Motion Jvco Limited Annual Report and Accounts 2020

Motion Jvco Limited Annual Report and Accounts 2020

Registered number 12057312 MOTION JVCO LIMITED ANNUAL REPORT AND ACCOUNTS 2020 CONTENTS At the end of 2020 the Group Strategic report KPIs 1 operated: At a glance 2 Chief Executive’s introduction 4 Business model 6 Growth drivers 8 Financial and operating review 10 Principal risks 17 Corporate social responsibility 23 129 Governance Corporate governance 28 attractions Directors’ report 33 Directors’ responsibilities statement 35 Independent auditor’s report 36 Financial statements Consolidated income statement 42 Consolidated statement of comprehensive income 43 Consolidated statement of financial position 44 Consolidated statement of changes in equity 45 with Consolidated statement of cash flows 46 Notes to the accounts 47 Motion JVco Limited Company financial statements 92 Notes to the Company financial statements 94 4,640 Additional information Glossary 99 rooms Other financial information 101 in 24 countries MOTION JVCO LIMITED ANNUAL REPORT AND ACCOUNTS 2020 KPIs Introduction Motion JVco Limited (the Company) was incorporated on 18 June 2019. On 4 November 2019, Motion Acquisition Limited, a subsidiary of the Company, acquired the Merlin Entertainments Group (Merlin, Merlin Group), completing the ‘take private’ transaction in respect of Merlin Entertainments plc announced in June 2019 by a consortium of investors comprising KIRKBI, certain Blackstone investment funds, and the Canada Pension Plan Investment Board (CPP Investments). The acquisition was financed through a combination of equity and shareholder loans from the consortium partners, together with debt finance agreed shortly prior to completion by certain of the Company’s subsidiaries that were incorporated for that purpose. The Company, together with other subsidiaries incorporated in order to perform the Merlin acquisition, had minimal activities until the acquisition was completed. Therefore, while the statutory comparative information within this report covers the period from incorporation, effectively it reports on Merlin’s trading period between the effective date of the acquisition on 4 November 2019 and the reporting date of 28 December 2019. This period of the year is when several of Merlin’s theme parks are closed or operating reduced hours in the winter period, so the results are therefore not indicative of the ongoing level of performance on a full year basis. In order to provide a more meaningful comparison of the performance of the Merlin Group, certain limited proforma comparative information and commentary on the continuing operations of the Merlin Group and its underlying trading is provided in the strategic report, as extracted from the audited 2020 and 2019 Merlin Entertainments Limited consolidated financial statements. This is identified where required by making specific reference to that document or by the use of ‘MEL’ to signify this. Furthermore the strategic report also makes reference to other comparative data or information, and refers to longer term historic activities and strategic initiatives; these should be read as referring to the continuing Merlin business as if the Company had been the parent company in that period. The audited consolidated financial statements present comparative information on the Group on a statutory basis, that is on the Group headed by Motion JVco Limited, for the 28 week period from incorporation on 18 June 2019 to the reporting date of 28 December 2019. Details on the period under review and the performance measures used are set out in the Financial and Operating Review on page 16. Terms used throughout this document are defined in the Glossary on pages 99 to 100. VISITORS REVENUE UNDERLYING OPERATING LOSS 22.1m £629m £(371)m MEL 2020: 22.1m (2019: 67.0m) MEL 2020: £629m (2019: £1,740m) MEL 2020: loss of £(319)m (2019: profit of £342m) TOTAL LOSS BEFORE TAX OPERATING LOSS £(740)m £(962)m GUEST SATISFACTION HEALTH AND SAFETY EMPLOYEE ENGAGEMENT This is based on guest satisfaction surveys; our In 2020 we helped lead the location based We are proud of our global team of employees and now, target is a score over 90%. We are proud that we entertainment industry in implementing new more than ever, employee engagement continues to be maintained the same high score of 94% as in 2019, measures to enable us to trade safely during the one of the key elements of our business model. In 2020 despite having to introduce a number of measures COVID-19 pandemic. The Medical Treatment we relaunched the ‘MyMerlin’ intranet and introduced a in respect of social distancing and other COVID-19 Case (MTC) rate captures the rate of guest injuries fortnightly company digital newsletter, which provide related safety protocols, to help keep our requiring external medical treatment relative to digital content including the latest reassuring health and guests safe. See more on page 7. 