Slide 1: Kinepolis Group Results YTD H1 2018 Analyst Meeting
Kinepolis Group Results YTD H1 2018 Analyst Meeting August 23, 2018
Slide 2: Business review YTD H1 2018
Business review YTD H1 2018 CEO, Mr. Eddy Duquenne
Slide 3: Executive Summary
EXECUTIVE SUMMARY Integration of Landmark Cinemas Canada on track Solid contribution of Landmark to overall Group results Further implementation of Group strategy and in particular premiumisation leads to further increase in sales and EBITDA per visitor Weaker in visitor numbers in most Euro
Slide 4: Key Financials
KEY FINANCIALS €m H1 2018 H1 2017 % Better / ‐Worse Revenue 221,8 160,1 38,5% Visitors (‘000) 17.088 11.775 45,1% EBITDAR 64,2 47,5 35,2% REBITDAR 65,1 48,6 34,0% REBITDAR Margin € 3,81/Vis 29,4% € 4,13/Vis 30,4% ‐100 bps EBITDA 51,0 42,9 18,8% REBITDA 51,9 44,0 18,0% REBITDA Margin € 3,04/Vis 23,4%
Slide 5: Strategic pillars and executive focus H2 2018
strategy H1 2018 results reflect Strategic Pillars set out in 2008 Best Marketer Best Cinema Operator Best Real Estate Manager Strong focus on experience‐driven product innovation and premiumisation Executive focus H2 2018 Further development and implementation of strategic pillars I
Slide 6: Business Highlights: Experience-driven technology
BUSINESS HIGHLIGHTS Kinepolis Group commits to laser projection New 4DX theatre in Valencia and chooses Barco laser to upgrade an estimated number of 300 screens through 2021 Further development of mobile services image recognition Experience‐driven technology 6
Slide 7: Business Highlights: Experience-driven marketing
BUSINESS HIGHLIGHTS Jurassic World PR stunts Escape rooms in Leuven and 30.000 ladies attended LATM Fifty shades Silent screening Granada Freed (BE) Experience‐driven marketing 7
Slide 8: Business Highlights: Content diversification
BUSINESS HIGHLIGHTS Content diversification Concerts: Nick Cave (One More Time), etc Programmation of first Nollywood & Chinese films 8
Slide 9: Major events
Major events On 26 April 2018 the Belgian Competition Authority confirms the previous relaxation of the behavioral conditions, which means that the opening of new cinema complexes in Belgium is no longer subject to prior approval of the Competition Authority, but this will enter into force as of 2
Slide 10: Major events: Further steps in expansion strategy
Major events Further steps in expansion strategy January 2018: acquisition of NH Bioscopen, the Netherlands January 2018: acquisition of Metz Palace, France (under renovation) January 2018: acquisition of ‘Magic Lantern Theatres’ Brighton Marketplace Cinema in Saskatoon, Canada (under constr
Slide 11: Kinepolis Group Today
kinepolis group today 11 3 Market Complexes in Ownership Countries Complexes Screens Share ** # %Visitors Belgium 11 138 47% 10 98% France 11 128 3% 9 97% Canada 45 +2 317 +15 11% 10 5% Spain 6 99 5% 2 47% The Netherlands 17 +2 121 +17 11% 11 73% Luxembourg 3 22 88% 1 62% Switzerland 1 8 1% 1 100% P
