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Cinema City International NVConference Call | Semi Annual Report 2010
20 August 2010
Change in the presentation of results in
the semi-annual report 2010
In the semi-annual report for the first six months of 2010 Cinema City presents
its operating activity results broken down as follows:
Revenues from cinema related operations
Operating costs of cinema related operations
Gross margin from cinema related operations
Revenues from the sale of real estate
Operating costs of real estate sold
Revenues and costs corresponding to
theatre operations, film distribution and
other cinema related real estate
Revenues and costs corresponding to
the transaction of sale of CCI’s
1
2Operating costs of real estate sold
Gross margin from the sale of real estate
Total revenues
Total operating costs
Total gross margin
General and
administrative expenses
Operating profit
the transaction of sale of CCI’s
real-estate activity in Bulgaria
Total operating revenues
and operating costs
Operating revenues and costs related to the divestment of the Company’s real estate
activity in Bulgaria are presented in the separate line in the profit and loss account of CCI.
2
3
1 + 2 = 3
REVENUEcinema related operations
in € million
sale of real estate
in € million
NET PROFIT
17.5 vs. 13.8
EBITDA
31.3 vs.24.8
1st half of 2010 was very successful for CCI’s operations
116.4 vs. 80.3
(+44.8%)
in € million
91.2 vs. 23.0
(+296.1%)
REVENUE
Cinema related
in € million
Total CCI in € million
17.5 vs. 13.8
+ 26.2%
ADMISSIONS
in million
tickets sold
15.1 vs. 12.3
+ 23.5%
Total CCI in € million
31.3 vs.24.8
+ 26.2%
EBITDA
Cinema related
in € million
28.3 vs. 15.0
+88.7%116.4 vs. 80.3
(+44.8%)
41 theaters 411 screens
193677 screens
134 K seats 9 IMAX®
6 countries 69 theaters
digital
screens
Cinema Chain: # 1 in CEE and in Israel
21
7
9
25
28
103
Romania
Bulgaria
The Czech
Rep.
Hungary
Israel
Poland
4
Screens in operation (677) Screens under development (411) Digital screens (193)
under binding contracts under binding contracts
Next opening: Arad, September 2010
72 (11%)
24 (4%)
46 (7%)
115 (17%)
104(16%)
316 (47%)
Romania
Bulgaria
The Czech
Rep.
Hungary
Israel
Poland
264 (64%)
46 (11%)
0%
0%
26 (7%)
75 (18%)
Romania
Bulgaria
The Czech
Rep.
Hungary
Israel
Poland
Strategy implementation in H1 2010
� Opening of 1 multiplex with 15 screens: Cinema City Sun Plaza, Romania
� Re-opening of 4 screen multiplex in Tel Aviv (6 screens before refurbishment)
� Preparations for 5-7 cinema openings scheduled for 2H 2010 in Romania, Bulgaria and Poland
� Closing of 1 cinema in Israel (4 screens)
� Further lease agreements in negotiation
� Rapid installation of digital projectors
� Process of analyzing business offers on the potential markets for CC expansion.
Cinema chain
Advertising
� Vodafone Tuesdays promotion in Hungary – successful follow up of Orange Wednesdays in Poland
� Preparations for new promotional programs to be introduced in Cinema City
� Cinema advertising development in Romania, Hungary and in the Czech Republic.
� Development of the cross country co-operation with key clients like SONY and Unilever and many others
DVD and film distribution
� Films distributed by Forum Film: Alice In Wonderland 3D, Prince of Persia, Toy Story 3, Princess and the Frog, Ghostwriter,
Saga Twilight and many others ….
� DVD distribution in Hungary and Czech Republic closed.
Real estate
� Closing of sale of CCI real estate activities in Bulgaria to Israel Theatres Ltd. in Q1 2010
5
3D technology continues
to enhance CCI’s financial results
Share of 3D
admissions in the
total number of
admissions goes up
Q2 2010 = 24.6%
H1 2010 = 34.7%
vs. 10.8% in Q2 2009
vs. 8.6% in H1 2009
Growth in average
ticket price
€ 4.77 (+23.7%)
supported by 3D
Cinema City continues the cinema digitalization
End of
H1 2010
End of
2010 (F)
28%
31%
Digital screens
% of total CCI screens
End of
2009
21%
21
7
9
25
28
103
Romania
Bulgaria
The Czech
Rep.
