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ANNUAL REPORT AND ACCOUNTS 2021
The Best Place to
Watch a Movie
Cineworld Group plc Annual Report and Accounts 2021
2021 has been another challenging year
forCineworld. Despite COVID-19 causing
doubtsabout the industry, our recovery only
strengthens our belief in our business’ future.
There is a clear demand and desire among our
customers to go out when there is great content
and it is safe to do so. We offer a superior
entertainment experience with the latest
technology and this offer will be more important
than ever when the crisis is over. We are proud
of our journey and unwavering vision to be
TheBest Place to Watch a Movie.
Our Purpose
To provide our customers with a choice of how to
watch a movie, in modern state-of-the-art cinemas
with the latest technology and a variety of retail
offerings, all underpinned by great customer service.
Our Vision
to be The Best Place to Watch a Movie
Our Values
Integrity, respect and fairness
THE BEST PLACE TOWATCH A MOVIE
CONTENTS
Strategic Report
p01–35
02 Chair’s Letter
04 Chief Executive Officer’s Review
06 Market Drivers
08 Our Business Model
10 Strategic Priorities and KPIs
14 Risk Management
15 Principal Risks and Uncertainties
20 Task force on Climate related
Financial Disclosures
23 Viability Statement
25 Responsible Business
30 Chief Financial Officer’s Review
Corporate Governance
p36–83
36 Chair’s Introduction
toGovernance
39 Board of Directors
42 Corporate Governance
Statement
53 Nomination CommitteeReport
56 Audit Committee Report
60 Remuneration Committee
61 Directors’ Remuneration Report
(including Remuneration Policy)
76 Directors’ Report
83 Statement of Directors’
Responsibilities
Financial Statements
p84–177
84 Independent Auditors’ Report
to the Members of Cineworld
Group Plc
94 Consolidated Statement
ofProfitorLoss
95 Consolidated Statement
ofComprehensive Income
96 Consolidated Statement
ofFinancial Position
97 Consolidated Statement
ofChangesinEquity
98 Consolidated Statement
ofCashFlows
99 Notes to the Consolidated
FinancialStatements
164 Company Statement
ofFinancialPosition
165 Company Statement
ofChangesinEquity
166 Notes to the Company
FinancialStatements
179 Shareholder Information
2021 HIGHLIGHTS
For more information visit:
www.cineworldplc.com
Footnotes:
(1) Refer to Note 2 for the full definition and reconciliation.
(2) Refer to Notes 2 and 7 for the full definition and reconciliation.
Sites
751
2020: 766
Screens
9,189
2020: 9,311
Admissions
95.3m
2020: 54.4m
Group Revenue
$1,804.9m
2020: $852.3m
Adjusted EBITDA
(1)
$454.9m
2020: ($115.1m)
(Loss) After Tax
($565.8m)
2020: ($2,651.5m)
Adjusted (Loss) AfterTax
(2)
($655.7m)
2020: ($913.2m)
Diluted EPS
(41.2¢)
2020: (193.2¢)
Adjusted Diluted EPS
(2)
(47.8¢)
2020: (66.5¢)
Dividend Per Share
–
2020: –
Cineworld Group plc
Annual Report and Accounts 2021
01
Strategic Report Corporate Governance Financial Statements
This financial year was dominated by
COVID-19 which provided an enormous
challenge for our business, our people
and our partners. I am very proud of
how the business has met these
challenges, delivering tothe very best
of our abilities for allour stakeholders.
The impact of the pandemic over
thepast two years has been well-
documented, with our business
subjected to mandatory closures and
restrictions across the period which is
reflected in our 2021 financial results.
We are now focused on getting our
cinemas back to pre-pandemic trading
levels supported by a strong backlog
ofmovies to be released. The Group
finished the year in as strong a position
as it could given current circumstances,
although material uncertainty remains
with regards to the Group’s ability to
continue as a going concern (as
disclosed in Note 1 to the
Financial Statements).
Our people and culture
It has been another challenging year
forour colleagues across the Group and
I am sincerely grateful for their ongoing
contribution. We have a very strong
team at Cineworld and this year has
proven that despite the many challenges
we have faced, we have outstanding
talent to lead our business. I would like
to thank all Cineworld’s employees
andmanagement for their loyalty and
support during the closure periods
andtheir determination and efforts
toreopen our cinemas starting
from April.
Our people are our greatest asset, and
this has never been more evident than
during the period of the pandemic.
The positivity, resilience, flexibility and
care shown by our staff have set new
standards, demonstrating the team
culture which exists within the
organisation. We support them with a
strong values-based culture, ongoing
training and development, and a solid
foundation of responsible business
governance, policies and programmes.
The Board and the Executive team,
wholead the organisation, have also
responded magnificently, dealing with
the complex operational and financial
challenges caused by the pandemic
calmly and efficiently. Although the
environment remains uncertain, we will
continue to endeavour to support our
people, with health, wellbeing and
financial security being the most
important aspects of that support.
Financial results
Our financial performance has been
impacted by closure of cinemas from
January to April/June. Since reopening,
our performance has continued to
improve and had a positive impact on
the Group’s performance in the second
half of the financial year.
As a result, our revenue for the year
increased by 111.8% to $1,804.9m
andadjusted EBITDA was $454.9m.
In addition, we continued our efforts
tominimise cash burn during cinema
closures and to protect our liquidity
with$424.9m raised through new debt,
a$203m US CARES Act tax refund
received in May 2021 and our agreement
with the Regal dissenting shareholders
signed in September to partially
postpone our $262m payment.
Whilst uncertainty and challenges still
remain, we are encouraged by the
demand that we have seen since
reopening, supporting a return to
profitability and cash generation in
Q4 2021.
Details of our financial performance
canbe found on pages 30 to 35.
CHAIR’S LETTER
Strong foundations
forthe future
“ I would like to thank our people for
theirloyalty and support during the
closureperiods and their determination
andefforts to reopen our cinemas starting
from April.”
Alicja Kornasiewicz
Chair
Cineworld Group plc
Annual Report and Accounts 2021
02
Section 172(1) statement
The Board actively considers the interests of the Group’s employees and
otherstakeholders, including the impact of its activities on the community,
environment, and the Group’s reputation, when making decisions. In addition,
while acting fairly between members and in good faith, the Board closely
takes into account what is most likely to promote the success of the Group
forits shareholders in the long term.
Read more about:
− how the views and interests of all our stakeholders were represented in the
Boardroom, together with how we responded, on pages 46 to 49;
− the Group’s strategy and business model on pages 8 to 13;
− how we manage risk on pages 14 to 24; and
− our approach to Corporate Governance on pages 36 to 52.
Corporate responsibility
andsustainability
Despite these challenging times,
managing our business in a sustainable
manner remains a key element of our
culture and strategy. Our customers
benefit from our affordable, safe, out
ofhome entertainment which allows
access to a high quality, diverse and
cultural offering that is essential to
our communities.
Our ongoing engagement with
employees has been vital during periods
of closure and we have maintained a
strong focus on our people’s wellbeing.
Through our open and inclusive culture,
we aim to create an environment which
allows our people to develop and thrive.
We are proud of the training and
development opportunities we offer
andstrive to provide progression
opportunities to all of our people.
Separately, we are always looking
forways to minimise the impact of
ouroperations on the environment,
exercising tight control on energy and
food waste, limiting the use of single-
use plastic, and through refurbishments
and installation of new energy initiatives.
We recognise that our people are critical
to our ability to achieve our goals in a
responsible and sustainable manner.
We also have exceptional leaders and
are proud of what we have achieved to
date in gender diversity. Although there
is more to do, as of year end we had
36.4% female representation on the
Cineworld Group Board and 43.8% on
the Senior Executive Team.
Cineplex
On 6 July 2020 the Group confirmed
that Cineplex had initiated proceedings
against it in relation to its termination
on12 June 2020 of the Arrangement
Agreement relating to its proposed
acquisition of Cineplex (the “Acquisition”).
The proceedings alleged that the
Groupbreached its obligations under
the Arrangement Agreement and/or
duty ofgood faith and claimed
damagesof up to C$2.18 billion less
thevalue of Cineplex shares retained
byCineplex shareholders.
The Group defended these proceedings
on the basis that it had terminated the
Arrangement Agreement because
Cineplex breached a number of its
covenants and counter-claimed against
Cineplex for damages and losses
suffered as a result of these breaches
and the acquisition not proceeding,
including the Group’s financing costs,
advisory fees and other costs.
The Ontario Superior Court of Justice
has now handed down its judgment.
It granted Cineplex’s claim, dismissed
the Group’s counter-claim and awarded
Cineplex damages of C$1.23 billion
forlost synergies to Cineplex and
C$5.5 million for lost transaction costs.
The Group strongly disagrees with this
judgment and has appealed the
decision. Cineplex has submitted a
cross-appeal to Cineworld’s own appeal.
The Group does not expect damages to
be payable whilst any appeal is ongoing.
No liability has been recognised in
respect of the judgement.
Outlook
We were so pleased to see the increase
inattendance in the second half of the
year as a reflection of both pent-up
demand, and also as a direct result
ofthe time and investment which
management has given to driving our
customer offering and ensuring we
offera safe and fun environment where
guests can enjoy amazing experiences.
We continue to operate cautiously,
aware that the risk of COVID-19 has
notyet vanished, but continue to be
pleasantly satisfied with the return to
normal trading.
Alicja Kornasiewicz
Chair
17 March 2022
Cineworld Group plc
Annual Report and Accounts 2021
03
Strategic Report Corporate Governance Financial Statements
Our strategy is to:
Provide the best
cinema experience
Be technological
leaders in theindustry
Expand and enhance
ourestate
Drive value for
shareholders
Read more page 10
Whilst our cinemas were partially closed
during the period under review, we were
very excited to start reopening from 2nd
April 2021 and finished opening across
our territories by June. Looking at our
performance since early June, it is clear
that our customers have missed the big
screen experience as well as the social
event of watching a movie with others.
In addition, our latest refurbishments
and new cinemas are being embraced
with great enthusiasm.
Our results still carry the effect
ofCOVID-19 and related lack of
productbut we are encouraged by
theupcoming line-up of big releases in
2022. This will include Avatar, Top Gun
Maverick, Jurassic World: Dominion,
