Kinepolis Group 2023 as a “transition year”
Although we believe in the longer term potential of Kinepolis Group we lower our Target Price to €59 (from € 68) after revising our FY23E visitor numbers from 40m to 36m. Kinepolis management is also seeing FY23 as a “transition year”. For FY24E the delta in our model is much more limited (from 45.7m to 43.4m). On the other hand, we have confidence in the pricing power of Kinepolis (passing on at least the inflation on the In-theatre sales) so we slightly increased our FY23 sales per visitor from € 16.8 to € 17.25. As a result the FY23E sales decline is somewhat more limited (FY23E sales going from 677m to 621m). As we believe that the long term story remains intact (theatrical exclusivity of content to cinemas before going to streaming platforms) we maintain our Buy rating.Kinepolis Group NV is a Belgium-based company, which is primarily engaged in the operation of cinemas. The Company's activities are divided into such business units, as Box office, In-theatre sales, Business-to-business (B2B), Film distribution and Real Estate. The Box office unit includes sale of the tickets. The In-theatre sales unit is involved in the sale of snacks and related articles. The B2B unit takes care of the organization of corporate events and the sale of screen advertizing to corporate customers. The Film distribution unit includes all activities related to movies showed in the cinema. The Real Estate is responsible for the property management and utilization. Additionally, the Company has a Technical department, which delivers technological support to Kinepolis facilities. The Company is present in Belgium, France, Spain and Poland.
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