Slide 12: Planned Greenfields
planned greenfields* Country City # Screens Est. Visitors / Year Estimated opening The Netherlands Schalkwijk Haarlem 6 0,3 mio 2019 France Brétigny‐sur‐Orge 10 0,5 mio Q3 2018 Metz 7 0,2 mio Q3 2018 Canada Fort McMurray** 8 ‐ Q4 2018 Calgary (Alberta) 5 0,3 mio 2019 Regina (Saskatchewan) 8 0,4 mio
Slide 13: Revenue by country
revenue by country Luxembourg Switzerland Luxembourg Switzerland The Netherlands 3,2% Poland The Netherlands 4,6% Poland 11,1% 1,0% 13,2% 1,6% Belgium Spain 32,5% 9,5% Belgium € 221,8m Spain € 160,1m 45,3% 12,8% Canada 27,1% France 15,6% France 22,5% H1 2018 H1 2017 13
Slide 14: Revenue by activity
revenue by activity Brightfish Brightfish 1,1% 2,3% Film Distribution Film Distribution Real Estate 1,0% Real Estate 1,1% 3,2% 4,3% B2B * 10,6% B2B * 12,7% € 221,8m € 160,1m Box Office Box Office In‐theatre Sales 56,2% 55,7% 27,9% In‐theatre Sales 23,9% H1 2018 H1 2017 * Including Cinema Screen Adve
Slide 15: Visitors
visitors Visitors (000's) H1 2018 % of Tot H1 2017 % of Tot % ∆ YoY Belgium 3.884 22,7% 3.955 33,6% ‐1,8% France 3.284 19,2% 3.637 30,9% ‐9,7% Canada 5.635 33,1% 0 0,0% 0,0% Spain 2.032 11,9% 2.064 17,5% ‐1,6% The Netherlands 1.751 10,2% 1.522 12,9% 15,0% Luxembourg 450 2,6% 536 4,6% ‐16,0% Switzerl
Slide 16: Top 5 Movies
movies Top 5 Movies 2018* 3D Visitors (000's) Top 5 Movies 2017 3D Visitors (000's) 1. Avengers: Infinity War 1.384 1. Beauty and the Beast 756 2. Black Panther 1.021 2. Fast & Furious 8 698 3. Deadpool 2 707 3. Fifty Shades Darker 575 4. Jumanji: Welcome to the Jungle 680 4. Pirates of the
Slide 17: Line-up 2018
Line-up 2018 2D 3D Major sequels • Mamma Mia! Here We Go Again (Q3) • Incredibles 2 (Q3) • X‐Men: Dark Phoenix (Q4) • Hotel Transylvania 3 (Q3) • How the Grinch Stole Christmas (Q4) • Ant‐Man and the Wasp (Q3) • Mary Poppins Returns (Q4) • Fantastic Beasts: The Crimes of Grindelwald (Q3) • Mission I
Slide 18: Financial Review YTD H1 2018
Financial Review YTD H1 2018 CFO, Mr. Nicolas De Clercq
Slide 19: Financial Highlights
financial highlights Revenue up by 38,5% with 45,1% more visitors Increase Visitors (+45,1%) Increase Box Office (+39,5%) Increase In‐theatre Sales (+61,7%) Increase B2B (+16,6%) Increase Sales and Events (+13,5%) Increase Screen Advertising (+31%) Less revenue Brightfish (‐3
Slide 20: Revenue by country
Revenue by country Revenue €m H1 2018 % of Tot H1 2017 % of Tot % ∆ YoY % ∆ Y Vis Belgium 71,8 32,5% 72,5 45,3% ‐1,1% ‐1,8% France 34,6 15,6% 36,0 22,5% ‐3,8% ‐9,7% Canada 60,2 27,1% 0,0 0,0% 0,0% 0,0% Spain 21,2 9,5% 20,5 12,8% 3,1% ‐1,6% The Netherlands 24,7 11,1% 21,1 13,2% 16,9% 15,0% Luxembourg
Slide 21: Evolution Box Office
Evolution Box OFFICE * Box Office revenue after deduction of indirect taxes, including VPF revenue 21
Slide 22: Evolution In-theatre Sales
