Kinepolis Group Nv · EURONEXT:KIN
Kinepolis Group Nv — Debt Investor Presentation (June 2019)
66 slides from Kinepolis Group Nv's debt investor presentation, June 2019
Slide 1: Kinepolis Group Roadshow Private Placement
Kinepolis Group Roadshow Private Placement rv Nees? S8es eebaeSa June 2019 Pr Att, ble
Slide 2: Presentation Disclaimer
KINEPOLIS GROUP NV –PRESENTATION DISCLAIMER By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: The information in this document has been prepared by Kinepolis Group NV (the “Company”) solely for use at
Slide 3: Presentation Disclaimer (continued)
IKINEPOLIS GROUP NV –PRESENTATION DISCLAIMER (CONTINUED) Investors and prospective investors in the Bonds of the Company are required to make their own independent investigation and appraisal of the business and financial condition of the Company and the nature of the Bonds. Any decision to purchase
Slide 4: Kinepolis Group footprint (cinema in Poland operated by third party)
(*) The cinema in Poland is operated by a third party 3
Slide 5: Kinepolis in Canada - Landmark Cinemas
Kinannlis in Canada‘l andmark Cinemas 7 =< Campbell River Courtenay Cranbrook Dawson Creek visitors in 2018 in Canada ( 11.60. | *» a) complexes m 44 ))) screens M317 \}]| seats #4 45 355 \\ supers Fort St.John Kelowna Nanaimo New Westminster Penticton Port Alberni Surrey (Guildford) Victona West Ke
Slide 6: Kinepolis and our strategy
Kinepolis and our strategy
Slide 7: Three strategic pillars
Three strategic pillars Best cinema operator iby Best marketer ) Best real estate manager
Slide 8: Best cinema operator
▪ Budget Ownership ▪ Financial KPI’s ▪ Customer Satisfaction ▪ People Satisfaction ▪ “Micro-manage to get macro-results” 8
Slide 9: Best marketer
▪ Customer knowledge and -segmentation ▪ Preference Center ▪ Net Promotor Score ▪ Active Programming ▪ Digitalisation ▪ Ultimate movie experience 9
Slide 10: Best real estate manager
Best real estate manager
Slide 11: Financial Performance
Financial Performance 140 000 500 000 Expansie 490 000 480 000 470 000 460 000 120 000 450 000 440 000 430 000 420 000 100 000 410 000 400 000 390 000 380 000 80 000 370 000 360 000 350 000 340 000 330 000 60 000 320 000 310 000 300 000 290 000 40 000 280 000 270 000 260 000 250 000 240 000 20 000 2
Slide 12: Financial Leverage
Financial Leverage €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 Financial Debt
Slide 13: Return on Capital Employed
Return on Capital Employed 25,00% 22,90% 21,50% 21,80% 20,00% 19,80% 20,90% 17,90% Expansie 16,00% 17,30% 16,30% 15,00% 12,00% 10,00% 10,00% 8,00% 5,00% 0,00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 13
Slide 14: From a self-learning to a self-innovating organisation
From a‘selt-learning’ to a ‘selt-innovating’ organisation * KINEPOLIS”
Slide 15: From the ultimate cinema experience to the ultimate movie experience
From “the ultimate cinema experience’ to ‘the ultimate movie experience’ * KINEPOLIS”
Slide 16: Expansion
re? Expansion ' = ™ ’ : = . i PT TE eet RRS gi") ae ad = TCT Nae —— 7 ~ : 3 —— =. : : “ val ‘ hn f J Nan OS = : ea —| = ; wy? ; = . \ * KINEPOLIS”
Slide 17: Realized expansion by country and city
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) Q2 2015 Dordrecht (greenfield) 1 6 0,3 mio Q1 2016 Br
Slide 18: Planned greenfield openings
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 SE Edmonton (Alberta) 8 0,4 mio 2020 * The listed planned greenfields are greenfie
Slide 19: Key in our expansion strategy
Key in our expansion strategy IMPROVEMENT POTENTIAL .. trade-off versus size ...
