Reading International Inc · NASDAQ:RDI
Reading International — Shareholder Meeting (November 2018)
51 slides from Reading International's shareholder meeting presentation, Nov 13, 2018
Slide 1: Reading International 2018 Annual Stockholders Meeting
READING INTERNATIONAL 2018 ANNUAL STOCKHOLDERS MEETING NOVEMBER 7, 2018
Slide 2: Safe Harbor Disclaimer
SAFE HARBOR DISCLAIMER Our comments today may contain forward-looking statements and management may make additional forward-looking statements in response to your questions. Such written and oral disclosures are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform A
Slide 3: Financial Reconciliations
FINANCIAL RECONCILATIONS We use EBITDA in the evaluation of our Company’s performance since we believe that EBITDA provides a useful measure of financial performance and value. We believe this principally for the following reasons: We believe that EBITDA is an accepted industry-wide comparative meas
Slide 4: Cinema Portfolio and Real Estate Portfolio
CINEMA PORTFOLIO 59 Theaters 478 screens in US, AU & NZ 4 Brands Reading Cinemas (US, AU & NZ) Consolidated Theatres (Hawaii) Angelika Film Centers (US) City Cinemas (NYC) Geographic Footprint United States 27 theaters in 6 states & DC 11 th largest US exhibitor Australia 21 theaters in five states
Slide 5: Elevating the Cinema Experience, Unlocking Real Estate Value
ELEVATING THE CINEMA EXPERIENCE UNLOCKING REAL ESTATE VALUE WELL POSITIONED TO CREATE LONG-TERM STOCKHOLDER VALUE • Complementary Cinema & Real Estate portfolios offer compelling strategic and financial benefits • Cinemas provide steady cash flow to support real estate development focused on driving
Slide 6: Newmarket Village Reading Cinemas
newmarket VILLAGE READING CINEMAS NEWMARKET-VILLAGE.COM.AU
Slide 7: Core Values & Guiding Principles
CORE VALUES & GUIDING PRINCIPLES INSPIRED BY OUR FOUNDER JAMES J. COTTER SR. ENTREPRENEURIAL approach to our business EDUCATED analysis underpins our strategies ENGAGING our guests is paramount to our success EXECUTION is a focus of our three-year strategy EXTENDED VIEW means pursuing a long-term va
Slide 8: Executing on Global Cinema Strategy
EXECUTING ON GLOBAL CINEMA STRATEGY SINCE 2015, INVESTED SUBSTANTIALLY IN OUR GLOBAL CINEMAS •BUILT 3 NEW CINEMAS • MADE SIGNIFICANT INVESTMENT IN EXISTING PORTFOLIO By end of 2018, . 38% of all US Screens to feature Luxury Recliner Seating . 19% of all AU/NZ Screens to feature Luxury Recliner Seati
Slide 9: Executing on Global Real Estate Strategy
EXECUTING ON GLOBAL REAL ESTATE STRATEGY . Completed expansion of Newmarket Village in Brisbane in Q1 2018, which added 52,668 leasable SF inclusive of a new 8 screen Reading Cinema and 10,150 SF of third party space . Acquired the strategically located Telstra property that directly abuts Redyard i
Slide 10: Cinema & Real Estate Synergistic Diversification Underpins Our Strategy
CINEMA & REAL ESTATE SYNERGISTIC DIVERSIFIFCATION UNDERPINS OUR STRATEGY TWO SYNERGISTIC BUSINESSES GLOBAL PROPERTY REVENUES 8% GLOBAL CINEMA REVENUES 92% OPERATING IN THREE STRONG ECONOMIES UNITED STATES REVENUES 53% AUSTRALIA REVENUES 36% NEW ZEALAND REVENUES 11% Revenues YTD September 30, 2018
Slide 11: Total Stockholder Return – RDI Class A
TOTAL STOCKHOLDER RETURN – RDI CLASS A SINCE JUNE 21, 2012: CONTINUOUS INCLUSION ON RUSSELL INDEX * TSR% READING INTERNATIONAL RUSSELL 2000 NASDAQ CAPITAL MARKET COMPOSITE S&P 500 *6/21/2012 11/05/2018 161% Growth
