Investor Presentation
February 16, 2024
Forward Looking Statements
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS PURSUANT TO THE U.S. PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:
This presentation contains, and our officers and representatives may from time to time make, “forward–looking statements” within the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. The “forward looking statements” can be identified by words such as “may,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,”
“anticipates,” “believes,” “plans,” “expects,” “future” and “intends” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make
regarding our future revenues, expenses and profitability, the future development and expected growth of our business, attendance at movies generally or in any of the markets in which we
operate, the number or diversity of popular movies released and our ability to successfully license and exhibit popular films, national and international growth in our industry, competition from other
exhibitors, and alternative forms of entertainment.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the
future of our business, future plans, and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future,
they are subject to inherent uncertainties, risk, and changes in circumstances that are difficult to predict and many of which are outside our control. Our actual results and financial condition may
differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Although it is not possible to predict or identify
all uncertainties and risks, we encourage investors to read the risk factors we described in our most recent annual and periodic reports filed with the Securities and Exchange Commission (“Risk
Factors”).
These Risk Factors include, but are not limited to, the impacts of the 2023 Writers Guild of America and SAG-AFTRA strikes on our business and the entertainment industry; our ongoing recovery
from the COVID-19 pandemic; our dependance on film production and performance; the seasonality of our business; competition from our peers and from other forms of entertainment; labor
shortages; our substantial long-term lease and debt obligations; our reliance on film distribution companies and the potential for alternate film distribution channels; regulation related to data
protection, data security and privacy laws; economic instability and currency exchange risks related to our foreign operations; and the effects of general political, social, health and economic
conditions on attendance at our theaters.
All forward-looking statements are expressly qualified in their entirety by these cautionary statements and Risk Factors. We undertake no obligation, other than as required by law, to update or
revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Except as otherwise specified or indicated by the context references in this presentation to “we,” “us,” “our,” “Cinemark” or the “Company” are to the combined business of Cinemark Holdings, Inc.
and its consolidated subsidiaries.
NON-GAAP FINANCIAL MEASURES:
GAAP refers to the U.S. generally accepted accounting principles. We include certain non-GAAP financial measures in this presentation, including Free Cash Flow, Adjusted EBITDA and other financial
measures utilizing Adjusted EBITDA. These non-GAAP financial measures may not be comparable to those of other companies and may not be comparable to similar measures used in our various
filings. Please see the Appendix for definitions of our non-GAAP financial measures and a reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated
in accordance with GAAP.
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Cinemark
Overview
Cinemark Overview
U.S. Operations
1)
• 309 theaters / 4,324 screens
• 3
rd
largest exhibitor (based on screen count and market share)
• Located in 42 states, 104 DMAs
• #1 or #2 in box office revenues in 21 of our top 25 markets
• Highest attendance per screen among leading exhibitors
• Surpassed North American industry box office growth for 13 out
of the past 15 years
International Operations
1)
• 192 theaters / 1,395 screens
• First modern theatre experience throughout Latin America
• Highly seasoned team with 30 years of operating experience
• Located in 13 countries
• Presence in 15 of top 20 metropolitan cities in the region
• ~25-30% market share in key countries
1) As of 12/31/2023
One of the largest and most influential theatrical exhibition companies in the world with 501
theaters with 5,719 screens in 14 countries
1)
4
Phillip Couch
EVP - Food &
Beverage
Highly Experienced Executive Leadership Team
Highly experienced management team with significant industry experience and proven track records;
Additional key leaders with 20+ years of industry/Cinemark experience in the US and internationally
Mike Cavalier
EVP General Counsel & Business Affairs
Served as General Counsel since 1997. Helped guide
company through various transactions including M&A,
IPO and numerous lending agreements
Sean Gamble
President & CEO
15+ years of industry experience. Joined Cinemark as
CFO in 2014, promoted to COO in 2018 and CEO in
2022. Spent 5+ years as CFO/EVP of Universal
Pictures within NBCUniversal prior to Cinemark.
Valmir Fernandes
President, International
25+ years of Cinemark experience including the past
15+ years as President of International following 10
years as the General Manager of Cinemark Brazil
Melissa Thomas
CFO
Joined as Cinemark’s CFO in 2021. Prior to
Cinemark, served multiple leadership roles with
Groupon, including CFO, CAO & Treasurer, and VP
Commercial Finance.