In-theatre Sales €m 70 62,0 s0 <I> 38,3 20 10 H1 2017 H1 2018 5,00 € 4,50 € 4,00 € 3,50€ 3,00 € 2,50€ 2,00 € 1,50€ 1,00 € H1 2014 ITS / Visitor H1 2015 H1 2016 GTED 3,63 H1 2017 H1 2018 * KINEPOLIS”
Slide 23: B2B revenue
B2B revenue * Excluding Brightfish * Excluding Brightfish 23
Slide 24: Real estate at flat fx
€m 8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0 H1 2017 H1 2018 af KINEPOLIS”
Slide 25: Brightfish
€m 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 H1 2017 @ Screen Advertising H1 2018 ™ Sales & Events * KINEPOLIS”
Slide 26: Film distribution
Film distribution # releases 13 14 26
Slide 27: Revenue by activity
Revenue by activity -0,3% +7,3 +9,5% +9,2% +38,0% -12,8% +11,3% €m +39,5% +61,7% +13,5% +31,0% ‐34,6% +31,7% +2,6% 250 160,1 35,3 23,7 2,2 1,1 ‐1,3 0,5 0,2 221,8 200 150 100 50 Business line Cinema 0 H1 2017 Box In‐theatre Sales & Screen Brightfish Film Real H1 2018 Office Sales Events Advertising D
Slide 28: Current operating costs
Current operating costs €m H1 2018 H1 2017 % Better / ‐Worse Current Marketing & Selling expenses ‐10,9 ‐8,7 ‐25,9% Current Administrative Expenses ‐12,4 ‐9,7 ‐27,4% Current Other Operating Income / Cost 0,6 0,5 27,0% Current Operating Costs ‐22,7 ‐17,9 ‐26,7% Non‐Current Operating Costs ‐0,4 ‐0,4 ‐
Slide 29: Non-Current items
Non-Current items €m H1 2018 H1 2017 Dismissal fees ‐0,4 ‐0,5 Legal fees ‐0,1 ‐0,4 Expansion costs ‐0,4 0,0 Gain / Loss on disposal PPE 0,0 ‐0,1 Other 0,0 ‐0,1 EBITDA ‐0,9 ‐1,1 Provisions 0,5 0,1 Provisions 0,5 0,1 Income tax expense 0,6 0,3 Net impact of non‐current items 0,2 ‐0,7 29
Slide 30: Evolution REBITDA per visitor
Evolution Rebitda* per visitor 8,00 € 7,00 € 6,74 6,46 6,00 € 5,25 5,00 € 4,09 4,00 € 3,74 3,80 3,41 3,35 ‐18,7% 3,35 3,04 3,00 € 2,56 2,65 2,00 € 1,46 1,00 € 0,00 0,00 € H1 2017 H1 2018 Belgium* France Canada Spain The Netherlands Luxembourg Group * Per country excluding corporate entities, KFD & B
Slide 31: REBITDA by country
Rebitda by country €m H1 2018 % of Total H1 2017 % of Total % Better / ‐Worse % ∆ Y Vis Belgium 17,4 33,5% 18,0 40,9% ‐3,4% ‐1,8% France 11,0 21,2% 12,4 28,2% ‐11,2% ‐9,7% Canada 8,2 15,9% 0,0 0,0% 0,0% 0,0% Spain 5,4 10,4% 5,3 12,0% 2,0% ‐1,6% The Netherlands 6,6 12,8% 5,1 11,6% 30,3% 15,0% Luxembo
Slide 32: REBITDA & REBITDAR
Rebitda & REBITDAR * ** Belgium 39,5% 40,4% 39,7% 40,6% * France 34,3% 35,6% 31,7% 33,4% * Canada 13,7% 27,7% * Spain 25,6% 35,8% 25,3% 35,6% * The Netherlands 24,1% 28,5% 26,9% 30,6% * Luxembourg 29,7% 33,6% 33,0% 37,0% Switz. & Poland 40,5% 39,3% #DIV/0! Total 27,5% 30,4% 23,4% 29,4% H1 2017 Impac
Slide 33: IFRS 16 Leases
IFRS 16 • The new standard (IFRS 16 ‐ Leases) becomes effective as from the 1st of January 2019. • This standard has a major impact on the accounting treatment of leases: • The balance sheet will grow due to the fact that all material leases will be booked on the asset and liability side of the Bala
Slide 34: Depreciation, amortization, provisions