Minions: The Rise of Gru, Doctor Strange
in the Multiverse of Madness, Thor: Love
and Thunder, Black Panther: Wakanda
Forever, Bullet Train, Spider-Man: Across
the Spider-Verse, Pixar’s Lightyear,
Fantastic Beast, Elvis and many more.
Nonetheless, we will need to remain
alert to any new COVID-related
developments – currently, itappears
that cases are slowly decreasing in our
territories and we may be entering
theendemic phase of this pandemic.
2021 performance
Our 2021 results reflect the recovery
from the pandemic’s impact on our
business. Our revenue in 2021 increased
by 111.8% to $1,804.9m as the pandemic
continued to impact our revenues and,
throughout the year, lockdowns and
restrictions were imposed and relaxed
across our markets.
Throughout 2021, we continued to
minimise and control our expenses,
including resizing the cost base and
increasing levels of labour flexibility.
These actions, along with continued
contract renegotiations, focus on
procurement, as well as general cost
control, minimised our cash burn during
the cinema closures and increased our
margins in H2 2021. Adjusted EBITDA
increased by 495.2% to $454.9m and
margin was 25.2%.
Our high quality cinema estate is well
placed to recover from the impact of
thepandemic and take advantage of
growth opportunities underpinned
bythe four tenets of our strategy
andculture: to give the best cinema
experience to our customers; to be
leaders in technology; to expand and
enhance our estate; and to drive up
value, described in more detail on
pages10 to 13.
“ We were delighted to reopen our cinemas starting
fromApril and despite the challenges of COVID-19, the
business has made good progress as we continue to see
recovery across our business. I am immensely proud and
inspired by the response of our people over the past
year.We have worked hard to strengthen the long-term
prospects of the business and, looking forward,
Cineworldenters 2022 confident about the next
chapterin our development”
Moshe (Mooky) Greidinger
Chief Executive Officer
CHIEF EXECUTIVE OFFICER’S REVIEW
The Best Place to
Watch a Movie
Cineworld Group plc
Annual Report and Accounts 2021
04
As the most affordable out-of-home
entertainment option, we believe that
cinemas will continue to be the main
driver of the industry, as they have been
for so many decades despite the arrivals
of new technologies, such as TV, Video,
DVD and others.
Cineplex
On 6 July 2020 the Group confirmed
that Cineplex had initiated proceedings
against it in relation to its termination
on12 June 2020 of the Arrangement
Agreement relating to its proposed
acquisition of Cineplex (the “Acquisition”).
The proceedings alleged that the Group
breached its obligations under the
Arrangement Agreement and/or duty
ofgood faith and claimed damages
ofup to C$2.18 billion less the value
ofCineplex shares retained by
Cineplex shareholders.
The Group defended these proceedings
on the basis that it had terminated the
Arrangement Agreement because
Cineplex breached a number of its
covenants and counter-claimed against
Cineplex for damages and losses
suffered as a result of these breaches
and the Acquisition not proceeding,
including the Group’s financing costs,
advisory fees and other costs.
The Ontario Superior Court of Justice
has now handed down its judgment.
It granted Cineplex’s claim, dismissed
the Group’s counter-claim and awarded
Cineplex damages of C$1.23 billion
forlost synergies to Cineplex and
C$5.5 million for lost transaction costs.
The Group strongly disagrees with
thisjudgment and has appealed the
decision. Cineplex has submitted a
cross-appeal to Cineworld’s own appeal.
The Group does not expect damages to
be payable whilst any appeal is ongoing.
No liability has been recognised in
respect of the judgement.
Outlook
Trading since our cinemas reopened
hasbeen encouraging and increasingly
improving, and our customers have
been expressing their appreciation for
our high quality offering and team.
We expect this progress to continue
asCOVID-19 reduces in significance.
The strong film slate gives us great
confidence in our ability to continue
torebound strongly, with a clear focus
on driving growth which will be
underpinned by our team of
great people.
Although the COVID-19 pandemic
continues to impact our global
operations, we are encouraged by
ourreturn to trading, the continued
recovery seen across our industry and
the return to profitability and cash flow
generation in Q4 2021. The success of
Spiderman – No Way Home which is
now the 6th biggest movie of all time
globally and 3rd biggest movie in the US
while Omicron was emerging across the
globe demonstrates the love and loyalty
to the big screen. Having said that, we
acknowledge the uncertainty and have
highlighted certain matters with regard
to them within our going concern
statement in this document.
I would like to conclude by expressing
my deep appreciation and gratitude to
all the members of the Cineworld team
as we continue our commitment to be
THE BEST PLACE TO WATCH A MOVIE.
Moshe (Mooky) Greidinger
Chief Executive Officer
17 March 2022
Our financial strategy continues to be
focused on cash flow generation and
ensuring the business has sufficient
liquidity. However, we also remain
focused on our long-term objective
ofdebt reduction through cash flow
generation and cost optimisation.
In 2021, we raised over $424.9m of
liquidity and received $203m under
theUnited States CARES Act tax refund.
Our net debt (ex. lease liabilities)
increased by $492.7m from $4,344.5m
to$4,837.2m. Further details of our
underlying and statutory earnings for
the period are set out in the Financial
Review on pages 30 to 35.
Strategy
Our strategy has always been focused
on our customers, and we remain
committed to giving them the best
experience combined with the most
COVID-safe environment. As for the
cinematic experience itself, we continue
to offer our customers big screens,
stadium seating accompanied by the
great technology of our special formats,
IMAX, 4DX, Screen-X, SuperScreen, RPX
and more, as well as upgrading to the
use of laser projectors. These special
formats provides our customer with
anenhanced experience, incremental
revenues for the group and are the first
viewing to sell-out
Across the business we closed 25
underperforming sites in the period,
refurbished 7 cinemas and opened 10
new sites, which have been welcomed
by our customers with great enthusiasm.
Most of these projects were under
construction prior to the onset of
COVID-19, and the decision to continue
with these projects during COVID-19
paid off. While our development plans
slowed somewhat, we believe that we
will be able to progress again soon and
when appropriate to do so.
Industry fundamentals
and respect for the
theatrical window
The main topic in focus throughout
thepandemic was the length of the
theatrical window. In light of COVID-19,
the studios tried various experiments
which led to a shortening of the
theatrical window and is dependent on
the theatrical revenue potential of each
movie. In 2022, we anticipate movies
willbe released with windows that are
anywhere between 20 to 60 days
andsubject to each movie’s potential.
The influence of high-quality pirated
copies of movies from PVOD day and
date releases can also significantly
affect a movie’s total revenue not only
incinemas but also in ancillary markets.
Cineworld Group plc
Annual Report and Accounts 2021
05
Strategic Report Corporate Governance Financial Statements
Market driver
TECHNOLOGY AND
INNOVATION
PROPERTY MARKET
ANDDEVELOPMENT
GDP AND THE
ECONOMIC
ENVIRONMENT
MARKET
MATURIT Y
COMPETING MEDIA
AND LEISURE
ACTIVITIES
CONSOLIDATION
OFTHEINDUSTRY
CINE MATIC
WINDOW
Developments in technology
have brought new innovative
audio and visual experiences
tothe cinema industry.
The rate of new cinema openings
is often dependent onlocal
market conditions. Planning
laws, the economic environment
and the ability of developers to
finance their projects are factors
which impact cinema location.
The cinema industry is dependent
on the customer choosing to
spend disposable income on
watching a movie.
Where a market is in
thematurity phase
thisimpacts the level
andtrend of cinema
admissions per capita.
Throughout the decades the
cinema industry has always
faced competition from
other forms of media
delivering content, for
example streaming, premium
video ondemand (“PVOD”),
DVD and Blu-ray.
The cinema industry
globallyhas recently seen
anincrease in acquisition
activity and consolidation
within the market.
Ongoing changes in the
cinematic window, the
period between the release
of a film in acinema and on
any otherplatform.
The impact
Technology impacts the
whole customer journey from
booking tickets to purchasing
concessions, as well as the
audioand visual experience.
The digitalisation of cinemas
has resulted in both a greater
range of films being offered
and the showing of alternative
content such as opera, live
events, theatre and ballet.
Local market conditions and
planning laws impact the rate and
feasibility of new openings as well
as which sites can be refurbished.
Value for money remains an
important factor and cinema
hastended to be one of the most
affordable forms of entertainment
in the wider leisure market in which
the cinema industry competes.
Historical trends and patterns
show that cinema attendance is
most closely related to the quality
of the movies rather than the gross
domestic product (“GDP”) of
a territory.
The more mature
markets such as the
US, UK and Israel tend
to be characterised by
higher admissions per
capita, higher average
ticket prices and a lower
population per screen ratio.
Growth markets have the
opposite characteristics and
provide great expansion
potential for the Group.
Although online streaming
and PVOD at home are
increasingly popular, in
particular during 2020 and
2021 due to COVID-19 and
cinema closures, an outing to
the cinema provides a unique
experience which cannot be
replicated at home, especially
with superior experiences
offered by technologies such
as IMAX, 4DX and ScreenX.
A trip to the cinema is a social
occasion and watching a
movie on a large state-of-the-
art screen with superb sound
is attractive to all age groups.
Visiting the cinema remains a
convenient, affordable out-of-
home activity, especially when
compared with other leisure
activities such as concerts and
sporting events.
We continued to see M&A
activity within the industry.
In 2021 AMC acquired four
former Pacific & Arclight
locations, following the
bankruptcy ofPacific cinema.
In the United States, outside of
the top three chains, the rest
of the market is represented
by smaller, independent
cinema chains.
There are currently ongoing
changes in the cinematic
window. In view of the
situation related to COVID-19,
the studios entered into
various experiments over
thepast two years.
Cineworld has shown in
our theatres releases with a
window ranging for 0 days to
75+ days depending on the
movie and studios.
A material reduction in the
cinematic window could
potentially reduce cinema
admissions but may provide
the opportunity for more
content to be shown in
cinemas and fee structure
tobe amended.
How our
strategy is
optimised
torespond
Investment in technology is a
key pillar of the Group’s strategy
– we want to be leaders in this
field. The Group continues
to invest in premium formats
globally such as 4DX, ScreenX,
IMAX and Premium Large
