ZEE Investor PPT Sept 2012 v1akamai.vidz.zeecdn.com/zeetele/pdfs/zeeinvestorppt...Analog Cable...
Transcript of ZEE Investor PPT Sept 2012 v1akamai.vidz.zeecdn.com/zeetele/pdfs/zeeinvestorppt...Analog Cable...
COMPANY OVERVIEWSEPTEMBER 2012
DISCLAIMER
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Some of the statements made in this presentation are forward-looking statements and arebased on the current beliefs, assumptions, expectations, estimates, objectives and projectionsof the directors and management of Zee Entertainment Enterprises Limited (ZEE) about itsbusiness and the industry and markets in which it operates.
These forward-looking statements include, without limitation, statements relating to revenuesand earnings.
The words “believe”, “anticipate”, “expect”, “estimate”, “intend”, “project” and similarexpressions are also intended to identify forward looking statements.
These statements are not guarantees of future performance and are subject torisks, uncertainties and other factors, some of which are beyond the control of the Companyand are difficult to predict. Consequently, actual results could differ materially from thoseexpressed or forecast in the forward-looking statements as a result of, among otherfactors, changes in economic and market conditions, changes in the regulatory environmentand other business and operational risks. ZEEL does not undertake to update these forward-looking statements to reflect events or circumstances that may arise after publication.
ZEE ENTERTAINMENT
Largest Indian TV Network in the World
Sports Channels
Regional Entertainment
Music & Lifestyle
Hindi Entertainment
English Entertainmen
t
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Leading Hindi Entertainment Network
Leading Sports Network
Leading Regional Entertainment Network
English Entertainment
Indian Music & Lifestyle Network
Our Growth Journey
1992
1995
1998
1999
• Flagship channel - Zee TV launched
• IPO of Zee Telefilms Limited
1995
2002
2010
2011
• Zee TV goes global
• Zee Network launched in UK
• Distribution partnership with Turner, a Time Warner subsidiary
• Zee acquires the regional entertainment networks
• Acquires another 45% stake in Ten Sports, after acquiring 50% in 2007
• Zee, Star, Turner & Den form a distribution alliance – Media Pro Enterprise India
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• M&E industry size estimated at Rs 728 bn in 2011
• Television sector estimated at Rs 330 bn, constituting 45% of the industry
• Television industry recorded growth of 11% in 2011
INDIAN MEDIA SECTOR
Source: FICCI-KPMG Report 2012 Source: Worldwide Media and Marketing Forecasts, Group M, Summer 2011
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0.33%
0.85%
0.97%
0.76%0.86%
0.76%
India UK US China Japan World
Media Spend as % of GDP
71 82 88 103 116 130
140158 169
194
214
250
15%
14%
7%
16%
11%15%
2007 2008 2009 2010 2011 2012P
Television Industry Revenues (Rs bn)
Ad revenues Sub revenues TV growth rate (%)
INDIAN TV HH'S AT A GLANCE
Digital
26 Mn
C&S HHlds
116 Mn
TV Owning Households
142 Mn
Total Households231 Mn
Digital
42 Mn
C&S HHlds
126 Mn
TV Owning Households
148 Mn
Total Households231 Mn
Growth
+4 %
+9 %
+63 %
2011 2012
Source: TAM TV Universe Update 2012
All India Household figures in million
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INDIA – RAPID DIGITISATION
Source: FICCI-KPMG Report 2012
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• DTH industry saw a growth of over 30% in 2011
• Industry is adding almost a million subscribers each month
• Digitization Act passed by the Govt. likely to give a further push to thedigitization wave
69 68 68 59 5032
124
4 5 6 19 3249
67 75
1628
3746
53 64 78 86
67
8
88
88
8
0
0
00
12
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2009 2010 2011 2012P 2013P 2014P 2015P 2016P
