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1 Cineplex Galaxy Income Fund 2006 Fourth Quarter & Full Year.

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Presentation on theme: "1 Cineplex Galaxy Income Fund 2006 Fourth Quarter & Full Year."— Presentation transcript:

1 1 Cineplex Galaxy Income Fund 2006 Fourth Quarter & Full Year

2 2 Cineplex Entertainment Circuit Famous Players Theatres:51 Screens:561 Cineplex Odeon Theatres:52 Screens:513 Galaxy Cinemas Theatres:27 Screens:231 As of December 31, 2006

3 3 Famous Players Acquisition - Rationale The leading film exhibitor in Canada Accretive to distributable cash Complementary operations will lead to cost savings Opportunities to increase distributable cash through revenue growth –Increase advertising market share and other income Addition of high quality theatres in metropolitan markets Superior combined management

4 4 Box Office Market Share Market Share of Canadian Box Office Revenues Cineplex Galaxy 32.1% Other 6.9% Cineplex Galaxy AMC 6.3% Famous Players 42.6% Empire 6.0% Landmark 3.1% Guzzo 3.0% Combined After Divestiture Cineplex Entertainment 64.5% Empire 12.5% Other 9.8% Guzzo 3.8% AMC 6.4% Landmark 3.0% Source: A.C. Nielsen EDI data Pre-Acquisition 2006

5 5 Six Top-Tier Brands SilverCity 22 theatres Coliseum 4 theatres Famous Players 22 theatres Cineplex Odeon 52 theatres Galaxy 27 theatres Colossus 3 theatres As of December 31, 2006

6 6 Industry Industry Overview overview

7 7 Canadian Box Office Revenue Consistent Long-Term Box Office Revenue Growth Canadian Recessionary Periods CAGR since 1965: 5.6%

8 8 Industry Box Office Canadian Industry Cineplex Entertainment Canadian Industry Cineplex Entertainment 2006 Flat to + 2.0% +3.2% Flat to + 2.0% +3.2%

9 9 Highest Grossing Films Released in 2005 Star Wars: Episode III$380 M The Chronicles of Narnia $291 M Harry Potter and Goblet of Fire$290 M War of the Worlds$234 M King Kong$218 M Star Wars: Episode III$380 M The Chronicles of Narnia $291 M Harry Potter and Goblet of Fire$290 M War of the Worlds$234 M King Kong$218 M Source: Box Office Mojo

10 10 Highest Grossing Films Released in 2006 Pirates of the Caribbean 2$423 M Cars$244 M X-Men: The Last Stand$234 M The Da Vinci Code$217 M Superman Returns$200 M Pirates of the Caribbean 2$423 M Cars$244 M X-Men: The Last Stand$234 M The Da Vinci Code$217 M Superman Returns$200 M Source: Box Office Mojo

11 Films FILMRELEASE DATENorth American Box Office of Prequel Films ($ millions) 1234 Spiderman 3May 4, 2007$403$374-- Shrek the ThirdMay 18, 2007$268$441-- Pirates of the Caribbean: At Worlds End May 25, 2007$305$421-- Ocean’s 13June 8, 2007$183$126-- Live Free or Die HardJune 29, 2007$83$118$100- Harry Potter and the Order of PhoenixJuly 13, 2007$318$262$250$290 The Bourne UltimatumAugust 3, 2007$122$176-- Rush Hour 3August 10, 2007$141$226

12 12 Company overview

13 13 Increasing Revenue per Guest $9.83 $10.27 $11.23 $10.84 $12.28 $12.89 Revenue per Guest

14 14 Synergies 1. Reducing overhead costs and adopting best practices –Consolidating two head offices –Staff reductions –Adopting best practices  Enhanced revenues  Operating savings 2. Media sales efficiencies and effectiveness –Creation of Cineplex Media 3. Improved purchasing and merchandising opportunities –Supplier contracts –Merchandising strategies –Concession management Three Core Synergies:

15 15 ProspectusQ1Current Acquisition Synergies Annualized Synergies: ($ millions) General and Administrative$15$15$15 Media559 Operations-56 Total$20$25$30 General and Administrative$15$15$15 Media559 Operations-56 Total$20$25$30

16 16 Looking Into the Future Leverage Over 60 Million Guests Magazine In-Theatre Interactive Media-Web Loyalty Naming Rights

17 17 Marketing

18 18 Growth 1. Other income initiatives –Digital pre-show network –Cineplex Media –Alternative programming –Website 2. Merchandising 3. Theatre openings

19 19 Digital Pre-Show Network Rollout Plan Phase 1: April 1 Launch Toronto Extended Market Area - 21 Locations; 215 Screens Phase 2: Complete Nationwide - Additional 800+ Screens TOTAL 89 theatres & 1020 screens

20 20 Cineplex Media Magazine publishing: –Famous Magazine, Famous Kids, Famous Quebec In-theatre advertising: –Magazine, onscreen, posters, monitors, buildings, naming rights

21 21 Alternative Programming

22 22 Loyalty Strategic Alliance Strategic Alliance 60 million Cineplex guests Cineplex locations 967 Scotiabank Canadian branches – 6 million Scotiabank Canadian customers To create Canada’s first and foremost entertainment loyalty program Includes media rights and naming rights for five Cineplex locations

23 23 Merchandising Concession Per Patron $3.04 $3.44 $3.72 $0.19 $0.39 $0.58

24 24 The Best Partners

25 25 New Theatres 9 Theatres89 Screens BrandLocationScreensOpening Galaxy Milton 8Opened June 2006 Cineplex Odeon Brossard 16Opened June 2006 GalaxyBrockville6 Opened July 2006 Galaxy Saskatoon 12Opened Sept Cineplex Odeon Oshawa 10Opened Nov Galaxy Collingwood 7Spring 2007 SilverCityBurloak (Oakville) 12Fall 2007 SilverCityHamilton GalaxyBrantford82008

26 26 Financial highlights

27 27 Annual Total Revenue ($ millions) 2005 excludes divestitures and includes FP for partial year Screen Count +5.1%

28 28 Annual Attendance (millions) 2005 excludes divestitures and includes FP for partial year +1.4%

29 29 Shifting the Revenue Pie (% of Total Revenue)

30 30 Concession Revenue Growth $2.62 $2.77 $2.89 $3.04 $3.50 $3.72 (in $ per guest) + 6.3%

31 31 Other Revenue Growth +10.0% $61.2 $61.7 $67.9 ($ millions)

32 32 Annual EBITDA EBITDA Margin Adjusted EBITDA Margins – LTM March 2005: CGX20.2% FP 9.0% ($ millions) +56.0%

33 33 Distributable Income (per unit) Distributable Cash per Unit $1.43 $1.03$1.23 Distributions Declared $1.15 Payout Ratio 80% 112%93%

34 34 Credit Facilities Development facility –Capacity - $60 million Working capital facility –Capacity - $50 million Term facility –Capacity - $235 million

35 35 Questions


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