Parques Reunidos Corporate Presentation November 2016 Disclaimer
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2 Leading global leisure operator of regional parks
One of the 3, truly global operators with a global platform of 62 parks in 14 countries(1)
Reported revenues of €606 MM and EBITDA of €195MM #8 Leisure Park Operator Worldwide(2) in FY2015 #2 European Leisure Park Operator(2) 21 MM visitors in 2015 #1 Water Park Operator Worldwide
Vietnam Water Park
Vietnam Theme Park
Theme Parks Animal Parks Water Parks MECs Other Notes 1. Includes two parks in Dubai, two parks in Vietnam and five MECs under development 2. Source: Inference from AECOM’s 2014 global attractions attendance report based on attendance 3 Well-diversified portfolio of regional parks
Regional park business model resilient to We benefit from a truly diversified portfolio adverse macro-economic conditions
2015 Revenue Geographical Split 2015 Revenue Split By Park
Park 55 7% Other(1) Park 1 Strong regional brands
Belgium 8% Park 2 Norway 3% 4% Park 3 Germany 7% 40% USA Good value for money proposition Park 4 France 7% Park 5 7% Italy Park 6 Stable, predictable local demand Park 7 23% Park 8 Park 9 Spain
Park 11 Park 10 Low dependence on tourism Spain USA
5% Non destination parks 60% 78% 21%
22% 14%
Note 1. Other includes Netherlands, UK, Denmark, Argentina 4
Highly regarded park portfolio with strong local brands and access to hot IPs when needed
nd A leading park in 2 largest leisure Spain’s largest urban park Germany park in Italy
Highly regarded strong local Largest New York area Designated a US National Oldest park in North brands water park and one of Historic Landmark America (1846) America’s top water parks
Proven ability to obtain hot IPs
5 We operate in a growing market with highly attractive fundamentals
Proportion of income dedicated towards leisure and recreational activities is expected to rise
Strong structural Growing middle class growth drivers More than half of the world's population is aged below 30: the main target group for leisure parks
Tourism is expected to continue growing
Scarcity of suitable locations without strong incumbent players
High barriers to Significant initial capex requirements and time to build a new park and long lead time to reach breakeven entry Scarcity of management know-how
Lack of economies of scale from a single park
Fragmented market Market largely composed of small to medium individual parks and independent operators with significant Family and state-owned companies, whose owners are expected to be sellers overtime potential for consolidation Limited number of competitors targeting similar acquisition targets
Ongoing macroeconomic and consumer spending recovery
Positive recent Increasing number of new developments of greenfield projects in Asia and the Middle East that require market trends industry management skills
Introduction of new entertainment concepts: Mall Entertainment Centers (“MECs”)
6 We are best in class operators
Continuous benchmarking across 62 parks Our ability to benchmark is a Over 300 cost / cash flow KPIs monitored on a park level monthly unique management State-of-the-art IT systems tool Best practice transfer between existing and new parks
2015 Parks EBITDAR margin(1) % of 2015 EBITDAR generated by parks with different 75% EBITDAR margins 60% Our parks are 45% <35% >60% consistently ≥45-60% 30% 7% operated at high 15% 85% 15% 17% margins above 0% 35% -15% margins 0 250 500 750 0 500 1.000 1.500 0 250 500 750 1.000 Visitors 60% Water Parks Theme Parks Animal Parks ≥35-45%
2013–2015 CAGR(2)
10,0% 8,7% Our cost base is 6,8% 7,5% flexible and 5,2% benefits from 5,0% operating 2,5% leverage 0,0% Revenue L-f-L EBITDA L-f-L Operating Free Cash Flow L-f-L(3)
Notes 1. Analysis excludes 5 FECs, 2 cable cars, 2 Dubai contracts and expansion projects that are shown collectively with the main park 2. Includes Revenue and EBITDA coming from expansion projects while the operating free cash flow does not include the capex invested in expansion projects 3. Defined as EBITDA – Recurrent Capex (maintenance of the parks’ facilities + capex for novelties) 7 We have a proven and unique track record, creating a truly global and diversified leader, with enormous potential
Delivering growth and improving efficiency…
Parques Reunidos EBITDA
€MM 240 189195 200
160
120 80 68 40
0 2006 2015
…whilst de-risking the business model
Parques Reunidos 2006 Parques Reunidos today
22 parks +40 62 parks
5 countries +9 14 countries
58% Revenue in Spain -34% 24% Revenue in Spain
Financial leverage 9.2x EBITDA -6.3x Financial leverage 2.9x EBITDA
8 Clear and well defined strategy focused on growth
1
• Expansion capex • Numerous top line projects Existing portfolio • Strict cost control growth initiatives • Capex for new attractions
2 • Collaboration • Dubai Management contracts • Uniquely positioned agreements • Vietnam • Pipeline
3
• 5 agreements • Strong pipeline Roll-out of Mall • New potential signed (2018 • 5/6 openings per Entertainment Centers licensing targets already year in mature (“MECs”) agreements achieved) phase
4 • All elements are in Selective acquisitions • Track record • Identified pipeline place
Safety is the #1 priority
9 1 Top line initiatives Parques Reunidos has well-defined actions in place to increase visitors…
Actions 2015 Group Growth
New attrections: innovative new rides, animal enclosures, themes or Like-for-Like visitors, MM shows
25 Marketing, channels and customer analytics: focus on direct channels
20 E-commerce: Migrate towards online channels
Expand existing catchment areas and increase presence in existing 15 markets
Strong regional brands with flexibility to introduce other hot brands 10
Package deal hotels: Asset light initiative to sell packages (hotel + park ticket) without investing in hotels 5
Expand the season through off season events to reduce seasonality of the business and maximize park attendance 0 2013 2015 Reduce non paying visitors without compromising attendance levels
Season passes to enhance revenue visibility
10 1 Top line initiatives …ticketing revenues...
