Six Flags Entertainment Corporation · NYSE:FUN
Six Flags Entertainment — Cedar Fair — Investor Presentation (March 2023)
46 slides from Six Flags Entertainment's investor presentation, Mar 6, 2023
Slide 1: Investor Presentation March 2023
Investor Presentation March 2023
Slide 2: Forward-Looking Statements
Some of the information in this presentation that is not historical in nature constitutes “forward‐looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements as to the Company's expectations, belief
Slide 3: Cedar Fair Well Positioned for Future Growth and Value Creation
Cedar Fair Well Positioned for Future Growth and Value Creation • Demand remains strong for our parks and resort properties • Reliable, recurring and growing revenue streams underpin the business model • Ongoing investments to continue around the guest and associate experience • Data‐driven pricing
Slide 4: FUN Overview
FUN Overview
Slide 5: Compelling Investment Rationale
Compelling Investment Rationale 1 2 Best‐in‐class parks and brands with loyal, high‐repeat customer base 3 High barriers to entry, with no new regional parks being built 4 Resilient operating performance through various economic cycles 6 Industry‐experienced management team with history of deliverin
Slide 6: Cedar Fair Business Model Highlights
Cedar Fair Business Model Highlights 6 Offering guests unique experiences; Driving advance purchases; Investing in the business • High‐Quality, Immersive Guest Experiences o Differentiated entertainment experiences aimed at driving demand and guest spending o Broadening park offerings drives value f
Slide 7: Irreplaceable Portfolio of Regional Parks and Resorts
2022 STATISTICS 26.9M guests entertained 3.2M season passes sold $1.82B in Net Revenues $552M of Adjusted EBITDA(a) PORTFOLIO OF PROPERTIES 11 amusement parks 4 separately gated outdoor water parks 1 indoor water park 7 hotels and other resort properties with 2,300+ rooms 4 campgrounds with 600+ cab
Slide 8: Recession Resilient Business Model
Recession Resilient Business Model Acquisitions: 1992 – Dorney Park 1995 – Worlds of Fun 1997 – Knott’s Berry Farm 2001 – Michigan’s Adventure 2006 – Paramount Parks (five parks) 2019 – Schlitterbahn (two water parks) 2019 – Sawmill Creek Resort & Conference Center $0 $100 $200 $300 $400 $500 $600 (
Slide 9: Business Model Generates Strong Free Cash Flow
Business Model Generates Strong Free Cash Flow $265 $283 $321 $291 $278 $324 $265 $369 $0 $50 $100 $150 $200 $250 $300 $350 $400 2014 2015 2016 2017 2018 2019 2020 2021 2022 Reported Adjusted EBITDA less CAPEX (a) 9 Enables consistent levels of reinvestment – a competitive advantage and long‐term gr
Slide 10: ESG Strategy: Better Fun Builds a Better World
ESG Strategy: “Better Fun Builds a Better World” 10 • Safety has been a key cornerstone and value throughout Cedar Fair’s history and has fostered the company’s long track record of leading the industry in providing a safe and fun experience for all. • Associate happiness at work is important for al
Slide 11: Looking Ahead
Looking Ahead….. • Record 2022 results demonstrated the strength and resiliency of the business model • Committed to reinvesting in the business to drive growth: o Keep the guest experience fresh and inviting to create urgency to visit and improve guest spending o Drive advance purchase commitments
Slide 12: 2022 Demonstrated the Strength and Resiliency of the Business Model
2022 Demonstrated the Strength and Resiliency of the Business Model
Slide 13: Data Comparisons Used for this Presentation
Please note: The COVID‐19 pandemic and corresponding market disruption had a material impact on Cedar Fair’s results in 2020 and 2021. In May 2021, the Company opened all its U.S. properties for the 2021 operating season on a staggered basis with capacity restrictions, guest reservations, and other
Slide 14: Record Top/Bottom Lines
3% 4% Record Top/Bottom Lines 1% Net Revenues $1.82B Adjusted EBITDA(b) $552M Attendance 26.9M In‐Park Per Capita Spending(a) $61.65 Out‐of‐Park Revenues $213M 14 2022 Results (2,302 operating days) 2019 Results (2,224 operating days) $1.47B 27.9M $48.32 $169M $505M Yellow font represents record per
Slide 15: Strong Post-COVID Recovery Validates Model's Resiliency
Strong Post‐COVID Recovery Validates Model’s Resiliency Record performance in 2022, demonstrates the stability and strength of the business model Despite unique challenges this past year, net revenues grew to $1.82 billion (up 23% from 2019 levels) and Adjusted EBITDA grew to $552 million (up 9%