Slide 12: Capital Investment and Operating Strategies Drive Strong Industry Performance
THE EXECUTION OF OUR CAPITAL INVESTMENT AND OPERATING STRATEGIES DRIVES READING’S 2018 STRONG INDUSTRY PERFORMANCE BOX OFFICE RESULTS UNITED STATES READING MARKET AUSTRALIA READING MARKET NEW ZEALAND * Q4 2016 NZ Wellington earthquake adversely impacted 2017 results 2018 Box Office results are YTD S
Slide 13: Global Cinema Strategy
GLOBAL CINEMA STRATEGY READING CINEMAS CONSOLIDATED THEATRES ANGELIKA FILM CENTER & CAFÉ CITY CINEMAS • Re-invest in existing portfolio • Improve Operating Income • Pursue Company growth through acquisitions and new developments
Slide 14: Global Cinemas Create Inspiring Cinema Experiences
GLOBAL CINEMAS CREATE INSPIRING CINEMA EXPERIENCES ENHANCING FOOD & BEVERAGE Craft food & beverage options to match our markets COMFORT & DESIGN Offer luxury recliner seating Create uniquely designed venues SIGNATURE PROGRAMMING Curate film and event programming tailored to our audiences ACHIEVING E
Slide 15: Foundation for Global Cinema Strategy: Theatrical Studio Slate
FOUNDATION FOR GLOBAL CINEMA STRATEGY • SOLID THEATRICAL STUDIO SLATE 2019 2020 • Major Studios anticipated to deliver another record Box Office year in 2018 • Expect strong slate from Major Studios in 2019 and 2020 • Event films drive premium experience TITAN LUXE
Slide 16: Specialty Film Continues to Support Angelika Box Office
SPECIALTY FILM CONTINUES TO SUPPORT ANGELIKA BOX OFFICE • STRONG 2019 SLATE US CINEMAS-ANGELIKA BRAND RELIES ON DOCUMENTARIES, INDEPENDENT & FOREIGN LANGUAGE FILMS • Fox Searchlight supported in Disney/Fox merger • Sony Pictures Classics and Focus Features continue to be supported by studio parent •
Slide 17: Recliner Seating Drives Attendance
RECLINER SEATING DRIVES ATTENDANCE • Luxury Recliner Seating in 56% of US screens by 2020 • Luxury Recliner Seating in 31% of AU/NZ screens by 2020
Slide 18: Premium Presentation Drives Reading Box Office
PREMIUM PRESENTATION DRIVES READING BOX OFFICE TITAN LUXE DOLBY ATMOS Percentage of cinemas with at least one premium screen by end of 2018 • 26% in US • 41% in AU/NZ Percentage of cinemas with at least one premium screen by end of 2020 • 33% in US • 52% in AU/NZ
Slide 19: United States Cinemas Enhancing Food & Beverage Menus
UNITED STATES CINEMAS ENHANCING FOOD & BEVERAGE MENUS By the end of 2018, • 14 theaters (52% of US circuit) to offer elevated food through improved kitchen facilities • 12 theaters (44% of US circuit) to sell beer, wine and/or liquor By the end of 2020, we anticipate • An additional 5 theaters will
Slide 20: US Cinemas Crafted Food & Beverage Drives Revenue
UNITED STATES CINEMAS CRAFTED FOOD & BEVERAGE DRIVES REVENUE US CINEMAS F&B PER CAPITA $0.53 increase for F&B per Capital (17% increase) $1.25 increase for F&B per Capital (34% increase) 2009 2009 2010 2011 2012 2013 2014 2014 2015 2016 2017 2018 2018 results are YTD September 30, 2018
Slide 21: AU/NZ Cinemas Enhancing Food & Beverage Menus
AU/NZ CINEMAS ENHANCING FOOD & BEVERAGE MENUS By the end of 2018, • 11% of AU/NZ circuit (22 screens) to feature Gold Lounge service • Waiters serve both elevated food and liquor in intimately sized auditoriums driving higher ticket prices • 10% of AU/NZ circuit (21 screens) will be branded Premium
Slide 22: Investing in Our Cinema Portfolio