No. Of Subscriber (In Millions)
Analog Cable Digital Cable DTH DD Direct IPTV
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PRODUCT OFFERINGHINDI ENTERTAINMENT
HINDI MOVIES
REGIONAL LANGUAGE ENTERTAINMENT (R-GEC)
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ENGLISH ENTERTAINMENT & MOVIES
PRODUCT OFFERINGSPORTS
MUSIC & LIFESTYLE & SPECIAL INTEREST
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HD
INTERNATIONAL ALTERNATE LIFESTYLE
Advertising, 52%
Subscription
Domestic, 30%
Subscription
International, 13%
Others, 4%
Advertising Subscription Domestic Subscription International Others
REVENUE PIE
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FY2012 Revenues: Rs 30,406 million
BUSINESS PERFORMANCE
HINDI ENTERTAINMENT CHANNELS
• Zee TV is the largest Hindi entertainment channel of the world
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HINDI MOVIE CHANNELS
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Source: TAM Media Research;
Period: April to March 2012
TG: CS 4+, HSM;
MAX ratings- non-cricket
Zee’s Cinema Channels - Zee Cinema, Zee Premier, Zee Action, Zee Classic
Relative Viewership Share
Zee's Cinema
Channels, 30.8%
Star Gold, 29.2%
MAX, 23.5%
UTV, 12.3%
Filmy, 4.2%
STRONG MOVIE LIBRARY
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Largest Hindi Movie Library in the World
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SPORTS CHANNELS – KEY PROPERTIES
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CRICKET, SOCCER, TENNIS & MORE
• Ten Sports, Ten Action, Ten Cricket, Ten Golf - The leading sports network ofthe country
• Key properties in FY13:
• Cricket: India vs Sri Lanka, South Africa vs New Zealand, Pakistan vs SriLanka, South Africa vs Pakistan, Zimbabwe vs South africa
• Others: WWE, UEFA Champions League, Europa League, US Open, ATPevents, Moto GP, Tour De France, US PGA, European PGA
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ENGLISH & NICHE CHANNELS
• Tie-ups with leading studios across the world
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ZEE MARATHI - HIGHLIGHTS
• Leading GEC in Maharashtra
• Library of over 9,000 hours & rights to over 400 movie titles
• Key properties: Uncha Maza Zoka, Tu Tithe Me, Mala Sasu Havi, Hafta Bandh Jagna Suru
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Source: TAM, Period: April to March 2012, CS 4+, All Maharashtra
Relative Viewership Share
ETV
Marathi, 31.
1%
Star
Pravah, 30.6
%
Zee
Marathi, 27.
7%
Mi
Marathi, 4.6
%DD10
Sahyadri,
3.5%
Saam
TV, 2.5%
Star
Jalsha, 41.5
%
Zee
Bangla, 35.8
%
ETV
Bangla, 12.9
%
Rupashi
Bangla,
4.8%
Aakaash
Bangla, 2.9%
Mahua
Bangla, 2.1%
ZEE BANGLA - HIGHLIGHTS
• Leading GEC in West Bengal with dominant share in non-fiction programming
• Library of over 9,000 hours & rights to over 600 movie titles
• Key properties: Banglar Sera Paribar, Dadagiri Unlimited III, Rashi, Saat Paake Bandha, Keya Patar Nouko
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Source: TAM, Period: April to March 2012, CS 4+, All WB
Relative Viewership Share
Gemini
TV, 39.4%
Maa
Telugu, 22.8%
ETV
Telugu, 19.7%
Zee
Telugu, 18.1%
ZEE TELUGU - HIGHLIGHTS
• Leading GEC in Andhra Pradesh
• Library of over 7,000 hours & rights to over 575 movie titles
• Key properties: Pasupu Kumkuma, Muddubidda, Kalavari Kodallu, Super Mom,
Chittam Chittam Prayachittam
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Source: TAM, Period: April to March 2012, CS 4+, All AP
Relative Viewership Share
ZEE KANNADA - HIGHLIGHTS
• Zee Kannada - Steadily gaining market share
• Library of over 6,500 hours & rights to over 150 movie titles
• Key properties: Radha Kalayana, Parvathi Parameshwara, Panduranga Vittala
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Source: TAM, Period: April to March 2012, CS 4+, All Karnataka
Relative Viewership Share
Udaya
TV, 42.1%
Suvarna, 23.
4%
Zee
Kannada, 20.
