date: may 17, 2006 · metro dwarka : 6 stations till 2011 delhi 80+ hoardings : spread across city...
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Date: May 17, 2006
2
Certain statements in this release concerning our future growth prospects are forward-looking statements,
which involve a number of risks, and uncertainties that could cause actual results to differ materially from
those in such forward-looking statements. The risks and uncertainties relating to these statements include,
but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth,
intense competition in our business segments, change in governmental policies, political instability, legal
restrictions on raising capital, and unauthorized use of our intellectual property and general economic
conditions affecting our industry. ENIL may, from time to time, make additional written and oral forward
looking statements, including our reports to shareholders. The Company does not undertake to update any
forward-looking statement that may be made from time to time by or on behalf of the company.
Disclaimer
3
1. Company Snapshot
2. Business Overview
3. Directors & Management
4. Key Financials FY 2006
5. Ownership Structure & Share Price Performance
6. Future Business Outlook
Agenda
4
Company Snapshot
5
Company Snapshot
Times Innovative Media Private Limited (TIMPL), incorporated on October 27, 2005
Subsidiary:
Radio Broadcasting brand Radio Mirchi
Out-of-home Media brand Times OOH; and
Experiential Marketing brand 3600 Experience
Business:
– ENIL
– TIMPL
29.0%FY06 EBITDA Margin:
Rs. 408.3 mn (US$ 9.1 mn)FY06 EBITDA:
Rs. 1,406.7 mn (US$ 31.3 mn), including other income of Rs. 32.0 mn (US$ 0.7 mn)
FY06 Total Income:
February 15, 2006Listed:
1999Incorporated:
Mumbai, IndiaHeadquarters:
6
Our Vision is to be “A Leading City-centric Media Company By Delivering Unique Audiences Through Media Vehicles Like FM Radio, Experiential Marketing And
Out-of-home Media”
ENIL: Unique Ability to Offer Integrated Media Solutions
7
Business Division Snapshot
Samsung, Set India, SBI, Mastercard, Deutsche Equities, Castrol India, Trent-Tata
Key Customers:
600+ events including Femina, Filmfare and Pravasi Bharti in FY2006
3600 Experience:
Bharti, Hindustan Times, HLL, HSBC, Standard Chartered, Cadbury, Coca-Cola
Key Customers:
Mumbai (1400+ Bus Queue Shelters), Delhi Metro (13 Stations), Kolkata (80 Hoardings)
Delhi – Noida toll bridge (66 Displays) and LED
Times OOH:– Till FY 2006
– In April 2006
Hutch, HLL, Sahara, BCCL, Bharti, Pepsi, ICICI, Dabur, Set Max
Key Customers:
7 Stations (Delhi, Mumbai, Kolkata, Chennai, Pune, Ahmedabad and Indore)3 Stations (Bangalore, Hyderabad and Jaipur)22 additional Stations in next 12-18 months
Radio Mirchi:– Till FY 2006
– Launched in April 2006– Planned
8
Business Overview
9
ENIL Key Highlights
• We are operating in high growth industry
• We are well prepared and well positioned for the increasing competition
• We exceeded our set financial goals for FY06
• We have managed to increase our market share in radio to over 50%
• We have maintained our number 1 status in listenership
• We launched 3 new radio stations in Jaipur, Bangalore and Hyderabad within 75
days of the completion of bidding process
• We won Out-of-Home advertising rights of Delhi Metro (13 stations), Kolkata (80
hoardings) and Delhi-Noida toll bridge (66 displays) for total license fee of Rs
340.0 mn (US$ 7.6 mn) payable over a license tenure of 2 - 5 years
• We have identified our challenges for next year and are working towards
addressing them
10
High Growth Projected for Radio Industry
1.6
1.4
1.11.0
0.7
0.6
0.3
0.0
0.5
1.0
1.5
2.0
Thailand New
Zealand
Singapore World
Average
Philipines China India
