Cineworld Memo 240521
- Understand whether Cineworld needs new money
- Understand the film slate by quarter for 2021 (and our expectations for 2022 film slate), our projections for box office revenue for the likely top 10 grossing films, Cineworld’s market share trends (particularly in US and UK), cinema capacity restrictions (in UK and state-by-state in US) and what these imply for Cineworld’s revenue trajectory coming out of COVID
- Understand how well covered Cineworld’s various Term Loans (including B1 and B2 TLs with priority over certain US assets) are by DCF EV under our scenarios
- Box office revenue projections for likely top 10 grossing films in 2021
- Financial projections, DCF valuation and sensitivities, with attendance driven by (besides COVID restrictions) our film-by-film box office revenue projections
- Given pricing of new film releases on to streaming video on demand (SVOD), are studios incentivised to reduce exclusive theatrical windows or would they be cannibalising their revenue when releasing to SVOD early and how does the same decision look in terms of profitability?
- Does Cineworld have sufficient liquidity after issuing c. $1bn in new debt since May-20: $213m convertible bond (in Q1 21), $450m TL B1 (in Q4 20), $250m private loan (in Q2 20) and c. $111m Incremental RCF (issued in Q2 20, converted to TL B2 in Q4 20)?
- How well does Cineworld compare vs AMC, Cinemark and Cineplex in terms of financial and operational performance and why do we see Cineworld’s US Regal cinemas as at risk of further market share loss?
- How much does Cineworld need to invest to modernise its US Regal cinemas?
- What are the structural trends in cinema attendance, ticket pricing and other sources of revenue?
- What transactions multiples have been seen in the cinema sector?
- View, Variant Perception & Recommendations
- Business Overview & Analysis
- Film Distribution, Theatrical Window & 2021 Movie Slate
- Historical Box Office Performance & Figures – US & UK
- Competitive Landscape - UK
- Competitive Landscape - US
- Historic Financials
- Financial Projections, Valuation & Sensitivities
- Appendix 1 – Cinema COVID Capacity Restrictions – UK & US