Key Trends in the Cinema Sector 20 April 2017

A Joint Seminar by and

and generously hosted by

Key trends in the cinema market

• Cinema Sector Overview Toby Hall • Operator Updates Dave Windross Keith Pullinger Rob Kenny • Panel Session, chaired by Sarah Fox • Q&A

SPECIALIST MARKETS CINEMA MARKET OVERVIEW 2017

Prepared for:

IT ALL BEGAN WHEN … 4

In 1985 the first multiplex opened in Milton Keynes…

… and closed in 2015

MULTIPLEX OPENINGS 5

Source: Dodona and CBRE

In 2016 there are 331 operational multiplexes accounting for 77.4% of the

UK screens

0

5

10

15

20

25

30

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

CINEMA STATS 2011 - 2016 6

2011 2012 2013 2014 2015 2016 Population (m) 63.28 63.75 64.11 64.59 65.11 65.57 Screens 3,767 3,817 3,867 3,909 4,046 4,150 Average Ticket Price £6.06 £6.37 £6.54 £6.72 £7.19 £7.41 Average Refreshment Sales £2.02 £2.04 £2.09 £2.20 £2.31 £2.47 Screen Advertising & Other (£m) £104.3 £101.4 £124.1 £126.9 £154.4 £202.0 Admissions Per Person 2.71 2.71 2.58 2.44 2.64 2.57 Persons Per Screen 16,800 16,690 16,578 16,525 16,092 15,800

Source: Dodona

171.6m 172.5m

165.5m

157.5m

171.9m

168.3m

£1,039m

£1,099m £1,082m £1,058m

£1,236m £1,247m

£900m

£950m

£1,000m

£1,050m

£1,100m

£1,150m

£1,200m

£1,250m

£1,300m

150m

155m

160m

165m

170m

175m

2011 2012 2013 2014 2015 2016

Con

trib

utio

n

Admissions (m) Gross box office (£m)

HOW IS THE CINEMA MARKET EVOLVING 7

Odeon, The Lounge

Cineworld Milton Keynes – 4DX

Loyalty Cards

Refurbished Seating – Vue Cambridge

Curzon Victoria

Costa Coffee

CINEMA OFFER EVOLVING 8

Emergence of

Enhanced

Loyalty Cards

Improved catering facilities

VIP Area / Premium Services

Enhanced seat and screen technology

Refurbishment of existing

boutique city centre cinema operators ‘at seat’ F&B offer preventing customer promiscuity including branded coffee shops becoming more prominent Integration into metropolitan sites seat reduction and upgrade

SHOWCASE READING 9

BEFORE AFTER

Auditoria

F&B

Foyer

SHOWCASE READING REFURBISHMENT – THE RESULTS 10

Refurbishment

Seat Reduction

UK Gross Box Office Rank

Gross Box Increase Year After UK Gross Box in same period

Attendance Increase Year After

completed 8th October 2015 59% from 3,072 to 1,260 Year Prior - 90 Year After - 24 YTD - 21 + 75% + 12% + 57%

