Parques Reunidos Corporate Presentation January 2017 Disclai aimer - - PowerPoint PPT Presentation
Parques Reunidos Corporate Presentation January 2017 Disclai aimer - - PowerPoint PPT Presentation
Parques Reunidos Corporate Presentation January 2017 Disclai aimer mer This document does not constitute or form part of any purchase, sales or exchange offer, nor is it an invitation to draw up a purchase sales or exchange offer, or advice on
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Disclai aimer mer
This document does not constitute or form part of any purchase, sales or exchange offer, nor is it an invitation to draw up a purchase sales or exchange offer, or advice on any stock issued by Parques Reunidos Servicios Centrales, S.A. (“Parques Reunidos”). Nor shall this document or any part of it form part of any offer for sale or solicitation of any offer to buy any securities on the basis of or be relied on in connection with any contract or commitment to purchase shares. Neither this document nor any information contained herein may be reproduced in any form, used or further distributed to any other person or published, in whole or in part, for any purpose, except that information may be extracted herefrom and used in equity research reports about Parques Reunidos in compliance with the applicable regulations. Failure to comply with this obligation may constitute a violation of applicable securities laws and/or may result in civil, administrative or criminal penalties. This document is not for publication, release, disclosure or distribution, directly or indirectly, in, and may not be taken or transmitted into the United States, Canada, South Africa, Japan or Australia, and may not be copied, forwarded, distributed or transmitted in or into the United States, Canada, South Africa, Japan, Australia or any other jurisdiction where to do so would be unlawful. The distribution of this document in other jurisdictions may also be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with such restrictions may constitute a violation of the laws
- f the United States, Canada, South Africa, Japan or Australia or any other such jurisdiction.
This document may include, in addition to historical information, forward-looking statements about revenue and earnings of Parques Reunidos and about matters such as its industry, business strategy, goals and expectations concerning its market position, future operations, margins, profitability, capital expenditures, capital resources and other financial and operating information. Forward-looking statements include statements concerning plans,
- bjective, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The words “believe”, “expect”, “anticipate”, “intends”, “estimate”,
“forecast”, “project”, “will”, “may”, “should” and similar expressions may identify forward-looking statements. Other forward looking statements can be identified from the context in which they are made. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of Parques Reunidos and the environment in which Parques Reunidos expects to operate in the future. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Parques Reunidos, or industry results, to be materially different from those expressed or implied by these forward-looking statements. None of the future projections, expectations, estimates or prospects in this presentation should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the presentation. Many factors could cause the actual results, performance or achievements of Parques Reunidos to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or targeted. As a result of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements as a prediction of actual results or otherwise. Current and future analysts, brokers and investors must operate only on the basis of their own judgment taking into account this disclaimer, as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as its considers necessary or appropriate in the circumstances and not reliance on the information contained in the
- Presentation. In making this Presentation available, Parques Reunidos gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in Parques Reunidos or in any other securities or investments
- whatsoever. These analysts, brokers and investors must bear in mind that these estimates, projections and forecasts do not imply any guarantee of Parques Reunidos ´s future performance and results, price, margins, exchange
rates, or other events, which are subject to risks, uncertainties and other factors beyond Parques Reunidos ´s control, such that the future results and the real performance could differ substantially from these forecasts, projections and estimates. The information in this document, which does not purport to be comprehensive, has not been independently verified and will not be updated. The information in this document, including but not limited to forward-looking statements, applies only as of the date of this document and is not intended to give any assurances as to future results. Parques Reunidos expressly disclaims any obligation or undertaking to disseminate any updates or revisions to the information, including any financial data and any forward-looking statements, contained in this document, and will not publicly release any revisions that may affect the information contained in this document and that may result from any change in its expectations, or any change in events, conditions or circumstances on which these forward-looking statements are based or whichever other events or circumstances arising on or after the date of this document. Market data and competitive position used in this document not attributed to a specific source are estimates of Parques Reunidos and have not been independently verified. In addition this document may contain certain financial and other information in relation to other companies operating in the leisure sector. This information has been derived from publicly-available sources and Parques Reunidos accepts no responsibility whatsoever and makes no representation or warranty expressed or implied for the fairness accuracy, completeness or verification of such information. Certain financial and statistical information contained in this document is subject to rounding adjustments. Accordingly, any discrepancies between the totals and the sums of the amounts listed are due to rounding. Certain management financial and operating measures included in this document, including number of visitors or revenues per capita, have not been subject to a financial audit or have been independently verified by a third party. In addition, certain figures contained in this document, which have also not been subject to financial audit, are combined and pro forma figures. None of Parques Reunidos nor any of its employees, officers, directors, advisers, representatives, agents or affiliates shall have any liability whatsoever (in negligence or otherwise, whether direct or indirect, in contract, tort or
- therwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document.