10,000 guest visitations. This key measure safety information, updates from senior leaders and remained constant with 2019 and is an celebratory content from our attractions, to help ensure improvement on 2018. See more on pages 24 our global teams continue to feel engaged and connected to 25. with the business. In 2020, as a result of COVID-19 related closures, many of our staff were on furlough and therefore we did not run our annual employee engagement survey that for many years showed results consistently above our target score of being over 80% (2019: 87%, 2018: 86%). In 2021 we look forward to new engagement and feedback tools being launched. See more on page 23. 1 MOTION JVCO LIMITED ANNUAL REPORT AND ACCOUNTS 2020 AT A GLANCE A GLOBAL LEADER IN LOCATION BASED, FAMILY ENTERTAINMENT MERLIN IS EUROPE’S NUMBER ONE AND THE WORLD’S SECOND-LARGEST VISITOR ATTRACTION OPERATOR AND OPERATES 129 ATTRACTIONS, 21 HOTELS AND SIX HOLIDAY VILLAGES IN 24 COUNTRIES AND ACROSS FOUR CONTINENTS. Our vision To be the global leader in location based entertainment by number of visitors. Our purpose To deliver memorable experiences to our millions of visitors. Our strategy Merlin’s strategy since its inception in 1999 has been to create a high growth, high return family entertainment company based on strong brands and a global portfolio that is naturally balanced against the impact of external factors. Merlin operates two distinct types of visitor attraction, organised into three Our portfolio of assets and brands is highly diversified across geography, Operating Groups. attraction type, brand and customer demographic and well balanced between indoor and outdoor attractions and international and domestic visitation. We Midway Attractions are high quality, branded, predominantly indoor also partner with third party intellectual property owners to create new attractions with a typical one to two hour dwell time located in city centres, brands which complement the portfolio and broaden our appeal across all key shopping malls or resorts. We have high quality, chainable brands and are the target demographics. only company to successfully operate the Midway model on a global scale. Our footprint across 24 countries provides a high degree of diversity and a Theme Parks are larger multi-day outdoor destination venues, incorporating strong platform to benefit from long term growth in leisure spending. on-site themed accommodation. We have demonstrated the strength of this diversified business model over • LEGOLAND Parks are aimed at families with younger children and have many years, where the drivers of our performance have been; LEGO as the central theme. Highly themed accommodation is central to • investment in our existing estate to increase capacity, provide compelling our strategy to develop the customer offering. Merlin holds the global, new propositions to guests, and improve customer satisfaction; exclusive rights to the LEGOLAND brand. • rolling out new Midway attractions to drive revenue growth, often • Resort Theme Parks are national brands aimed at families, teenagers and with a ‘cluster’ focus and in locations that continue our geographic young adults, with themed accommodation at all locations. They have high diversification; brand and customer awareness in their local markets and include the • developing new LEGOLAND parks under a combination of operating leading theme parks in the UK, Italy and Northern Germany. models. We have parks currently under construction in Asia and in the USA; Our three Operating Groups are supported by our unique in-house business • transforming our theme parks into destination resorts by adding a broad development, creative, project management and production group, Merlin range of themed accommodation and other second gate attractions to Magic Making, which includes teams across Europe, North America and the improve customer satisfaction and drive multi-day visitation; Asia Pacific region. Merlin Magic Making is responsible for driving innovation • leveraging strategic synergies by generating revenue from promotions and across our Group and creating compelling propositions for our attractions; marketing; improving our customers’ online ‘digital journey’; operating developing new concepts into commercially viable attractions; producing more efficiently; and securing procurement savings; compelling content such as LEGO models, wax figures and attraction theming; • acquisitions, ranging from large scale transformational transactions to and constructing new attractions and investment projects, including new hotels smaller add-on deals. and rides. 2 MOTION JVCO LIMITED ANNUAL REPORT AND ACCOUNTS 2020 AT A GLANCE A GLOBAL LEADER IN

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