2q 2016 earnings results

2Q 2016 Earnings Results

Aug 26, 2016

2

Disclaimer

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The information contained in the Presentation has not been independently verified and some of the information is in summary form. No representation or warranty, express or implied, is made by Codere or any of its affiliates (together, “Codere Group”), nor by their directors, officers, employees, representatives or agents as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions expressed herein. None of Codere nor any of its affiliates, nor their respective directors, officers, employees, representatives or agents shall have any liability whatsoever (in negligence or otherwise) for any direct or consequential loss, damages, costs or prejudices whatsoever arising from the use of the Presentation or its contents or otherwise arising in connection with the Presentation, save with respect to any liability for fraud, and expressly disclaim any and all liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in connection with the accuracy or completeness of the information or for any of the opinions contained herein or for any errors, omissions or misstatements contained in the Presentation.

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This Presentation contains financial information derived from Codere’s unaudited financial statements for the quarter and, if applicable, year to date period. None of this financial information has been audited by our auditors. Financial information by business areas is presented according to GAAP as well as internal Codere Group’s criteria including a restatement of historical figures to reflect, among other things, an exclusion of non-recurring items and impact of effective exchange rates, in each case as per management estimates. These criteria do not follow any particular regulation and can include historical figures, forecasts and subjective valuations which could represent substantial differences should a different methodology be applied.

Market and competitive position data in the Presentation has generally been obtained from industry publications and surveys or studies conducted by third-party sources. Peer firm information presented herein has been taken from peer firm public reports. There are limitations with respect to the availability, accuracy, completeness and comparability of such data. Codere has not independently verified such data and can provide no assurance of its accuracy or completeness. Certain statements in the Presentation regarding the market and competitive position data are based on the internal analyses of Codere, which involve certain assumptions and estimates. These internal analyses have not been verified by any independent source and there can be no assurance that the assumptions or estimates are accurate. Accordingly, undue reliance should not be placed on any of the industry, market or Codere’s competitive position data contained in the Presentation.

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3

Index

• Operating Results

• Credit Overview

• Company Outlook

• Appendix

4

Latam EuropeArgentina Mexico Italy Spain Panama Uruguay Colombia Brazil

68%

32%33%

23%

21%

11%

7%

3%2%

0%

69%

31%28%

27%

20%

11%

7%

4%2%

0%

1,231 1,241 1,294 1,357 1,398 1,439 1,459 1,471

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

310.1330.9 350.1 365.5 351.7

372.0 369.5 377.6

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Operating Results

Total Revenue (ARS @ Blue Rate) (1)

(1) Figures reflect Company consolidated revenue plus 50% of HRU (unconsolidated joint venture accounted for under equity method) revenue.

Quarter

Geographic Mix

+2.2%

+3.3%

LTM to Jun-15

LTM

+0.8%

+8.4%

LTM to Jun-16

5

80%

20%

40%

30%

10%

10%

5%

3% 2%

82%

18%

32%

37%

10%

8%

6%

3% 3%

190 199214

229 238252 255 259

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

52.2 55.861.4 59.3 61.2

70.064.3 63.5

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Operating Results

Total Adjusted EBITDA (ARS @ Blue Rate) (1)

(1) Figures reflect Company consolidated adjusted EBITDA plus 50% of HRU (unconsolidated joint venture accounted for under equity method) adjusted EBITDA.(2) Figures reflect contribution to total adjusted EBITDA before Corporate Overhead and excluding Brazil and Carrasco Nobile due to negative adjusted EBITDA.

