SFAF Presentation. June 6 th 2017

Transcription

1 SFAF Presentation June 6 th 2017

2 Mediawan team today s presentors PIERRE-ANTOINE CAPTON CEO & co-founder Founder of 3e Oeil Productions, one of the largest French independent production companies TV production Theatre production Others (cinema, music, trailers, short films, etc.) ORLA NOONAN CEO of Groupe AB CEO of Groupe AB since 2014 Member of Mediawan Strategic Committee Previously Chairman of the TV channel NT1 Board member of Iliad and Schibsted 2

3 Mediawan: building an independent European leader in premium content

4 Mediawan History: from a SPAC to an established media group December 2015: Founded as a SPAC by PA Capton, X Niel and M Pigasse Objective = create a leading independent platform in Europe dedicated to premium content April 2016: Raised 250m through an IPO on Euronext Paris 1 st successful SPAC in France March 2017: Realized its first structuring acquisition, Groupe AB Acquisition for approx. 274m Approved by the special meeting of shareholders Today: Leading independent editor, producer and distributor of audiovisual content in French speaking Europe Standard corporate rules and applicable laws Means and ambition to aggregate independent companies with complementary expertise in premium content 4

5 Mediawan Today: strong team supported by visionary industry board members Board members Pierre Bergé Pierre Lescure Xavier Niel Matthieu Pigasse Rodolphe Belmer Andrea Scrosati Cécile Cabanis Julien Codorniou Relevant experience Pierre-Antoine Capton CEO and Chairman Guillaume Izabel CFO (Lazard, Barclays) Management team Maxime Guichot-Perere Deputy CFO (Eight Advisory) Charlotte Margueritte Legal Counsel (White & Case) Target 1 Target 2 Orla Noonan CEO Joined in 1996 Denis Bortot COO Joined in 1985 Richard Maroko VP Channels, Programming acquisitions Joined in 1996 Valérie Vleeschouwer VP Distribution & Coproduction Joined in 1996 Indicates Mediawan sponsors 5

6 Mediawan Today: leading independent content editor, producer and distributor Groupe AB at a glance a sleeping beauty ready to wake up Leading independent integrated player in France Founded in 1977, Groupe AB is a leading player in channels broadcasting, production and distribution of audio visual content in French-speaking Europe Fully integrated business model with a broad offering across the value chain of the French TV landscape...with scaled and balanced asset base 2016 revenue of 160m (a) 2016 EBITDA of 37m (a)(b) 2016 unlevered FCF > 30m and 80% cash conversion ratio 370 full-time employees equivalent Large and diversified library of programming rights 2016 revenue by segment (a)(c) 2016 EBITDA by segment (a)(b) Production c. 80 hours inhouse production per year Distribution c. 12,000 hours of programming in library Channels & Broadcasting 19 TV channels in entertainment, special interest and documentaries Production & Distribution c. 1/3 Channels & Broadcasting c. 2/3 Production & Distribution c. 70% Channels & Broadcasting c. 30% Strong integration between the group s divisions (a) Excluding exceptional revenues of 7.5m (b) After amortization of programming rights (c) Excluding c. 60m intra-group revenue 6

7 Groupe AB a track record of successful programs 7

8 Mediawan Ambition: build an independent European leader of premium audiovisual content through 3 levers Consolidate a leading independent player in Europe Market still very fragmented with opportunity for consolidation Accelerate growth with selected and complementary new developments Acquisition of library or production companies Disciplined M&A strategy Attractiveness of a large independent platform Strengthen Groupe AB s leading positions Sustained growth and cash flow generation supported by favorable market dynamics Recruitment of talents to launch of new business verticals Strategic partnerships with global industry players VALUE Identified levers to optimize business leveraging on Mediawan industry expertise Develop digital audience targeting specific communities Further develop Groupe AB s strong brands and IP franchises 8

9 Mediawan Ambition: build an independent European leader of premium audiovisual content through 3 levers 6 June, 2017: Mediawan enters into exclusive talks regarding the acquisition of CC&C, producer of the Apocalypse documentaries Founded in 2001, CC&C is an audiovisual production company that specializes in history and social programs for international television, notably via the Apocalypse brand with series that recount the major events of the 20 th century in a vivid manner through the point of view of ordinary people. A powerful narrative and archive footage often never seen before, restored and put into color thanks to the expertise developed by CC&C are the hallmark of this collection of historical documentaries that have enjoyed record viewing figures in France and 165 other countries. 9