Hungary
Israel
Poland + 10
+ 8
+ 6
+ 4
+ 9
+ 6
43 digital
projectors
to be installed
until the end of
2010
Financial and Operating Results
in H1 2010
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� Very well received international movie production
� New openings from H2 2009 and 2010
Financial Results| Key factors
� Higher percentage of 3D admissions
� Solid development of CCI’s advertising business
� Lower contribution to EBITDA from the sale of real estate vs H2 2009
8
For 6 months
30 Jun 2010
For 6 months
30 Jun 2009
change
%
Revenues(cinema related
operations)
116 394 80 361 44,8%
Revenues 91 212 23 028 296,1%
Consolidated Financial Results in H1 2010
in € ‘000
H1 2010 / H1 2009 Q2 2010 / Q2 2009
For 3 months
30 Jun 2010
For 3 months
30 Jun 2009
change
%
Revenues(cinema related
operations)
46 317 36 012 28,6%
Revenues 91 212 1 492 6013,4%
in € ‘000
For 6 months
30 Jun 2010
For 6 months
30 Jun 2009
change
%
EBITDA margin(cinema related )
24,2% 18,4% 5,8 ppt
Revenues(sale of real
estate)
91 212 23 028 296,1%
EBITDA 31 333 24 824 26,2%
Net profit 17 533 13 848 26,6%
margins
9
Revenues(sale of real
estate)
91 212 1 492 6013,4%
EBITDA 11 052 9 458 16,9%
Net profit 4 827 4 139 16,6%
For 3 months
30 Jun 2010
For 3 months
30 Jun 2009
change
%
EBITDA margin(cinema related )
17,3% 14,2% 3,1 ppt
margins
Poland
59,0%Romania
3,2%
Israel
17,8%
Revenue from cinema related operations
breakdown by countries
H1 2010 H1 2009
Poland
51,9%Romania
Israel
20,0%
The Czech
Republic
5,5%
Hungary
11,4%
Bulgaria
3,1%
3,2%
10
The Czech
Republic
5,8%
Hungary
11,0%
Bulgaria
3,4%
Romania
7,9%
€ 116.4 m € 80.4 m
Revenue from cinema related operations
breakdown by segments
Theatre operations 91%
breakdown (% of total sales):Ticket sales 62%
Concessions 19%
Advertising 11%
Theatre operations 91%
breakdown (% of total sales):Ticket sales 59%
Concessions 19%
Advertising 13%
H1 2010 H1 2009
91%
7%
2%
91%
8%
1%
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Real estate(cinema related)
Film
distribution
Film
distribution
€ 116.4 m € 80.4 m
Real estate(cinema related)
Investment, debt and financing resources
In EUR million | 30.06.10 | 30.06.09 | change |
equity 198,9 161,9 22,9%
debt 31,1 90,1 -65,5%
cash 10,6 14,4 -26,4%
net debt 20,5 75,7 -72,9%
CF from operations 27.8 20.3
CF for investment 35,7 (8.9)
CF from financing (75.7) (8.4)
EBITDA 31,3 24,8 26,2%
net debt/EBITDA 0,3 1,5 -1,2
net debt/equity 0,1 0,5 -0,4
capex 18.5 15.6 + 18.6%12
Segments performance overview
H1 2010H1 2010
13
Theatre operations H1 2010
+ 45.4%
106 328
Revenues
Admissions
15.1 M + 23.5%
Admissionslike-for-like
13.5 M + 9.9%
in EUR ‘000
73 133
+ 135.6%
7 892
18 590
EBIT
Average
ticket price
Average no
of screens
EUR 4.77
664 + 12.7%
H1 2009H1 2010
+ 83.7%
15 288
28 084
EBITDA
14
+ 23.7%
Average Ticket Prices in € vs. local currencies
� Increase in the average ticket prices in local currencies and in €
in all territories
For 6 months
30 Jun 2010
For 6 months
30 Jun 2009
change
%
Poland 19,23 16,70 15,2%
Czech Republic 141,22 121,60 16,1%
Hungary 1 019,73 877,40 16,2%
Bulgaria 7,27 7,19 1,1%
Romania 15,17 11,71 29,5%
Israel 32,65 28,20 15,8%
For 6 months
30 Jun 2010
For 6 months
30 Jun 2009
change
%
Poland 4,80 3,76 27,4%
Czech Republic 5,48 4,49 22,2%
Hungary 3,75 3,08 21,8%
Bulgaria 3,72 3,68 1,1%
Romania 3,65 2,76 32,0%
Israel 6,54 5,20 25,8%
Average CCI 4,77 3,85 23,7%
in €in local
currencies
Film distribution H1 2010
9 069
Revenues
� Expansion of Forum Film into
Bulgaria (q4 2009) and
Romania (q1 2010).