1%
ETV
Kannada,
14.3%
• Presence across 5 continents
through over 23 beams
• Catering to both South Asian as well
as non South Asian communities
• Recent local language launches in
Russia, South East Asia, Saudi Arabia
• International subscription
contributed 13% of company top line
in FY2012
• Renewed focus on advertising as a
source of revenues
INTERNATIONAL OPERATIONS
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STRENGTHENING PAY REVENUES
• Zee Turner is a 74:26 joint venture between ZEE and Turner currently distributingZEE channels, Zee News Channels and Turner Channels
• Star-Den is a 50:50 JV between Star India and DEN for distribution of Starchannels, Fox channels and third party channels like NDTV Channels
• Media Pro distributes all the channels which were earlier distributed by Zee-Turnerand Star Den
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50% 50%
DIGITIZATION: POTENTIAL GAME CHANGER
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Underpenetrated TV market Low ARPUs
Additional business models emergingMandatory digitization hugely beneficial
India TV market expected to reach ~180mn HHs by 2016
Alternate distribution platforms to augment revenue streams
Market
TV ARPU
(USD)
Movie Ticket
(ATP in USD)
TV ARPU as a
multiple of ATP
USA 56.9 7.9 7.2
UK 45.4 9.0 5.1
Malaysia 20.0 3.9 5.1
India 3.5 2.8 1.2
If pay TV ARPU reaches upto 3x of a multiplex ticket price, it will reach a healthy 8-10 USD
Source: PwC Media Report (2011) + IDFC research report
Source: FICCI KPMG Report 2012
Markets Deadline for digitization
Delhi, Mumbai, Kolkata, Chennai 31st October, 2012
Cities with population of 1mn+ 31st March, 2013
All urban areas 30th September, 2014
Rest of the country 31st December, 2014
98% 97% 90%78%
61%
China Germany Brazil Indonesia India
TV HH's penetration-2011(%)
FOCUSED INVESTMENTS
India.com OTT Distribution
Platform
24-hours Golf
Channel
New Arabic Channel Bangla Movie
Channel
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Education Channel
H1 FY2013 RESULTSApril – September 2012
FINANCIAL RESULTS
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*Note: Operating revenues for FY11 include a non-recurring one time fees of Rs 700 million forpremature termination of sporting events rights.
Y-o-Y
Growth
Operating Revenues* 30,088 30,406 1% 14,110 17,964 27%
Expenditure 21,870 23,010 5% 10,531 13,456 28%
Operating Profit (EBITDA) 8,219 7,396 -10% 3,579 4,508 26%
EBITDA Margin 27% 24% 25% 25%
PBT before exceptional items 8,725 8,407 -4% 3,917 4,836 23%
Less: Provision for Tax 2,671 2,500 -6% 1,015 1,391
PAT before exceptional items 6,054 5,907 -2% 2,902 3,445 19%
Add: Exceptional Items 197 - - -
PAT after exceptional items 6,251 5,907 -6% 2,902 3,445 19%
Less: Minority Interest / Share of
Associates -118 16 (33) (12)
(Rs million) Six Months
FY12 FY13FY11 FY12 Growth
BALANCE SHEET
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• Debt free balance
sheet
• Strong net cash
position
• Return on Avg.
Capital Employed
of 22% for FY12
Equity & Liabilities
Shareholder's Funds 34,354 37,443
Non Curremt Liabilities 240 306
Current Liabilities
a) Trade Payables 3,613 3,460
b) Other Current Liabilities 3,273 4,194
c) Short Term Provisions 1,705 10
Total - Equity and Liabilities 43,185 45,413
Assets
Non Currrent Assets
a) Tangible Assets 2,164 2,653
b) Intangible Assets 7,035 7,083
c) Capital WIP 201 34
d) LT Loans & Advances 1,415 1,701
d) Others 1,328 1,300
Currrent Assets
a) Current Investments 7,324 7,739
b) Inventories 7,339 7,583
c) Trade Receivables 8,690 10,690
d) Cash & Bank Balance 3,283 2,286
e) Others 4,374 4,386
Minority Interest 32 -42
Total Assets 43,185 45,413
(Rs million)As on 31
st
March, 2012
As on 30th
Sept., 2012
18,354
21,773 21,998
30,088 30,406
5,423 5,480 6,135 8,219 7,396
2008 2009 2010 2011 2012
Revenues and Operating Profit (Rs in million)
Revenue Operating profit (EBITDA)
CONSISTENT PROFITABLE GROWTH
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Consistent dividend payout since 1994
Revenue CAGR: 13.5%
OUTLOOK AND STRATEGY
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Revenues
• Digitization: Big
pay opportunity
• Advertising:
Continued growth
• New streams:
Digital
media, syndication
Content
• Innovation &
quality
• Regional
revolution
• Niche content
• Broadcast to
narrowcast
Our Strategy
Enhance our leadership position in the genres we compete
Continue to run our business as best in class
Deploy strong cash flows to improve returns to shareholders
Returns
• Consolidation
• Collaboration
• Disciplined
investments
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Pioneer in several entertainment genres
World’s leading Indian TV network with 650 million households in over 168 countries
Consistent performer since inception; Shareholder value CAGR of >30% since listing
The global force in entertainment