Depreciation, amortization, provisions €m 0 ‐2 ‐4 ‐6 ‐8 ‐10 ‐12 ‐14 ‐16 0,1 ‐14,7 ‐14,8 ‐18 ‐3,5 ‐18,3 0,5 ‐17,8 ‐20 H1 2017 Non‐current H1 Current H1 2017 Normal Current H1 2018 Non‐current H1 H1 2018 2017 diff's* 2018 * € ‐3,5 M of which € ‐3,1 M is related to Canada. 34
Slide 35: Financial result
Financial result €m H1 2018 H1 2017 % Better / ‐Worse Interest Expense ‐5,27 ‐3,61 ‐45,9% Other (CNC, Derivates, FX) ‐1,28 ‐0,49 ‐165,2% Financial (Cost) / Income ‐6,55 ‐4,10 ‐59,9% €m 0,0 ‐1,0 ‐2,0 ‐3,0 ‐4,0 ‐4,10 ‐5,0 ‐6,0 ‐1,66 0,06 ‐7,0 ‐0,85 ‐6,55 ‐8,0 H1 2017 Interest FX Other H1 2018 35
Slide 36: Taxes
taxes €m H1 2018 H1 2017 % Better / ‐Worse Profit before taxes 26,7 24,1 10,7% Taxes ‐7,8 ‐8,4 6,6% Profit 18,9 15,8 19,8% Effective Tax Rate ('ETR') 29,2% 34,6% ‐540 bps Tax effect on non‐current items ‐0,6 ‐0,3 113,7% Current Effective Tax Rate ('CETR') 31,0% 34,4% ‐339 bps €m 0 ETR CETR CETR ETR
Slide 37: REBITDA to net result
Rebitda to net result €m 60,0 51,9 ‐18,3 50,0 40,0 33,6 ‐6,5 30,0 ‐8,4 0,2 18,9 20,0 10,0 0,0 REBITDA H1 2018 Current REBIT H1 2018 Current Current Other Non‐current Result H1 2018 Depr, financial taxes items Amort, result Prov 37
Slide 38: Investments
investments €m H1 2018 H1 2017 €m Belgium 4,4 4,2 50 45 43,7 France 1,8 1,5 Canada 4,0 0,0 40 35 Spain 1,5 0,7 30 The Netherlands 1,9 1,3 25 Luxembourg 0,1 0,8 20 Other 0,0 0,2 15 Maintenance & Internal Expansion 13,8 8,7 8,5 10 6,3 5,3 4,8 3,9 External Expansion 43,7 6,3 5 TOTAL 57,5 15,0 0 MAINTEN
Slide 39: Free cash flow: H1 2018 vs H1 2017
Free cash flow: H1 2018 vs H1 2017 €m 18,0 1,8 ‐0,7 ‐0,5 0,1 15,6 16,0 6,3 14,0 12,0 10,0 8,6 8,0 6,0 4,0 2,0 0,0 FCF H1 2017 EBITDA Income Tax Working Capex ‐ Maintenance Interest FCF H1 2018 Paid Capital Paid 39
Slide 40: Net financial debt evolution
Net financial debt evolution €m H1 2018 YE 2017 Better/‐Worse % Better/ ‐Worse Net Financial Debt (NFD) 305,0 224,3 ‐80,7 ‐36,0% Leverage ratio*: NFD/REBITDA** 2,67 2,15 m€ 25 ‐25 ‐75 ‐125 ‐175 ‐7,4 ‐13,4 ‐225 ‐224,3 48,5 ‐24,5 ‐275 ‐57,1 ‐6,9 0,8 ‐305,0 ‐325 ‐20,3 ‐0,3 NFD YE 2017 EBITDA + Taxes Wo
Slide 41: Net financial debt evolution
net financial debt evolution €m H1 2018 YE 2017 Better/‐Worse % Better/ ‐Worse Net Financial Debt (NFD) 305,0 224,3 ‐80,7 ‐36,0% Leverage ratio*: NFD/REBITDA** 2,67 2,15 € 350 3,5 € 300 3,0 € 250 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 H1 2018 REBITDA Net
Slide 42: Ratios
ratios REBITDA Margin ROCE Gearing 30% 27,5% 26,7% 27,5% 2,50 26,8% 23,4% 2,06 25% 25% 20,9% 21,5% 2,00 20% 20% 17,9% 17,3% 17,1% 1,50 1,32 15% 15% 1,13 1,13 1,27 1,00 10% 10% 5% 5% 0,50 0% 0% 0,00 H1 H1 H1 H1 H1 2014 2015 2016 2017 H1 2014 2015 2016 2017 H1 2014 2015 2016 2017 2018 2018 2018 42
Slide 43: Maturity profile financial debt
