About Edwards Theatres Circuit, Inc.
Cineworld Group likes living in the reel world. The international cinema chain operates nearly 800 theaters and more than 9,500 screens in some ten countries in North America and Europe. Brands include Cineworld, Regal, Cinema City, Picture House, and Yes Planet. UK-based Cineworld acquired US counterpart Regal Entertainment in a £2.5 billion reverse takeover in 2018 to become the world's second largest cinema chain (by number of screens). In late 2019 it announced plans to expand into Canada with the acquisition of Cineplex for $1.65 billion, creating North America's largest cinema operator. The company was founded in 1995 by Stephen Wiener and began trading on the London Stock Exchange in 2007.
Cineworld offers several formats to watch movies, including regular screens, 3D, IMAX, and Premium Large Format as well as 4DX (motion seats and environmental effects), ScreenX (multi-projection, 270-degree viewing), and a VIP offering (which screens movies in a small auditorium with reclining seats, food and drink options, and access to a separate lounge and bar). At the end of 2018 Cineworld had a total of 130 IMAX screens, more than 50 4DX screens, and some 115 Premium Large Format screens.
About 60% of Cineworld's revenue comes from box office sales, while concession stand sales and other retail accounts for about 30%. Remaining revenue comes from Other Income, mostly from advertisements shown on screen prior to film screenings and from booking fees associated with online ticket purchases. The company also generates some distribution revenue in certain markets.
Cineworld is based in Brentford, UK (west London) and currently operates in the UK, Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania, Israel, and the US.
US cinema brands include Regal, United Artists, and Edwards; UK and Ireland chains include Cineworld and Picturehouse; and Rest of World (ROW) includes Cinema City in Central and Eastern Europe and the Yes Planet and Rav-Chen brands in Israel. Some 75% of revenue comes from the US and about 15% comes from the UK and Ireland. ROW accounts for the remaining 10%.
Sales and Marketing
Cineworld operates a number of marketing programs designed to encourage repeat visits to its cinemas. In the UK and Poland it offers an Unlimited membership service for a fixed monthly (or annual) subscription, enabling customers to watch as many films as they wish. In the US, members of the Regal Crown Club loyalty program earn credits for each dollar spent at its cinemas, and can redeem them for movie tickets, concession items, and movie memorabilia.
Like the rest of the movie theater industry, Cineworld relies on the number, timing, and popularity of the films it is able to show in its cinemas. Box-office hits give it the potential to make money from premium concessions and movie-related events. Major acquisitions have helped the company achieve recent revenue growth. Net income has also grown year-to-year since 2015, except for a dip in profits in 2016.
Total revenue for 2018 was $4.1 billion, up from $1.1 billion the prior year, as a result of including Regal for the first time. Total admissions increased by 2.6% in 2018, when US releases such as Avengers: Infinity War, Black Panther, and Incredibles 2 boosted ticket sales at Regal.
Net income was $284.3 million in 2018, up from $129.5 billion the prior year. Cineworld said integration benefits and cost synergies from its acquisition of Regal -- which was completed on February 28, 2018 -- were greater (and carried out faster) than expected.
Cash at the end of 2018 was $316.3 million, up from $91.0 million the prior year. Operations in 2018 generated $631.9 million, while investing activities used $3.6 billion. Financing activities generated $3.1 billion.
Investment in technology continues is a key pillar of Cineworld's strategy. In 2018 the company expanded its viewing offering for customers with the introduction of ScreenX, which it claims is the world's first multi-projection immersive cinema auditorium.
Other strategic initiatives include growth through the expansion of food and drink offerings and new international locations. During 2018 Cineworld continued rollout of its expanded food and alcohol menu, adding alcoholic beverage availability at 35 US theaters and expanding food offering in 14 theaters. During 2018 Cineworld also opened more than a dozen new cinemas totaling nearly 110 screens, including six in the US and six in the UK.
Mergers and Acquisitions
Cineworld at the tail end of 2019 agreed to buy Canada's Cineplex for $1.65 billion in a deal that will create North America's largest cinema operator.The acquisition will give the British company more than 11,200 screens globally and top rival AMC Entertainment (itself part of China's Dalian Wanda Group) in North America. Cineworld also hopes the deal will allow it to save some $65 million in costs and generate an additional $65 million in revenue from subscription programs, improving concessions, and additional advertising. The transaction, subject to shareholder and regulatory approvals, is expected to close in 2020.
The Cineplex deal follows Cineworld's 2018 purchase of Regal Entertainment Group, which made it the world's second largest cinema chain. Regal added more than 7,200 screens at approximately 550 theaters across the US to Cineworld's portfolio in a deal worth $3.6 billion.
The Cineplex and Regal deals are two examples of recent industry consolidation as cinema owners attempt to combat competition from streaming services and other forms of entertainment.
Cineworld Group was founded in 1995 by then CEO Stephen Wiener. The Group was listed on the London Stock Exchange in 2007. The company has spent the last decade expanding through acquisitions, including Picturehouse in 2012, Cinema City International in 2014, and Regal Entertainment Group in 2018.
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Employer Type: Privately Owned
Employees (This Location): 118
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