Ad Spent as a % of GDP Radio Industry Share in Ad Spend
15.3
12.5
9.48.7
6.5
4.4
2.9
-2.0
1.0
4.0
7.0
10.0
13.0
16.0
Philipines New
Zealand
Singapore World
Average
Thailand China India
Source: Zenith Optimedia
Indian Ad Spend: Potential for ad industry to grow to Rs 480 billion ($11 billion) in 10 years
Indian Radio Industry:PWC estimates radio industry to grow at
CAGR of 32% in next 5 years increasing its ad share to 5% and size to Rs. 12 billion
11
• Roll-out of Phase II of privatization
• Fixed License Fee regime changed to OTEF + Revenue share
• Annual license fee 4% of gross revenues
• FDI in Radio increased to 20%
• From existing 12 cities to 91 cities
• From existing 21 stations to approximately 300 stations
• From existing 7 players to 43 players
Growth opportunity for private FM:
From current 3% (Rs 3.7 billion) of Rs 129 billion to 8% (Rs 38.0 billion) of Rs 480 billion in ten years starting FY 07
Radio Industry: Positive Regulatory Reforms
12
We are now present in all the top 13 towns (pop 2 mn +)
Chennai
Delhi
Kolkata
PuneMumbai
Ahmedabad
Lucknow
Kanpur
Jaipur
Hyderabad
Bangalore
Surat
Phase I excluding Indore
Phase II – A+ & A circles
Nagpur
• ENIL won 25 licenses in the Phase II bidding
• Only company to have presence in top 13 towns with population of 2 mn+
• Only incumbent in all the four metros
13
Player Total stations Of top 13 towns
• Adlabs 44 7
• South Asia/Kaal Radio 40 10
• ENIL 32 13
• Radio City 20 11
• Dainik Bhaskar 17 4
• Bag Films 10 0
• Zee/Century 8 0
• Thanthi/Today/Midday 7 1/3/7
• HT/Positive/Raj Pat 4 4/0/1
• Red FM 3 3
FM Radio – Competitive landscape
14
The Radio Station India Tunes To
20.519.0
12.0
2.5
0.0
10.0
20.0
30.0
Radio Mirchi Radio City Red FM Go
Lakhs
Listnership in MumbaiListnership in Delhi
#1 Listenership Share
13.5
17.3
36.8
0.0
10.0
20.0
30.0
40.0
Radio Mirchi Radio City Red FM
Lakhs
Source: MRUC Survey, AC Neilson (ORG-Marg-Wave 8, fieldwork Jan 06 toMar 06. All Sec 12+)
Source: MRUC Survey, AC Neilson (ORG-Marg-Wave 8, fieldwork Jan 06 toMar 06. All Sec 12+)
15
Mirchi a “Must-Have” Media Vehicle
Radio Mirchi Today Reaches More People Than The #1 TV/Print Media Brands
16
• Innovative Content:– Strong relationships with Hindi, Bengali and
Tamil film fraternity
– Exclusive music breaks
– Mature research culture – music/listenership
• Success in Diverse Markets– Experience in establishing superior linkage
between Marketing and Programming
– Customized content in 10 distinct markets
Track Record of Developing Innovative Content & Operating in Diverse Markets
We Are Best Positioned For Success In New Cities Across India
17
Superior Sales Capabilities
• Dedicated 180 member sales team across 10 centers
• Offering unique and innovative solutions to clients– Hutch ‘Pink Campaign’
• Strong emphasis on training
• Mirchi Activation: Pioneers in the radio space
18
8,500 9,00010,500
12,00013,500
15,500
17,500
0
4000
8000
12000
16000
20000
2004 2005 2006 2007E 2008E 2009E 2010E
Indian OOH Industry Growth
Source: PWC report - The Indian Entertainment and Media Industry
PWC estimates Out-of-Home media industry to grow at CAGR of 14% in next 5 years increasing its ad share to 7% and
size to Rs. 17.5 billion
• Tendered PropertiesIncreasing tender of properties to organized players
• Long term ContractsOpportunities for acquiring or taking long term rights for attractive sites in selected cities
• Technology & InnovationBring in technology based innovative OOH solutions like Light-emitting diode (LED) screens
Indian Out of Home Industry and Growth Drivers
Rs. In mn
19
Bus SheltersTill Dec 2008
South Mumbai & West Mumbai (except Central) : Target Quality: Affluent Population Mass1400+Sites : Choice & Coverage