5
Wanda Gierhart
EVP - Chief Marketing
& Content Officer
Damian Wardle
EVP - Theater &
Technical Operations
Jay Jostrand
EVP - Real Estate &
Construction
Sid Srivastava
EVP - Human
Resources, DEI/CSR
Exhibition Industry Trends
Stable, long-term industry growth trends across technology innovations and economic cycles with
box office growth in 6 of the last 8 recessionary periods
Sources: North America ComScore; NATO
1980
1985
1990
1995
2000
2005
2010
2015
2020
Industry
recovery
Recession year
Internet begins
to go mainstream
Megaplex and
stadium seating
Exhibition
bankruptcies/
consolidation
DVD player
drops to $100
(DVD heyday)
Financial
crisis
VCR Internet DVD Streaming
Mass OTT streaming adoption
Recliners and
enhanced food
investments
1.1B patrons
1.57B patrons
1.38B patrons
1.3B patrons
Digital projector conversion
North America Box Office Trends
VHS begins to ramp
post beta-max
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$2.8B
$11.4B
$7.5B
COVID-19 pandemic
$9.1B
North American Industry Outperformance
Cinemark’s operational excellence and execution of strategic priorities has driven faster domestic
box office recovery and market share gains
7
79%
86%
Domestic Industry Cinemark
13%
14%
FY19 FY23
Market Share
2)
24%
16%
14%
7%
39%
FY23 Market Share
2)
AMC Regal Cinemark Cineplex Others
1) North American industry FY23 vs FY19 per comScore based on gross box office
2) Market share data per ComScore based on gross box office
FY23 Box Office Recovery
1)
37%
41%
19%
3%
Chile
Cinemark Cinepolis Cineplanet Others
Latin American Industry Outperformance
8
23%
25%
FY19 FY23
Market Share
1) 2)
FY23 Market Share - Key Latin American Markets
2)
1) All Latin American countries compiled based on FY23 vs. FY19 admissions;
2) Source: comScore
Strong international presence throughout Latin America provides diversification, increased scale,
cross-company synergies, and promotional opportunities with global partners
23%
12%
8%
57%
Brazil
Cinemark Cinepolis Kinoplex Others
38%
10%
10%
42%
Argentina
Cinemark Cinemacenter Cinepolis Others
19%
39%
17%
25%
Colombia
Cinemark CineColombia Royal Others
Initiatives Driving Growth and Outperformance
Continuing to benefit from sustained investments in guest experience; prioritizing investments in
strategic initiatives that position Cinemark for ongoing success
~70% U.S. recliner penetration -
highest among major circuits
1)
#1 private-label premium large
format in the world with nearly 300
auditoriums across US and LatAm
~80% of U.S. circuit features
expanded food & beverage
offerings, ~60% with alcohol
Industry-leading subscription
programs; ongoing evolution of
loyalty programs
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1) As of 12/31/2023
Heightened focus on the guest
experience with 95% guest
satisfaction rating.