The information contained in this presentation does not constitute investment, legal, accounting, regulatory, taxation or other advice and the information does not take into account your investment objectives or legal, accounting, regulatory, taxation or financial situation or particular needs. You are solely responsible for forming your own opinions and conclusions on such matters and the market and for making your own independent assessment of the
- information. You are solely responsible for seeking independent professional advice in relation to the information contained herein and any action taken on the basis of the information contained herein. No responsibility or
liability is accepted by any person for any of the information or for any action taken by you or any of your officers, employees, agents or associates on the basis of such information. By attending the presentation or receiving this document you agree to be bound by the foregoing limitations.
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Leading global leisure operator of regional parks
One of the 3, truly global operators with a global platform of 61 parks in 14 countries(1) Reported revenues of €584 MM and EBITDA of €188MM in FY2016 20 MM visitors in 2016
Notes
- 1. Includes two parks in Dubai, two parks in Vietnam and five MECs under development
- 2. Source: Inference from AECOM’s 2014 global attractions attendance report based on attendance
#8 Leisure Park Operator Worldwide(2) #2 European Leisure Park Operator(2) #1 Water Park Operator Worldwide
Theme Parks Animal Parks Water Parks Other MECs
Vietnam Theme Park Vietnam Water Park
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Well-diversified portfolio of regional parks
Note te
- 1. Other includes Netherlands, UK, Denmark, Argentina
2016 Revenue Geographical Split
40% 24% 7% 6% 7% 4% 4% 8%
Spain Italy USA Germany Belgium Norway France Other(1)
Park 2 Park 1 Park 3 Park 4 Park 5 Park 6 Park 7 Park 8 Park 9 Park 10
Park 11
Park 55
8%
2016 Revenue Split By Park
We benefit from a truly diversified portfolio Regional park business model resilient to adverse macro-economic conditions Strong regional brands Good value for money proposition Stable, predictable local demand Low dependence on tourism Non destination parks
USA Spain 21% 60% 80% 20% 14% 5%
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Highly regarded park portfolio with strong local brands and access to hot IPs when needed
Highly regarded strong local brands Proven ability to
- btain hot
IPs
Largest New York area water park and one of America’s top water parks Oldest park in North America (1846) A leading park in Germany Second largest leisure park in Italy Designated a US National Historic Landmark Spain’s largest urban park
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We operate in a growing market with highly attractive fundamentals
Strong structural growth drivers
Proportion of income dedicated towards leisure and recreational activities is expected to rise Growing middle class More than half of the world's population is aged below 30: the main target group for leisure parks Tourism is expected to continue growing
High barriers to entry
Scarcity of suitable locations without strong incumbent players Significant initial capex requirements and time to build a new park and long lead time to reach breakeven Scarcity of management know-how Lack of economies of scale from a single park
Fragmented market with significant potential for consolidation
Market largely composed of small to medium individual parks and independent operators Family and state-owned companies, whose owners are expected to be sellers overtime Limited number of competitors targeting similar acquisition targets
Positive recent market trends
Ongoing macroeconomic and consumer spending recovery Increasing number of new developments of greenfield projects in Asia and the Middle East that require industry management skills Introduction of new entertainment concepts: Mall Entertainment Centers (“MECs”)
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We are best in class operators
