Odeon & UCI Finco plc. Q Investor Presentation

Transcription

1 Odeon & UCI Finco plc Q Investor Presentation 29 May

2 Disclaimer DISCLAIMER THIS DOCUMENT HAS BEEN PREPARED BY ODEON & UCI FINCO PLC ( ODEON ). BY REVIEWING THIS DOCUMENT OR PARTICIPATING IN THE CONFERENCE CALL THAT PRESENTS IT, YOU AGREE TO BE BOUND BY THE FOLLOWING CONDITIONS. THIS DOCUMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SECURITIES IN ODEON. FURTHERMORE, IT DOES NOT CONSTITUTE A RECOMMENDATION BY ODEON OR ANY OTHER PARTY TO SELL OR BUY SECURITIES IN ODEON OR ANY OTHER SECURITIES. ALL WRITTEN OR ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO ODEON OR PERSONS ACTING ON THEIR BEHALF ARE QUALIFIED IN THEIR ENTIRETY BY THESE CAUTIONARY STATEMENTS. Unaudited Information This document contains financial information regarding ODEON and its fellow subsidiaries (the Group ). Such financial information may not have been audited, reviewed or verified by any independent accounting firm. The inclusion of such financial information in this document or any related presentation should not be regarded as a representation or warranty by ODEON, any of its respective affiliates, advisors or representatives or any other person as to the accuracy or completeness of such information s portrayal of the financial condition or results of operations by the Group. Non-GAAP information We have presented certain non-gaap information in this document. As used in this document, this information includes EBITDA, which represents earnings before interest, tax, depreciation, amortisation, exceptional items and strategic costs. Our management believes that EBITDA is meaningful for investors because it provides an analysis of our operating results, profitability and ability to service debt and because EBITDA is used by our chief operating decision makers to track our business evolution, establish operational and strategic targets and make important business decisions. In addition, we believe that EBITDA is a measure commonly used by investors and other interested parties in our industry. 2

3 Forward-Looking Statements Forward-Looking Statements This document includes forward-looking statements. When used in this document, the words "anticipate," "believe," "estimate," "forecast," "expect," "intend," "plan" and "project" and similar expressions, as they relate to ODEON, its management or third parties, identify forward-looking statements. Forward-looking statements include statements regarding ODEON s business strategy, financial condition, results of operations, and market data, as well as any other statements that are not historical facts. These statements reflect beliefs of ODEON s management, as well as assumptions made by its management and information currently available to ODEON. Although ODEON believes that these beliefs and assumptions are reasonable, the statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties expressly qualify all subsequent oral and written forward-looking statements attributable to ODEON or persons acting on its behalf. 3

4 Film Phasing in 2012 As expected and as highlighted on the last call Q film slate was weaker than previous years. It was then exacerbated by poor cinema-going weather: Q1 markets (3) down 16% Q1 LFL attendance down 16% Q1 LFL revenue (1) down 14% The pattern has reversed in Q2 to date (2) with better slate and more favourable weather in April and May: Q2 to date (2) markets (3) up 25% Q2 to date (2) LFL attendance up 25% Q2 to date (2) LFL revenue (1) up 26% Year to date (2) total revenue is well ahead. For the rest of the year the film slate looks strong, although the sports calendar will affect phasing. (1) Constant fx rates (2) Estimated to 24 May 2012 (3) Weighted average of our major territories 4

5 Q1 Market - Films No break-out films in 2012 compared with prior years: 2011: The King s Speech UK GBOR 45m 2010: Avatar UK GBOR 94m 2009: Slumdog Millionaire UK GBOR 32m Top 5 UK & Ireland Titles in Q m Top 5 UK & Ireland Titles in Q m The King s Speech 45 The Woman in Black 21 Tangled 20 War Horse 19 Black Swan 16 The Best Exotic Marigold Hotel 16 Gnomeo & Juliet 15 The Muppets 16 Paul 14 Sherlock Holmes: A Game of Shadows 11 Total Variance to Q (25%) 5

6 CE Top Films Q1 Germany was the only one of our major markets with a break-out film in Q Q1 Actual (Adm m) Q1 Actual (Adm m) Spain Torrente Sherlock Holmes: A Game of Shadows 1.3 Tangled 1.9 The Descendants 1.3 The Black Swan 1.5 Intouchables 0.9 Hereafter 1.5 Safe House 0.8 The King's Speech 1.4 Hugo 0.8 Total 8.6 Total 5.1 Variance from Q (40%) Germany Kokowääh 4.0 Intouchables 7.1 Black Swan 2.1 Alvin and the Chipmunks: Chipwrecked 1.1 Tangled 2.0 Sherlock Holmes: A Game of Shadows 1.1 The King s Speech 1.8 Puss in Boots 1.1 Tron: Legacy 1.0 Rubbeldiekatz 1.0 Total 10.9 Total 11.4 Variance from Q % Italy Che bella giornata 7.5 Benvenuti al Nord 4.7 Immaturi 2.9 Immaturi Il Viaggio 2.0 Qualunquemente 2.7 Intouchables 1.9 Femmine contro maschi 2.1 Posti in Piedi in Paradiso 1.6 La banda dei Babbi Natale 1.5 Come Bello Far L Amoure 1.2 Total 16.6 Total 11.4 Variance from Q (31%) 6

