Hollywood Bowl Group Plc · LSE:BOWL
Hollywood Bowl — FY2023 Earnings Presentation
28 slides from Hollywood Bowl's earnings presentation, Dec 18, 2023
Slide 1: Hollywood Bowl Group plc Financial year ended 30 September 2023
Hollywood Bowl Group plc Financial year ended 30 September 2023
Slide 2: Agenda
Agenda Stephen Burns Chief Executive Officer • FY2023 highlights • Operational progress • Canadian expansion • Summary and outlook Laurence Keen Chief Financial Officer • FY2023 financial performance • Capital investment update • Property update • Financial outlook 2
Slide 3: FY2023 financial highlights
FY2023 financial highlights LFL revenue growth1 Total revenue +4.5% £215.1m (FY2022: +26.8%) (FY2022: £193.7m) Total average spend per game1 Group adjusted EBITDA pre-IFRS 162 £11.19 £64.9m (FY2022: £10.98) (FY2022: £60.6m) (FY2022 ex TRR of VAT: £57.6m) Adjusted profit after tax Adjusted earnings p
Slide 4: FY2023 operational highlights
FY2023 operational highlights Capital invested UK centres refurbished/rebranded £30.3m 13 New UK centres opened Centres acquired in Canada 3 3 Average refurbishment ROI UK LFL spend per game increase 50%+ 3.4% Best Big Companies To Work For UK centres using Pins on Strings 12th 83% UK centres with s
Slide 5: Financial review
Financial review
Slide 6: Excellent FY2023 financial performance
Excellent FY2023 financial performance Revenue (£m) Group Adjusted EBITDA** pre-IFRS 16 (£m) +16.2% vs FY2022 (excluding TRR of VAT) +12.7% vs FY2022 (excluding TRR of VAT) 215.1 8.8* 64.9 185.0 3.0* 57.6 129.9 38.2 79.5 71.9 14.0 15.1 FY2019 FY2020 FY2021 FY2022 FY2023 FY2019 FY2020 FY2021 FY2022 F
Slide 7: Record breaking revenue performance
Record breaking revenue performance • Record revenue of £215.1m up 16.2% vs FY2022 revenue • All ancillary revenues in LFL revenue growth ex TRR of VAT • New centre performance in line with expectations • UK LFL revenue growth of 4.1% • Canada LFL of 15.1% ➢Games played +0.7% ➢Games played +9.5% ➢Sp
Slide 8: Record EBITDA performance
Record EBITDA performance (£m) FY2023 FY2022 FY2022 Movement vs FY2022 • Total revenue up 16.2% on FY2022 excluding (statutory) (excluding VAT (excluding VAT bowling benefit) bowling benefit) the benefit of TRR of VAT on bowling ➢Statutory revenue +11.0% vs FY2022 Revenue 215.1 193.7 185.0 +16.2% •
Slide 9: Well insulated from inflationary pressures
Well insulated from inflationary pressures Manageable inflationary pressures • 72% revenue has no cost of goods inflation • Food and drink costs represent <8% of total revenue • Labour costs account for <19% of revenue at centre level ➢ UK NLW increase of at least 10% in April 2024 ➢ Impact of 1.8%
Slide 10: Strong trading driving free cash flow
Strong trading driving free cash flow • Group adjusted operating cash flow of £52.0m • Total dividend payments in year of £25.3m • Continued maintenance capital investment of £9.1m • Acquisition of three new centres in Calgary £7.3m • 13 refurbishments / rebrands completed for £7.0m • Three centres
Slide 11: Attractive returns from UK refurbishments
Attractive returns from UK refurbishments • Spend per game performance +13.2% • Remaining AMF centres rebranded to Hollywood Bowl • Lineage +3.7% • Interior design elements constantly evolving • Space optimisation growing amusement spend • 2nd and 3rd generation refurbishments also generating • Aver
Slide 12: Strong new centre UK pipeline
Strong new centre UK pipeline • Continued focus on quality locations to drive long term sustainable EBITDA Focus on quality locations • Strong ROI in context of increased capital spend (+10%) • Lincoln acquired early October 2023 • Average annual EBITDA of recent 12 openings is £0.7m • On site in Du
Slide 13: Updated capital allocation priorities remain focused on profitable growth and shareholder returns
Updated capital allocation priorities remain focused on profitable growth and shareholder returns Ordinary Additional New Maintenance Transformational Dividend 55% distributions refurbishments centres and capital of Adjusted to acquisitions PAT shareholders Ordinary dividend moves from 50% to 55% of
