City # Screens Est. Visitors / Year Estimated opening France Servon 9 0,4 mio 2019 The Netherlands Schalkwijk Haarlem 6 0,3 mio 2020 Canada Calgary (Alberta) 5 0,3 mio 2019 Regina (Saskatchewan) 8 0,4 mio 2019 Total 28 1,4 mio 14

  15. Slide 15: Revenue by country

    revenue by country Luxembourg Switzerland Luxembourg Switzerland The Netherlands 3,1% Poland The Netherlands 4,3% Poland 12,0% 0,9% 12,4% 1,4% Belgium Spain 33,0% 9,4% Belgium Spain 45,5% € 475,9m 12,3% € 355,4m Canada 3,4% Canada 26,7% France 14,9% France 20,7% YE 2018 YE 2017 15

  16. Slide 16: Revenue by activity

    revenue by activity Brightfish Brightfish 2,3% 3,4% Film Distribution Film Distribution Real Estate 1,0% Real Estate 1,1% 2,9% 3,8% B2B * 11,7% B2B * 13,7% € 475,9m € 355,4m Box Office Box Office 54,7% 54,1% In‐theatre Sales 27,4% In‐theatre Sales 23,9% YE 2018 YE 2017 * Including Cinema Screen Adve

  17. Slide 17: Visitors

    visitors Visitors (000's) YE 2018 % of Tot YE 2017 % of Tot % ∆ YoY Belgium 7.987 22,4% 8.428 33,3% ‐5,2% France 6.571 18,5% 7.053 27,9% ‐6,8% Canada 11.630 32,7% 1.070 4,2% 986,9% Spain 4.306 12,1% 4.397 17,4% ‐2,1% The Netherlands 4.073 11,4% 3.177 12,6% 28,2% Luxembourg 920 2,6% 1.044 4,1% ‐11,9%

  18. Slide 18: Top 5 Movies

    movies Top 5 Movies 2018* 3D Visitors (000's) Top 5 Movies 2017 3D Visitors (000's) 1. Avengers: Infinity War  1.401 1. Star Wars: Episode VIII ‐ The Last Jedi  816 2. The Incredibles 2  1.256 2. Despicable Me 3  785 3. Jurassic World II  1.161 3. Beauty and the Beast  762 4. Black Panther  1

  19. Slide 19: Ratios

    ratios REBITDA Margin ROCE Gearing 35% 2,50 30,2% 29,1% 29,3% 30% 28,3% 25% 25,0% 20,9% 21,5% 2,00 25% 20% 17,9% 17,3% 1,56 16,3% 20% 1,50 1,32 15% 1,27 1,13 1,13 15% 1,00 10% 10% 5% 0,50 5% 0% 0% 0,00 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 19

  20. Slide 20: Dividend payment

    dividend payment Dividend/Share +1,1% 1,0 € € 0,91 € 0,92 € 0,87  Based on Net Income: € 47,4 m 0,9 € € 0,79 0,8 €  # Dividend eligible shares: 26.872.851* 0,7 € € 0,64 € 0,65 0,6 €  € 0,92* per share € 0,47 0,5 € 0,4 € € 0,36  15th year increase consecutively 0,3 € € 0,25 € 0,18 0,2 € € 0,13 0,

  21. Slide 21: Line-up 2019

    Line-up 2019 2D 3D Major sequels • Creed II (Q1) • How to Train Your Dragon: The Hidden World • Fast & Furious presents: Hobbs & Shaw (Q3) (Q1) • It: Chapter Two (Q3) • The Lego Movie 2: The Second Part (Q1) • Kingsman 3 (Q4) • Avengers: Endgame (Q2) • Toy Story 4 (Q2) • Spider‐man: Far From Home (Q

  22. Slide 22: Financial Review 2018

    Financial Review 2018 CFO, Mr. Nicolas De Clercq

  23. Slide 23: Financial highlights

    financial highlights  Revenue up by 33,9% with 40,7% more visitors  Increase Visitors (+40,7%)  Increase Box Office (+35,5%)  Increase In‐theatre Sales (+53,6%)  Increase B2B (+14,3%)  Increase Sales and Events (+13%)  Increase Screen Advertising (+20,2%)  Less revenue Brightfish (‐1

  24. Slide 24: Revenue by country

    Revenue by country Revenue €m YE 2018 % of Tot YE 2017 % of Tot % ∆ YoY % ∆ Y Vis Belgium 156,6 33,0% 161,9 45,5% ‐3,3% ‐5,2% France 71,0 14,9% 73,4 20,7% ‐3,3% ‐6,8% Canada 127,0 26,7% 12,1 3,4% 947,3% 986,9% Spain 44,7 9,4% 43,7 12,3% 2,3% ‐2,1% The Netherlands 57,2 12,0% 44,0 12,4% 30,0% 28,2% Lu