7 Total Market by Territory Q Q Variance UK & Ireland GBOR ( k) 285, ,524 (10.4%) Spain Attendance (k) 26,561 20,944 (21.1%) Germany Attendance (k) 33,530 33,251 (0.8%) Italy Attendance (k) 40,267 30,471 (24.3%) Average Weighted Market Decline for group territories* (15.8%) Group Paid Attendance (k) 19,306 19,136 (0.9%) Group LFL Paid Attendance (k) 19,144 16,137 (15.7%) Q saw unfavourable weather patterns across our main territories which disrupted attendance in the UK, Spain and Italy most notably: Heavy snow in Italy and UK in February Hottest and driest winter in Spain for 65 years Warm and dry weather in the UK and Italy throughout March * Weighted using Odeon/UCI group attendance. Weighting is constant across both years, based on Odeon & UCI group 2012 attendance. Excludes Ireland, Portugal and Austria. 7

8 Weighted Historic Market Attendance Q1 Attendance in Odeon/UCI Major Markets* 45 m Slumdog Millionaire Avatar The King s Speech and Che Bella Giornata Q is lower than recent years, which benefited from strong break-out films, but not out of line with earlier years. * Weighted using Odeon/UCI group attendance. Weighting is constant across all years, based on Odeon & UCI group 2012 attendance. Excludes Ireland, Portugal and Austria. 8

9 Q1 & Q Market Volume versus 2011 Market attendance variance Volume has recovered strongly in Q2 to date* as the film slate has strengthened and weather turned more favourable: m (2) (4) (6) (8) (10) (12) UK Spain Germany Italy Group Weighted Average** Q1 Q2 to date * Estimated to 24 May ** Weighted using Odeon/UCI group attendance. Weighting is constant across both years, based on Odeon & UCI group 2012 attendance. Excludes Ireland, Portugal and Austria. 9

10 3D Quarterly Market Performance 3D UK GBOR as a percentage of total UK GBOR Q1 was a weak quarter for 3D films Q2 has seen a strong recovery in the quality of the 3D slate. Our overall market share performs disproportionately well on 3D films. 35% 30% 32% 30%* 31% 26% 25% 20% 18% 21% 22% 24% 21% 15% 10% 10% 5% 0% Q1 Q2 Q3 Q4 * Q2 to date estimated to 24 May

11 Q Financial Highlights Financial performance was strong considering the low market volumes: Attendance: LFL down 15.7%, total down 0.9% Revenue (1) : LFL down 14.1%, total down 0.5% ATP (1) : LFL up 0.1%, despite lower 3D mix (2), total down 2.1% RPH (1) : LFL up 3.7%, continuing growth, total up 1.8% Gross profit margin: Both LFL and total up 130 bps, lower film hire on smaller films Operating costs: LFL (1) down 2.8%, total up 11.9% Acquisitions contributed 26m in revenue and 3m in EBITDA (1) Stated at constant fx rate (2) Total ATP at constant 3D/2D mix year-on-year would have been 2.3% point variance higher 11

12 Q Margins and Costs LIKE-FOR-LIKE ESTATE TOTAL ESTATE m unless otherwise stated Q Q Variance from Q Fav/(Adv) Q Q Variance from FY 2011 Fav/(Adv) Group Revenue (1) (14.1%) (0.5%) Gross Profit (1) (12.4%) % Gross Profit Margin 65.3% 66.6% 130 bps 65.4% 66.7% 130 bps Operating Costs (1) (84.4) (82.0) 2.8% (85.3) (95.5) (11.9%) EBITDA (49.0%) (38.1%) EBITDA Margin 14.0% 8.3% (570 bps) 14.3% 8.9% (540 bps) Q gross profit margin improved due to lower film hire and the impact of an increased proportion of retail revenue that has higher margin than box office. Q EBITDA margin declined on lower volumes despite favourable KPIs and good cost control across the estate. (1) Variances stated at constant fx rate 12

13 Quarterly & Annual EBITDA Progression * Q1 Q2 Q3 Q4 0 Full Year EBITDA has progressed strongly in recent years, but phasing each year varies * Proforma for full year PropCo rent 13

14 Q Abbreviated Cashflow As at 31 March March 2011 m OpCo EBITDA Acquisitions (0.1) - Payments for Capex (17.2) (8.0) Net Financing Costs Paid (24.0) (7.3) Provisions, One-Offs, Tax (3.1) (6.3) Working Capital and similar (14.2) 30.7 (Increase)/Decrease in Net Debt (43.9) 32.8 Cash balance at end of period Payments for capex increased due to refurbishment activity, new sites including The Point, initiatives on the existing estate and maintenance. 18m of digital refunds on capex spent are expected during Net financing costs paid included the first long period Sterling bond coupon. Working capital outflow reflected normal seasonal pattern and slower trading. Last year was distorted by 30m receipt for advanced ticket sales for summer performances which has not been repeated this year. 14