Quarter

Geographic Mix (2)

-1.2%

+7.1%

Argentina Mexico Italy Spain Panama Uruguay (HRU) Colombia Latam Europe

LTM

+1.6%

+13.1%In line with

guidance of

€63 – 66 mm

LTM to Jun-15 LTM to Jun-16

6

13.4%

9.3%10.4% 9.7%

12.8%14.1%

11.2% 11.1%

20.9%

23.3% 22.9%21.7% 21.8%

22.7% 22.9% 22.1%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin

(%)

Margin - Europe Margin - Latam

11.5% 11.4% 10.9% 10.7% 10.6%11.8% 12.0% 12.3%

20.0%20.9% 21.6% 22.2% 22.4% 22.3% 22.3% 22.4%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin

(%)

Margin - Europe Margin - Latam

16.8% 16.8% 17.5% 16.2% 17.4% 18.8% 17.4% 16.8%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin

(%)

15.4% 16.0% 16.5% 16.9% 17.0% 17.5% 17.5% 17.6%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin

(%)

Operating Results

Total Adjusted EBITDA Margin (ARS @ Blue Rate) (1)

Quarter

-0.6 p.p.

+0.6 p.p.

0.1 p.p.

+0.7 p.p.

LTM

+12.0 p.p.+11.0 p.p. +10.1 p.p.

+11.5 p.p.

(1) Figures reflect Company consolidated adjusted EBITDA plus 50% of HRU (unconsolidated joint venture accounted for under equity method) adjusted EBITDA.

7

16.5 18.423.1 24.5 27.5 27.8 31.7 29.9

21.2% 21.4% 22.1%20.7%

24.3% 23.4%25.1%

22.9%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

65.0 67.3 72.4 82.5 93.5 102.9 111.5 116.8

20.4% 21.0% 20.8% 21.3% 22.2% 22.6% 23.4% 23.9%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

77.586.1

104.4118.5 112.9 118.8 126.1 130.7

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

319.2 320.8347.4

386.5421.9

454.6 476.2 488.4

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

Operating Results

Argentina (ARS @ Blue Rate)

Quarter LTM

+3.6%

+10.3% +2.6%+26.4%

-5.7%+22.0%

-2.2 p.p.+2.2 p.p.

+0.5 p.p.+2.6 p.p.

+4.7%+41.6%

Adjusted EBITDA Adjusted EBITDA

8

87.2 92.1 90.9 92.385.3 86.8 81.2 81.1

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

338.1 341.9 354.4 362.6 360.7 355.3 345.5 334.3

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

19.6

25.9 25.0 24.621.8 22.7 21.8 22.2

22.5%

28.1% 27.5% 26.6%25.5% 26.2% 26.8% 27.4%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

72.3 79.388.4 95.0 97.2 94.0 90.8 88.5

21.4%23.2%

24.9%26.2% 26.9% 26.5% 26.3% 26.5%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

Operating Results

Mexico

-0.1%

-12.1%-3.2%

-7.8%

+1.8%

-9.8%

+0.6 p.p.+0.8 p.p.

+0.2 p.p.+0.3 p.p.

-2.2%-6.8%

Quarter LTM


9

1,2841,398

1,528 1,626 1,683 1,651 1,662 1,697

21.4%23.2%

24.9%26.2% 26.9% 26.4% 26.3% 26.5%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

MX

N m

m

341

448 420 417 398 416 431 452

22.5%

28.1% 27.5% 26.6%25.5% 26.2% 26.8% 27.4%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

MX

N m

m

6,006 6,032 6,135 6,203 6,250 6,247 6,329 6,412

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

MX

N m

m

Revenue

1,515 1,594 1,526 1,567 1,563 1,590 1,609 1,650

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

MX

N m

m

Revenue

Operating Results

Mexico (Local Currency)

Quarter LTM

+2.5%

+5,3%+1.3%

+3.4%

+4.9%

+8.4%

+0.6 p.p.+0.8 p.p.

+0.2 p.p.+0.3 p.p.

+2.1%+4.4%


10

37.6 36.7 37.6 37.339.9 41.1 41.6 42.4

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

150.0 149.9 150.0 149.2 151.5 155.9 159.9 164.9

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

5.43.7

5.7 5.47.5 6.7

8.6 7.4

14.4%

10.1%

15.0% 14.6%

18.9%

16.4%

20.7%

17.5%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

18.1 19.0 19.9 20.2 22.325.3

28.3 30.3

12.1%12.7%

13.3% 13.6%14.7%

16.2%

17.7%18.3%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

Operating Results

Spain

+1.9%

+13.7%

+3.1%

+10.5%

-13.9%

+37.0%

-3.2 p.p.