Formats every year. We are also
investing in next-generation
laser projectors.
The Group is also evolving its IT
systems to provide customers
with the ability to book tickets
and pre-order concessions
online more easily and through
mobile applications. The Group
is continually reviewing and
analysing the latest technology
available to ensure the right and
safest technology is selected.
The Group has been successful
managing our estate portfolio by
closing 25 sites, in particular in the
United States, and opening 10 new
sites over the past year.
The Group operates a
predominantly leasehold estate.
As the estate is generally older in
the mature markets, refurbishment
of the existing estate, in particular
in the US and the UK, is a key
focus for the Group.
The Group monitors local and
national markets to ensure ticket
and concession prices remain
a competitively priced form of
entertainment. The Group invests
in both the estate and technology
to ensure customers receive a
premium experience during every
visit while getting value for money.
The geographic spread
of the Group provides
diversification benefits
and opportunities across
both the more mature
and growth markets.
This includes the
opportunity to open new
sites as well as refurbish
older sites, particularly in
the more mature markets
where the estate is
generally older. We have
started our extensive
refurbishment programme
in the United States with 14
sites already refurbished
and more to be refurbished
in the future.
Due to COVID-19, our
capex programme has
been reduced until trading
returns tonormalised levels.
The Group understands the
shift during 2020 and 2021
of certain movie releases
from theatrical to PVOD
is temporary and due to
the cinema closures and
COVID-19 situation in major
markets such as the United
States. In addition, the Group
continues to invest in new
technology to ensure a
premium and differentiated
experience while remaining
an affordable activity for the
whole family. We also offer a
subscription programme in
three of our territories which is
a great value option for movie
enthusiasts. Going to the
cinema has also become more
than just watching a movie,
and that is why the Group has
invested in its retail offerings
across our estate such as
Starbucks, Lavazza, alcohol
bars, premium food and our
VIP offering.
The Group’s strategy includes
identifying potential profitable
opportunities to grow and
expand the business.
In 2021, the company
acquired one theatre:
ArclightSherman Oaks.
In 2020 the proposed
acquisition of Cineplex
was terminated.
Most of the major studios are
committed to the cinematic
window as it benefits both
the film studios and the
movie theatres financially.
We expect in 2022, the
window will stabilise to
somewhere between 20 and
60 days, but subject to each
movie’s potential.
PVOD day and date releases
(the release of a film on
multiple platforms at the same
time) have been affected by
high-quality pirated copies of
movies which has affected a
movie’s total revenue.
The Group continually
monitors the status of this and
engages with the distributors
and studios to discuss
the subject and preserve
the theatrical experience,
while adapting to changing
consumer behaviour.
Addressing our biggest opportunities and challenges
MARKET DRIVERS
Cineworld Group plc
Annual Report and Accounts 2021
06
Market driver
TECHNOLOGY AND
INNOVATION
PROPERTY MARKET
ANDDEVELOPMENT
GDP AND THE
ECONOMIC
ENVIRONMENT
MARKET
MATURIT Y
COMPETING MEDIA
AND LEISURE
ACTIVITIES
CONSOLIDATION
OFTHEINDUSTRY
CINE MATIC
WINDOW
Developments in technology
have brought new innovative
audio and visual experiences
tothe cinema industry.
The rate of new cinema openings
is often dependent onlocal
market conditions. Planning
laws, the economic environment
and the ability of developers to
finance their projects are factors
which impact cinema location.
The cinema industry is dependent
on the customer choosing to
spend disposable income on
watching a movie.
Where a market is in
thematurity phase
thisimpacts the level
andtrend of cinema
admissions per capita.
Throughout the decades the
cinema industry has always
faced competition from
other forms of media
delivering content, for
example streaming, premium
video ondemand (“PVOD”),
DVD and Blu-ray.
The cinema industry
globallyhas recently seen
anincrease in acquisition
activity and consolidation
within the market.
Ongoing changes in the
cinematic window, the
period between the release
of a film in acinema and on
any otherplatform.
The impact
Technology impacts the
whole customer journey from
booking tickets to purchasing
concessions, as well as the
audioand visual experience.
The digitalisation of cinemas
has resulted in both a greater
range of films being offered
and the showing of alternative
content such as opera, live
events, theatre and ballet.
Local market conditions and
planning laws impact the rate and
feasibility of new openings as well
as which sites can be refurbished.
Value for money remains an
important factor and cinema
hastended to be one of the most
affordable forms of entertainment
in the wider leisure market in which
the cinema industry competes.
Historical trends and patterns
show that cinema attendance is
most closely related to the quality
of the movies rather than the gross
domestic product (“GDP”) of
a territory.
The more mature
markets such as the
US, UK and Israel tend
to be characterised by
higher admissions per
capita, higher average
ticket prices and a lower
population per screen ratio.
Growth markets have the
opposite characteristics and
provide great expansion
potential for the Group.
Although online streaming
and PVOD at home are
increasingly popular, in
particular during 2020 and
2021 due to COVID-19 and
cinema closures, an outing to
the cinema provides a unique
experience which cannot be
replicated at home, especially
with superior experiences
offered by technologies such
as IMAX, 4DX and ScreenX.
A trip to the cinema is a social
occasion and watching a
movie on a large state-of-the-
art screen with superb sound
is attractive to all age groups.
Visiting the cinema remains a
convenient, affordable out-of-
home activity, especially when
compared with other leisure
activities such as concerts and
sporting events.
We continued to see M&A
activity within the industry.
In 2021 AMC acquired four
former Pacific & Arclight
locations, following the
bankruptcy ofPacific cinema.
In the United States, outside of
the top three chains, the rest
of the market is represented
by smaller, independent
cinema chains.
There are currently ongoing
changes in the cinematic
window. In view of the
situation related to COVID-19,
the studios entered into
various experiments over
thepast two years.
Cineworld has shown in
our theatres releases with a
window ranging for 0 days to
75+ days depending on the
movie and studios.
A material reduction in the
cinematic window could
potentially reduce cinema
admissions but may provide
the opportunity for more
content to be shown in
cinemas and fee structure
tobe amended.
How our
strategy is
optimised
torespond
Investment in technology is a
key pillar of the Group’s strategy
– we want to be leaders in this
field. The Group continues
to invest in premium formats
globally such as 4DX, ScreenX,
IMAX and Premium Large
Formats every year. We are also
investing in next-generation
laser projectors.
The Group is also evolving its IT
systems to provide customers
with the ability to book tickets
and pre-order concessions
online more easily and through
mobile applications. The Group
is continually reviewing and
analysing the latest technology
available to ensure the right and
safest technology is selected.
The Group has been successful
managing our estate portfolio by
closing 25 sites, in particular in the
United States, and opening 10 new
sites over the past year.
The Group operates a
predominantly leasehold estate.
As the estate is generally older in
the mature markets, refurbishment
of the existing estate, in particular
in the US and the UK, is a key
focus for the Group.
The Group monitors local and
national markets to ensure ticket
and concession prices remain
a competitively priced form of
entertainment. The Group invests
in both the estate and technology
to ensure customers receive a
premium experience during every
visit while getting value for money.
The geographic spread
of the Group provides
diversification benefits
and opportunities across
both the more mature
and growth markets.
This includes the
opportunity to open new
sites as well as refurbish
older sites, particularly in
the more mature markets
where the estate is
generally older. We have
started our extensive
refurbishment programme
in the United States with 14
sites already refurbished
and more to be refurbished
in the future.
Due to COVID-19, our
capex programme has
been reduced until trading
returns tonormalised levels.
The Group understands the
shift during 2020 and 2021
of certain movie releases
from theatrical to PVOD
is temporary and due to
the cinema closures and
COVID-19 situation in major
markets such as the United
States. In addition, the Group
continues to invest in new
technology to ensure a
premium and differentiated
experience while remaining
an affordable activity for the
whole family. We also offer a
subscription programme in
three of our territories which is
a great value option for movie
enthusiasts. Going to the
cinema has also become more
than just watching a movie,
and that is why the Group has
invested in its retail offerings
across our estate such as
Starbucks, Lavazza, alcohol
bars, premium food and our
VIP offering.
The Group’s strategy includes
identifying potential profitable
opportunities to grow and
expand the business.
In 2021, the company
acquired one theatre:
ArclightSherman Oaks.
In 2020 the proposed
acquisition of Cineplex
was terminated.
Most of the major studios are
committed to the cinematic
window as it benefits both
the film studios and the
movie theatres financially.
We expect in 2022, the
window will stabilise to
somewhere between 20 and
60 days, but subject to each
movie’s potential.
PVOD day and date releases
(the release of a film on
multiple platforms at the same
time) have been affected by
high-quality pirated copies of
movies which has affected a
movie’s total revenue.
The Group continually
monitors the status of this and
engages with the distributors
and studios to discuss
the subject and preserve
the theatrical experience,
while adapting to changing
consumer behaviour.
Cineworld Group plc
Annual Report and Accounts 2021
07
Strategic Report Corporate Governance Financial Statements
OUR BUSINESS IS UNDERPINNED BY:
WHAT WE DELIVER
Everything that we do is to
deliver onourvision... to be
“The Best Place toWatch
a Movie”
OUR ASSETS
Our financial strength
We have taken steps to reinforce our financial position by adding
significant liquidity during the year. Focus on cost and revenue
initiatives enables us to minimise cash burn during cinema closure
andgenerate healthy margins when operating while continuing to
invest in our estate. This continued investment ensures that we are
able to reach as many customers as possible with the high quality
experience we believe in. We manage investment in ourestate in
conjunction with the maintenance of a financially secure business.
Our knowledge and know-how
The wealth of knowledge and know-how which has been built up
