ODEON & UCI Cinemas Group Annual Review 2011

ODEON & UCI Cinemas 

Annual Review 2011

Contents 

Highlights 3 

Chairman’s Statement 6 

Chief Executive’s Review 7 

UK & Ireland Divisional Review 

Continental Europe 

13 

Divisional Review 16 

Corporate Social Responsibility 20 

Our People 21 

Chief Financial Officer’s Report 22 

Our Directors 26 

Corporate Governance Report 28 

Front Cover: Newly refurbished ODEON Swiss Cottage 

site including North London’s first IMAX screen. 

This page from top left to right: 1. Emma Watson 

signed autographs outside the premiere of ‘Harry 

Potter and the Deathly Hallows Part 2’ hosted at 

ODEON Leicester Square. 2. Guests enjoy fine food 

and film at The Lounge at ODEON Whiteleys. 3. 

Entrance to the big screen format auditorium iSens. 

4. Exterior of the new UCI site in Cagliari, Italy. 5. The 

newly refurbished box office at Parc Vallès, Spain. 6. 

The opening of the brand new ODEON Swadlincote. 

1 © David Fisher / Rex Features 

2 

3 4 

5 6

highlights 2011 

s 

ODEON & UCI Cinemas Group - 

Europe’s Leading Cinema Operator 

Number 1 Operator in Europe 

n More than twice the size of our nearest European competitor in screen numbers 

n Number 1 operator in the UK & Ireland, Spain and Italy 

n Significant presence in Germany, Austria and Portugal 

n Largest operator outside America 

n 1.6 million guests visit our cinemas weekly ● 

n 6.8 million users in pan-European database and 3.5 million loyalty card members 

Acquisitive Growth 

n 5 acquisitions between 2005-2009 continue to deliver good value 

n Further 6 acquisitions for total of 34 cinemas have been completed since 2009 

in the UK & Ireland, Spain and Italy 

n Over £135m invested in 2010/2011 to increase number of screens by 16% 

✛ 

EBITDA 

£103m 

increased 12% * 

Investment in cinemas and customer offer driving 

revenue growth despite economic downturn 

n Ticket price average increased 2% u 

n Retail per guest average increased 2% u 

n Screen ads declined, down 5% year-on-year ✝ 

n Other revenue up 31%, including 3D glasses sales ✝ 

n £32m invested in development projects 

Driving Digital Development 

ODEON & UCI Cinemas Annual Review 2011 

n Roll-out close to completion, screens converted increased from 11% in December 2009 to nearly 90% in December 

2011 with the UK & Ireland fully digital in November 2011. 

n On track to complete digital transformation by July 2012. This will make us the largest all digital exhibitor in the world. ❖ 

s ODEON & UCI Cinemas Group comprises ODEON & UCI Cinemas Holdings Ltd and ODEON Property Group LLP as described in the CFO’s Report. 

✛ Earnings before interest, tax, depreciation, amortisation, exceptional items and strategic one-off costs. 

* Compared to previous year. 

u Major territory weighted average, like-for-like (“LFL”) estate, at constant foreign exchange rate. 

● Based on average weekly attendances for 2011. 

✝ LFL estate, constant foreign exchange rate. 

❖ Excludes 3 sites managed for other owners & one site scheduled for closure this year. 

3


4 

Leaders in Cinema 

n Number 1 Cinema Operator in Europe and largest 

outside America 

n Only cinema chain successfully operating in 7 Western 

European markets 

n Europe’s flagship cinema – ODEON Leicester Square 

n Service standards ahead of competition * 

n One of the highest retail revenue per head of any major cinema chain 

n Ben & Jerry’s biggest franchisee in the world 

n Co-owner of Europe’s largest screen advertising company - DCM 

n Biggest circuit of IMAX screens in Europe 

n Leaders in customer loyalty and guest service 

* See page 10. 

– Most loyalty members in Europe, schemes in all territories 

– Total members 3.5m as at December 2011, up 43% on 2010 

– Total customer database grew 16% on 2010 to 6.8m 

– Consistently ahead of competition in Mystery Shopper scores 

Total Customer Database 

Territory (‘000s) 2006 2007 2008 2009 2010 2011 CAGR 

UK 1,284 1,723 2,373 2,864 3,703 4,142 26% 

Germany 353 477 594 811 1,026 1,191 28% 

Spain 301 378 454 526 600 696 18% 

Italy 68 105 158 221 312 487 48% 

Austria 53 81 104 133 165 194 30% 

Portugal 41 55 70 84 95 109 22% 

Total 2,100 2,819 3,753 4,639 5,901 6,819 27%

Leaders in Digital Cinema 

n More 3D digital screens than any other cinema group in UK/Ireland; 

more 3D digital screens than any other cinema group in Europe. 

n First cinema chain outside USA to sign directly six major Hollywood 

studio digital deals to enable 100% roll out 

n First to sign a pan European deal for supply of in-auditorium 3D 

equipment with supplier Real D 

n First live 3D sports event 

n First live 3D football in cinema 

n More alternative content events than any other European exhibitor 

n More digital screens than any other cinema group in Europe 

n UK & Ireland digital fully rolled out as of last November 

Number of 

Digital Screens 

CE 

UK & Ireland 

221 

20 

201 

Dec 2009 

Accelerating Digital Screen Roll-out 

506 

208 

298 

July 2010 

805 

360 

445 

Dec 2010 

1,223 

557 

666 


June 2011 

1,926 

1,017 

909 

Dec 2011 

5


6 

Chairman’s Statement 

ODEON & UCI Cinemas Group s 

continued to grow strongly 

in this seventh year of Terra Firma ownership. u 

I am pleased to report that 2011 was another strong year for 

ODEON & UCI Cinemas Group. EBITDA was £103m, an increase 

of 12% over the prior year. 

The Group is firmly established as Europe’s number 1 cinema 

chain and is the largest operator outside America. We continue 

to expand through new site openings and in-territory acquisitions. 

The total number of sites and screens reached 231 and 2,153 

respectively in December 2011, following 6 acquisitions in less 

than a year, an increase in screen count of 16%. 

At ODEON we work consistently hard to provide the best 

customer experience, as demonstrated by our positive customer 

feedback. During the year we have continued to invest in new 

initiatives to further improve the customer experience, including 

additional premium seats, IMAX screens, our new proprietary big 

screen and big sound experience iSens, 3D screens and further 

retail developments. 

Since the original acquisition of the ODEON and UCI businesses 

in 2004, Terra Firma has supported further investment in bolt-on 

acquisitions, with £224m invested to 2011, and in further capital 

expenditure, with £228m invested. 

Excellent progress was made in 2011 on the digital roll-out. 

By December 2011 we had 1,926 digital screens representing 

nearly 90% of the total estate. By the end of 2011 the UK 

and Ireland was fully digital and we are on track to complete 

the transformation in Europe by July 2012. These exciting 

developments are enabling the business to enhance its 

operational capability and flexibility as well as providing exciting 

new content for customers, 3D films and alternative content 

such as opera, theatre and sports. 

In May 2011 we successfully issued a bond of £475m equivalent 

to refinance existing debt, complete recent acquisitions and fund 

future growth. The Group still has funds available to invest to grow 

the existing business and complete further bolt-on acquisitions. 

The strong team at ODEON & UCI Cinemas Group is led by 

Rupert Gavin, our Chief Executive. I would again like to extend 

my thanks to all of the Group’s employees for their high level 

of professionalism, commitment and enthusiasm which really 

do make a difference to customers’ enjoyment of their cinema 

experience. 

Finally after 5 years this is my last Annual Review as Chairman. 

Terra Firma, as part of good corporate governance, reviews and 

rotates its Board positions and my colleague Robbie Barr will 

now replace me as Chairman. I am staying on the Board as a 

non-executive director and look forward to continuing to work 

with the team in the further development of the business. 

Mike Kinski 

Chairman ✝ 

Terra Firma has supported substantial 

investment in ODEON & UCI Cinemas Group 

£224 million 

in bolt-on acquisitions 

£228 million 

further capital investment in the estate 

s Defined on page 3. 

u Terra Firma is described on page 24. 

✝ See director profiles on page 26.

Chief Executive’s Review 


2011 has been a successful year for ODEON & UCI Cinemas Group. Our continued 

investment in new sites, in-territory acquisitions, improved retail offerings, digital and 

3D have all contributed to a strong set of results. 

The Cinema Market 

ODEON & UCI Cinemas Group operates in four major European 

markets: UK, Spain, Italy and Germany; and three smaller 

markets: Austria, Portugal and Ireland. 

The performance of these markets depends primarily on 

the strength of the film line-up but also external factors 

such as weather patterns and major events such as football 

tournaments. The film line-up consists of a combination of 

major global Hollywood blockbusters (such as the ‘Harry Potter’ 

franchise, the ‘Bond’ films and ‘Ice Age’), secondary Hollywood 

titles (which are often not franchises but are single stand alone 

titles, such as ‘Alice in Wonderland’ and ‘Bridesmaids’), niche 

titles and local film titles. 

The performance of the market in each year is dependent on 

the interaction of all four categories. This means that markets in 

different countries do not always move in the same direction. 

UK 

Brand ODEON 

Rank* 1 st 

Total Cinemas 108 

Total Screens 848 

Market Share 25% 1 

Ireland 

Brand UCI/Storm ❖ 

Rank 2 nd 



Spain 

Brand Cinesa 

Rank* 1 st 



Market Share 20% 

Portugal 

Brand UCI 

Rank* 3 rd 



Europe Rank*: 1st Total Cinemas: 230 Total Screens: 2,140 

The above represents owned and managed sites as at March 2012 

In 2011, our main markets experienced a decline in attendance 

of 1% on 2010 primarily because of an 8% decline in 

attendance in Italy compared to an unusually strong 2010 (as 

‘Avatar’ opened in January 2010 in this market). Spanish market 

attendance declined by 2% on 2010 due to a weaker film slate 

and warm dry weather but this was more than compensated 

by increases in the UK and Germany of 2% each on the prior 

year. In box office terms Spain and Italy declined 2% and 6% 

respectively whilst the German market grew 4% year-on-year 

and the UK by 6%. 

3D 

2010 was the breakthrough year for 3D when releases 

increased from 13 in 2009 to 27 in 2010 and on average 3D 

attendance was 88% of the total when a film was shown in both 

3D and 2D. In 2011 customers became more discerning about 

the choice between 3D and 2D and typically would only choose 

3D if the conversion was of high quality. ‘The Lion King’ 

Germany 

Brand UCI-Kinowelt 

Rank* 3 rd 




Austria 

Brand UCI-Kinowelt 

Rank* 3 rd 



1 As measured on the UK & Ireland Gross Box Office Market. 

* Rankings measured by screen counts. 

❖ Throughout 2010 ODEON managed the UCI/Storm chain. On 31 st May 2011 ODEON acquired those sites and a ninth site in Stillorgan that opened in May 2011. 

Italy 

Brand UCI 

Rank* 1 st 




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8 

UK & Ireland 

Market Box Office (£m) 1,145 

Growth YoY (Attendance) 2% 

Growth YoY (Box Office) 6% 

Share of Box Office 25% 

Spain 

Market Attendance (m) \ 100 

Growth YoY (Attendance) (2%) 

Share of Attendance 20% 

Italy 


Growth YoY (Attendance) (8%) 


Germany 


Growth YoY (Attendance) 2% 


2008: 6 3D releases 

Beowulf 

Fly Me To The Moon 

Hannah Montana 

Journey to the Centre of the Earth 

Scar 

U2 3D 


My Bloody Valentine 

Bolt 

Monsters vs. Aliens 

Coraline 

Jonas Brothers 

Ice Age 3: Dawn of the Dinosaurs 

G-Force 

The Final Destination 

Cloudy With a Chance of Meatballs 

Toy Story 

Up 

A Christmas Carol 

Avatar 


Toy Story 2 

Alice in Wonderland 

How to Train Your Dragon 

Clash of the Titans 

Streetdance 

Space Chimps 2 

Shrek Forever After 

Toy Story 3 

Cats and Dogs 2 

Step Up 3 

The Last Airbender 

Piranha 

Avatar Re-issue 

Resident Evil: Afterlife 

The Hole 

True Legend 

Garfield’s Pet Force 

Despicable Me 

Alpha and Omega 

Legend of the Guardians 

Saw 7 

Jackass 3 

Megamind 

Chronicles of Narnia 

Animals United 

Tron Legacy 

Gulliver’s Travels 

\ 2011 full market estimate (provisional data). 