+2.9 p.p.+0.6 p.p.

+4.7 p.p.

+7.1%+50.0%

Quarter LTM


11

3638

36

2925 26

2321

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Mo

nth

s (#

)

Target = 20

10,059 9,892 9,750 9,652 9,521 9,379 9,228 9,197

41.644.2 44.3 43.5

45.950.0 50.4 50.9

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

AW

Ps (#)

EUR

Avg. Installed AWPs (#) Gross Win / AWP/ Day

7.4

6.26.8 6.8

8.79.7

9.09.6

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

0.40.8

2.0

3.9

1.7

1.1

1.8

5.3

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Operating Results

Spain

Gross Win / AWP / Day AWP Capex – Product Investment

AWP Operating EBITDA (1) AWP Units – Average Age

+6.7%

+41.2%

(1) Figures reflect segment Operating EBITDA before business unit (Spain) overheads.

-8.7%

-27.6%

-0.3%-4.7%

+1.0%+17.0%

12

64.771.7 69.2 67.9 69.9

77.281.7 82.8

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

259.6 263.8 268.1 273.5 278.8 284.2 296.7 311.6

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

8.26.4 5.4 4.8

6.69.9

5.2 6.5

12.7%

8.9%

7.9%7.1%

9.4% 12.9%

6.4%

7.8%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

29.0 28.0 25.7 24.8 23.226.7 26.5 28.3

11.2%10.6%

9.6%9.1%

8.3%

9.4%8.9% 9.1%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

Operating Results

Italy

+1.3%

+21.9%

+5.0%

+13.9%

+25.0%+35.4%

+1.4 p.p.

+0.7 p.p.

+0.2 p.p.

0.0 p.p.

+6.8%+14.1%

Quarter LTM


13

17,191

16,789

17,222

17,721

18,336

17,997 17,934

19,007

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

0.6

1.1 1.11.0

1.1

0.7

1.8

2.7

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

7,3387,159

6,998 7,079

7,507

7,792

7,549

7,810

58.362.2 63.9 61.6 59.0

66.6

74.8 76.9

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

AW

Ps (#)

EUR

Avg. Installed AWPs (#) Gross Win / AWP/ Day

Operating Results

Italy

Gross Win / AWP / Day Gross Win / VLT / Day

AWP Maintenance Capex Network Connected Units (AWPs + VLTs)

1,169

1,2571,280

1,3581,407 1,405 1,414

1,437

197.9

219.1 218.3200.3 192.8

218.8 214.6199.9

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

VLTs (#)EU

R

Avg. Connected VLTs (#) Gross Win / VLT / Day

+6.0%+7.3%

14

Operating Results

Italy – Impact of 2016 Stability Law (1)

26.7

16.5

7.1

17.36.2 - 7.8 22.7 - 24.3

2015 A Impact of 2015Stability Law (2)

Impact of 2016Stability Law (3)

2015 PF Steps toMitigate Impact (4)

2015 PFw/ Mitigation

EUR

mm

Adjusted EBITDA

-10.2

Net Impact

(1) Increase in gaming taxes, effective January 1, 2016, including 4,5% on AWP’s (to 17,5%) and 0,5% on VLT’s (to 5,5%).(2) Figure reflects actual impact on 2015 results.(3) Figure reflects proforma impact (ie. as if 2016 Stability Law was in place on January 1, 2015).(4) Figure reflects expected impact on EBITDA from a reduction in machine payout to 70%, from 74%; previous guidance was a range between €4 – 7.3 mm.

15

23.4 24.8 25.8 26.9 25.4 25.323.3 23.1

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

86.3 88.694.2

100.9 103.0 103.4 100.9 97.0

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

4.5 4.0 3.6 3.82.9

3.8 3.4 3.4

19.2% 16.1% 14.0% 14.2% 11.3% 15.1% 14.8% 14.7%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

14.9 14.6 15.1 15.9 14.3 14.1 13.9 13.5

17.3%16.4% 16.0% 15.8%

13.9% 13.6% 13.8% 13.9%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

Operating Results

Panama

-0.9%

-14.1%-3.9%

-3.9%

-1.2%

-10.5%

-0.1 p.p.