� Larger number of successful
+ 56.4%
5 799
28
EBIT
H1 2009H1 2010
� Larger number of successful
titles in distribution including
„Alice in Wonderland 3D”
EBITDA
(539)
102
16
(386)
Transaction of sale of real estate in Bulgaria
EBITDA
Transactions of sale of real estate projects contributed to Cinema City
financial results in H1 2010 and H1 2009.
H1 2010: Divestment of entire CCI’s real estate activity in Bulgaria
H1 2009: Sale of 30% interest in the Mall of Plovdiv in Bulgaria
Revenues
€ 3.1 m
€ 9.7 m
EBITDA
- 68.0%
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€ 91.2 m
Revenues
+196.0%
€ 23.0 m
H1 2009H1 2010 H1 2009H1 2010
Outlook for H2 2010
� Plan to open between 5-7 multiplexes with around 65 screens
� 1-3 cinemas in Romania
� 2 cinemas in Bulgaria
� 2 cinemas in Poland
� Difficult conditions in the real estate market may cause delays in openings of new projects
�Further lease agreements in negotiation
� Continuing installation of digital projectors. Target: over 200 digital projectors at the end of 2010.
�Process of analyzing business offers on the potential markets for CC expansion.
Cinema chain
�Process of analyzing business offers on the potential markets for CC expansion.
� Films on the screens: Shrek 4, Saga Twilight Eclipse, Harry Potter, Narnia, Tangled and many others
Advertising
� Extension of co-operation with existing clients on other countries of CCI operations
� New brand and product cross country campaigns of clients from the countries other than CCI countries of operations
� Preparation of new special promotions, sponsorships etc in all CCI markets
DVD and film distribution
� Films to be distributed by Forum Film : Tangled, Trone Legacy, You again and many others
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Cinema City OpeningsPlans for 2H 2010
Mall of Ruse, Bulgaria,
CC 11 screens
Baia Mare, Romania,
CC 6 screens
Wałbrzych, Poland,
CC 7 screens
Turgu Mures, Romania,
CC 8 screens
Stara Zagora, Bulgaria,
CC 7 screens
Arad Atrium, Romania,
CC 10 screens
Bytom, Poland,
CC 9 screensBraila, Romania,
CC 10 screens
AppendixAppendix
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Revenues from cinema related
operations by segments
For 3 months
30 Jun 2010
For 3 months
30 Jun 2009
change
%
For 6 months
30 Jun 2010
For 6 months
30 Jun 2010
change
%
Theatre operation 41 878 32 995 26,9% 106 328 73 133 45,4%
Ticket sales 25 942 20 824 24,6% 71 972 47 499 51,5%
Concession 8 578 6 904 24,2% 21 541 15 034 43,3%Concession 8 578 6 904 24,2% 21 541 15 034 43,3%
Advertising 7 358 5 267 39,7% 12 814 10 599 20,9%
Distribution 4 018 2 778 44,6% 9 069 5 799 56,4%
Real estate 420 239 75,7% 997 1 429 -30,2%
Total revenues 46 317 36 012 28,6% 116 394 80 361 44,8%
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Theatre operations performance factors (1)
Number of admissions
in thousand
For 3 months
30 Jun 2010
For 3 months
30 Jun 2009
change
%
For 6 months
30 Jun 2010
For 6 months