GLOBAL CINEMAS INVESTING IN OUR CINEMA PORTFOLIO United States • 2018 expected to be invested $15M-$18M • 2019 & 2020 expected to be invested $35M-$38M Australia • 2018 expected to be invested $6M-$7M • 2019 & 2020 expected to invested $17M-$18M New Zealand • 2018 expected to be invested $1M-$2M • 2
Slide 23: Innovative Pricing Improves Attendance
GLOBAL CINEMAS INNOVATIVE PRICING IMPROVES ATTENDANCE • In AU/NZ, a compelling value-based ticket pricing structure, with a simple, clear marketing plan, continues to be the foundation for circuit distinction and strength • US pricing decisions made market-by-market, due to geographic and programmin
Slide 24: Digital Marketing Drives Revenues
GLOBAL CINEMAS DIGITAL MARKETING DRIVES REVENUES • Fully deployed US Cinemas Mobile App in Q4 2017 • Soft launching AU/NZ Cinemas Mobile App by end of 2018 • Implement reserved seating across most global cinemas by end of 2019 • Improving and expanding social media platforms globally • Launched sale
Slide 25: Online Ticket Sales Improve Total Cinema Revenues
GLOBAL CINEMAS ONLINE TICKET SALES IMPROVE TOTAL CINEMA REVENUES • Online ticket sales on multiple proprietary platforms in US, AU and NZ • Websites • Mobile Apps • Social Media • Loyalty Programs • Increased Global Net Convenience Fee Revenue by 57% to $4.2M over TTM (September 30, 2018)
Slide 26: Curated Programming
GLOBAL CINEMAS CURATED PROGRAMMING • Continue to generate incremental revenues through the curation of signature programming • Alternative Content emphasis • Japanese anime, foreign language films, music movies, cultural events • Exclusively programmed repertory series, coupled with events or engage
Slide 27: Disciplined Approach to Pursuing New Opportunities
CONTINUED DISCIPLINED APPROACH TO PURSUING NEW OPPORTUNITIES • Three new Reading Cinemas are expected to be built in Australia over the next few years • Traralgon, outside of Melbourne (5 screens with 2 Premium auditoriums) – Expected to open 2019 • South City Square, Brisbane (8 screens with 3 Gold
Slide 28: Reading Property: Global Real Estate Strategy
READING PROPERTY READING INTERNATIONAL INC. newmarket VILLAGE THE BELMONT COMMON AUBURN REDYARD CANNON PARK Courtenay Central 44 UNION SQUARE 5995 SEPULVEDA GLOBAL REAL ESTATE STRATEGY • Unlock embedded and organic value in our existing real estate portfolio • Reposition and incrementally build and
Slide 29: Global Real Estate: Build Long-Term Value for Stockholders
GLOBAL REAL ESTATE BUILD LONG-TERM VALUE FOR OUR STOCKHOLDERS BY MAXIMIZING THE VALUE IN OUR EXISTING REAL ESTATE PORTFOLIO, WHILE PURSUING NEW OPPORTUNITIES THAT MEET OUR INVESTMENT CRITERIA LONG TERM VALUE FOR STOCKHOLDERS PORTFOLIO Assemble a more complementary tenant mix to better serve our cust
Slide 30: Australia Portfolio: Newmarket Village
AUSTRALIA PORTFOLIO newmarket VILLAGE • Completed expansion in December 2017 • New 8 screen state-of-the-art Reading Cinemas with TITAN LUXE opened December 2017 • 10,150 SF of new Food & Beverage Retail created • 7 new restaurants open and trading, terms have been agreed for final tenancy, expected
Slide 31: Australia Portfolio: Auburn Redyard Strategic Acquisition
AUSTRALIA PORTFOLIO AUBURN REDYARD STRATEGIC ACQUISTION COMPLETED OCTOBER 2018 • Acquired building owned and occupied by ASX listed Telstra Corporation • The Telstra property abuts Redyard on three sides and offers an expansive frontage to Parramatta Road • Net leasable area of building is 16,830 SF
