Parques Reunidos Corporate Presentation June 2018 Disclaimer This - - PowerPoint PPT Presentation
Parques Reunidos Corporate Presentation June 2018 Disclaimer This - - PowerPoint PPT Presentation
Parques Reunidos Corporate Presentation June 2018 Disclaimer 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
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Disclaimer
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
- r 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 This document is not for publication, release, disclosure or distribution, directly or indirectly, in, and may not be taken or transmitted into the United States, Canada, South Africa, Japan or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 of 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, objective, 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
- r
- therwise.
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 otherwise) 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
Notes
- 1. Includes five MECs underdevelopment
▪ 20 MM visitors ▪ Revenues of €579 MM ▪ EBITDA of €174 MM ▪ Global platform of over 60 parks ▪ Presence in 14 countries ▪ One of the 3, truly global operators
2017 Revenue Geographical Split
38% 25% 7% 5% 7% 4% 4% 11%
Italy Spain USA France Germany Norway Belgium Other (1)
USA Spain
21% 60% 80% 20% 14% 5%
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Well-diversified portfolio of regional parks
Note
- 1. Other includes Netherlands, UK, Denmark, Argentina, Dubai
We benefit from a truly diversifiedportfolio Regional park business model resilientto adverse macro economic conditions
▪ Strong regional brands ▪ Stable, predictable local demand ▪ Low dependence on tourism ▪ Non destinationparks ▪ Good value for money proposition
Best in class operators
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Our parks are consistently
- perated at
high margins
▪ Continuous benchmarking and sharing of best practices across the entire portfolio ▪ Over 300 cost / cash flow KPIs monitored on a park level monthly ▪ State-of-the-art IT systems ▪ Proven capacity to operate all type pf parks across multiple regions
Our ability to benchmark is a unique management tool
Visitors
2017 Parks EBITDAR margin Water Parks Theme Parks Animal Parks 0% 15% 30% 45% 60% 75%
250 500 750 500 1,000 1,500 250 500 750 1,000
Highly regarded park portfolio with strong local brands and access to global IPs
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Oldest park in North America (1846) Spain’s largest urban park Second largest leisure park in Italy A leading park in Germany Designated a US National Historic Landmark Largest New York area water park and
- ne of America’s top water parks
Highly regarded strong local brands Proven ability to obtain global IPs
Growing market with highly attractive fundamentals
▪ Proportion of income dedicated towards leisure and recreational activities is gradually increasing ▪ Growing middleclass ▪ 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 ▪ 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
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High barriers to entry Strong structural growth drivers 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
Positiverecent 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: Indoor Entertainment Centers (“IECs”)
29 174
2003 2017
Proven track record becoming a truly global and diversified player
€MM
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15 parks 1 country 100% Revenue inSpain Over 60 parks 14 countries 25% Revenue in Spain
- 75%
…whilst de-risking the business model Delivering growth and improving efficiency… Parques Reunidos 2003 Parques Reunidos TODAY Parques Reunidos EBITDA
+13 +46
Clear and well-defined strategy focused on growth
▪ Developing new projects within or adjacent to an existing park ▪ Different types: water parks, lodging facilities
- r camping
▪ €55 MM projects under execution over 2018-19 ▪ Target of c.20% ROIC ▪ Dubai ▪ Ongoing active negotiations ▪7 lease agreements signed ▪Strong pipeline of potential new IECs ▪New potential licensing agreements
2 3 4
