Market Insight

Kinepolis reports a 7.5% increase in cinema visitors in 2016 primarily due to acquisitions

February 23, 2017  | Subscribers Only

Xin Zhang Xin Zhang Senior Research Analyst, Cinema, IHS Markit
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Pan-European exhibitor Kinepolis posted a positive 7.5% increase in cinema admissions across six territories it operates. This is in spite of the less strong film offer, the European football championship and fewer public holidays in 2016. The increase was primarily attributed to the Group’s acquisitions in 2015 and 2016, which were included in the Group’s annual figures for the first time. The five new cinemas opened in 2016 also contributed to the rise. Revenue generated by box office was a marginally softer 7.3% rise to reach € 175.6 million in 2016, primarily due to the changed country mix after expansion and the loss of part of the revenues from the Virtual Print Fee (VPF). 

Our analysis:

Belgium-based Kinepolis currently operates 47 cinemas with  474 screens across six countries in Europe (not including the two leased cinemas in Belgium and Poland). Belgium and France were the key markets for the Group, accounting for 35.2% and 29.4% of the total admissions in 2016 respectively. However, Netherlands (56.9%) and Luxembourg (309.3%) saw the most growth in cinemas visitors over 2015. 

Acquisitions and new builds are a core part of Kinepolis’ business strategy. The Group took over the operation of the 14-screen cinema in Rouen, France in January 2016 from its previous owner UGC. It also acquired another French cinema Megaroyal with 12 screens in 2015. The acquisition of Utopolis Group in 2015 with 13 cinemas across four territories was the most strategic, which largely strengthened its presence in the European market. The five new builds in the Netherlands (Dordrecht, Breda, Utrecht), Spain (Granada) and France (Fenouillet) were the key organic growth drivers for the Group in 2016.

The European market has displayed a steady rise in concentration over the past decade driven by acquisitions among leading exhibitors. Odeon UCI, Vue, Kinepolis, and Nordic Cinema Group are all growing their overall cross-border screen count as well as their presence in individual countries. Kinepolis is not the biggest of these groups but acts as a bellwether for the health of the European industry, and is a keen innovator of technology and service levels. 

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