Six Flags Entertainment Corporation · NYSE:FUN
Six Flags Entertainment — Investor Presentation (October 2019)
32 slides from Six Flags Entertainment's investor presentation, October 2019
Slide 1: Investor Presentation October 2019
Investor Presentation October 2019 October 2019 1
Slide 2: Disclaimer
Disclaimer Presentation is subject to safe harbor laws • Presentation includes forward looking statements about events and financial results • Actual events or results may be materially different • Risks are described in the company’s filings with the SEC • Statements are made subject to “safe harbo
Slide 3: Overview of Six Flags
Overview of Six Flags Global leader in an attractive industry • Exceptional brand & business Ongoing Growth Opportunity foundation 750 • Substantial growth opportunities 594 o Base business 558 o North American expansion strategy 520 545 477 o International licensing 444 416 379 323 • Strong, recurr
Slide 4: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry o Stable in a weak economy o High barriers to entry • Exceptional brand and business foundation o Focused strategy o Expansive array of entertainment & services • Substantial growth opportunities o Innovative products an
Slide 5: Attractive Industry
Attractive Industry Stable industry with high barriers to entry • Stable in normal economy – resilient in a weak one • Compelling value relative to other forms of entertainment o Consumers focused on experiences • High recurring revenue • High barriers to entry o $500-700MM investment; 3+ years deve
Slide 6: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry o Stable in a weak economy o High barriers to entry • Exceptional brand and business foundation o Focused strategy o Expansive array of entertainment & services • Substantial growth opportunities o Innovative products an
Slide 7: A Focused Strategy
A Focused Strategy Delivering excellence in all we do October 2019 7
Slide 8: Strategically Located Parks
26 Strategically Located Parks Prime locations; economic and weather diversity; limited direct competition • $1.5 billion revenue • 33 million guests • 52,000 employees o 2,400 full-time • 925 rides / 145 coasters * October 2019 8
Slide 9: Top Rated Rides
Top Rated Rides Home to many of the top coasters and rides USA Today Best New Attraction World’s tallest, fastest roller coaster Industry’s Best New Attraction 2015 41 story drop at 91 miles per hour Immersive interactive ride World’s tallest and steepest World’s First 4D Free Fly Coaster World’s Ta
Slide 10: Expansive Array of Entertainment
Expansive Array of Entertainment More than coasters… we provide thrills and entertainment for all ages Waterparks Games Concerts & Shows Family Coasters Animals Events October 2019 10
Slide 11: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry o Stable in a weak economy o High barriers to entry • Exceptional brand and business foundation o Focused strategy o Expansive array of entertainment & services • Substantial growth opportunities o Innovative products an
Slide 12: Substantial Growth Opportunities
Substantial Growth Opportunities Five strategic growth initiatives driven by industry-leading innovation Total Revenue ($MM’s) 1,496 • Membership / Season 1,464 Pass penetration 1,359 1,319 1,264 • Pricing and ticket yield 1,176 management 1,110 1,070 • In-park revenue 976 1,013 initiatives 913 • No
Slide 13: Innovation
Innovation Leading the industry in innovation Recent Innovations o First-of-Kind Rides o All Season Dining o News in Every Park, Every Year o Virtual Reality Rides Disciplined Capital Spending: 9% of Revenue Asset Maintenance New rides and 25% attractions 60% 15% In-Park October 2019 13
Slide 14: 2020 Ride Innovation
2020 Ride Innovation October 2019 14
Slide 15: Membership & Season Pass Penetration
Membership & Season Pass Penetration Growing Active Base of members and season pass holders – up 2% as of September 30, 2019 • Generate more annual revenue and cash flow than single day visitors • Build recurring revenue • Visit during off-peak periods • Provide weather hedge • Only about 40% of our
Slide 16: Premium-tiered Membership Program
Premium-tiered Membership Program Grows contractual, recurring revenue stream • Offers up to 50 exclusive benefits • Creates Members, our most loyal and profitable guests – Higher retention rates – 3-4x lifetime revenue of Season Pass holder • Provides three revenue sources – Higher annual prices w/
Slide 17: Ticket Yield Management
Ticket Yield Management A multi-year approach to Admissions Revenue ($MM) improve ticket yields 810 824 741 715 688 • Increase ticket prices 642 577 602 542 511 483 • Drive membership penetration • Execute dynamic pricing 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q3 LTM • Continue to ra