+0.5 p.p.+0.1 p.p.

-1.9 p.p.

-2.9%

-15.1%

Quarter LTM


16

8.3 8.27.5 7.5

7.0 6.7

5.4

6.6

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

31.6 31.4 31.8 31.5 30.2 28.726.6 25.7

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

1.6

2.3

1.6 1.71.9

1.6

0.9

1.6

18.7%

28.2%

21.6% 22.2%

27.0%

24.3%

16.6%

24.1%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

6.7 7.1 7.2 7.2 7.5 6.8 6.1 6.0

21.1%22.7% 22.7% 22.7%

24.8%23.7% 22.9% 23.3%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

Operating Results

Colombia

+22.2%

-12.0%

-3.4%

-18.4%

+77.8%

-5.9%

+7.5 p.p.

+1.9 p.p.

+0.4 p.p.

+0.6 p.p.

-1.6%

-16.7%

Quarter LTM


17

4.6 4.5

7.17.7

4.1

9.0

3.34.3

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

19.8 18.220.2

23.8 23.3

27.924.1

20.7

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

-2.4 -2.4-1.6

-0.7

-3.3-2.9

-6.4

-9.2

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

-0.7 -0.5

0.40.1

-3.2

-0.1

-3.2-2.7

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Operating Results

Uruguay (Carrasco Nobile)

+30.3%

-44.2%

-14.1%

-13.0%

Quarter LTM


18

2.1 1.9

2.42.2 2.4 2.3

2.52.3

34.2%

30.6%

34.3%32.8%

36.3%34.3%

38.0%36.6%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

8.0 7.9 8.2 8.5 8.9 9.3 9.4 9.5

33.6%32.9% 33.0% 33.0%

33.6%34.4%

35.3%36.3%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

EUR

mm

23.7 23.9 24.9 25.8 26.4 27.0 26.5 26.1

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

6.0 6.17.0 6.7 6.6 6.7 6.6 6.3

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Revenue

Operating Results

Uruguay (HRU) – Codere 50% Interest

-4.5%

-6.0%

-1.5%

+1.2%

-8.0%+4.5%

-1.4 p.p.+3.8 p.p.

+1.0 p.p.

+3.3 p.p.

+1.1%+11.8%

Quarter LTM


19

Index


• Credit Overview

• Company Outlook

• Appendix

20

53.7

-0.1

46.8

26.721.8

45.1

16.1

38.1

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

110.9

78.7102.5

127.3

95.4

140.5

109.8121.1

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Credit Overview

Consolidated Free Cash Flow (ARS @ Blue Rate) (1)

Quarter LTM

+137%

+42.7%+10.3%

-4.9%

(1) Consolidated free cash flow, as defined herein, reflects consolidated adjusted EBITDA less i) corporate income taxes paid, ii) total capital expenditures and iii) increases in net working capital.

Figures in EUR mm, except where noted otherwise.

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

Adjusted EBITDA 50.1 53.9 59.0 57.2 58.8 67.7 61.8 61.2

(-) Corporate Income Tax Paid (5.3) (7.1) (5.8) (10.4) (7.9) (8.7) (8.3) (18.6)

(-) Maintenance Capex (14.4) (10.2) (8.1) (14.1) (11.3) (12.4) (20.7) (21.0)

(-) Increase in Net Working Capital 25.9 (27.0) 3.8 (0.1) (13.3) 3.0 (12.4) 17.5

FCF before Growth Capex 56.3 9.5 49.0 32.5 26.3 49.6 20.4 39.1

(-) Growth Capex (2.5) (9.6) (2.1) (5.8) (4.5) (4.5) (4.3) (1.1)

