Cinema City International NV Acquisition of Palace Cinemas in Central Europe Warsaw, 20 January 20
Cinema City acquired Palace Cinemas in Central Europe CCI acquiredall of the cinema activities of Palace Cinemas, which are in the Czech Republic, Slovakia and Hungary* Acquired assets of Palace Cinemas: 5 multiplexes with 4 screens in operation *Acquisition excludedanon-profitable part of the Hungarian business, which has been carved out of the acquisition. Slovakia 2% Palace CEE operations by country* The Czech Rep. 46% The Czech Republic 8cinemas (2) 65 screens Usti nad Labem Praha Brno Hungary () 4 cinemas 47 screens Slovakia 3cinemas Ostrava (2) 29 screens Bratislava Budapest Hungary 33% *by no of screens () CCI is acquiring 00% of the Palace Hungary company, but not the Palace Mozicompany. CCI will provide selected management services for Palace Mozi operations, which include 5multiplexes inbudapestand 3 multiplexes outside Budapest. (2) Numbers exclude the multiplex under development in Ostrava,Czech Republic, to be opened in 202 2
Transaction Business, price & valuation Acquired business Seller Price & valuation Cinema City purchases 00% shares of four Palace Cinemascompanies: Palace Cinemas Czech s.r.o. (Czech Republic), Palace Cinemas Hungary Kft(Hungary), Palace Multikino s.r.o. (Slovakia), Palace Cinemas Slovak Republic s.r.o. (Slovakia). PalaceCinemas(Central Europe) BV,controlled by Argus Capital, a CEE Private Equity fund. Purchase price 28 million represents6x multiple of Palace Cinema s 200 normalized EBITDA* generated from management accounts. Agreement The agreement isfinal. No post-closing adjustments. No requirement for regulatory approvals due to size of operations. * Normalized EBITDA is comprised primarily of 200 management accounts EBITDA plus annualized results of cinemas opened during 200
Transaction Financial highlights & transaction rationale Financial highlights Transaction rationale Payment of 28million at theclosing of the transaction. Cash payment of 2.4 million plus assumption of 6.6 million of Palace Cinemas debt. Purchase price represents 6X multiple of Palace Cinema s 200 normalized EBITDA generated from management accounts. Financing of acquisition from CCINT cash generation and from available credit lines. Significant increase in market share in the Czech Republic and in Hungary. Entering new market Slovakia. Strong synergies with acquired operations in a number of fields. Larger operational footprint further supports development of cinemarelated business lines. Goal to increase of CCI s value for its Shareholders.
CCI becomes #3cinema operator in Europe moving faster towards,000 screens Cinema City Screens*,260 940 725 668 5 566 97 997 2007 2008 2009 200 20 (F) 202-203 (F) * including Palace Cinemas acquisition and based on the binding lease agreements signed as of January 20 Acquisition of Palace Cinemas will make CCI the third largest cinema operator in Europe sites screens. UCI/Odeon 204 850 2. Gaumont Pathe (EuroPalaces) Before acquisition 96 99 3. Cineworld 78 80 4. CCI 75 725 5. Vue 70 669 sites screens. UCI/Odeon 204 850 2. Gaumont Pathe (EuroPalaces) After acquisition 96 99 3. CCI 90 866 4. Cineworld 78 80 5. Vue 70 669
The Czech Republic From #3 to # 3 multiplexes screens 23,700 seats 36 d-projectors CCI s market share in # of admissions* Pilzen Usti nad Labem Prague 3 4 Liberec Pardubice Ostrava () prior to transaction 3% post-transaction 40% CCI multiplex Acquired PC multiplex 2 Brno () multiplexin Ostrava with 8 screens to be opened in 202 CCI s market share in box office ( ) * Admissions in 000 in 2009 Revenuesin 000in2009 Admissions in 000 in 200 prior to transaction Consolidated 4,55,645 2,870 Consolidated 27,830 0,694 7,36 Consolidated 4,848,848 3,000 5% post-transaction 45% CCI PC CCI PC CCI PC *based on 2M 2009
