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2015 Q3 INVESTOR
PRESENTATION
ODEON & UCI CINEMAS GROUP 24 November 2015
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
IMPORTANT INFORMATION
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.
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.
2
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
AGENDA
1 2015 Q3 and YTD highlights
2 Q3 markets & films
3 Future film slate
4 Strategic progress
5 Financial highlights
6 Current trading and outlook
7 Q&A
Paul Donovan
Group Chief
Executive Officer
Mark Way
Group Chief
Financial Officer
Ian Shepherd
Group Chief
Commercial Officer
3
2015 Q3 AND YTD HIGHLIGHTS
1
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
Q3 HIGHLIGHTS CONTINUED OUTPERFORMANCE DESPITE QUIETER QUARTER
Market Attendance1 up by 5.8% • Inside Out, Minions, Mission
Impossible – Rogue Nation performed
strongly across the Group
• Fack Ju Göhte 2 performed well in
Germany
ODEON & UCI Paid Attendance
up 12.4% • Market Share1 increased by 0.5% pts
vs. 2014
• Fourth quarter of market share
growth, aided by strategic actions
• Box Office Revenue2 increased by
12.9%
• 2.2m more guests attended than Q3
last year
Retail Revenue2 up 14.3% • Driven by Group-wide retail and
training initiatives
Total Revenue2 up 12.9%
EBITDA2 more than doubled
1 At constant territory weighting and includes all territories
2 At constant FX rate
5
Q3 Q3
2015 2014
Market Weighted Attendance1 (m) 5.8%
Odeon & UCI Paid Attendance (m) 19.8 17.6 12.4%
Total Market Attendance Share1 19.5% 19.0% 0.5% pts
Box Office Revenue2 (£m) 106.0 94.0 12.9%
Retail Revenue2 (£m) 41.4 36.2 14.3%
Total Revenue2 (£m) 159.4 141.2 12.9%
EBITDA2 (£m) 9.8 4.2 130.6%
Average Ticket Price1,2 (£) (ATP) 5.35 5.28 1.3%
Retail Revenue Per Head1,2 (£) (RPH) 2.09 2.03 3.2%
vs LY
Fav/(Adv)
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
Q3 YTD HIGHLIGHTS ATTENDANCE GROWTH CONTINUES TO BE HIGHER THAN MARKET
1 At constant territory weighting and includes all territories
2 At constant FX rate
6
Q3 YTD Q3 YTD
2015 2014
Market Weighted Attendance1 (m) 6.8%
Odeon & UCI Paid Attendance (m) 62.7 55.3 13.4%
Total Market Attendance Share1 19.2% 18.3% 0.9% pts
Box Office Revenue2 (£m) 343.0 295.4 16.1%
Retail Revenue2 (£m) 126.4 107.4 17.7%
Total Revenue2 (£m) 508.1 438.9 15.8%
EBITDA2 (£m) 47.1 22.7 107.4%
Average Ticket Price1,2 (£) (ATP) 5.47 5.38 1.7%
Retail Revenue Per Head1,2 (£) (RPH) 2.02 1.96 2.8%
Fav/(Adv)
vs LYMarket Attendance1 up by 6.8% • Strong film slate (including Jurassic
World, Fifty Shades of Grey,
Avengers: The Age of Ultron, Fast &
Furious 7, Honig im Kopf, Inside Out
and Minions )
ODEON & UCI Paid Attendance
up 13.4% • Outperformed market growth in all
quarters
• Market Share1 up 0.9% pts vs. 2014
• Box Office Revenue2 increased by
16.1%
Retail Revenue2 up 17.7% • New combo deals
• Enhanced range
• Further training across the Group
Total Revenue2 up 15.8% • Driven by improved market volumes
and strategic actions across business
EBITDA2 more than doubled to
£47.1m
Q3 MARKETS AND FILMS
2
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
£19.5m
£21.2m
£27.9m
£32.7m
£33.4m
£14.3m
£16.3m
£21.0m
£31.6m
£37.9m
5
4
3
2
1
UK & IRELAND 2% MARKET GROWTH
• Strong family titles were top 2 films, performing well
throughout the quarter
• Overall Total Market Attendance +2% due to mixed
performance from other titles
• New team structures in cinemas and additional commercial
activities drove revenues and improved guest experience
Inside Out
The Inbetweeners 2
Minions
Dawn of the Planet of Apes
Mission: Impossible - Rogue Nation
Guardians of the Galaxy
Ant-Man
How to Train Your Dragon 2
Legend
Transformers: Age of Extinction
Q3 2015 GBOR
Q3 2014 GBOR
8
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
1.3m
1.6m
1.6m
2.1m
2.3m
1.0m
1.0m
1.4m
3.7m
4.2m
5
4
3
2
1
SPAIN STRONG IMPROVEMENT; MARKET ATTENDANCE UP +15%
Minions
El Niño
Inside Out
Dawn of the Planet Apes
Atrapa la Bandera
How to Train Your Dragon 2
Mission: Impossible - Rogue...