DND Flyover
Mumbai
Metro Stations
Metro CP : 7 Stations Till 2007Metro Dwarka : 6 Stations Till 2011
Delhi
80+ Hoardings : spread across city Till 2011
Kolkata
66 displays : spread across flyway Till 2008
Must-Win Market
Must-Win Market
Must- Presence Market
Multi City- Multi MixTimes OOH Media : Ability to Offer Integrated Marketing Solutions
20
• Imported 4 LED screens
– Put up 1 LED screen at Sahara Mall –Gurgaon
• Planned Rs. 350.0 mn (US$ 7.8 mn) over the time
• Positives of LED
– Dynamic - Television Outdoors, Motion and sound
– Aesthetic - Superior quality of color, Weather Proof
– Flexible - Scalable to any dimension– Three Revenue Streams
Branding
Multiple Clients
Content Sales
Focus on new technology – LED Video Walls
21
• Focus on big ticket events:
Conceptualizing, marketing and
execution
– Filmfare Awards, International Film
Festival of India, 2004, Femina Miss
India
– Ability to raise sponsorships
• Marquee client list:
– Bennett Coleman & Co Ltd, Samsung
India Ltd., SET India Pvt Ltd, State
Bank of India, Mastercard, Deutsche
Bank, Castrol India
• Now focusing on “wellness” not “illness”
approach
360o
Fashion & Lifestyle Third Party
• Produce and manage Filmfare awards & Femina Miss India Pageant (Internal clients – Times Group)
• Recently started building brands / properties such as the FDCI Fashion awards
• Conducted over 600 events in fiscal 2006
• Focus on moving towards big events
360° Experience: Move towards Large Ticket Business
2004200420042004 2005200520052005
22
• Rapid roll-out of stations
• Talent identification, training and retention
• Retaining and growing absolute listenership numbers
• Cost management – especially w.r.t marketing and payroll
• Music royalty regime – rationalization
• Development of listenership research standards and spread
across the country
Key Challenges facing ENIL
23
Board of Directors And Management
24
• Mr. Deepak M Satwalekar – Non-Executive and Independent Director
– MD and CEO , HDFC Standard Life
– Director on the board of Infosys, Asian paints, Nicholas Piramal & others
• Mr. N Kumar – Non-Executive and Independent Director
– Vice Chairman, Sanmar Group
– Director on the board of Bharti tele, The India Cement, MRF Ltd & others
• Ms. Rama Bijapurkar – Non-Executive and Independent Director
– Marketing Consultant
– Director on the board of Infosys, Godrej Consumer, Crisil, UTI Bank & others
• Mr. Ravi Dhariwal – Non-Executive Director
– Executive Director, BCCL
– Director on the board of BCCL, TIML
• Mr. A.P. Parigi – Managing Director and Chief Executive Officer
Board Driven company with emphasis on best corporate governance practices
Board of Directors
25
Strong & Experienced Management Team
Kaushik Ghosh, Senior Vice President, Marketing
Sharath Chandra, COO, ENIL International
Deputy CEO
Prashant Panday
Experience 17 years overall51/2 at ENIL
CFO
HarvinderjitSingh Bhatia
Experience16 years overall,
5 at ENIL
Business Head Times OOH
Farid Kureshi
Experience16 years overall,
4 at ENIL
SVP Legal & CS
Anil Fernandes
Experience15 years overall,
3 at ENIL
SVP, People Innovation
Prasad Swaminathan
Experience10 years overall,41/2 at ENIL
EVP, Regulatory Affairs
Ravi Narula
Experience33 years overall51/2 at ENIL
Tapas Sen, Executive Vice President, Programming
Nandan Srinath, COO, ENIL India
CEOAP Parigi
Experience
34 years overall
51/2 years at ENIL
Col. (Retd.) Nataraja Thiagarajan, Chief Technical Officer
26
Key Financials FY 2006
27
ENIL Financials - Key Highlights
• Initial Public Offer of 13.2 mn shares of Rs.10/- each at a premium of Rs. 152/-
aggregating issue proceeds of Rs. 2,138.4 mn
• Investment of Rs. 40.0 mn in 100% subsidiary Times Innovative Media Pvt.