500 1.000 1.500
0% 15% 30% 45% 60% 75%
250 500 750 250 500 750 1.000 Visitors
2016 Parks EBITDAR margin Water Parks Theme Parks Animal Parks
Our ability to benchmark is a unique management tool
Proven capacity to operate all type of parks across multiple regions Continuous benchmarking across 61 parks Over 300 cost / cash flow KPIs monitored on a park level monthly State-of-the-art IT systems Best practice transfer between existing and new parks
Our parks are consistently operated at high margins
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68 189
40 80 120 160 200 240
2006 2016
We have a proven and unique track record, creating a truly global and diversified leader, with enormous potential
Parques Reunidos EBITDA
…whilst de-risking the business model Delivering growth and improving efficiency…
€MM
188
Parques Reunidos 2006 Parques Reunidos today 22 parks 5 countries 58% Revenue in Spain Financial leverage 9.2x EBITDA 61 parks 14 countries 24% Revenue in Spain Financial leverage 2.9x EBITDA +39 +9
- 34%
- 6.3x
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Clear and well defined strategy focused on growth
Multiple top line growth initiatives Expansion Capex Management Contracts MECs
Season Passes IPs Off season events Ticketing and In-Park revenue New attractions Virtual Reality Operational discipline 4 new projects €33 MM capex 20% ROIC Dubai opening Vietnam Ongoing active negotiations 5 lease agreements signed Strong pipeline Lionsgate agreement New potential licensing agreements
Selective Acquisition Strategy
+ 1 2 3 4 5
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11% 13% 5% 16% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Group Spain RoE US
Top line initiatives
Season passes
Penetration of Season passes
% of 2016 Ticketing Revenue
Strong potential to continue growing in season passes, bringing more loyal customers, enhancing visibility of earnings and reducing the impact of weather on the business Key Initiatives Include entry level passes with limited advantages Launch multi-tier season passes with different advantages and prices Up-selling initiatives Marketing campaigns ‒ Black Friday sale ‒ Christmas campaign ‒ Exclusive events targeting pass holders
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Top line initiatives
New IP Licensing Agreements
We have shown our ability to
- btain hot brands
We operate very strong regional brands and, when convenient, we leverage on other brands Movie Park Germany
Start Trek IP license ‒ 10 year agreement in connection with a themed area at Movie Park Germany ‒ The first and only Star Trek themed coaster worldwide ‒ 2nd largest coaster at Movie Park
1
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Top line initiatives
Expand the season – Off season events
1
Off season revenues are growing on the back of off season events 2016 Halloween Season +18% revenue growth achieved in 2016 Halloween season(1) Extend length of the events (more days) Extend length of stay (more hours) Develop and roll-out new off season events: Spring and late Summer Key Initiatives Continue to roll-out existing off season events
Note
- 1. Only includes revenues from those parks with Halloween event
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Top line initiatives
Ticketing Revenues
Yield Management Dynamic Pricing Push high yield channels and increase percaps in each channel Reduced discounts along the season by increasing low promotions discounts (15%-25%) and reducing strong promotions discounts (25%-40%) Control and restrict number of coupons that are launched to the market (i.e.: online coupons, urban check tickets) Include Blackout dates in promotions for high attendance days (i.e.: Halloween or 15th August in Summer) Reduce period to redeem promotions to create a sense
- f urgency to the customer and avoid discounting during