Slide 32: Australia Portfolio: Auburn Redyard Added Tenancies
AUSTRALIA PORTFOLIO AUBURN REDYARD SINCE 2017, ADDED SIX NEW INCREMENTAL TENANCIES AND UPGRADED CENTER • Including the Telstra property, an incremental 31,549 SF of net leasable area added since Jan 2017 • 53% incremental increase in third-party net leasable area • Completed major upgrade of common
Slide 33: Australia Portfolio: The Belmont Common
AUSTRALIA PORTFOLIO THE BELMONT COMMON • Re-configured existing leasable area to create more efficient layout • Constructed and opened three new leading restaurants between Q3 2017 and Q2 2018 • Completed renovation of Reading Cinemas by adding two Premium auditoriums • Finalizing LOI for remaining
Slide 34: Australia Portfolio: Cannon Park Re-imagination Plans
AUSTRALIA PORTFOLIO CANNON PARK PROGESSING RE-IMAGINATION PLANS 2018 • Rationalized land ownership control by acquiring 163,000 SF of common title land • Developing Site Master Plan and supporting Feasibility Analysis to • Upgrade Reading Cinemas • Add 2,400 SF of incremental Retail Area • Upgrade C
Slide 35: New Zealand Portfolio: Wellington Is Thriving
NEW ZEALAND PORTFOLIO COURTENAY CENTRAL WELLINGTON IS THRIVING • Significant Public and Private Investment • City Council confirms proposed Convention Centre (across the street from Courtenay Central) to break ground in 2019 • “Let’s Get Wellington Moving”: Governmental plans include NZ$230M to upgr
Slide 36: New Zealand Portfolio: Courtenay Central Re-imagination Plans
NEW ZEALAND PORTFOLIO Courtenay Central PROGESSING RE-IMAGINATION PLANS • Resolving Seismic and Reclaimed Land issues for each part of Project • “Work-in-Progress” Feasibility continues to explore • Hotel • Incremental entertainment retail space • Upgraded premium Countdown Supermarket • Additional
Slide 37: New Zealand Portfolio: The Courtyard
NEW ZEALAND PORTFOLIO THE COURTYARD AN INDOOR FOOD & ENTERTAINMENT HUB: KEEPING COURTENAY CENTRAL COMPELLING DURING TRANSITION • Creating a local food scene • Eight eclectic, local street food vendors, with a waiting list • Filipino, Vietnamese, Indonesian, Spicy Nashville BBQ, Mexican • Part of Wel
Slide 38: Global Real Estate: Engaging and Enriching Our Communities
GLOBAL REAL ESTATE ENGAGING AND ENRICHING OUR COMMUNITIES Our marketing team transforms our centres into exciting community spaces delivering memorable in-centre experiences • Support our tenants – retailers, restaurants, services • Support our communities • Engage via our digital/social platforms •
Slide 39: Future Long-Term Value Creation Project: 70.4 Acres in New Zealand
FUTURE LONG-TERM VALUE CREATION PROJECT 70.4 ACRES OF UNDEVELOPED LAND IN NEW ZEALAND’S FASTEST GROWING INDUSTRIAL MARKET Together with adjoining landowners-Southern Gateway Consortium-we have collaborated with governmental agencies to facilitate major industrial development on our properties by com
Slide 40: Value Creation Project: 44 Union Square
VALUE CREATION PROJECT 44 UNION SQUARE AN IRREPLACEABLE NYC PROPERTY 73,322 SF (INCLUDING BOMA ADJUSTMENTS) • Supporting Building Structure substantially complete • Concrete superstructure (floors, columns, beams) and exterior façade completed • Installation of Iconic Glass Dome commences November 2
Slide 41: Value Creation Project: 44 Union Square Leasing