across the Group over the past nine decades has enabled us to
designand build the latest state-of-the art cinemas and operate
themefficiently through optimal management structures.
Investing inour people to ensure that we drive performance,
innovation from agrowing talent base. While we do not have control
over the content, our close and long-standing relationships with the
film distributors are fundamental to providing the best and most
varied selection of moviesfor our customers at the right time.
Our estate and brands
The geographic spread of our business reduces exposure
tovolatility inindividual markets. It also provides opportunities
across both mature and growth markets. We have established
brands in each of the territories in which we operate. We have
focused on developing and optimising the estate through our
refurbishment and construction programme which is at the heart
ofour strategy.
Our technology
We are technological leaders in the industry, offering our customers
the latest audio and visual technology. We have seven different
formats in which our customers can watch a movie: regular screens,
3D, 4DX, IMAX, ScreenX, Premium Large Format(Superscreen and
RPX) and VIP auditoriums. We set our prices according to the
format the customer chooses andtype of movie.
Regulation and responsible business
We are committed to ensuring that all of our teams comply
with local and national industry laws and business regulations
andstrive to attain the highest levels of health and safety
standards across the Group.
Following the FRC Climate Thematic Review 2020, the Group
has considered the impact of climate change on its business
model. During 2021 the impact of climate change is still
considered an emerging risk for ongoing review by
management and is also considered to represent a principle
risk to the Group’s operations and success, full details are set
out on page 21.
HOW WE CREATE VALUE
Customers
Customer experience
Operational excellence
Our offering
We create value through providing our
customers with achoice of where and how to
watch a movie along with a variety of concession
products. The Group’s knowledge andknow-how
ensures we achieve operational excellence across
the estate while providing our customers with a
superior experience every time they visit one of
our cinemas.
OUR BUSINESS MODEL
Delivering on our vision
Cineworld Group plc
Annual Report and Accounts 2021
08
THE VALUE WE CREATE
Customers
By delivering our vision to be “The Best Place to Watch
aMovie”, we are ensuring that our customers enjoy the
experience, and will want to return to our cinemas again
and again. As well as our estate and product offerings we
believe that it is the “Tiny Noticeable Things” our people
do and our customer-centred culture which make
the difference.
Employment
Operating in ten countries, we create direct jobs
andcareer opportunities for over 28,000 people.
Through our open and inclusive culture, we aim to create
an environment which allows our people to develop and
thrive. The investment we make in our people, particularly
through learning and development, and the way we
operate is key to maintaining our happy and motivated
workforce. We also create a number of indirect jobs – for
example, through our construction and refurbishment
programmes as well as security and cleaning.
Shareholders
We aim to deliver returns, long-term value and dividend
growth to our shareholders. When cinemas are operating,
this is achieved through driving revenues, increasing
earnings, and re-investing in the business. When cinemas
were closed, this was achieved by prudently managing
our cash position and minimising costs.
Wider stakeholders
We give back to our communities through a range of
activities and initiatives. This includes events run both at
anational level and in our local communities. We partner
with distributors to provide charity screenings, and
arrange events for local schools and organisations.
Governance
Our experienced and diverse Board and Committees
provide effective governance and oversight to the
whole Group.
Read more about our approach to Corporate Governance
on pages 36 to 52
Risk management
Maintaining and monitoring an effective system of risk
management and internal control ensures that our business,
people and assets are safeguarded and that material financial
errors and irregularities are prevented or detected. The Group
uses its KPIs to continually monitor its risk management
effectiveness although no formal targets are set, they are
reviewed by the board a regular basis.
Read more about on how we manage risk on pages 14 to 24
Customer
experience
Our
offering
Operational
excellence
Customers
Cineworld Group plc
Annual Report and Accounts 2021
09
Strategic Report Corporate Governance Financial Statements
Provide the best cinema
experience…
…to give our customers a choice of how to
watcha movie, with a variety of retail offerings,
allunderpinned by the best customer service
Our people continue to be pivotal in delivering our vision to
be“The Best Place to Watch a Movie”. It’s the “Tiny Noticeable
Things” our people do which differentiate our customers’
experience. Therefore, recruiting high quality employees
andinvesting in their training is at the heart of our strategy.
Providing our customers with choice is key – this includes
themovies they can watch, how they watch them, the type
ofvenue they watch them in and a variety of retail offerings
provided to cater for all demographics.
What we achieved
− Reopened our estate starting from April 2021
− Raised over $424.9m of liquidity to support the
business during closure and re-opening
− 54% online booking penetration in the United States
from 40% in 2019
− Continued enhancement of our online offering and app
Priorities for 2022
− Health and safety of employees and customers
− Sustain concession spending level and selected ticket
price increase
− Continue to enhance online offering and number of
tickets sold through our website and app
Measuring our progress
Admissions Average ticket price $ Retail spend per person $
95.3m
2020: 54.4m
$10.03
2020: $8.25
$5.80
2020: $4.27
Risks
− COVID-19government restrictions and limitation
on operations
− Quality and availability of films and PVOD releases
− People planning and development
− Business continuity and crisis management
− Changes in customer preferences
− IT and website disruption
Sustainability drivers
− Employee wellbeing and health and safety
− Customer satisfaction and brand loyalty
− Enhance tailored content depending on
local demographic
− Promote and distribute smaller and locally
produced movies
− Offer healthier retail and concession alternatives
− Energy efficient business processes and behaviours
Read more page 14 Read more page 25
STRATEGIC PRIORITIES AND KPIs
Cineworld Group plc
Annual Report and Accounts 2021
10
Be technological leaders...
…in the industry to offer the latest audio
andvisual technology
We want to be at the forefront of providing the latest
technology to our customers. We continue to strengthen
anddeepen our partnerships and relationships with our
technology partners.
What we achieved
− We are one of the largest operators of IMAX screens
inthe United States and across Europe
− The Group is the only provider of 4DX in the UK
andanextensive provider in the United States
and Europe
− By the year end we had installed a total of 2,039 laser
projectors across the estate and they are nearly four
times more energy efficient than older projectors
Priorities for 2022
− Continue our investment in providing a range
ofpremium formats
− Rollout of laser projectors across the estate
Measuring our progress
Number of premium formats
132
IMAX screens
(2020: 134)
98
4DX screens
(2020: 88)
73
ScreenX
(2020: 57)
120
PLF
(2020: 125)
Risks
− Availability of content tailored for specific technology
− Change in technology
− Strength of relationship with technology partners
− Environment and sustainability
Sustainability drivers
− Energy saving through rollout of laser projectors
− Ensure safety requirement of stakeholders
− Maintain long-term relationship with our
technology partners
Read more page 14 Read more page 25
Cineworld Group plc
Annual Report and Accounts 2021
11
Strategic Report Corporate Governance Financial Statements
Expand, enhance and
optimise our estate…
…to provide consistent, sustainable, high quality,
modern cinemas
When selecting new sites for development or sites for
refurbishment, we consider the location, accessibility,
competition, and other local economic factors. We also have
aselective site closure programme when the lease terms
haveexpired and it is not commercially beneficial or feasible
to renew these leases.
What we achieved
− Opening of 10 new sites: seven in the United States,
twoin the UK and one in Romania
− Completed seven refurbishments; six in the United
States; one in the UK
− Closure of 23 underperforming sites in the United
States, onesite in the UK and one site in Poland
− Emissions intensity ratio impacted by low revenue
Priorities for 2022
− Further optimise our estate through closure of
lossmaking sites and selective site opening
− Reduce our environmental impact through
refurbishments including installation of new
energy initiatives
Measuring our progress
Number of new sites Number of major refurbishments
completed
Emissions intensity tonnes CO
2
e
per $1m revenue
10
2020: 2
7
2020: 9
102.1
2020: 302.4
Risks
− Quality of the cinemas
− State and maintenance of the theatres
− Opening and refurbishment dependent on
planninglaws and building permits
Sustainability drivers
− Durability of refurbishment
− Collaboration with local authorities
− Energy efficient new builds
Read more page 14 Read more page 25
Cineworld Group plc
Annual Report and Accounts 2021
12
STRATEGIC PRIORITIES AND KPIs CONTINUED
Drive value for shareholders...
…by delivering our growth plans in an efficient,
sustainable and effective way
To be able to reward our shareholders we remain focused on
driving revenues, increasing earnings and prudently managing
our cash position.
What we achieved
− Minimised cash burn during cinema closures and cash
flow generation in Q4 2021
− Raised $424.9m during the year to support the
business through the pandemic
− Deferred $92m to H1 2022 out of the $262m dissenting
shareholder payment
− Continued focus on driving efficiencies across
the Group
− Group financial covenant waiver through June 2022
and we are currently operating under a $100m
minimum liquidity covenant
Priorities for 2022
− Cash flow generation from operations
− Commitment to reduce debt
− Employee engagement
Measuring our progress
Revenue
$m
Adjusted EBITDA
$m
Adjusted diluted EPS
¢
Net Debt (ex. lease liabilities)
$m
$1,804.9m
2020: $852.3m
$454.9m
2020: ($115.1m)
(47. 8¢)
2020: (66.5¢)
$4,837. 2m
2020: $4,344.5m
Risks
− Retain strategic employees
− Deliver on strategic initiatives and performance
− Availability of film content in theatres
− Financial covenants
Sustainability drivers
− Effective and proactive estate management
− Engagement with local communities and charities
− Employee support
− Reduction of food waste and single-use plastics
Read more page 14 Read more page 25
Cineworld Group plc
Annual Report and Accounts 2021
13
Strategic Report Corporate Governance Financial Statements
PRINCIPAL RISKS
Risk Strategic relevance Trend Owner
1. Technology and Data Control