Limited (TIMPL)
• One Time Entry Fee of Rs.1,301.0 mn for 25 new radio licenses and Migration fee
of Rs. 815.2 mn for existing 7 stations for 10 years
– Amortization of annual migration fee Rs.81.5 mn accounted in fourth quarter
• The Company granted 109,360 options at an exercise price of Rs.90/- each under
ESOS
• Written back provision for license fees of Rs. 98.8 mn no longer required
28
Consolidated Results in line with Analyst Expectations…
15.1%13.6%15.0%Margin (%)
212.4226.0230.0PAT
29.0%24.7%26.4%Margin (%)
408.3412.0415.0EBITDA
998.41,255.01,140.0Operating Expenses
1,406.71,667.01,555.0Total Income
ActualENAMJMMSIn Rs. mn
• TIMPL Actual results are for 5 months period from October 27, 2005 to March 31, 2006, as compared to annualised numbers in the Analyst report
• EBITDA Margins of 29% in FY06
• Exceptional item of Rs. 98.9 mn not included in PAT
29
ENIL Standalone - Strong Financial Performance
550
762
1202
0
200
400
600
800
1000
1200
1400
FY04 FY05 FY06
Revenue in Rs. Million
-245
-122
381
-300
-200
-100
0
100
200
300
400
FY04 FY05 FY06
EBITDA in Rs. Million
30
ENIL Standalone - How did we Spend…
21%
19%
19%
16%
7%
5%
5%3% 3% 2%
31
ENIL Standalone: Key Financials FY 2006
(5.29)
(23.5%)
(179.3)
(16.1%)
(122.6)
884.8
762.3
FYE 2005
(Audited)
5.48Recurring EPS (Rs.)
16.4%Margin (%)
196.6PAT
31.8%Margin (%)
381.4EBITDA
820.5Operating Expenses
1,201.9Total Income
FYE 2006
(Audited)In Rs. mn
• Increase in airtime sales of 57% in FY06 over FY05
• EBITDA Margins of 32% in FY06
• Exceptional item of Rs. 98.9 mn not included in PAT
32
Ownership Structure and Share Price Performance
33
Ownership Structure
By Category Top Shareholders
FII Holding increased from 12.45% at the time of allotment to 18.07%
72%
18%
6% 2% 1%1%
Promoters FIIs
Individuals Corporates
Directors & Employees Others 1.32%0.63Citigroup
1.62%0.77Morgan Stanley
1.68%0.80Macquarie
2.64%1.26HSBC (ME)
7.13%3.39BCCL
9.48%4.51Fidelity
64.18%30.52TIML
% HoldingShares (mn)
1. Total Paid up capital (in no. of shares) as on 31st March, 2006 (after exercise of Green Shoe Option) is 47,563,665
2. Others include Mutual Funds, Banks, HUF, Clearing Members, NRIs and Trusts Data as of March 31, 2006
34
Share Price Performance (1)
• 48.6% gain against Allotment price of Rs.162 per share
• Market Cap. :Rs. 11,446.2 mn
• Promoters holding : Rs. 8,162.3 mn200
220
240
260
280
15-Feb 1-Mar 16-Mar 31-Mar 18-Apr 2-May 15-May
Price (Rs.)
-
1.6
3.2
4.8
6.4
8.0
Share
s (Million)
Price (15/05/06) : Rs. 240.7
All time High : Rs. 287.5
All time Low : Rs. 197.0
Weighted Average : Rs. 239.8
Share Price
Volume
1. Share Price as traded on National Stock Exchange till May 15, 2006
19-Apr-06Fourth quarter and annual results above expectations
35
Media Companies Market Performance...
38.8x11,446240.7162.015-Feb-06ENIL
46.9x3,80084.970.004-Apr-01Mid-day Multimedia
NM15,640257.270.019-May-04NDTV
66.3x24,720527.7530.001-Sep-05HT Media
46.3x14,820295.2320.022-Feb-06Jagran Prakashan
1,12,530
13,290
Market Capital
(Rs. mn)
25-Nov-93
10-Jan-01
Listed On
152.3x272.830.0Zee Telefilms
50.5x333.9120.0Adlabs Films
P / E(1)
(x)
Price
15/05/06 (Rs.)
Allotment Price (Rs.)