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Multiple top line growth initiatives Expansion Capex 2 Management Contracts 3 2 IECs Selective Acquisitions
3 2 4 5
▪ Season Passes ▪ IPs ▪ Off season events ▪ Ticketing and In-Park revenue ▪ New attractions ▪ Virtual Reality ▪ Operational discipline
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▪Unique track record ▪Fragmented market with potential opportunities
Penetration of Season passes
% of 2017 TicketingRevenue
Key Initiatives
▪ 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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Strong potential to continue growing in season passes, bringing more loyal customers, enhancing visibilityof earnings and reducing the impact of weather on thebusiness
▪ Include entry level passes with limited advantages
Top Line iniciatives
Season passes
1
12.2% 15.4% 4.9% 16.5%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
Group Spain RoE US
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Licensing agreement with FC Barcelona
Top Line iniciatives
New IP Licensing Agreements
1
Licensing agreement with Discovery
▪ Strategic agreement to develop FC Barcelona Indoor
Entertainment Centers with an initial target of 5 potential projects
▪ Benefiting from FC Barcelona strong brand awareness ▪ Offering a family-friendly sports based experience ▪ Strategic agreement to develop Discovery branded indoor
entertainment centers
▪ Developing innovative family friendly, adventure,
educational experiences
▪ Target is to expand in North America, Western Europe
and Asia Pacific Regions
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Off season revenues are growing on the back of off seasonevents
Halloween Season ▪ 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 ▪ Continue to roll-out existing off season events
Important Revenue Growth achieved in 2017 Halloween and Christmas Campaigns Key Initiatives
Top Line iniciatives
Expand the season – Off season events
1
Christmas Season
Parques Reunidos is always pursuing new ways to raise in-park percaps
▪ Introduce all-inclusiveoffers ▪ Offer VIP products andservices ▪ CRMinitiatives
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Examples Key actions
Top Line initiatives
In Park revenues
▪ Enhance throughput ▪ Introduce new upchargeexperiences ▪ Develop branded partnerships ▪ Improve facilities
1
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New attractions are a key factor to drive attendance and increasepercaps Recurrent capex (maintenance and new rides) represent 10-11% of annualrevenues
Top Line initiatives
New attractions coming in 2018
1
Raja The Worlds Largest King Cobra Bombs Away & Riptide Racer
Top Line initiatives
New Virtual Reality Coasters
1
▪ Improves guestexperience ▪ Reduces capitalneeds ▪ Flexibility to easily update VR themes every season or during the sameseason ▪ Potential extend VR capabilities to otherrides ▪ Upchargeexperience
▪ Kennywood – USA (2017 Season) ▪ Sky Rocket roller coaster ▪ Located at Kennywood Park in Pittsburg, PA ▪ Parque Atracciones de Madrid – SPAIN (2017 Season) ▪ TNT roller coaster ▪ 1st roller coaster in Spain with interactive VR Key Benefits
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Examples ▪ 4 new VR attractions to open in the 2018 season ▪ Europe: Bobbejaland, BonBonLand ▪ USA: Castle Park, Tusenfryd ▪ Warner Park Madrid – SPAIN (2017 Season) ▪ Batman Escape suspended roller coaster ▪ 1st VR coaster in Spain ▪ Mirabilandia – ITALY (2017 Season) ▪ Master Thai double roller coaster
▪ 2nd gate parks, lodging facilities, or new areas in available space within or adjacent to an existing park ▪ Low operational risk and high visibility of targeted attendance (vs. a greenfield project) ▪ Efficient use of unexploited space (c.400 acres of availableland) ▪ Significant cross selling opportunity within main park ▪ Tangible cost synergies by leveraging on the structure of the main park ▪ Lower investment requirements by leveraging on existing facilities and rides Strong and visible growth opportunity
Expansion capex projects
Expansion capex projects: Maximizing the value of the existing portfolio