The King’s Speech The Inbetweeners Movie 

2011: 48 3D releases 

The Green Hornet 

Tangled 

The Lovers’ Guide 

Sanctum 

Gnomeo & Juliet 

Yogi Bear 

The Flying Machine 

Justin Bieber: Never Say Never 

Drive Angry 

Cave of Forgotten Dreams 

A Turtle’s Tale 

Mars Needs Moms 

Rio 

Pina 

TT3D 

Thor 

Flying Monsters 

Priest 

Pirates of the Caribbean: At World’s End 

Kung Fu Panda 2 

Born to be Wild 

The Green Lantern 

Transformers: Dark of the Moon 

Harry Potter and the Deathly Hallows Part 2 

Cars 2 

Captain America 

Horrid Henry 

The Smurfs 

Glee 3D 

Spy Kids 4 

Conan the Barbarian 

Final Destination 5 

Sex and Zen 

Fright Night 

Cane Toads 

Shark Night 

The Lion King 

The Three Musketeers 

Dolphin Tale 

The Adventures of TinTin: The Secret of the 

Unicorn 

RA.One. 

Arthur Christmas 

Immortals 

Happy Feet 2 

Hugo 

Puss in Boots 

A Very Harold and Kumar Christmas 

Don 2 

re-release generated 90% of its box 

office at ODEON cinemas in 3D and 

‘Transformers: Dark of the Moon’ 

generated 83% compared with films 

that were perceived to have lower 

3D quality in 20-30% range. 3D 

attendance was approximately 21% of 

our total attendance in 2011, down 3.5 

percentage points from 2010. 3D remains 

a strong product offering and customer 

feedback remains excellent. The major 

Hollywood studios remain committed 

to the format and we are impressed by 

the innovations that the leading directors 

such as James Cameron and Peter 

Jackson are making to enhance the 3D 

experience. Key 3D titles in 2012 will likely 

be ‘Marvel Avengers Assemble’, ‘Ice Age: 

Continental Drift’, ‘The Amazing Spider- 

Man’ and ‘The Hobbit: An Unexpected 

Journey’. 

Strong Film Product 

2011 was another year with a varied film 

slate as established popular franchises 

such as ‘Harry Potter and the Deathly 

Hallows Part II’ and ‘Pirates of the 

Caribbean: On Stranger Tides’ were 

joined by surprise British successes 

such as ‘The King’s Speech’ and ‘The 

Inbetweeners Movie’ at the top of the box 

office in the UK. The UK and Ireland total 

box office increased 6% in 2011 when 

compared to 2010 driven by a popular 

film slate. 

Local titles performed strongly and 

continue to contribute to the strength of 

the markets in which we operate. The 

top 3 films in the UK were all Britishproduced. 

Italy’s ‘Che Bella Giornata’ 

broke box office records upon its release 

in January 2011 and helped

Harry Potter and the Deathly Hallows Part 2 

to ensure that more than half of the Top 

20 film attendance was derived from local 

films. The Spanish film slate was weaker 

than in recent years, but encouragingly 

the new government is committed to 

building a stronger local commercial film 

industry as well as tackling the piracy 

issues in this market. 

A film premiere at ODEON’s prestigious 

Leicester Square cinema remains the 

best location for global exposure today. 

The redevelopment of the Square has 

meant that premiere opportunities 

have been limited during 2011 but we 

did host the World Premiere for ‘Harry 

Potter and the Deathly Hallows Part 

2’. The renovation work has now been 

completed and already in 2012 we 

have hosted the World Premieres of 

‘War Horse’ and ‘Snow White and the 

Huntsman’, the Gala Premieres of ‘Men in 

Black 3’ and ‘The Amazing Spider-Man’. 

Market Prospects for 2012 

and Beyond 

Looking to the future, there is reason 

to be positive about the film slate. 3D 

films will continue to be an important 

contributor to the rankings with 50 films in 

2012 from 48 in 2011. Several key titles 

are being released in 3D such as ‘Marvel 

Avengers Assemble’ and ‘The Amazing 

Spider-Man’. Peter Jackson’s eagerly 

anticipated ‘The Hobbit: An Unexpected 

Journey’ will also be released in 3D. 

Several enduring franchises such as ‘Ice 

Age’ and ‘Madagascar’ will see future 

instalments released in 3D. First quarter 

2012 did not have a film comparable in 

success to 2011’s ‘The King’s Speech’ 

or ‘Che Bella Giornata’ but a number 

of titles put in good performances such 

as ‘The Woman in Black’ and ‘The Best 

Exotic Marigold Hotel’ in the UK and 

‘Intouchables’ in Germany and Spain. 

The second quarter has already begun 

stronger with the success of ‘Marvel 

Avengers Assemble’ which has already 

grossed over £40m in the UK to date. In 

the second half of the year there are also 

high expectations for the first new Bond 

film in four years, ‘Skyfall’, and Peter 

Jackson’s ‘The Hobbit’. The line-up for 

the summer includes several new films 

from established franchises such as the 

conclusion of director Christopher Nolan’s 

Batman trilogy ‘The Dark Knight Rises’ 

‘Ice Age: Continental Drift’, ‘Madagascar 

3’ and ‘Men in Black 3’, a number of 

franchise reboots such as 

‘The Amazing Spider-Man’ and ‘The 

Bourne Legacy’ and the launch of 

Top 5 Titles in Spain 2011 

1 Twilight: Breaking Dawn Part 1 

2 Pirates of the Caribbean: 

On Stranger Tides (3D) 

3 Torrente 4 (3D) 

4 The Adventures of Tintin: 

The Secret of the Unicorn (3D) 

5 Harry Potter and the Deathly 

Hallows Part 2 (3D) 

Top 5 Titles in Italy 2011 

1 Che Bella Giornata 



3 Immaturi 

4 Qualunquemente 


Top 5 Titles in Germany 2011 



2 Pirates of the Caribbean: 


3 Kokowääh 

4 The Hangover Part 2 



potential new franchises with 

‘Prometheus’ and ‘Brave’. Later in 

the year the hugely successful Twilight 

franchise will be concluded with ‘Breaking 

Dawn Part 2’. 

Our Strategy 

Our strategic goal is to be the best in the 

cinema sector in delivering sustainable 

and long term EBITDA growth and 

growth in EBITDA per customer whilst 

delivering superior return on equity. We 

aim to achieve this goal by leveraging our 

unique strategic edge namely: 

Top 20 Titles in the UK 2011 

1 Harry Potter & The Deathly 

Hallows: Part 2 (3D) 

2 The Inbetweeners Movie 

3 The King’s Speech 

4 Pirates Of The Caribbean: 


5 The Hangover Part II 

6 The Twilight Saga: 

Breaking Dawn - Part 1 

7 Transformers: Dark Of 

The Moon (3D) 

8 Bridesmaids 

9 Rise Of The Planet Of The Apes 

10 Johnny English Reborn 

11 Tangled (3D) 

12 Arthur Christmas (3D) 

13 Fast & Furious 5 

14 Smurfs, The (3D) 

15 Kung Fu Panda 2 (3D) 

16 Black Swan 

17 The Adventures Of Tintin: 

Secret Of The Unicorn (3D) 

18 Gnomeo And Juliet (3D) 

19 Cars 2 (3D) 

20 Sherlock Holmes: A Game 

Of Shadows 

9


10 

Che Bella Giornata Kokowääh Twilight: Breaking Dawn Part 1 

1. Being the leader in international 

multi-territory cinema 

We actively seek opportunities to increase 

our scale, whether through acquisitions or 

new site investment opportunities. 

The initial combination of ODEON & UCI 

in the UK market made us number one 

even after the disposal of 11 of our sites 

as a condition of the OFT competition 

clearance. In 2011 we purchased 

9 existing sites (8 of which we had 

previously managed for a third party) in 

Ireland and 4 existing sites previously 

branded as Reel in the UK to cement 

our position as the number one operator 

in the UK and Ireland. Both deals also 

included opportunities to add pipeline 

sites to the estate in future years. 

2011 Customer Service Scores 

Territory 

We have also successfully acquired 

and integrated four businesses in Spain 

(Warner Lusomundo, AMC, UGC and 

Coliseo), making us number one in 

that market and five businesses in Italy 

(Europlex, Cinestar, Pathe, UGC and 

Giometti) and we are now number one 

in that market too. In Germany our 

acquisition of four Kinoplex sites in 

2008 consolidated our number three 

position. On average we have been able 

to improve the EBITDA margin of the 

acquired businesses by about 10%, and 

have exceeded our acquisition plans. 

Our goal is to target at least 20% market 

share in every territory as this scale allows 

us to leverage economies, apply best 

practice between territories and draw on 

our breadth of management expertise. 

UK ODEON 94% 

Competition 89% 

Spain Cinesa 86% 


Italy UCI 91% 


Germany UCI 92% 


These customer service scores are based on independently conducted mystery shopper visits to our sites 

and those of our competitors. 

Summary Loyalty Card Growth 

Territory (Thousands) 2010 2011 Growth 

UK 1,038 1,784 72% 

Spain 600 696 16% 

Germany 382 426 12% 

Italy 235 371 58% 

Other Territories 173 196 13% 

Total Group 2,428 3,473 43% 

In 2010 we opened one new site and 

took over another site in Continental 

Europe and acquired three sites from 

Pathe in Italy. In 2011 we completed five 

acquisitions that added 31 sites and 315 

screens to our owned estate. We opened 

new sites in Stillorgan, Ireland (7 screens), 

Swadlincote, UK (5 screens), La Coruna, 

Spain (12 screens) and Cagliari, Italy (8 

screens) during the year. In 2012 we have 

already opened a new 6-screen site at 

The Point in Dublin and are hopeful that 

several other new sites will open during 

the year in Dorchester and Llanelli in the 

UK, Catania and Gualtieri in Italy and 

Zaragoza in Spain. We will continue to 

focus on opening new sites and targeting 

in-territory acquisitions that will improve 

our existing estate portfolio and deliver 

superior results. 

2. Being the leader in providing 

customers an accessible and attractive 

cinema experience 

Our strategy is to continue to invest 

in the quality of our cinemas, the skill 

of our employees and the range and 

presentation of the retail products as 

offering an attractive customer experience 

is a fundamental part of our competitive 

edge and positively impacts the value of 

each customer. 

We have achieved successful growth 

in our average ticket prices in all of 

our major markets over the past five 

years, directly as a result of introducing 

improved seats, upgraded facilities and 

better film presentation. 

We have also achieved good growth 

in the sales per head of retail products 

in the major markets over the past five 

years. This follows investment in: 

n Broader ranges of popular products, 

such as Ben & Jerry’s ice cream, Costa 

Coffee, Pizzas, Milkshake Bars and 

now Danone and Yog frozen yoghurt 

franchises designed to increase both 

enjoyment and dwell time.

n Operational training for our staff to 

ensure that we provide a high quality 

personal customer service. 

n Exciting new ways of presenting 

merchandise. 

We monitor the performance of our 

employees by external mystery shoppers 

visiting on a regular basis every single 

cinema in our network. The chart on 

the previous page shows the continuing 

lead in the standard of service that we 

maintain in all our markets versus our 

competitors. We also take very seriously 

all matters relating to risk, health and 

safety which may affect both customers 

and our employees. We have a dedicated 

team focused on these issues, and 

continuously improve our procedures 

and reporting as well as our cinemas and 

other places of work. 

3. Being the leader in innovation in 

customer offering and application of 

technology 

Technology can be used beneficially 

in a number of areas of our business. 

In particular, we have rolled out digital 

projectors and 3D technology, we 

are developing our websites, CRM 

capabilities and customer loyalty 

programmes and further leveraging our 

investment in point of sale infrastructure. 

The current major technological 

innovation is the transformation of our 

cinema projection infrastructure to digital. 

In April 2010 the full roll-out of digital 

projectors in the UK commenced and 

it was completed ahead of schedule 

in November 2011. The full roll-out of 

the rest of the group is well progressed 

and will be completed during 2012. We 

already have the largest network of digital 

screens both in the UK/Ireland market 

and in Europe as a whole. 