FCF 53.7 (0.1) 46.8 26.7 21.8 45.1 16.1 38.1

2015 20162014

21

10.4

18.6

8.6

(0.1) (0.2) (0.1)

2Q 2015 Argentina Mexico Panama Others 2Q 2016

EUR

mm

5.37.1

5.8

10.4

7.98.7 8.3

18.6

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

25.1 25.2 26.328.7

31.3 32.835.4

43.5

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

Credit Overview

Corporate Income Taxes Paid (ARS @ Blue Rate)

Quarter LTM

+124%

+78.8%

+22.9%

+51.6%

28.7

43.5

12.6

3.90.3 (0.0) (1.9)

2Q 2015 Argentina Mexico Spain Corporate Others 2Q 2016

EUR

mm

22

14.4

10.28.1

14.1

11.3 12.4

20.7 21.0

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

36.1 35.838.5

46.843.7 45.8

58.5

65.4

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

EUR

mm

4.7%

3.1%2.3%

3.9%3.3% 3.4%

5.7% 5.7%

28.7%

18.9%

13.6%

24.7%

19.2% 18.3%

33.5% 34.3%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

% EB

ITDA

% R

even

ue

% Consolidated Revenue

% Consolidated Adjusted EBITDA

3.0% 2.9% 3.0%3.5%

3.2% 3.2%

4.1%4.5%

19.8%18.7% 18.8%

21.2%

19.1% 18.9%

23.8%

26.2%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

% EB

ITDA

% R

even

ue

% Consolidated Revenue

% Consolidated Adjusted EBITDA

Credit Overview

Maintenance Capital Expenditures (ARS @ Blue Rate)

Quarter LTM

+1.4%

+48.9%

+11.8%

+39.7%

23

102

46%

12154%

MXN 223 mm

Top 10 Gaming Halls Rest

156.470%

28.413%

37.917%

MXN 223 mm

Main Floor Areas VIP Areas Rest

223

17

240

Gaming Halls (1) Other Installations (2)

128

58%

95

42%

MXN 223 mm

CodCales ICELA

Gaming Halls – Investment (Top 10)

Investment (MXN mm)

Gaming Halls – Investment by Use

Gaming Halls – Investment by B.U.

(1) In total, 42 of Codere Mexico’s 91 gaming halls will be renovated over the 2016-17 period.(2) Primarily include improvement of the Hipodromo de las Americas racetrack.

Credit Overview

Gaming Halls Renovation (i.e. Catch-up Maintenance Capex)

24

Credit Overview

Change in Net Working Capital

(1) Figure reflects the non-cash portion of income statement exchange gains (losses).(2) Figure reflects the non-cash impact on shareholders equity of exchange rate fluctuations upon consolidation (ie. conversion of local accounts to EUR).(3) Figure reflects variation between management reporting of NWC and accounting (cash flow statement) presentation related to authorized deferred gaming taxes in Spain.(4) Figure reflects €5.5 mm in provisions related to amounts due (i.e. accounts receivable) from VIPs at Carrasco Nobile (included in Impairment Charges).(5) Figure reflects other adjustments to reconcile BS evolution with CFS.(6) Figure reflects total cash impact on cash flow from operation.

-101.1 -99.6

-1.5

5.1

-8.4-9.1

-0.9

3.2 2.96.2

1.5 8.19.3

0.9

-5.5 -0.2

NWC31/12/15

AccountsReceivable

TaxesReceivable

PrepaidExpenses Inventory

AccountsPayable

TaxesPayable

Other ShortTerm

LiabilitiesNWC

30/06/16∆ NWC

1H 2016

Non-CashFX Impact(P&L) (1)

Non-CashFX Impact

(BS) (2)Other

Var. (3)

C.N.Provision

(4)Other Adj.