2
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Expansion capex projects
Expansion capex projects: Maximizing the value of the existing portfolio
2
3 different types of expansion projects already successfullyproven 2nd Gate Parks Transformational areas Lodging Facilities
▪ Mirabeach water park (Mirabilandia) ▪ Aquamexicana water park (Slagharen) ▪ Warner Beach water park (Warner) ▪ Bear Creek Campground (Lake Compounce) ▪ Raccoon Lodging facility (Slagharen) ▪ Ducati Land (Mirabilandia) ▪ Nickelodeon area (Parques de Atracciones de Madrid and Movie Park)
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▪ Investment: c.€4MM ▪ 2018 Season ▪ Strategicrationale
▪ Extend length of stay with more content
for a 2 dayvisit
▪ Expand product offering to attract all
segments (families, kids and teenagers) ▪ Investment: c.€8MM ▪ 2018 Season ▪ Strategicrationale
▪ Extend length of stay with
more content for a 2 dayvisit
▪ Expand catchment area ▪ Enhance productoffering
▪ Investment: c.€5MM ▪ 2018 Season ▪ Strategicrationale
▪ Phase 2 of successful first Nickelodeon
area launched in 2014
▪ Reinforce penetration of families with
kids
▪ Enhance product offering ▪ Boost in-park consumption
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- C. €55 MM of projects announced and under execution to be opened over 2018-19
Target of a c.20% ROIC Expansion of Warner Beach New Nickelodeon Area Expansion of Mirabeach
Expansion capex projects
Expansion capex: 2018-19 projects
2
▪ Investment: c.€4MM ▪ 2018 Season ▪ Strategicrationale
▪ Indoor aquarium in the New Hampshire
White Mountains
▪ Strong product bundling options(2 day
stay, hotel packages and annualpasses)
▪ Year-roundoperation
▪ Investment: c.€7MM ▪ 2018 Season ▪ Strategicrationale
▪ Targeting families with kids ▪ IP strong brand awareness
providing a great opportunity to bring new demand
▪ Enhance product offering
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- C. €55 MM of projects announced and under execution to be opened over 2018-19
Target of c.20% ROIC Thomas Town Living Shores Aquarium
Expansion capex projects
Expansion capex: 2018-19 projects
2
Ducati World
▪ Investment: c.€25MM ▪ 2019 Season ▪ Strategicrationale
▪ Unique location close to
Bologna, Ducati’s hometown, to attract motorcycle fans
▪ Includes new generation of
roller coasters and simulators
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Dubai: Motiongate & Bollywood
Management Contracts
3
▪ A €3,400 MM premier year-round regional leisure and entertainment destination ▪ Motiongate and Bollywood parks represent the largest investment in the entire leisure destination ▪ Both parks opened in 2016
Dubai: Dubai Safari Parks
▪ New agreement reached with Meraas Group reinforcing our presence in Middle East ▪ Dubai Safari is a unique asset in Middle East with 120has hosting 250 different species ▪ Represents one of the largest investments in animal parks worldwide in recent years
Lionsgate Centre Nickelodeon Adventure Splash WaterPark Discovery Atlantis Aquarium
IECs
Designed IEC concepts
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FC Barcelona
FY17 Results Presentation 22
Center Location RealEstate Operator Concept Lease Agreement Signed Expected Opening (Calendar dates) THADER Murcia,Spain Merlin Properties Nickelodeon Mar-16 Opened XANADU Madrid,Spain Intu Aquarium Jul-16 Q4-18 XANADU Madrid,Spain Intu Nickelodeon Jul-16 Q1-19 DOLCE VITA Lisbon,Portugal Intu Nickelodeon Jul-16 H2-19 LAKESIDE London,UK Intu Nickelodeon May-16 Q4-19 TIMES SQUARE New York, US n.a. Lionsgate Aug-17 Q4-19 PRINCIPE PIO Madrid,Spain n.a. Lionsgate Sep-17 H1-20
6 centers under development, 1 already opened and 1 to be open at the end of this year Large pipeline for future opportunities Signed Contracts
IECs
IECs: Strong pipeline of opportunities
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Acquisition #Parks Country YearAcquired ImpliedEBITDA multiplepaid(1) Bobbejaanland 1 Belgium 2004 BoSommarland 1 Norway 2006 Marineland 1 France 2006 Mirabilandia 1 Italy 2006 Warner 1 Spain 2007 Aqualud 1 France 2007 GrantLeisure 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 DutchWonderland 1 US 2010 Slagharen 1 Netherlands 2012 Noah’sArk 1 US 2012 MiamiSeaquarium 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 countriessince 2004 ▪ Implied EBITDA multiple paid(1) post integration