Slide 16: Record 2022 Performance Advances Capital Allocation Priorities
Record 2022 Performance Advances Capital Allocation Priorities 16 Dec 2021 Early redemption of 2024 bonds ($450M) Aug 2022 Reinstated cash distribution @ $1.20 annualized rate Authorized $250M buyback programJuly 2021 Parks fully reopen for first time post- pandemic July 2022 Sold record 3.2M season
Slide 17: Committed to Reinvesting in the Business Model
Committed to Reinvesting in the Business Model
Slide 18: Reinvesting in Properties Essential to Long-Term Growth
Reinvesting in Properties Essential to Long‐Term Growth 18 More than $1.6B of capital improvements made since 2012 • 16 roller coasters added, in addition to other rides/attractions • New attractions drive urgency and broaden guest experience New Rides and Attractions Expanded and Upgraded F&B Facil
Slide 19: Capital Investments Drive Attendance and Per Capita Growth
19 Capital Investments Drive Attendance and Per Capita Growth $45.54 $46.20 $46.90 $47.30 $47.69 $48.32 $46.38 $62.03 $61.65 $30.00 $35.00 $40.00 $45.00 $50.00 $55.00 $60.00 $65.00 ‐ 4,000,000 8,000,000 12,000,000 16,000,000 20,000,000 24,000,000 28,000,000 2014 2015 2016 2017 2018 2019 2020 2021 20
Slide 20: Investing in Our Associates
Investing in Our Associates • Following the pandemic, we made a strategic pivot to become market leader in wage rates, driving immediate returns in recruiting and retention o Average seasonal wage rate of ~$11.85 in 2019 compared to ~$17.10 in 2022 • Formed partnership with Bowling Green State Unive
Slide 21: Keeping the Guest Experience Fresh and Inviting
Keeping the Guest Experience Fresh and Inviting
Slide 22: Insights from Consumer Research Informing Guest Experience
Insights from Consumer Research Informing Guest Experience Market research and focus groups helping define types of entertainment experiences that are most likely to motivate visitation Key Findings: • Something for everyone ‐ consumers are seeking entertainment options that accommodate all types of
Slide 23: Seasons of FUN Event Strategy Drives Urgency and a High-Repeat Guest Base
Seasons of FUN Event Strategy Drives Urgency and a High‐ Repeat Guest Base • Compelling event calendar enhances value and drives demand • Differentiating the park experience creates urgency and promotes reasons for guests to visit more often • A differentiated event calendar broadens the guest exper
Slide 24: Driving Long-Term Sustainable Growth in Food & Beverage
Driving Long‐Term Sustainable Growth in Food & Beverage $‐ $50 $100 $150 $200 $250 $300 $350 $400 $450 2014 2015 2016 2017 2018 2019 2020 2021 2022 F&B Net Revenues (in $MM) 24 Since 2014, we’ve invested more than $160 million of strategic capital investments to enhance and expand dining facilities,
Slide 25: Resort Properties Expand Market Draw and Extend Length of Stay
Resort Properties Expand Market Draw and Extend Length of Stay $0 $20 $40 $60 $80 $100 $120 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Resort Revenues (in $MM) 25 Impacted by COVID‐19 Since 2012, we’ve invested more than $250 million of transformational capital to expand and upgrade our
Slide 26: Drive Advance Purchase Commitments Around Season Pass Products
Drive Advance Purchase Commitments Around Season Pass Products
Slide 27: Season Pass Strategy Provides Stability of Demand
Season Pass Strategy Provides Stability of Demand 27 • Compelling value in exchange for a non‐refundable commitment prior to the season • Flexible access for the entire season and event calendar • Various tiers of access and price across the network of parks • Ancillary benefits through add‐ on prod
Slide 28: Season Pass Represents Our Fastest Growing Channel
Season Pass Represents Our Fastest Growing Channel • Season pass visitation in 2022 totaled 15.9 million guests – up 10% from pre‐pandemic (2019) levels • A record 3.2 million season passes sold for the 2022 season o Unit sales were up more than 20% from 2.6 million passes sold for the 2019 season o
Slide 29: Driving Growth Through Season Pass Channel is Working
Driving Growth Through Season Pass Channel is Working $60 $70 $80 $90 $100 $110 $120 400,000 800,000 1,200,000 1,600,000 2,000,000 2,400,000 2,800,000 3,200,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Season Number of SP Units Sold (left scale) Average SP Price (right scale) 29 Achieved 4%