Industry-leading technology and
technological capabilities; first
exhibitor to initiate Barco laser
conversion; ~15% global circuit
converted
325+ auditoriums feature D-BOX
motion seats that are synchronized
with the on-screen action
Sophisticated omni-channel marketing
platform with significantly enhanced
digital and social capabilities
Financial
Results
Highlights of FY 2023 Results
Box
Office
Food &
Beverage
Loyalty
Profitability
Premium
Formats
• Achieved all-time food & beverage revenue that exceeded FY19 by 3%
• Generated record food & beverage per cap of $7.45 domestically, an increase of 40% compared with FY19; international
per cap increased 33% versus FY19 in USD
• Continued to offset inflationary pressures through product alternatives, category management and strategic pricing actions
• Movie Club exceeded 1.2 million members – an increase of 25% from 2019; represented 24% of FY23 box office
• Global consumer reach of 22 million addressable customers
• Delivered $3B total revenue (within 7% of FY19 on 25% less attendance)
• Delivered $594M AEBITDA with a 19.4% AEBITDA margin
• Generated free cash flow of $295M and increased cash balance to $849M at the end of the year
• Achieved all-time high XD box office with FY23 and exceeded FY19 box office by 13%
• As a percentage of global box office, XD remains nearly 300 bps higher than FY19
• Delivered record DBOX motion seat box office revenue and surpassed FY19 box office by 87%
We continue to make significant progress recovering from the pandemic and have consistently
demonstrated our ability to flex and adapt in a dynamic landscape
1) See Appendix for reconciliation of Adjusted EBITDA to the most directly comparable GAAP measures
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• Domestic box office outperformed the North American industry results by 700 bps comparing FY23 against FY19 with the
largest share gain among the major U.S. exhibitors (~100 bps)
• International admissions also surpassed Latin American industry benchmarks by 600 bps comparing FY23 against FY19
FY23 Financial Summary
FY23 Highlights
1) in Millions
2) See Appendix reconciliation of Adjusted EBITDA and Free Cash Flow to the most directly comparable GAAP measures
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Worldwide Results
1) 2)
FY23 FY22 Variance
Attendance 210 173 22%
Revenue $3.1B $2.5B 25%
Adj. EBITDA $594 $336 77%
Adj. EBITDA % 19.4% 13.7% 570 bps
Operating Cash Flow $444 $136 227%
Capital Expenditures $149 $111 34%
Free Cash Flow $295 $25 1069%
End Cash Balance $849 $675 26%
• Worldwide attendance increased 22% year-over-year driven
by a steady recovery of film volume and a diverse slate of
high-quality films.
• Executed upon strategy to maximize attendance and box office and further
monetize through ancillary revenue opportunities.
o Average ticket price increased 5% in the U.S.
and 28% internationally in constant currency
o Concession per cap increased 7% in the U.S.
and 31% internationally in constant currency
• Grew Adj. EBITDA 77% to $594M and yielded a healthy Adj. EBITDA
margin of 19.4% by maximizing box office opportunities and successfully
executing strategic initiatives.
• Further strengthened the balance sheet by generating $295M
in free cash flow and ending the year with $849M of cash; reduced
pandemic-related debt by over $100M during the year
Capital Structure and Allocation
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Our balance sheet remains a strategic asset and key differentiator, providing ample flexibility
(in $ millions)
As of Dec. 31, 2023
Long-term debt
1)
$2,432
Cash balance $849
Net Debt $1,583
TTM Adj. EBITDA $594
Net Debt/ Adj. EBITDA 2.7x
1) The company has an undrawn revolver of $125M; Gross long-term debt excluding capital lease obligations
2) Historic net leverage ratio ~2.0 – 2.5x
3) Over 90% of debt at fixed rate
• Covenant-lite debt
• Company has a history of proactively managing debt with nearest maturity in
2025
• Redeemed $100M of 8.75% Senior Secured Notes due May 2025
• Successfully refinanced credit facility, securing $650M term loan maturing in
2030 and upsizing revolver to $125M maturing in 2028
• Repaid all remaining deferred lease obligations incurred over the course of
the pandemic
• Continued to invest in high-confidence ROI initiatives with $149M of CapEx
deployed during 2023
• Focus on sustaining net leverage ratio of 2.0 – 3.0x, dependent upon timing
and extent of box office recovery, as well as strategic investment
opportunities
A Look Ahead
2024 Notable Titles
Jan. 12
(PAR)
Feb. 14
(PAR)
March 1
(WB)
March 8
(UNI)
March 22
(SNY)
Feb. 14
(SNY)
May 3
(UNI)
May 24
(WB)
June 14
(DIS)
June 28
(PAR)
May 10
(20TH)
May 24
(SNY)
July 3
(UNI)
July 19
(UNI)
July 26
(DIS)
Aug. 9
(LGF)
Sept. 6
(WB)
Oct. 4
(WB)
Nov. 8
(SNY)
Nov. 27
(DIS)
Dec. 20
(DIS)
Dec. 20
(PAR)
Sept. 16
(PAR)
Nov. 27
(UNI)
Quarter 1 Quarter 2 Quarter 3 Quarter 4
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2025 Compelling Film Slate
