Hollywood Bowl Group Plc · LSE:BOWL
Hollywood Bowl — H1 2022 Earnings Presentation
33 slides from Hollywood Bowl's earnings presentation, May 25, 2022
Slide 1: Half Year Results H1 FY2022
Half Year Results H1 FY2022 Hollywood Bowl Group plc
Slide 2: Agenda
Agenda Stephen Burns Chief Executive Officer • H1 FY2022 financial and operational highlights • Trading in a post covid environment • Summary and outlook Laurence Keen Chief Financial Officer • H1 FY2022 financial review • Investment into core estate and new centres Hollywood Bowl Group plc 2
Slide 3: H1 FY2022 highlights
H1 FY2022 highlights Average spend Total revenue1 LFL sales growth1 per game1 £91.3M +26.8% £10.52 (H1 FY2021: £10.4m) (H1 FY2019: +4.4%) (H1 FY2021: £10.16) Net cash / (debt) Group adjusted Profit / (loss) EBITDA2 before tax2 £49.6M £31.0M £24.8M (FY2021: £29.9m) (H1 FY2021: (£7.4m)) (H1 FY2021: (£
Slide 4: COVID-19 impact on H1 FY2022
COVID-19 COVID-19 impact on H1 FY2022 • Levelling off of demand during December • Team absence peaked due to Omicron • Post COVID demand exceptional, not structural • The reduced rate (TRR) of VAT on bowling activities secured Safe and welcoming environments • Staged removal of COVID-19 protocols •
Slide 5: Financial review
Financial review
Slide 6: Financial performance
Financial performance Revenue1 (£m) +36.3% vs H1 FY2019 Group Adjusted EBITDA2 pre-IFRS 16 (£m) +46.9% vs H1 FY2019 91.3 31.0 67.0 69.2 21.1 21.6 12.0 H1 19 H1 20 H1 21 H1 22 H1 19 H1 20 H1 21 H1 22 Statutory Operating Profit Margin (%) +12.8%pts vs H1 FY2019 Statutory Earnings Per Share (Pence) +82
Slide 7: Record breaking H1 performance
Record breaking H1 performance • LFL revenue growth of 26.8% (vs H1 FY2019) driven by growth in • Ancillary LFL revenue growth number of games played and spend per game growth (excluding » Food revenue up 8.4% despite food menu pricing 10.9% lower TRR of VAT on bowling) than in FY2019 • Games LFL vo
Slide 8: Income statement
Income statement (£m) H1 FY2022 H1 FY2022 (excluding H1 FY2021 H1 FY2019 Movement vs (statutory) VAT bowling benefit) FY2019 Revenue 100.2 91.3 10.4 67.0 +36.3% • Total revenue up 36.3% on H1 FY2019 Gross profit 86.5 77.7 9.2 57.5 +35.1% » Statutory revenue up 49.5% vs H1 FY2019 Gross profit % 86.4%
Slide 9: Input inflation under control
Input inflation under control • Payroll (c.17.5% of revenue) inflation in line with expectations 5.8% H1 FY2022 P&L breakdown » Successful hourly incentive scheme » Biggest centre management bonus ever 14.8% • Energy costs (c.2.5% to revenue) – hedged until 2024 » FY2022 paying less than 30% of curr
Slide 10: Strong trading driving free cash flow
Strong trading driving free cash flow • Group adjusted operating cash flow of £30.7m • 2 new centres opened in H1, with Belfast opening in April 2022 • Record trading and effective cost management drove cash inflow Overall new centre spend of £5.8m (inc £1.6m for Belfast) • Working capital benefit i
Slide 11: Capital allocation policy
Capital allocation policy • Strong balance sheet • Dividend policy in line with pre Covid » Net cash of £55.2m April 2022 » Ordinary dividend of 50% profit after tax » No CLBILs or government support taken in FY2022 » H1 dividend of 3.0 pence per share • Priorities for capital » Organic investments
Slide 12: Financial outlook for FY2022
Financial outlook for FY2022 • Exceptional start to FY2022 » H1 LFL of 26.8% (exc TRR of VAT on bowling) vs H1 FY2019 » More modest growth expected during summer due to increased foreign travel » Expecting double digit teen-LFL growth for full year » Dividend reinstated • Managing cost pressures » C
Slide 13: Delivering on our growth strategy
Delivering on our growth strategy
Slide 14: Growing sustainably
Growing sustainably Organic growth New centres and acquisitions Constant focus on customer experience Maintaining a high quality, profitable estate • Increasing dwell time through customer focused culture and innovation • Rolling refurbishment programme which prioritises spend on strong returns • Fo
Slide 15: Delivering experiences our customers really value
Delivering experiences our customers really value • The universal appeal and inclusiveness of bowling combined with an affordable price point, gives resilience against consumer spending squeeze • Customer service is a true point of differentiation in a growing competitive socialising market • Critic
Slide 16: Enhancing the customer journey through technology
Enhancing the customer journey through technology • Growing database of over 2m contactable customers • Enhanced Data Platform improving engagement rates and driving revenue from the database, with learning used to increase effectiveness of the digital advertising and improve conversion rates • Inve
