Tivoli International A/S

Tivoli International A/S Vesterbrogade 3 P.O. Box 233 DK - 1630 Copenhagen V. Phone: (+45) 33 75 04 21 Fax: (+45) 33 75 04 82 Cvr: 12 12 34 85

Tivoli International A/S – 2006

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An introduction to the amusement park

Tivoli Gardens

and the consultancy

Tivoli International A/S


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Table of Contents

Tivoli .............................................................................................................................................. 4 1. Introduction to Tivoli .................................................................................................................. 4 2. The History of Tivoli................................................................................................................... 5 3. Distinctive features of Tivoli ....................................................................................................... 6 4. Business Model........................................................................................................................... 7 Tivoli International A/S................................................................................................................... 9 1. Introduction................................................................................................................................. 9 2. Background................................................................................................................................. 9 3. Work Process ............................................................................................................................ 10 4. Selected References .................................................................................................................. 17 5. Contact Information: ................................................................................................................. 18


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Tivoli

1. Introduction to Tivoli The 163 year old amusement park situated in the heart of Copenhagen is many different things; Denmark and Scandinavia’s most popular tourist attraction, a bearer of national traditions and a private company – Tivoli was even an inspiration to Walt Disney who visited Tivoli several times in the 1950’ies. During its 163 years of operation Tivoli has developed at a continuous pace and appears today as an amusement park where old cultural attractions, the Gardens and entertainment are combined with modern amusements and tastes. Annual reinvestments, however loyal to the park’s historical traditions and unique atmosphere, create the attraction value. Annual attendance lies at approximately 4,2 million, divided on 3,2 million in the summer season (April – September) and 1 million in the 1½ month Christmas Season in November and December. Tivoli is for everyone and all age groups are represented – from the tiny toddler enjoying an ice cream, teenagers and young adults trying Tivoli’s various amusement rides and attending rock concerts to elders enjoying a peaceful stroll among the flowers and unique scenery. Tivoli is a private company and quoted on the Copenhagen Stock Exchange with the following main shareholders:

• Scandinavian Tobacco Company: 32 % • Chr. Augustinus Fabrikker A/S: 25 % • Danske Bank A/S: 5 %

Tivoli’s recent 4 year financial results are presented in the below table and show a solid growth in turnover and, not least, profit after tax: Table 1: Financial Results of Tivoli A/S (Euro 1.000)*** 2000/01*) 2001/02**) 2002/03) 2003/04 2004/05 Revenue (ex. tenants & lease holders) 48.967 9.321 49.329 54.211 61.534

Revenue (incl. tenants & leaseholders) 94.903 19.555 94.662 100.657 109.174

Profit before tax 1.234 (8.879) 2.267 3.058 6.424 Equity 62.943 55.901 57.430 58.839 62.594 Total Assets 90.504 82.323 77.401 80.472 81.223 Equity (Tivoli International) 1.900 1.900 1.900 1.956 1.822

* ) Comparative figures are adjusted to the 2002/03 changes in Danish accounting practices ** ) Year of accounting adjustment (period October 1st 2001 – March 31st 2002) ***) EUR/DKK exchange rate as of August 2005 For more information on Tivoli’s financial results, management and ownership structure, please refer to Tivoli’s homepage: http://www.tivoli.dk/composite-2576.htm


