Promising restart for Kinepolis Group after lengthy closures in first half-year
19 August 2021, 7 a.m.
As a result of the Covid-19 pandemic, Kinepolis continued to be confronted with lengthy closures in the first half of 2021. Only the Spanish, Luxembourg and American cinemas were open during the first few months of the year, albeit with significant restrictions and a shortage of content. The French, Dutch and Belgian cinemas subsequently reopened at the end of May and the beginning of June. All Canadian Landmark cinemas were also allowed to reopen in mid-July.
The restart has been promising in all countries, resulting in an average visitor level of 50% in the open cinemas for the month of June, compared to the same period in 2019, which was a pre-Covid record year. In July, this rose to an average of 62% of the visitors in 2019. The picture per country differs due to the differences in vaccination coverage, the Covid figures and the Covid measures imposed, confidence among the population and the quality of the local film offer. The newly opened cinemas in Haarlem and Leidschendam (NL), Metz (FR) and SE Edmonton (CA) got off to a strong start.
The reopening was also supported by a richer film offering, with blockbusters performing well in many countries, although not yet reaching their pre-Covid potential. The extent of the impact of the Covid measures on the one part, and of the different release strategies from Hollywood studios on the other (the simultaneous or early release on Premium VOD), remains unclear for the time being.
The average revenue per visitor is significantly higher than in 2019 in almost all countries. In Luxembourg, the measures did not yet allow the shops to reopen.
Free cash flow turned positive again in the second quarter, thanks to the positive operating result in June, the partial recovery of working capital and the ongoing cost control measures. The net financial debt only increased by € 2.7 million in the second quarter, and this was due to investments in new-builds (€ 3.8 million).
Kinepolis remains financially solid, even after a year and a half of pandemic, with a comfortable liquidity position of € 141.9 million at the end of June 2021, which has since risen to € 174.3 million at the end of July. Since the beginning of 2020, € 38,3 million has been invested in new-build projects.
Important achievements in H1 2021
- Promising restart of all cinemas after months of closure. Visitor numbers are developing positively and vary country by country (50 to 80% of visitors in 2019), due to the difference in restrictive measures, local content and consumer confidence.
- Strong opening of the new complexes in Haarlem (NL), Leidschendam (NL), Metz (FR) and SE Edmonton (CA).
- The execution and implementation of the Entrepreneurship plans is on track to support the Group's performance in the post-Covid era.
Key figures H1 202112
- Kinepolis welcomed 2.2 million visitors in the first half of the year, or 26.9% of the visitors in the same period in 2020.
- Total revenue in all countries fell less sharply than the visitor numbers.
- Thanks to the cost control measures taken, the impact on EBITDA remained limited, resulting in a loss of € -7.1 million. Both EBITDA and EBITDAL were positive again in the month of June.
- The net result amounted to € -45.8 million due to the negative operating result, as well as depreciation and financial costs, and was partly offset by the tax impact.
- Free cash flow averaged € -3.6 million per month in the first semester, and was positive in the second quarter.
- The net financial debt (NFD), excluding lease liabilities, increased from € 513.3 million to € 542.3 million compared to 31 December 2020.
Eddy Duquenne, CEO of Kinepolis Group, regarding the first half of the year:
“We are excited about the restart of our cinemas, which are performing strongly despite the restrictive measures, with visitor numbers developing positively week after week. In contrast to last summer, we are being helped in this by a stronger international film offer.
I hope that we can soon get past this Covid period, as a whole series of strong films are planned for the autumn, and I am excited about the plans we have developed with the teams during the pandemic period. These plans, our strong liquidity position, four newly opened complexes and, of course, our teams who have resumed their activities with a great deal of enthusiasm, allow us to continue to work on the future of Kinepolis with confidence.”
Half-yearly Financial Report 2021 attached.
1 Figures from 1 January to 30 June 2021, in which a comparison is made with the same period in the previous year.
2 Press release based on unaudited figures.