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Strong film slate with broad consumer appeal already announced for 2025
Value of an Exclusive Theatrical Window
A theatrical release enhances a film’s promotional impact and overall asset value
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Increases consumer
awareness, interest
and recognition
Produces bigger
brands, franchises
and cultural moments
Elevates perception
of films by
eventizing them
Creates stronger
emotional connections
with characters/stories
Satisfies consumer/
creative desires to see
films on big screen
Generates
stronger results in
downstream channels
Provides incremental
monetization channel
expanding revenue
Delays sizable jump
in piracy upon
in-home availability
Strategic Priorities for Long-Term Operating Success
Cinemark maintains an advantaged position to capitalize on the ongoing recovery of theatrical
exhibition through varied experiential consumer-based, revenue-generating, and productivity initiatives
Create an exceptional guest experience through premium amenities and offerings that cannot be replicated at home, as well as
an ongoing focus on top-notch customer service
Maximize attendance and box office through pricing strategies, sophisticated showtime planning, and pursuit of alternative
content that appeals to a broader consumer base
Utilize advanced digital and social marketing capabilities to build audiences, increase moviegoing frequency, and strengthen
loyalty to Cinemark
Grow food and beverage consumption through expanded offerings and enhancements that simplify the ease of purchase,
including the online food and beverage ordering platform
Simplify and streamline theater practices through technology, workforce management, and enhanced inventory procedures
Utilize enhanced data management, analytics, and process enhancements to drive margin expansion through company-wide
Continuous Improvement programs
Pursue disciplined strategic investments in long-term growth while re-fortifying balance sheet
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$2.8B
Appendix
Key Financial Metrics
• Significant progress year-over-year in each of the key performance
metrics, recovering toward 2019-levels
• Delivered total revenue within 7% of 2019 with strong execution of
revenue-generating initiatives
• Generated $594M of Adj. EBITDA, within 80% of 2019 on 25% less
attendance, resulting in a healthy Adj. EBITDA margin of 19.4%
• Delivered Free Cash Flow of $295M and ended the year with $849M
cash balance despite repaying $100M of pandemic-related debt
Annual Worldwide Results
1) 2)
Highlights
1) in Millions
2) See Appendix reconciliation of Adjusted EBITDA and Free Cash Flow to the most directly comparable GAAP measures
2023 2022 2019
Attendance 210 173 280
Revenue $3,067 $2,455 $3,283
Adj. EBITDA $594 $336 $745
Adj. EBITDA % 19.4% 13.7% 22.7%
Free Cash Flow $295 $25 $258
End Cash Balance $849 $675 $488
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FY 2023 Non-GAAP Measure Reconciliations
2023 2022 2019
Cash flows provided by (used for)
operating activities
$444 $136 $562
Deduct:
Capital Expenditures 149 111 304
Free Cash Flow $295 $25 $258
2023 2022 2019
Total Revenues
1)
$3,067 $2,455 $3,283
Adjusted EBITDA
1)
594 337 745
Adjusted EBITDA Margin 19.4% 13.7% 22.7%
2023 2022 2019
Net Income/(Loss) $191 $(268) $194
Add (deduct):
Income taxes 30 3 80
Interest expense
2) 3)
150 155 100
Other (income) expense, net
4)
(20) 24 (22)
Cash distributions from equity investees
5)
6 7 53
Depreciation and amortization 210 238 261
Impairment of long-lived and other assets 17 174 57
(Gain)/Loss on disposal of assets and other (8) (7) 12
Loss on extinguishment and refinancing 11 - -
Non-cash rent expense (18) (11) (4)
Share based awards compensation expense
6)
25 22 15
Adjusted EBITDA $594 $336 $745
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1) In millions
2) Includes amortization of debt issue costs, amortization of original issue discount and amortization of accumulated (gains) losses for amended swap agreements.
3) Amounts for 2019 were impacted by the adoption of ASC Topic 842 and the resulting change in the classification of certain of the Company’s leases.
4) Includes interest income, foreign currency exchange and other related gain (loss), interest expense – NCM and equity in income (loss) of affiliates and unrealized gain on investment in NCM.
5) Includes cash distributions received from equity investees that were recorded as a reduction of the respective investment balances. These distributions are reported entirely within the U.S. operating segment.
6) Non-cash expense included in general and administrative expenses.
Reconciliation of Cash Flows
Provided by Operating Activities to Free Cash Flow
1)
Reconciliation of Net Income/(Loss) to
Adjusted EBITDA
1)
Thank You
Chanda Brashears
SVP Investor Relations
cbrashears@cinemark.com
972-665-1671