Actions Group ticketing performance
Like for Like ticketing revenue Push high yield channels and increase Yield percaps across channels € MM Management 500
Different online prices based on 400 Dynamic anticipation (implemented since 2013) Pricing Dynamic pricing based on visitors 310 demand (implemented since 2015) 300 279
Increase visitor average ticketing 200 Upselling percap initiatives Provide better and unique customer experience 100
Promote visits to other parks of the Group in a given area Cross-selling 0 initiatives 2013 2015 Benefit from having clusters of parks
11 1 Top line initiatives …and in-park revenues
Actions Group In-park performance
Like for Like In-park Revenue Develop branded partnerships € MM
400 Improve facilities 300 228 210 Introduce new upcharge experiences 200
100 Enhance throughput 0 2013 2015 Introduce all-inclusive offers
Offer VIP products and services
CRM initiatives
12 1 Strict cost control Relentless attention to detail and continuous reconsideration of every item of the cost structure is in Parques Reunidos’ DNA
Over 20 lines of variable costs items and over 150 lines of continuous benchmarking operating costs are analysed on a monthly basis
(% of total costs Cost item Like-for-Like Group Operating costs as % of Revenues 2015)
80%
COGS 17% Costs)
(Variable 70%
60% 57,4% 57,1% 56,0%
Personnel Costs 41% 50%
27,6% 27,9% 27,8%
40%
30%
Costs
Operating Other Operating 37% Costs(1) 20% 26,5% 26,1% 25,2%
10%
Rents 4% 3,3% 3,1% 3,0% 0% 2013 2014 2015
Rents Other Operating Costs Personnel Costs Note 1. Excludes rents 13 1 Novelties New attractions are a key factor to drive attendance and increase percaps
Description Examples
New Warner Beach water park Transformation of kids area We introduce a flagship attraction every 3 / 4 years in each big park
‒ New customers
‒ Increase repetition
‒ Increase prices
‒ Increase brand awareness Lake Compounce: First triple launch coaster ‒ Increase Mirabilandia: New western Area in New England recommendation
Recurrent capex (maintenance and new attractions) represent 10- 11% of annual revenues
14 1 Expansion capex projects Expansion capex projects: Maximizing the value of the existing portfolio
Strong and visible growth opportunity
Second gate parks or hospitality in available space within or adjacent to an existing park that generates Benefit from low operational risk and high visibility of target attendance (vs. a greenfield project) Efficient use of unexploited space (c.400 acres of available land) Significant cross selling opportunity Tangible cost synergies by leveraging on the structure of the main park Lower investment requirements by leveraging on existing facilities and rides
4 different types of expansion projects facilities already successfully proven
Water park Hotel Camping Lagoon
Already developed in Already developed in Already developed in Already developed in Mirabilandia and Marineland Lake Compounce Marineland and being Slagharen developed in Miami 15 1 Expansion capex projects Expansion capex is a proven, strong and visible organic growth opportunity
4 projects identified and approved for development in 4 projects already under operation 2017
Lake Compounce A water park, a new lagoon, an upgrade and extension of Campground Marineland Hotel lodging facilities and a new aquarium
2 projects in Europe and 2 in US
Represent c.€33 MM of investment
To be developed in 2017 and parks are expected to open in 2017/2018
Aqua Mexicana Marineland Lagoon Slagharen Large number of future projects already identified
Over 20 potential expansion projects identified
Target of €25 MM investment per year
Target ROICs(1) of c.20% to be achieved in 2 full Total amount invested: €31.1 MM seasons
Note 1. Defined as run-rate EBITDA (EBITDA after 2 full years in operation) / Initial Investments; Slightly lower for hotel projects as they are more capital intensive 16 2 Management contracts Dubai Parks and Resorts: $2,900 MM premier year-round regional leisure and entertainment destination expected to open in Q4 2016
MotionGate and Bollywood parks expected to represent the largest investments in the entire leisure destination
1 Operated by:
2 Operated by:
Operated by: 3
