Merlin Entertainments, Europe’s leading and the world’s second-largest visitor attraction operator, today announces its financial results for the year to December 25th 2010
· Total visitors increased to 41.0m – a rise of 2.5m (6.5%)
· Group Revenue up 4.1% to £800.8m (2009: £769.0m)
· Underlying Group EBITDA up 8.5% to £255.8m (2009: £235.7m)
· Capital investment of £103.8m during the year (2009: £101.2m), funded from operating cash flow
· Continued strong and resilient growth against a tough economic backdrop
· Performance driven by strong trading in existing estate
· International growth through 3 new openings on 3 continents
· 2010 acquisitions of Cypress Gardens, Florida, USA to become LEGOLAND Florida and operating contract for the UK’s iconic Blackpool Tower Complex
· 2011 acquisition of Sydney Attractions Group completed post year end
· Current 2011 trading in line with expectations
OPERATIONAL AND DEVELOPMENT OVERVIEW
· Good performance across all three Operating Groups: Resort Theme Parks; LEGOLAND Parks; Midway Attractions
· Theme park performance driven by the opening of new rides and attractions and the development of destination positioning (2-3 day stays)
· Continued momentum of Midway roll-out strategy with three attractions opened in the year
– LEGOLAND Discovery Centre Manchester;
– SEA LIFE Phoenix;
– Madame Tussauds Bangkok, first Merlin attraction in Thailand
· Move into the Australian and New Zealand markets with the acquisition of Sydney Attractions Group and Kelly Tarlton’s Underwater World. This acquisition added six businesses which attracted 2.6m visitors in 2010
· LEGOLAND Florida development proceeding to plan and due to open in October 2011
· Merlin appointed by Blackpool City Council to manage the redevelopment of and operate the iconic Blackpool Tower Complex
· Acceleration of growth plans for 2011 driven by:
– Innovative new rides and attractions opening in the existing estate including Atlantis Submarine Voyage at LEGOLAND Windsor, Raptor at Gardaland and the Kraken at Heide Park
– Seven further Midway openings across our five brands: three in the UK, two in Continental Europe and two in the US
– Opening of LEGOLAND Florida
– Integration of the Australian and New Zealand attractions into the Group
· Strong schedule of new attractions planned for 2012, with the opening of LEGOLAND Malaysia and the LEGOLAND Windsor Hotel and five new Midways including two in the US: SEA LIFE Kansas City and LEGOLAND Discovery Centre in Atlanta
· Strong development pipeline would leave Merlin with more than 80 attractions across four continents by the end of 2012
Nick Varney, Merlin Entertainments Chief Executive, said, “We are delighted to report another year of strong performance from Merlin Entertainments, with growth coming from all parts of our unique business. During 2010 we significantly extended our geographic footprint, while delivering further growth in turnover and profitability as we welcomed 2.5m more visitors to our iconic attractions around the world.
“In the past year we have continued to invest to grow and develop our business. We now operate over 70 attractions in 17 countries across four continents under our internationally recognised brands. Looking ahead, we have accelerated our growth plans and by the end of 2012 we will be operating more than 80 attractions as we develop further across Europe, North America and the Asia Pacific region.
“This year will be one of the most exciting in Merlin’s history. October will mark our move into the biggest family tourist centre in the world when we open the gates to LEGOLAND Florida. The development of this exciting theme park on the historic Cypress Gardens site has gone to plan and early ticket sales have confirmed our confidence in taking LEGOLAND to the heart of the US theme park market. In addition, we will capitalise on the wealth of opportunities open to us in the Asia Pacific market in the wake of our acquisition of the Sydney Attractions Group while keeping up the pace of change in Europe and the US with the opening of seven new Midway attractions.
“We are now approaching the start of our key trading period in confident mood. We have an impressive pipeline of new developments across all of our existing attractions, including thrilling new roller coasters in our theme parks in Germany and Italy. While the outlook for the consumer economy remains uncertain, we believe Merlin will make further good progress and continue to grow. Under our new ownership structure we will continue to invest in our clear and proven strategy of growing our strong brands in a portfolio of attractions balanced by geography, product and demographics.”
