DRAFT – 23.10.2010
Ratos Capital Markets Day 14th March 2013
An introduction to Finnkino Liisi Jauho, CEO A leading cinema chain in Finland and the Baltics
. Founded in 1986, Finnkino is the leading cinema chain in Finland and in the Baltic countries. . In Finland the company operates under the Finnkino brand and has 14 cinemas and 88 screens in 11 cities. . In the Baltics under the Forum Cinemas brand and has 10 cinemas and 70 screens in 9 cities. . Finnkino is also engaged in the distribution of movies to cinemas (theatrical distribution) in Finland and the Baltics, and in the distribution of DVDs to retailers in Finland (video distribution) . Finnkino is owned by Ratos since 2011.
Confidential 2 Finnkino in numbers 2009–2012
Net sales (EUR million) Admissions (EUR million)
120 12 10,5 99,0 9,9 9,9 100 10 9,5 83,0 88,6 88,5 80 8 60 6 40 4 20 2 0 0 2009 2010 2011 2012 2009 2010 2011 2012
EBITDA (EUR million) Number of employees
25 22,4 1 000 829 855 794 762 20 800 15,9 16,2 14,5 15 600
10 400
Note: Figures 5 200 2009–2011 are Pro Forma. 0 0 2009 2010 2011 2012 2009 2010 2011 2012
Confidential 3 Finnkino by country (2012)
Sales (%) Number of employees
LIT 400 376 11% 300
LAT 200 8% 137 138 111 FIN 100 EST 73% 8% 0 Finland Estonia Latvia Lithuania
Admissions (EUR million) Market position (%)
7 100 5,8 6 79 80 70 5 4 60 50 48 3 2,4 40 2 1,3 1,1 20 1 0 0 Finland Estonia Latvia Lithuania Finland Estonia Latvia Lithuania
Confidential 4 Finnkino’s sources of income (2012)
Sales by segment (%) Average ticket price (EUR)
Advertising Other 14,00 Sales Sales 12,42 Distribution 2% 5% 12,00 10,81 6% 10,00 8,90
Concession 8,00 Sales 6,00 18% 3,90 4,10 4,00 3,40 Box Office 2,00 69% 0,00
Finland, Estonia, Latvia, Lithuania, Finnkino Group’s internal figures
Sweden and Norway provisional figures Source: European Audiovisual Observatory,
Confidential 5 Box office sales
. Box office revenues is the largest source of income (69% in 2012) . Major studios have important role . In 2012, local movies represented 28% of admissions in Finland
Market share of domestic film, Finnkino’s countries vs. Europe (%) 30,0 28,0 24,5 25,0 22,0 Finland 19,8 20,0 17,2 17,8 Estonia 15,0 Latvia 9,7 Lithuania 10,0 6,9 7,6 4,5 4,5 Sweden 5,0 2,5 Norway 0,0 2011 2012*
* Provisional Source: European Audiovisual Observatory
Confidential 6 Online becoming extremely important
Share of ticket sales . In the beginning of 2013 53% of all in Finland 2012 (%) the tickets were booked or bought online B-to-B sales . www.finnkino.fi ranked 8% among top 25 sites in Finland (*TNS Metrix) Retail
partners Box 14% office . Average online purchase value 32% EUR 25 Online . Serial vouchers also valid online booked / bought since last year 46% . Mobile ticketing and applications for the main operating systems will be launched H1/2013 . ATM roll out in cinemas 2013
Confidential 7 Concession sales
. Concession sales has an increasingly important role as a revenue source (18% in 2012) . Concession sales concept developed to maximize spend: product development, customer flow, store renewals, etc.
Concession sales per admission (EUR)
2,50 1,93 1,94 2,00 1,79 1,68 1,65 1,70 1,50 1,55 EUR 1,66 Norway 2011 1,50
1,00 EUR 1,04 Sweden 2011
0,50 Finnkino Group Finnkino Finland 0,00 2009 2010 2011 2012
Figures for Finnkino Group and Finnkino Finland are internal figures. Figures for Sweden and Norway available only for 2011. Source: Dodona Research
Confidential 8 Concession sales
Confidential 9 Trends within the cinema business
. Digitalization – old news, but still processing . Finnkino units in Finland, Estonia and Latvia are fully digitalised, Lithuania will continue Q3/2013 . Efficiency, cost savings, flexibility, quality . Virtual Print Fee (“VPF”) agreement . New technology . 3D, High Frame Rate (HFR), 2K–4K . Premium pricing . Enhances the image of movie-going . Alternative content improves utilisation . Attracts new customer base . Premium pricing
Confidential 10 Strategic objectives
. Objectives . Leading cinema chain in existing markets . Further growth and profitability in the existing markets . Develop concession concept & sales channels . Increasing advertising sales . Enhance organizational resources and competencies
. Planned new units . Finland: Kuopio opening May 2013, Lappeenranta opening 2016
. Number of potential projects in Helsinki capital area and in the Baltics
Confidential 11 Stay tuned!
Contacts:
Liisi Jauho, CEO, Finnkino
www.finnkino.fi
Confidential 12 Finnkino Jan Pomoell
14 March 2013
1 Ratos’s investment in Finnkino
. Acquired from Sanoma in April 2011 - EV EUR 96.4m - Ratos investment EUR 45.1m - Ratos owns 98%
. Book value 31 December 2012: SEK 445m
. Ratos team - Jan Pomoell (responsible for holding) - Lina Arnesson
2 Finnkino 2010-2012
140 25 22.6 120 20 18.3 17.9 99 100 89 89 15 80
60 10
40
5 20
0 0 2010PF 2011PF 2012ACT
Net sales (mEUR) EBITDA margin (%)
3 Investment attractions
. Stable, uncyclical market . Strong market positions . Relatively undeveloped markets with room for growth through new cinemas . Potential to increase concession and advertising sales . Normalization of the profits in the Baltics
4 Key value creation opportunities going forward . Lower film rent . New distribution channels . Continued turn-around in the Baltics . Continued fine-tuning of the operations . Re-financing and sale-and-leasebacks of real estate
5 6