Operated by: 4
Operated by: 5
6
Capex: $2.9 Bn
Infrastructure and Motiongate Other 25% 46% Bollywood 13%
Legoland Lapita 10% 6%
17 2 Management contracts We have been recently awarded a new management contract in Vietnam; expanding our presence in to Asia
Key Terms of the Agreement
10 year management contract with Sun Group to operate a theme park and a water park in Vietnam Expected opening date: 1st half of 2017 First class theme park and water park located in Ha Long City with 214 hectares Fees structure − Development fee − Management fee: Variable fee based on performance (linked to both revenues and EBITDA) and with a minimum fee guaranteed
18 3 MECs The roll-out of MECs represents a highly attractive growth opportunity for Parques Reunidos
Simple business model… The feasibility analysis works
Illustrative example: Financing shared 50% / 50% with Real Estate New ad-hoc leisure concepts located in high-traffic areas developed in partnership with the owner of the facility Developer
Small indoor facilities, of c.4,000 – 7,000 sqm, located in Visitors (‘000) 300 urban centers Percap (€) 16.0
Win–win opportunity Revenue (€MM) 4.8
EBITDAR (€MM) 1.9
…with strong growth fundamentals % Margin 40.0%
Large number of opportunities worldwide Rent paid to real estate developer (€MM) (0.8)
% Revenue 17.0% Attractive value proposition for shopping mall developers globally EBITDA (€MM) 1.1
% Margin 23.0% Very limited competition and with limited product overlap Required investment (€MM) 10.0 Indoor parks that further hedges PQR seasonality exposure PQR investment (€MM) 5.0
Strong, visible and growing pipeline of opportunities Developer investment (€MM) 5.0
PQR ROIC 22.1%
19 3 MECs Designed MEC concepts
Nickelodeon Centre Seaquarium
Key Features * Key Features *
Area 5,000-7500 sqm Area 6,000 sqm
Visitor Visitor Capacity 1,500 per day (max) 1,000-1,200 (max) Capacity Main • Coral Reef Attractions Experience Main • Playground • Shark Experience Attractions • Mini rides and • Penguin Encounter Attractions • Big Main Tank • 4D Cinema • Touch pools • Photo Call • Interactions and • Driving school pavilions • Play stage • VIP Diving • Big space with experience more than 20 interactive games Nickelodeon ‘s strong international IPs * Estimated figures Shark acrylic tunnel • Party rooms
* Estimated figures
Water park Jungle park
Key Features * Key Features *
Area 6,000 sqm Area 5,000 sqm
Visitor Visitor 1,500 (max) 1,500 Capacity Capacity Main • Mangrove Sea Main • Wave Pool Attractions • Lemur Attractions • Spa Area Interaction • Slides and • Otter Habitat loops • Jungle Trail • Lazy River • Interactions and • Children’s pavilions area • Tropical birds Wave Pool Jungle Trail * Estimated figures * Estimated figures 20 3 MECs Strong pipeline of opportunities
Already accomplished our 2017-18 goals Large and growing pipeline Ongoing conversations to analyse new potential projects are taking place
Lease Real Estate Expected MECs Location Concept Agreement Operator Opening Signed
THADER Murcia, Spain Metrovacesa Nickelodeon Mar-16 Q4-17
LAKESIDE London, UK Intu Nickelodeon May-16 Q4-18 Signed Contracts LISBON Lisbon, Portugal Eurofund Nickelodeon Jul-16 Q4-17 / Q1-18
XANADU Madrid, Spain Ivanhoe Nickelodeon Jul-16 Q1-18
XANADU Madrid, Spain Ivanhoe Aquarium Jul-16 Q4-17
Over 20 additional situations being discussed and at different stages Pipeline Provides high visibility to accomplish our targets for the period 2017-20
21 4 Selective acquisitions Unique track record sourcing, executing and creating value through acquisitions
Implied EBITDA Acquisition # Parks Country Year Acquired multiple paid(1) 18 transactions Bobbejaanland 1 Belgium 2004 successfully completed across Bo Sommarland 1 Norway 2006 10 countries since Marineland 1 France 2006 2004 Mirabilandia 1 Italy 2006 Warner 1 Spain 2007 Aqualud 1 France 2007 Target average Grant Leisure 3 UK 2007 EBITDA improvement of BonBonLand 1 Denmark 2007 c.50% after 2 full Tusenfryd 1 Norway 2008 seasons under Faunia 1 Spain 2008 Parques Reunidos Palace Group (FECs) 31 US 2008 management Hawaii 1 US 2008 Kennywood Group 5 US 2008 Movie Park 1 Germany 2010 Dutch Wonderland 1 US 2010 Implied EBITDA multiple paid(1) post Slagharen 1 Netherlands 2012 integration of 5.8x Noah’s Ark 1 US 2012 Miami Seaquarium 1 US 2014 Total 54 5.8x