1. Price / earning (P / E) multiple is calculated by dividing current price with reported LTM ordinary EPS
Stock Market is Valuing expected robust growth in Indian Media Industry
Source: Economic Times, BSE
36
Future Business Outlook
37
• Expand our footprint in radio broadcasting
– Rapid roll-out of 22 new stations
– Explore opportunities to become FM radio broadcasters in international
markets
• Maintain market leadership in fast growing radio industry
– Continuously invest in brand building and programming innovation
– Launch Visual Radio through mobile phones
– Leverage our footprint to capture additional income
– Exploit additional revenue streams like Mirchi Activation
Bright Future Outlook - ENIL
38
• Focus on Out-of-Home media growth
– Expansion of the network of out-of-home media sites managed by us
– Explore opportunities to lease sites on a long-term basis
– Introduce innovative technology and processes
• Establish long-term client relationships for Experiential Marketing
– Establish ourselves as a provider of innovative solutions
– Create own event properties at an appropriate time
– Focus on Life style, Fashion shows and Exhibitions
Bright Future Outlook - TIMPL
39
• News & Current Affairs
• FDI/FII cap
• Multiple frequencies
• Tradability
• Limitation on share transfer of main promoter for 5 years
Radio Industry: Pending agenda
Thank You
41
Back-ups
42
ENIL Consolidated: Key Financials FY 2006 (Above the Line Items)
29.0%
71.0%
19.7%
32.4%
14.3%
4.6%
100.0%
2.3%
1.2%
13.0%
83.5%
% of
Revenue
408.3EBITDA
17.0Out of Home Media
998.4Total Operating Expenses
276.9Employee Costs
455.7Administration and Other Exp.
64.3License Fee
Production Expenses:
201.5Other Production expenses
32.0Other Income
1,406.7
183.6
1,174.1
FYE 2006
(Unaudited)
Total Income
Event Income
Airtime Sales
In Rs. mn
43
ENIL Consolidated: Key Financials FY 2006 (Below the Line Expenses)
3.0%42.7 Depreciation
15.1%212.4PAT
17.7%Effective Tax rate (%)
3.2%45.6Taxation(1)
18.3%258.0 PBT
5.8%81.5 Amortisation of Migration Fee
26.1
408.3
FYE 2006
(Unaudited)
1.9%Interest
Less:
29.0%EBITDA
% of
RevenueIn Rs. mn
Note:
1. For ENIL tax calculated as per provisions of Section 115JB of Income Tax Act, 1961 (Minimum Alternate Tax), TIMPL tax is calculated at normal tax rates
44
ENIL: Key Financials FY 2006 (Above the Line Items)
235.0
(122.5)
884.8
160..5
262.3
63.6
398.5
762.3
12.8
749.4
FYE 2005
(Audited)
31.3%
(16.1%)
116.1%
21.1%
34.4%
8.3%
52.3%
100.0%
1.7%
98.3%
% of
Revenue
62.3%
NM
(7.3%)
51.0%
72.9%
(4.9%)
(83.9%)
57.7%
117.2%
56.7%
Growth
(%)
31.7%
31.7%
68.3%
20.2%
37.7%
5.1%
5.3%
100.0%
2.3%
97.7%
% of
Revenue
381.4Adjusted EBITDA(1)
1,201.9Total Income
381.4EBITDA
820.5Total Operating Expenses
242.3Employee Costs
60.5Other Production expenses
453.4Administration and Other Exp.
Production Expenses:
64.3
27.8
1,174.1
FYE 2006
(Audited)
License Fee
Other Income
Revenues
In Rs. mn
Note:
1. Assuming license fee for FY 2005 under revenue share regime on like basis with FY 2006
45
ENIL: Key Financials FY 2006 (Below the Line Expenses)
(23.5%)16.4%Margin (%)
21.7%53.441.8 Depreciation
NM(179.3)196.6PAT
NM15.3%Effective Tax rate (%)
NM0.135.5Taxation(1)
NM(179.2)232.1 PBT
(100%)0.3Preliminary Expenses w/off
(23.5%)19.3%Margin (%)
(100%)NA81.5 Amortisation of Migration Fee
25.9
381.4
FYE 2006
(Audited)
793.1%2.9Interest
Less:
NM(122.6)EBITDA
Growth
(%)
FYE 2005
(Audited)In Rs. mn
Note:
1. Tax calculated as per provisions of Section 115JB of Income Tax Act, 1961 (Minimum Alternate Tax)
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