Tuesday, January 30, :45-13:00

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1 Tuesday, January 3, 27 11:45-13: Fun, Fun, Fun: The Outlook for the Industry Julie Clark Jeff Bertus Euro Attractions Show January 3 - February 1, 27 Fibes Seville Spain

3 Euro Attractions Show Fun, Fun, Fun: The Outlook for the Industry Julie Clark, PricewaterhouseCoopers 3 th January 27 Agenda Theme park revenue forecasts: - How good have they been? - Drivers of market growth The changing consumer Spend patterns Forecasts 26 21: - EMEA v US -Spain - Germany What does this mean for the future? Theme park revenue forecasts: how good are they? Seven years of theme park attendance and revenue forecasts A proprietary model by Wilkofsky and Gruen, tested and challenged by PwC sector specialists The underlying market drivers.economic, travel, demographic, behavioural and supply.are key Unpredictable one off events (eg 9/11) affect the results

4 EMEA attendance growth has been lower than forecast in % Growth GDP Year Source:, US Census Bureau International Database, Wilkofsky Gruen Associates But spend per capita has matched the forecast more closely, despite the impact of 9/11 and resulting economic slowdown 7 6 Per Capita Spending % Growth GDP Year Source:, US Census Bureau International Database, Wilkofsky Gruen Associates The consumer starting point is very different in US and across EMEA Theme park penetration 9% 8% 7% 6% % population 5% 4% 3% 2% 1% % North America UK Spain Germany Source: ERA, Deloitte

5 The consumer is getting older Demographic trends between 25 and Percentage change US EMEA Age group Source:, US Census Bureau International Database, Wilkofsky Gruen Associates The consumer is more complex Healthy easting Ethics and spirituality Products Brands and belonging Luxury Packages Indulgence/binge culture Hedonism Experience Individuality Value for money Bespoke services Leisure spending patterns also differ across Europe 9% Expenditure on leisure and recreation as a % GDP 8% 8% Household spend Government spend 7% 6% 6% 6% % GDP 5% 4% 5% 3% 2% 1% 1% 1% % 1% % Source: OECD Factbook 26 United Kingdom United States Spain Germany

6 Consumer spending is forecast to show significant growth 24 Trends in consumer spending Growth in household consumption (indexed) Forecast USA Spain UK Germany Source: Henley, Consensus Economics, personal or household expenditure shown The US market remains the largest, but per capita spend is comparable Theme Park Market Revenue CAGR Per capita spending on theme parks 3 25 Total: 4.5% US: 3.6% EMEA: 4.7% Spend (US$ Millions) US EMEA Total Per capita spend (US$) EMEA US Year Year Source:, US Census Bureau International Database, Wilkofsky Gruen Associates Macro-economic conditions in Spain have been highly favourable in recent years Growth Rates (%) GDP, Household Consumption and Consumer Prices Growth Rates Spain GDP Household Consumption Consumer Prices Forecast Spanish growth is expected to remain strongest among the larger Euroland economies at 3.6% this year PwC European Overview Oct Source: World Development Indicators (historical), Economist Intelligence Unit (forecast)

7 Spanish disposable income has grown at 5%p.a. since 2 and spend on leisure activities has grown ahead of this at 6.9%p.a Euros Average Personal Disposable Income Spain 2-24 Average Disposable Income Growth 18 CAGR 5.% % 5% 4% 3% Spend (Euros) 5, 4,5 4, 3,5 3, 2,5 2, Spanish Leisure Spend CAGR Total 6.9% Other goods and 9.% services Hotels. cafés and 5.5% restaurants 6 2% 1, % % 1, Leisure. 6.8% 5 performances and culture Source: INE Note: Spend on leisure includes INE groups Leisure, performances and culture, Hotels, cafés and restaurants and Other goods and services The Spanish leisure park market has seen strong growth, due to the opening of new attractions 7 6 Spanish Leisure Park Market Forecast CAGR : 9.1% CAGR 26-28: 5.4% Market Value (Euro M) Source: DBK But there are some key risks in the Spanish market House prices CAGR 2-6 Indexed (Q = 1) Prices in Q1 6 are 2.8 times higher than in Q % bn Mortgage-related debt in Spain Source: Ministry of Housing Source: INE, Press Article, Banco de Espalña

8 German macro-economic outlook is stronger after a few difficult years GDP, Consumption and Consumer Prices Growth Rates, Germany GDP Private Consumption Consumer Prices 2.5 Forecast Growth Rates (%) Source: Consensus Economics, PricewaterhouseCoopers forecasts, Economic Intelligence Unit, The Economist 3 But country wide data masks considerable differences GDP by Federal State CAGR CAGR Germany 3.3% 1.7% 4 Bavaria 3.6% 2.4% 35 3 Baden- Württemberg 2.8% 2.1% GDP (Euro Bn) 25 2 Lower Saxony 2.8%.9% 15 1 Hamburg 2.9% 2.% 5 Bremen 2.1% 2.1% Source: Federal Statistics Office Germany 6 Revenues to German theme parks continue to grow modestly Theme Park Revenue in Germany 62 6 Forecast CAGR 26 21: 1.9% Spend (US$ Million) Year Source: Source:, US Census Bureau International Database, Wilkofsky Gruen Associates

9 What does this mean for a successful leisure business in EMEA? Iconic building element Location/ Access Flexibility to demand Strong management Reinvestment Wow factor Cluster effect Sustainable Business plan Sweat the asset Future Challenges Challenges Terrorism Global health pandemic/ decline in travel Possible impacts on theme parks Could see more visitors at regional parks Increased use of regional parks Regulations/ Health and Safety Issues Developing compensation culture/strong expertise required Sophisticated home-based entertainment Focus on creating wow factors and people interaction Limited leisure hours Increasing demands on people s time Price of travel Climate Change Fixed costs Could see more visitors at regional parks Extreme weather conditions may reduce park visits, but design can counter the impact Likely to increase In summary Fewer new parks Complex consumer Focus on making asset sweat Increasing differentiation Inevitably more consolidation

10 Name Julie Clark Director Office Embankment Place Telephone +44 () Mobile +44 () Fax +44 () julie.d.clark@uk.pwc.com This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law,, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. 27. All rights reserved. 'PricewaterhouseCoopers' refers to (a limited liability partnership in the United Kingdom) or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

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