deutsche bank media and telecom conference march 9,...
TRANSCRIPT
Deutsche Bank
Media and Telecom Conference
March 9, 2011
Cineplex Entertainment
Largest
Company in
Most
Successful
and
Motion Picture
Theatre Exhibition
Canada
131
Theatres
with
1,362
Screens
The
*as of December 31, 2010
Box Office Market Share - 2010
Empire 12.9%
Other 9.9%
AMC 6.1%
Landmark 2.3%
Guzzo 3.0%
Canadian Market Share
Cineplex
Entertainment
65.8%
Market Share
Regal 23%
AMC 21%
Cinemark 12%
Carmike 4%
Box Office Revenues and Screen Count
2010
US Exhibitors Market Share
The Cineplex Business Model
*US Exhibitors include Regal, Cinemark, AMC and Carmike
Cineplex US Exhibitors* NCM
Exhibition
Merchandising
Media
Alternative
Loyalty
E-Commerce
Cineplex vs. US Exhibitors – 2010 vs 2009
(1) North American operations only
(2) Prior year pro forma information including pre-acquisition results of Kerasotes
acquisition not available
Cineplex Regal Cinemark(1)
AMC(2)
BPP 4.4% 7.1% 4.3% (2)
Box Office revenue growth
3.4% -1.8% 1.8% (2)
CPP growth 3.6% 1.8% 3.1% (2)
Concession revenue growth
2.7% -6.6% 0.6% (2)
Total Revenue
growth 4.8% -3.0% 1.4% (2)
EBITDA growth 5.8% -11.3% 0.5% (2)
Attendance growth -0.9% -8.3% -2.4% (2)
Cineplex Regal Cinemark(1)
AMC
Total Revenue per
Screen (000’s) $742 $419 $412 $491
BPP $8.67 $8.72 $6.48 $8.78
CPP $4.27 $3.23 $3.03 $3.36
Other Revenue per Patron
$1.64 $0.57 $0.27 $0.31
EBITDA per patron $2.44 $2.21 $2.25 $1.58
Cineplex vs. US Exhibitors - 2010
(1) North American operations only
Exhibition
Overview Business
2008
Cineplex
Entertainment
2010 2009
Industry Box Office
* Source: Motion Picture Theatre Associations of Canada
Canadian
Industry* +1.8%
+13.7%
+12.8%
+3.4% +4.5%
+3.3%
Cineplex vs North American Industry
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
Cineplex 1.4% 6.5% 3.8% 10.2% -0.9%
N.A. Industry 1.3% 0.3% -4.3% 6.0% -5.6%
2006 2007 2008 2009 2010
Attendance Growth (source: MPAA)
Cineplex Average = 4.2%
North American Average=-0.5%
Media
Merchandising Loyalty
Interactive
Evolving the Entertainment Experience
Alternative Programming
Exhibition
Loyalty
Media
Interactive
Merchandising
Exhibition
Evolving the Entertainment Experience
Alternative Programming
Exhibition
2011:
Digital rollout will expand to replace 35mm projectors
Expand VIP Cinemas
Expand UltraAVX - Audio Visual Experience
New builds (Edmonton (Windermere), Chatham, Victoria (Westshore))
Theatre Upgrades and Retrofits
D-Box – installations
69.4 million people visited our theatres in 2010
Exhibition fuels ALL core businesses
Digital Projection and 3D
Canadian digital financing structure
- Anticipate Q2 2011 launch
- Anticipate taking 18 months to complete rollout
As of Dec. 31, 2009 As of Dec 31, 2010
Digital Screens 190 415
Real D 3D Systems 149 366
Locations 89 118
Percentage of 3D Screens 11% 27%
3D Impact
Game changer – guests love 3D
Drives increased attendance
Drives increased box office revenues (premium price)
Provides incremental growth potential moving forward
- Media – advertising revenues
- Alternative Programming – 3D sports, concerts, live theatre, opera and more!