high attendance periods Increase prices associated to new attractions or events Flexible pricing structure ‒ Price established per day according to visitor demand ‒ Five different scenarios ‒ Price adjusted depending on booked demand Status of implementation (direct channels) ‒ In 2015: 5 parks in Spain in 2015 ‒ In 2016: ‒ Rest of Spanish portfolio and rest of Europe ‒ US: Flexible calendar pricing at Splish Splash ‒ In 2017: ‒ Spain and rest of Europe: 2nd / 3rd season with dynamic pricing ‒ US: Flexible calendar pricing at water park portfolio and Kennywood
1
14
Top line initiatives
In Park revenues
Parques Reunidos is always pursuing new ways to raise in-park per caps Key Actions Examples Develop branded partnerships Improve facilities Introduce new upcharge experiences Enhance throughput Introduce all-inclusive offers Offer VIP products and services CRM initiatives
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Top line initiatives
New attractions coming in 2017
New attractions are a key factor to drive attendance and increase percaps Recurrent capex (maintenance and new attractions) represent 10-11% of annual revenues
PAM: Extension of Nickelodeon Area Slagharen: Coaster Gold Rush Dutch Wonderland: Suspended Coaster Lake Compounce: Phobia Coaster (2016)
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Top line initiatives
New Virtual Reality Coasters
Key Benefits Improves guest experience Reduces capital needs Flexibility to easily update VR themes every season or during the same season Potential extend VR capabilities to other rides Examples The first virtual reality coaster in the Benelux In partnership with Samsung The Revolution, one
- f the most popular
family rides
Bobbejaaland (2016 Seasson) Coming in 2017 Season Batman´s Escape @ Warner Sky Rocket Coaster @ Kennywood
1
Upcharge experience
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Strong and visible growth opportunity Second gate parks or hospitality in available space within or adjacent to an existing park that generates Benefit from low operational risk and high visibility of target attendance (vs. a greenfield project) Efficient use of unexploited space (c.400 acres of available land) Significant cross selling opportunity Tangible cost synergies by leveraging on the structure of the main park Lower investment requirements by leveraging on existing facilities and rides
Expansion capex projects
Expansion capex projects: Maximizing the value of the existing portfolio
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Water park Hotel Camping Lagoon
4 different types of expansion projects facilities already successfully proven
Already developed in Mirabilandia and Slagharen Already developed in Lake Compounce Already developed in Marineland Already developed in Marineland and being developed in Miami
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4 projects identified and approved for development in 2017 and are expected to open in 2017 /18 Represent c.€33 MM of investment to be incurred in 2017 and 2018 Investment: c.€8 MM Strategic rationale ‒ Extend length of stay with more content for a 2 day visit ‒ Expand catchment area ‒ Enhance product offering Expected ROIC: +20%
Expansion capex projects
Expansion capex: 2017 projects
Warner Park: Expansion of Warner Beach Slagharen: Extension of lodging facilities
Investment: c.€8 MM Strategic rationale ‒ Expand capacity of the existing lodging ‒ Increase off season attendance on the back of the new indoor water park ‒ Improve story telling experience and upgrade existing facility Expected ROIC: +20%
2
Story Land: Living Shores Aquarium
Investment: c.€4 MM Strategic rationale ‒ Indoor aquarium in the New Hampshire White Mountains (popular destination in summer for
- utdoor recreation and winter for
skiing) ‒ Strong product bundling options (2 day stay, hotel packages and annual passes) ‒ Year round operation Expected ROIC: +20%
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A €3,400 MM premier year-round regional leisure and entertainment destination Motiongate and Bollywood parks expected to represent the largest investments in the entire leisure destination Bollywood open in November and Motiongate opening is expected for December Management Contracts
Dubai Parks