Slide 30: Evolving Suite of Season Pass Products Grows Double Digits
Evolving Suite of Season Pass Products Grows Double Digits $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Season Annual Sales of All‐Season Products (in $MM) 30 Achieved 10% CAGR in sales of all‐season products over the last 9 seasons Impacted b
Slide 31: Advance Purchase Channels Driving Admission Revenues
Advance Purchase Channels Driving Admission Revenues • Less than 50% of admissions revenues generated by advance commitment of season pass and group sales in 2012 • The mix of admission revenues continues to shift to advance commitment channels • Admission Revenues mix for 2020‐2022 reflects the imp
Slide 32: Segmentation of Our Marketable Guest Base
Segmentation of Our Marketable Guest Base
Slide 33: Opportunities to Expand Market Penetration Being Explored
Opportunities to Expand Market Penetration Being Explored Market sizing studies performed to measure the current penetration of markets feeding our parks and gain a better understanding of the consumer segments within those markets Key Findings: • Highest attendance penetration rates among demograph
Slide 34: Data-Driven Marketing Approach
Data‐Driven Marketing Approach • 17M Total Marketable Guests(1) in our CRM databases • Product and pricing decisions leverage guest behavior and price elasticity data • Targeted marketing via personalized messaging and product recommendations • Capital investments driven by market research and data
Slide 35: Pricing and Product Strategies Offer Value in Exchange for Commitment
Pricing and Product Strategies Offer Value in Exchange for Commitment • Advance purchase products create deliberate trade between lower price in exchange for: o Non‐refundable commitment o Purchase in advance of season/visit • Objective is to shift guests from single‐day tickets to season pass produ
Slide 36: Strategies For Growth Focused on Maximizing Excess Park Capacity
Strategies For Growth Focused on Maximizing Excess Park Capacity Throughout the Season 36 • Generate close to two‐thirds of our annual attendance during Q3 and Q4, leaving significant park capacity and opportunities to grow attendance during the first half of the year • Bigger crowds on peak days (e
Slide 37: Capital Allocation Priorities
Capital Allocation Priorities
Slide 38: Capital Allocation Strategy Remains Unchanged
• Total Net Leverage Target 3.0x to 4.0x Capital Allocation Strategy Remains Unchanged 38 • $200M in CAPEX planned for 2023 • Sustainable and growing • Current annualized rate of $1.20 per unit • $250M authorized • ~$210M used through January 2023 Reduce Debt to $2B Target Invest in our Properties P
Slide 39: Strong History of Returning Capital to Investors
$‐ $25 $50 $75 $100 $125 $150 $175 $200 $225 $250 Annual Cash Distributions Paid Annual Amount of Units Repurchased Impact of Great Recession Impact of COVID‐ 19 Strong History of Returning Capital to Investors 39 Since 1987, returned more than $3 billion of capital to unitholders through a combinat
Slide 40: Capital Investment Strategy Continues in 2023
Capital Investment Strategy Continues in 2023 • Investments of scale at each of our five largest parks, which have the highest operating leverage and produce more than 80% of our Adjusted EBITDA o Enhanced or expanded new themed areas planned at Cedar Point, Knott’s Berry Farm, Canada’s Wonderland,
Slide 41: Balance Sheet Strong and Getting Stronger
Balance Sheet Strong and Getting Stronger • Fully repaid term loan in Q3‐2022, reducing total debt outstanding to $2.3 billion at the end of the year o Have successfully paid off the equivalent of more than 90% of the pandemic‐related debt • Low average cost of debt – just above 5% o Full‐year 2023
Slide 42: Solid Capital Structure with No Near-Term Maturities
Solid Capital Structure with No Near‐Term Maturities In $MM $300 $1,000 $500 $300 $500 0 300 600 900 1200 2023 2024 2025 2026 2027 2028 2029 Revolver Capacity Senior Notes 42 5.500% Secured Notes 5.375% Unsecured Notes 5.250% Unsecured Notes 6.500% Unsecured Notes S + 350 bps (a) (a) Revolving credi
Slide 43: Appendix
Appendix
Slide 44: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 44
Slide 45: Calculation of Net Debt and Total Net Leverage
Calculation of Net Debt and Total Net Leverage 45
Slide 46: Table of Key Operational Measures
Table of Key Operational Measures 46