Six Flags Entertainment Corporation · NYSE:FUN
Six Flags Entertainment — Cedar Fair — Investor Presentation (March 2020)
40 slides from Six Flags Entertainment's investor presentation, Mar 6, 2020
Slide 1: Investor Presentation March 2020
Exhibit 99.1 Investor Presentation March 2020Exhibit 99.1 Investor Presentation March 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some slides and comments included here, particularly related to estimates, comments on expectations about future performance or business conditions, may contain “forward-looking statements” within the meaning of the federal securities laws which involve risks and uncertain
Slide 3: Cedar Fair Executive Team
Cedar Fair Executive Team Brian Witherow Duff Milkie CFO GC Tim Fisher COO Kelley Semmelroth CMO Richard Zimmerman Dave Hoffman CAO CEO Craig Heckman HRO 2Cedar Fair Executive Team Brian Witherow Duff Milkie CFO GC Tim Fisher COO Kelley Semmelroth CMO Richard Zimmerman Dave Hoffman CAO CEO Craig Hec
Slide 4: Vision and Mission
Vision: To be the preferred choice for regional entertainment. Mission: To make people happy by providing them fun, dynamic and memorable experiences they can share with their family and friends year after year. 3Vision: To be the preferred choice for regional entertainment. Mission: To make people
Slide 5: Parks Portfolio Key Statistics
PARKS PORTFOLIO KEY STATISTICS Own and operate 11 Entertain amusement parks 28M visitors annually 9 outdoor water parks 841 (in-park) rides and attractions 4 124 outdoor water parks roller coasters (unique gates) 2,300+ 1 hotel rooms indoor water park (hotel feature) 4PARKS PORTFOLIO KEY STATISTICS
Slide 6: 2019 Operating Results
Ended 12/31/19 Ended 12/31/19 Same-park Basis 2019 Operating Results w/ Schlitterbahn $1.47B $1.43B 3% 4% Net Revenues 9% 6% 1% Net Revenues Growth 8% 5% Attendance 1% 1% In-Park Per Capita Spending 8% 11% Out-of-Park Revenues 5Ended 12/31/19 Ended 12/31/19 Same-park Basis 2019 Operating Results w/
Slide 7: Consumer Demand Remains Strong
Consumer Demand Remains Strong (a) TOTAL REVENUE ADJUSTED EBITDA ($ in millions) ($ in millions) 1,600 550 $1,475 1,500 $505 500 $481 $479 $1,349 $468 1,400 $459 $1,322 $1,289 $431 1,300 450 $1,236 $425 $1,160 1,200 $391 $1,135 400 $375 $1,068 1,100 $1,028 350 1,000 900 300 2011 2012 2013 2014 2015
Slide 8: Strong Long-Term Growth and Recession Resilient
Strong Long-Term Growth and Recession Resilient Financial Crisis 2009 = (11.0%) $600 Acquisitions: 2010 = 13.2% 1992 – Dorney Park Early 2000’s 1995 – World of Fun $500 Recession 1997 – Knott’s Berry Farm 2001 – Michigan’s $400 Adventure 2001 = (6.1%) Early 1990’s 2002 = 11.4% 2004 – Geauga Lake Rec
Slide 9: Compelling Investment Rationale
Compelling Investment Rationale Why FUN Industry has high barriers to entry Steady growth in revenues, free cash flow and cash distributions Consumers prioritizing experiences over possessions Balance Sheet quality and strength Invests in high-quality assets FUN guests have loyal and emotional conne
Slide 10: Investment of Excess Cash Flow
Investment of Excess Cash Flow • $3.74 per limited partner unit Sustainable Strong free (annualized) and growing cash flow (a) • Yield of 8.2% distribution from • 33 consecutive years of distributions operations • Expand investments in more immersive guest experiences within the core Investment in f
Slide 11: CAPEX Strategy
CAPEX Strategy Capital investment in new attractions and infrastructure needs • Maintain position as the leader in world- migrating toward 9% of revenues over next 2‐3 years, before investment in adjacent development class thrill rides and attractions • Broaden park offerings, improve guest New Ride
Slide 12: New Long-Range Plan
New Long-Range Plan 11New Long-Range Plan 11
Slide 13: Consumer Insights Research
Consumer Insights Research We’ve held numerous Focus Groups to explore which types of entertainment experiences are most likely to motivate visitation. Key Findings: • Something for everyone - consumers are seeking entertainment options that can accommodate all types of people, ages and interests •
Slide 14: Consumer Insights Research: Top Reasons to Visit
Consumer Insights Research Rides and events remain top reasons for visiting our parks, with high-park-interest guests driven by water parks and family coasters. Top Reasons to Visit Parks: • Family Rides • Thrill Coasters • Water Rides • Seasonal Events • Anniversary Celebrations 13Consumer Insights
Slide 15: Long-Range Plan: Core Strategies
Long-Range Plan: Core Strategies • Broaden the Guest Experience o More visits from existing guests o Incremental visits from new guests • Expand the Season Pass Program • Increase Market Penetration through Targeted Marketing Efforts • Pursue Adjacent Development 14Long-Range Plan: Core Strategies •
Slide 16: Broadening the Guest Experience
Broadening the Guest Experience 15Broadening the Guest Experience 15
Slide 17: Traditional Attractions Still Important
Traditional Attractions Still Important (circa 2019) 16Traditional Attractions Still Important (circa 2019) 16
Slide 18: Coming Rides and Attractions for 2020
Coming Rides and Attractions for 2020 • Every park gets something new • Headliners include Giga-coaster Orion at Kings Island and South Bay Shores water park at California’s Great America • A new Camp Snoopy for Michigan’s Adventure and Beagle Brigade Airfield kids' airplane ride for Canada’s Wonder
Slide 19: Significant Milestone Celebrations in 2020
