Kinepolis limits cash consumption in 2020 and maintains a solid financial base throughout the Covid-19 crisis

Regulatory release

February 25, 2021, 7 a.m.

After a promising start to 2020 for Kinepolis, with a 12.0% increase in attendance until March 12, the cinema sector was severely affected by the Covid-19 pandemic, with long periods of shutdowns of cinemas and restrictive measures as well as rehearsal postponements of successful film releases.

Thus, Kinepolis welcomed 12.1 million visitors in 2020, against initial expectations of more than 45 million visitors. Thanks to rigorous cost control and various measures taken, the loss of EBITDA, corrected for rents (EBITDAL), was limited to -14.0 million euros.

Kinepolis entered the crisis with a prudent debt ratio and a large liquidity reserve, reinforced by the additional loan of 80.0 million euros concluded in early 2021. Solid cost management, supported by the significant real estate position of the Group, allows Kinepolis to navigate with confidence through the crisis and can continue to face the negative effects of the Covid-19 pandemic for a considerable period of time. The Group had a financial margin of € 171.0 million at the start of 2021.

In recent months, management has focused on consolidating its business strategy, resulting in a plan – called “Entrepreneurship 2022” – which, based on new optimization and innovation measures, should support the restart as much as possible. and the Group’s performance from 2022.. Construction on various new build projects also continued over the past year, and these new cinemas will also help support the restart.

Important achievements in 2020

• Mainly thanks to solid cost management, cash consumption linked to the Covid crisis was limited to € 32.1 million in 2020 (excluding the impact on working capital).
• An additional final loan of 80.0 million euros, with a duration of 3 years, combined with an extension of the covenant leave until June 30, 2022.
• Development of ‘Entrepreneurship 2022′ plans, in pursuit of the implementation of Kinepolis’ business strategy.
• Pursuit and completion of various new construction projects: Kinepolis Haarlem (NL), Leidschendam (NL), Metz Waves (FR) and Edmonton Tamarack (CA)
• Various new initiatives in the context of Covid-19, including “Kinepolis on Tour”, a home delivery service and a “private cinema” concept.

2020 key figures compared to 2019

• Kinepolis welcomed 12.1 million visitors in 2020 due to repeated cinemas closures from mid-March, imposed security measures and the postponement of blockbusters.
• Total revenue per visitor also increased in 2020.
• Thanks to the cost measures taken, EBITDAL, ie EBITDA adjusted for rents, is only € -14.0 million.
• the net profit amounted to – € 69.1 million, mainly due to high depreciation linked to the Group’s significant real estate position.
• Free movement of capital amounted to -56.5 million euros for the year as a whole. Without taking into account the loss in working capital, the free cash flow was limited to only -3.6 million euros per month in the second half of the year.
• the net financial debt, excluding lease liabilities, compared to December 31, 2019, increased from € 417.0 million to € 513.3 million, mainly due to negative free cash flow combined with investments in the construction of new complexes .
• In view of the results and the current circumstances, it will be proposed to the General Meeting not to distribute a dividend for the 2020 financial year.

Eddy Duquenne, CEO of Kinepolis Group, on the 2020 results:

“Financially, Kinepolis is still in a very solid position. Our net financial debt only increased by 96.3 million euros. This includes nearly 40 million euros of investment in the expansion. This debt also includes a working capital loss of 24.3 million euros due to the cessation of our activities, which we will recover when we restart our cinemas. This means that our actual cash consumption in 2020 was only 32.1 million euros, which we can be proud of under the circumstances. With a cash reserve of 171.0 million euros at the start of this year, Kinepolis can still hold its own and we can say with confidence that our company will survive this crisis.

Everyone is waiting for the cinemas to reopen. Both American studios, which continue to postpone their blockbusters because of the importance of theaters in a film’s life cycle, and our clients, who need to be able to relax away from home. And our employees, who have been unemployed for a long time, are also eager to get back to work. We are convinced that we can reopen safely and thus contribute to the well-being of everyone. In the meantime, we continue to prepare for the future with our ‘Entrepreneurship 2022’ plans. “

Full report of the 2020 annual results attached.

• EN_Results Kinepolis FY 2020