Deputy CEO
2. Availability and Performance of Film Content

CCO
3. Provision of Next-Generation Cinemas

CEO
4. Viewer Experience andCompetition

CCO
5. Revenue from Retail/Concession Offerings
CCO
6. Cinema Operations

CEO
7. Regulatory Breach

CFO
8. Strategy and Performance

Deputy CEO
9. Retention and Attraction

Deputy CEO
10. Governance and InternalControl

CFO
11. Major Incident

CEO
12. Treasury Management

CFO
13. Climate Change (TCFD)
CCO
Provide the best
cinemaexperience
Be technological
leaders in the industry
Expand and
enhance our estate
Drive value for
shareholders
Supporting growth through effective risk management
RISK MANAGEMENT
Principal risks and uncertainties
Operating as a cinema chain in ten
different countries presents a number
ofrisks and uncertainties that continue
tobethe focus of the Board’s
ongoingattention.
Risk management approach
The Group’s approach to risk
management and internal control is
designed to manage risk at all levels.
Where possible, the Group has
implemented appropriate mitigation
strategies to reduce the overall risk
exposure in line with the Board’s risk
appetite, including the introduction of a
new Environment Committee as set out
in more details on page 44. For further
details please seethe Group approach
to risk management set out on pages 50
to 52.
Principal risk assessment
The Board has undertaken a robust
assessment of the principal risks facing
the Group during the year, including
those that would threaten its business
model, future performance, solvency
and liquidity. Emerging risks, including
those related to climate change, are
identified through the boards liaison
with its Risk Committee as well as the
Group’s risk and assurance teams.
The Board also leverages external
thinking and research as considered
necessary where specific risks are
identified. Their potential impacts are
presented to and monitored by
the Board.
The time-frame horizon for
consideration of the principal risks is
aligned to the three-year period used
when considering the future viability of
the Group. For further details, please
see the Group’s Viability Statement on
pages 23 and 24.
After the Board’s review of existing risk,
the Board believes the existing principal
risks continue to reflect the Group’s risk
profile. The Board’s review of emerging
risks resulted in an additional risk being
added to the principal risks list related
to the effects and future impact of
climate change to the Company.
The Board has evaluated the current
and future impact of COVID-19 and we
are taking measures to ensure we are
prepared for all eventualities. We expect
conditions to improve; however, if
conditions do not improve, we have
measures available to reduce the impact
on our business including capital
expenditured delay and further
cost reduction.
Appetite
The Board undertook a formal review of
risk appetite to ensure that the view it
has established for each of the principal
risks reflects its current perspective and
willingness to accept risk in pursuit of
the strategic objectives of the Group.
For further details please see the Group
approach to risk management set out
on pages 50 to 52.
Viability
In addition, the Directors’ viability
assessment has taken into consideration
the potential impact of the principal
risks in the business model, future
performance, solvency and liquidity
over the period, including principal
mitigating actions such as reducing
capital expenditure. More details about
the viability assessment may be found
on pages 23 and 24.
Cineworld Group plc
Annual Report and Accounts 2021
14
Key
1 2 3
TECHNOLOGY
AND DATA CONTROL
AVAILABILITY AND
PERFORMANCE OF
FILMCONTENT
PROVISION OF NEXT-
GENERATION CINEMAS
A critical system interruption
ormajor IT security breach
encountered.
Lack of access to high quality,
diverse and well publicised
movieproduct.
Maintaining/refurbishing
existing sites and/or
developing new sites fails
to provide a circuit of
next-generation cinemas.
Link to strategy Link to strategy Link to strategy
Risk owner
Deputy CEO
Risk owner
CCO
Risk owner
CEO
Impact
Any critical system interruption for a sustained
period could have a significant impact on
the Group’s performance. In addition, any
breach (cyber or otherwise) of data protection
rules or security measures surrounding
the storage of confidential and proprietary
information (including movie content)
could result in unauthorised access, loss or
disclosure of this information. This could lead
to claims, regulatory penalties, disruption
of operations of the Group and ultimately
reputational damage.
Impact
Underpinning the overall success of the Group
is the quality of the movie slate, the timeliness
of release, the release window and the appeal
of such movies to our customers. Where the
movie studios do not produce sufficiently
attractive movies, or movies underperform,
this has a direct impact on cinema attendance
and, therefore, box office revenue for the
Group may decline.
Impact
Ensuring our cinemas are of state-of-the-
art design and have the latest cutting-edge
cinema experience technology are both key
for our strategy to provide “The Best Place to
Watch a Movie”. A deviation from this could
have a direct impact on admissions and the
financial health of the Group.
Mitigation activity
− The Group IT function monitors, manages
and optimises our systems, including
ensuring their resilience through regular
back-ups and the implementation of
security measures.
− External experts are employed where
necessary to oversee and help manage
major projects involving the upgrading or
replacement of key systems.
− Under the direction of the Group Data
Protection Officer there is a Data Privacy/
Security Committee (supported by
external professional advisers) that drives
the programme of data protection across
the Group.
Mitigation activity
− We work closely with distributors to
acquaint ourselves, as early as possible,
with the upcoming film slate in order to
forecast likely movie performance.
− Although access to the latest movie slate
is reliant on our relationship with the
distributors, the Group’s strategy is to show
a wide range of movies over and above
the traditional Hollywood blockbusters.
This allows us to capitalise on specific
local area demand for type and content of
movies shown.
− While we have no control over the
availability of film content, in order to
reduce this risk, we are remaining active in
industry associations and maintaining our
studio relationships to ensure theatrical
release remains priority for delayed and
future releases.
Mitigation activity
− We perform a site prioritisation analysis for
the selection of refurbishments, new sites
and/or closures.
− Project management expertise that allows
the unique position of renovating without
cinema closures.
− Ensuring access to the latest cutting-edge
technology through our ability to secure
agreements with key suppliers.
− Maintaining long-term working
relationships with key contractors to
ensure continued access to knowledge
and experience.
Changes in the year
− Threat protection tools have been
standardised across the Group.
− During the pandemic, IT environments have
been scaled accordingly with no disruption
to security patch cycles, vulnerability scans
or account audits.
− Remote working capabilities have
been hardened.
− Oversight of Group data initiatives have
continued to ensure we remain compliant.
Changes in the year
− As pandemic related restrictions have
eased (e.g., social distancing requirements)
across the group, there has been a marked
improvement in the availability of high
quality film content as compared with 2020.
− Studios are honouring longer theatrical
windows and are moving away from day
and date releases.
Changes in the year
− There continues to be a very strong
pipeline of Cinema openings and
refurbishments planned in the UK and US.
− 7 new theatres opened in the US in 2021
and more are scheduled for 2022.
− 2 new cinemas opened in the UK in 2021
and more are scheduled for 2022.
− 1 new cinema opened in the ROW in 2021
and more are scheduled for 2022.
− There were also a number of
refurbishments completed in 2021 with
more scheduled for 2022.
For further details see the Chief Executive
Officer’s Review on pages 04 to 05.
Opportunity
− Continuing the programme of investment
in systems and ensuring our processes
are robust will strengthen the day-to-day
operations across the Group.
Opportunity
− Enhance tailored content depending on
local demographic.
− Continue to grow event cinema business
to satisfy customers’ appetite for
alternative content.
− There is a strong film slate for 2022 forward.
Opportunity
− Further optimise our estate through
closure of loss making sites and selective
site opening.
− Continue long-term refurbishment
programme in the US and UK.
  
Cineworld Group plc
Annual Report and Accounts 2021
15
Strategic Report Corporate Governance Financial Statements
PRINCIPAL RISKS AND UNCERTAINTIES
4 5 6
VIEWER EXPERIENCE
ANDCOMPETITION
REVENUE FROM
RETAIL/CONCESSION
OFFERINGS
CINEMA OPERATIONS
Failure to deal with competition
effectively by not offering quality
products and services that meet the
needs of the customer and deliver an
enhanced viewer experience.
Delivery of a retail/concession
offering that does not meet the
requirements and preferences
ofourcustomers.
Failure to maintain and operate well
run and cost-effective cinemas.
Link to strategy Link to strategy Link to strategy
Risk owner
CCO
Risk owner
CCO
Risk owner
CEO
Impact
Although cinema admissions are
predominantly driven by the quality and
availability of films, ensuring that the Group
continually enhances the viewer experience
is crucial. Any decrease in the quality of the
services we offer, from the ease of booking
and the technology we use to a friendly
farewell on departure, could result in loss
of customers to competitors and/or other
leisure/entertainment attractions.
Impact
Retail/concession sales generally fluctuate
in line with admissions and the genre of film
on show. Therefore, if admissions were to
fall, revenue from retail sales could decrease.
Retail spend may also decrease due to
changes in customer preferences, decreased
disposable income or other economic and
cultural factors. In addition, the cost of items
such as energy and foodstuffs, as well as the
introduction of the Soft Drinks Industry Levy,
has a direct impact on price.
Impact
Operating cinemas well is pivotal to the
overall success of the Group. The key is to
ensure that cinema management understand
the local market (film scheduling, pricing
and retail offerings), effectively manage
employees, maintain service standards
and increased COVID-related health and
safety requirements, and are able to react
to incidents should they occur. A reduction
in performance in any area can directly
affect overall viewer experience, reputation
of cinemas, and ultimately the Group’s
financial performance.
Mitigation activity
− Our strategy is focused on continually
improving the quality of services we offer
to customers and making a visit to our
cinemas a unique experience.
− This includes increasing the efficiency
of online booking, cutting edge cinema
design, removing clutter from the foyers,
investing in technical innovation and
premium offerings (ScreenX, 4DX and other
large screen formats), upgrading seating
options, further rollout of the VIP offering
and improving retail offers.
− We also focus on our approach to customer
interaction with the Group outside of the
cinema environment.
Mitigation activity
− Monitor various metrics, including spend
per person, in order to understand and
react quickly to changing customer needs.
− A key strategy for the Group is to maintain
a strong relationship with the principal
retail suppliers.
− We run targeted promotions and bring
in different ranges of products to meet
changing customer demand.
− We work closely with our drinks partners
to mitigate the potential impact of the Soft
Drinks Industry Levy by broadening our
ranges of diet and sugar free options along
with water and are trialling innovation with
reformulated products while still providing
consumer choice based on preferences.
− Brexit risk identification and mitigation
planning to respond to any impact on our
retail supply chain. We remain focused to
ensure potential operational disruption is
mitigated as effectively as possible.
Mitigation activity
− Cinema management continually
monitor their staffing requirements,
making adjustments to scheduling based
on customer demand, forecasts and
film scheduling.
− On a monthly basis detailed operational and
financial reviews are undertaken by cinema
management to ensure performance
matches expected targets.
− Ongoing evolution and updating of cinema
operational processes and procedures.
− Monitoring health and safety requirements
to ensure we have implemented sufficient
health and safety measures.
Changes in the year
− Due to the global pandemic all cinemas
were closed for a portion of the year.
− We are one of the largest operators of IMAX
in the US and across Europe.
− The Group is the only provider of 4DX in
the UK and an extensive provider in the US
and Europe.
Changes in the year
− Enhanced mobile applications to provide
customers with the ability to book tickets
and pre-order concessions online more
easily and through mobile applications.
− Due to the global pandemic all cinemas
were closed for a portion of the year
resulting in lower revenue from retail
and concession.
For further details see the Chief Executive
Officer’s Review on page 04 and 05 and Chief
Financial Officer’s Review on pages 30 to 35.
Changes in the year
− Due to the global pandemic all cinemas
were closed for a portion of the year.
− Health and safety guidelines were
established to ensure safe operations
during the pandemic.
− Evolved IT systems to provide customers
with the ability to book tickets and pre-
order concessions online more easily and
through mobile applications.
For further details please see Responsible
Business on pages 25 to 29.
Opportunity
− Further expansion of concession offering
in the US.
− Rollout of laser projectors across the estate.
− Continue our investment in providing a
range of premium formats.
Opportunity
− Upon reopening there will be new Lavazza
and B.Fresh locations opening for the
first time.
− Continue to enhance online offerings and
increase tickets and concessions sold
through our mobile platforms.
Opportunity
− New cinemas were ready for business once
reopening occurred.
− Continue to deploy operational best
practices across the Group.
 