VALUE CREATION PROJECT44 UNION SQUARE AN IRREPLACEABLE NYC PROPERTY 73,322 SF (INCLUDING BOMA ADJUSTMENTS) • Retail leasing efforts continue with ongoing interest from potential full floor and multi-floor users • Overall Manhattan office leasing market is strong • Midtown South submarket experienced
Slide 42: Future Project: Reading Viaduct & Adjacent Properties, Philadelphia
FUTURE LONG-TERM VALUE CREATION PROJECT READING VIADUCT & ADJACENT PROPERTIES PHILADELPHIA, PA • Our Reading Viaduct is 3,200 feet in length and at least 70 feet wide. We also own several small parcels (which all have air rights) adjacent to the Viaduct • June 2018-Center City District completed Pha
Slide 43: Future Project: 202 Acres in Coachella, CA
FUTURE LONG-TERM VALUE CREATION PROJECT 50% MANAGING INTEREST IN 202 ACRES OF UNDEVELOPED LAND COACHELLA, CA • Located immediately south of Interstate 10 and east of Highway 86 in Coachella Valley • Current zoning for 50 acres of high density mixed-use and 150 acres of single family residences • As
Slide 44: Live Theatre Portfolio
LIVE THEATRE PORTFOLIO MINETTA LANE THEATRE NEW YORK CITY audible • In May 2018, Audible Inc., a subsidiary of Amazon and the leader in audiobooks, announced that the Minetta Lane would be its creative home for live productions in New York • Since June 2018, Audible has been producing limited run pr
Slide 45: Financial Review Presented by Dev Ghose
FINANCIAL REVIEW PRESENTED BY DEV GHOSE Executive Vice President & Chief Financial Officer
Slide 46: Financial Review: Summary Financial Data, Year Ended December 31
FINANCIAL REVIEW SUMMARY FINANCIAL DATA STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, ($ in thousands, except per share data) 2017 2016 Revenues $279,734 $270,473 Operating Income 20,561 20,311 Interest Expense, net 6,194 6,782 Income Taxes 3,337 4,020 Net Income Attributable to Common Shareholder
Slide 47: Financial Review: Summary Financial Data, Nine Months Ended September 30
FINANCIAL REVIEW SUMMARY FINANCIAL DATA STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, ($ in thousands, except per share data) 2018 2017 Revenues $ 234,395 $ 208,037 Operating Income 18,849 17,012 Interest Expense, net 5,132 5,310 Gain On Sale Of Assets-9,417 Gains On Insurance Recoveries-9
Slide 48: Financial Review: Summary Balance Sheet
FINANCIAL REVIEW SUMMARY BALANCE SHEET ($ in thousands) 09/30/2018 12/31/2017 12/31/2016 Cash and Cash Equivalents $ 15,714 $ 13,668 $ 19,017 Receivables 7,306 13,050 8,772 Other Current Assets 6,624 6,757 44,852 Total Current Assets 29,644 33,475 72,641 Operating Property, Net 261,139 264,724 211,8
Slide 49: Financial Review: Reading International Debt
FINANCIAL REVIEW READING INTERNATIONAL DEBT Debt Summary AS OF SEPTEMBER 30, 2018 ($ in thousands) Corporate and/or Property Debt Expiration Year Contractual Capacity Capacity Used Unused Capacity Trust Preferred Securities C 2027 $ 27,913 $ 27,913 $-U.S. Corporate Office P 2027 9,552 9,552-Union Sq
Slide 50: Financial Review: 2001-2018 Yearly Financial Trend
FINANCIAL REVIEW 2001- 2018 YEARLY FINANCIAL TREND in US $ 2001 Proforma 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 9/30/18 TTM Assets* $170,595 $182,772 $222,866 $230,227 $253,057 $289,231 $346,071 $371,870 $406,417 $430,349 $430,764 $428,588 $386,807 $401,586 $
Slide 51: Reading International Thank You
READING INTERNATIONAL THANK YOU
Reading International — Shareholder Meeting (November 2018) on 6ix