Q1 Cineplex Galaxy Income Fund 2008
Cineplex Entertainment Circuit The Largest and Most Successful Motion Picture Theatre Exhibition Company in Canada 131 Theatres 1,327 Screens with As of December 31, 2007
Box Office Market Share Market Share of Canadian Box Office Revenues 2007 Empire Empire 12.8% 12.8% Cineplex Other Other Entertainment 8.0% 8.0% 66.9% 66.9% AMC AMC 5.8% 5.8% Landmark Landmark 3.3% 3.3% Guzzo Guzzo 3.2% 3.2%
Exhibition Overview Business
Consistent Long-Term Box Office Revenue Growth Canadian Box Office Revenues - 1965-2007 CAGR 1965 5.7 % since 1965 1970 1975 1980 1985 1990 1995 2000 2005 Recessionary Periods
2007 Industry Box Office Full Year Full Year Canadian Industry* +1.3% Cineplex Entertainment +6.5% * Source: Motion Picture Theatre Associations of Canada
Films for Summer 2008 Indiana Jones Kingdom of the Chronicles of Narnia Iron Man Prince Caspian Sex And The City Crystal Skull May 2 nd May 16 th May 21 st May 30 th Wall-E Kung Fu Panda The Incredible Hulk Get Smart June 27 th June 6 th June 13 th June 20 th
Films for Summer 2008 The Dark Knight Mamma Mia Hancock Hell Boy 2 July 18 th July 18 th July 2 nd July 11 th The Mummy Star Wars Tomb of the Dragon The Clone Wars X-Files Sequel Pineapple Express Emperor August 15 st July 25 th August 8 th August 1 st
3D Films for 2008 Journey to the Fly Me to Hanna Montana/ U2/3D Bolt Center of the Earth the Moon Miley Cyrus July 11 th August 8 th November 26 th My Bloody Valentine - Piranha 3D - Jan 23 rd Jul 24 2009 Coraline - G-Force - Feb 6 th Jul 23 th 3D Monsters vs. Aliens - Toy Story - Mar 27 th Oct 2 nd Up - A Christmas Carol - May 29 th Nov 6 th Releases Avatar - Ice Age III - Dec 18 th Jul 1 st
Company Overview
2007 Accomplishments SCENE Loyalty Program Renaming of 5 Scotiabank Theatres New Theatres - Collingwood and Oakville Cinema City Acquisition Cineplex Media - Expands Coast to Coast - Digital pre-show installations completed Cineplex.com website re-launched Expanded Alternative Programming - Met Opera + Digital/Real D 3D installations Financial - Credit Facilities, Cash Distributions Gift Cards and Corporate Sales Pricing Strategies - Big Ticket Tuesday
Looking Ahead in 2008 2005 Acquired Famous Players 2006 Consolidated and realized $30M in synergies 2007 Year of transformation and innovation Reaping the rewards of innovation through 2008 growth and leadership
Six Core Business Areas Exhibition Merchandising Media Customer Loyalty Interactive Alternative Programming
Six Core Business Areas Exhibition Merchandising Media Customer Loyalty Interactive Alternative Programming
Cineplex Media Fully integrated media business 93% Canadian market share Coast to Coast coverage Advertising sales: - In-theatre: - On-screen - full motion and digital pre-show - Lobby - monitors and backlits - Special media - banners, popcorn bags, sampling, kiosks etc. - Magazines: - Famous, Famous Quebec, Famous Kids - Cineplex.com
Cineplex Media 2007 Revenue by Component Digital Pre-Show 29% Full Motion 52% Magazine 8% Lobby/Monitors 3% Commissions 4% Website and Other 4%
Cineplex Media Growth ($millions) 64.3 %
Six Core Business Areas Exhibition Merchandising Media Customer Loyalty Interactive Alternative Programming
SCENE Loyalty Program Number of members (000’s) Q2 ‘07 Q3 ‘07 Q4 ‘07 Q1 ‘08
SCENE Loyalty Program FUTURE Continued member acquisition INITIATIVES New reward partners New reward platforms Member engagement Leverage database
Six Core Business Areas Exhibition Merchandising Media Customer Loyalty Interactive Alternative Programming
Alternative Programming Our theatres continue to build new audiences Our theatres continue to build new audiences through alternative programming such as: through alternative programming such as: The Metropolitan Opera World Wrestling Entertainment Bollywood and Ethnic Movies National Hockey League Concerts and Live Events Championship Sports Future 3D Sports (e.g. NBA)
Six Core Business Areas Exhibition Merchandising Media Customer Loyalty Interactive Alternative Programming
Six Core Business Areas Exhibition Merchandising Media Customer Loyalty Interactive Alternative Programming
Cineplex.com 2007 Accomplishments Accomplishments 2007 #2 Movie entertainment website in Canada Complete site redesign and re-launch in April - Enhanced infrastructure - New design and navigation - New Content Enhanced search engine optimization Mobile ticketing launched in October Exclusive content 300% increase in online advertising revenue 250% increase in online ticketing sales 200% increase in online corporate and gift card sales Growth in all key metrics
Cineplex.com The Future... SMS and digital pre-show integration Launch of social media platform - Blogs/Chats - Social community development - User generated content Launch of “My Cineplex” Mobile and online ticketing enhancements Mobile and online marketing initiatives Launch E-Commerce business: - Phase 1 - Q4 2008 (DVD Sales) - Phase 2 - Q1 2009 (Electronic Downloading)
Six Core Business Areas Exhibition Merchandising Media Customer Loyalty Interactive Alternative Programming
Merchandising CPP Revenue Growth
Six Core Business Areas Exhibition Merchandising Media Customer Loyalty Interactive Alternative Programming
Exhibition 61 million people visited our theatres in 2007 Exhibition fuels ALL core businesses Digital and 3D enhances the future of exhibition Entertainment “destinations” Hollywood, Bollywood, digital content...