  25. Slide 25: Evolution Box Office

    Evolution Box OFFICE * Box Office revenue after deduction of indirect taxes, including VPF revenue 25

  26. Slide 26: Evolution In-theatre Sales

    €m 140 120 100 In-theatre Sales 2017 130,5 2018 5,00 € 4,50 € 4,00 € 3,50 € 3,00€ 2,50 € 2,00 € 150€ 1,00€ ITS / Visitor 2014 2015 ——ITS / visitor 2016 2017 2018 ++e-+ Excl Canada af KINEPOLIS”

  27. Slide 27: B2B revenue

    B2B revenue * Excluding Brightfish * Excluding Brightfish 27

  28. Slide 28: Real estate

    €m 15,0 14,0 13,0 12,0 11,0 10,0 9,0 8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0 ’ YE 2017 YE 2018 af KINEPOLIS”

  29. Slide 29: Brightfish

    12,1 YE 2017 @ Screen Advertising YE 2018 @ Sales & Events af KINEPOLIS”

  30. Slide 30: Film distribution

    Film distribution # releases 31 34 30

  31. Slide 31: Revenue by activity

    Revenue by activity -0,3% +7,3 +9,5% +9,2% +38,0% -12,8% +11,3% €m +35,5% +53,6% +13,0% +20,2% ‐11,8% +20,7% +2,9% 600 355,4 68,2 45,5 5,1 1,8 ‐1,4 0,8 0,4 475,9 500 400 300 200 100 Business line Cinema 0 YE 2017 Box In‐theatre Sales & Screen Brightfish Film Real YE 2018 Office Sales Events Advertis

  32. Slide 32: Recurring operating costs

    Recurring operating costs €m YE 2018 YE 2017 % Better / ‐Worse Recurring Marketing & Selling expenses ‐24,9 ‐20,1 ‐23,9% Recurring Administrative Expenses ‐26,2 ‐21,2 ‐23,6% Recurring Other Operating Income / Cost 1,8 1,0 85,9% Recurring Operating Costs ‐49,3 ‐40,4 ‐22,2% Non‐Recurring Operating Cos

  33. Slide 33: Non-recurring items

    Non-recurring items €m YE 2018 YE 2017 Dismissal fees ‐0,5 ‐0,8 Legal fees ‐0,3 ‐1,6 Expansion costs ‐0,8 ‐0,5 Gain / Loss on disposal PPE ‐0,3 1,7 Other 0,3 ‐0,1 EBITDA ‐1,8 ‐1,2 Depreciation & Impairment losses ‐0,5 ‐ Provisions 0,5 0,1 Financial result 0,4 0,6 Income tax expense 1,2 4,8 Net impac

  34. Slide 34: Evolution REBITDA per visitor

    Evolution Rebitda* per visitor 8,00 € 6,96 7,00 € 6,47 6,00 € 5,60 5,04 5,00 € 4,47 4,12 3,95 4,00 € 3,67 3,34 3,54 2,93 ‐18,9% 3,00 € 2,61 2,75 2,00 € 1,58 1,00 € 0,00 € YE 2017 YE 2018 Belgium* France Canada Spain The Netherlands Luxembourg Group * Per country excluding corporate entities, KFD & B

  35. Slide 35: REBITDA by country

    Rebitda by country €m YE 2018 % of Total YE 2017 % of Total % Better / ‐Worse % ∆ Y Vis Belgium 40,3 33,9% 44,0 42,1% ‐8,2% ‐5,2% France 23,3 19,6% 25,9 24,8% ‐10,1% ‐6,8% Canada 18,4 15,4% 3,1 3,0% 485,7% 986,9% Spain 11,9 10,0% 11,5 11,0% 3,4% ‐2,1% The Netherlands 18,2 15,3% 12,5 12,0% 45,2% 28,2

  36. Slide 36: REBITDA & REBITDAR

    Rebitda & REBITDAR * ** Belgium 41,7% 42,4% 39,9% 40,8% * France 35,2% 36,5% 32,8% 34,6% * *** Canada 8,8% 22,6% 14,5% 28,2% * Spain 26,1% 36,5% 26,5% 36,6% * The Netherlands 28,5% 32,7% 31,8% 35,9% * Luxembourg 34,4% 38,0% 34,6% 38,5% Switz. & Poland 40,2% 39,7% Total 29,3% 32,3% 25,0% 30,9% YE 201

  37. Slide 37: IFRS 16 Leases

    IFRS 16  The new standard (IFRS 16 ‐ Leases) becomes effective as from the 1st of January 2019.  This standard has a major impact on the accounting treatment of leases:  The balance sheet will grow due to the fact that all material leases will be booked on the asset and liability side of the bala