LOCATION OF EXISTING CINEMA ESTATE 2017 11

61%

25%

8% 6%

Leisure Park Shopping CentreHigh Street Retail Park

New in 2017…

Showcase, Southampton

Odeon, Bournemouth

Source: CBRE

NEW OPENINGS PIPELINE 2017-19 12

Location Operator Screens Opening Type

Bournemouth Odeon 10 2017 Leisure Park

Southampton Showcase 11 2017 Shopping Centre

Ipswich Empire 11 2017 Shopping Centre

Sheffield The Light 9 2017 High Street

Dover Cineworld 6 2017 Retail Park

Ruislip Cineworld 10 2017 Leisure Park

Bedford Vue 7 2017 Leisure Park

Bradford The Light 10 2017 Shopping Centre

Stockport The Light 10 2017 Shopping Centre

Leeds Cineworld 11 2017 Shopping Centre

Addlestone The Light 6 2017 High Street

Bromley Vue 10 2017 Leisure Park

Weston Cineworld 8 2017 Leisure Park

Oxford Curzons 5 2017 Shopping Centre

Bracknell Cineworld 12 2017 Shopping Centre

Skelmersdale Reel 6 2017 Shopping Centre

Location Operator Screens Opening Type

Clacton Reel 6 2018 Leisure Park

Eltham Vue 6 2018 Shopping Centre

Watford Cineworld 9 2018 Shopping Centre

Speke Cineworld 11 2018 High Street

Grantham Reel 6 2018 Retail Park

Islington Odeon 5 2018 Leisure Park

Stafford Odeon 6 2018 Leisure Park

Durham Odeon 6 2018 Shopping Centre

Ealing Picturehouse 6 2018 Shopping Centre

Plymouth Cineworld 12 2019 Shopping Centre

Burghess Hill Cineworld 10 2019 High Street

Edgware Cineworld 6 2019 Leisure Park

Eastbourne Cineworld 9 2019 Leisure Park

Rushden Lakes Cineworld 12 2019 Shopping Centre

Finsbury Park Cineworld 10 2019 Shopping Centre

Marble Arch Odeon 5 2019 Shopping Centre

York Cineworld 12 2019 Retail Park

Source: CBRE

NEW PIPELINE IMPACT ON CINEMA FUTURE ESTATE

Total of 33 new locations, equating to 279 screens

4 new High Street locations, 3 new Retail Park locations

CURRENT CYCLE

13

0

2

4

6

8

10

12

14

16

18

20

2015 2016 2017 2018 2019

Cin

ema

Ope

ning

s

2017 - 2019

24% increase in Shopping Centre locations, equating to 142 screens

10 new Leisure Park locations, equating to 77 screens

Cineworld, Bracknell

The Light, Stockport

Source: Dodona

KEY ISSUES FACING THE SECTOR 14

! 2013 began with strong momentum

due to a busy Q4 2012 which accounted almost 73% of

the total turnover for 2012

Ceiling on ticket price inflation

2013 began with strong momentum due to a busy Q4 2012 which

accounted almost 73% of the total turnover

for 2012

Big 3 operators reduced

acquisition plans

2013 began with strong momentum due to a busy Q4 2012 which

accounted almost 73% of the total turnover

for 2012

Restaurant market growth slowed

2013 began with strong momentum due to a busy Q4 2012 which

accounted almost 73% of the total turnover

for 2012

Local authorities Funding Expansion

2013 began with strong momentum due to a busy Q4 2012 which

accounted almost 73% of the total turnover

for 2012

Loyalty Cards limiting competitor

plans

2013 began with strong momentum due to a busy Q4 2012 which

accounted almost 73% of the total turnover

for 2012

Relatively Static Admissions

Prepared for:

SPECIALIST MARKETS CINEMA MARKET OVERVIEW 2017

V U E E N T E R T A I N M E N T Dave Windross

Senior Property Manager UK&I

VUE UK & IRELAND AT A GLANCE

• Formed in 2003

• Grown organically and through company acquisitions

• Currently majority owned by Omers Private Equity and Alberta Investment Management

• 85 trading multiplex sites in UK and Ireland with 812 screens

VUE INTERNATIONAL AT A GLANCE

• New Openings – Bedford (7 screens / 935 seats /18k sq ft)

• Seating – 6 existing sites to be converted to luxury seating proposition

• Leicester Square - Full refurbishment (9 screens with enhanced proposition)

• Preston – Full refurbishment (7 screens with enhanced seating proposition)

• Westfield – 3 additional screens to be completed early Summer

UPCOMING PROJECTS 2017

20

RETAIL

• Bristol Cribbs refurbishment completed March 2017 • New ‘concept’ retail environment • Includes draft beer, Square Pie, Pizza Hut and Lavazza concessions

VUE LEICESTER SQUARE

• Full Refurbishment of all 9 screens and bar area • New exciting Retail environment • Luxury Seating • To be completed Summer 2017

T H A N K Y O U

• Cinema goers are becoming more demanding and are looking for a premium / aspirational experience

• Cinemas that show a complacent market attitude (under

investment / weak customer experience) are vulnerable

• The Light look to deliver a unique premium cinema experience, in a personable style, relevant to each community and offering good value for money

• Expansion focussed on ‘destination’ shopping centres and

town centres

Trading Cinemas: 1. New Brighton • 8 screens 2. Wisbech • 8 screens 3. Cambridge • 9 screens 4. Halle (Germany) • 8 screens 5. Walsall • 8 screens 6. Bolton • 9 screens 7. Thetford • 3 screens 8. Sheffield • 9 screens

Pipeline UK sites: 1. Stockport • 10 screens • November 2017 – Stockport Council 2. Bradford • 7 screens • November 2017 – Mayer Bergman 3. Skelmersdale • 8 screens • December 2017 – London & Cambridge 4. Addlestone • 6 screens • March 2018 – Runneymede Council / Bouygues 5. Banbury • 8 screens • April 2019 – Hawkestone 6. Sittingbourne • 8 screens • July 2019 – Swale Council / U and I 7. Lichfield • 7 screens • August 2019 – U and I 8. Wakefield • 9 screens • 2018 - Sovereign 9. Dundee • 9 screens • 2019 – Orchard Street 10. Stoke • 9 screens • 2019 – Realis 11. Redhill • 6 screens • 2019 – Reigate & Banstead Council 12. Skelmersdale • 8 screens – 2019 – London & Cambridge / Threadneedle 13. Nottingham• 9 screens • 2019 – Intu 14. Huddersfield • 7 screens • 2020 – Kingsgate Shopping Centre 15. Preston • 9 screens • 2020 – Preston Council

.

Popcorn…and so much more:

.

Concessions; offered with style!

.

Family Fun

.

Café Bar with fully licensed auditoria

.

Foyer as social space:

.

Toilets areas:

Auditorium Reclining Seats with side tables

.

Curzon Canterbury

Curzon Canterbury

Curzon Canterbury

Curzon Canterbury

Curzon Canterbury

Curzon Victoria

Curzon Victoria

Curzon Victoria

Curzon Victoria

Curzon Victoria

Curzon Victoria

Curzon Sheffield

Curzon Sheffield

Curzon Sheffield

Curzon Sheffield

Curzon Sheffield

Curzon Bloomsbury

Curzon Bloomsbury

Curzon Bloomsbury

Curzon Bloomsbury

Curzon Bloomsbury

Curzon Aldgate

Curzon Aldgate

Curzon Aldgate

Curzon Aldgate

Curzon Aldgate

Key Trends in the Cinema Sector 20 April 2017

A Joint Seminar by and

and generously hosted by