Cineworld Group plc
Annual Report and Accounts 2021
16
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
7 8
REGULATORY BREACH STRATEGY AND
PERFORMANCE
A major statutory, regulatory or
contractual compliance breach.
The approach to setting,
communicating, monitoring and
executing a clear strategy fails to
deliver long-term objectives.
Link to strategy Link to strategy
Risk owner
CFO
Risk owner
Deputy CEO
Impact
The Group’s business and operations are
affected by regulations covering such matters
as planning, the environment, health and
safety (cinemas and construction sites),
licensing, food and drink retailing, data
protection and the minimum wage. Failure to
ensure ongoing compliance with regulation/
legislation could result in fines and/or
suspension of activity.
Impact
Although the overall strategy for the Group
is not a complex one, it is key that this
is executed.
Any diversion from this strategy could result in
loss of market share to competitors, failure to
capitalise on emerging market opportunities,
reduction in potential revenue/profits and
therefore loss in shareholder value.
Mitigation activity
− Management operate an ongoing cinema
compliance programme, supplemented by
independent compliance assurance reviews
by external advisers where appropriate.
− Group support functions use a combination
of ongoing staff development as well as
updates from professional advisers to
ensure management are aware of the latest
regulations in key areas.
− Robust health and safety protocols have
been implemented to ensure compliance
with COVID-19 compliance requirements.
Mitigation activity
− A structure is in place to support
effective strategy development, as well
as ongoing reporting and monitoring
of business performance on a daily,
weekly, monthly, quarterly and annual
basis. Monitoring Senior Management
performance against their agreed personal
objectives is an ongoing exercise.
− There are various communication strategies
(emails, meetings and conferences) used
to ensure the strategic goals of the Group
are clearly understood and executed by
Senior Management.
Changes in the year
− The global pandemic has sparked various
compliance requirements that are fluid and
vary by country, state and municipality.
For further details please see the Risk and
Internal Control section pages 50 to 52.
Changes in the year
− Our performance was significantly
impacted by COVID-19 with the closure of
our cinemas globally during the first half
of the year. During the period of closure,
our focus was on supporting our people,
ensuring that our financial position was
robust and minimising cash burn at a time
of great uncertainty. Once the cinemas
reopened, the focus was to support cinema
management with the resources needed to
ensure Cineworld is the best place to watch
a movie.
Opportunity
− Continue to align the approach to health
and safety audits across the Group.
− Continue data privacy compliance initiatives
across the Group.
− Continue the evolution of our approach to
compliance to ensure it is embedded in our
day-to-day operations.
Opportunity
− The Group’s strategy includes identifying
potential profitable opportunities to grow
and expand the business.
− Continual focus on and review of strategy
ensures the Board is well placed to assess
value adding opportunities as they arise.

Provide the best
cinema experience
Be technological
leaders in the industry
Expand and
enhance our estate
Drive value for
shareholders
Key
Cineworld Group plc
Annual Report and Accounts 2021
17
Strategic Report Corporate Governance Financial Statements
9 10 11
RETENTION AND
ATTRACTION
GOVERNANCE AND
INTERNAL CONTROL
MAJOR INCIDENT
Failure to attract and retain
SeniorManagement and/or other
keypersonnel.
A critical internal control and/or
governance failing occurs.
Inability to respond to
a major incident.
Link to strategy Link to strategy Link to strategy
Risk owner
Deputy CEO
Risk owner
CFO
Risk owner
CEO
Impact
The Group’s performance and its ability to
mitigate significant risks within its control
depend on its employees and Senior
Management teams. Therefore, reliance
is placed on the Group’s ability to recruit,
develop and retain Senior Management and
other key employees. If the Group loses key
people, this could have an impact on its ability
to deliver business objectives.
Impact
Maintaining Corporate Governance
standards and an effective and efficient risk
management and internal control system,
proportionate to the needs of the Group, is
a key part of short and long-term success.
Any failure and/or weakness in this area
(financial and non-financial) could have
an impact on the efficientand effective
operations of the Group.
Impact
Cinema attendance may be affected by
political events, such as terrorist attacks on,
or wars or threatened wars in territories in
which we operate, health-related epidemics
and random acts of violence, any one of which
could cause people to avoid our cinemas
or other public places where large crowds
are in attendance. In addition, due to our
concentration in certain markets, natural
disasters such as hurricanes, earthquakes
and severe storms in those markets
could adversely affect our overall results
of operations.
Mitigation activity
− To ensure the long-term success of the
Group, it uses a variety of techniques to
attract, retain and motivate its staff, with
particular attention to those in key roles.
− These techniques include the regular review
of remuneration packages, share incentive
schemes, training, regular communication
with staff and an annual performance
review process.
Mitigation activity
The Group uses various mechanisms to
support the implementation and effectiveness
of controls.
These include:
− implementation of the Group Risk
Management Framework;
− ongoing self-assessment process for
monitoring cinema compliance and
financialcontrol standards;
− regular consultation and advice from
external advisers;
− a risk-based cinema compliance and
financial control audit programme;
− the delivery of targeted risk-based internal
audit reviews; and
− the use of technology for live
forensic monitoring.
Mitigation activity
− We receive communications from
relevant government authorities and law
enforcement agencies which keep us
informed and allow us, when needed, to
monitor any potential impact external
events could have on the security and
safety of our cinema estate.
− Various security systems and/or personnel
are in place across the Group.
− Should an incident occur at one of
the Group’s sites, business continuity
and disaster recovery plans are in
place to ensure that management can
react appropriately.
− Appropriate insurance is in place to mitigate
the financial consequences as a result of
property damage.
Changes in the year
− The pandemic continued to impact the
Group during the first half of 2021 with
cinema closures and employee furloughs.
As a result, there has been significant
turnover of key personnel. The Company
is successfully replacing these key roles
with experienced professionals within and
outside of the Group. It is important the
Company remain competitive with the
regional markets to retain and attract key
personnel in the future.
For further details please see Responsible
Business on pages 25 to 29.
Changes in the year
− New Environment Committee established.
For further details please see Risk and Internal
Control on pages 50 to 52.
Changes in the year
− During a portion of the year, the pandemic
resulted in cinema closures, reduced seating
capacity and film content and caused some
reluctance to go into social environments.
− Once the cinemas resumed business, the
availability of quality film content increased
and there is a strong film slate scheduled
for 2022.
− Health and safety procedures have been
implemented in the cinemas to ensure
compliance with jurisdictional COVID-19
compliance requirements.
Opportunity
− The growth of the Group has increased
the opportunities for internal promotion
and transfers.
Opportunity
− Continue to enhance the use of technology
for embedding automated controls and
providing ongoing live assurance.
− Increase internal audit resources focusing
on improving Group compliance activities.
Opportunity
− Enhanced US active shooter training to
provide computer-based learning and
annual certification.
− Continuous review of processes which can
identify areas for operational improvement
and improve overall safety at our sites.
 

Cineworld Group plc
Annual Report and Accounts 2021
18
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
12 13
TREASURY
MANAGEMENT
CLIMATE CHANGE
(TCFD)
Ineffective treasury management
slows down our ability to service our
debt obligations and deliver against
our planned strategic initiatives
(e.g.refurbishment programmes).
Warming of the planet caused by
greenhouse gas emissions poses
serious risks to the global economy
and will have an impact across many
economic sectors.
Link to strategy Link to strategy
Risk owner
CFO
Risk owner
CFO
Impact
A key future strategy for the Group is ensuring
it has the ability to use the cash generative
nature of the business to reduce the net debt
to Adjusted EBITDA ratio. Balancing this with
the level of planned investment in strategic
initiatives globally will be a continual focus
forthe Board.
Impact
Transitioning to a lower carbon economy
may entail extensive policy, legal, technology,
and market changes to address mitigation
and adaption requirements related to
climate change.
Mitigation activity
− Integration of Regal and Cineworld
treasury functions.
− Ongoing review of financial instruments
being used.
Mitigation activity
− The Company is in the implementation
stages of developing a governance
strategy around climate related risks and
opportunities. Potential impacts of climate-
related risks and opportunities related to
businesses, strategy and financial planning
are being determined and mitigation and
adaption strategies are being established.
Changes in the year
− Secured new debt of $424.9m throughout
the year.
− Obtained a Group covenant waiver until
June 2022 and are currently operating
under a minimum liquidity covenant.
− Accelerated tax year closure brought
forward a tax refund of over $203m to 2021.
− Judgement received in respect to
Cineplex claim.
Changes in the year
− The analysis of climate-related risk has
been integrated into the Group’s existing
risk management framework. As such, the
Company’s Risk Management Committee
has responsibility for monitoring
and managing climate-related risks
and opportunities.
− Following the climate-related analysis
conducted in preparation for reporting
against the recommendations of the
Task Force on Climate-related Financial
Disclosures, the Group has set a target
to reduce its carbon emissions net zero
by 2050.Continue long-term objective
of debtreduction through cash flow
generation and costs optimisation.
Opportunity
− Continue to monitor liquidity.
− Continue long-term objective of debt
reduction through cash flow generation
|and costs optimisation.
Opportunity
− Organisations that shift their energy usage
toward lowemission energy sources could
potentially save on annual energy costs.
− Organisations that innovate and develop
new low emission products and services
may improve their competitive position
and capitalise on shifting consumer and
producer preferences.