Slide 20: Evolution REBITDA
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 2,45 1,54 1,01 1,07 1,22 1,18 1,60 1
Slide 21: Business Review 2018
Riisiness Review 2018 KINEPOLIS GROUP
Slide 22: 2018 highlights
❑ 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 warm weather, the
Slide 23: Financial results YE 2018 vs YE 2017
€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/Vis 25,0% € 4,12
Slide 24: Visitors by country
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% Switzerl
Slide 25: Top 5 Movies 2018 and 2017
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 ✓ 1.021 4.
Slide 26: REBITDA Margin, ROCE, Gearing
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 26
Slide 27: Dividend per Share
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 0,1 € 0,0 € 2008 20
Slide 28: Update Q1 2019
RIISINESS Update Q1 2019 KINEPOLIS GROUP
Slide 29: Q1 2019 results summary
❑ Revenue down with -6% less visitors ❑ Decrease visitors ❑ Decrease Box office ❑ Decrease In-theatre sales ❑ Increase B2B ❑ Increase Sales and events ❑ Increase Screen Advertising ❑ Increase Brightfish ❑ Less releases Film Distribution ❑ Decrease Real Estate ❑ At moment of Q1 Press Release (8th May
Slide 30: Belgian Competition Authority new decision
Belgian Competition Authority takes new decision regarding the behavioural conditions imposed on Kinepolis Group: After the annulment, for procedural reasons, by the Court of Appeal in Brussels on 21 November 2018 of the decision by the Belgian Competition Authority (BCA) of 26 April 2018, which eas
Slide 31: Expansion highlights
❑ Expansion highlights ❑ February 2019: Announcement introduction Laser ULTRA in Canada (Shawnessy) ❑ February 2019: Announcement new-build project Servon, France (opening Q3 2019) ❑ February 2019: Announcement Landmark new-build project in Regina (opening Q3 2019) ❑ March 2019: Acquisition of Spani
Slide 32: Visitors Q1 2019 by country
Visitors (000’s) Q1 2019 % of Tot Q1 2018 % of Tot % Δ YoY Belgium 1 843 20,9% 2 408 25,7% -23,5% France 1 987 22,5% 1 932 20,6% 2,8% Canada 2 555 29,0% 2 662 28,4% -4,0% Spain 1 088 12,3% 1 059 11,3% 2,7% The Netherlands 1 084 12,3% 1 035 11,0% 4,7% Luxembourg 238 2,7% 254 2,7% -6,3% Switzerland 25
Slide 33: 2019 film line-up
2D 3D Major sequels • Fast and Furious presents: Hobbs & Shaw (Q3) • Avengers: Endgame (Q2) • It: Chapter Two (Q3) • Toy Story 4 (Q2) • Kingsman 3 (Q4) • Men In Black: International (Q2) • Spider-man: Far From Home (Q3) • Terminator: Dark Fate (Q3) • The Secret Life Of Pets 2 (Q3) • Maleficent: Mist
Slide 34: Financial Review
Financial Review KINEPOLIS GROUP
Slide 35: Revenue up 33.9% with 40.7% more visitors
❑ 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 (-11,8%) ❑ Increase Film Distrib
Slide 36: 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% Luxembourg 5,1 4,
Slide 37: Box Office and Box Office per Visitor
€m Box Office Box office* / Visitor 10,00 € 300 9,50 € 260,5 9,00 € 250 8,50 € 7,91 192,3 8,00 € 200 7,60 7,39 7,37 7,50 € 7,15 150 7,00 € 7,32 6,50 € 100 6,00 € 5,50 € 50 5,00 € 2014 2015 2016 2017 2018 0 2017 2018 Box office / visitor Excl Canada * Box Office revenue after deduction of indirect ta
Slide 38: In-theatre Sales
In-theatre Sales ITS / Visitor €m 5,00 € 140 130,5 4,50 € 120 4,00 € 3,67 3,50 € 3,36 100 85,0 3,06 3,00 3,00 € 2,84 3,48 80 2,50 € 60 2,00 € 40 1,50 € 20 1,00 € 2014 2015 2016 2017 2018 0 2017 2018 ITS / visitor Excl Canada 38
Slide 39: Sales & Events and Screen Advertising
€m Sales & Events * €m Screen advertising * 50 12,0 45 10,0 40 35 8,0 30 25 6,0 9,0 10,8 39,6 44,7 20 4,0 15 10 2,0 5 0 0,0 YE 2017 YE 2018 YE 2017 YE 2018 * Excluding Brightfish * Excluding Brightfish 39
Slide 40: Brightfish revenue
€m 15,0 14,0 13,0 12,0 11,0 10,0 9,0 8,0 7,0 13,6 14,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0 YE 2017 YE 2018 40
Slide 41: Screen Advertising and Sales & Events