15 Debt and Leverage Leverage increased through Q1 principally because of lower LTM EBITDA and lower working capital. These are both timing effects which are expected to reverse during the year. In addition, digital refunds of 18m are expected during the year. Bond OM Q Q LTM EBITDA m Proforma adjustments m (eg. new acquisitions, digital) Proforma LTM EBITDA m Net Debt m Net Debt / EBITDA 4.1x 4.2x 5.1x Fixed Charge Cover 2.2x 2.3x 2.2x 15

16 2012 Activity Highlights to date Whiteleys Refurbishment launch of The Lounge concept Full refurbishment of lower level s standard screens Launch of a new premium concept The Lounge with fully reclinable leather seats and at-seat food and beverage service New Site The Point, Dublin New 6 screen complex features Ireland s first isens big screen and big sound auditorium Big Screen and Big Sound Innovation Further 6 isens screens opened in CE in addition to The Point Dublin Retail Innovation 8 new Costas to bring the total estate to 30 New Danone frozen yoghurt concession launched in Spain Further Farggi coffee shops and Pick n Mix walls in CE UK Refurbishment Maidstone was refurbished in the quarter with all new seating in every screen. Greenwich refurbishment ongoing, expected opening date is 18 June. CE Refurbishments Two sites in Spain have been fully refurbished this quarter Parc Valles, Barcelona (24 screens) and Festival Park, Mallorca (20 screens). Parc Valles reopened with a new isens screen and also a new yoghurt concession stand featuring Danone products. 16

17 Current trading & Outlook Q has started strongly with Marvel s Avengers Assemble opening ahead of expectations in most territories. Its UK performance would have been enough to place it as second ranked film in 2011 with a box office to date of 47m. Q to date* markets and LFL attendance are up 25% on There are several potentially strong Q2 releases to come including Prometheus and Snow White and the Huntsman but June is up against a strong comparative. Phasing will be impacted by the UEFA EURO 2012 Football Championships (June) and by the Olympics in London (August). The film slate for the remainder of the year looks strong especially The Amazing Spider- Man, Ice Age 4, Skyfall (Bond 23), The Hobbit: An Unexpected Journey and the conclusion of the Twilight saga. It is anticipated that six further new sites will open in 2012 namely Llanelli and Dorchester in the UK and Catania and Gualteri both in Italy, Puerto Venecia (Zaragoza) and Santiago both in Spain. We still have c. 50m cash available for acquisition investment if the right opportunity arises. We continue to investigate potential targets. * Estimated to 24 May

18 2013 Hollywood Film Slate Top 20 titles in any year usually represent approx half the box office Film slate for the years 2012 and 2013 could outperform 2011 Although business plan is based on flat attendance profile A consistent number of potential 40m+ blockbusters are being planned in 2012 and 2013 vs. a greater number of 25-40m blockbusters than in 2011 The 3D and IMAX mix for 2013 is not currently known UK Slate 2012 Anticipated Top 20 * 2013 (Announced) Q1 Woman in Black Jack the Giant Killer The Best Exotic Marigold Hotel Les Miserables The Muppets Oz: The Great and Powerful War Horse Aardman s The Croods Q2 The Hunger Games Iron Man 3 Prometheus 3D The Fast and the Furious 6 The Avengers 3D Star Trek 2 Men In Black 3 3D Despicable Me 2 American Pie Reunion Disney s The Lone Ranger The Pirates! In An Adventure With Scientists 3D Superman: Man of Steel Snow White and the Huntsman Q3 The Dark Knight Rises Monsters University Ice Age: Continental Drift 3D Dirty Dancing The Amazing Spiderman 3D Spielberg s Robopocalypse Brave 3D DreamWorks Animation s Turbo The Bourne Legacy The Smurfs 2 Q4 Skyfall (Bond 23) The Hobbit: There and Back Again The Hobbit: An Unexpected Journey 3D Thor 2 Twilight Saga: Breaking Dawn Part II DreamWorks Animation s Me and My Shadow Madagascar 3 3D Walking with Dinosaurs 3D Disney s Frozen Good film slate supported by sequels, 3D and new movies based on existing franchises. Phasing in 2012 will be different to Q1 is weaker but the slate overall and Q4 in particular look strong. * Based on actual performance to 24 May 2012 and anticipated performance for the remainder of the year. Note: Films playing across two years appear in the year of release, in the band corresponding to their expected full gross run based on Odeon forecasts 18

19 Summary Q1 volumes were low due to weaker film slate and unfavourable cinema-going weather Q1 financial metrics were strong in view of low market volumes Q2 is showing significant volume recovery with a stronger slate and more favourable cinema-going weather Development activity and investment will continue to grow earnings with 6 further new sites expected this year Phasing will be impacted by major sporting events and weather patterns but we are looking forward to a strong slate in the balance of the year 19

20 Q&A & AOB Any questions? Further questions can be addressed below: PR: Financial PR: Andrew Dowler, Finsbury +44 (0) Telephone: Jonny Mason +44 (0)

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