Parques Reunidos Corporate Presentation€¦ · Parques Reunidos Corporate Presentation January...
Transcript of Parques Reunidos Corporate Presentation€¦ · Parques Reunidos Corporate Presentation January...
Parques Reunidos Corporate PresentationJanuary 2018
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Disclaimer
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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 otherstatements, 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 statementscan 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 thefuture. 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 bythese 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 suchfuture 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 bematerially 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 mayvary 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 resultsor 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 informationhaving 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 norecommendation 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 ParquesReunidos ´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 theseforecasts, 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 thisdocument 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, containedin 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 arebased 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 othercompanies 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 orverification 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 includedin 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 fromany 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 orparticular 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 tothe 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 orassociates 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
Animal Parks
Water Parks
ThemeParks
Other
Notes1. 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)
USASpain
21%
60%80%
20%14%
5%
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Well-diversified portfolio of regional parks
Note1. Other includes Netherlands, UK, Denmark, Argentina, Dubai, Vietnam
We benefit from a truly diversifiedportfolioRegional park business model resilient to
adverse macro economic conditions
▪ Strong regional brands
▪ Stable, predictable local demand
▪ Low dependence on tourism
▪ Non destination parks
▪ Good value for money proposition
Best in class operators
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Our parks are consistently operated 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 ParksAnimal Parks
0%
15%
30%
45%
60%
75%
0 250 500 750 0 500 1.000 1.500 0 250 500 750 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 one 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 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
▪ 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
Strongstructural
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
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: Indoor Entertainment Centers (“IECs”)
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174
2003 2017
Proven track record becoming a truly global and diversified player
€MM
8
15 parks
1 country
100% Revenue in Spain
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 or camping
▪ €55 MM projects under execution over 2018-19
▪ Target of c.20% ROIC
▪Dubai
▪Vietnam
▪ China
▪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
2Management
Contracts
32IECs Selective
Acquisitions32 4 5
▪ Season Passes
▪ IPs
▪Off season events
▪ Ticketing and In-Park revenue
▪New attractions
▪Virtual Reality
▪Operational discipline
1▪Unique track record
▪Fragmented market with potential opportunities
Penetration of Season passes
% of 2017 TicketingRevenue
Key Initiatives
▪ Launch multi-tier season passes with differentadvantages 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 visibilityofearnings and reducing the impact of weather on the business
▪ Include entry level passes with limited advantages
Top Line iniciatives
Season passes1
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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Ducati @ Mirabilandia (Italy)
Top Line iniciatives
New IP Licensing Agreements1
Licensing agreement with Discovery
▪ Investing €25 MM to develop the 1st themed are of the Ducati Brand
▪ The area will include the latest technologies including a new generation roller coaster and simulators to replicate the experience of riding a Ducati
▪ Expected to open in the 2019 season
▪ 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 season events
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 CampaignsKey Initiatives
Top Line iniciatives
Expand the season – Off season events1
Christmas Season
Parques Reunidos is always pursuing new ways to raise in-park per caps
▪ Introduce all-inclusive offers
▪ Offer VIP products and services
▪ CRM initiatives
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ExamplesKey actions
Top Line initiatives
In Park revenues
▪ Enhance throughput
▪ Introduce new upcharge experiences
▪ Develop branded partnerships
▪ Improve facilities
1
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New attractions are a key factor to drive attendance and increase percapsRecurrent capex (maintenance and new rides) represent 10-11% of annual revenues
Top Line initiatives
New attractions coming in 20181
RajaThe Worlds Largest
King Cobra
Bombs Away &
Riptide Racer
Top Line initiatives
New Virtual Reality Coasters1
▪ Improves guest experience
▪ Reduces capital needs
▪ Flexibility to easily update VR themes every season or during the same season
▪ Potential extend VRcapabilities to other rides
▪ Upcharge experience
▪ 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 available land)
▪ 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 portfolio2
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Expansion capex projects
Expansion capex projects: Maximizing the value of the existing portfolio2
3 different types of expansion projects already successfullyproven
2nd Gate Parks Transformational areasLodging 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
▪ Strategic rationale
▪ 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
▪ Strategic rationale
▪ Extend length of stay with more content for a 2 dayvisit
▪ Expand catchment area
▪ Enhance product offering
▪ Investment: c.€5MM
▪ 2018 Season
▪ Strategic rationale
▪ 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 2018-19Target of a c.20% ROIC
Expansion of Warner Beach New Nickelodeon Area Expansion of Mirabeach
Expansion capex projects
Expansion capex: 2018-19 projects2
▪ Investment: c.€4MM
▪ 2018 Season
▪ Strategic rationale
▪ Indoor aquarium in the New Hampshire White Mountains
▪ Strong product bundling options (2 day stay, hotel packages and annual passes)
▪ Year-round operation
▪ Investment: c.€7MM
▪ 2018-19 Season
▪ Strategic rationale
▪ 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 2018-19Target of c.20% ROIC
New branded kids area Living Shores Aquarium
Expansion capex projects
Expansion capex: 2018-19 projects2
Ducati World
▪ Investment: c.€25 MM
▪ 2019 Season
▪ Strategic rationale
▪ 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 Contracts3
▪ 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
Vietnam: Dragon & Typhoon parks
▪ 10-year management contract with Sun Group
▪ Dragon Park opened in January 2017; Typhoon Water Park opened in April 2017
▪ First class theme park and water park located in Ha Long City with 214 hectares
Atlantis Aquarium
Lionsgate Centre Nickelodeon Adventure Splash Water Park DiscoveryAtlantis Aquarium
IECs
Designed IEC concepts
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(1) Illustrative figures and features. Actual figures will vary site by site.