Maturity profile financial debt € 120.000.000 RCF 5Y* Priv. Plac. 8Y (December) 90.000.000 60.000.000 100.000.000 Bond 7Y Priv. Plac. 7Y 80.000.000 59.122.000 61.400.000 Priv Plac. 10Y 65.000.000 60.000.000 40.000.000 Term loan Bond 8Y Priv Plac. 10Y (January) (yearly) 15.878.000 34.600.000 20.000.0
Slide 44: Balance sheet
Balance sheet €m 30/06/2018 % of Total 31/12/2017 % of Total €m 30/06/2018 % of Total 31/12/2017 % of Total Intangible assets 9,0 1,4% 9,0 1,3% Capital & share premium 20,1 3,1% 20,1 2,8% Goodwill 99,3 15,4% 86,4 12,0% Consolidated reserves 132,2 20,5% 157,6 21,9% Property, plant & equipment 414,2 6
Slide 45: Shareholders
shareholders 17/08/2018 27/04/2018 # 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% 13.254.315 48,43% Treasury shares (own shares) 492.346 1,80% 420
Slide 46: Financial calendar
Financial calendar Thursday 15/11/2018 Business update Q3 2018 Thursday 21/02/2019 Annual results 2018 Press & analyst meeting Wednesday 08/05/2019 General Meeting Kinepolis Group 46
Slide 47: Q&A Thank you
Q&A Thank you KINEPOLIS GROUP YY
Slide 48: Annexes
Annexes Results YTD H1 2018 KINEPOLIS GROUP |-7"
Slide 49: Realized acquisitions and greenfields (2014–2018)
REALIZED ACQUISITIONS AND greenfields (2014 – 2018) 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) Q
Slide 50: Consolidated income statement
Consolidated income statement €m H1 2018 H1 2017 % Better / ‐Worse Revenue 221,8 160,1 38,5% Cost of Sales ‐165,4 ‐113,5 ‐45,7% Gross profit 56,4 46,5 21,1% Gross profit % 25,4% 29,1% Marketing & selling expenses ‐11,0 ‐8,7 ‐27,3% Administrative expenses ‐12,7 ‐10,1 ‐26,1% Other operating income and
Slide 51: Consolidated balance sheet
Consolidated balance sheet €m 30/06/2018 31/12/2017 % Better / ‐Worse Intangible assets 9,0 9,0 ‐0,6% Goodwill 99,3 86,4 14,9% Property, plant & equipment 414,2 390,0 6,2% Investment property 17,0 17,7 ‐4,0% Deferred tax assets 1,1 1,2 ‐9,6% Other receivables 9,1 10,1 ‐10,4% Total non‐current assets
Slide 52: Consolidated balance sheet
Consolidated balance sheet €m 30/06/2018 31/12/2017 % Better / ‐Worse Capital & share premium 20,1 20,1 0,0% Consolidated reserves 132,2 157,6 ‐16,1% Translation differences ‐4,0 ‐1,3 ‐212,7% Equity attributable to equity holders of the parents 148,3 176,4 ‐15,9% Total equity 148,3 176,4 ‐15,9% Inte
Slide 53: Cash flow statement
Cash flow statement €m H1 2018 H1 2017 Better / ‐Worse Profit before tax 26,7 24,1 2,6 Adjustments for: Depreciation, amortization & provisions 16,6 14,5 2,1 Government grants ‐0,5 ‐0,5 0,0 Gains / losses on sale of PPE & financial assets ‐0,1 0,0 ‐0,1 Financial result & Share based payments 5,7 4,0
Slide 54: Free cash flow
Free cash flow €m H1 2018 H1 2017 Better / ‐Worse Cash Flow before WC movements & tax paid 48,5 42,2 6,3 Income taxes paid ‐7,4 ‐9,2 1,8 Working capital ‐13,4 ‐12,7 ‐0,7 Capital exp – maintenance ‐5,3 ‐4,8 ‐0,5 Interest paid ‐6,8 ‐6,9 0,1 Free cash flow 15,6 8,6 7,0 Capital Exp ‐ Digitalization & Re
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