In 2017 Kinepolis Posted 9.4% Higher Turnover With 6.2% More Visitors and Took a Major Step in its Expansion Strategy

Kinepolis in Rotterdam, The Netherlands
Brussels, Belgium ( February 27, 2018 ) -

The continued implementation of Kinepolis’ three-pillar strategy and premium product innovation ensured that Kinepolis posted solid results in 2017, against the background of a changeable and often less successful film program. The integration of acquired cinemas and realization of the intended improvement potential is going according to plan. Turnover, EBITDA and profit per visitor increased in virtually all countries. The rise in visitor numbers is due to the expansion of the Group, driven, on the one hand, by the newly opened complexes in 2016 and, on the other, by the acquisition of Landmark Cinemas Canada in December 2017. With this acquisition Kinepolis took a major step in its expansion strategy, with regard to both the number of complexes in its portfolio and their geographical spread, entering the first non-European market.

Key figures 2017 vs. 2016[1]:

  • A 6.2% rise in visitor numbers to € 25.3 million, due to the expansion of the Group.
  • Total revenue increased by 9.4% to € 355.4 million, due to the rise in visitor numbers, higher sales per visitor and the increased B2B and real estate income.
  • Current[2] EBITDA[3] (REBITDA) rose by 10.3% to € 104.3 million. REBITDA per visitor increased in virtually every country.
  • Current profit increased by 10.7% to € 44.7 million, due to the higher operating result and in spite of higher depreciations and financial costs as a consequence of the expansion.
  • Profit increased by 3.0% to € 49.1 million, due to higher current profit, the revenue from the sale of the Toison D’Or building (Brussels, Belgium) and the release of tax provisions. Earnings per share were € 1.80.
  • The net financial debt rose by 32.1% to € 224.3 million, due to investments in the expansion of the Group. The level of debt remains conservative with an NFD/REBITDA ratio of 2.15.
  • Free cash flow[4] increased by 10.8% to € 59.4 million, in spite of more paid investments in the first quarter.
  • The proposed dividend per share is € 0.90, a rise of 3.4%, on the basis of a 50% pay-out ratio and the number of shares entitled to dividend on 23 February 2018.

Kinepolis welcomed 6.2% more visitors in 2017 than the previous year, due, on the one hand, to the cinemas acquired and newly opened in 2016 in France (Rouen and Fenouillet), the Netherlands (Dordrecht, Breda, Utrecht) and Spain (Granada), and, on the other, to the acquisition of Landmark Cinemas in Canada in December 2017. The results of Landmark Cinemas were included in the 2017 group results from 8 December onwards.

The quality of the film program in 2017 was highly variable. Exceptionally strong months alternated with weak periods. The first quarter (-0.8%) suffered from a difficult basis for comparison given the strong first quarter of 2016. In the second quarter (+13.07%) a successful April, thanks to ‘The Fate of the Furious’, ‘Beauty and the Beast’ and ‘Boss Baby’, compensated for the two weak months of May and June, which were due to the hot weather. The third quarter (+7.8%) included an exceptionally strong September, driven by the film ‘It’, but was followed by a difficult fourth quarter, with a lack of high-quality content in October and November. On the other hand, the second half of December was exceptionally strong, thanks to a successful combination of international and local content, including ‘Star Wars: Episode VIII – The Last Jedi’, ‘Coco’ and ‘FC De Kampioenen 3’ in Belgium. The rise in visitor numbers in the fourth quarter (+7.1%) is exclusively due to the addition of Landmark Cinemas Canada from 8 December 2017.

Total revenue increased by 9.4%, as such outpacing the rise in visitor numbers, thanks to the rise in revenue across all activities. Only Kinepolis Film Distribution (KFD) posted lower turnover.

Revenue from ticket sales (Box Office) increased faster than visitor numbers (9.5% vs. 6.2%) in all countries, due to the increased sales of premium products, such as Cosy Seating, Imax and the success of alternative content.

The sale of beverages and snacks (In-theatre sales) increased by 16.6%, due, on the one hand, to the higher share of the Netherlands and Canada (with higher consumption on average) in the country mix and, on the other, to a rise in the number of shop visitors in all countries (combined in some countries with a rise in the number of products sold per visitor).

B2B revenue (+2.0%) increased thanks to a strong rise in screen advertising in all countries, combined with the expansion of the Group. Revenue from real estate activities also rose (+11.1%[5]), primarily due to the renting out of concessions in Luxembourg, higher revenue from concessions operated by the company, a higher occupancy rate and the increased rent in Poland.

After an excellent 2016 (with ‘Safety First’, ‘Achter de Wolken’, ‘De Premier’ and ‘De Buurtpolitie’), Kinepolis Film Distribution (KFD) experienced a year (-23.5%) with fewer film releases and less successful local content. The most successful local KFD films of 2017 were ‘Het tweede Gelaat’, ‘Le Fidèle’ and ‘Helden Boven Alles’.

Revenue of Brightfish rose by 4.3%, thanks to an increase in revenue from national and regional screen advertising.

Current EBITDA increased by 10.3% to € 104.3 million, recording stronger growth than either visitor numbers or turnover. As foreseen, the addition of Canada contributed to the results with a lower than average EBITDA per visitor, due to the rented complexes. REBITDA per visitor was up in all countries except for Spain.

Commenting on the 2017 figures, Eddy Duquenne, CEO of Kinepolis Group, said: “2017 was a key year in the pursuit of our expansion strategy, with the acquisition of Landmark Cinemas in Canada – the first in North America – and the announcement of the acquisition of the Dutch NH Bioscopen in Hoofddorp and Schagen just before the end of the year. The integration of the acquired cinemas is going according to plan, as we realize the planned improvement potential. Despite the important growth of the Group in the past four years, our level of debt remains low.”

Full report annual results 2017 attached.

[1] All comparisons are made with the 2016 figures.

[2] After eliminating non-current transactions.

[3] EBITDA is not a recognized IFRS term. Kinepolis Group NV has defined this concept by adding depreciations, amortizations and provisions to the operating profit and subtracting any reversals or uses of the same items.

[4] Kinepolis Group defines the free cash flow as the cash flow generated from operating profits less the investments in intangible assets and property, plant and equipment and investment property, and paid interest charges.

[5] At constant exchange rates.

Report annual results 2017

Kinepolis Press Office
Corporate Communication
Kinepolis Group