India s Fastest Growing Media Conglomerate

Transcription

1 October 2010

2 India s Fastest Growing Media Conglomerate Managed revenues of $470 mn with a CAGR of 83% over the last 5 years (05-10) Operate the country s leading brands in Entertainment, General and Business News, Internet, Films, Yellow Pages and Home Shopping Reach in excess of 350 mn people through its media properties Excellence in execution with an unmatched track record of creating market leaders Led by a highly experienced and professional management team Partner of choice for global media giants: Viacom, NBC (CNBC), Time Warner (CNN) & Forbes 2

3 Market Leading Properties #1 Hindi GEC #1 Youth & Music Television #1 #1 Business News Business News (Hindi) #1 #1 Kids International / Entertainment #1 English News #1 Home Shopping Film New Age Motion Pictures Print #1 Yellow Pages & Local Information Web #1 Business Portal #2 Horizontal Portal 3

4 Well Positioned Across Media Platforms Company Television Print Films Home Shopping Digital Legend Leadership Position Strong Challenger Market Presence Niche Presence Presence across all media platforms coupled with leadership position in 3 platforms 4

5 Indian Media & Entertainment Opportunity

6 Large And Growing Indian Economy 4 th Largest Economy Globally (1) One of the Fastest Growing Economies (2) 2009 GDP at Purchasing Power Parity US$ Trillion $16 $14.3 $14 GDP Growth Rate (%) 15% 10% $12 China $10 $8.8 5% 8% $8 $6 $4 $4.1 $3.6 $2.8 $2.1 0% -5% $2 $0-10% USA China Japan India Germany UK India China US UK Japan Germany Driven By Its Unique Domestic Consumption-led Growth, Indian Economy Is One Of The Largest, Rapidly Growing And Most Resilient Economies Globally (1) Source: CIA World Fact book (2010) (2) Source: Global Insight 6

7 Just Hitting Point Of Inflection $1,000+ Per Capita Income (1) Indian M&E To Become 5x In Next Decade (2) Per Capita Income (US$) US$ Billion $50,000 Japan USA $80 $74 Bn $20,000 Malaysia Korea $70 $60 $21 $5,000 Thailand $50 $3,000 China INDIA $40 $2,000 $30 $53 $1,000 $0 Bangladesh Cambodia INDIA $20 $10 $0 $15 Bn $4 $ Emerging Rapid Growth Mature Media Entertainment With The Per Capita Income Reaching The Critical $1,000 Level And Riding On The Back Of Favorable Demographics, Indian Economy Is All Set For A Phase Of Extra-ordinary Growth (1) Source: World Bank, Edelweiss Estimate (2010) (2) Source: FICCI Frames, CMIE, Edelweiss Estimate (2010) 7

8 Television Broadcasters To Benefit Disproportionately Advertisement Revenues (1) Subscription Revenues (1) US$ Billion US$ Billion $14 $35 $12 $12 Bn $30 $23 Bn $10 $25 $8 $20 $6 $15 $4 $2 $2 Bn $10 $5 $5 Bn $7 Bn $0.7 Bn $0 $ The growth of the Media & Entertainment industry to be driven mainly by television segment with the broadcasters gaining the largest piece of the pie as subscription share improves (1) Source: KPMG-FICCI Report (2010); Capital18 Estimates 8

9 An Industry with Global Scale & Potential 600 Mn Viewers of Indian Television -- 2x the population of United States 105 Mn Cable & Satellite Households in India Mn in United States 3.5 Bn movie tickets sold annually for movies in India x the size of the second largest market Yet Indian Media & Entertainment Industry Valued at $25 Bn -- Market Cap of Walt Disney alone is $64 Bn Source: IDFC SSKI Report ( Feb 2010) 9

10 Network18

11 New Focused Structure Promoters 56.81% Network18 (Listed) Yellow Pages/Magazines Web % New TV18 (Listed) Events 18 Sports18 DEN & Yatra 51% Homeshop18 100% Capital18 Newswire18 70% 50% Viacom18 SetPro18 66% TIFC 50% Infomedia18 (Press) 48% IBN Lokmat (Listed Held for sale) 100% Sun18 North 11