Provide the best
cinema experience
Be technological
leaders in the industry
Expand and
enhance our estate
Drive value for
shareholders
Key
Cineworld Group plc
Annual Report and Accounts 2021
19
Strategic Report Corporate Governance Financial Statements
Introduction
The Group’s ambitions in respect of decarbonisation are reflected in its
governance framework for climate-related risks and opportunities and the
consideration of climate-related strategy and transition plans at Board and
Committee level.
As required by Listing Rule 9.8.6R(8), the Company confirms that this
Annual Report and Accounts includes climate-related financial disclosures
consistent with the applicable recommendations and recommended
disclosures set out by the Task Force on Climate-related Financial
Disclosures. Following the climate-related analysis conducted in
preparation for reporting against the recommendations of the Task Force
on Climate-related Financial Disclosures, the Group has set a target to
achieve net zero carbon emissions by 2050. This target includes Scope 1
and 2 emissions under the following categories:
Scope 1 – direct emissions, which are GHG emissions from the operation of
directly owned or leased assets.
Scope 2 – indirect emissions from the purchase of energy or heating in
activities controlled by the Group.
The Group does not currently quantify and disclose its Scope 3 emissions as
sufficient information and analysis of its supply chain is not yet in place to
do so. The Group will work to quantify its Scope 3 emissions (being indirect
emissions that indirectly impact on the Group’s activity, but are not caused
by activities or assets under its control) with the intention of considering
whether this category of emissions should also be brought within its target.
To support achieving the target of net zero carbon emissions by 2050,
theCompany has put in place the Cineworld Decarbonisation Strategy,
against which progress will be measured annually. The strategy consists
ofpeople, technology and process change, which together make up an
energy reduction strategy. With Scope 2 emissions representing the most
significant emissions category for the Group, addressing energy usage
isconsidered to be the foundation of the Group’s strategy. The energy
reduction strategy is built on consumption reduction though behavioural
change and analysis of the use of energy across the Group. The most
material energy source used in the Group’s activities is electricity, which
isthe primary focus of the strategy in the short term.
The Cineworld Decarbonisation Strategy is aligned with the strategic
priorities of the business.
Governance
Cineworld’s governance around climate-related risks and opportunities
The analysis of climate-related risks has been integrated into the Group’s
existing risk management framework. As such, the Company’s Risk
Management Committee has primary responsibility for monitoring and
managing climate-related risks and opportunities. Where applicable, the
Risk Management Committee will consider climate-related issues when
reviewing and guiding strategy, major plans of action, risk management
policies, as well as when overseeing major capital expenditures,
acquisitions, and divestitures.
Management and the Risk Management Committee will report to the Board
on their ongoing assessment of climate-related risk on a regular basis and
the advice of the Risk Management Committee will form part of the Group’s
considerations in addressing wider strategy decisions. Climate-related risks
are not currently considered to have a material impact on the financial
performance of the Group.
The Board’s review of emerging risks resulted in an additional risk (relating
to the effects and future impact of climate change to the Group) being
added to the Principal Risks list. Details of this assessment and the Group’s
approach to management of the risk are set out on pages 14-19. The Risk
Management Committee is chaired by the Chief Financial Officer, and
members include the Group’s Head of Risk and Assurance, the Group
Financial Controller and the Company Secretary.
The Risk Management Committee reports to the Company’s newly
established Environment Committee with regard to climate-related risks
and opportunities, which in turn reports to the Audit Committee and the
Board. For more information on the newly established Environment
Committee and reporting structures, please see page 37 of the
Governance section.
This approach ensures that the individuals within the business with
management control over our climate impacts and risk mitigation activities
are involved in decision-making and action, and that key issues are escalated
directly to the Environment Committee, and ultimately the Board.
The Risk Management Committee holds four meetings each year to review
the Group’s risk register and a review and assessment of climate-related
risks and opportunities has been built into these review meetings. More
information on the risk assessment processes in place for the Group may
befound on pages 50 to 52.
The Group has retained external energy experts to advise on the area of
climate risk, strategy and reporting.
The implementation of the Cineworld Decarbonisation Strategy, against
which progress is to be measured on an annual basis, will facilitate the
Board to monitor and oversee progress against the overarching target
ofnet zero carbon emissions by 2050 by:
− Providing a framework of activities within which the Group’s
decarbonisation and risk mitigation steps can be considered; and
− Providing context for the Group’s decarbonisation activities against
developments in technology, regulation and other external factors.
Cineworld Group plc
Annual Report and Accounts 2021
20
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD)
Risk Management
Cineworld’s processes for identifying and assessing climate-related risks
The Group’s risk management framework is designed to identify, evaluate
and mitigate the risks that the business faces at all levels.
Management, together with the Risk Management Committee, will continue
to engage with employees to review current and emerging climate-related
risks. Risk assessments have been undertaken with senior staff in the
Group’s major operating territories to identify all climate-related risks.
Further assessments will be undertaken and the results considered by
management in the context of the climate risk set out on page 21.
The relative significance of climate-related risks in relation to other risks is
determined on the basis of the probability of each given risk materialising
and the severity of the impact on the Group financially. Where considered
necessary, management will engage external advisors to support the risk
assessment process and consider the most appropriate response for the
Group and the potential impact on performance and wider strategy.
The underlying process aims to provide robust management information
toenable conscious risk-based decision-making.
In addition to complying with existing regulatory requirements in relation to
climate change, the Group is conscious of emerging regulatory requirements
in this area, not least the commitment by the UK government to reduce GHG
emissions to net zero by 2050, which directly informs the Group’s headline
target. The Group views such regulatory developments as integral to its
overall Decarbonisation Strategy.
Cineworld’s processes for managing climate-related risks
As part of the processes for managing risks and opportunities presented by
climate change, issues are carefully managed and monitored within our
operational structures.
All risks of the Group are recorded within the risk management system,
which is held by the Group Risk and Assurance team, and the risk register is
employed to manage all significant risks facing the business and ultimately
used to decide how to mitigate, transfer, accept or control such risks.
Risk registers are reviewed regularly by the Risk Management Committee
and relevant teams across the business.
Climate-related risks are assessed and prioritised in terms of consequence
and likelihood and, as described above, the Cineworld Decarbonisation
Strategy has been developed as a result of the climate-related risk review.
Given the nature of the Group’s activities, energy efficiency and energy
sources are considered to be the most pertinent risks to the Group in the
short and medium term. The financial impact of these risks could be
beneficial or detrimental to the Group’s financial performance given the
potential changes in energy use and pricing. The materiality of these risks
(as with all other risks) is considered by reference to the potential impact
onthe Group’s earnings each year.
Cineworld’s integration of processes for identifying, assessing, and
managing climate-related risks into its overall risk management structure
Climate-related risks have a high profile across the Group – they are
fullyintegrated into the risk identification, assessment and management
processes, which are organised and monitored by the Risk Management
Committee, and overseen by the Environment Committee, the Audit
Committee and the Board.
The aim of the risk management process is to enable us to proactively
anticipate, prepare for, respond to and adapt to incremental changes and
sudden disruptions, including those that are climate-related.
The same process for identifying and assessing the climate-related risks
applies across the global business, but the management of the identified
risks varies across the global portfolio.
Strategy
Climate-related risks and opportunities that Cineworld has identified
over the short, medium, and long term
Our primary climate-related risks and opportunities include:
− Short term – greater impact from physical rather than transitional risk
areexpected. Severe storm weather has the potential to cause major
disruption to our sites due to flooding, rainwater ingress, and/or unusual
weather patterns of extreme cold or heat. Increased storm events also
raise the risk of floods at our buildings due to rising external waters, such
as from rivers and the sea. Our cinemas would be particularly affected by
flooding should it occur, as water ingress would damage important and
expensive electrical equipment.
− Short to medium term – providing cinematic screening is a relatively
energy intensive business. Fluctuations in energy prices driven by
risingcarbon costs imposed on power generators, as well as through
increasing taxation at the point of consumption, may impact
the business.
− Long term – decarbonisation requires changing energy sources, such as
moving to more expensive zero-carbon electricity tariffs, and replacing
gas-fired heat sources with more expensive electrically generated heat.
− Short to long term – the Company has identified that its close control
ofenergy consumption is an opportunity to reduce the operational costs
of the cinemas, and to mitigate the rising costs of energy and the costs of
adaption and transition.
The process used by the Group to determine which risks and opportunities
could have a material financial impact is by modelling the marginal cost
andrevenue impact on the Group’s results of achieving its targets and
considering whether the modelled amounts would materially impact the
short term forecasts of the Group.
Management will continue to assess these risks and time horizons. As the
Group’s assessment of climate-related risk develops, more specific time
horizons for specific risks will be established, taking into consideration the
useful life of our cinemas and the fact that climate-related issues often
manifest themselves over the medium and longer terms.
Impact of climate-related risks and opportunities on Cineworld’s
business, strategy, and financial planning
In March 2022 the Board approved Cineworld’s Decarbonisation Strategy
designed to achieve net zero carbon emissions by 2050.
The Cineworld Decarbonisation Strategy consists of people, technology
and process pillars, as set out above. A focus is the reduction in energy,
inparticular electricity usage, through developing behavioural change,
investment in more environmental technologies where commercially
viable,and more energy efficient processes. The Group’s forecast
financialperformance is not considered to be materially impacted by the
implementation of Cineworld’s Decarbonisation Strategy. No impact on
revenue is forecast, nor is the valuation of the Group’s assets forecast to be