All elements are in place to continue being the leading consolidator
Notes 1. Based on EBITDA after 2 full seasons under Parques Reunidos operation 22 Attractive financial profile delivering growth
Reported (Group) Like-for-Like (Group)
€MM €MM
700 700 606 Revenue 600 541 600 573 518 500 500 400 400 2013 2015 2013 2015
Margin 30.9% 32.2% 31.5% 32.5% €MM €MM
195 186 200 167 200 163 EBITDA 150 150
100 100 2013 2015 2013 2015
Cash flow 66% 69% Conversion(2) 68% 68%
€MM Operating €MM Free Cash 200 200 flow 133 128 113 108 (1) Generation 100 100
0 0 2013 2015 2013 2015
Notes 1. Defined as EBITDA – Recurrent Capex (maintenance of the parks’ facilities + capex for new attractions) 2. Defined as EBITDA – Recurrent Capex / EBITDA 23 Strong and visible cash flow generation
10–11% Recurrent capex as % of No year-on-year operating working Stable and resilient cash flows with revenues capital requirements high conversion rates of 65-70%
Cash generated from change in working Group L-f-L recurrent capex(1) Group L-f-L operating free cash flow(2) capital € MM € MM € MM 150 150 150
128
100 108 98 100 100
74 50
55 58 12,6 50 50 0
(8,8)
0 -50 0 2013 2014 2015 2014 2015 2013 2014 2015
% of Cash 10.6% 13.4% 10.1% revenue conversion 66.4% 57.0% 68.8% rates(3)
Notes 1. Defined as maintenance of the parks’ facilities + capex for new attractions 2. Defined as EBITDA – Recurrent Capex (maintenance of the parks’ facilities + capex for new attractions) 3. Defined as EBITDA – Recurrent Capex / EBITDA 24 Capital structure designed to allow delivery of business plan
€575 MM term loan facility (60%/40% €/$ denominated)
‒ €230 MM Term Loan A
‒ €345 MM Term Loan B
Debt Structure €200 MM multi currency revolving credit facility
Natural hedged to act against currency fluctuations
‒ Local currency expenditures at each location
‒ Balanced capital structure between US debt and European debt
Leverage at IPO of c.2.9x Net debt / EBITDA
Target capital ‒ Excludes draw down of revolver Structure On average 2.0x-2.5x target net debt / EBITDA in the medium term
‒ Strong cash generation profile to self fund external growth avenues
20-30% pay-out ratio
Annual distributions Dividend Policy ‒ Starting in 2017 on the back of 2016 FY results
‒ Allow headroom to seek value/enhancing growth opportunities 25
Current trading performance affected by external factors
Visitors Like-for-like Growth Q4 performance has been affected by external factors: Q4 2016E Abnormally adverse weather conditions in the North East of the growth growth US (represents c.70% of US EBITDA) Visitors Devastating attack suffered in Nice (France) affecting Marineland Spain 7,5% 2,9% Total Q4 revenues as well as annual revenues will decrease by RoE (ex-Marineland) (0,5%) 0,8% 1.3% on a like-for-like basis US (3,3%) (3,8%) Total Visitors (ex-Marineland) 0,5% (0,1%) Marineland (25,2%) (34,4%) Q4 performance by region: Total Visitors (0,9%) (1,9%) Strong performance achieved in reaching a robust revenue growth for the quarter of 10.5%
RoE (excuding Marineland) has grown revenues by 2.1% in Q4
Both offset by a decrease of 3.6% in the US (affected by Revenues Like-for-like Growth abnormally adverse weather conditions) and the impact of the Q4 2016E Nice attacks in Marineland growth growth Revenues The company continues delivering its growth strategy with recent Spain 10,5% 5,5% strategic developments RoE (ex-Marineland) 2,1% 2,5% Expansion capex: 4 projects (2 in Europe and 2 in US) are ready US (3,1%) (3,6%) for development during 2017 Total Revenues (ex-Marineland) 0,9% 0,4% Management contracts: Dubai and Vietnam parks to open in Q4- Marineland (33,8%) (25,3%) 16 and Q1-17, respectively Total Revenues (1,3%) (1,3%) MECs: 2018 targets have been already achieved
26 Why Parques Reunidos?
1 2 We are a leading We operate in a global platform with growing market with strong regional attractive brands fundamentals
6 3 Our management team We are best in class is experienced and operators committed
5 4 We have a solid and Our business model is visible growth resilient and has been potential “stress-tested”
27