Slide 14: Financial outlook for FY2024
Financial outlook for FY2024 Continued growth • Modest UK LFL growth given beneficial weather in FY2023 • Full year effect of Calgary acquisitions and refurbishments • 3 new centre acquisitions completed already (1 in UK and 2 in Canada) Managing cost pressures • NLW payroll inflation higher than ex
Slide 15: Driving our growth strategy
Driving our growth strategy
Slide 16: Well-funded UK and Canada growth strategy
Well-funded UK and Canada growth strategy 41 centres 130 centres The Group was formed with 41 centres in 2010. The Group is targeting operating Over the following 13 years it has significantly grown 130 centres in the UK and Canada by 2035, its presence in the markets it operates in reflecting the g
Slide 17: Continuous product improvement
Continuous product improvement Ongoing investment in core offer Best in class amusements Value, quality product, served fast • Pins on Strings installed in an • Increased density of machines • Simplified menu content additional 13 centres • Significant investment across the ➢80% of customers satisfi
Slide 18: Upgraded technology to support next stage of growth
Upgraded technology to support next stage of growth New core reservations platform in development • Scalable open technology • Revenue and yield enhancements • Connectivity with marketing systems • Shared platform with Canadian operation • Launching in UK H2 FY2024 Upgraded website • Over 60% of bow
Slide 19: A well invested team delivering a fantastic experience
A well invested team delivering a fantastic experience Employer brand refreshed and relaunched • Improved retention and reduced cost and time to hire Successful top talent and development programmes • 45% of management appointments from internal candidates • 94% of team members completing online dev
Slide 20: Continued progress with our ESG strategy
Continued progress with our ESG strategy Safe and inclusive destinations • 963k concessionary discount games bowled (+28.4% vs FY2022) • 50%+ of soft drinks sold were from sugar free range Outstanding workplaces • #12 in UK’s Top 25 Best Big Companies to Work For • Team wellbeing scores increased by
Slide 21: Canada
Canada
Slide 22: Great progress in FY2023, further investment planned in FY2024
Great progress in FY2023, further investment planned in FY2024 Strong financial performance Operational success Estate investment Supporting the industry • LFL revenue growth of 15.1% • Investment in people with some • Richmond Hill refurbishment • Bowling centres increasing their roles filled by se
Slide 23: Richmond Hill refurbishment driving significant LFL growth
Richmond Hill refurbishment driving significant LFL growth Acquisition rationale • Acquired centre in May 2022 • Refurbishment spend included new bar, kitchens, amusement area, façade, lighting and significant construction works • Total spend of CAD 4.4m Post refurbishment returns • Revenue up 70.4%
Slide 24: Strong post-acquisition performance from new Calgary centres
Strong post-acquisition performance from new Calgary centres Acquisition rationale • Acquired 3 centres for CAD 12m • TTM financials ➢ Revenue CAD 7.1m ➢ EBITDA CAD 2.8m • EBITDA multiple 4.3X Pre refurbishment returns • Rebranded to Splitsville • System and process investments • Post acquisition pe
Slide 25: UK market review
© UK market review
Slide 26: Increased competition in the competitive socialising market
Increased competition in the competitive socialising market Growth of wider sector • Appetite for experiences over material items • 13% uplift in competitive socialising participation (2023 vs 2019) • New solo and combo offer operators emerging and gaining scale • Bowling remains most popular activi
Slide 27: FY2024 outlook
FY2024 outlook ae Mh / \
Slide 28: Outlook for FY2024
Outlook for FY2024 Market leader with high quality, well-invested estate • Led by experienced management team Continued demand for affordable leisure experiences • Volumes still strong even when compared to a record FY2022 • Value for money offer at less than £25 for a family of four Well positioned