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Operated by: 4 themed zones: Studio Central, DreamWorks, Smurfs Village and Sony Pictures Studios 27 attractions located in an open park Key brands: Shrek, Madagascar, Kung Fu Panda and How to Train Your Dragon Licensed IPs: DreamWorks, Sony Pictures and Lionsgate Six themed zones: Bollywood Boulevard, Mumbai Chowk, Rustic Ravine, Bollywood Film Studios, Hall of Heroes and Royal Plaza (includes Rajmahal theatre with separate ticketing) 16 different rides Licensed IP from Bollywood film studios
2 3 4 5 6
2
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Management Contracts
Vietnam
10 year management contract with Sun Group to operate a theme park and a water park in Vietnam Expected opening date: March 2017 First class theme park and water park located in Ha Long City with 214 hectares Fees structure − Development fee − Management fee: Variable fee based on performance (linked to both revenues and EBITDA) and with a minimum fee guaranteed Recently awarded a new management contract in Vietnam; expanding our presence into Asia Parks are expected to open by march 2017
Key Terms of the Agreement
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New ad-hoc leisure concepts located in high-traffic areas developed in partnership with the owner of the facility Small indoor facilities, of c.4,000 – 7,000 sqm, located in urban centers Win–win opportunity Large number of opportunities worldwide Attractive value proposition for shopping mall developers globally Very limited competition and with limited product overlap Indoor parks that further hedges PQR seasonality exposure Strong, visible and growing pipeline of opportunities Simple business model… The feasibility analysis works
Visitors (‘000) Percap (€) Revenue (€MM) EBITDAR (€MM) % Margin Rent paid to real estate developer (€MM) % Revenue EBITDA (€MM) % Margin Required investment (€MM) PQR investment (€MM) Developer investment (€MM) PQR ROIC 300 16.0 4.8 1.9 40.0% (0.8) 17.0% 1.1 23.0% 10.0 5.0 5.0 22.1% Illustrative example: Financing shared 50% / 50% with Real Estate Developer
…with strong growth fundamentals
MECs
The roll-out of MECs represents a highly attractive growth
- pportunity for Parques Reunidos
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MECs
Designed MEC concepts
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Atlantis Aquarium Lionsgate Centre
Lionsgate ‘s strong international IPs Key Features * Area 3,500-5000 sqm Visitor Capacity 1,000-1,200 (max) Main Attractions
- Horror
Walkthrough
- Interactive Dark
Ride
- Media/VR
Simulator
- Branded Escape
Rooms
- Media-Enhanced
challenge course
- Live Stage Show
* Estimated figures Key Features * Area 6,000 sqm Visitor Capacity 1,500 per day (max) Main Attractions
- Coral Reef
Experience
- Shark Experience
- Penguin
Encounter
- Big Main Tank
- Touch pools
- Interactions and
pavilions
- VIP Diving
experience * Estimated figures
Nickelodeon Centre
Key Features * Area 5,000-7500 sqm Visitor Capacity 1,000-1,200 (max) Main Attractions
- Playground
- Mini rides and
Attractions
- 4D Cinema
- Photo Call
- Driving school
- Play stage
- Big space with
more than 20 interactive games
- Party rooms
* Estimated figures Nickelodeon ‘s strong international IPs
Water park
Key Features * Area 6,000 sqm Visitor Capacity 1,500 (max) Main Attraction s
- Wave Pool
- Spa Area
- Slides and
loops
- Lazy River
- Children’s
area * Estimated figures
Jungle park
Key Features * Area 5,000 sqm Visitor Capacity 1,500 Main Attractions
- Mangrove
Sea
- Lemur
Interaction
- Otter Habitat
- Jungle Trail
- Interactions
and pavilions
- Tropical birds
* Estimated figures
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Already accomplished our 2017-18 goals Large and growing pipeline On going conversations to analyse new potential projects are taking place Pipeline Signed Contracts Over 20 additional situations being discussed and at different stages Provides high visibility to accomplish our targets for the period 2017-20
MECs
MECs: Strong pipeline of opportunities