Slide 17: Core to the offer
Core to the offer Great value food and drink offer Amusement innovation and increased capacity • Food menu simplified during COVID restrictions • Increasing the density and quality of machines - over time, it has become cheaper to play • VFM, quality and speed of service metrics up versus FY2019 • R
Slide 18: Attracting and retaining the very best people
Attracting and retaining the very best people • 15% more team members than in FY2019 - recruited in a very competitive labour market • Re-started the talent development programmes with over 100 ‘managers in training’ over 40% of our management roles filled internally • Hourly paid incentive scheme,
Slide 19: Delivering on our ESG strategy
Delivering on our ESG strategy Safe and inclusive leisure Outstanding workplaces Sustainable centres destinations • Talent attraction and retention • Waste management • Health and safety • Diversity and inclusion • Energy efficiency • Accessibility and wellbeing • Training and development • Greenhou
Slide 20: Sustainable centres
Sustainable centres Generating our own energy EV car scheme • Eight centres now have solar panels installed • c. 32% of our business miles will be driven by • On course to have at least 15 installed by end of electric cars by end of FY2022 FY2022 • Panels generate 30% of the electricity used by the
Slide 21: Investment led growth
Investment led growth
Slide 22: Attractive returns from refurbishments
Attractive returns from refurbishments • SPG performance +13.2% • Lineage +17.8% • Average LFL revenue growth of 39.5% for last 7 refurbishments and rebrands • 3 centres refurbished/rebranded in H1 – 4 more by end of FY2022 • Ongoing pipeline of centres to refurbish – typically on a 5-7 year cycle •
Slide 23: Increasing amusements density
Increasing amusements density Birmingham Rubery • Combined the bar and diner and maintained the number of covers • Repurposed diner space to create an extra 1,300 sq ft for machines • Additional 10 machines added to the amusements offer • No loss in food and drink revenue • Amusements seeing the lar
Slide 24: Strong new centre pipeline to FY2024
Strong new centre pipeline to FY2024 • 11 new centre openings for Hollywood Bowl and Puttstars brands currently signed in high quality leisure and retail schemes • A further 4-6 locations are targeted for openings before 2025 • Belfast open • Birmingham Resorts World open • Harrow (Puttstars) open •
Slide 25: Attractive returns from new centres
Attractive returns from new centres • Continued focus on quality openings » Total of £8.2m net capital invested » EBITDA return of £3.7m in first 12 months of new openings • Strong performance from new centre openings in FY2022 1,000 80% 70.9% 900 70% 800 59.3% 60% Return on investment 700 51.0% Yea
Slide 26: Puttstars – testing, learning, evolving
Puttstars – testing, learning, evolving • 4 centres open – robust group to continue testing and evolving the concept • All profitable, expected to deliver circa £1.2m EBITDA annualised • Hole design refinements, environment refinements, brand development ongoing • Puttstars capacity similar to 12-la
Slide 27: International expansion
International expansion
Slide 28: Well operated business in an attractive growth market
Well operated business in an attractive growth market • Developing our business in international markets is part of our long-term growth strategy and after an extensive and thorough search, we identified a target in Canada • Canada is a well-established market with similarities to the UK, but is fra
Slide 29: Significant opportunity to add value and grow the business
Significant opportunity to add value and grow the business • The management team will remain with the business and has an ambitious growth plan that will require some funding from the UK – it is not envisaged this funding will impact the Group’s capital allocation policy • Consideration spread acros
Slide 30: Summary and outlook
Oo Summary and outlook
Slide 31: Well positioned for the future
Well positioned for the future • Market leader with high quality, well-invested estate led by experienced management team • Continued strong demand for family focused, affordable leisure experiences • Strong balance sheet supports ability to invest in future growth and take advantage of market oppor
Slide 32: Appendices
Appendices
Slide 33: Management
Management Stephen Burns Chief Executive Officer Appointment Stephen joined the Group as Business Development Director in 2011. He was promoted to Managing Director in 2012 and became Chief Executive Officer in 2014. Skills and experience Before joining the Group, Stephen worked within the health an