Lucy
Pixels
Guardians of the Galaxy
Q3 2015 Market Attendance
Q3 2014 Market Attendance
9
Local titles in italic
• Outstanding outperformance from Minions and Inside Out
• Overall Total Market Attendance was +15% vs 2014 Q3
• Further evidence that improving consumer confidence is
leading to a sustained market recovery
• Increased marketing and CRM activity by Cinesa team to
stimulate guest attendance
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
1.6m
1.6m
2.4m
2.5m
2.8m
1.1m
1.1m
1.4m
5.4m
6.7m
5
4
3
2
1
GERMANY SOLID TOTAL MARKET ATTENDANCE UP 4% DRIVEN BY TOP FILMS
Minions
Qu'est-ce qu'on a fait au Bon Dieu?
Fack Ju Göhte 2
How to Train Your Dragon 2
Mission: Impossible ...
Transformers: Age of Extinction
Jurassic World
Lucy
Pixels
Guardians of the Galaxy
Q3 2015 Market Attendance
Q3 2014 Market Attendance
10
• Top 2 films Minions and Fack Ju Göhte 2 were much stronger
than prior year comparisons
• Total Market Attendance +4%
• New websites driving UCI Kinowelt profile and presence in
German market
Local titles in italic
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
0.6m
0.8m
0.9m
1.3m
1.4m
0.5m
0.5m
0.6m
2.5m
3.6m
5
4
3
2
1
ITALY TOTAL MARKET ATTENDANCE UP 17%
• Strong appeal of Minions and Inside Out to family audiences
• Total Market Attendance up 17%
• Consumer confidence providing positive indication that Italy
is pulling out of recession
• UCI commercial actions driving year on year share gain
Minions
How to Train Your Dragon 2
Inside Out
Transformers: Age of Extinction
Ant-Man
The Fault in our Stars
Mission: Imposs...