Digital Projection Digital Projection - 33 locations and 47 screens - Rollout planned for Fall 2008 (2 years to complete) 3D projection - IMAX 3D (9 locations) - Real D 3D - 33 locations installed to date - 8 additional locations planned for Q2
New Theatres Opened in 2007 Location Brand Screens Opened 7 May Collingwood, ON Galaxy SilverCity 12 December Oakville, ON Acquired Theatres Acquired Cinema City McGillivray 12 July Winnipeg, MB Cinema City Northgate 8 July Winnipeg, MB Cinema City Movies 12 12 July Edmonton, AB 5 Theatres and 51 Screens
New Theatres for 2008 and 2009 Location Brand Screens Opening Location Brand Screens Opening 10 March Red Deer, AB Galaxy 8 Brantford, ON Galaxy 2008 9 Toronto, ON SilverCity 2008 Fairview Mall Fairview Mall 10 Hamilton, ON SilverCity 2008 11 London, ON Cineplex 2009 5 Theatres and 48 Screens
SilverCity Oakville
SilverCity Oakville - Backlot
SilverCity Oakville - VIP
Financial Highlights
Annual Total Revenue ($ millions) 1,327 1,327 1,305 1,305 1,275 1,275 1,275 1,275 775 775 740 740 694 694 678 678 613 613 2005 excludes divestitures and includes FP for partial year
Annual EBITDA ($ millions) 21.1% 20.4% 19.4% 16.7% 17.0% 15.9% 15.8% 12.2% 10.7% EBITDA Margin Adjusted EBITDA Margins - LTM March 2005 CGX 20.2% FP 9.0%
Total Revenue 2007 ($ millions) 2007 2006 Growth 2007 2006 Growth Box Office Box Office $488.9 $488.9 $458.8 $458.8 6.5% 6.5% Concessions 235.1 213.5 213.5 10.1% 10.1% Concessions 235.1 Other 81.0 67.9 67.9 19.4% 19.4% Other 81.0 Total Revenue $805.0 $740.2 $740.2 8.8% 8.8% Total Revenue $805.0 Attendance 61.1 57.4 6.5% Average Ticket Price $7.99 $7.99 “ - ” Average Concession Purchase $3.84 $3.72 3.2%
Increasing Revenue Per Guest Revenue per Guest $13.17 $12.89 $12.28 $11.23 $10.84 $10.27 $9.83
Significant Other Revenue Contribution Other Revenues ($millions) Tota l $81m
Total Revenue Q1 2008 ($ millions) 6.3% 2008 2007 Growth 2008 2007 Growth Box Office Box Office $116.8 $116.8 $112.8 $112.8 3.5% 3.5% Concessions Concessions 56.7 56.7 52.3 52.3 8.4% 8.4% Other Other 16.3 16.3 13.3 13.3 21.8% 21.8% Total Revenue Total Revenue $189.8 $189.8 $178.5 $178.5 6.3% 6.3% Attendance 14.6 13.9 5.4% Average Ticket Price $7.98 $8.13 -1.8% Average Concession Purchase $3.87 $3.77 2.7%
Adjusted EBITDA Q1 2008 ($ millions) 6.1% Margin 13.8% 13.8% Margin 13.8% 13.8%
Distributions Earned Paid Payout % Earned Paid Payout % 2007 $1.72 $1.18 69% 69% 2007 $1.72 $1.18 With Distribution $1.26 $1.26 73% 73% With Distribution Increase (May 2008) Increase (May 2008)
Credit Facility Amendment Increased commitment amounts Extended 5 Year term Financial covenant improvements Reductions in interest margins Additional flexibility in permitted use of funds
Financial Summary Leading market position Exhibition - mature industry Stable and predictable cash flows Low capital requirements Significant growth opportunities Strong balance sheet 1.Conservative payout ratio 2.Conservative leverage ratio 3.Positive tax attributes
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