Kinepolis takes further major steps in implementing its long-term strategy in 2018
21 February 2019, 7 a.m.
2018 was a successful year for Kinepolis in terms of implementing and validating its long-term business and expansion strategy. The successful integration of Landmark Cinemas Canada has contributed significantly to the Group's results. In addition, Kinepolis took major steps in the Group's further expansion.
It is common knowledge that last summer's heatwave, the World Cup football and a less appealing range of Hollywood films had an impact on visitor numbers in Europe. Further implementation of the corporate strategy - which focuses on the annual introduction of sales-enhancing and efficiency-driven measures, combined with strong focus on premium product innovation - again led to an improved EBITDA.
Kinepolis once again realised a record performance last year. In 2018, overall visitor numbers were up by 40.7%, which resulted in a 33.9% revenue increase and a 14.1% REBITDA increase. At the same time, the Group's debt ratio remained limited with a NFD/REBITDA ratio of 2.33, which highlights the Group's cautious financial policy.
Other 2018 business highlights
- Further investment in customer experience through the accelerated roll-out of laser projection including Laser ULTRA, the opening of various 4DX theatres, the further roll-out of Cosy Seats in Europe and recliner seats in Canada.
- The opening of new cinema complexes in the Netherlands ('s-Hertogenbosch), France (Metz and Brétigny-sur-Orge) and Canada (St. Albert, Saskatoon and Fort McMurray).
- The opening of the first self-service shop concept (the ‘MarketPlace’) in Kanata (Canada), based on the Kinepolis megacandy shop concept.
- Strong growth in the Netherlands (+28.2% visitors) due to bringing the newly opened complexes up to speed and the acquisition of NH Bioscopen.
- Announcement of the acquisition of the El Punt cinemas in Barcelona and Valencia. The acquisition is planned on 1 March 2019.
Financial highlights 2018 vs. 20171:
- The number of visitors increased by 40.7% to 35.6 million thanks to the expansion of the Group.
- Total revenue increased by 33.9% to €475.9 million with visitor-related revenue increasing by 41.0%.
- Recurring2 EBITDA3 (REBITDA) increased by 14.1%, to €119.0 million. The addition of Canada provided, as planned, a lower average EBITDA per visitor, due to the fact that most Canadian complexes are rented.
- Net profit decreased by 3.4%, to €47.4 million. Earnings per share amounted to €1.76.
- Free cash flow increased by €5.3 million to €64.7 million.
- Net financial debt increased by 23.4%, to €276.8 million. The level of indebtedness remained conservative with an NFS/REBITDA ratio of 2.33.
- The proposed dividend per share amounts to €0.92, an increase of 1.1%.
Eddy Duquenne, CEO of Kinepolis Group, on the 2018 results : “2018 was an important year for validating our acquisition in Canada, our first expansion outside Europe. The integration of the acquired cinemas is going smoothly and the foundation has been laid for implementing our three-pillar strategy. We took further steps in the Group's expansion and continue to work on implementing our expansion strategy.
We were confronted with rather disappointing visitor numbers in almost all European countries last year due to a very hot summer, the World Cup football and less successful film content. In this context, penetration into a new country and continent like Canada helps to reduce dependence on local factors such as weather, content and changes in purchasing power.
By combining a carefully considered expansion strategy with cautious financial management, we have once again achieved strong growth in EBITDA (for the tenth year in a row) against a backdrop of solid cash flow development, which resulted in a low debt ratio."
Full report annual results 2018 attached.
1 All comparisons are made with respect to the figures of 2017.
2 After elimination of non-recurring transactions.
3 EBITDA is not recognized as an item under IFRS. The Kinepolis Group defined the concept by adding the depreciations, write-downs and provisions booked to the operating result and deducting any reversals or practices from the same headings.