This deployment will enable the studios 

to save dramatic sums from their global 

cost of 35mm prints. Apart from enabling 

3D, it means that we can be much more 

flexible in our film offering to respond to 

customer demand. Digital improves the 

cinema as an advertising medium by 

improving media quality and increasing 

the flexibility for advertisers. It also 

allows the cinema to show a range of 

alternative content offerings. To date we 

have successfully offered our customers 

a diverse range of digital programming 

including opera, rugby, live theatre, 

international football and contemporary 

music. Technology has now been 

developed and tested for live 3D 

performances culminating in the showing 

of the Rugby 6 Nations live in 3D. The 

Wimbledon Championships 2011 were 

shown in 3D for the first time and we also 

showed the ‘Strictly Come Dancing’ final 

in 3D. 

Our websites, in each country, have 

become a major point of contact 

between us and our customers and have 

provided us with an extensive and rapidly 

growing database that is proving to be 

a very valuable marketing resource. Our 

websites deliver an excellent environment 

to understand the full breadth of the 

product we have to offer, as well as a 

slick single click method of choosing 

seats and buying tickets. We have also 

launched new mobile applications such 

as iPhone and Android apps and various 

social media tools such as an event 

planner on Facebook. 

We are regularly in touch with our 

customers electronically. In all of our 

major territories we have launched very 

successful loyalty programmes for our 

customers, which have managed to 

stimulate a greater number of visits. 

We have also been transforming our point 

of sale infrastructure over the last few 

years. These are major programmes of 

investment which enable us to achieve 


© Rex Features 

Pirates of the Caribbean: On Stranger Tides Torrente 4 Paul Hills - General Manager ODEON Leicester Square, 

escorts Prince William and Catherine Duchess of 

Cambridge as they attend the War Horse Premiere 

operational savings through combined 

sales of ticket and retail items, as well as 

the much greater promotional flexibility 

and improved customer data capture 

which underpins our loyalty and reward 

programmes. 

11


12 

National Theatre Frankenstein Wimbledon Foo Fighters 

No.1 

pan-European cinema 

operator 

Summary 

Our overall strategy is positioning us well to capitalise on the long term improvement in 

the film slate and withstand the occasional weaker year as we reap the benefits of the 

recent investment in the efficiency of our organisation, the quality of our cinemas and 

the attractiveness of our customer offering. 

The film community has continued to produce commercially appealing titles in good 

quantity over the last few years. This trend looks set to continue, with a focus on a 

great slate of 3D films. Our ability to invest in digital technology has enabled us to 

provide even more of our customers with more of the 3D experience that has proven so 

successful over the past few years. 

There remain some challenges in the short term. Growth in retail spend is held back 

in some areas by the poor economic conditions and we have had to take increasingly 

direct responsibility for the advertising operations in our major territories, UK, Spain 

and Italy. Screen advertising is an aspect of our business which has been clearly 

affected by the economic cycle and it remains weak due to government marketing 

spending cuts and advertisers holding back spend. The short term will remain 

challenging but the potential benefits of the flexibility of digital advertising should 

improve the overall market. 

2011 was a further demonstration that our results overall appear resilient to the poor 

economic conditions. While the past is no guaranteed indicator of the future, we have 

not managed to find any historic correlation between previous consumer recessions 

and cinema-going. The biggest impact on the cinema market has consistently been the 

quality of the film line-up, and of course, the weather. 

There are significant opportunities in the business, not least in continuing to improve 

and to grow our estate, from investing further in our retail offer and from digital 

technology, 3D and further technical innovations. 

I would like to offer fulsome thanks to Mike Kinski for his excellent Chairmanship of 

the company over the past 5 years, we are delighted he is staying on our board. We 

warmly welcome Robbie Barr to the chair as Mike’s replacement from June 2012. 

Rupert Gavin 

Chief Executive Officer

UK & Ireland Divisional Review 

ODEON increased earnings and retained its market leading position through 

acquisitions, estate development and technological innovation. 

2011 Highlights 

n UK & Ireland market attendance up 2% and GBOR 

up 6% 

n Continuing growth in ticket prices, up 5% LFL and retail 

spend, up 3% LFL 

Market leading position through estate 

development and acquisitions 

n May 2011 acquisition of 9 UCI/Storm sites in Ireland, 

a chain that was previously managed by ODEON on 

behalf of a third party 

n November 2011 acquisition of 4 Reel sites in the UK 

n New site opened at Swadlincote 

n 7 new Costa Coffees added to increase the portfolio 

to 22 sites 

n 7 refurbishments were completed during the year 

including our iconic ODEON Swiss Cottage location 

with North London’s first IMAX screen 

100% digital estate 

n In November 2011 ODEON achieved the 100% roll-out of 

digital projectors in all existing ODEON cinemas 

n 764 3D screens (84% of estate) at end of 2011 

Continued growth of Loyalty Scheme 

n ODEON Première Club has over 1.7m members making it 

the largest cinema loyalty scheme in the UK 

n The ODEON Première Club supports our most valuable 

and frequent customers and provides an invaluable 

marketing resource. 


UK: www.odeon.co.uk Ireland: www.odeoncinemas.ie 

ODEON is market leader in the UK & Ireland with 919 screens 

and a box office revenue share of 25% in 2011 (25% in 2010; as 

reported by the industry monitor IBOE). UK market attendance 

was up 2% year-on-year due to the strong performance of the 

film slate against weaker comparatives in 2010 when the FIFA 

World Cup played in June and exceptional snowfall in December 

impacted attendance. 

In the UK we continued to upgrade our existing multiplexes and 

traditional cinemas with retail and refurbishment programmes. 

Acquisitions 

In May 2011 ODEON completed the acquisition of 9 existing 

sites and 2 pipeline sites branded as UCI/Storm in Ireland. Eight 

of the existing sites had previously been managed by ODEON 

on behalf of a third party with the ninth site at Stillorgan reopening 

following a refurbishment shortly after completion of 

the acquisition. A tenth site opened in April 2012 at The Point 

in Dublin. The Irish estate is in the process of being rebranded 

ODEON and products such as our loyalty scheme ODEON 

Première Club are in the process of being launched. The Irish 

business is the second largest exhibitor in that market with 16% 

market share.* 

In November 2011 ODEON completed the acquisition of 4 

existing and 3 pipeline sites from Reel Cinemas. One of the 

pipeline cinemas at Swadlincote also opened in November. One 

of the two further sites will be open late in 2012 (Llanelli) and the 

second, early 2013 (West Bromwich). The sites have all been 

rebranded as ODEON and every screen has been converted to 

digital technology. 

Roll-out of digital and 3D capability 

ODEON continued to increase its investment in digital 

technology throughout 2011 in order to take advantage of 

the 3D phenomenon and other benefits. By the end of 2011 

ODEON had 909 digital screens in the UK and Ireland which 

completed the roll-out of the digitisation of the estate. ODEON 

also had 764 3D screens. 28% of ODEON box office was 3D 

which was 6% lower than 2010 despite the number of 3D films 

increasing. This reflects a shift in consumer choice whereby 

customers became more selective over the choice between 3D 

and 2D showings where higher quality 3D films have attracted 

a higher proportion of their audience in 3D than lesser quality 

films. ODEON achieved a 29% share of the 3D market which 

was ahead of our overall market share, demonstrating the 

benefit of the digital roll-out. 

* GBOR share (source: IBOE) 

13


14 

IMAX - See more, hear more, feel more Costa coffee at ODEON Fully reclining leather seating at The Lounge 

Refurbishments 

ODEON continued to focus on the refurbishment of the existing 

estate to improve the customer offer. ODEON refurbished 7 

UK locations in 2011 through a combination of general site 

refurbishment and seat replacement programme. The historic 

Swiss Cottage site was entirely refurbished and reopened in 

September 2011 with North London’s fi rst IMAX screen, new 

club seats in two screens, an Ambar offering and a Costa Coffee 

franchise. The refurbishment has seen the location increase its 

attendance share signifi cantly. Whiteleys cinema screens were 

refurbished: the standard screens opened in December 2011 

and in January 2012 we opened “The Lounge”, our unique, 

luxury in-cinema dining offer with reclining leather seating and 

at-seat service service of food and drink. drink. 

Retail Retail Improvements 

ODEON continued to focus on improving the the variety of retail 

offers and upgrading existing retail facilities. Building Building on the 

success of the existing Costa Coffee Coffee franchises a a further 8 were 

added in the the UK for for a total of 22 stores. ODEON ODEON believes that 

there are additional opportunities to add Costa Coffee franchises 

to the existing estate. ODEON has also started started to add add Costa 

Coffee franchises to the the acquired UCI/Storm sites sites in Ireland with 

4 added during the fi rst quarter quarter of 2012. 

Big Screen Formats – IMAX 

IMAX theatres provide a a combination of sharp images, crystalclear 

digital surround sound and custom-designed custom-designed auditoria 

enabling a more immersive fi lm experience. ODEON opened 

its twelfth IMAX site at Swiss Cottage in in September 2011. 2011. 

The IMAX brand is well-established in the UK UK and capable of 

delivering delivering higher attendance per screen at a a higher ticket price. price. 

The fi lm lm slate in 2012 2012 will feature feature at least twenty new Hollywood 

fi lms including eagerly anticipated potential blockbusters such 

as ‘The Amazing Spider-Man’, the conclusion conclusion of Christopher 

Nolan’s Batman trilogy trilogy ‘The Dark Knight Knight Rises’, the latest Bond 

fi lm ‘Skyfall’ and ‘The Hobbit: An Unexpected Journey’ to name name 

a few.

ODEON Première Club ODEON on the iPad 

The ODEON Magazine 

In addition we have launched a new proprietary big screen 

and big sound format in Ireland (“isense”). This technology 

was initially developed and successfully established by our 

Continental Europe division and opened at the new ODEON 

Point Village in Dublin and ODEON Blanchardstown in April 

2012. The screens are three stories high and feature a 

24-channel surround sound system. We are further evaluating 

the concept in the UK and Ireland to complement our existing 

IMAX estate. 

Loyalty 

The ODEON loyalty programme, ODEON Première Club (OPC), 

was fully rolled-out across all cinemas in late 2009. By the end 

of 2011 over 1.7 million cards had been sold, making OPC the 

largest cinema loyalty programme within the UK. This provides 

a great opportunity for us to interact with our customer base. 

Our analysis has proven that OPC members transact more 

online after joining the scheme. Spend per transaction is also 

increased compared to non-OPC members. OPC was launched 

in Ireland in April 2012. 

Digital Cinema Media (DCM) was established in 

2008 as a joint venture to sell screen time and other 

advertising media and capabilities to advertisers on 

behalf of ODEON. The advertising market remains weak and 

DCM saw declining revenue in 2011 due to extraneous factors 

like the Japanese earthquake and subsequent tsunami in March 

and reduced government spending in the UK. However Vue, 

the third largest exhibitor in the UK, transferred their on-screen 

advertising requirements to DCM on 1 January 2011. DCM 

is not anticipating an immediate recovery in the advertising 

market in 2012, but it remains very well-placed to capitalise on 

an eventual cyclical recovery and the benefi ts of transition to 

digital advertising in the long term. The focus, in the short term, 

remains to drive advertising revenues and brand campaigns with 

the launch of the digital delivery of advertising campaigns at the 

end of 2011; reducing production costs and providing greater 

fl exibility for national and local ad campaigns. 

% of Local Content in Top 20 Film Attendance * 

26% 

2007 

31% 

2008 

2012 Outlook 

The benefi ts of the investments made to improve the customer 

experience in our cinemas will continue to fl ow through to 

2012. 3D , IMAX and isense programming represent signifi cant 

opportunities to drive box offi ce and market share based on the 

2012 fi lm slate. Now that the entire UK and Ireland estate has 

been digitised and the majority of screens have 3D capability, 

ODEON will benefi t from greater fl exibility in both advertising and 

programming and from non-fi lm based events (such as sport, 

opera and theatre). The alternative content slate continues 

to improve as new product is launched by distributors. An 

expanded theatre slate and more sport are anticipated in 2012. 

Roger Harris 

Chief Operating Offi cer, UK & Ireland 


18% 

2009 

28% 

45% 

2010 2011 

* Includes Hollywood produced and distributed “British” fi lms 

15


16 

Continental Europe 

Divisional Review 

The Continental Europe (“CE”) division consists of 113 cinemas and 1,234 screens spread 

over five territories: Spain, Italy, Germany, Portugal and Austria (as at December 2011). 