Slide 18: In-Park Revenue Initiatives
In-Park Revenue Initiatives Highly profitable businesses In-Park Revenue ($MM) within the business 575 554 525 • More than 2,500 locations 500 449 460 437 • New products and programs 414 401 o All Season Dining Pass 375 o Broader offerings o Enhanced venues 2009 2010 2011 2012 2013 2014 2015 2017 20
Slide 19: North American Expansion Strategy
North American Expansion Strategy Seeking to own or operate parks in markets adjacent to our theme parks • Largest waterpark operator in North America • Added 8 parks in two years • Dozens of potential targets • Strategy will: o Expand active pass reach to adjacent markets o Create demand for member
Slide 20: International Agreements
International Agreements Nanjing Theme Park, Waterpark, Kids World & Zhejiang Adventure Park Theme Park, Saudi Theme Waterpark & Park Kids World Chongqing Theme Park, Waterpark, Kids World & Adventure Park Long-term strategy to license brand outside North America • Twelve parks signed in China and S
Slide 21: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry o Stable in a weak economy o High barriers to entry • Exceptional brand and business foundation o Focused strategy o Expansive array of entertainment & services • Substantial growth opportunities o Innovative products an
Slide 22: Strong Recurring Revenue
Strong Recurring Revenue Higher ticket pricing and strong attendance fuel revenue Attendance / Guest Spending Per Capita Revenue ($MM) 1,496 42.97 1,464 41.60 42.58 42.36 40.18 41.07 41.61 39.33 39.41 33.0 1,359 36.84 37.55 32.0 1,319 1,264 30.1 30.4 28.6 1,176 1,110 25.7 26.1 25.6 1,070 24.3 24.3 1
Slide 23: Cost Discipline
Cost Discipline Continued focus on costs and effective management of capital investment Cash Operating Costs(1) as a % of Revenue Cash Capex as a % of Revenue 11% 75.6% 10% 9% 10% 9% 9% 9% 9% 9% 9% 67.4% 8% 62.8% 61.2% 129 135 133 60.0% 59.5% 59.4% 58.9% 58.7% 58.9% 114 98 98 102 108 91 79 (2) (2) 2
Slide 24: Strong EBITDA
Strong EBITDA Growing earnings with industry-leading margin Adjusted EBITDA ($MM’s)(1) and Modified EBITDA Margin(1)(2) 41% 41% 41% 41% 40% 41% 39% 37% 439 481 507 519 554 383 404 33% 350 295 31% 32% 32% 31% 31% 24% 30% 31% 28% 25% 197 14% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Adjusted E
Slide 25: Strong Cash Flow
Strong Cash Flow Industry-high Modified EBITDA less CAPEX margin 31% 31% 32% 32% 31% 31% 28% 30% 25% 14% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Six Flags Other theme park operators October 2019 25
Slide 26: Capital Allocation
Capital Allocation Eight consecutive years of dividend increases; excellent dividend yield >6% Quarterly Dividend Cumulative Distributions ($ Millions) $3.28 annualized dividend >$3.7 Billion excess cash returned Yield >3X S&P 500 to shareholders $3,723 $3,514 $0.82 $3,136 $0.70 +17% $0.64 +9% 2,078
Slide 27: Investment Thesis
Investment Thesis Global leader in an attractive industry • Attractive industry o Stable in a weak economy o High barriers to entry • Exceptional brand and business foundation o Focused strategy o Expansive array of entertainment & services • Substantial growth opportunities o Innovative products an
Slide 28: Project 750
Project 750 Aspirational goal to deliver $750MM of Modified EBITDA by 2021 Ongoing Growth Opportunity • Will create significant 750 shareholder value 594 520 545 558 • Represents ~8% Adjusted 477 444 416 EBITDA CAGR from YE 2018 379 323 223 • Closely aligns employees with shareholders (1)(2) 2009 20
Slide 29: Project 750 Cash Flow
Project 750 Cash Flow Sufficient cash flow to maintain and grow dividend annually; Tax reform added $40-50MM to the bottom line 2018 Project 750(1) Modified EBITDA 594 750 Minority Interest (40) (40-45) Adjusted EBITDA 554 705 – 710 CAPEX (133) (135 – 150) Cash Interest (98) (100 – 110) Cash Taxes (
Slide 30: Summary
Summary Delivering shareholder value + Delighting our guests + Building brand equity + Leveraging brand outside of North America + Maximizing revenue and cash flow + Generating strong returns for our shareholders October 2019 30
Slide 31: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 2019 ($MM; Share amounts in 000's) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q3 LTM Net (Loss) Income (196) 634 13 403 157 114 193 157 313 316 310 Loss (Income) from Discontinued Operations 34 (9) (1) (7) (1) (1) ‐ ‐ ‐ ‐ ‐ Income Tax Expense (Benefit) 3 12
Slide 32: Disclaimer
Disclaimer Note About Forward-Looking Information • The information contained in this presentation, other than purely historical information, contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements may involv
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