  38. Slide 38: Depreciation, amortization, provisions

    Depreciation, amortization, provisions €m 0 ‐5 ‐10 ‐15 ‐20 ‐25 ‐30 ‐35 ‐30,3 0,0 ‐30,3 ‐40 ‐7,8 ‐38,1 0,0 ‐38,1 ‐45 YE 2017 Non‐recurring YE Recurring YE 2017 Normal Recurring YE 2018 Non‐recurring YE YE 2018 2017 diff's* 2018 * € -7,8 M of which € -6,7 M is related to Canada. 38

  39. Slide 39: Financial result

    Financial result €m YE 2018 YE 2017 % Better / ‐Worse Interest Expense ‐10,30 ‐7,39 ‐39,5% Other (CNC, Derivates, FX) ‐2,07 ‐0,83 ‐149,9% Financial (Cost) / Income ‐12,37 ‐8,21 ‐50,6% €m 0,0 ‐2,0 ‐4,0 ‐6,0 ‐8,0 ‐8,21 ‐10,0 ‐12,0 ‐2,92 ‐0,08 ‐1,16 ‐12,37 ‐14,0 YE 2017 Interest FX Other YE 2018 39

  40. Slide 40: Taxes

    taxes €m YE 2018 YE 2017 % Better / ‐Worse Profit before taxes 66,8 64,7 3,2% Taxes ‐19,4 ‐15,6 ‐23,8% Profit 47,4 49,1 ‐3,4% Effective Tax Rate ('ETR') 29,0% 24,2% 482 bps Tax effect on non‐recurring items 1,2 4,8 ‐74,4% Recurring Effective Tax Rate ('RETR') 30,2% 31,3% ‐112 bps €m 0 ETR RETR RETR

  41. Slide 41: REBITDA to net result

    Rebitda to net result €m 130,0 119,0 110,0 90,0 80,9 ‐38,1 70,0 ‐12,8 50,0 47,4 ‐20,6 ‐0,1 30,0 10,0 ‐10,0 REBITDA YE 2018 Recurring REBIT YE 2018 Recurring Current Other Non‐recurring Result YE 2018 Depr, financial taxes items Amort, result Prov 41

  42. Slide 42: Investments

    investments €m YE 2018 YE 2017 €m 95,7 Belgium 12,3 11,0 100 France 4,3 3,0 90 Canada 7,6 1,8 80 70 Spain 3,5 3,1 56,8 60 The Netherlands 3,7 1,1 50 Luxembourg 0,9 0,3 40 Other 0,1 0,2 30 Maintenance & Internal Expansion 32,4 20,6 15,9 16,4 20 External Expansion 56,8 95,7 10 10,6 10,0 TOTAL 89,1 116

  43. Slide 43: Free cash flow: YE 2018 vs YE 2017

    Free cash flow: ye 2018 vs ye 2017 €m 80,0 1,8 ‐0,6 ‐5,5 12,6 70,0 ‐3,0 64,7 59,5 60,0 50,0 40,0 30,0 20,0 10,0 0,0 FCF YE 2017 EBITDA Income Tax Working Capex ‐ Maintenance Interest FCF YE 2018 Paid Capital Paid 43

  44. Slide 44: Net financial debt evolution

    Net financial debt evolution €m YE 2018 YE 2017 Better/‐Worse % Better/ ‐Worse Net Financial Debt (NFD) 276,8 224,3 ‐52,5 ‐23,4% Leverage ratio*: NFD/REBITDA** 2,33 2,15 m€ 0 ‐50 113,0 ‐100 ‐150 ‐22,4 0,3 ‐200 ‐224,3 ‐88,7 ‐250 ‐10,7 0,5 ‐24,5 ‐276,8 ‐20,3 ‐0,3 0,5 ‐300 NFD YE 2017 EBITDA + Taxes Wo

  45. Slide 45: Net financial debt evolution

    net financial debt evolution €m YE 2018 YE 2017 Better/‐Worse % Better/ ‐Worse Net Financial Debt (NFD) 276,8 224,3 ‐52,5 ‐23,4% Leverage ratio*: NFD/REBITDA** 2,33 2,15 € 300 3,5 € 250 3,0 2,5 € 200 2,0 €m € 150 1,5 € 100 1,0 € 50 0,5 €0 0,0 YE 2014 YE 2015 YE 2016 YE 2017 YE 2018 REBITDA Net Finan