(5)CFO

Impact (6)

EUR

mm

Balance Sheet Cash Flow Statement

Assets Liabilities

+1.5

25

5.5x

2.5x

Mar-16 Jun-16

Leverage Ratio (Net Debt / LTM Adjusted EBITDA) (2, 3)

0.2 0.4 6.3 6.1

109.5

59.9

16.9

15.8

Mar-16 Jun-16

Senior Debt

HY Debt

OpCo Debt

Capital Leases

3.6 6.9 88.1 82.0

1,287.1

670.5

130.0

194.6

Mar-16 Jun-16

Senior Debt

HY Debt

OpCo Debt

Capital Leases

Credit Overview

Credit Profile (1)

82.1

Total Debt

132.9

116.0

320.8

Mar-16 Jun-16

954.0

1,508.8

- 554.8

+204.8

- 50.8

Total Cash Interest Expense (4)

(1) Figures reflect consolidated accounts, except where noted otherwise.(2) Figures include 50% of HRU debt (€10.1mm), cash (€3.0mm), and LTM Adjusted EBITDA (€9.5mm), as per NSPN Issuance Agreement.(3) Figures reflect ARS @Blue Rate.(4) Figures reflect full year figure based on debt capitalization as at March 31st and June 30th (as applicable).

- 3.0x


26

39.5

34.4

2.8 2.7

1.7 0.9

Uruguay (Carrasco) Mexico Colombia Panama Spain Italy

6.9 82.0

327.3

343.3

194.6

1

Senior Private Notes -First Ranking

HY Notes -Second Ranking

HY Notes -Third Ranking

OpCo Debt

Capital Leases

Credit Overview

Debt Capitalization (as at June 30, 2016) (1)

Senior PrivateNotes

HY Notes

OpCo Debt

Corporate Debt

954.0

75.4%

24.6%

Fixed Floating

94.2%

3.6%

2.2%

USD MXP Other

Total Debt

Fixed vs Floating

OpCo Debt

Currency

(1) Figures reflect consolidated accounts.


27

41.2

40.9

1

Cash Interest PIK Interest

0.4 6.1

28.8

31.1

15.8

1

Senior Private Notes -First Ranking

HY Notes -Second Ranking

HY Notes -Third Ranking

OpCo Debt

Capital Leases

Credit Overview

Interest Expense (based on Debt Capitalization as at June 30, 2016)

82.1 82.1

76.8%

23.2%

Fixed Floating

95.2%

3.3%1.5%

USD MXP Other

OpCo Debt

Corporate Debt

Total Interest (Consolidated)

Fixed vs Floating

PIK vs Cash Interest

Currency


28

Credit Overview

Capital Structure (as at June 30, 2016) (1)


(1) Figures reflect consolidated accounts for restructuring transaction and based on exchange rates as at June 30, 2016.(2) Interest rate reflects blended interest rate for all OpCo debt as at June 30, 2016.(3) Libor rate reflects the 1% floor, as established in the NSPNs Issuance Agreement; Libor on June 30, 2016 was below 1%.(4) Figure reflects LTM consolidated figure through June 30, 2016 (ARS @ Blue rate).(5) Maintenance covenant: Net Debt / EBITDA of 6.0x (as per NSPNs Issuance Agreement).(6) Figure reflects proforma interest expense based on financial debt and interest rates as at June 30, 2016; includes 50% of HRU profoma interest expense.(7) Figure reflects LTM Total Adjusted EBITDA divided by proforma total interest expense.

Interest Rate

Amount Spread / Coupon

O/S Leverage Libor Cash PIK Total Maturity Comments

OpCo Debt (2) 82.0 - - - 7.4% Various 39.5 mm in Uruguay and 34.4 mm in Mexico

OpCo Capital Leases (2) 6.9 - - - 5.2% Various -

OpCo Debt 88.9 0.36 x

NSPNs (3) 194.6 1.00% 7.00% - 8.00% Apr-21 USD 218.9 mm par value; callable @ par

Sub-Total 283.5 1.14 x

2nd Lien Notes 343.3 - 5.50% 3.50% 9.00% Jun-21 USD 383.1 mm par value; callable 102 / 102 / 101 / 100


3rd Lien Notes 327.3 - 0.00% 9.00% 9.00% Jun-21 USD 355.8 mm par value; callable 102 / 102 / 101 / 100