12 New TV18: An Integrated TV Company Business GEC New TV18 News Youth Children 12

13 New TV18: Vertical Integration Into Pan-India Distribution NEW CHANNELS (OWN & 3 RD PARTY) Sun18 will distribute a total of 33 channels (10 of Network of Sun + 3 of Disney) across platforms on an all India basis; plans to add other channels 13

14 New Network18: Digital, Ecommerce and Publishing Assets Digital Publishing New Network18 E Commerce 58% Investments Emerging New TV18 14

15 Digital Assets: India s Destination of Choice Business Portal Local Search World s 3 rd largest business portal 2 nd largest Indian website Local info platform Premier end-to-end business and finance destination for Indians all across the world 5 mn + unique users / month Leading general interest destination which is now the gateway to the web for Indian internet users 8 mn unique users / month Leading local information & search platform Covers 74 cities in India; 3 mn businesses listed already E-Commerce Leading websites for travel bookings, entertainment and B2C e-commerce Mobile Provides content and applications such as WAP sites, Mobile Applications and SMS & Voice services Comprehensive Portfolio of Internet and Mobile Assets 15

16 Publishing: Building on Yellow Pages & Magazines Leadership Yellow Pages Magazines Print Auto Business Engineering #1 with 40% market share 3 mn copies distributed annually in 26 cities Reach of 1.5 mn businesses across 1,500 categories Photography Computer Gadget B2B Search India s largest B2B publisher Leader with 20 magazines Readership of 1+ mn India s leading portfolio of Industrial Directories, Office Directories, Exporters Guides and Construction Guides 16

17 HomeShop18: Leveraging the Indian Retail Opportunity On Air and Online Shopping Destination Robust Infrastructure 24 hour in-house call centre Deliver to 2,750 towns One of The Largest Selection of Products and Brands Under One Roof 17

18 Investments: Stakes in High Potential Businesses Media & Entertainment Education Leading MSO and Digital Cable Provider Colosceum: New Age Production House Digital School Education Company Film exhibition Employability and Skill- Enhancement company New Media Consumer Electronics Leading Online Travel Portal IP driven MVAS player Consumer electronics leader in digital channels India s No 1 Digital Agency and Ad Network Near Liquid Investments: Den and Yatra Valued At Over $100 MM 18

19 Rapid Growth in Partnership with Global Giants Managed Revenues* (USD Mn) Global partnerships across media platforms Leading global entertainment content company World's leaders in news and information delivery 470 CAGR 83% :50 JV for Partner in English news GEC/Youth/Kids/Music 174 Recognized world leader in business news World s leading business magazine Partners in business news Partners in business magazine publication * Managed Revenues: Total revenues managed by the group without adjustment for ownership 19

20 Growth so far driven by Advertising Revenues; Significant Subscription Opportunity Ahead

21 Existing Subscription Opportunity US$ 4 Bn Market Today Broadcasters % Share of Sub Revenue (1) Broadcasters 13% LCO s / Leakage 74% MSO 13% Immediate Subscription Revenue Opportunity All Values in USD MM Pro forma FY10 Ad Revenue Subscription Revenue Total Revenue Zee+ZNL (2) ~$326 ~$228 $592 NEW TV18 ~$261 ~$26 $289 NEW TV18 as a % of Zee+ZNL 75% 11% (1) Numbers include international sub revenue; Break up of Broadcasting revenues only (2) Zee financials are on a reported basis, New TV18 financials are on a managed basis Note: Conversion Rate of 46 INR / USD used 21

22 Sun18: Monetizing the Subscription Opportunity Create first truly pan-india distribution company Objective Become one of the dominant players in the pay TV subscription market Network18: 10 Channels Channels Distributed Sun Network: 20 Channels Disney: 3 Channels Highest GRP Delivering Bouquet In India Platforms / Market All platforms including cable, DTH, IPTV, HITS and MMDS All India Market 2 new companies being formed Structure Sun18 Media Services North Co. Sun18 Media Services South Co. India s Best Media Team Network18: Haresh Chawla, Rajesh Kamat Sun TV: Tony D Silva 22