€m 14,0 12,1 12,0 10,7 10,0 5,6 8,0 5,7 6,0 4,0 5,0 6,5 2,0 0,0 YE 2017 YE 2018 Screen Advertising Sales & Events 41
Slide 42: Film Distribution
€m 6,0 5,0 4,0 3,0 4,6 2,0 3,8 1,0 0,0 YE 2017 YE 2018 # releases 31 34 42
Slide 43: Revenue bridge by business line
-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 Advertising Distribution Est
Slide 44: 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 Costs -1,8 -0,1 -1366,7% Tota
Slide 45: 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 impact of non-recurring i
Slide 46: Revenue per visitor by country
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 & Brightfish revenue ; total all i
Slide 47: 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% Luxembourg 5,1 4,
Slide 48: REBITDA and REBITDAR margin by country
* ** 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 2017 Impact Rent YE 20
Slide 49: IFRS 16 executive summary
Executive summary • IFRS 16 (the new leasing standard) is effective since January 1st 2019. • This new standard does not have an impact on Kinepolis’ business or total cash flow but does have a major impact on the accounting treatment of leases (in the balance sheet and in the income statement). • I
Slide 50: Expected impact of IFRS 16 in 2019
Expected impact of IFRS 16 in 2019 (based on current portfolio of lease agreements) Income statement Cash flow Revenue - Cost of sales 3,2 Gross profit 3,2 Marketing & selling expenses 0,1 Administrative expenses 0,2 Other operating income and expenses - EBIT 3,5 Financial result -8,1 Profit before
Slide 51: Depreciation and amortisation bridge
€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. 51
Slide 52: 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 52
Slide 53: Taxes and effective tax rate
€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 ETR -5
Slide 54: REBITDA to profit bridge
€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 54
Slide 55: Capital expenditure
€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 89,1 116,3 0 MAINTEN
Slide 56: Free cash flow bridge
€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 56
Slide 57: Net financial debt bridge
€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 -100 113,0 -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 Working Investments Interest &
Slide 58: Financial Leverage
€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 Financial Debt (NFD) NFD/REBITDA *
Slide 59: Debt maturity profile
€ 120 000 000 RCF 5Y* Priv. Plac. 8Y (December) 90.000.000 60.000.000 100 000 000 Priv. Plac. 7Y 80 000 000 61.400.000 Priv Plac. 10Y 65 000 000 60 000 000 40 000 000 Term loan (yearly) Bond 8Y Priv Plac. 10Y (January) 10.110.000 34.600.000 15.878.000 20 000 000 0 2019 2020 2021 2022 2023 2024 2025
Slide 60: Consolidated 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 62,3% 390,0 54,
Slide 61: Shares outstanding and reference shareholders
3/05/2019 19/02/2019 # 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% 492.346 1,80% Free
Slide 62: Private Placement
Private Placement KINEPOLIS GROUP
Slide 63: Private placement timetable
▪ JUNE 11 ANNOUNCEMENT POTENTIAL TRANSACTION ▪ JUNE 18 – 20 ROADSHOW FRANCE, THE NETHERLANDS, BELGIUM COLLECTING INITIAL ORDERS OF INTEREST ▪ JUNE 24 - 25 BOOKS OPEN – BOOK BUILDING ▪ JUNE 25 - 26 ALLOCATION AND PRICING ▪ JUNE 28 – JULY 5 SETTLEMENT T+3 (TBD) 63
Slide 64: Indicative bond terms
Issuer Kinepolis Group NV Rating Non-Rated Issue Size 2 tranches depending on investor appetite Acquisitions, construction of new theatres, re-modelling, investments in new experience concepts, other capital expenditure and Use of Proceeds general corporate purposes Ranking Senior, unsecured, unsubo
Slide 65: Financial calendar
Thursday 22/08/2019 Half Year results 2019 Press & analyst meeting Thursday 14/11/2019 Business Update Q3 2019 Thursday 20/02/2020 Full year results 2019 Press & analyst meeting 65
Slide 66: Slide 66
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