Total Debt 954.0 - - - 8.6% -

(-) Cash -320.8 - - - - -

Net Debt 633.2 2.54 x

(+) 50% of HRU Net Debt 7.2

Total Net Debt 640.4 2.47 x

LTM Total Adjusted EBITDA (4) 249.5

(+) 50% of HRU LTM EBITDA 9.5

LTM Total Adjusted EBITDA (5) 259.0

CoveragePF Total Interest Expense (6) 82.5

EBITDA / Interest Expense (7) 3.14 x

29

Index


• Credit Overview

• Company Outlook

• Appendix

30

Exchange Rates versus EUR (avg.)

Company Outlook

3Q 2016 EBITDA Guidance (1)

(1) Total adjusted EBITDA figures include 50% of HRU.(2) Figures reflect change versus period ARS @ Blue Rates.

3Q 2016 3Q 2015 2Q 2016

ARS 17.00 1.1% (2) 5.8%

MXP 20.72 12.8% 1.8%

USD 1.12 0.5% -0.6%

Chg. versus

Total Adjusted EBITDA:

€65 – 68 mm

31

Index


• Credit Overview

• Company Outlook

• Appendix

32

19.76

16.75

13.5814.99

17.91

10.66 10.419.48 10.14 10.54

14.21

16.76 16.64

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

@Blue Rate

@Offical Rate

16.97

17.89

16.40

17.52

19.13 18.88

19.64

20.60

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

1.261.21

1.081.12 1.12 1.09

1.14 1.11

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

2,552

2,9042,772

2,892

3,498 3,429 3,4413,238

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Appendix

Exchange Rate Evolution (End of Period)

EUR / ARS EUR / MXN

EUR / USD EUR / COP

-0.7%

+11.0%

+4.9 %

+17.6%

-2.6%

-0.9%

-5.9%

+12.0%

33

17.8417.12

14.8414.14

16.81 16.29

10.98 10.619.77 9.94 10.33

11.27

16.04 16.07

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

@Blue Rate

@Offical Rate

17.37 17.2916.78 16.98

18.37 18.32

19.8320.36

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

1.321.25

1.12 1.11 1.11 1.09 1.10 1.13

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

2,5292,714 2,770 2,764

3,299 3,3513,581

3,370

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Appendix

Exchange Rate Evolution (Period Average)

EUR / ARS EUR / MXN

EUR / USD EUR / COP

+0.2%

+13.6%

+2.7%

+19.9%

+2.7%

+1.8% -5.9%

+21.9%

34

Appendix

Argentine Peso Devaluation (thru June 30, 2016)

On December 17, 2015, the Argentine government lifted currency controls (thereby allowing the ARS to trade freely) which resulted in a 34,7% devaluation against the EUR.

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

EUR

/AR

S (@

Off

icia

l Ra

te)

Year End

(31/12/2015)

34,7% Argentine

Peso Devaluation

(17/12/2015)

+4.5% +15.1%

+18.2%

35

6.587.49 8.15

8.97

10.79 10.53

12.9013.79

14.89

16.59

19.76

16.75

13.5814.99

17.91

14.20

5.84 5.74 6.05 6.50 6.55 7.017.85

9.01

11.03 11.15 10.66 10.419.48 10.14 10.54

14.21

16.76 16.64

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2012 2013 2014 2015 2016

EUR

mm

EUR / ARS @ Blue Rate EUR / ARS @ Official Rate

Appendix

ARS Blue Rate (Argentina)

• In October 2011, in response to the negative macroeconomic situation of Argentina and resultant capital flight, the government introduced foreign exchange (“capital”) controls.

• This weak economic environment eventually led to run away inflation which both reduced Argentine citizen purchasing power anddemand for local savings.

• Due to the capital controls in place, these individuals were unable to move their savings to hard currency safe havens (e.g. USD), at least not at official exchange rates, which led to the emergence of an unofficial foreign currency market (to satisfy this demand to shift savings out of ARS and into, for example, USD).

• The rate at which the USD traded versus the ARS in this unofficial rate was referred to as the USD Blue Rate.

