Israel Analyst Presentation 24 th May 2017 Overview Overview - PowerPoint PPT Presentation

Israel – Analyst Presentation 24 th May 2017

Overview

Overview Israel economy and demographics The cinema market in Israel Our brands in Israel Israel – a case study for the UK

Israel Economy & Demographics

Israel economy and demographics High GDP per capita, with low unemployment rate and stable inflation GDP per capita (+2.9% average for the last 8 years) Haifa population low level of inflation over of the population are living in Tel Aviv the last 8 years 14 cities with >100,000 Jerusalem inhabitants Unemployment rate in December Current NIS/GBP exchange rate is 2016 Beer Sheva average monthly salary

The cinema market in Israel

Market overview in 2016 major competitors – market share Bu Combination of Hollywood and local movies Ro Is screens Ro sites UK Hu people per screen UK Hu Increased to Po admissions per capita from Is in 2006 (Higher ratio when taking into the consideration the local demographics)

Investment in an established market Annual Screen Change Since the end of 2006 the following took place: Screen changes 100 71 41 screens closed in old cinemas 25 27 28 26 50 24 24 7 3 3 - 0 screens opened in new cinemas 4 9 11 13 14 -50 24 24 29 32 64 -100 New generation cinemas launched 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Screen Openings Screen Closures Premium formats introduced: Total Screens 3D Hu Total screens 4DX 368 400 314 295 297 289 IMAX 281 281 277 271 275 264 300 VIP 200 Dolby Sound systems 100 The average number of screens per site increased to 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 from in 2006

Growth in an established market (millions) Admissions per Capita 25 2.5 Investment in the cinema estate had the following impact on 2.1+ the national market: 2.0 20 1.8 2.0 17.0 18.0+ 1.7 1.7 increase in admissions 1.6 1.6 15.6 1.5 12.2 12.0 13.0 14.0 14.4 15 1.5 1.3 Admissions per capita – to 1.2 1.2 1.2 9.9 9.1 9.0 9.0 10 1.0 : Hu ATP 5 0.5 SPP Advertising 0 0.0 EBITDA margin 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Forecast Admissions in Israel Admissions per capita 2017 forecast

Our brands in Israel

Our history Acquisition of forum Start operation 2 nd Yes planet Merging with film (Disney) in Europe Haifa Cineworld 1931 1982 2006 2012 2015-2017 2014 1997 2008 1967 1 st cinema 1 st Rav-Chen 1 st megaplex – Yes Flagship megaplex Opening of 3 in Haifa multiplex in Planet Ayalon – Yes Planet megaplexes – Yes Planet Dizengof Tel Aviv Rishon Jerusalem, Beer Sheva & Zichron

Our brands 124 screens 10 sites Bu Ro Is Two brands – and Ro Market leader with more than third of market share 3 Focused on continually improving the customer experience UK Hu Forum Film established in Israel, the Group’s strategic distribution arm UK Hu 3 In 2006 we operated 131 screens in 23 cinemas Po Is Closed 94 screens in 18 cinemas and opened 87 screens in 5 cinemas between 2006 and 2016 4 New megaplex with 12 screens opening in Zichron Yaakov in June 2017

Yes Planet Circuit Rishon Lezion – Flagship Megaplex Opened in 2012 Stand alone megaplex 24 screens 2D/3D Imax 4DX 3 VIP halls Strong ATP and SPP due to unique experience Strong revenue from other income e.g. advertising and rental income

Yes Planet Circuit Yes Planet - Ayalon Yes Planet - Haifa Haifa Ayalon Opened in 2008 Opened in 2006 23 screens 15 screens 2D/3D 2D/3D 4DX Prime location near Tel Aviv 3 VIP halls

Yes Planet Circuit Yes Planet - Jerusalem Yes Planet – Beer Sheva Jerusalem Opened in 2015 Opened in 2016 Beer Sheva 16 screens 18 screens 2D/3D 2D/3D Imax Imax 4DX 4DX 3 VIP halls

Yes Planet Zichron – opening June 2017 Located in a strategic location between Haifa and Tel Aviv next to the main highway 12 screens 2D/3D 2 VIP halls

Rav-Chen circuit Givatayim Seven Stars Modiin Dizengoff Kiryat Ono 5 multiplex with 28 screens 2D/3D Located in the city centres around Tel Aviv area In the beginning of of 2006 we operated 22 Rav-Chen multiplexes with 116 screens As part of the trend of opening megaplex, we closed 18 multiplex with 94 screens and retained only those in prime locations with a strong and stable … EBITDA 16

New generation cinemas number of screens per cinema Bu ATP due to premium formats (4DX/IMAX/VIP ) and greater variety of movies Ro Is SPP due to a range of products and larger concessions areas Ro advertisement per person due to more sponsorship opportunities other income from hall hire and leasing of real estate UK Hu UK Hu Po Is New generation cinema

Evolution of the Israeli cinema market 2006 2016 Bu Bu Ro Is Is 60 cinemas 44 cinemas Old 3D, 4DX, 39 sites 314 screens Ro cinemas to 368 screens Ro VIP & closed and next 5.2 avg. screens per site 8.4 avg. screens per site Dolby 23 opened generation Atmos 9m tickets sold 17m tickets sold cinemas UK UK 1.2 admission per capita 2.0 admission per capita Hu Hu UK Hu 45.2 viewing option (i.e. 54.9K viewing option standard seating) (i.e. standard seating) Po Is Po

Israel – a case study for the UK

The UK as an established market Population of in 2016 (source The market is currently under ONS) invested major players dominating the Higher average age of site in the market UK Admissions per capita in 2016: Average number of screens per site (source: UK CA) in 2016 (source: UKCA) Local movies popular as well as Considered as a mature market Hollywood blockbusters with mature prices people per screen in 2016

The UK market – a state of transition Closing of small, older cinemas Opening of the next generation, state of the art megaplexes Expansion of premium formats e.g. 4DX, Imax, Superscreen and VIP Refurbishment of older cinemas

Admissions per head comparison 4.0 2.6 3.2 3.4

The UK Market Potential In Israel – strategic investment in new megaplex sites and technologies increased the admission per capita Other mature markets have much higher admission per capita than the UK

Q&A