The cinemas trade under the name ‘Cinesa’ in Spain, ‘UCI’ in Italy & Portugal and ‘UCI 

Kinowelt’ in Germany & Austria. 

2011 Highlights 

Significant EBITDA growth on mixed 

attendance performance, despite deepening 

economic difficulties 

n Germany market attendance up 2%, Spain and Italy down 2% 

and 8% respectively. 

n Continuing ticket price growth driven by 3D performance and 

improved customer offerings like VIP seating. 

n EBITDA growth boosted by contribution from acquisitions in 

Spain and Italy. 

New sites and acquisitions 

n Three sites in Italy were acquired from Pathe in December 2010, 

adding 39 screens. 

n In May 2011, 9 sites were acquired from UGC – 5 in Spain 

and 4 in Italy adding 158 screens. 

n Also in May 2011, 2 sites were acquired from Coliseo Circuit in 

Bilbao, Spain adding 23 screens. 

n In June 2011, 7 sites were acquired from Giometti in the Adriatic 

region of Italy adding 51 screens. 

n Two new sites opened during the year in La Coruna, 

Spain (12 screens) and Cagliari, Italy (8 screens). 

3D and Big Screen & Big Sound cinema 

n Increased amount of 3D product during 2011 in 

all territories. 

n Continued investment in the roll-out of 3D projectors. By 

December 2011 there were 628 3D enabled screens in CE 

accounting for 51% of the total screens. 

n Digital roll-out completed in 2012. 

n Launch of proprietary big screen and big sound concept in CE 

called iSens. The large screen format and 24-channel sound 

was installed in 3 sites by the end of the year. In addition 3 IMAX 

screens were installed in CE. 

Retail 

n Refurbished the retail offers at 32 existing locations improving 

pick ‘n’ mix offers and the overall presentation at the main retail 

areas. We added an additional 2 Pane & Sapori (pizza and 

sandwich offers) and increased the number of vending machines 

in key sites. 

n In the acquired sites we completed major retail refurbishments 

rebuilding the majority of the retail areas and converting self 

service areas into assisted serve. We implemented our best 

practice procedures in terms of training and overall retail 

presentation by installing new menu boards, impulse counters 

and coffee and pizza offers. 

ODEON & UCI Cinemas is the biggest exhibitor in Continental 

Europe in terms of attendance, screens and box office. It is the 

number one exhibitor in terms of market share in both Spain 

and Italy, number three in Germany and has leading locations 

in Portugal and Austria. The CE estate has grown substantially 

since December 2010 with 21 sites and 271 screens added 

through acquisitions. The CE division will complete its digital 

and 3D roll-out in July 2012 to ensure that it continues to benefit 

from the expanding 3D film slate in all territories. 

Trading Performance 

CE delivered a significant earnings increase on 2010. Average 

ticket prices were ahead overall, benefiting from the strength of 

3D product and the premia charged. 

Market attendance in Spain was lower than in 2010 by just 2%, 

partly explained by a weaker local product slate. EBITDA was 

up due to the impact of acquisitions, new sites and cost control 

despite slightly lower average ticket prices and retail per head. 

In Italy EBITDA increased due to the impact of acquisitions 

despite an 8% decline in market attendance. In addition both 

ticket prices and retail per head improved. Local film was an 

important contributor as 51% of the Top 20 by attendance 

was from Italian films. ‘Che Bella Giornata’ became the most 

successful Italian film in the box office history of the country. 

In Germany EBITDA increased from 2010, with increases in both 

ticket prices and retail per head. 

Investment in the cinema experience continued throughout the 

estate, including digital and 3D technology, premium seats and 

a significant investment in the retail facilities. 

In all markets, we monitored the performance of our cinema 

employees and managers through external mystery visitors. All 

cinemas were visited on a regular basis and scored similar or 

ahead of the competition in 2011. 

José Batlle 

Chief Operating Officer, Continental Europe

Newly refurbished auditorium at Parc Vallès, 

Barcelona 

Spain 

The cinemas trade under the Cinesa brand in Spain. 

Total attendance for the Spanish market in 2011 was 100m, a 

decrease of 2% against the previous year. The acquisition of 7 

sites from UGC and Coliseo added 3% market share. EBITDA 

was up on 2010, due to the impact of the acquisitions, new 

sites and improved cost management. The weak economic 

conditions in Spain continued to restrain revenue growth. 

Key highlights for 2011 

n Acquisition of 7 sites from UGC and Coliseo Circuit in May 

2011 added 115 screens. 

n One new cinema opened in the year in La Coruna (12 screens). 

n 3D digital screen numbers increased to 247 (48% of the 

estate) by the end of the year. 

n Launch of proprietary Big Screen & Big Sound iSens format at 

Principe Pio (Madrid) and Marineda City (La Coruna) and IMAX 

screens at Parquesur (Madrid) and Festival Park (Mallorca). 

n In our retail areas we refurbished 6 existing cinemas adding 

new pick ‘n’ mix units and improved the look of the main retail 

stand with new menu boards and product displays. We also 

took over the management of an existing ice cream/coffee 

offering called Farggi at two locations. 

n Two sites were refurbished to improve the customer 

experience. 

n Active loyalty cards increased to 320k members (up 10% on 

2010) and the total database increased to 696k (up 16% on 

2010). 23% of all tickets sold were purchased by loyalty 

card holders. 

n We installed VIP seating in 5 of the new cinemas acquired in 

2011. 

n Wide activity on Facebook, offering promotions, to become 

the top exhibitor fan page in Spain, reaching more than 175k 

fans to date. 

n Mobile applications for iPhone and Android smartphones, 

reaching 104k downloads of iPhone and 47k of AndroId apps. 

2012 outlook 

The film slate for 2012 looks strong, especially for 3D films. 

Cinesa is in a good position to benefit from this with over 50% of 

our screens equipped with 3D capabilities by March 2012 at key 

locations. Alternative content will continue to expand with more 

events on offer. Cinesa will continue to invest in retail initiatives 

and refurbish the existing estate. 

* Provisional data 

www.cinesa.es 

Danone frozen yoghurt counter at Parc Vallès, 

Barcelona 

Portugal 

The group operates 3 cinemas in Portugal under the UCI brand. 

Total attendance for the Portuguese market in 2011 was 15.5m, 

a 6% decrease on the previous year. The weak economic 

conditions restrained our KPIs, but cost control was good 

and protected EBITDA. 3D digital expansion has now been 

concluded in Portugal. 



Newly refurbished Mendez Alvaro, Madrid 

% of Local Content in Spanish Top 20 Film Attendance 

12% 

2007 

26% 

2008 

20% 

2009 

6% 

www.ucicinemas.pt 

7% 


n During 2011 we refurbished our Arrabida cinema. 

n 3D digital expansion has now been concluded in Portugal. 

17


18 

Brand new auditorium at UCI Cagliari Self-serve ticket collection point Retail counters at UCI Cagliari 

The exterior of the new 8-screen UCI cinema in Cagliari 

% of Local Content in Top 20 Film Attendance * 

41% 

2007 

35% 

2008 

28% 

2009 

41% 

51% 


Italy 

The group operates cinemas under the UCI Cinemas brand in Italy. 

Total attendance for the Italian market in 2011 was 112m, down 

8% on 2010, due to an unusually stong previous year (with the full 

run of ‘Avatar’) . Local content continues to play an important role 

in the market with 51% of total Top 20 attendance being for local 

films. 


www.ucicinemas.it 

n Acquisition of 11 sites from UGC and Giometti adding 117 

screens to the estate 

n Opened a new 8-screen site in Cagliari 

n 3D digital screen numbers increased to 232 (54% of the 

total estate) 

n Launch of proprietary Big Screen & Big Sound iSens format at 

Genoa and IMAX screen at Pioltello (Milan) 


2010) and the total database increased to 487k (up 36% on 

2010). The large increases are due to the success of the loyalty 

card programme and the introduction of the scheme to new 

and acquired sites. 13% of all tickets sold were purchased by 

loyalty card holders. 

n In terms of retail we refurbished 4 existing cinemas with new 

retail areas, new menu boards and larger pick ‘n’ mix areas. We 

introduced our pizza and sandwich offer called Pane & Sapori 

to two additional cinemas. We completely refurbished the 11 

acquired sites adding new retail stands, Pane & Sapori, menu 

boards, impulse counters, additional products and introduced 

our best practice procedures for our new employees. 

n We added VIP seating to an additional four locations: Bicocca 

and Pioltello (Milan), Fiumara (Genoa) and Casoria (Naples). 

2012 outlook 

The film slate for 2012 looks good and the expectations for the 

second half of the year are stronger. Additional investment is also 

planned for retail facilities and premium seats. We will continue 

expanding the installation of big format iSens in 4 additional sites. 

The full digitisation of the Italian estate has now been completed 

in 2012, positioning UCI to benefit from the success of 3D titles 

and alternative content options. 

* Management estimates

Super Loge seating now installed in 5 cinemas iSens auditorium iSens auditorium entrance 

Germany 

The group operates under the UCI-Kinowelt brand in Germany. 

Total attendance for the German market in 2011 was 129m, a 2% 

increase on 2010. Local product was significantly up on the weak 

slate from 2010 with 14.7% of the Top 20 film attendance being 

generated from local films. Like-for-like market share was stable 

despite the fact that our first-mover advantage on 3D roll-out has 

been diminishing. Revenue per head increased, supported by 

improved facilities and investment in the customer offer. 


www.uci-kinowelt.de 


2010) and the total database increased to 1.2m (up 16% on 

2010). 19% of all tickets sold were purchased by loyalty card 

holders. 

n Closure of a loss-making site at Berlin’s Zoopalast (9 screens) 

n 3D digital screen numbers increased to 105 (54% of the total 

estate) by the end of the year 

n In terms of retail we refurbished 20 existing cinemas with new 

retail areas, new menu boards and larger pick ‘n’ mix areas. 

We introduced several new products such as pastries, chicken 

nachos and non-carbonated bottled drinks promoting health. 

We introduced impulse counters into an additional 13 locations 

and launched a new pick ‘n’ mix design. 

n We frequently ran retail promotions linked to blockbuster 

releases to optimize retail revenues. 

n We expanded our Super Loge seating offer. 

n UCI is pursuing a long-term cooperation with Germany´s 

largest club “ADAC” (automobile club) with more than 18 million 

members. Exclusive UCI offers are promoted by ADAC among 

its members. 

n Several promotions in 2011 turned UCI´s facebook fanpage to 

the top exhibitor fanpage in Germany with more than 100k fans 

to date. 

n In May 2011 UCI introduced the first Android smartphone app 

with the ability to select the preferred seat. This app continues 

the success of the iPhone and iPad app which was released 

the year before. 

2012 outlook 

3D performances have been particularly well received in Germany 

and we are looking forward to a strong slate in 2012 featuring 


a number of high profile 3D films. We have continued to install 

new Super Loge seating, which offers additional comfort versus 

premium and standard seating. Development of the loyalty 

scheme will continue with additional customer offers and detailed 

behavioural analysis to drive performance. Retail offers will 

be enhanced through further investments in coffee bars and 

refurbishments to existing facilities. We will install 7 new big format 

iSens sound systems into key locations. 86% of the estate was 

digitised by the end of the year and we have concluded the 

roll-out in Q1 2012. 

% of Local Content in German Top 20 Film Attendance * 

8% 

2007 

Austria 

The group trades at 3 cinemas in Austria, including the largest in 

the country, under the UCI-Kinowelt brand. 

Total attendance for the Austrian market in 2011 was 16.9m, 

which was 2.4% down on the previous year. 

Key highlights 

26% 

2008 

* Management estimates 

20% 

2009 

6% 


www.uci-kinowelt.at 

15% 

n Customer database increased to 194k (up 15% on 2010). 

n We refurbished two key retail areas at our MEC site in Vienna. 

This high volume site is now offering a better customer service 

and is able to cover peak times more effectively. 

n In 2012 we will upgrade the PicMix offer at MEC. 

n Super Loge seating offer will be expanded during 2012 into 

Graz cinema. 

n In 2012 we will introduce the large screen iSens concept into 2 

screens, MEC and SCS in Vienna. 

n 100% of the Austrian estate had been digitised with 50% of the 

screens enabled for 3D by the end of 2011. 