Significant Milestone Celebrations in 2020 th Cedar Point’s 150 Anniversary • Celebrate 150 Spectacular o Evening Parade and Street Party • Ticket of a Lifetime o 150 Golden Tickets Giveaway – lifetime free admission for winner and 3 guests • Snake River Expedition o Riverboat adventure th Knott’s B
Slide 20: "Seasons of FUN" Model: Creates Urgency to Visit
“Seasons of FUN” Model: Creates Urgency to Visit 19“Seasons of FUN” Model: Creates Urgency to Visit 19
Slide 21: Offer Guests Immersive Experiences
Offer Guests Immersive Experiences 20Offer Guests Immersive Experiences 20
Slide 22: Food & Beverage Playing A Key Role
Food & Beverage Playing A Key Role • Our research confirms food and beverage today play a critical role in the guest experience • Consumers want unique experiences, offerings they can’t get at home • We have enhanced existing F&B facilities, added more immersive dining experiences • Executive chefs
Slide 23: The Changing Landscape of Food & Beverage
The Changing Landscape of Food & Beverage 22The Changing Landscape of Food & Beverage 22
Slide 24: Popular 4th Quarter Special Events Providing Growth
th Popular 4 Quarter Special Events Providing Growth • 2016 – first year for the event (one park with approximately 140,600 guests in attendance) • 2019 – six parks with a combined attendance of approximately 1.2 million st • Canada’s Wonderland – extraordinary 1 year • Haunt’s popularity has increa
Slide 25: Expanding the Season Pass Program
Expanding the Season Pass Program 24Expanding the Season Pass Program 24
Slide 26: Season Pass Channel Growth Remains Strong
Season Pass Channel Growth Remains Strong 2019 • Season pass visitation comprised 53% of Retail / Other 2019 total attendance (same park), up from Season 27% in 2009 Pass Group • Season passes sold for 2019 exceeded 2.6 Sales million units, nearly double the number sold in Season Pass Group Sales Re
Slide 27: Evolution of the Season Pass Program
Evolution of the Season Pass Program Goal: Transition program to Long-term Relationship-based model (from Seasonal Transactional) § Loyalty Program builds lifetime value for guests Objectives: § Address affordability concerns for value-oriented guests while maintaining admissions price integrity § D
Slide 28: SP Payment Plan + Loyalty Program Meet Objectives
SP Payment Plan + Loyalty Program Meet Objectives CEDAR FAIR SEASON PASS PROGRAM Subscription Key Objectives Payment Plan+ Loyalty Program Model Affordability YES NO YES Retention NO YES YES Visitation NO YES NO Pricing Power YES YES NO Purchase Urgency YES NO NO 27SP Payment Plan + Loyalty Program
Slide 29: PassPerks Loyalty Program – 2020 Introduction
PASSPERKS Loyalty Program – 2020 Introduction Objective: Deliver surprises and provide incentives to our most engaged guests – the season passholder • Offer a program that resonates with season passholders • Play into our guest’s emotions by delivering the unexpected • Drive incremental visits from
Slide 30: Enhanced Targeted Marketing Efforts
Enhanced Targeted Marketing Efforts 29Enhanced Targeted Marketing Efforts 29
Slide 31: Market Sizing Study
Market Sizing Study Performed to better measure the current penetration of markets feeding our parks and gain a better understanding of the consumer segments within those markets. Key Findings: • Strong attendance penetration among demographic groups in decline o Lowest penetration among groups with
Slide 32: Pursue Adjacent Development
Pursue Adjacent Development 31Pursue Adjacent Development 31
Slide 33: Evolution of the Accommodations Channel
Evolution of the Accommodations Channel • Substantial growth of accommodations portfolio last 8 years: o Total hotel rooms grew to more than 2,300 from 1,900 (includes Schlitterbahn and Sawmill Creek Resort) o Total luxury RV sites increased to more than 600 • Accommodations Revenue: o > $80 million
Slide 34: Adjacent Development – Accommodations
Adjacent Development – Accommodations • Charlotte – adjacent to Carowinds • Sandusky – minutes from Cedar Point • Opened November 2019 • 236-room hotel and conference center, • 130 well-appointed suites restaurants, Tom Fazio-designed golf course • Year-round accommodations • Undergoing rolling reno
Slide 35: Cedar Point Sports Center
Cedar Point Sports Center Outdoor Facility • Opened March 2017 – performance is pacing well ahead of the original pro-forma model • 10 multi-use fields with clubhouse • Baseball, softball, soccer, lacrosse Indoor Center • Opened January 2020 • 145,000 square feet • Court space accommodates 10 basket
Slide 36: 2019 Transactions
2019 Transactions 352019 Transactions 35
Slide 37: Key Takeaways
Key Takeaways •Growth o We’re confident we have the strategies and initiatives in place to drive attendance, per capita and revenue growth for the foreseeable future • Leverage o Our priority is responsibly reducing total leverage back below 4.0x as quickly as possible o Re-establish balance sheet f
Slide 38: Appendix
Appendix 37Appendix 37
Slide 39: Capital Structure – Debt Maturities
Capital Structure – Debt Maturities Amounts in Millions 1200 § Total debt outstanding of $2.2B Revolver Term Debt Bonds at 12/31/19 $450 900 § Cash on hand totaled $182M at 12/31/19 § Consolidated Leverage Ratio at 600 12/31/19 of 4.3x (3.9x net) § Full-year 2019 cash interest costs of $86M $729 300
Slide 40: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 39Adjusted EBITDA Reconciliation 39