30 Jun 2010
change
%
Poland 2 738 3 036 -9,8% 7600 7 426 2,3%
Czech Rep. 375 322 16,5% 948 728 30,2%
Hungary 916 844 8,6% 2 161 1 607 34,5%
Bulgaria 347 200 73,1% 733 378 93,7%
Romania 617 244 152,5% 1 526 527 189,4%
Israel 779 768 1,5% 2 130 1 559 36,6%
Total 5 772 5 414 6,6% 15 098 12 226 23,5%
Number of admissions
like-for-like in thousand
For 3 months
30 Jun 2010
For 3 months
30 Jun 2009
change
%
For 6 months
30 Jun 2010
For 6 months
30 Jun 2010
change
%like-for-like in thousand 30 Jun 2010 30 Jun 2009 % 30 Jun 2010 30 Jun 2010 %
Poland 2 571 3 036 -15,3% 7 035 7 425 -5,3%
Czech Rep. 375 322 16,5% 948 727 30,4%
Hungary 818 844 -3,1% 1 929 1 607 20,0%
Bulgaria 364 200 81,6% 609 378 60,9%
Romania 321 244 31,4% 804 528 52,3%
Israel 779 768 1,5% 2 130 1 574 35,3%
Total 5 228 5 414 -3,4% 13 455 12 239 9,9%
Admissions per screen
(annual basis)
For 3 months
30 Jun 2010
For 3 months
30 Jun 2009
change
%
For 6 months
30 Jun 2010
For 6 months
30 Jun 2010
change
%
Poland 34,66 43,22 -19,8% 48,10 53,04 -9,3%
Czech Rep. 32,61 28,00 16,5% 41,22 31,65 30,2%
Hungary 31,86 33,09 -3,7% 37,58 31,51 19,3%
Bulgaria 57,83 33,40 73,1% 61,08 39,83 53,3%
Romania 43,30 32,58 32,9% 53,54 36,37 47,2%
Israel 29,40 27,18 8,2% 40,19 27,59 45,6%
Total 34,77 36,34 -4,3% 45,48 41,51 9,5%22
Theater operations performance factors (2)
Average no of screensFor 3 months
30 Jun 2010
For 3 months
30 Jun 2009
change
%
For 6 months
30 Jun 2010
For 6 months
30 Jun 2010
change
%
Poland 316 281 12,5% 316 280 12,9%
Czech Rep. 46 46 0,0% 46 46 0,0%
Hungary 115 102 12,7% 115 102 12,7%
Bulgaria 24 24 0,0% 24 19 26,3%
No of screens
at end of the period
As at
30 Jun 2010
As at
31 Jun 2009
change
%
Poland 316 288 9,7%
Czech Rep. 46 46 0,0%
Hungary 115 102 12,7%
Bulgaria 24 24 0,0%
Romania 72 30 140,0%
Israel 104 113 -8,0%
Total 677 603 12,3%
Bulgaria 24 24 0,0% 24 19 26,3%
Romania 57 30 90,0% 57 29 96,6%
Israel 106 113 -6,2% 106 113 -6,2%
Total 664 596 11,4% 664 589 12,7%
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Theater operations performance factors (3)
Average price of ticket in EURFor 3 months
30 Jun 2010
For 3 months
30 Jun 2009
change
%
For 6 months
30 Jun 2010
For 6 months
30 Jun 2010
change
%
Poland 4,55 3,82 19,0% 4,80 3,76 27,4%
Czech Rep. 5,31 4,46 19,1% 5,48 4,49 22,2%
Hungary 3,54 2,96 19,9% 3,75 3,08 21,8%
Bulgaria 3,47 3,54 -2,1% 3,72 3,68 1,1%
Romania 3,42 2,59 32,0% 3,65 2,76 32,0%
Israel 6,33 5,13 23,3% 6,54 5,20 25,8%Israel 6,33 5,13 23,3% 6,54 5,20 25,8%
Total 4,49 3,85 16,9% 4,77 3,85 23,7%
Average price of ticket
in local currencies
For 3 months
30 Jun 2010
For 3 months
30 Jun 2009
change
%
For 6 months
30 Jun 2010
For 6 months
30 Jun 2010
change
%
Poland 18,30 17,06 7,3% 19,23 16,70 15,2%
Czech Rep. 135,91 119,07 14,1% 141,22 121,60 16,1%
Hungary 973,95 848,54 14,8% 1 019,73 877,40 16,2%
Bulgaria 6,78 6,93 -2,1% 7,27 7,19 1,1%
Romania 14,33 10,91 31,4% 15,17 11,71 29,5%
Israel 30,43 28,43 7,0% 32,65 28,20 15,8%
24