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2. The History of Tivoli World wide renown The name Tivoli referred to in the amusement park business is known world wide and is synonymous with originality and high quality. Tivoli is the leading tourist attraction in Denmark and the third most visited amusement park in Europe after Disneyland in Paris, France and Blackpool Pleasure Beach in England. Despite a population of only 5,5 million people Tivoli manages to attract more than 4 million visitors annually on a 7½ month season. Tivoli has a strong loyalty base among its visitors, who primarily are Copenhageners and secondly all other Danes, yet also appeals to international travellers. In the summer of 2005, approximately 20 percent of Tivoli’s guests were international tourists. The historical foundation While many other amusement parks are created and closed again, Tivoli in Copenhagen has shown itself vigorous and is today one of the oldest amusements parks in the world. Tivoli is related to the 19th century amusement gardens, the so-called “Vauxhalls”, which evolved in the cities of Europe. This phenomenon of eventful and sensuous experiences spread to larger cities in the beginning of the 19th century. The point of origin was a scenic garden where people could promenade while listening to music, watching performances and being entertained by various rides and games. At nightfall people were enchanted by magic illuminations and fire works. The architecture was inspired by the Orient and the exotic and the setting created an atmosphere, which was different from everyday life. Tivoli today Tivoli has in the last 7 – 8 years experienced large changes however without jeopardising the historic foundation and valuable traditions. The company has been modernised and the organisation geared to the modern world. The same goes for the actual Gardens – new rides have been introduced, landscape elements have been changed and the entertainment programme modified and expanded. As a consequence, also the sales & marketing strategy changes according to preferences and habits among Tivoli’s visitors. As part of this new development Tivoli has increasingly focused on introducing systems and documenting existing practices. In 1999, Tivoli was certified in accordance with ISO 14001 (the environmental standard) as the first amusement park in the world. In 2001, Tivoli’s quality management scheme was certified in accordance with ISO 9001; the ISO 9001 certification was terminated in 2005 after full incorporation into the Tivoli management system. Other strategic focus areas are systematic maintenance, security, service concept and human resource development. Today, Tivoli stands out as a modern organisation with a sharp branded profile both as an amusement park and as a cultural institution. Tivoli is the third most mentioned company name in Danish media and is estimated to be the third strongest brand in Denmark. Furthermore, Tivoli is the biggest tourist attraction in Northern Europe.


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3. Distinctive features of Tivoli The following elaborates Tivoli’s distinctive features, i.e. its ambience and atmosphere. Many ingredients are used in the process of creating this, where architecture, design and the physical environment are the crucial defining elements. Despite only constituting 8,1 hectares (20 acres) Tivoli presents a host of visual and sensual experiences to its visitors. The site of Tivoli is divided into three zones, each with their own characteristics and natural transitions between them. The zones are the Traditional Tivoli, the Park Tivoli and the Popular Tivoli The Traditional Tivoli runs in the middle of the Gardens from the main entrance to the Chinese Tower. In this zone the oldest buildings in Tivoli are situated, for example The Pantomime Theatre as well as the Glass Theatre. The Park Tivoli lies in the area around the Tivoli Lake and is a series of calm gardens, beautiful sceneries and promenade paths. The Popular Tivoli is an amusement zone stretching along the perimeter of the Gardens in between the two other entrances to the Gardens. In this zone rides and noisy games are placed. Within the zones there are a variety of scenarios, which deliberately constitute spatiality and intimacy. Tivoli does not feature a broad main street like many other amusement parks. The guest is guided through Tivoli on meandering paths and alleys, which create changing and surprising views of the garden. These paths and alleys are traditionally covered with soft materials such as gravel and flags. Important are the landscaped features with many old trees, different coloured flower gardens, fountains, sculptures and many types of seating. These sloping grounds and the Tivoli Lake create scenic variety. Architecture and design is also greatly emphasized in Tivoli, why it has been given its own appellation: Tivoli style. In pinning down Tivoli style, the main elements are diversity, particularity and quality. The main characteristics are, amongst other things, open buildings with diffuse transitions between in- and outdoors, i.e. porches, terraces and balconies. There are numerous small buildings and pavilions and larger buildings are placed in the perimeter of the Gardens. The strong feature of these is an imaginative idiom with decorations and ornaments. In design, an Oriental and Middle Eastern inspiration is upheld along with inspiration from nature, variation of styles, a careful choice of materials, and attention to details and colouring. Tivoli has a long tradition of using architects and artists in creating an expression customized to Tivoli. Tradition is always the starting point in projecting the Gardens. Old buildings and special scenery are preserved to a great extent. The traditional architecture of amusements known from other amusement parks all over the world, has never gained access to Tivoli. Concerning illuminations and lighting design, Tivoli also has its own guiding principles matching the physical environment of the garden. The lighting emphasizes Tivoli’s poetic and romantic atmosphere, charm and spirit. Tivoli lighting is soft and indirect with incandescent lamps. Tivoli does not use sharp blinking or hard light-effects, neon lights are banned, but artistic effects instead. Classical colours are used such as white, yellow, red, green and blue. Coloured light-effects and imaginative fittings create the magical, intimate atmosphere that enshrouds Tivoli when darkness falls.


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4. Business Model The business model of Tivoli in figures: Two seasons:

• Summer season: from mid–April to mid-September • Christmas season: from mid–November to December 30th.