- f5.8x
▪ Target average EBITDA improvement of c.50% after 2 full seasons under Parques Reunidos management
Selective acquisitions
Unique track record sourcing, executing and creating value through acquisitions
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▪ Acquisition of Belantis Adventure Park in Germany for €26.5 MM (EV) ▪ Implied transaction multiple of 10x EV/EBITDA(2017) including the value of available land for future developments ▪ Belantis is a leading themed park in Germany ▪ Located in the city of Leipzig (c.600k population) and close to the cities of Berlin, Dresden and Prague ▪ With an area of 38ha, comprises 70 attractions divided into 8 zones and is focused on families with young kids
Selective acquisitions
Recent acquisition in Germany: Belantis Park
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▪ A good fit for our portfolio ▪ Reinforces our footprint in Germany where we already own Movie Park (Bottrop) ▪ Opportunity to transform Belantis into a flagship regional park in an area with limited leisure offering ▪ Sizeable value creation by improving customer experience and implementing our best operational practices ▪ Belantis has an EBITDA margin of c.20%, below selected PQR European theme parks of c.36% ▪ Further growth potential available for expansion opportunities
167 170 195 188 174 2013 2014 2015 2016 2017
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Attractive financial profile delivering growth
541 543 606 584 579 2013 2014 2015 2016 2017
Revenue (€MM) EBITDA (€MM)
19,417 20,637 20,962 19,813 19,636
10,000 20,000 30,000
2013 2014 2015 2016 2017
Visitors (‘000)
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16% 41%
Variable Costs Operating Costs
Relentless attention to detail and continuous reconsideration of every item
- f the cost structure
EBITDA Margin Evolution Margins improvement driven by i) high drop through of incremental revenues, ii) operating leverage and iii) relentless focus on efficiency and benchmarking % of total costs 2017 Cost item
4% 39% COGS Personnel Costs Other Operating Costs Rents
30.9% 31.2% 32.2% 32.3% 30.0% 2013 2014 2015 2016 2017
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Strong and visible cash flow generation
Stable and resilient cash flow with high conversion rates of 60-70% Group reported operating free cash flow (1)
Notes
- 1. Defined as EBITDA – Recurrent Capex
- 2. Defined as EBITDA – Recurrent Capex /EBITDA
Group reported recurrent capex
Cash Conversion Rates (2) % of revenue
10 –11% Recurrent capex as % of revenues No year-on-year operating working capital requirements
€MM €MM
54 71 62 72 67
50 100 150
2013 2014 2015 2016 2017
4.4 (1.6) (2.4) (1.4)
- 50
50 100 150 2014 2015 2016 2017 113 98 133 116 107 50 100 150 2013 2014 2015 2016 2017
€MM
Cash generated from change in working capital
13.2% 10.3% 12.4% 10.0% 11.5% 57.8% 68.0% 61.5% 67.5% 61.4%
Capital structure designed to allow delivery of business plan
Target capital Structure Dividend Policy
▪ Current leverage of 3.0x Net debt /EBITDA ▪ On average 2.0x-2.5x target net debt / EBITDA in the medium term ▪ 2017 dividend: €20 MM equivalent to a 39% pay-out ratio over pro-forma net income ▪ Dividend policy: 20-30% payout
Debt Structure
▪ €575 MM term loan facility (60%/40% €/$ denominated) ▪ €200 MM multi currency revolving credit facility ▪ Natural hedged to act against currencyfluctuations
▪ Local currency expenditures at each location ▪ Balanced capital structure between US debt and Europeandebt
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Why Parques Reunidos?
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1 2 3 4 5
Best in class
- perator
Leading global player with strong regional brands Positioned in a growing market with highly attractive fundamentals Solid and visible organic growth potential Clear and well- defined strategy focused
- n growth