Hungary Strengthening Budapest presence solidifies country leadership 7 multiplexes 62 screens 30,800 seats 40 d-projectors CCI s market share in # of admissions* CCI multiplex Acquired PC multiplex Budapest Gyor 2 4 Sopron Veszprem Szombathely Szolnok Szekesfehervar Zalaegerszeg Szeged Pecs Miskolc Debrecen prior to transaction 36% post-transaction 62% CCI s market share in box office ( ) * Admissions in 000 in 2009 Revenuesin 000in2009 Admissions in 000 in 200 prior to transaction Consolidated 6,549 3,803 2,746 Consolidated 36,785 22,974 3,8 Consolidated 7,62 4,703 2,459 3% post-transaction 53% CCI PC CCI PC CCI PC *basedon 2M 2009
Slovakia New country on CCI s map. Leadership in capital city. 3 multiplexes 29 screens 5,560 seats 9 d-projectors CCI s market share in Slovakia* 3 Bratislava in # of admissions 3% in box office ( ) 40% CCI s market share in Bratislava* Admissions in 000 Revenuesin 000 in # of admissions 95%,089,275,334 6,458 8,204 in box office ( ) 95% 2008 2009 200 2008 2009 *basedon 2 M 2009
Palace Cinemas Aggregated financial results of four subsidiaries in '000 2008 2009 200 () Revenues 39,309 39,264 44,26 EBITDA 4,97 2,866 4,656 (2) No of admissions 6,684 6,89 7,23 (2) Average Ticket Price in 4.2 4. 4.5 () 200 data derived from Palace Cinemas management accounts. (2) Normalized EBITDA and admissions, comprised of 200 management accounts results plus annualized results of cinemas opened during 200. EBITDAmultiple of the transaction will be effectively lowered thanks to synergies and benefits following the acquisition.
Synergies& benefits Value added in a number of areas Cinema City will benefit from a number of synergies naturally resulting from larger scale of operations on both the revenue and cost sides. Planned integration of Palace Cinemas and Cinema City in the Czech Republic and in Hungary. Implementation of CCI s business model and management tools, with goal to improve certain inherited operational inefficiencies. On-screen advertising catalyst. CCI digitalization program spread over new locations. In the coming two years Cinema City plans to invest additional capex to upgrade the quality of acquired cinemas.
Cinema City International A look at post-acquisition footprint 7 countries 90 theatres 866 screens 287 digital screens 72 K seats 9IMAX 35 theatres 360 screens under binding contracts under binding contracts 3IMAX to open Next opening: Romania, spring 20 Screens in operation(866) Screens under development (360) Digital screens (287) Poland Hungary The Czech Israel Romania Bulgaria Slovakia 33(38%) 62(9%) (3%) 04(2%) 88(0%) 4(5%) 29(3%) Poland Hungary The Czech Israel Romania Bulgaria Slovakia 0 0 8 47(3%) 25(7%) 29(8%) 25(7%) Poland Hungary The Czech Israel Romania Bulgaria Slovakia 9 6 40 28 42 32 20
Appendix
Palace Cinemas Central Europe List of cinemas location city # of screens # ofseats. Park Hostivar Prague 8,730 2. Slovansky Dum Prague 0,839 3. Novy Smichov Prague 2 2,702 4. Letnany Prague 8 2,223 5. Olympia SC Brno 0 2,287 6. Velky Spalicek Brno 7,406 7. Forum Ústí nad Labem 5 664 8. Forum Liberec 5 868 9. Karolina Ostrava 8,208* The Czech Republic 65 +8 3,79 +,208. MOM Park Budapest 9 2,467 2. West End SC Budapest 4 3,039 3. Campona SC Budapest 2,39 4. Mammut & 2 Budapest 3 2,29 Hungary 47 0,88. AuPark Bratislava 2 2,36 2. Polus Bratislava 8,63 3. Eurovea Bratislava 9,63 Slovakia 29 5,560 Palace Cinemas 4+8 29467+ 208 *Under construction