Opening hours: Low season: Sunday – Wednesday: 11 am. – 23 pm. Thursday and Saturday: 11 am. – 00 pm. Friday: 11am. – 01 am. High season: Sunday – Thursday: 11 am. – 24 pm. Friday – Saturday: 11 am. – 01 am. (Approximate) Price structure (Based on a pay-as-you-go principal):

• Admission fee grown ups: € 9 • Children (3 – 13 years): € 5 – 5,75 • Free ride passes: € 19,50 to € 26

• Large loyalty programme: app. 300.000 pass-holders in 2005. Prices begin at € 25 • Approximately 2.000 events each season, primarily free entertainment on various stages • Annually 4,2 million guests (75 percent during the summer season); 50 % use the rides • Guests are spread throughout the day and through out the week • Friday evening the main visitation day and time over the summer season (avg. 22 %) • Broad appeal serving all segments age wise • 25 restaurants and 15 cafés with a seating capacity of approximately 10.000 (7.000 indoor) • 25 mobile rides with a high ride capacity and limited queuing in the Garden • Average stay in the garden 3 – 4 hours • Marketing primarily to adults, young adults and upper middle class

For more information on Tivoli, please see the following homepages: General: http://www.tivoli.dk/composite-2450.htm Financial results and ownership structure: http://www.tivoli.dk/composite-2576.htm


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1. Introduction Tivoli International (TI) is a subsidiary to Tivoli and offers consultancy services on various technical levels related to the amusement and theme park industry. Drawing on the 163 years of operational and design experience of Tivoli we strive to offer tailor–made solutions based on our client’s wishes and preferences and offer solutions that are conceptually, operationally and financially feasible. With primary focus on amusement park development, our approach to every project is based on balancing imaginative visions with our client’s operational and financial realities to achieve a product that will succeed creatively and commercially. Our vision is to support international partners/clients on their ideas and projects and to assist on projects from “cradle to delivery” thereby securing a stable process resulting in viable results. Moreover, TI pursues the development of Tivoli branded and non Tivoli–branded amusement parks with external investors. TI has decided to partly focus its efforts on developing Tivoli Parks on the more traditional markets and partly on developing smaller scale parks on emerging markets and in developed countries. In the case of Tivoli branded parks these would be established with a license agreement with TI with the right to use the “Tivoli” name. TI is not an investment company but can in certain cases participate as a minority investor in projects.

2. Background TI was established in 1988 in order to offer know–how and expertise in the planning and operation of amusement parks on the international market. Further, to establish Tivoli parks in different parts of the world with external investors. It was the intention that these parks were to adopt the name, concept and brand of Tivoli Copenhagen in negotiated license agreements. As a result of TI’s work the first Tivoli Park outside Copenhagen opened in Kurashiki, Japan in July 1997. The Tivoli Park in Kurashiki is the first complete showcase of TI’s work on promoting the Tivoli name, concept and brand internationally. Today TI has a flexible approach to developing concepts for new parks internationally by constantly developing our expertise and focusing on new activities. These activities involve development of amusement parks either sub–branded, non–Tivoli branded or the concept of “Christmas in Tivoli”. This flexibility is based on 163 years of experience in designing, developing and running the amusement park in Copenhagen. TI draws on the know-how of the entire Tivoli organization, in particular the development department’s architects and designers as well as the operations office. In other cases, we use our broad network of industry experts as sub–consultants and suppliers. As a part of this concept TI also offers services to amusement parks regarding environmental management. Tivoli Gardens has over the years developed a strong environmental profile, and in the summer of 1999 Tivoli was, as the first amusement park in the world, certified in accordance with the international standard ISO 14001. The certification is handled by Bureau Veritas Quality International A/S (BVQI) and every half a year the management systems are checked.


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3. Work Process When assisting our clients on all new project developments (amusement park development, Christmas Market or other) TI adheres to a series of sequential steps and to which we are involved in at varying degrees. These various steps and responsibilities are summarized in the following pages:


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Figure 1: Steps in Project Development

1. PROJECT IDEA & CONCEPT DEVELOPMENT

3. PRE-MASTER PLAN

5. PRELIMINARY CONCEPT DESIGN

9. PRODUCTION AND CONSTRUCTION DOCUMENTS

11. INSTALLATION AND TESTING

4. MASTER PLAN PROGRAM

10. PRODUCTION AND CONSTRUCTION

6. FINAL CONCEPT DESIGN

7. SCHEMATIC DESIGN

8. DETAIL DESIGN

12. PRE-OPENING SERVICES

GRAND OPENING

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2. MARKET FEASIBILITY ANALYSIS Tivoli International A/S

Local specialists (Under supervision of Tivoli International)


STEP WHO

13. MANAGEMENT CONSULTANCY


Stop: Examination of Project Fundamentals


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1. PROJECT IDEA, STRUCTURE OF COOPERATION Before any project is initiated TI agrees with the partner/client with regards to the project’s overall objectives, time frame and relevant parties involved in the project. Second, to reach agreement on the terms of cooperation between TI and the partner/client.