• For multi-national companies with operations in Argentina, the primary channel utilized to upstream cash during this period was through the purchase of Argentine sovereign bonds in ARS followed by, after meeting minimum hold period requirements, the sale of these bonds in USD (incurring a cost approximately equal to the difference between the ARS Official Rate and ARS BlueRate, or a similar alternate effective rate).

• On December 17, 2015, following the election of a new national government in Argentina, the foreign exchange controls were lifted, resulting in a 36% devaluation in the USD/ARS exchange rate.

EUR / ARS Blue Exchange Rate (End of Period)

36

972 1,074 1,1511,284

1,4541,570

1,7361,871

19.7%20.4% 20.5%

21.2%22.1% 22.3%

23.1%23.6%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)AR

S m

m

285 314 341 344

455 431506 479

20.7% 21.4% 22.1%20.5%

24.1%22.3%

25.1%

22.8%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)AR

S m

m

4,935 5,271 5,6026,063

6,5747,036

7,5067,930

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

AR

S m

m

Revenue

1,378 1,465 1,544 1,6751,889 1,927 2,014 2,099

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

AR

S m

m

Revenue

Appendix

Argentina (Local Currency)

Quarter LTM

+4.2%

+25.3% +5.6%+30.7%

+5.3%+39.2%

-2.3 p.p.+2.3 p.p.

+0.5 p.p.+2.4 p.p.

+7.8%+45.7%


37

20.2 19.3 19.1 19.216.5 15.6 15.3 14.8

17.3%16.4% 16.1% 15.9%

13.9% 13.6% 13.7% 13.8%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

USD

mm

5.95.0

4.1 4.23.2

4.1 3.8 3.7

19.2% 16.1% 14.0% 14.2% 11.3% 14.9% 14.8% 14.3%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

USD

mm

30.9 30.929.0 29.9 28.3 27.6

25.7 26.0

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

USD

mm

Revenue

117.0 117.2 118.5 120.6 118.0 114.8 111.5 107.6

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

USD

mm

Revenue

Appendix

Panama (Local Currency)

Quarter LTM

+1.2%

-13.0%-3.5%

-10.8%

-2.6%

-11.9%

-0.5 p.p.

+0.1 p.p.+0.1 p.p.

-2.1 p.p.

-3.3%

-22.9%


38

17,436 19,049 19,309 19,366 21,583 20,677 19,379 20,408

21.1%22.9% 22.8% 22.8%

24.9%23.8%

22.7% 23.5%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

CO

P m

m

3,938

6,319

4,485 4,6256,154

5,413

3,187

5,654

18.7%

28.4%

21.6% 22.3%

26.9%

24.3%

16.5%

25.3%

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

Ma

rgin (%

)

CO

P m

m

82,782 83,340 84,520 84,845 86,686 86,707 85,250 86,893

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

CO

P m

m

Revenue

21,053 22,28420,764 20,745

22,893 22,30519,307

22,387

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

CO

P m

m

Revenue

Appendix

Colombia (Local Currency)

Quarter LTM

+15.9%

+7.9%

+1.9%

+2.4%

+77.4%

+22.2%

+8.8 p.p.+3.0 p.p.

+0.8 p.p.

+0.7 p.p.

+5.3%

+5.4%


39

-74.2 -75.1-51.5

-24.0

-105.8-92.1

-215.6

-296.9

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

UYU

mm

-20.5-16.2

9.82.8

-102.3

-2.5

-113.7

-78.5

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

UYU

mm

603.0 561.2 602.9701.7 687.8

844.7763.6

687.7

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

UYU

mm

Revenue

143.8 135.0

197.3225.6

129.8

292.0

116.1149.7

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2014 2015 2016

UYU

mm

Revenue

Appendix

Uruguay – Carrasco Nobile (Local Currency)

Quarter LTM

+28.9%

-33.6%

-9.9%

-2.0%


40

For additional information, please contact:

[Investor Relations

[email protected]

+34 91.354.2819

2q 2016 earnings results

Documents