19


20 

Corporate Social 

Responsibility 

ODEON & UCI Cinemas Group continues to focus on the responsible management 

and development of the business for the long-term benefit of all key stakeholders. 

Local & Business Communities 

ODEON & UCI Cinemas Group continues to 

make real progress in support of local and 

business communities. Customer safety, 

security, enjoyment, comfort and choice 

remain the cornerstones of our service 

proposition. 

Cinemas in each territory continue to work 

closely with all key stakeholders to further 

improve the cinema-going experience for 

the benefit of all customers and in particular 

those with disabilities. 

Reducing Environmental Impact 

The Group has continued to invest in energy 

reduction initiatives. In the UK ODEON has 

invested in an energy management service 

and an on-line energy management tool. 

This allows further focus on consumption 

which has continued to fall (for both gas and 

electricity) 

In 2011 ODEON completed the installation of 

Automatic Meter Reading technology across 

all cinemas for both gas and electricity. This 

allowed much more immediate and greater 

visibility of consumption data. ODEON has 

continued to work with suppliers to switch 

current cinemas from standard lighting 

systems to low consumption LEDs. All new 

build cinemas are now fitted with LED lights 

as part of the standard specification. 

Replacement of chiller equipment continues 

in the UK. An HVAC and cooling systems 

swap out is also well underway. The new 

units will only run when required and are 

specifically sized for each cinema. 

In 2011 ODEON introduced a printer 

replacement programme so that every 

cinema replacing printers received new low 

energy equipment. 

Based on the outcome of a highly successful 

trial in several locations in 2011 ODEON 

intends to introduce recycling bins to every 

cinema during 2012. This will allow more 

recycling to take place (beyond the 20% of 

packaging we currently target to recycle) 

* Note: the company does not contribute directly to the charities. 

Given the success of energy reduction and 

efficiency initiatives in the UK ODEON has 

decided to apply for reaccreditation for the 

Carbon Trust Standard that was awarded in 

2010. 

In Continental Europe we continue to follow 

the European Directive 94/62/EC applicable 

to Packaging Waste Management and 

each territory participates in an Integrated 

Management System (IMS). 

Health & Wellbeing 

In the UK we continue to offer customers 

greater choice and variety across the retail 

product range. 

In 2011 ODEON became the first cinema 

company in the UK to provide customers 

with specific nutritional facts on the entire 

range of products on sale in cinemas. 

Nutritional information was made available to 

customers via leaflets, on the website and on 

menu boards. 

For 2012 ODEON is working to support two 

key government-backed initiatives and we 

will fully support the Responsible Drinking 

and the Health Responsibility Deal pledges. 

The latter aims to better inform customers 

about calorific and nutritional intake. 

In all Continental European territories, 

significant progress has been made to 

source, promote, and merchandise healthier 

food alternatives. This has been achieved 

by actively promoting non sugared drinks, 

introducing larger sizes of bottled water, 

using sunflower oil to produce popcorn and 

introducing alternative drink choices such as 

fruit smoothies. 

Charity Activities 

In the UK ODEON continues to work closely 

with its charity partners, the NSPCC and 

Variety. There is ever increasing involvement 

and engagement by all employees to 

support the company’s charity activities with 

numerous events taking place each week 

across the country. 

There is now an even more focused and 

determined Charity team in place and all 

regions have adopted a charity target. 

In 2011, through the joint efforts of 

customers and employees over £80,000 in 

donations was raised. In total over £325,000 

has been raised to date and we fully expect 

this amount to exceed £400,000 by the end 

of 2012.* 

Mike Stevens 

Group and UK HR Director

Our People 

The health and safety of our employees 

and customers remains the key priority and 

we endeavour to operate to the highest 

standards by frequent employee training, 

coaching, mentoring and performance 

reviews. Structured cinema audits by 

internal safety practitioners and external 

safety consultants form an integral part of 

our health and safety processes. 

Periodic health and safety reports are 

presented to the Board by the UK Risk 

Management Director and the COO 

Continental Europe, and actions are taken 

on matters arising when necessary. 

In 2011 we employed over 9,500 people on 

average across the group. The increase in 

headcount versus previous years was driven 

by acquisitions. 

Learning & Development 

We have robust learning and development 

processes in place which are linked to 

an integrated career development and 

succession plan. The latter ensures that we 

have a resource of competent employees at 

all levels ready to move into new or different 

roles. 

In the UK, during 2011, we launched an 

e-learning platform. The first module in 

place was developed to enable newly 

appointed employees to quickly assimilate 

into the business via an on-line induction 

programme. Further specific e-learning 

modules have been developed to address 

key business initiatives. We ran nearly 60 

different learning and development events 

on various topics resulting in over 900 

training days completed. 

Based on the successful launch of 

e-learning in Continental Europe additional 

modules have been developed to support 

this flexible learning alternative to traditional 

off-the-job training and development. 

In 2012 we intend to introduce an ODEON 

Academy for newly appointed employees 

leading to a nationally recognised and 

accredited NVQ in one of the following: 

Customer Service, Team Leading, Business 

Admin, Management, Food Production & 

Cookery and Hospitality Leadership. An 

ODEON Apprenticeship will be open to 

existing employees to pursue the same 

learning opportunities. 

Reward & Recognition 

Attracting and retaining the industry’s best 

talent continues to sit at the centre of 

our People strategy. Our recognition and 

incentive programmes are intended to focus 

individuals and teams on key business 

priorities and to provide appropriate 

rewards. 

In December 2011 we introduced a flexible 

benefits programme for nearly 700 UK 

managers to enable them to personalise 

their benefits package to meet their 

individual circumstances and lifestyle 

preferences. 

Leadership development, career and 

succession planning 

During 2011 there was an enhanced focus 

on succession planning and we continue to 

identify and develop internal talent, as well 

as bring in new people, to make sure we 

have the right skills in key areas of business 

focus. 

We continue to invest in management 

and executive development and during 

2011 there was significant emphasis on 

developing coaching skills amongst the 

senior manager population. 

Employee engagement 

We have maintained our commitment to 

employee involvement and participation 

at all levels of the business. Employees 

are kept well informed of the performance 

and the objectives of the business through 

periodic management updates, briefings, 


Health and safety is the key priority. Our employees remain passionate about 

delivering consistently high levels of customer service. We invest actively in our 

employees and support their development to enable them to meet the high 

performance standards we and our customers expect. 

focus groups and conferences. These 

initiatives help to inform future strategy and 

business priorities. 

We actively encourage employees to 

participate in organised social events and 

this has resulted in ever growing numbers 

of employees who are keen to do so. In 

the UK during 2011 over 2,500 employees 

participated in such events. 

We hold annual meetings for the 

management teams in each territory, the 

purpose of which is to share the details 

of the business plan and to facilitate 

engagement and communication between 

cinemas. 

A further meeting of the European Employee 

Forum (‘EEF’) took place in June 2011 and 

elected representatives from all European 

territories attended. 

This group provides an additional forum 

for informing, consulting and involving 

employee representatives from the countries 

in the European Community. 

1. Engagement 2. Development 3. Reward and recognition 4. Communication 

Headcount 2011* 

UK & Ireland 5,563 

Spain 1,472 

Portugal 142 

Germany 1,082 

Austria 186 

Italy 1,146 

Total Group 9,591 

* Full year average; includes part-time employees. 

21


22 

Chief Financial Officer’s 

Report 

EBITDA performance was strong in 2011, increasing by £11m to £103m, continuing a 

long trend of growth. 

Group Structure 

ODEON & UCI Cinemas Holdings Ltd (“OpCo”) and ODEON 

Property Group LLP (“PropCo”) are distinct entities, each with 

its own corporate governance arrangements and consolidated 

financial results. Both are owned by Terra Firma. The structure is 

summarised in the diagram below. 

PropCo owns the freehold or leasehold interests in 31 properties 

in the UK and leases them to OpCo. PropCo’s income is limited 

to the rent from OpCo on those properties. 

RCF 

Senior 

Notes 

ODEON & UCI 

Finco plc 

Presentation of Financial Results 

The financial accounts for OpCo and PropCo are available 

on the website: www.odeonucicinemas.com. In general in 

this review, the revenue and EBITDA quoted exclude the rent 

payable by OpCo to PropCo. This CFO’s report summarises the 

results of OpCo first, then PropCo. 

Activity Highlights 2011 

Bond issue – The Opco bank facility was replaced in May 

2011 by the issue of £475m equivalent senior notes split into 

£300m fixed at 9% and €200m floating rate notes at Euribor 

plus 5%. The floating rate interest has been swapped for fixed 

at approximately 9% including the margin until May 2014. 

The bond issue helped to provide the funds for the ongoing 

development of the Group, including the five acquisitions 

completed in 2011. At the same time, a Senior Revolving Credit 

Facility (“RCF”) of £90m was agreed. 

s Terra Firma is described on page 24. 

Terra Firma Terra Firma 


Holdings Ltd 


Group Ltd 

ODEON & UCI Bond 

Holdco Ltd 

ODEON & UCI Bond 

Midco Ltd 

Operating 

Company 

Subsidiaries 

rent 

ODEON Property 

Group LLP 

Property 

Company 

Subsidiaries 

Bank 

Debt 

Acquisitions – The portfolio of cinemas was developed further 

during the year, with five in-territory acquisitions: 

n Five cinemas in Spain and four cinemas in Italy from UGC. 

n Two cinemas from the Coliseo circuit in the area of 

Bilbao, Spain. 

n Nine UCI/Storm branded cinemas from Entertainment 

Enterprises in Ireland, plus two pipeline sites. 

n Seven cinemas from Giometti Cinema in Italy. 

n Four cinemas from Reel in the UK, and three pipeline cinemas. 

One of the three pipeline sites opened in November, with the 

other two scheduled for end 2012 / early 2013. 

Portfolio Development – Two new cinemas were opened in 

2011 in Cagliari (Italy) in September and in Marineda (Spain) in 

April. In addition, the first pipeline site from the Reel acquisition 

in the UK (Swadlincote) opened on 11 November 2011. The 

first pipeline site from the UCI/Storm acquisition in Ireland (The 

Point, Dublin) opened on 27 March 2012. In the UK, two major 

refurbishments were undertaken. The cinema at Swiss Cottage, 

London, re-opened in September, newly refurbished to include 

an IMAX screen, Costa Coffee, Ambar and club seating screens. 

The Whiteleys cinema in London was closed for redevelopment 

during late 2011 and re-opened in January 2012. It now 

includes “The Lounge”, our unique, luxury in-cinema dining offer 

with reclining leather seating and at-seat service of fine food 

and drink. In CE, there were also two major refurbishments, of 

Arrabida, Portugal and Las Rozas, Spain. 

Digital and 3D - Significant progress was made in 2011 towards 

the transformation of the entire estate to digital projection. 

Contracts for external funding were signed for the deployment 

of the digital equipment in Germany, Portugal and Italy in 

addition to the UK which had already been secured. In 2012, we 

have secured funding for Ireland and Austria. By the end of April 

2012, approximately 98% of our screens were digital. Our full 

estate is on track to be digital by July 2012.

OpCo 

Attendance 

Paid attendance for 2011 was 79.2m 

compared to 73.1m in 2010, with the 

acquisitions contributing to the increase. 

Global economic recession continued 

to be a concern for many businesses in 

2011, but the cinema sector was again 

resistant to its effects. On a weighted 

average basis, the market volumes in 

the Group’s major territories were down 

1% overall compared to 2010, mostly 

because Italy enjoyed an unusually strong 

year in 2010. 

EBITDA* 

EBITDA of £103m (up 12%) included 

£10m part-year contributions from 

acquisitions. On a full year basis the 

acquisitions contributed in line with 

expectations. LFL EBITDA of £91m was 

4% ahead of prior year. 

EBITDA* (£m) 2007 to 2011 

68 t 

72 

80 

Revenue 

Revenue increased 12% to £725.1m, 

or 11% excluding foreign exchange 

(fx) difference. Revenue KPIs increased 

despite general economic weakness 

across Europe, with LFL average ticket 

price (“ATP”) up 2.2% and retail revenue 

per head (“RPH”) up 1.8%. Screen 

advertising was weaker with the softer 

economies. It is expected that digital 

delivery will support advertising revenues 

going forward. 