2. MARKET FEASIBILITY AND CONCEPT ANALYSIS The “roadmap” for the project. For each project idea, TI initially compiles information of the general market, in cooperation with the partner/client, to develop clear market assessments on the potential project. In connection with this, TI defines the contents of the market study and prepares desk research and terms of reference for the market study. On the basis of the market assessment a Concept Analysis and Model for the project is developed in cooperation with the partner/client. The development of the business concept and model becomes the foundation of the architectural outline which again has consequences for the operational issues and for the financial and economic feasibility of the project. The framework is adjusted according to changes and refinements of each box along with integration of external factors etc. This will affect the visual outline of the park as well as operational and financial issues, which again will cause changes in the business concept. This process is presented in figure 2 below. The Market Feasibility Study should arrive at definitive conclusions on all the basic issues of the project after consideration of various alternatives. The Study determines the potential of the project and considers cost assessments, corporate structuring and organization, market segmentation, investment budgeting and financing as well as risk assessments. The objective of the Concept Analysis is to present a frame for the proposed amusement park. The definition of the park’s mission, vision and overall targets are key elements of the conceptual framework together with the analysis of primary and secondary market segments. The purpose of the Concept Analysis is to provide a structured description of the projected park in order to reach a mutual understanding of a) which market segments the park should aim at and b) the park’s content portfolio.


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Figure 2: Presentation of work process

3. PRE–MASTER PLAN At this preliminary stage of the project development, the purpose of the Pre–master plan is to give an initial visual proposal of the site layout and definition of the suggested business elements defined in the combined Market Feasibility Study/Concept Analysis. The visual definition will be done at a level enabling recipients (client, project developers, potential investors, community leaders, other relevant 3rd parties) to understand the layout, concept and the interrelationship of the respective elements of the project development. As the Pre–Master is a first step towards a final Master Plans, the level of definition on individual structural elements (hereunder dimensions, scaling, colouring) is presentational and not binding final solutions.

Business Concept and Model

Financial and economic feasibility

study

Operational Issues

Architecture and visual story board

Integration

Market Assessment


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4. MASTER PLAN PROGRAMME

This phase delivers a set of clear goals that define the size, financial parameters, schedule milestones, and target audience. In addition, the creation of physical layout, site utilization, planning and development strategies help to establish the project scope. Development of the master plan includes interim planning, landscape architecture and set–up of the different aspects of the park (restaurants, (redemption) games, playgrounds, ride, etc.). These plans are developed in co–operation with local partners and architects.

5. PRELIMINARY CONCEPT DESIGN Preliminary concept designs are developed for major components to address the scope and nature of the project. Design themes, storylines, and architectural styles are established. Issues that are addressed include not only design, but also economic and operational guidelines. Conceptual design developed during this stage is based upon the owner’s project objectives.

6. FINAL CONCEPT DESIGN The final concept design covers all project disciplines (i.e. architecture and engineering, etc.) developed to a level of detail sufficient for understanding the project’s scope, style, and content. This will allow the determination of the requirements needed by these disciplines to design and develop the project. Verification of the final concept design against all major components of the project scope and establishment of project budget and schedule will complete the project’s master planning phase.

7. SCHEMATIC DESIGN This phase determines the size, function, appearance, and basic requirements of the various component elements and project disciplines; as well, as allows for the development of preliminary floor plans and elevations. The detail of this stage will be adequate to prepare cost estimates for all of the components.

8. DETAIL DESIGN This phase develops the design to a level of detail that accurately describes the project. Generally, this includes detailed strategies and specifications, as well as design documentation describing the show, architectural, and site elements that support the project’s design intent. Documents produced include, though not limited to: refined floor plans, developed elevations, details, finishes, and outline specifications.


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9. PRODUCTION AND CONSTRUCTION DOCUMENTS This phase develops all production and construction documents that consultants, vendors, and contractors will need to implement the project. It can include developing plans, specifications, drawings, scripts, storyboards, and other detailed information that will support and delineate the production and construction bid documents.

