Parques Reunidos Aims to Surpass 2019 EBITDA During 2022 After Huge Budget Beat in 2H’21; Strong Start to Year With January, February Earnings Ahead of Budget

Distressed update: Parques Reunidos from Reorg's EMEA Core Credit team.

Following a strong second half of 2021, Parques Reunidos expects to surpass 2019 pre-Covid EBITDA by 12% in 2022, sources told Reorg. The Spanish amusement park group expects the number of visitors to remain 5% below 2019 levels, but this is to be more than offset by a 15% jump in average spend per head. It got off to a solid start this year with January and February earnings beating budget, sources said.

The group comfortably exceeded its 2021 budget in terms of both top and bottom line following a strong recovery during the third and fourth quarters. Full-year revenue reached €584.7 million, which was well ahead of €400.6 million budgeted, while EBITDA came to €170.7 million, more than four times the €40.8 million the group had budgeted as travel recovered from the pandemic. Parques had faced a difficult first half as a result of Covid-19 related restrictions, but more than caught up in the second half, with revenue overtaking pre-Covid levels in the fourth quarter.

As a result, the group set a bullish 2022 budget, targeting revenue of €739.8 million compared with €659.2 million recorded in 2019 and EBITDA of €212.1 million, up from €189.9 million three years earlier. It expects Spain to generate €69.3 million EBITDA, the rest of the world €104.3 million EBITDA and the U.S. €78.5 million EBITDA.

While Parques expects visitor numbers to reach 20.1 million, which is still slightly below the 20.6 million in 2019, it forecasts average spend per visitor of €36.7 versus €32 per head in 2019. The average spend per visitor had reached €40.8 in 2021, although that was driven by catch-up demand as people were able to travel again following lockdowns and may not be sustainable, sources noted.

Part of the 2022 budgeted growth is down to the group’s recent acquisition of Adventureland, which is guided to boost 2022 revenue by €33 million and EBITDA by €8 million. Parques acquired the Iowa, U.S.-based amusement park for $57 million, implying 4.9x 2021 Adj. EBITDA and 6.2x 2022 budgeted EBITDA. The deal was 100% equity-funded by Parques shareholders EQT through a €52 million capital increase, slightly reducing the group’s leverage. Adventureland generated $41.4 million in revenue and $11.6 million of EBITDA in 2021.

Parques got off to a solid start to the year despite the impact of the Covid-19 omicron variant. Visitor numbers reached 300,000 in January versus 400,000 million budgeted, and hit its internal budget of 400,000 in February. Average spend per visitor exceeded budget at €38.4 and €43.1 in the first two months, respectively. That translated into €12.9 million of revenue in January, just short of €14.1 million budgeted, and €15.7 million in February, ahead of €13.9 million budgeted. EBITDA was negative €10.5 million in January, beating negative €12.3 million budgeted, and negative €9.1 million in February, beating negative €10.9 million budgeted. As a result, year-to-date revenue is 2% ahead of budget and EBITDA is 16% ahead of budget.

Parques ended 2021 with €289 million of liquidity, comprising €110 million of cash and equivalents, €157 million available under its RCF and €22 million of undrawn local facilities. Net debt improved to €1.233 billion from €1.272 billion in 2020, which suggests that Parques generated €40 million of free cash flow during 2021.

The RCF is subject to a springing net leverage covenant test of 8.46x when revolver drawings minus cash represent more than 40% of the RCF commitment (€80 million). Moody's expects the company to maintain sufficient buffers under this covenant over the next 12 months to 18 months. The company had obtained a covenant waiver in 2020 until December 2021.

The group’s Euribor+350 bps term loan B is quoted at 98.5 and the E+750 bps additional loan at 101, according to Solve Advisors.

Spanish bank Santander, one of the group’s lenders, has been looking to offload some of the loans to reduce its exposure, one source said.

According to Reorg’s CLO database, Parques Reunidos lenders in the Piolin II Sarl vehicle issuing the first lien loans include:

• Hayfin Capital Management (€4 million in the E+375 bps facility);


• Credit Suisse Asset Management (€2 million in the E+375 bps facility);


• King Street Capital (€17 million in the E+750 bps facility);


• Angelo Gordon (€3.5 million in the E+750 bps facility); and


• Blackstone Liquid Credit strategies (€2.5 million in the E+750 bps facility);

For a review of Parques Reunidos SFA as of September 2019 please contact our EMEA Covenants team HERE.

Parques Reunidos’ capital structure as of Dec. 31, 2021, is below:

Sponsor EQT and Santander declined to comment.

– Robert Schach, Andrew Ross