Kinepolis responds quickly and decisively to the crisis, and is looking forward to the future with confidence
Half-yearly financial report 2020
20 August 2020, 7 a.m.
As is known, Kinepolis was forced to close all its cinemas from mid-March onwards following the Covid-19 outbreak. During the month of June, cinemas in several countries, namely in the Netherlands, Switzerland, Luxembourg, France, Spain, and some in Canada, were cautiously reopened, although with important capacity restrictions and other safety measures. As a result, the contribution of the second quarter to the results of the first half of the year was negative.
Up to the closing of the cinemas in all the countries where Kinepolis is active, the Group recorded an increase in visitors and financial results, partly due to its recent acquisitions.
The strategy and nature of the company, characterised by a maximum variability of costs, a solid real estate position, with a large proportion of cinema real estate owned, a self-learning organisation and a 'facts and figures'-driven corporate culture, have helped Kinepolis to respond quickly and decisively to the current crisis.
In the explanation of the results for the first half of 2020, we make a distinction between the results before the closure of the first cinemas1 and the results for the entire first half of the year.
Results for 2020, up to and including 12 March (excluding the impact of Covid-19)2
- Up to and including 12 March, the number of visitors increased by 12.0%, thanks to the addition of the American activities acquired in the fourth quarter of 2019.
- Revenue from ticket, beverage and snack sales showed a stronger increase than the number of visitors, mainly due to an increase in revenue per visitor in almost all countries.
- Adjusted EBITDA per visitor rose, despite a slightly negative effect caused by the changed country mix as a result of the US market being added, and a consequently lower share for Belgium.
Results for the first half of 2020 (including the impact of Covid-19)3
- The number of visitors fell by 54.1%, to 8.1 million visitors
- Total revenue dropped by 52.7%, to € 112.6 million.
- Adjusted EBITDA decreased by 76.6%, to € 16.4 million.
- The net result amounted to € -29.7 million, due to the lower operating result, increased financial costs and higher depreciations and amortisations as a result of the expansion in 2019.
- The net financial debt, compared to 31 December 2019, excluding lease liabilities, increased to € 462.8 million.
- Free cash flow amounted to € -29.4 million due to the lower operating result, the evolution of the working capital and higher interest paid.
Important achievements in H1 2020
- Construction progress in Haarlem (NL), Leidschendam (NL), Metz Waves (FR) and South East Edmonton (CA) as planned.
- Renovation of previously acquired "Full" cinema in Barcelona (ES).
- Further roll-out of laser projection, including four new Laser ULTRA theatres in Canada.
- Successful reopening campaign in all European countries and Canada.
- Launch of the brand-new "Kinepolis on Tour" drive-in cinema concept in Belgium.
Kinepolis has taken various measures in recent months with a view to protecting its customers, employees and the company in the light of the Covid-19 pandemic and the measures taken by the authorities.
Kinepolis entered the crisis with a strong cash position, and subsequently made every effort to adjust its costs as much as possible and in the very short term to the impact of the Covid-19 virus on its activities. The measures taken include a drastic scaling back of the number of active employees, thereby drawing on the support measures in each country, both in cinemas and at the support services level in the national and international headquarters. In addition, various measures were taken to limit the 'cash out', such as the decision not to pay a dividend for 2019, negotiations with suppliers and the owners of rented cinemas with a view to obtaining financial concessions as a result of the reduction or closure of the activities, as well as the maximum postponement of all investments, except for the new-build projects already in progress.
Eddy Duquenne, CEO of Kinepolis Group, regarding the first half of the year:
“I am proud of the determination and speed with which our teams have responded to the current crisis, making it possible for us to protect our customers, employees and the company to the best of our ability. Given the exceptional and challenging circumstances, we are continuing to closely monitor the cash position of our company, and the associated cost control is proceeding according to plan. This means that our Group will be able to cope with the Covid-19 impact for a considerable time to come. Considering the lack of new international film content and the drastic measures taken to protect public health - which are more drastic in some countries than others - we receive a rather limited, but nevertheless encouraging number of visitors this summer. Our customer survey also shows that moviegoers appreciate the measures we have taken and feel comfortable during their visit. This strengthens our confidence that we can quickly return to achieving results once the external conditions are favourable again.”
Full semestrial financial report attached.
1 The first cinemas were closed on 13 March, with all the others following shortly afterwards.
2 Visitor numbers and revenue up to and including 12 March. Other trends based on the figures available at the end of February. Comparisons are made in relation to the same period of the previous year.
3Figures from 1 January up to and including 30 June 2020, compared to the same period in the previous year.