- Other core businesses benefit e.g. Merchandising, SCENE
2008 2009 Full Year 2010
% of Total Box Office
Revenues from IMAX and
3D 3.4% 14.4% 28.3%
Quality of Assets
Screens %
TOTAL CIRCUIT 1,362 100%
Stadium
1,139
84%
Non-Stadium
223
16%
Drive-Ins 8 1%
Lease Expiry < 5 years 142 9%
Owned & Other Locations 83 6%
Exhibition Summary
Loyalty Program
Discount Tuesdays
New Builds and Retrofits
Evolving the Entertainment Experience
- Digital and 3D
- UltraAVX - Audio Visual Experience
- XSCAPE Entertainment Centres
- VIP Cinemas
Exhibition
Evolving the Entertainment Experience
Alternative Programming
Loyalty
Media
Interactive
Merchandising
The Metropolitan Opera
World Wrestling Entertainment
Bollywood and Ethnic Movies
Concerts and Live Events
UFC
2010 Olympic Games at 64
Cineplex theatres across Canada
Future
- 3D sports, 3D concerts,
live theatre productions,
speaker series
Alternative Programming
Loyalty
Media
Interactive
Merchandising
Exhibition
Evolving the Entertainment Experience
Alternative Programming
Merchandising CPP Revenue Growth
Pro Forma 2005
$3.44
2006
$3.72 $3.84
2007
$3.96
2008 2009
$4.12 $4.27
2010
Merchandising
Expand speed of service initiatives (Zoning)
Rationalization of Branded Food Offerings
Expand in-house brand – Outtakes
Strategically add XSCAPE Entertainment Centres
2011:
Loyalty
Media
Interactive
Merchandising
Exhibition
Evolving the Entertainment Experience
Alternative Programming
Cineplex Media
93% Market Share
On screen advertising - Full Motion and Digital Pre-show
Cineplex and Le magazine Cineplex
Cineplex.com advertising
Specialty Media - backlits, banners, popcorn bags, in-theatre sampling, kiosks, etc.
Cineplex Digital Media - Theatre and External Networks
Sponsorship and Naming Rights
Other exhibitor representation commissions
Cineplex Media Revenue Summary ($millions)
2005
$34.2
2006
$47.1
$56.2
2007 2008
$61.0
$66.8
2009 2010
$82.3
Cineplex Digital Media
Theatre Lobby & External Networks
Completed digital signage
installations in 100 theatres
Sports Stadium Network
Plans to expand External Network
Premiere office network
Cineplex Digital Solutions Acquired in July 2010
Award-winning digital signage company
CDS designs, installs, maintains and operates networks for retail, financial, hospitality and entertainment industries
CDS’ ‘service model’ networks combined with Cineplex Digital Media’s ‘advertising model’ networks, sales force and entertainment content provide significant opportunities for growth
Loyalty
Media
Interactive
Merchandising
Exhibition
Evolving the Entertainment Experience
Alternative Programming
SCENE Loyalty Program
Program launched (January 24, 2007)
Reached 1 million members (July 22, 2008)
Reached 2 million members (October 24, 2009)
At December 31, 2010 - 2.7 million members
Number of members (millions)
2007 2008 2009 2010
0.6
1.4
2.1
2.7
Gain a more thorough understanding of guests
Mine membership data to generate insights
Communicate directly and regularly
Drive Increased frequency of visitation
Drive increased purchase incidence
Generate additional revenue
Continued member acquisition
Add program partners
Use database to target members
- Studios – film sequels or series
- Advertisers – targeted database
Cineplex targeted offers
- Drive frequency and purchase incidenceMonetize program
SCENE Loyalty Program
Scene Objectives: Future Initiatives:
Loyalty
Media
Interactive
Merchandising
Exhibition
Evolving the Entertainment Experience
Alternative Programming