10. PRODUCTION AND CONSTRUCTION This phase deals with the bidding, negotiation, and subsequent production and construction of all components for the project.

11. INSTALLATION AND TESTING This phase covers the installation, termination, testing, and programming of all components and equipment directly related to the show systems and technologies proposed for the project. Show systems are tested to ensure compliance with the requirements set forth in the project program.

12. PRE–OPENING SERVICES This stage covers the training of operations and maintenance personnel; the establishment of operations and maintenance procedures and manuals; the loading of operations furniture, fixtures, and equipment; and the stocking of all inventories required for operations. TI can provide a team in cooperation with the local park operators to provide pre–opening operational consulting services for the organizational development and operational planning. These services include, though are not limited to:

• Production of job–descriptions of park operations • Organization Development • Training of employees including follow–up courses when park is in operation • Operational Design Reviews • Administration of parks including economic controlling • Operating Manuals • Operating Plans & Systems • Grand Opening Events


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13. MANAGEMENT CONSULTANCY In operation of the projected park TI’s core competencies are within management, quality and environment. For the projected park TI can supply a management team with responsibilities covering, though not limited to:

• Administration of the park including economic controlling • Operation of the park including restaurants and fast food and retail shops • Continuous training of employees • Continuous development plans of the park • Sales & Marketing Plans • Investment Strategy Plans

On a further note, Tivoli has over the years developed a strong quality and environmental profile. In the summer of 1999 Tivoli was the first amusement park in the world to be certified in accordance with the international standard ISO 14001. Services in this area relate to:

• Assessment of environmental performance and preparation of an environmental action plan. • Introduction and implementation of environmental management systems (EMS). • Preparations for certification in accordance with ISO 14001 by an external certification agency. • Implementation of an action plan regarding reduction of waste, recycling, reduction of water consumption and reduction of energy

consumption. • Introduction and implementation of Occupational Health and Safety (OSH) Standards.

Tivoli has considerable documentation on all operating systems including systematic maintenance, economic operations, ticketing, and security systems etc. all based on our 163 years of experience running the amusement park in Copenhagen. This documentation serves as basis for our pre–opening/management services.


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4. Selected References TI has been involved in the development of several concept studies and market assessments in among others Japan, Germany, Korea and USA. We have furthermore developed business models for several projects around the world including Italy, Germany and Japan. TI has developed master plans for projects in Japan, Italy, Greece and China. Tivoli Kurashiki, Japan Opening in July 1997 Tivoli Kurashiki, Japan, is the first Tivoli Park outside Copenhagen. A criteria for opening a park in Japan was that it should be original and adapt the unique atmosphere, ambience and philosophy of Tivoli in Copenhagen to its new environment, although still embracing the local cultural settings. Architects and designers from TI designed the park in co-operation with the Japanese owners. In that way, cultural synergy effects have been obtained and a close relationship established. Korea Since 2004 TI has collaborated with a Korean client regarding the establishment of an amusement park in Korea. TI has prepared initial market feasibility and concept studies regarding the amusement park in addition to a concept and feasibility description for the surround area. Linköping Based on the popular “Christmas in Tivoli” concept, TI has prepared a pre–master plan, business concept and budget model for a Christmas Market for the Swedish city of Linköping’s open air museum “Gamla Linköping”. Poland In collaboration with a strategic partner TI undertook a green–field project development regarding the establishment of an amusement park in Gdansk, Poland. Both TI and the partner acted as project developers and produced considerable documentation for the project: feasibility reports, preliminary market study, budget model, concept description, preliminary master plans. A close collaboration with the Mayor of Gdansk ensured a serious support to the project. Greece TI prepared a pre–master plan for an amusement park in Athens, Greece – “Mythos Park”. The park was designed by TI architects based on the myths of Homer creating villages related to Greek mythology. USA For several projects in the USA TI has participated in development of theme parks. TI has prepared pre–master plans and concept plans for projects in Niagara and New York. For more information on Tivoli International, please see: http://www.tivoli.dk/composite-615.htm


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5. Contact Information: Tivoli International A/S Vesterbrogade 3 P. O. 233 DK – 1630 Copenhagen V. Denmark Phone: (+45) 33 75 04 21 Fax: (+45) 33 75 04 82 Email: [email protected]


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Tivoli International A/S

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