affected by potential investment required in the long term. The Executive
Directors, the Environment Committee, and ultimately the Board oversee
the implementation and monitoring of the Cineworld
Decarbonisation Strategy.
Climate-related physical risks, considered with reference to their potential
impact on the financial performance of the Group as a whole, are being
integrated into our business strategy through the mitigation activity flowing
from the risk management processes monitored by the Risk Management
Committee, and through the implementation of the Cineworld
Decarbonisation Strategy.
The Group’s global operational footprint means that there are varying risks
and opportunities across the geographical regions, which reflect the acute
and chronic climate-related risks in those areas. Information is being
collated on the climate-related physical risks, to support an assessment
ofthe value of the risks and the opportunities in the coming years.
Cineworld Group plc
Annual Report and Accounts 2021
21
Strategic Report Corporate Governance Financial Statements
Metrics and Targets
The metrics used by Cineworld to assess climate-related risks and
opportunities in line with its strategy and risk management process
In order to assess risks and opportunities in line with Group strategy, the
following metrics are tracked:
− Total Scope 1 and Scope 2 global carbon footprint against carbon targets
globally, tracked by region using the GHG protocols. The Group is in the
process of establishing processes to evaluate potential Scope 3
emissions. Future reporting on such emissions will be considered as the
process develops.
− Carbon intensity against revenue, annually
Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG)
emissions and the related risks
Please see pages 80 to 82 for our latest carbon footprint figures. We have
established 2019 as our baseline year for Scope 1 and Scope 2, and are
working to establish our Scope 3 emissions.
Full details of the Group’s risk assessment can be found on pages 50 to 52.
Targets used by Cineworld to manage climate-related risks and
opportunities and performance against targets
In March 2022, the Board approved a decarbonisation strategy and
associated target to achieve net zero carbon emissions by 2050.
The Environment Committee will continue to monitor electricity and gas
usage, its GHG protocols and overall energy costs in assessing Cineworld’s
Decarbonisation Strategy and its effectiveness in supporting the Group
achieving its target.
It is possible that achieving the headline target of net zero carbon emissions
by 2050 will require Cineworld to set interim targets. The Company is still
considering the most appropriate targets to support its headline target
whilst it is in the process of developing its strategy. The Environment
Committee has overall responsibility for formulating any interim targets,
and will consider their effectiveness in supporting the overall strategy and
success in meeting the net zero target in doing so.
As part of its impact assessment, the Company has conducted a gap
analysis of the information that it needs to acquire in the future to help
further address climate-related risks, such as quantification of its Scope 3
emissions. Financial impacts of the Cineworld Decarbonisation Strategy
arebeing considered, and will be incorporated into financial planning.
Resilience of Cineworld’s strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower scenario
The focus of the Cineworld Decarbonisation Strategy is on ensuring that the
Company plays its part in delivering the carbon reductions that are needed
to mitigate the worst consequences of climate change. The net zero by
2050 target is in line with the IPCC scenario intended to keep global
warming to below 1.5°C.
In terms of the resilience of Cineworld’s Decarbonisation Strategy, the
scenario analysis that has been undertaken so far, taking into account a
2°Cor lower scenario, suggests that the Company’s carbon reduction
programme should serve to mitigate many of the ‘transitional risks’
associated with climate change (for example, increasing legislative, financial
and reputational pressure on businesses to reduce carbon emissions).
The physical risks associated with climate change are focused on our
cinemas, with the incremental changes and sudden disruptions from
extreme weather (from flooding to excessive heating or cooling) being
fullyintegrated into our risk identification, assessment and
management processes.
As the experience and understanding in this area matures, the scenarios
employed to test the resilience of Cineworld’s Decarbonisation Strategy
willshift to take a more systematic and quantitative approach. This will
further enable teams to appraise the risks presented by the physical and
transitional effects of climate change on business operations.
The annual review of performance will further provide the Group with
decision-useful information against which its strategy may be modified.
Cineworld Group plc
Annual Report and Accounts 2021
22
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) CONTINUED
In accordance with Provision 31 of the
2018 UK Corporate Governance Code,
the directors are required to assess the
prospects of the Company, explain the
period over which we have done so and
state whether we have a reasonable
expectation that the Company will be
able to continue in operation and meet
liabilities as they fall due over this period
of assessment.
The Directors have determined that
athree-year period from the date of
approving the financial statements
constitutes an appropriate period over
which to provide its viability statement.
Three years was determined based on
the maturity period of the Group’s
financing facilities, the forecast recovery
from COVID-19, the visibility of the
future film slate, the Group’s planned
investment in its estate,investment in
technology and relationships with the
film distributors. Whilst three years is
considered the most appropriate time
horizon for assessing viability, the Board
also has regard for longer term financial
forecasts, key to this are industry level
factors which are set out in the Group’s
business model on pages 08 to 09.
The Directors’ viability assessment has
taken into consideration the potential
impacts of the principal risks in the
business model, future performance,
solvency and liquidity over the period,
including principal mitigating actions
such as reducing capital expenditure
and additional sources of liquidity.
For the purpose of assessing the
Group’s viability, the Directors identified
that of the principal risks detailed on
pages 14 to 19 the following are the
mostimportant to the assessment
ofthe viability of the Group:
− availability and performance of
film content,
− viewer experience and competition,
− major incident,
− treasury management.
Each of the above risks are considered
to have remained consistent during
2021. The impact of COVID-19 continues
to have a significant effect on the
Group’s financial position, with the
availability of film content and the
Group’s liquidity both having been
constrained by the impact of the
interruption caused by amajor external
factor. Availability and performance
offilm content is expected to become
aless significant issue as the impact
ofthe pandemic reduces and the
Group recovers.
The impact of COVID-19 has caused a
significant level of uncertainty in cinema
markets across the world, including all
of those in which the Group operates.
As set out in the Directors’ Going
Concern assessment in note 1 to the
Financial Statements, the Group expects
cinema attendance to return to levels
observed in the year prior to the
pandemic by the end of the viability
assessment period. However, the
directors acknowledge the uncertainty
inthe precise timing of the return to
such levels and therefore have
considered scenarios reflecting varying
rates of recovery. Key factors driving
theoutcomes of such scenarios are
focussed more on short term factors,
due to the current stage of recovery
across the Groups operating territories.
In assessing the viability of the
Group,the Board has considered the
sustainability of the Group’s business
model and the potential impact of
changes to environmental factors which
may potentially affect performance in
the future. New considerations around
risk governance and strategy in the
context of the Group’s compliance
withthe Taskforce on Climate Related
Financial Disclosures (TCFD) are set
outon pages 22 and 23. The Group has
implemented governance structures
toasses and monitor sustainability
issues and carry out risk assessments
identifying threats to operations and
performance. As set out in the TCFD, no
material impact on the Group’s financial
performance is considered to exist in
the short term.
The Group has performed a weighted
scenario analysis, set out in the Going
Concern disclosure on page 99.
The Group’s base case scenario assumes
a gradual increase in admissions, with
cinemas in the US performing at 85% of
comparable levels to 2019 throughout
2022, with the UK and ROW performing
at 90% and 95% respectively.
Admissions across the Group are
thenforecast to return to 95% of
comparable periods in 2019 during 2023.
Admissions are then forecast to reach
2019 levels during 2024. This weighted
base case, forecasts that the Group
willmaintain sufficient liquidity and
headroom against key covenant metrics
through its continued recovery from the
pandemic in 2022 and 21 months beyond
the Going Concern assessment period.
Cineworld Group plc
Annual Report and Accounts 2021
23
Strategic Report Corporate Governance Financial Statements
Viability Statement
To assess the Group’s viability,
management performed scenario
analysis considering key factors
expected to drive uncertainty in the
recovery profile. Based on the principal
risks identified above, the scenario
applied was:
− lower cinema attendance for two
months during the first half of 2022,
driven by a lack of content due to
changes to the film slate, achieving
only 50% of admissions levels.
Then gradually recovering to the
weighted base case assumptions
bythe end of December 2022.
Under this scenario assessment, the
Group would still be able to continue to
meet its day to day liabilities as they fall
due over the three-year period. However,
the Group would be in breach of financial
covenants on its debt facilities in June
2022. Further implications of this scenario
are set out in the going concern
disclosure in note 1.
As set out in the Going Concern
disclosure on page 99, a judgement
against the Group awarding damages
ofC$1.23 billion for lost synergies to
Cineplex and C$5.5 million for lost
transaction costs was received in
December 2021. The Group disagrees
with this judgement and has appealed
the decision. The Group does not expect
damages to be payable whilst any
appeal is ongoing. The directors have
not factored any payment of damages
in their assessment of the Group’s
viability. In the event that the Group
loses its appeal and full damages are
required to be paid within the viability
period, the Group would be unable to
meet this obligation.
The maturity of the Group’s various
debtagreements is set out on page 140.
Of the instruments in place eight reach
maturity within the viability period,
representing $4.3bn in liabilities.
The Group will therefore need to agree
refinancing terms for these borrowings
prior to them falling due.
Whilst the reviews performed do
notconsider all of the risks that the
Group may face, the Directors consider
that the scenario based assessment
prepared of the Group’s prospects is
reasonable in the circumstances of the
inherent uncertainty involved.
The Directors believe the risk
management and internal control
systems in place allow them to monitor
the key variables that have the ability
toimpact the liquidity and the solvency
ofthe Group and have a reasonable
expectation that the Group will be able
to continue to meet liabilities as they fall
due over the coming three-year period.
However, as described, there is a risk of
covenant breach should the weighted
base case scenario not be realised.
In addition, if the continued recovery
from COVID-19 is more interrupted or
more prolonged than modelled in the
Group’s weighted base case, there is
apossibility that the Group could be
required to find additional sources
of liquidity.
Cineworld Group plc
Annual Report and Accounts 2021
24
VIABILITY STATEMENT CONTINUED