Interactive – Cineplex.com
Cineplex Store:
2011:
Online Ticketing:
2011:
Fastest, easiest and most convenient way to purchase tickets -- PRINT SKIP SCAN
Gift Card Redemption FRC Season Tickets D-Box Tickets Mobile Kiosks in Theatre
Online sales of gift cards, DVDs, Blu-ray, new release and catalogue movies
Stream HD content for DTO and VoD titles When available, store content in cloud-based
UltraViolet™ account
m.cineplex.com
Cineplex Apps - Blackberry, iPhone, iPad, iPod Touch, Android
Mobile Payment and Ticketing SMS – contests, games, promotions, segmented alerts
New Mobile Web Redesign
New App – BlackBerry PlayBook
Mobile Advertising Delivery for Media
Additional Social Networking Integration – FaceBook/Twitter/FourSquare
Cineplex Magazine, Entertainment News Feeds
Archival Film Content
SCENE new account sign up
Interactive - Mobile
Mobile:
2011:
Strategic Areas of Focus
Enhance and expand our existing exhibition infrastructure and service offerings
Capitalize on our core media strengths to provide continued media growth inside and outside our theatres
Expand our presence as an in-theatre and in-home entertainment destination for Canadians
Pursue selective acquisitions that are strategic, accretive and capitalize on our core strengths
Financial
Highlights
Record Annual Results
*Indicates Annual Record
2010 2009 %
Box Office 601.1* $581.1 3.4%
Concession 296.0* 288.3 2.7%
Other 113.7* 95.0 19.7%
Total Revenue 1,010.8* 964.3 4.8%
Adjusted EBITDA 169.3* 159.9 5.8%
EBITDA Margin 16.7% 16.6% 0.1%
Attendance 69.4 70.0* -0.9%
BPP $8.67* $8.30 4.5%
CPP $4.27* $4.12 3.6%
Attendance (millions)
2005 2006 2007 2008 2009 2010
56.6 57.4
61.1
63.5
70.0 69.4
Box Office Revenue
Box Office Revenue
($millions)
2005 2006 2007 2008 2009 2010
$444 $459 $489
$511
$581 $601
Box Office Per Patron ($ millions)
Box Office per Patron
2005 2006 2007 2008 2009 2010
$7.99 $7.99 $8.05
$7.73
$8.30 $8.67
Concession Revenue
Concession Revenue
($millions)
2005 2006 2007 2008 2009 2010
$198
$213
$235
$252
$288 $296
Concession Revenue Per Patron
CPP
($millions)
2005 2006 2007 2008 2009 2010
$3.84
$3.72 $3.84
$3.96 $4.12
$4.27
Cineplex Media Other
Other Revenue
$68
$81
$87
$95
($millions)
$44
2005 2006 2007 2008 2009 2010
$114
$34 $47
$56 $61 $67 $82
Adjusted EBITDA*
Adjusted EBITDA
($millions)
2005 2006 2007 2008 2010 2009
$67
$118
$137 $145
$164 $173
* Results for Cineplex Entertainment Limited Partnership
Credit Facilities
Covenant Leverage Ratio
Maturity Capacity Drawn
Term Facility July 2012 $235.0 $235.0
Revolving Facility July 2012 130.0 0
Total $365.0 $235.0
($millions)
2.89 2.39 1.94 1.88 1.64 1.57
2005 2006 2007 2008 2009 2010
1.58
Distributions
Payout Ratio
Distributions
112%
80%69% 67% 59% 57%
2005 2006 2007 2008 2009
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Cineplex Regal Cinemark Carmike NCM
Cineplex has outperformed its peer group since the 2007 IPO’s
Cineplex IPO Price – Nov. 2003 = $10.00
Cineplex Price – Dec. 2010 = $22.41
Dividends and Stock Appreciation = 21% CAGR since IPO in 2003
Performance and Returns
Peer Group Stock Performance
Why Invest in Cineplex?
Conversion to Corporate Structure provides eligible investors with dividend tax credit
Diversified Business Model
Strongest Market Position – 65% Market Share
Industry Leading Attendance Growth
Industry Leading CPP
Industry Leading Revenue per Screen
Industry’s Lowest Leverage
Industry’s Highest Dividend Yield
Public Float similar to U.S. circuits
Questions
Answers and