MECs Location Real Estate Operator Concept Lease Agreement Signed Expected Opening THADER Murcia, Spain Metrovacesa Nickelodeon Mar-16 Q4-17 LAKESIDE London, UK Intu Nickelodeon May-16 Q4-18 LISBON Lisbon, Portugal Intu Nickelodeon Jul-16 Q1-18 XANADU Madrid, Spain Ivanhoe Nickelodeon Jul-16 Q2-18 XANADU Madrid, Spain Ivanhoe Aquarium Jul-16 Q1-18
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Selective acquisitions
Unique track record sourcing, executing and creating value through acquisitions
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Acquisition # Parks Country Year Acquired Implied EBITDA multiple paid(1)
Bobbejaanland 1 Belgium 2004 Bo Sommarland 1 Norway 2006 Marineland 1 France 2006 Mirabilandia 1 Italy 2006 Warner 1 Spain 2007 Aqualud 1 France 2007 Grant Leisure 3 UK 2007 BonBonLand 1 Denmark 2007 Tusenfryd 1 Norway 2008 Faunia 1 Spain 2008 Palace Group (FECs) 31 US 2008 Hawaii 1 US 2008 Kennywood Group 5 US 2008 Movie Park 1 Germany 2010 Dutch Wonderland 1 US 2010 Slagharen 1 Netherlands 2012 Noah’s Ark 1 US 2012 Miami Seaquarium 1 US 2014 Total 54 5.8x
All elements are in place to continue being the leading consolidator
Notes
- 1. Based on EBITDA after 2 full seasons under Parques Reunidos operation
18 transactions successfully completed across 10 countries since 2004 Target average EBITDA improvement of c.50% after 2 full seasons under Parques Reunidos management Implied EBITDA multiple paid(1) post integration of 5.8x
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Attractive financial profile delivering growth
541 584 400 500 600 700 2013 2016 €MM 167 188 100 150 200 2013 2016 €MM
EBITDA Margin
30.9% 32.3%
Revenue EBITDA
26 3,4% 2,4% 2,6% 2,4% 26,3% 25,3% 25,1% 25,5% 27,5% 27,3% 27,9% 28,7% 57,2% 55,0% 55,6% 56,5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 2013 2014 2015 2016 Rents Other Operating Costs Personnel Costs
Note
- 1. Excludes rents
COGS Other Operating Costs(1) Personnel Costs
Cost item (% of total costs 2016)
17% 42% 38% (Variable Costs) Operating Costs Rents 3%
Over 20 lines of variable costs items and over 150 lines of continuous benchmarking operating costs are analysed on a monthly basis
Relentless attention to detail and continuous reconsideration
- f every item of the cost structure
Group Operating costs as % of Revenues
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Strong and visible cash flow generation
10–11% Recurrent capex as % of revenues No year-on-year operating working capital requirements
4,4 (1,6) (2,4)
- 50
50 100 150 2014 2015 2016
Stable and resilient cash flows with high conversion rates of 65-70%
113 98 133 116 50 100 150 2013 2014 2015 2016
Group reported operating free cash flow(2)
€ MM
Notes
- 1. Defined as maintenance of the parks’ facilities + capex for new attractions
- 2. Defined as EBITDA – Recurrent Capex (maintenance of the parks’ facilities + capex for new attractions)
- 3. Defined as EBITDA – Recurrent Capex / EBITDA
Group reported recurrent capex(1) Cash generated from change in working capital
€ MM € MM 54 71 62 72 50 100 150 2013 2014 2015 2016 Cash conversion rates(3) 67.5% 57.8% 68.0% % of revenue 10.0% 13.2% 10.3% 12.4% 61.5%
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Capital structure designed to allow delivery of business plan
€575 MM term loan facility (60%/40% €/$ denominated) €200 MM multi currency revolving credit facility Natural hedged to act against currency fluctuations ‒ Local currency expenditures at each location ‒ Balanced capital structure between US debt and European debt Debt Structure Target capital Structure Dividend Policy Current leverage of 2.9x Net debt / EBITDA On average 2.0x-2.5x target net debt / EBITDA in the medium term 20-30% pay-out ratio ‒ 2016 dividend proposal: €20 MM or 26% pay-out ratio on the back of 2016 pro-forma Net Income
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Why Parques Reunidos?
We are a leading global platform with strong regional brands 1 We operate in a growing market with attractive fundamentals 2 Our business model is resilient and has been “stress-tested” 4 We have a solid and visible growth potential 5 We are best in class
- perators