On Thursday (February 17) Belgian exhibitor Kinepolis released its 2021 earnings report, which showed a substantial increase in both visitors and revenue compared to the prior year.
Kinepolis received 17.2 million visitors in 2021, an increase of 42.6% compared to 2020, and total revenues of €266.4 million ($302.6 million USD), marking a 51.1% increase over the prior year. That said, total visitors and revenue were still significantly down from 2019. In the second half of 2021, Kinepolis received 33.7% fewer visitors compared to the same period in 2019, while total revenues were 26.7% lower. Revenue per visitor also increased in 2021 thanks to a strong increase in box office and in-theater sales.
Nonetheless, a press release notes that Kinepolis was able to limit its cash consumption to €3.6 million ($4.09 million) per month in the first half of 2021 – versus €5.9 million ($6.7 million) per month, excluding working capital, at the start of the pandemic – thanks to “strong cost management and one-off support measures.” This allowed the exhibitor to build up significant cash again in the second half of the year, during which theaters reopened, Covid-19 vaccines became widely available and blockbusters (and customers) returned to cinemas. The release notes that Kinepolis additionally saw “an increased demand” for premium cinema experiences in the latter half of the year.
The release notes that cost savings in the first half of the year allowed Kinepolis “to build up significant cash again” in the second half, resulting in €199.8 million ($227 million) of available financial resources at the end of December 2021, versus €141.9 million ($161.2 million) at the end of June 2021, according to the release. The company also saw a decrease in net financial debt, excluding lease liabilities, by €67.8 million ($77 million) compared to the end of June 2021.
Overall, Kinepolis’ operating result adjusted for leases (EBITDAL) totaled €38.5 million ($43.7 million) at the end of December 2021, compared to -€24.0 million (-$27.3 million) at the end of June 2021. EBITDA increased from €17.2 million ($19.5 million) in 2020 to €72.7 million ($82.6 million) in 2021, while the net result was -€25.5 million (-$29 million), compared to -€69.1 million (-$78.5 million) in 2020 and -€45.8 million (-$52 million) at the end of June 2021.
Elsewhere, Kinepolis reported free cash flow of €48.9 million ($55.6 million) in 2021, of which €70.3 million ($79.9 million) came in the second half of the year. Net financial debt, excluding lease liabilities, decreased from €513.3 million ($583.3 million) at the end of 2020 – and from €542.3 million ($616.2 million) at the end of June 2021 – to €474.5 million ($539.2 million) at the end of 2021. The company also boasted €199.8 million ($227 million) in available financial resources at the end of December 2021.
Kinepolis gives much of the credit to its positive second-half results to its implementation of the “’Entrepreneurship 2022” plan, which “concerns cost-saving optimisations as well as innovations that build on Kinepolis’ business strategy and protect the company against a possible slower recovery in visitor numbers from 2022 on,” as stated in the release.
In 2021, Kinepolis launched several new construction projects, including Kinepolis Leidschendam (Netherlands), Kinepolis Metz Waves (France) and Landmark Edmonton Tamarack (Canada).
The Kinepolis Board of Directors will make a proposal to the General Meeting not to distribute a dividend for the 2021 financial year.
In a statement, Kinepolis Group CEO Eddy Duquenne had this to say:
“We did not get the best case-scenario in 2021 for which we had hoped at the start of the vaccination campaign. Nevertheless, I look back with satisfaction on a year in which we, as a company and as a team, did everything that was within our power and which has led to a more than decent result given the circumstances.
“We have used the past two years to strengthen our company. We managed to be profitable from a relatively low occupancy rate of our cinemas, something that was supported by the implementation of our ‘Entrepreneurship 2022’ plan, all the measures of which have now been implemented and are effective. We are also continuing to work on our Star plans, which are focused more on innovation and new sources of income, and we have also recently taken steps to further integrate our sustainability policy in our strategy.
“All of this, coupled with a promising visitor recovery thanks to high-performing blockbusters, means we can look to the future with confidence. We can already conclude that we shall come out of this crisis stronger and I am very proud of that.”
Kinepolis’ full financial report for 2021 can be viewed here.