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Kinepolis Group NV — Earnings Release 2011
Nov 15, 2011
3971_ir_2011-11-15_bd7c89f2-f3bd-431e-9b1c-f3e4421f214a.pdf
Earnings Release
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Kinepolis Group Business Update Q3 2011 15 November 2011
Regulatory release
Q31 2011 compared to Q3 2010:
- Higher box office revenue2 , resulting from 4% higher admissions in Belgium, despite the sharp fall in admissions in Spain
- 5.4 million admissions internationally, a decrease of 1.7%
- Continued higher in-theatre sales (ITS)3 , also per visitor
- Increased business-to-business revenue (B2B)
- Real estate revenue remains at the same level
- Completion Opéra project (real estate sale of the former Opéra cinema in Liège)
- Current4 EBITDA5 up
- Increased net financial debt after capital reduction and share buy-back
YTD6 2011 admissions compared to YTD 2010:
- Further catch-up after Q3
- YTD 13 November 2011 evolution of -3.6%, compared to -5.0% on 30 September 2011 and -6.8% on 30 June 2011
Notes
During the third quarter of 2011 (1 July to 30 September) Kinepolis Group welcomed 5.4 million visitors, 1.7% less than in the third quarter of 2010. Kinepolis Belgium recorded a 4% rise in admissions, driven by a strong summer programme and cinema-friendly weather. The lack of strong local movies impacted France and especially Spain in the third quarter. The situation in Spain results from the continued economic crisis. Kinepolis recorded higher box office revenue in this quarter, due to higher admissions in Belgium and despite the sharp fall in admissions in Spain.
The top 5 movies in Q3 were 'Harry Potter and the Deathly Hallows – Part 2', 'The Smurfs', 'Cars 2: World Grand Prix', 'Rise of the Planet of the Apes' and 'Transformers 3: Dark of the Moon'. Hollywood productions filled the top spots in all countries and many movie lovers enjoyed the 3D offering. In 3D movies 'The Smurfs' took the lead, followed by 'Harry Potter and the Deathly Hallows – Part 2' and 'Transformers 3: Dark of the Moon'.
From 1 January to 30 September Kinepolis Group welcomed 15.0 million visitors. The previously reported drop in visitors of -6.8% at the end of June 2011 was reduced to -5.0% at the end of September 2011 mainly thanks to the performance of the Belgian cinemas. Year-to-date admissions were fully in line with projections, given that 2010 was an exceptional year for movies, marked by very strong figures for Avatar in the first six months.
| Belgium | France | Spain | Switzerland | Total | |
|---|---|---|---|---|---|
| Q1-Q3 2011 (m) | 7.0 | 4.8 | 3.1 | 0.1 | 15.0 |
| Q1-Q3 2010 (m) | 7.0 | 5.2 | 3.5 | 0.1 | 15.8 |
| 2011 compared to 2010 | -0.5% | -7.5% | -10.6% | +2.5% | -5.0% |
Admissions are down by 3.6% from 1 January to 13 November. The further increase after 30 September was clearly driven by the strong international movie offering, headed by 'The Adventures of Tintin', 'Abduction' and 'Johnny English Reborn'.
The strong 3D offering and the VPF ('Virtual Print Fee') income resulting from agreements with distributors had a favourable impact on box office revenue. These agreements will enable Kinepolis to gradually earn back the greater part of investments in digital equipment over the coming years.
In-theatre sales (ITS) per visitor rose in the third quarter, thanks to the optimisation of the product range, which is increasingly adapted to movie lovers, together with the continued rollout and the success of the Mega Candy self-service shops. The higher consumption per visitor more than offset the impact of lower ticket sales, which resulted in a rise in total ITS compared to the third quarter of 2010. A second generation of the self-service concept was introduced in Spain.
Business-to-business (B2B) revenue increased in the third quarter compared to the same quarter last year among others due to the recovery of the screen advertising market.
Real estate revenue remained at the same level as the previous year. New leases were signed in France, Poland and Switzerland. In Belgium rent income declined as a result of the redevelopment of the Leuven multiplex.
In September 2011 Kinepolis sold the former Opéra cinema in Liège (which closed in 2004) to ULG (Liege university).
The revenue of Kinepolis Film Distribution ('KFD') decreased in the third quarter of 2010, due to a lower number of movie releases. Successful releases by KFD in Q3 were 'Columbiana' (27/07/2011) and 'Hasta La Vista' (14/09/2011).
'Columbiana' was the result of a partnership agreement signed by KFD and Dutch Film Works (DFW) in September. KFD now also releases DFW catalogue movies in Belgium and Luxembourg, while DFW is responsible for distribution in the Netherlands.
The permanent focus on improving efficiency, increasing margins and controlling fixed costs resulted in a higher current EBITDA, despite the lower admissions. Overheads increased due to investments in talent, management, skills and systems, as Kinepolis continued to pursue its strategic objectives, which are to be the best marketeer, the best cinema operator and the best cinema real estate manager.
The net financial debt augmented as a consequence of the capital reduction and the share buyback programme.
Important event since 30 June 2011
Kinepolis Group capital optimization
In accordance with the Extraordinary General Meeting of 20 May 2011, the registered capital was reduced and a mandate was given to the Board of Directors for share buy-back. Through these measures, Kinepolis wants to optimize its capital structure and create value for its shareholders. The registered capital of Kinepolis Group was reduced by a round € 30 million. A dividend of € 4.33 per share was paid out to shareholders accordingly. Between 1 September 2011 and 8 November 2011, 300,000 shares were acquired, bringing the total number of treasury shares at present to 577,231.
Line-up
'The Adventures of Tintin' recently opened the autumn movie season. In Belgium, 'Code 37' experienced a flying start, while 'Les Intouchables' did the same in France. Movie lovers are already looking forward to international hits such as 'Twilight Saga: Breaking Dawn', 'Puss in Boots', 'Mission Impossible 4' and 'Happy Feet 2'. Several local movies are also promising: 'Groenten uit Balen' and 'Mega Mindy en de Snoepbaron' between others in Belgium, 'Carnage', 'The Lady' and 'Les Lyonnais' in France and 'Mientras duermes', 'La voz dormida' and 'Fuga de cerebros 2' in Spain. Live opera, ballet, theatre and musicals continue to win hearts. The fifth live opera season has started well and Spanish football fans are looking forward to Real Madrid versus FC Barcelona, which will be shown by Kinepolis on 11 December.
Contact
Kinepolis Press Office Kinepolis Investor Relations Tel: +32 9 241 00 16 Tel: +32 9 241 00 22
Email: [email protected] Email: [email protected]
1 Third quarter
2 Revenue from ticket sales
3 Revenue from the sale of drinks, snacks and merchandising
4 After eliminating non-current transactions
5 EBITDA is not a recognized IFRS term. Kinepolis Group has defined this concept by adding depreciations, amortizations and provisions to the operating profit and subtracting any reversals or uses of the same items
6 Year-to-date: from 1 January up to the given date