1. FURTHER FINANCIAL INFORMATION
· Figures at constant currency: group revenue up 6.1%; underlying EBITDA up 9.6%
· Like-for-like constant currency figures: total visitors up 4.5%; revenue up 6.0%; underlying EBITDA up 9.4%
· Capital investment of £103.8m comprised £74.6m on existing estate and £29.2m on new business development in Midways and LEGOLAND Florida
· Balance sheet strengthened in support of future growth plans:
– Refinancing agreed; financing secure to 2015
– Net debt reduced by £615.3m to £1, 094.1m, primarily due to conversion of shareholder loan notes for equity
– Underlying financing costs in 2010 reduced by 19%
· The seven further Midway openings planned in 2011 across our five brands are as follows : Madame Tussauds Vienna, Austria; SEA LIFE Jesolo, Italy; LEGOLAND Discovery Centre Dallas, USA; SEA LIFE Dallas Fort Worth, USA; and a Dungeon, Eye and Madame Tussauds attractions in Blackpool, UK
· Underlying EBITDA is defined as earnings before finance income and costs, taxation, depreciation, amortisation and impairment, after taking account of profit after tax of joint ventures and is stated before exceptional and non-trading items
· Like-for-like is defined as all businesses owned and operational at the start of the preceding financial year.
2. MERLIN ENTERTAINMENTS is the leading name in location-based, family entertainment, and has seen the most successful and dynamic growth of any company in the sector over the last five years. Europe’s Number 1 and the world’s second-largest visitor attraction operator, Merlin now operates over 70 attractions, six hotels/two holiday villages in 17 countries and across four continents. The company aims to deliver memorable and rewarding experiences to its 43.6 million visitors worldwide (which includes the 2.6m visitors to the Sydney Attractions Group attractions in 2010), through its iconic global and local brands, and the commitment and passion of its managers and more than 15, 000 employees. Merlin Entertainments operates the following attractions – SEA LIFE, Madame Tussauds, LEGOLAND, The EDF Energy London Eye, Dungeons, Gardaland, LEGOLAND Discovery Centres, Alton Towers Resort, Warwick Castle, Thorpe Park, Chessington World of Adventures Resort, Heide Park, Earth Explorer, Sydney Aquarium, Sydney Wildlife World, Sydney Tower Observatory and Skywalk, Kelly Tarlton’s Antarctic Encounter Underwater World, Oceanworld Manly and Hamilton Island Koala Gallery.
3. OWNERSHIP STRUCTURE
Merlin Entertainments is a privately owned company. Its primary shareholders are the Blackstone Group, which purchased the company in May 2005, KIRKBI A/S, CVC Capital Partners, and the management team. A new ownership structure was agreed in June to underpin Merlin’s ambitious growth plans:
– Funds advised by CVC Capital Partners acquired 28% stake
– Blackstone and KIRKBI retained significant stakes as continued supportive owners.
4. MERLIN SHAREHOLDERS
Blackstone (NYSE: BX) is one of the world’s leading investment and advisory firms. We seek to create positive economic impact and long-term value for our investors, the companies we invest in, the companies we advise and the broader global economy. We do this through the commitment of our extraordinary people and flexible capital. Our alternative asset management businesses include the management of corporate private equity funds, real estate funds, funds of hedge funds, credit oriented funds, collateralized loan obligation vehicles (CLOs) and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement services. Further information is available at www.blackstone.com.
KIRKBI A/S is a privately held, family-owned investment and holding company based in Billund, Denmark. Its holdings include a 75% ownership share in the LEGO Group, the remaining 25% being held by a family foundation. The LEGO Group was founded in 1932 and today the group is one of the world’s leading manufacturers of play materials for children, employing more than 9, 000 people globally. The LEGO Group is committed to the development of children’s creative and imaginative abilities. LEGO products can be purchased in more than 130 countries. LEGO and the LEGO logo are trademarks of the LEGO Group. ©2011 The LEGO Group.
CVC Capital Partners (‘CVC’) is one of the world’s leading Private Equity and investment advisory firms. Founded in 1981, CVC now has a network of 20 offices and over 220 employees throughout Europe, Asia and the United States. CVC funds, raised from pension funds, financial institutions and various other partners, seek to identify attractive investments and then develop sustainable, long-term value in close partnership with management teams. Today, CVC manages in total over US$38 billion in funds, and is currently investing from funds with an aggregate of US$18 billion in available equity capital. In total, CVC has completed over 250 investments across a wide range of industries and countries. Today, CVC funds own 53 companies worldwide, employing approximately 400, 000 people in numerous countries. Together these companies have combined annual sales of over US$100 billion. Further information is available at www.cvc.com
Image at top, kind courtesy Merlin Entertainments: Adrian Jones, GM at LEGOLAND Florida at a recent press day.