Investor Presentation November 2016
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Investor Presentation November 2016 November 2016 1 Disclaimer Presentation is subject to safe harbor laws • Presentation includes forward looking statements about events and financial results • Actual events or results may be materially different • Risks are described in the company’s filings with the SEC • Statements are made subject to “safe harbor” provisions of Private Securities Reform Act of 1995 • Full disclaimer and reconciliation of Non-GAAP financial measures to GAAP measures are at the end of this presentation November 2016 2 Overview of Six Flags Global leader in an attractive industry Ongoing Growth Opportunity • Exceptional brand & business 750 foundation • Substantial growth opportunities 520 532 – Base business 477 444 – International licensing 416 379 • Strong, recurring cash flow 323 – Industry-leading EBITDA and EBITDA 223 less CAPEX margins – Efficient CAPEX • Excellent Growth and Yield stock (1)(2) 2009 2010 2011 2012 2013 2014 2015 2016 2020 (3) – 8% Adj. EBITDA CAGR through 2020 Q3 LTM Project 750 (>2x growth rate of industry peer) – >4% Dividend yield (>2x S&P 500) Adjusted EBITDA Modified EBITDA $MM $MM (1) Excludes SFKK as discontinued operation (2) 2009 Modified EBITDA calculation includes revenue from Six Flags Great Escape Lodge and Indoor Water Park so it is consistent with future periods (3) Project 750 is an aspirational goal set by the company in October 2016 to achieve $750MM of Modified EBITDA by calendar year 2020. November 2016 3 Investment Thesis Global leader in an attractive industry • Attractive industry – Stable in a weak economy – High barriers to entry • Exceptional brand and business foundation – Focused strategy – Expansive array of entertainment & services • Substantial growth opportunities – Innovative products and programs – Pricing and ticket yield management – Season Pass / Membership penetration – In-park revenue initiatives – International licensing • Financial Excellence – Strong recurring revenue and cash flow – Industry-leading margin – Favorable capital allocation strategy – Sizeable NOL carry forward • Employees closely aligned with shareholders November 2016 4 Attractive Industry Stable industry with high barriers to entry • Stable in normal economy – resilient in a weak one • Compelling value relative to other forms of entertainment – Consumers focused on experiences • High recurring revenue • High barriers to entry – $400MM+ investment; 3+ years development – Key North American markets already served November 2016 5 Investment Thesis Global leader in an attractive industry • Attractive industry – Stable in a weak economy – High barriers to entry • Exceptional brand and business foundation – Focused strategy – Expansive array of entertainment & services • Substantial growth opportunities – Innovative products and programs – Pricing and ticket yield management – Season Pass / Membership penetration – In-park revenue initiatives – International licensing • Financial Excellence – Strong recurring revenue and cash flow – Industry-leading margin – Favorable capital allocation strategy – Sizeable NOL carry forward • Employees closely aligned with shareholders November 2016 6 A Focused Strategy Delivering excellence in all we do November 2016 7 19 Strategically Located Parks Prime locations; economic and weather diversity; limited direct competition • $1.3 billion revenue • 29 million guests • 42,000 employees • $1.3 billion revenue - 1,900 full-time • 29 million guests • 830 rides / 135 coasters • 42,000 employees - 1,900 full-time • 830 rides / 135 coasters * * * Opening Q1 2017 November 2016 8 Top-Rated Rides Home to many of the top coasters and rides in North America Twisted Colossus Zumanjaro Justice League World’s Industry’s tallest Best New drop ride Attraction 2015 World’s longest hybrid 41 story coaster drop at 90 Immersive miles per interactive hour ride Goliath Batman the Ride Texas World’s World’s SkyScreamer tallest Fastest swing Wooden World’s carousel Coaster First 4D ride Free Fly World’s Coaster tallest, fastest and 400 ft. steepest aerial wooden Flip head swing coaster over heels ride November 2016 9 Expansive Array of Entertainment More than coasters… we provide thrills and entertainment for all ages Water Parks Games Concerts & Shows Family Coasters Animals Events November 2016 10 Investment Thesis Global leader in an attractive industry • Attractive industry – Stable in a weak economy – High barriers to entry • Exceptional brand and business foundation – Focused strategy – Expansive array of entertainment & services • Substantial growth opportunities – Innovative products and programs – Pricing and ticket yield management – Season Pass / Membership penetration – In-park revenue initiatives – International licensing • Financial Excellence – Strong recurring revenue and cash flow – Industry-leading margin – Favorable capital allocation strategy – Sizeable NOL carry forward • Employees closely aligned with shareholders November 2016 11 Innovation Introducing news in every park, every year Thrills for all ages • Guest-centered attractions • Mix of family, teen and tween thrills • 5-year plan Capital Spending: 9% of revenue Asset Maintenance New rides and attractions 25% 60% 15% In-Park November 2016 12 Innovation Coming in 2017 – Something new for every park Six Flags Magic Mountain Six Flags New England Six Flags Great Adventure Six Flags Great America Six Flags Fiesta Texas Six Flags Over Georgia Six Flags Over Texas Thunder Rapids JUSTICE LEAGUE: The Joker • North America’s first rocket BATTLE FOR METROPOLIS • 4D Free fly coaster blast water coaster • Interactive battle where • Two beyond-vertical free falls • Custom-designed inline raft guests fight together with • Six head-over-heels spins and new water jet propulsion super heroes technology • Lifelike animatronics • Lightning-fast uphill speeds and adrenaline-pumping • 3D graphics and robust drops gaming elements • First-of-its-kind, fully programmable, multi- ”degree-of-freedom” vehicles November 2016 13 Virtual Reality Coasters This Changes Everything! • First VR coasters in North America • Introduced in 12 parks in 2016 • Fully immersive riding experience – The New Revolution VR Coaster – Superman VR Coaster – Rage of the Gargoyles • Perfectly synced to drops, loops and turns of coaster • Minimal CAPEX required November 2016 14 Substantial Growth Opportunities Effective execution of our strategy Total Revenue ($MM’s) 1,298 • Improving ticket yields 1,264 • Season Pass / 1,176 Membership penetration 1,110 1,070 1,013 • In-park initiatives 976 913 • International licensing (1) 2009 2010 2011 2012 2013 2014 2015 2016 Q3 LTM (1) 2009 Revenue restated to include Six Flags Great Escape Lodge and Indoor Waterpark, which was consolidated for reporting purposes beginning January 1, 2010 November 2016 15 Ticket Yield Management A multi-year approach to improve ticket yields Admissions Revenue ($MM) 688 700 • Increase ticket prices 642 602 577 542 511 • Execute dynamic pricing 483 • Continue to raise guests’ value-for- 2009 2010 2011 2012 2013 2014 2015 2016 the-money ratings Q3 LTM 2015 Admissions Per Cap – vs. Others • Close / surpass pricing gap vs. $37.69 others – SIX parks serve top 10 U.S. DMA’s $28.12 $24.09 SIX FUN SEAS November 2016 16 Season Pass and Membership Penetration Growing Active Base of season pass holders and members – up 15% as of September 30, 2016 Season Pass Holders / Members: Season Pass / Membership (1) Attendance % of Total • Generate more annual revenue and cash flow than single day visitors 56% 50% 48% • Build recurring revenue 44% • Visit during off-peak periods 35% 32% 30% • Provide weather hedge • Put downward pressure on per caps 2009 2010 2011 2012 2013 2014 2015 (1)Introduced membership program in February 2013 November 2016 17 In-Park Revenue Initiatives Highly profitable businesses within the business In-Park Revenue ($MM) • Over 2,000 locations 500 510 437 449 460 401 414 375 • New products and programs – All Season Dining Pass – Broader offerings – Enhanced venues 2009 2010 2011 2012 2013 2014 2015 2016 Q3 LTM November 2016 18 International Licensing Long-term strategy to license brand outside North America • Agreements in Dubai, China and Vietnam • Strong global brand recognition – seeking additional partners • Growing middle class, disposable income, and demand for entertainment • Fees related to design & development, licensing, and management services • Zero capital investment – $5-10MM EBITDA per park per year pre-opening – $10-20MM EBITDA per park per year post-opening November 2016 19 Investment Thesis Global leader in an attractive industry • Attractive industry – Stable in a weak economy – High barriers to entry • Exceptional brand and business foundation – Focused strategy – Expansive array of entertainment & services • Substantial growth opportunities – Innovative products and programs – Pricing and ticket yield management – Season Pass / Membership penetration – In-park revenue initiatives – International licensing • Financial Excellence – Strong recurring revenue and cash flow – Industry-leading margin – Favorable capital allocation strategy – Sizeable NOL carry forward • Employees closely aligned with shareholders November 2016 20 Strong Recurring Revenue Higher ticket pricing and strong attendance fuel revenue Attendance / Guest Spending Per Capita Revenue ($MM) 1,298 1,264 42.97 41.60 41.74 39.33 39.41 40.18 37.55 29.0 1,176 36.84 28.6 1,110 1,070 26.1 1,013 25.7 25.6 976 913 24.3 24.3 23.3 (1) (1) 2009 2010 2011 2012 2013 2014 2015 2016 2009(1)