Revenue Growth Table (LFL) 

92 

103 

2007 2008 2009 2010 2011 

% Growth 

2011 vs 2010 

Average Ticket Price (ATP) 2.2% 

Retail Revenue per Head (RPH) 1.8% 

Other Revenue 17.1% 

Revenue per customer 4.0% 

Yield per customer w 2.6% 

Control over costs was strong, with 

indirect costs up only 1.6% on the LFL 

estate. EBITDA margin improved to 

14.2%, despite the impact of acquisitions 

where profit improvement plans had still 

to be completed. 

PropCo rent in total for the year was 

£11.6m (2010: £11.3m). Of this total, 

£9.5m (2010: £9.1m) was shown as 

P&L operating lease rentals for statutory 

accounts purposes. The remaining £2.1m 

related to finance leases (5 of the 31 

properties). 

Strategic costs were excluded from 

EBITDA on the basis that they are 

not costs required to deliver ongoing 

earnings, but are related to the 

development of potential new business. 

Some of these activities lead to ongoing 

new business, some are aborted. 

EBITDA is a reflection of the earnings 

excluding the cost of this new business 

development activity. 

Depreciation and amortisation of £65.3m 

increased by £11.7m compared to 2010, 

principally because of the increased size 

of the estate following acquisitions and 

higher capital expenditure. Of the total, 

£9.7m was amortisation of goodwill. 

Exceptional costs of £4.1m in the year 

related primarily to staff restructuring 

resulting from the digital roll-out and 

integration costs resulting from the 

acquisitions during the year. 

Exceptional income of £4.6m in the year 

related to favourable property litigation 

settlements. 

Bank interest decreased year-on-year 

because the bank debt was repaid upon 

refinancing in May. 

Bond interest in the P&L represents 

the cost from the refinancing on 24 

May to the year-end date. The cost is 

approximately 9% on £475m equivalent. 

OpCo Profit & Loss £m 2011 2010 

Group Turnover 725.1 649.6 

EBITDA* 102.9 91.5 

EBITDA % 14.2% 14.1% 

PropCo rent (excl finance leases) (9.5) (9.1) 

Strategic costs (3.0) (1.3) 

Depreciation (55.6) (43.9) 

Amortisation (9.7) (9.7) 

Exceptional costs (4.1) (1.5) 

Exceptional income 

Operating profit/(loss) after 

4.6 

exceptional items 25.6 26.0 

Share of JV results 0.3 - 

Loss on disposals - (0.5) 

Bank interest (7.5) (17.9) 

Bond interest (26.3) 

Accrued/other finance costs (58.4) (46.3) 

(Loss) before tax (66.3) (38.7) 

Tax (2.4) (4.5) 

(Loss) after tax (68.7) (43.2) 

t 2007 is stated on a 52 week basis. 

* Earnings before PropCo rent, interest, tax, depreciation, amortisation, exceptional items and strategic one-off costs. 

w ATP and RPH net of associated direct costs. 


A large part of the charge is accrued only 

in 2011, because the first Sterling bond 

interest payment date was 1 February 

2012. Euro bond interest was paid during 

2011 on 1 August and 1 November. 

Other finance costs included primarily 

the non-cash charges of £38m on 

Terra Firma loan notes and the £8m 

one-off non-cash costs of writing off 

capitalised arrangement costs relating to 

the old facilities. Also included were the 

interest income on the loan to PropCo, 

regular amortisation of capitalised loan 

arrangement fees, unwinding of discounts 

on provisions, guarantee, commitment 

and other fees. 

Tax in the P&L was a charge of £2.4m, 

part of which was non-cash deferred tax. 

Capex 

Investment continued at a high level in 

2011. Additions included £4m for new 

sites, £17m for initiatives, £6m postacquisition 

spend on 2011 acquisitions 

and £14m for maintenance. Digital 

additions in the year were £47m (offset by 

£33m of refunds in the year with further 

refunds to follow in 2012). 

Capex £m 

£m 

31 

16 

15 

42 

30 

12 

30 27 

1 

3 27 

21 11 

13 

2007 2008 2009 2010 2011 

Maintenance Development Non Refundable 

Digital 

Cashflow 

Net debt increased by £154m largely 

because of acquisitions £116m, 

refinancing fees £22m and capex on 

digital assets for which refunds are 

expected in 2012 £13m. The main 

movements in net bank debt for OpCo 

during the year are set out in the 

table on the following page. 

46 

PropCo rent was paid for 3 quarters in 

2010 and 5 quarters in 2011, because of 

the timing of year end dates and public 

holidays. 

8 

5 

14 

23


24 

OpCo Cashflow 

£m 2011 2010 

EBITDA 

Propco rent 

102.9 91.5 

(operating and finance leases) (14.6) (8.4) 

Movement in provisions (8.1) (7.0) 

Working capital / other (9.2) (5.5) 

Payments for capex (net) (51.2) (32.8) 

Exceptional and strategic / one-off (4.9) (3.7) 

Refinancing fees 

Finance costs paid 

(21.9) (2.9) 

(excl PropCo finance leases) (24.5) (22.6) 

Acquisitions (116.2) (16.3) 

Pension deficit funding (2.1) (1.7) 

Tax (paid) / refunds received (3.8) (0.6) 

Change in Net Bank Debt (153.6) (10.0) 

The movement in provisions relates 

principally to the utilisation of onerous 

lease provisions. 

Change in working capital was an outflow 

in 2011 due to payment timings. Over 

time we expect working capital to be 

close to flat. 

Payments for capex of £51m (net of 

disposal proceeds) were £18m higher 

than prior year as a result of increased 

investment in revenue-generating 

development projects, and investment 

in digital assets for which refunds from 

external investors of £13m are expected 

in 2012. 

Exceptional and strategic / one-off costs 

were referred-to in the P&L description. 

Refinancing fees related to the bond and 

RCF financing in 2011 and the previous 

facility in 2010. 

Acquisitions spend of £116m in 2011 

was payments for the 5 acquisitions 

completed in 2011, including costs and 

net of cash acquired, and a deferred 

payment for the 2010 Pathe (Italy) 

acquisition. 

A statutory presentation of the cashflow 

statement is included in the OpCo 

statutory accounts. 

Balance Sheet 

A summary balance sheet for OpCo is set 

out below. 

The increase in the shareholders’ deficit 

compared to 2010 was a result of: 

(a) the retained P&L loss (increases 

deficit £68.7m) described in an earlier 

section, which included a number of 

non-cash items; 

(b) fx retranslation of the underlying local 

currency balance sheets (reduces 

deficit £0.9m); 

(c) actuarial pension scheme movement 

in STRGL net of associated deferred 

tax (increases deficit £2.4m). 

The balance sheet is generally larger at 

the 2011 year-end compared to 2010 

because of the larger size of the business 

following acquisitions. 

Goodwill increased by a net £73m 

because of the £91m provisional goodwill 

relating to the 2011 acquisitions, a £(3m) 

reduction to finalise the Pathe goodwill 

which was provisional at 2010, £(10m) 

amortisation and £(5m) fx movements. 

Tangible fixed assets increased as 

a result of Group funded capital 

expenditure, externally funded digital 

assets capitalised, finance lease assets 

capitalised and assets already in acquired 

businesses brought onto the Group 

balance sheet. These increases were net 

of depreciation, impairment charges and 

fx movements. The increase in net book 

value was £77m. 

Long term debtors are primarily the loans 

due from the PropCo Group plus related 

interest. 

Cash is generally at a peak at the end 

of the calendar year, including revenues 

collected during the busy Christmas 

trading period but prior to payment of 

the related film hire. Cash at the 2011 

year-end was higher than usual because 

the bond proceeds had not yet been 

fully invested in acquisitions or other 

opportunities. 

Net current assets are naturally favourable 

(negative) in this business, because 

revenues are collected from customers 

close to the day of attendance, whereas 

most direct costs and expenses are paid 

after a period of credit. 

Long term creditors at 2011 were 

primarily the bond debt (2011 bond debt 

was £181m higher than 2010 bank debt, 

net of capitalised costs), shareholder 

loan notes, finance lease creditors and 

non-cash accounting balances relating 

principally to externally funded digital 

assets. 

Provisions were principally the onerous 

lease provisions. 

Pension deficit, as measured in 

accordance with the FRS17 accounting 

standard, increased by £0.8m from 

2010, due to an increase in the asset 

values (£5.5m) and an increase in the 

scheme liabilities (£4.8m) net of the 

effect of accounting rules preventing 

the recognition of a surplus on the ABC 

scheme (£1.7m change in the year) and 

deferred tax movement (£0.2m). 

OpCo Balance Sheet 

£m 2011 2010 

Goodwill 216.1 142.9 

Tangible fixed assets 431.4 354.5 

Investments in JVs 1.2 1.2 

Debtors long term 56.1 48.4 

Cash 76.0 39.3 

Net current assets (101.3) (92.7) 

Creditors long term (908.5) (655.1) 

Provisions (67.3) (65.5) 

Pension deficit (1.1) (0.3) 

Shareholders’ deficit (297.4) (227.2) 

Terra Firma 

The directors regard Terra Firma Holdings 

Ltd, a company registered in Guernsey, 

as the ultimate parent entity. The ultimate 

controlling party is Guy Hands. 

Funding and Going Concern 

The Group has a sound funding structure, 

comprising bond finance (senior secured 

notes), a senior revolving credit facility, 

shareholder loan notes and equity 

funding from Terra Firma via intermediate 

entities. The Group has no refinancing 

requirements in the foreseeable future. 

The financial statements have been 

prepared on a going concern basis. 

Principal Risks and Risk Management 

The principal risk in the business is 

cinema attendance. There is some 

volatility year on year, depending on 

the film slate, which in turn depends on 

production from Hollywood and local 

content in each country. The weather, the 

level of competition from other exhibitors 

and from alternative entertainment events 

may also have an impact on attendance. 

The risk to earnings performance is 

mitigated by cost savings in film hire and 

staff, which reduce at lower attendances, 

and by controlling discretionary costs and 

capital expenditure. 

The challenging economic conditions 

have caused a reduction in screen 

advertising in the last three years and 

slower growth in retail revenue, but 

cinema attendance has been resilient. 

The Group has continued to achieve 

growth in the main revenue KPIs and 

Group earnings on the like-for-like estate 

have increased through this economically 

challenging period. Acquisitions and new 

cinema openings have further increased 

the growth.

Some commentators have been 

concerned about the impact of the 

increasing penetration of home cinema 

equipment and online film downloads 

on cinema attendance. Similar concerns 

were expressed with the introduction of 

Video Cassettes and DVDs. The directors 

believe that cinema continues to offer 

excellent value in the “going out” market 

and that there will be ongoing demand for 

the cinema experience for the foreseeable 

future. The value to the customer of the 

cinema experience has been further 

demonstrated and reinforced by the 

growth of high quality 3D product. 

The principal financial risk to the Group is 

the movement of interest rates. Following 

the 2011 refinancing, the Sterling element 

of the senior secured notes (£300m) is 

at a fixed interest rate of 9.0% and, to 

hedge the Euro element (€200m) which is 

at floating rates, a three year interest rate 

swap is in place to fix the effective total 

rate to 9.07%. 

The Group’s foreign exchange position is 

naturally hedged by holding a proportion 

of debt in Euros similar to the proportion 

of earnings. Most of the group’s excess 

cash is held in Sterling. 

Key Contractual Arrangements 

Major contracts fundamental to the 

performance of the business are those 

governing the senior secured notes and 

the revolving credit facility, referred to 

above, and the cinema property leases. 

Property leases vary by country and by 

location, but typically are for terms of 15 

to 25 years, with rent adjusted by general 

or property inflation. A minority include 

an element of rent related to turnover, 

but total rent paid as turnover-related is 

immaterial. Some retail goods are bought 

at prices reflecting contracts of up to 

5 years and a proportion of utilities are 

bought in advance. The rental paid to 

distributors for each film is determined 

within framework agreements, but 

subject to specific negotiation on a title 

by title basis. In some territories staff 

costs are subject to collective bargaining 

agreements. The Group’s other revenues 

and costs are determined largely at 

market rates over short terms. 