Area 3,500-5,000 sqm
Visitorcapacity 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
Key Features(1)
Area 5,000-7,500 sqm
Visitorcapacity 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
Key Features(1)
Area 6,000 sqm
Visitorcapacity 1,700 (max)
Main Attractions
▪ Wave Pool▪ Spa Area▪ Slides and loops
▪ Lazy River▪ Children’s area
Key Features(1)
Area 6,000 sqm
Visitorcapacity 1,500 (max)
Main Attractions
▪ Mangrove Sea▪ Lemur Interaction▪ Otter Habitat
▪ Jungle Trail▪ Interactions
and pavilions
▪ Tropical birds
Key Features(1)
Area 5,000 sqm
Visitorcapacity 1,500 (max)
Main Attractions
▪ Coral Reef Experience
▪ Shark Experience
▪ Penguin Encounter▪ Big Main Tank▪ Touch pools
▪ Interactions and pavilions
▪ VIP Diving experience
Key Features(1)
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FY17 Results Presentation 22
Center Location Real Estate Operator ConceptLease Agreement
SignedExpected Opening
(Calendar dates)
THADER Murcia, Spain Merlin Properties Nickelodeon Mar-16 Q4-17
XANADU Madrid,Spain Intu Aquarium Jul-16 Q2-18
XANADU Madrid,Spain Intu Nickelodeon Jul-16 Q3-18
DOLCE VITA Lisbon, Portugal Intu Nickelodeon Jul-16 Q2-19
LAKESIDE London, UK Intu Nickelodeon May-16 Q2-19
TIMES SQUARE New York, US n.a. Lionsgate Aug-17 Q4-19
To be announced Europe n.a. Lionsgate Sep-17 Q1-20
7 centers under development (3 of them to open during the 2018 season) Already accomplished our 2018 – 19 goals
Large pipeline for future opportunities
Signed Contracts
IECs
IECs: Strong pipeline of opportunities4
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Acquisition #Parks Country YearAcquired ImpliedEBITDAmultiplepaid(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
Dutch Wonderland 1 US 2010
Slagharen 1 Netherlands 2012
Noah’sArk 1 US 2012
Miami Seaquarium 1 US 2014
Total 54 5.8x
All elements are in place to continue being the leading consolidator
Notes1. Based on EBITDA after 2 full seasons under Parques Reunidos operation
▪ 18 transactions successfully completed across 10 countries since 2004
▪ Implied EBITDA multiple paid(1) post integration of 5.8x
▪ 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 acquisitions5
167 170
195 188174
2013 2014 2015 2016 2017
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Attractive financial profile delivering growth
541 543
606584 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 of 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 2017Cost item
4%
39%
COGS
PersonnelCosts
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 withhigh conversion rates of 60-70%
Group reported operating free cash flow (1)
Notes1. 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
7162
7267
0
50
100
150
2013 2014 2015 2016 2017
4,4
(1,6) (2,4) (1,4)
-50
0
50
100
150
2014 2015 2016 2017
113
98
133
116107
0
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
DividendPolicy
▪ 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
DebtStructure
▪ €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 European debt
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Why Parques Reunidos?
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1
2
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Best in classoperator
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
focusedon growth
Experienced andcommitted
managementteam
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