Dawn of the Planet of the Apes
Paper Towns
Lucy
11
Local titles in italic
Q3 2015 Market Attendance
Q3 2014 Market Attendance
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
Spectre
The Hunger Games: Mockingjay – Part 2
Star Wars Episode VII – The Force Awakens
The Good Dinosaur
Ocho Apellidos Catalanes
Q4 ON TRACK TO BE STRONGEST QUARTER OF THE YEAR
Q4
12
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
Finding Dory A Monster Calls
Fantastic Beasts and Where to Find Them The Secret Life of Pets
X-Men: Apocalypse Rogue One: A Star Wars Story
Ice Age 5 Batman v Superman: Dawn of Justice
Jungle Book Zootropolis
Captain America: Civil War Ghostbusters
2016
2016 LOOKING PROMISING
13
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
CONTINUED PROGRESS OF STRATEGIC CHANGE
Continued innovation in marketing and pricing
• Brand refresh in UK
• Exclusive pan-European partnerships with premiere of The
Martian, and launch of Maze Runner: Scorch Trials
• Expanding use of strategic pricing across all territories
Focus on guest experience in all cinemas
• Net Promoter Score action plans in all cinemas
• UK teams structured to focus on customer contact
• Investment in 32 cinemas, including:
• Luxury seating tests
• Retail counter upgrades
• Refurbishments to foyers & other guest service areas
• Launched re-engineered guest standards in UK cinemas
Improved digital offering
• Removal of online booking fee in UK driving year on year
growth
• Development of social media activity, including:
• Instagram competitions
• Facebook and Twitter communities growing fast
New retail initiatives and training
• Preparation training for Q4 peak period
• Extension of Make it Your Way concept after successful pilot
14
FINANCIAL HIGHLIGHTS
MARK WAY CFO
5
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
TOTAL REVENUE UP 12.9% IN Q3
2015 Q3 vs. 2014 Q3
• Market Share1 up 0.5%pts due to
Odeon & UCI Paid Attendance growth
outpacing Market Attendance growth
• Small improvement of 1.3% in ATP1,2
growth held back by the high film slate
mix of kids product
• Box Office Revenue2 increased by
12.9%; More than double Weighted
Market Attendance1 growth of 5.8%
• Continued Group-wide focus on
effective retail initiatives resulted in
3.2% increase in RPH1,2 and 14.3%
increase in overall Retail Revenue2
• Screen Ads and Other Revenue2 up
8.1% driven by increased Odeon &
UCI attendance
• Total Revenue2 up 12.9%
1 At constant territory weighting
2 At constant FX rate
16
Q3 Q3 Q3 YTD Q3 YTD
2015 2014 2015 2014
Market Weighted Attendance1 (m) 5.8% 6.8%
Odeon & UCI Paid Attendance (m) 19.8 17.6 12.4% 62.7 55.3 13.4%
Total Market Attendance Share1 19.5% 19.0% 0.5% pts 19.2% 18.3% 0.9% pts
Average Ticket Price1,2 (£) (ATP) 5.35 5.28 1.3% 5.47 5.38 1.7%
Retail Revenue Per Head1,2 (£) (RPH) 2.09 2.03 3.2% 2.02 1.96 2.8%
Box Office Revenue2 (£m) 106.0 94.0 12.9% 343.0 295.4 16.1%
Retail Revenue2 (£m) 41.4 36.2 14.3% 126.4 107.4 17.7%
Screen Ads and Other Revenue2 (£m) 12.0 11.1 8.1% 38.7 36.1 7.0%
Total Revenue2 (£m) 159.4 141.2 12.9% 508.1 438.9 15.8%
vs LY
Fav/(Adv)
vs LY
Fav/(Adv)
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
EBITDA UP 130% IN QUARTER UP 107% YTD
1 At constant FX rate
17
Q3 Q3 Q3 YTD Q3 YTD
2015 2014 2015 2014
Gross Profit1 (£m) 102.0 90.8 12.4% 324.5 284.8 13.9%
Gross Profit Margin1 64.0% 64.3% (0.3%) pts 63.9% 64.9% (1.0%) pts
Operating Costs (Excluding Rent)1 (£m) 61.8 55.9 (10.5%) 187.0 170.6 (9.6%)
Operating Costs (Excluding Rent)1 as a
% of Total Revenue38.8% 39.6% 0.8% pts 36.8% 38.9% 2.1% pts
EBITDAR1 (£m) 40.2 34.9 15.4% 137.5 114.3 20.3%
Rent1 (£m) 30.4 30.6 0.6% 90.4 91.6 1.2%
EBITDA1 (£m) 9.8 4.2 130.6% 47.1 22.7 107.4%
EBITDA1 Margin 6.1% 3.0% 3.1% pts 9.3% 5.2% 4.1% pts
vs LY vs LY
Fav/(Adv) Fav/(Adv)
2015 Q3 vs. 2014 Q3
• Gross Profit Margin1 of 64.0% was
broadly in line with last year
• Slight improvement of 0.8% pts in
Operating Costs (Excluding Rent)1
as a % of Revenue
• Rent1 was broadly in line with last
year
• EBITDA1 increased by £5.6m driven
by increased market attendance,
higher market share and ongoing
cost control
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
LEVERAGE CONTINUES TO IMPROVE
• LTM EBITDA of £77m has reduced leverage to 6.0x, vs 8.7x in
prior year
• Seasonal outflow of Working Capital in the quarter, greater than
2014 due to high film hire payments on successful Q2 product.