  46. Slide 46: Maturity profile financial debt

    Maturity profile financial debt € 120.000.000 RCF 5Y* Priv. Plac. 8Y (December) 90.000.000 60.000.000 100.000.000 Bond 7Y Priv. Plac. 7Y 80.000.000 59.122.000 61.400.000 Priv Plac. 10Y 65.000.000 60.000.000 40.000.000 Bond 8Y Priv Plac. 10Y (January) 15.878.000 34.600.000 20.000.000 0 2019 2020 2021

  47. Slide 47: Balance sheet

    Balance sheet €m 31/12/2018 % of Total 31/12/2017 % of Total €m 31/12/2018 % of Total 31/12/2017 % of Total Intangible assets 9,7 1,4% 9,0 1,3% Capital & share premium 20,1 3,0% 20,1 2,8% Goodwill 94,9 13,9% 86,4 12,0% Consolidated reserves 161,5 23,7% 157,6 21,9% Property, plant & equipment 424,3 6

  48. Slide 48: Shareholders

    shareholders 19/02/2019 17/08/2018 # Shares % # Shares % Total shares outstanding 27.365.197 100% 27.365.197 100% Reference Shareholders & Free Float # Shares % # Shares % Kinehold Bis, Pentascoop and Mr. Joost Bert 13.192.268 48,21% 13.192.268 48,21% Treasury shares (own shares) 492.346 1,80% 492.3

  49. Slide 49: Financial calendar

    Financial calendar Thursday 21/02/2019 Annual results 2018 Press & analyst meeting Wednesday 08/05/2019 General Meeting Kinepolis Group Wednesday 08/05/2019 Business Update Q1 2019 Thursday 22/08/2019 Half Year results 2019 Press & analyst meeting Thursday 14/11/2019 Business Update Q3 2019 49

  50. Slide 50: Annexes Financial Statements

    Annexes Financial Statements Results 2018

  51. Slide 51: Realized acquisitions and greenfields (2014-2018)

    REALIZED ACQUISITIONS AND greenfields (2014 – 2018) Country City # Complexes # Screens Est. Visitors / Year Realized Spain Alicante 1 16 1,0 mio Q2 2014 Alcobendas ‐ Madrid 1 12 Nevada – Granada 1 8 0,4 mio Q4 2016 The Netherlands Wolff Bioscopen 9 46 1,6 mio Q3 2014 Acq. Building Enschede (Wolff) Q

  52. Slide 52: Consolidated income statement

    Consolidated income statement €m YE 2018 YE 2017 % Better / ‐Worse Revenue 475,9 355,4 33,9% Cost of Sales ‐345,7 ‐242,0 ‐42,8% Gross profit 130,2 113,4 14,8% Gross profit % 27,4% 31,9% Marketing & selling expenses ‐25,2 ‐20,4 ‐23,6% Administrative expenses ‐26,9 ‐22,8 ‐18,0% Other operating income

  53. Slide 53: Consolidated balance sheet

    Consolidated balance sheet €m 31/12/2018 31/12/2017 % Better / ‐Worse Intangible assets 9,7 9,0 6,8% Goodwill 94,9 86,4 9,8% Property, plant & equipment 424,3 390,0 8,8% Investment property 17,0 17,7 ‐4,0% Deferred tax assets 1,4 1,2 20,7% Other receivables 10,8 10,1 6,6% Total non‐current assets 55

  54. Slide 54: Consolidated balance sheet

    Consolidated balance sheet €m 31/12/2018 31/12/2017 % Better / ‐Worse Capital & share premium 20,1 20,1 0,0% Consolidated reserves 161,5 157,6 2,5% Translation differences ‐4,2 ‐1,3 ‐225,1% Equity attributable to equity holders of the parents 177,4 176,4 0,6% Non‐controlling interests 0,2 0,0 0,0% T

  55. Slide 55: Cash flow statement

    Cash flow statement €m YE 2018 YE 2017 Better / ‐Worse Profit before tax 66,8 64,7 2,1 Adjustments for: Depreciation, amortization & provisions 36,2 29,8 6,4 Government grants ‐1,1 ‐0,9 ‐0,2 Gains / losses on sale of PPE & financial assets 0,3 ‐1,8 2,1 Financial result & Share based payments 11,0 8,

  56. Slide 56: Free cash flow

    Free cash flow €m YE 2018 YE 2017 Better / ‐Worse Cash Flow before WC movements & tax paid 113,0 100,5 12,6 Income taxes paid ‐22,4 ‐24,1 1,8 Working capital 0,3 1,0 ‐0,6 Capital exp – maintenance ‐15,9 ‐10,4 ‐5,5 Interest paid ‐10,3 ‐7,3 ‐3,0 Free cash flow 64,7 59,5 5,2 Capital Exp ‐ Digitalizatio

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Kinepolis Group — FY2018 Earnings Presentation on 6ix