23 Substantial Growth in Subscription Market Ahead DTH Driving Digitization Regulatory Push Likely to Further Increase Penetration 6 players with Projected Subs Recent TRAI Tariff Order mandates addressable system service providers (DTH, IPTV, HITS, Digital Cable) to deep pockets 32 provide pay channels on an a-la-carte basis post Jan 1, 2011; additionally, minimum monthly subscription not 25 to exceed Rs 150 DTH Subs in Mn Actual Subs Above moves likely to reduce prices and incentivize digital platform adoption Digitization Improving Broadcasters Negotiating Position Broadcaster Share Expected to Double by 2013 No bandwidth / channels constraint in the digital platforms Ability to control access to content Carriage fees stabilizing / reducing on the analog side 23

24 Key Financials

25 Network18 Consolidated P&L - Quarterly By Business Revenue (US$ MM) EBITDA (US$ MM) US$ MM 9 TV18 IBN18 HS18/TIFC/Others US$ MM TV18 IBN18 HS18/TIFC/Others (3.0) (11.3) (0.7) (1.1) (2.4) (3.3) (2.6) (4.3) (8.0) (2.2) 0-15 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Notes: 1) Others includes Setpro18, Events & Sports Management and Advisory Services revenues besides adjustments for inter-company revenues 2) IBN18 revenues have increased in Q2 FY10 on account of consolidation of 50% of Viacom18 financials (compared to 33.71% consolidation in Q1) 3) Conversion rate of 1USD = 46INR used across all quarters 25

26 New TV18 Pro Forma P&L - Quarterly By Business Revenue (US$ MM) EBITDA (US$ MM) US$ MM 60 TV18 IBN18 V US$ MM 8 TV18 IBN18 V (6.3) (1) (2) 30-2 (4) (4) Notes: Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY10 Q3FY10 Q4FY10 Q1FY11 1) Management Accounts - Not Audited 2) Viacom18 Numbers Reflect 50% New TV18 Shareholding 3) Conversion rate of 1USD = 46INR used 26

27 New TV18 Pro Forma Balance Sheet Balance Sheet (STANDALONE) Reported FY2010 All Values in USD MM Pro Forma FY2010 Sources of Funds Equity Debt Application of Funds Fixed Assets (Net Block) Investments Viacom18 Cash & Equivalents Net Current Assets P&L A/c Metrics Net Debt (24) 21 Debt/ Equity Net Debt/ Equity (Net Debt NCA) / Equity Note: Conversion rate of 1USD = 46INR used 27

28 Network18 Consolidated Balance Sheet (Extract) All Values in USD MM As at As at As at As at (Audited) (Audited) (Audited) (Audited) SOURCES OF FUNDS Equity Debt Minority interest APPLICATION OF FUNDS Fixed assets (net block) Goodwill (on consolidation) Investments Cash & Equivalents Net current assets Profit & Loss Net Debt (net of cash equiv) Debt / Equity Net Debt / Equity (Net Debt NCA) / Equity Note: Conversion rate of 1USD = 46INR used 28

29 A Final Word Amount in USD MM ZEE ENTERTAINMENT NETWORK18 FY09 FY10 FY09 FY10 Financial Performance Sales % Growth 1% 66% Advertising Subscription EBITDA (44) (6) EBITDA Margin 25% 28% -26% -2% Net Profit (40) (29) Market Data Market Cap 3, Net Debt EV 3, Share Price (INR) Market Multiples EV/Sales 6.8X 2.0X P/E 32 NA 12% Note: Conversion rate of 1USD = 46INR used 29

30 Summary Fastest Growing and Most Diversified Media Company Unmatched Collection of Market Leading Brands New Simplified Structure & Focused Business Model Recent Results Demonstrate Profitability Focus Strategic Alliance With Sun to Help Monetize Large Subscription Opportunity Uniquely Positioned to Benefit from Industry Growth Potential 30