10 Favorable market dynamics

11 Attractive fundamentals for the European content market Key trends driving opportunity for Mediawan 1 Proliferation of platforms ~87m subs ~69m subs ~12m subs Use viewer segmentation to deliver more targeted audiences to advertisers ~1.8bn users >1bn users ~150m users 2 Increasing spend on content Spending on content in 2016 ~$5bn ~$3.2bn Monetize new and existing content across a greater number platforms 3 M&A heightening value of content (a) Strong strategic demand for premium proprietary content / IP assets 4 European content has global success 7.8 / 10 IMDb 8.3 / 10 IMDb 8.7 / 10 IMDb TV series produced in Europe are increasingly successful globally (eg. Gomorra sold into multiple countries and achieved strong ratings) (a) Distribution agreement instead of acquisition Source: Broker research, press reports, IMDb, Variety, BCG and Statista 11

12 Attractive market conditions in France underpin a global opportunity New OTT platforms are driving growth Non-linear viewership increasing across other European markets Source: Screendigest, IHS, Netflix 66% 7% 13% 24% TUNISIA OTT MOROCCO revenue CAGR (2016E) Non linear TV viewing as % of total viewing (2015A) ALGERIA 27% 10% 20% 8% 39% 7% ESTONIA LATVIA LITHUANIA ROMANIA SERBIA BELARUS MACEDONIA UKRAINE MOLDOVA GREECE Non linear share still relatively low, offering opportunity for growth RUSSIA BULGARIA European markets well positioned to capture opportunity Traditional broadcasters TURKEY SYRIA CYPRUS IRAQ LEBANON EGYPT GEORGIA ISRAEL JORDAN SAUDI ARABIA OTT players 12

13 Local content popular among French viewers Fiction series are sought after as they are synonymous with high audience figures Breakdown of the top 100 audience by format (2015 / 2016 average) Fiction series 47 Sports 18 Reality TV 13 Films 12 Others 11 9 out of 10 most watched fiction series in France are local productions Most viewed fiction series in 2015 Most viewed fiction series in 2016 Program Production Program Production 1 L Emprise Leonis Production (Endemol Group) 1 Le Secret d Elise Quad Télévision (Quad Group) 2 Mentalist Warner Bros. 2 Sam Authentic Prod. (Ind.) 3 Une chance de trop VAB Productions (JLA Groupe), TF1, RTL TVI, RTS 3 Section de recherches Auteurs Associés (Groupe AB) 4 Profilage Beaubourg Audiovisuel (Tetra media) 4 Profilage Beaubourg Audiovisuel (Tetra media) 5 Forever Good Session, Lin Pictures (Ind.), Warner Bros. 5 La Vengeance aux yeux clairs JLA Productions (JLA Groupe) 6 Le mystère du lac Elephant Story (Ind.), Solune Productions 6 Munch JLA Productions (JLA Groupe) 7 Clem TF1, Merlin Productions (Lagardère) 7 Person of Interest Kilter Films, Bad Robot, Warner Bros. 8 On se retrouvera Merlin Prod. (Lagardère), AT-Production (Ind.) 8 Le mec de la tombe d à côté Troisième Oeil Productions (Ind.) 9 Esprits criminels CBS 9 Flic tout simplement Capa Drama (Newen) 10 Person of Interest Kilter Films, Bad Robot, Warner Bros. 10 Alice Nevers, le juge est une femme Ego Productions (Groupe AB) Note: Rank by most successful episode (total audience) Source: CNC, Mediamat-Mediamétrie 13

14 Groupe AB overview and strategy

15 Leading independent production and distribution player Production & Distribution Fully integrated platform with a large library of TV rights Leading producer and distributor of TV programs, including fiction (TV series & movies), cartoons and documentaries Distribution rights under mandate are generated through in-house productions, rights acquisitions or 3rd-party mandates Increasing international distribution activities (approx. 20% of 2016 distribution revenues) thanks to recognised expertise and international relationships Production and distribution strategically integrated with TV channels TV channels sourced for c. 40m of total content directly through production and distribution division One of the largest and most diversified libraries in France with c. 12,000 hours of programming generating visible and stable revenues Strong valuable library mixing the best fiction TV series, animation content and documentaries in France and abroad Successful refocus on production activities since 2013 enabling increased diversification and further international development 2016 revenue contribution Library overview (in % hours) 53m external revenues (a) Distribution: 67% of revenues. Sales of broadcasting rights on all library programming (including subsequent and international sales on in-house productions, as well as acquired rights and mandates). Includes 20% of international sales Production: 33% of revenues. Sales of firstrun broadcasting rights on newly produced programming (generated by own studios) to original broadcasters. Distribution 67 % Production 33 % Rights under mandate 15% Rights Acquired 41% In-house Production 44% Films and Telefilms 14% Documentaries 14% Animation 12% TV series and Sitcoms 60% (a) Excluding c. 54m intra-group revenue 15

16 A large, diversified and highly valuable library Production & Distribution Prime-time TV series TV series under mandate Current primetime French TV series Section de recherches Alice Nevers Black Spot Original creations of Canal + Spiral Mafiosa Kaboul Kitchen Classic French TV series Une femme d honneur Navarro L Instit Prime-time units Collection «Meurtres à» International TV series Un cas pour deux Rex Friends Strong animation brands Snoopy Iron Man American feature film 175 best movies from Paramount library TV series with a large public success Fais pas çi, Fais pas ça Famous animated TV series Miraculous 7 & Me New gen TV series with strong potential Lazy Company Les Grands Missions TV series still under production 16

17 80 hours of in-house production per year Production & Distribution Fiction French TV series for wide audience including 3 for prime-time under production in 2017 Coproduction of TV series with strong potential for international distribution Animation / Children s content Exclusive partnership with On Entertainment (Method Animation) 2 animated TV series broadcast in France and globally (TF1, Disney EMEA, Netflix, Globo, Al Jazeera, etc) 2 animated TV series under production in 2017 Documentaries c. 50 documentaries per year based on AB channels needs and editorial expertise Distribution in France and globally Investment in projects with strong potential of international distribution 17

18 Strong channels and broadcasting business Channels & Broadcasting Strong portfolio of channels Strong portfolio of 19 channels widely distributed in French speaking territories and globally Categories of channels focused on entertainment, special interest and documentaries, with differentiated positioning and partnerships with premium content publishers Meaningful production and purchasing efficiencies generated through integrated operating structure Contractual fees with advertising upside 107m external revenues (a) Others Carriage 13 % Fees 67 % Carriage Fees: 67% of revenues. Driven by contractual relations with channels broadcasters 2/3rd are fixed revenues Advertising: 20% of revenues. Driven by audience results and channels attractivity to advertisers Other: 13% of revenues. Transportation, audiotel, TV shopping, barters. Advertising 20 % Broad coverage with key strategic relationships Extensive distribution strategy Leading independent player in France benefiting from long term relationships with pay-tv platforms Significant and fast growing international presence Wide distribution in standard package to pay-tv operators in France, Switzerland and Belgium Wide broadcasting generating audience and growing advertising revenues Leading independent player Other 20% 5% 6% 7% 2016 pay-tv audience 7% 8% 10% 37% (a) Excluding exceptional revenues of 7.5m Source: Médiamétrie, pay-tv audience between 23-Dec-2015 and 12-Jun-2016 for 4+ yo 18

19 Strong portfolio of channels Channels & Broadcasting Entertainment 3 channels Basic packages with wide distribution Large advertising potential Special interest 12 channels Thematic channels ARPU generating Strong digital potential Documentary 4 channels High-end positioning Strong ARPU subscribers 19

20 Multiple monetization opportunities Channels & Broadcasting Enhanced distribution through multiple channels Evolution of advertising revenue ( m) French In m +10.1% 21.8 (a) 19, % 17,9 International Direct B2C 2014A 2015A 2016E Long standing relationship with all French pay TV operators Wide distribution network generating more than 20% of 2016 revenues from international carriage Strong growth advertising revenues Confirmation of programming expertise generating audience and advertising (a) Advertising revenues are almost exclusively generated by entertainment channels 20

21 Financial overview: key historical financial figures Revenues (1) ( m) Channels & Broadcasting of which Jook Production & Distribution TV Channels & Digital Revenues Key components and drivers Carriage Fees: 67% of revenues. Driven by contractual relations with pay TV operators 2/3rd are fixed revenues Advertising: 20% of revenues. Driven by audience results and channels attractivity to advertisers Other: 13% of revenues. Transportation, audiotel, TV shopping, barters Costs Programming costs: approx. 50% of revenues Transmission costs: approx. 13% of revenues Other: advert. sales commissions, barter and structure costs EBITDA ( m) and EBITDA margin (1)(2) (21%) (23%) (23%) Channels & Broadcasting Production & Distribution Production & Distribution Revenues Distribution: 67% of revenues. Sales of broadcasting rights on all library programming (including subsequent and international sales on in-house productions) Production: 33% of revenues. Sales of first-run broadcasting rights on newly produced programming (generated by own studios) to original broadcasters. Costs Amortization of capitalized production and library programs: 40-45% of total revenues (incl. intra-group) Other : royalties and structure costs. (1) Reported figures, excluding c. 7.5m of exceptional compensation fees in 2016 (2) EBITDA after amortisation of programming rights 21

22 Revenues and growth Financial overview: a clear inflexion point in 2016 Business reorganization and strategic refocus Renegotiation of distribution contracts Acquisitions in TV production Termination of SVOD services Jook Continued refocus and stabilization of performance Rationalization of channels portfolio Growth in advertising revenues Further development of production Reigniting growth Continued growth acceleration Stable to slight improvement of margin Steady cash generation ~ % 2013 A 2014 A 2015 A 2016 A 2017 E Mid-term EBITDA and margin (a) 21% 23% 23% ~ 23% ~ A 2014 A 2015 A 2016 A 2017 E Mid-term (a) Post amortization of programming rights 22

23 Key initiatives to sustain Groupe AB profitable growth and cash flow generation Mediawan s expertise will strengthen Groupe AB s capability to undertake a number of identified initiatives to accelerate additional growth and cash flow generation TV Channels Content and IP Corporate Channel distribution Advertising Production Distribution Cost improvement Growing competition between French Pay-TV platforms Improve channels portfolio with stronger brands and content Develop new themes and niche channels TV advertising revenues to catch up with audience share New local advertising offering in French speaking markets generating upside Develop digital offers, leveraging on strong brands and broad subscriber base Acceleration of production strategy Focus on fiction and documentaries International attractiveness of French productions Selected acquisitions can be envisaged Grow the library with disciplined rights acquisitions Capitalize on in-house productions Improvement of the legacy organization Optimization of existing structure Potential synergies with other acquisitions

24 Conclusion

25 Multiple growth opportunities Mediawan will build a global platform for premium content, by expanding Groupe AB business as well as making strategic investments in other verticals Business will remain integrated with a centralized distribution organization GLOBAL CONTENT PLATFORM EXISTING PERIMETER SELECTED ADD-ONS ANIMATION INTERNATIONAL FICTION OTHERS Strengthening of existing portfolio and production log Focus on national Free TV content Recruitment of talents Developments in key areas of expertise Local fiction Documentaries Entertainment Existing presence Strong visibility on production schedule High international potential Very fragmented market Production of premium series with high international potential Targeted towards pay-tv operators Local content in other European geographies Cinema rights Digital content Common platform for multi-channel distribution Creation and development of proprietary IP feeding a library of premium content 25

26 Why invest in Mediawan? Attractive content market fundamentals with explosive demand globally Unique sponsor and management team with recognized industry expertise Large library and premium proprietary IP delivering strong and predictable cash flow Powerful levers for growth through content production and multiplatform exploitation Fragmented industry with few sizable independent players Ambition and capability to pursue accretive M&A and build a leading international player 26

27 Legal disclaimer and contacts Legal disclaimer These materials are being provided to you on a confidential basis, may not be distributed to the press or to any other persons, may not be redistributed or passed on, directly or indirectly, to any person, or published or reproduced, in whole or in part, by any medium or for any purpose. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Mediawan or any subsidiary or affiliate of Mediawan nor should it or any part of it form the basis of, or be relied on in connection with, any purchase, sale or subscription for any securities of Mediawan or any subsidiary or affiliate of Mediawan or be relied on in connection with any contract or commitment whatsoever. The information contained herein has been obtained from sources believed by Mediawan to be reliable. Whilst all reasonable care has been taken to ensure that the facts stated herein are accurate and that the opinions and expectations contained herein are fair and reasonable, it has not been independently verified and no representation or warranty, expressed or implied, is made by Mediawan or any subsidiary or affiliate of Mediawan with respect to the fairness, completeness, correctness, reasonableness or accuracy of any information and opinions contained herein. In particular, certain of the financial information contained herein has been derived from sources such as accounts maintained by management of Mediawan in the ordinary course of business, which have not been independently verified or audited and may differ from the results of operations presented in the historical audited financial statements of Mediawan and its subsidiaries. Neither Mediawan nor any of its respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss or damage howsoever arising from any use of this presentation or its contents, or any action taken by you or any of your officers, employees, agents or associates on the basis of this presentation or its contents or otherwise arising in connection therewith. The information contained in this presentation has not been subject to any independent audit or review and may contain forward-looking statements, estimates and projections. Statements herein, other than statements of historical fact, regarding future events or prospects, are forward-looking statements, including forward-looking statements regarding the group s business and earnings performance, which are based on management s current plans, estimates, forecasts and expectations. These statements are subject to a number of assumptions and entail known and unknown risks and uncertainties, as there are a variety of factors that may cause actual results and developments to differ materially from any future results and developments expressed or implied by such forward-looking statements. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Although Mediawan believes that the estimates and projections reflected in the forward-looking statements are reasonable, they may prove materially incorrect, and actual results may materially differ. As a result, you should not rely on these forward-looking statements. Mediawan undertakes no obligation to update or revise any forward-looking statements in the future or to adjust them in line with future events or developments, except to the extent required by law. Investor Relations Team Media Relations Team Further information Mediawan investors@mediawan.eu NewCap Marc Willaume mediawan@newcap.eu Mediawan press@mediawan.eu NewCap Nicolas Merigeau mediawan@newcap.eu For all financial or business information, please refer to our website at: 27

28 Appendix

29 TV content production a virtuous business model Production on demand : broadcasters are committed to funding the program production (co-production scheme) and/or to buy the rights for the first run (pre-sale scheme) Other financing sponsors (co-producers, CNC, regional subsidies, tax credit, minimum guarantees for international distribution, ) are secured before production: planned costs are totally covered by commitments from sponsors Financing needs are solely related to the time differences between cash inflows (from sponsors) and outflows (costs) during production after the development phase: PRIMARY MARKET : PRODUCTION SECONDARY MARKET : DISTRIBUTION Development phase Project writing & organization Budget & financing planning Production phase Filming / Editing / Post-production Program delivery Program commercialization (France & international) CASH INFLOWS Optional : Advances from co-producers Phased payments from co-producers and broadcasters Subsidies from CNC (mostly at project approval) French Tax Credits (payment on year N+1 after delivery) Other sponsors, including potentially minimum guarantees for international distribution Financing commitments fully covering production costs at launch Production margin : structurally limited Distribution margin : structurally high 29

30 Pro-forma balance sheet: significant financial flexibility Sound balance sheet position after the acquisition of Groupe AB and the capital redemption Significant financial flexibility for potential strategic acquisitions Focus on resilient cash generation with disciplined approach to M&A Cash position Mediawan Acquisition debt Cash position Groupe AB Net position Net cash position as of Acquisition of shares in Groupe AB (1) (144) (130) - (274) + Cash at Groupe AB at closing (1)(2) Transaction and other costs (3) (19) - - (19) - Capital reduction (4) (28) - - (28) Pro-forma position as of (130) 37 (34) (1) Estimated figures, subject to post-cloing adjustments in progress. (2) Assuming acquisition of minorities in RTL9 (3) Total costs including debt arrangement fees, fees paid to advisors and deferred payments related to the 2016 IPO (4) Redemption of 2.8m shares on May 2 nd

31 SFAF Presentation June 6 th 2017