PropCo 

Ownership and structure 

“PropCo” refers to ODEON Property 

Group LLP and its subsidiaries which own 

31 cinema properties. The 31 properties 

are leased to OpCo. 

Funding 

The audited financial statements for 

PropCo are available on the website 

www.odeonucicinemas.com. 

Profit and loss account 

Revenue in PropCo represents rents 

receivable from OpCo. Of the 31 leases 

between PropCo and OpCo, 5 are 

accounted for as finance leases and the 

remaining 26 as operating leases. Finance 

lease accounting is applied to properties 

where the external lease is similar in length 

to the OpCo/PropCo lease. 

PropCo incurs a very low level of 

administrative costs. Interest is the main 

cost. Interest payable to OpCo is noncash 

in the short term (until the bank 

funding is repaid). The amortisation of loan 

issue fees is also a non-cash P&L item, 

which leads PropCo to record a book 

loss. 

Property Valuation 

In accordance with the requirements 

of the UK accounting standard relating 

to investment properties (SSAP19), 

updated valuations were performed as at 

December 2011. 

The average rental yield in the December 

2011 valuation was 7.7% (2010: 8.0%). 

This gave rise to an increase in value of 

£10.1m, increasing the total value of the 

31 properties from £143.1m to £153.2m. 

Of this total, £131.3m is accounted for 

within fixed assets (26 operating leases). 

The remaining property assets are shown 

in the balance sheet as finance lease 

debtors, and are not subject to annual 

revaluations. 


Cashflow 

The main ongoing cashflows in PropCo 

are the quarterly receipt of rents from 

OpCo and the payment of bank interest 

and bank loan principal. Bank debt was 

reduced by £2.8m in 2011 

Funding and Going Concern 

PropCo has a sound funding structure, 

comprising £113m bank loans (due 2014) 

and the related party (OpCo) balances. 

The bank funding continues to be 

contractually available provided the terms 

of the agreement with the lenders are 

followed. Projections indicate ongoing 

compliance with required covenant ratios. 

Consequently, the financial statements 

have been prepared on a going concern 

basis. The funding from OpCo is 

contractually subordinated beneath the 

bank debt. 

Jonny Mason 

Chief Financial Officer 

25


26 

Our Directors 

Mike Kinski Julie Williamson 

Tim Money 

Dean Brown 

Tracey Huggett Fraser Duncan 

Professor Gordon Edge 

Jonny Mason 

Mike Kinski (Non-Executive, Terra Firma) 

Mike was appointed Chairman of ODEON & UCI Cinemas Holdings 

Limited on 5 April 2007. He has been involved in a large number of Terra 

Firma’s investments since 2000 including Hyder plc, some of the pub 

companies, WRG and East Surrey Holdings. He was the acting Chief 

Executive Officer of the Voyager Pub Company for a period up to its sale 

in 2002. 

His other current Terra Firma responsibilities are Chairman of Infinis 

Capital Limited (a renewable energy business in the UK), and a Director of 

Lake Woods Holdings Pty. Ltd the governance company for Consolidated 

Pastoral Company (Terra Firma’s cattle business in Australia). He is also 

supporting the development of EverPower (Terra Firma’s recently acquired 

wind development business in the USA). 

Prior to joining Terra Firma in 2000, Mike was Group Chief Executive 

Officer of Stagecoach Holdings Plc and Chief Executive Officer of Power 

Distribution and Water Operations for Scottish Power Plc. He was also a 

government appointed Non-Executive Director of the UK post office from 

1998 to 2002. 

As part of Terra Firma’s regular review of resources and responsibilities, 

Mike is stepping down from the Chairmanship of ODEON & UCI Cinemas 

Holdings Limited. Mike will remain a Board member of the Company. 

Rupert Gavin 

José Batlle Roger Harris Mike Stevens 

Robbie Barr (Non-Executive, Terra Firma) 

Robbie was appointed a director of ODEON & UCI Cinemas Holdings 

Limited on 11 June 2012 and replaces Mike as Chairman as of that date. 

Robbie is the Chief Operating Officer of Terra Firma Capital Partners 

Limited (“TFCP”), advisor to the Terra Firma shareholders and has overall 

responsibility for the operational management of Terra Firma’s portfolio 

businesses. Prior to joining TFCP in 2009, he held a number of senior 

positions at Vodafone Group plc including the role of Group Financial 

Controller and regional CFO for Vodafone’s businesses outside 

Western Europe. 

Julie Williamson (Non-Executive, Terra Firma) 

Julie was appointed a director of ODEON & UCI Cinemas Holdings Limited 

on 27 January 2012. She recently led the Terra Firma team advising on the 

investment in The Garden Centre Group. Julie also previously led the Terra 

Firma team advising on the investment in Tank & Rast and was responsible 

for its refinancing in 2006 and the partial exit in 2007. Julie was also heavily 

involved in the group’s pub businesses. She currently focuses on the 

hospitality and leisure sectors for Terra Firma. 

Prior to joining the group in 1998, Julie worked for Nomura International 

plc where she headed the legal team that provided legal risk analysis and 

transaction execution support to the group. Prior to that, she was a partner 

in the Banking department with the law firm of Winthrop & Weinstine.

December 2011 

Mike Kinski 

Fraser Duncan 

Gordon Edge 

Tim Money 

Tracey Huggett 

Dean Brown 

Rupert Gavin 

Jonny Mason 

Roger Harris 

Jose Batlle 

Mike Stevens 

Board 

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ODEON & UCI Cinemas Holdings Ltd 

Audit 

Committee 

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Finance 

Committee 

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Renumeration & 

Nomination 

Committee 

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Group Ltd 

Appointment and Resignation of Directors from 1st January 2011 to 30th June 2012 

Appointments Resignations 

Dean Brown (appointed 22 July 2011) Mayamiko Kachingwe (resigned 19 May 2011) 

Tracey Huggett (appointed 30 September 2011) 

Julie Williamson (appointed 27 January 2012) 

Robbie Barr (appointed 11 June 2012) 

Glenn Timms (resigned 8 July 2011) 

Tim Money (Non-Executive, Terra Firma) 

Tim was appointed to the Board on 22nd April 2009. Tim has been with 

Terra Firma since 2007 and is also involved in a number of Terra Firma’s 

other investments including Tank & Rast and Consolidated Pastoral 

Company. Prior to joining Terra Firma, Tim was Chief Financial Officer of 

P&O Nedlloyd. Tim is a Chartered Accountant. 

Dean Brown (Non-Executive, Terra Firma) 

Dean was appointed to the Board on 22 July 2011. As a Business Director 

at Terra Firma he holds responsibility for ODEON & UCI Cinemas Holdings 

and The Garden Centre Group (the leading UK specialist garden products 

retailer). Prior to joining Terra Firma in 2011, he worked at OC&C strategy 

consultants and then held a number of different Trading, Marketing and 

Development roles at both Tesco and Waitrose. Dean holds an MBA from 

INSEAD and an MA in Mathematics from Cambridge University. 

Tracey Huggett (Non-Executive, Terra Firma) 

Tracey was appointed to the board on 30 September 2011. She has been 

involved with ODEON & UCI Cinemas Holdings since 2007. She has been 

with Terra Firma since 2006 and has also been involved in a number of 

Terra Firma’s other investments including AWAS and Tank & Rast. Prior to 

joining Terra Firma, Tracey was employed at MidOcean Partners and prior 

to that by Deutsche Bank Capital Partners. 

Professor Gordon Edge (Non-Executive, Independent) 

Gordon has been a non-executive director of ODEON & UCI Cinemas 

Holdings Limited since May 2007. He is a long term serial scientific 

entrepreneur and in 1986 founded The Generics Group; a leading 

laboratory based international technology and business consulting and 

investment company (now the Sagentia group). 

Fraser Duncan (Non-Executive, Independent) 

Fraser has been involved with ODEON & UCI Cinemas Group since 2004 

and was appointed Chairman of ODEON Property Group LLP in March 

2007. He was with Terra Firma from 1997 to 2009, during which time his 

responsibilities included pre- and post-acquisition operational change 

planning and implementation, performance monitoring and governance 

processes. Prior to joining Terra Firma, Fraser held positions within Rentokil 

Initial, Cameron Consultants and Unilever. He left Terra Firma in 2009 but 

continues to act as a non-executive director of ODEON & UCI Cinemas 

Holdings Ltd and non-executive chairman of the management committee 

of ODEON Property Group LLP. 

Executive 

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ODEON Property 

Group LLP 

Management 

Committee 

Rupert Gavin (Executive Director) 

Rupert was appointed as Chief Executive Officer of ODEON & UCI Cinemas 

in July 2005. Prior to joining the business, he was Chief Executive of BBC 

Worldwide, and a member of the BBC’s Executive Committee. He led 

BBC Worldwide through a period of rapid expansion. Rupert’s earlier roles 

included Managing Director at British Telecom and Deputy Managing Director 

at Dixons Store Group. 

Jonny Mason (Executive Director) 

Jonny joined ODEON & UCI Cinemas in March 2006 as Chief Financial 

Officer. Previously, Jonny was a member of the Operating Board and 

Finance Director of Sainsbury’s. Prior to that Jonny’s roles included the 

CFO of a private equity-backed fitness chain and financial management 

positions in Hanson and Shell. 

José Batlle (Executive Operating Board) 

José is the Chief Operating Officer (Continental Europe) of ODEON & UCI 

Cinemas Group. He joined the cinema industry in 1986 as Chief Executive 

of Cinesa, Spain. He was appointed Vice President of UCI when Cinesa 

was sold to UCI in 1991 and later established UCI Brazil, started 

operations in Italy and Portugal, and continued the rapid expansion of 

Cinesa in Spain. In 2003 he was appointed Senior VP Continental Europe 

and made additional acquisitions in Germany and Austria. 

Roger Harris (Executive Operating Board) 

Roger is the Chief Operating Officer (UK and Ireland) of ODEON & UCI 

Cinemas Group. He joined UCI in 2002, working closely with the Executive 

and UK Senior Management Team to develop a five-year plan for the UK 

business. Roger has been in the cinema business since 1988. He held 

a number of positions at Famous Players in Canada, including Senior 

Executive Vice President and General Manager. 

Mike Stevens (Executive Operating Board) 

Mike has worked in the cinema industry for over 11 years and was 

previously employed by UCI between 1997-2001. He returned to the 

company in 2005 having spent the intervening period in a senior HR role 

in the UK media sector. Mike has over 30 years’ experience as an HR 

practitioner. 

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28 

Corporate Governance 

Report 

The boards of ODEON & UCI Cinemas Holdings Ltd and ODEON Property Group 

LLP are committed to the highest standards of corporate governance as set out in 

the Combined Code on corporate governance. 

ODEON & UCI Cinemas Holdings Ltd 

ODEON & UCI Cinemas Holdings Ltd’s 

Board believes that effective corporate 

governance is a fundamental aspect of 

a well run company and is committed 

to achieving the highest standards 

of corporate governance, corporate 

responsibility and risk management in 

directing and controlling the business. 

The following paragraphs describe 

the key governance structures and 

internal controls operating within the 

company. Through these mechanisms, 

the company aims to apply the highest 

standards of corporate governance 

and to conform with the spirit of the 

‘Combined Code’. 

Board Constitution and Procedures 

The Board comprises of 10 members: 

a non-executive Chairman, 2 executive 

directors and 7 non-executive directors. 

The Chairman is responsible for the 

effective running of the Board and for 

communications with all directors and 

shareholders. He ensures that the Board 

receives sufficient information on financial 

trading and corporate issues prior to the 

Board meetings. The executive directors 

are responsible for day-to-day operations 

and the development of strategic 

plans for consideration by the Board 

as a whole. 

The Board meets regularly during the 

year. In 2011, 12 scheduled meetings 

were held in the UK during the year. 

All members of the Board receive 

detailed financial information and regular 

presentations from executives on the 

business performance, in addition to 

items for decision and minutes of board 

committees in advance of each board 

meeting, whether they are able to attend 

or not. This enables the directors to make 

informed decisions on corporate and 

business issues under consideration. 

The Board adopted a formal schedule 

of delegated authorities on 5th April 

2007 whilst ensuring that key policy and 

strategic decisions are made by the full 

board. Such matters include, but are not 

limited to, the final approval of the annual 

accounts and budget, major acquisitions 

and disposals, and any changes to the 

Company’s financing arrangements and 

financial policies. Regular updates on 

risk management, health and safety, and 

other key company policies are given to 

the Board. 

Where urgent decisions are required 

on matters specifically reserved for the 

Board in between meetings, there is a 

process in place to facilitate discussion 

and decision-making. The directors also 

have access to the advice and services 

of the Company Secretary and external 

advisers, as appropriate. 

Board Committees 

The Board has established several 

committees, each with clearly defined 

terms of reference, procedures, 

responsibilities and powers. 

Finance Committee 

The Finance Committee is chaired by 

Mike Kinski and consists of a further 5 

non-executive directors and 2 executive 

directors. This committee is responsible 

for making recommendations to the 

board on funding strategy, capital 

structure and management of financial 

risks and the policies and control 

procedures, approval of investments and 

divestments, raising of external financing 

and the granting of securities, guarantees 

and indemnities as set out within the 

delegated authorities. In certain specific 

circumstances the Board has delegated 

authorities to the committee to make 

decisions in these areas. 

Audit committee 

The Audit committee is chaired by 

Fraser Duncan and consists of a further 3 

non-executive directors. 

The Chief Executive Officer, Chief 

Financial Officer, Director of Group 

Finance and external auditors are 

normally invited to attend the meeting. 

The committee meets at least twice 

during the financial year at appropriate 

times in the reporting and audit cycle. 

The committee oversees the relationship 

with the external auditors. It reviews 

their audit plan and discusses audit 

findings with them. In addition, the 

committee reviews the effectiveness 

of the Company’s internal controls and 

risk management systems and also 

ensures that there is proportionate 

and independent investigation of any 

matter bought to their attention. The 

committee is required to assist the 

Board to fulfil its responsibilities related 

to external financial reporting and 

associated announcements. During the 

year the committee reviewed either as a 

committee or as part of the Board: 

n the annual financial statements, 

including the requirements for financial 

reporting; 

n changes proposed to the Company’s 

accounting policies and practices; 

n significant accounting issues; 

n the audit plan and processes, and; 

n the Company’s risk management 

process. 

The committee is also responsible for 

the development, implementation and 

monitoring of the Company’s policy 

on external audit. The committee has 

oversight responsibility for monitoring 

independence, objectivity and compliance 

with ethical and regulatory requirements. 

The committee recommends the 

appointment and reappointment of 

the Company’s external auditors and 

annually reviews a formal letter provided

Risk management processes and systems of internal control are designed 

to manage, rather than eliminate, the risk of failure to achieve the group’s 

strategic objectives. 

by the external auditors confirming their 

independence and objectivity within 

the context of applicable regulatory 

requirements and professional standards. 

The committee also reviews the terms, 

areas of responsibility and scope of the 

audit (including schedules of unadjusted 

errors and representation letters) as set 

out in the external auditors’ engagement 

letter; the overall work plan for the 

forthcoming year, together with the costeffectiveness 

of the audit as well as the 

auditors’ remuneration and performance; 

any major issues which arise during the 

course of the audit and their resolution; 

key accounting and audit judgements; 

the level of errors identified during the 

audit; and the recommendations made 

to management by the auditors and 

management’s response. 

Remuneration and Nominations 

Committee 

The remuneration and nominations 

committee is chaired by Mike Kinski and 

consists of a further 2 non-executive 

directors and an executive director. The 

committee meets at least twice a year 

and at such other times as the Board 

requires. 

The committee’s specific duties and 

responsibilities are as follows: 

n to establish criteria to be used in 

selecting Directors and ensure the 

remuneration packages are designed 

to attract, motivate and retain staff of 

the highest calibre 

n to approve the remuneration of the 

executive directors and management, 

to provide independent and objective 

assessment of any benefits granted to 

directors and management, and 

n to ensure that the pension 

arrangements throughout the Group 

are appropriate, well supervised and 

conform to applicable law. 

The committee will also review the design 

of incentive and performance related pay 

plans for approval by the Board and 

will review the Company’s remuneration 

policies as a whole and remuneration 

trends across the Company. 

Risk Management and 

Internal Controls 

The Company’s aim is to manage risk 

and to control its business and financial 

activities cost-effectively and in a manner 

that enables it to exploit profitable 

business opportunity in a disciplined way. 

The Board has overall responsibility for 

the systems of internal controls, which 

are designed to manage risk of failure to 

achieve the objectives of the business 

where such risk cannot be eliminated. 

The Board has considered the systems 

of internal control for the accounting year 

under review and is satisfied that they 

are appropriate. There is a programme of 

regular review and development which is 

monitored by the audit committee. 

Bribery Act 

During the year the Board discussed 

the implementation of the UK Bribery 

Act and the Company’s Anti Corruption 

procedures. The Board were informed 

of all the measures the Company had 

established to ensure that its employees, 

agents, intermediaries, consultants, 

distributors, sub-contractors, suppliers 

and Joint Venture partners working on the 

Company’s behalf anywhere in the world 

would be fully aware of the requirements 

of the Act and what was expected 

of them. Employees undertook the 

Company’s Anti Bribery in-house training 

and continual training will be provided on 

an ad hoc basis where necessary. 

ODEON Property Group LLP 

ODEON Property Group LLP (“PropCo”) 

is also committed to meeting the high 

standards of corporate governance within 

the legal framework that it is subject to. 


PropCo has entered into a Limited 

Liability Partnership agreement with 

Aurelius Property LLP and Metellus 

Property LLP which outlines the duties 

and responsibilities of the designated 

members. The members have appointed 

a management committee to carry out 

the day to day business of the company. 

The management committee must 

have at least one representative of 

each of Aurelius and Metellus and the 

senior executives of the company. The 

Management Committee meets at least 

twice a year, with the senior executives of 

the business, to carry out its duties and 

to discuss the progress of the business. 

In 2011 the Committee met 4 times and 

was chaired by Fraser Duncan. 

The meetings included a review of the 

policies, strategy and financial position 

of the Group. 

The Management Committee also 

oversees the relationship with the external 

auditors. It reviews their audit plan and 

discusses audit findings with them. In 

addition, it reviews the effectiveness of 

internal controls and risk management 

systems and also ensures that there 

is proportionate and independent 

investigation of any matter brought to 

their attention. 

The Management Committee also has 

to fulfil its responsibilities related 

to external financial reporting and 

associated announcements. 

29


30 

Cinemas by Territory 

As at June 2012 

UK 

Andover 

Aylesbury 

Ayr 

Banbury 

Barnet 

Basingstoke 

Bath 

Beckenham 

Belfast 

Birmingham 

Blackpool 

Bournemouth 

Bournemouth ABC 

Bracknell 

Braehead 

Bridgend 

Brighton 

Bristol 

Bromborough 

Camden 

Canterbury 

Cardiff 

Chatham* 

Chelmsford 

Colchester 

Covent Garden 

Coventry 

Crewe 

Darlington 

Derby 

Dudley 

Dumfries 

Dundee 

Dunfermline 

East Kilbride 

Edinburgh Lothian 

Road 

Edinburgh Wester 

Hailes 

Epsom 

Esher 

Exeter 

Gateshead 

Gerrards Cross 

Glasgow Quay 

Greenwich 

Guildford 

Harrogate 

Hastings 

Hatfield 

Hereford 

* Managed sites 

Holloway 

Huddersfield 

Hull 

Kensington 

Kettering 

Kilmarnock 

Kingston 

Lee Valley 

Leeds 

Leicester 

Leicester Square 

Lincoln 

Liverpool 

Liverpool Switch Island 

Loughborough 

Maidenhead 

Maidstone 

Manchester 

Mansfield 

Marble Arch 

Milton Keynes 

Muswell Hill 

Newark 

Norwich 

Nuneaton 

Oxford George Street 

Oxford Magdalen Street 

Panton Street 

Port Solent 

Preston 

Putney 

Richmond 

Rochdale 

Salisbury 

Sheffield 

Silverlink 

South Woodford 

Southampton 

Southend 

Stoke-on-Trent 

Streatham 

Surrey Quays 

Swadlincote 

Swansea 

Swiss Cottage 

Tamworth 

Taunton 

Telford 

Tottenham Court Road 

Trafford 

Tunbridge Wells 

Uxbridge 

Warrington 

West End 

Weston-Super-Mare 

Whiteleys 

Wimbledon 

Worcester 

Wrexham 

Ireland 

Blanchardstown 

Cavan 

Coolock 

Dublin, The Point 

Limerick 

Naas 

Newbridge 

Portlaoise 

Stillorgan 

Waterford 

Spain 

Aldaia 

Area Central (Santiago 

De Compostela) 

Artea (Leioa) 

Augusta (Zaragoza) 

Barnasud (Barcelona) 

Diagonal (Barcelona) 

Diagonal Mar 

(Barcelona) 

El Foro (Merida) 

El Muelle (Las Palmas) 

Equinoccio 

(Majadahonda) 

Festival Park (Marratxi) 

Gran Casa (Zaragoza) 

Heron City (Barcelona) 

La Cañada (Marbella) 

La Farga (Hospitalet) 

La Gavia (Madrid) 

La Maquinista 

(Barcelona) 

La Moraleja 

(Alcobendas) 

Las Rosas (Madrid) 

Las Rozas 

Loranca (Fuenlabrada) 

Los Barrios 

Manoteras (Madrid) 

Maremagnum 

(Barcelona) 

Marineda City (La 

Coruna) 

Mataró 

Max Ocio (Bilbao) 

Mendez Alvaro (Madrid) 

Nassica Getafe (Madrid) 

New Capitol* (Madrid) 

Nueva Condomina 

(Murcia) 

Oviedo 

Parc Vallès (Terrassa) 

Parquesur (Leganes) 

Principe Pio (Madrid) 

Proyecciones (Madrid) 

Sant Cugat 

Santander 

Sevilla 

Siete Palmas (Las 

Palmas) 

Xanadu (Arroyomolinos) 

Zaratan (Valladolid) 

Zubiarte (Bilbao) 

Portugal 

Dolce Vita (Lisbon) 

Lisbon 

Oporto 

Germany 

Bad Oeynhausen 

Berlin Colosseum* 

Berlin Eastgate 

Berlin Friedrichshain 

Berlin Gropius 

Bochum Ruhr Park 

Cottbus Lausitz Park 

Dessau 

Dresden Elbe Park 

Duesseldorf 

Duisburg 

Flensburg 

Gera 

Hamburg East 

Hamburg Mundsburg 

Hamburg West 

Huerth 

Kaiserslautern 

Leipzig Nova Eventis 

Neuss 

Paderborn 

Potsdam 

Wilhelmshaven 

Austria 

Graz 

Vienna MEC 

Vienna SCS 

Italy 

Alessandria 

Ancona 

Arezzo 

Bergamo 

Bicocca (Milan) 

Cagliari 

Casoria (Naples) 

Campi Bisenzio 

(Florence) 

Certosa (Milan) 

Como 

Fano 

Ferrara 

Fiume Vento 

Firenze 

Genoa 

Jesi 

Lissone (Milan) 

Lunghezza (Rome) 

Marcon (Venice) 

Marconi (Rome) 

Meridiana (Bologna) 

Messina 

Mestre 

Milano Fiori 

Molfetta 

Moncalieri (Turin) 

Palermo 

Perugia 

Pesaro 

Piacenza 

Pioltello 

Porta di Roma (Rome) 

Porto Sant’Eplidio 

Reggio Emilia 

Rimini 

Roma Fiumincino 

(Rome) 

Senigallia 

Sinalunga (near Siena) 

Verona 

Torino

Website 

odeonucicinemas.com 

ODEON & UCI Cinemas Group 

54 Whitcomb Street 

London 

WC2H 7DN 

Tel: +44 20 7321 0404 

For Enquiries 

investors@odeonuk.com 

Public Relations 

Red 

41-44 Great Windmill Street 

London 

W1D 7NF 

Tel: +44 20 7025 6524 

Financial Public Relations 

RLM Finsbury 

Tenter House 

45 Moorfields 

London 

EC2Y 9AE 

Tel: +44 20 7251 3801 

Terra Firma Capital Partners Ltd 

2 More London Riverside 

London 

SE1 2AP 

Tel: +44 20 7015 9500

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ODEON & UCI Cinemas Group Annual Review 2011

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