YTD outflow is also seasonal and is significantly improved on prior
year
• YTD 2015 Capital Expenditure was higher than in 2014 due to
two new cinemas in Milton Keynes and Edinburgh and spend
related to strategic programmes. 2015 Q3 CAPEX was broadly in
line with prior year
• YTD Finance Costs related to the interest payments (three
quarterly Euro and two half-yearly Sterling), lower than last year
due to benefits of a different interest rate swap
• Acquisitions and Disposals reflects the proceeds from the
disposal of 4 cinemas that were sold to Everyman and completed
in the quarter
• During the quarter the Euro strengthened and therefore FX
includes the adverse foreign exchange impact on the value of the
Euro note. YTD 2015 remains favourable as the Euro exchange
rate remains weaker than at year end 2014
18
Q3 Q3 Q3 YTD Q3 YTD
£m 2015 2014 2015 2014
EBITDA before FX impact 9.8 4.2 47.1 22.7
FX impact 0.0 (0.4) 0.0 0.3
EBITDA 9.8 3.8 47.1 23.0
Working Capital and Other (9.8) (2.1) (23.8) (33.9)
Net Capital Expenditure (6.5) (6.8) (23.9) (16.4)
Provisions and One Offs (3.6) (3.2) 0.9 (10.5)
Finance Costs (17.0) (17.5) (38.8) (43.4)
Tax (Paid)/Received (0.2) 0.0 0.6 0.6
Acquisitions and Disposals 4.9 0.2 6.2 (0.4)
(22.5) (25.6) (31.9) (80.8)
Propco - - - 16.5
Cash Flow (22.5) (25.6) (31.9) (64.3)
FX (5.8) 3.6 9.0 11.7
Change in net debt (28.4) (21.9) (22.9) (52.6)
Net Debt 463.8 488.6
LTM EBITDA 76.7 56.2
Net Debt to LTM EBITDA 6.0x 8.7x
CURRENT TRADING & OUTLOOK
PAUL DONOVAN CEO
6
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
CURRENT TRADING AND OUTLOOK
Strong trading continues
• Record breaking Q4 slate
• Spectre
• The Hunger Games: Mockingjay - part 2
• Star Wars: The Force Awakens
• Ocho Apellidos Catalanes
• Strategic transformation continues:
• medium term strategic initiatives on track
• whole Group focussed on executing detailed commercial,
operational and retail plans effectively in Q4 with significantly
increased volumes
• Market share continuing to track ahead of Q4 last year
20
ODEON & UCI CINEMAS GROUP
2015 Q3 INVESTOR PRESENTATION
INVESTMENT FOR THE FUTURE
2015 capex in line with previous guidance
• State of the art new sites opened in Q3:
• Charlestown, Dublin (Ireland)
• Marcianise, Naples (Italy)
• Spain‟s first Dolby laser projector screen launched in Cinesa, Barcelona
• Continued investment in sites to enhance guest experience, improve
retail offer and upgrade seating
Long term business development
• Pipeline of innovative new sites confirmed, including:
2016: Orpington; Oldham (UK)
2017: Peterborough; Bournemouth, (UK); Roma Laurentino (Italy)
2018: Mercedes Benz Arena, Berlin (Germany); Islington Square
(UK); Westfield, Milan (Italy)
2019: West End, London (UK)
• Ongoing digital and multichannel investment
21
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QUESTIONS
AND ANSWERS
7 Further questions can be addressed to:
Financial PR: