investor presentation, july 2009
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Reliance MediaWorks
February 2011
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This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Reliance MediaWorks Limited (the “Company”), nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment therefore.This presentation contains statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or current expectations of the Company or its directors and officers with respect to the results of operations and financial condition of the Company. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” or other words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in such forward-looking statements as a result of various factors and assumptions which the Company believes to be reasonable in light of its operating experience in recent years. The Company does not undertake to revise any forward-looking statement that may be made from time to time by or on behalf of the Company.No representation, warranty, guarantee or undertaking, express or implied, is or will be made as to, and no reliance should be placed on, the accuracy, completeness or fairness of the information, estimates, projections and opinions contained in this presentation. Potential investors must make their own assessment of the relevance, accuracy and adequacy of the information contained in this presentation and must make such independent investigation as they may consider necessary or appropriate for such purpose. Any opinions expressed in this presentation are subject to change without notice. None of the Company, the placement agents, promoters or any other persons that may participate in the offering of any securities of the Company shall have any responsibility or liability whatsoever for any loss howsoever arising from this presentation or its contents or otherwise arising in connection therewith.This presentation and its contents are confidential and should not be distributed, published or reproduced, in whole or part, or disclosed by recipients directly or indirectly to any other person. In particular, this presentation is not for publication or distribution or release in the United States, Australia, Canada or Japan or in any other country where such distribution may lead to a breach of any law or regulatory requirement. The information contained herein does not constitute or form part of an offer or solicitation of an offer to purchase or subscribe for securities for sale in the United States, Australia, Canada or Japan or any other jurisdiction. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to or for the benefit of US persons absent registration or an applicable exemption from registration
Disclaimer
Film processing13% DI
2% Eqp rent2%
Restoration6%
TV prod5%
Cinemas72%
Reliance ADA Group stepped into the company in FY 2006
Revenues: Rs 1,250 million(USD 26.6 million)
Film processing
53%
Cinemas33%
Film prod14%
Operations in Mumbai only
8 theatres (32 screens)
14 professionals with > 10 years’ experience
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Revenues: Rs 6,720 million(USD 143 million)
FY 2006 FY 2010 (60% CAGR over 4 years)
New businesses added, to Yield further results FY 2011 onwards
Market leader in every business
Operations in 118 cities, 5 countries
156 professionals with > 10 years’ experience
Projects under implementation in 2011: Studios, TV Post
82% from businesses created in last 4 years
56% from businesses in last 2 years
FY 2010
New business areas to
incrementally add to revenues
in the coming years
FY 2006
Performance in FY11
FY 10 YTD
Studio operational with 70,000 sq ft
BPO operational with 90,000 sq ft
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Revenue and EBIDTA have increased as compared to last year.
With the recent commissioning of the Studios and the BPO facility, we expect film and media services division to be a substantial contributor to our business portfolio
YTD Dec’10
Revenues: Rs 7095 million(USD 157 million)
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The growth opportunity is very large….
Films
Net Box Office Collection (“NBOC”) of top 50 films has gone up by 32%, to Rs. 15,050 million (USD 334 Million) in CY 2010 from Rs. 11,440 million (USD 254 million) in CY 2008
Big Budget films (>500 prints) – 48 in CY 2010 versus 30 in CY 2008
Average cost of production of big budget films has increased by more than 50% over the last 5 years
Television
Penetration in TV households 60% in FY 2010 versus 50% in FY 2006
460 channels in FY 2010 versus 120 channels in FY 2004
The number of big format shows has increased substantially over the last 5 years
Comprehensive presence across production value chain – Film, TV and Ad Commercials
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Film & Media Services (Domestic)
Services Suite
Studios
TV Broadcast
Film cameras
Lights, Grips
Set Design & Construction
Lab: Mumbai, Chennai, Kolkata
Digital Intermediate
Promos
India VFX
Sub-titling
Digital Cinema Mastering
Film PostProduction services
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200,000 sq ft state of the art Studio facility being built at Film City
Phase I (70,000 sq ft with 3 sound stages) - completed recently
Phase II and III expected to be ready by May and August 2011
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70,000 sq. ft. – Jan 2011 launchPhase I
Picture: Jan 5, 2011
India's first and only full service Studio Complex designed by LA architects and built to Hollywood standards Design includes stringent fire protection, detection and fire fighting facilities adhering to LA County Fire Safety Norms SOPs being developed by LA consultants based on Hollywood Best Practices for studio operations Experienced expat from LA assisting an Indian team of professionals in implementing SOPs and setting up operations USPs
Facility for films, TV shows and TV commercials Largest, fully air-conditioned facility in Mumbai Built-up area of 2 lakh sq ft over a 7 acre property in Film City Clear internal height of 58 ft 8 silent sound stages of different sizes
Studio facility is a natural extension to Production Services portfolio
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Film Post
2008 2009 2010 2011 (Half Year)
No. of films 140 161 163 89
No. of analogue prints 19,777 26,280 23,957* 14,502
No. of analogue prints / film 141 163 147 163
No. of digital prints - - 1,069 1,286
No. of films done for DI - 34 45 34
No. of promos - - - 6
Typical film goes through the film post value chain as – Cans DI VFX Promos Prints (Analogue and Digital)
Incremental services FY 2010 onwards lead to increased wallet share
* 2010 impacted due to strike
Focus is to increase share of wallet New businesses – DI and VFX – leverage existing clients and add significantly to profitability Cross Selling opportunities tapped
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Production Services – Equipment Rental Solutions
RMWL is associated with most of the popular reality shows, televised events and films - 33 programmes on general entertainment channels in India, 49 televised events since April 2009. As of December 31, 2010; RMWL rented out film equipment for 83 films.
Shows Events Films
Kaun Banega Crorepati Filmfare Awards Dabangg (Arbaaz Khan Productions)
Bigg Boss Femina Miss India Rajneeti (Prakash Jha Productions)
Jhalak Dikhla Ja Mirchi Awards Ravana (Madras Talkies)
Nach Baliye Star Parivaar Awards What’s Your Rashee (Ashutosh Gowarikar Prod)
India’s Got Talent Star Screen Awards Aisha (Anil Kapoor Films)
Pati Patni Aur Who Standard Chartered Mumbai Marathon Break Ke Baad (Kunal Kohli Productions)
Rakhi Ka Swayamvar Airtel Delhi Marathon Ra – One (Red Chilies Entertainment)
Rahul Dulhaniya Le Jayega Sunfeast Bangalore Marathon Khelein Hum Jee Jaan Se (Ashutosh Gowarikar Prod)
Dus Ka Dum Economic Times Awards Tees Maar Khan (Three’s Company Prod)
Sacch Ka Samna Brand Equity Awards Khatta Meetha (Seven Arts International)
Film & Media Services (International)
International Business
Distinct business lines Creative Services – VFX, 2D to 3D conversion, Animation, CGI Media Services BPO – Restoration, Archival, Migration, Encoding, Transcoding, Compression &
Authoring, Standards & Format Conversion All businesses exhibit strong entry barriers in terms of
Technology Brand & Credibility Manpower training Infrastructure quality
Top Trends in the Industry:
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Trends
Alternate platforms: TV, Internet and mobile Demand for high-definition images 3D VFX / Animation / CGI
Technology Skill sets Front-end/ Development centers Scale Digital platform – one world
Key Drivers
London
New York
Mumbai
ChennaiKolkata
TokyoLos Angeles
Pune
Presence
We have built global capabilities
Technology
ImagingRMW
Burbank (Lowry)3D
QC & Operations Centers
LA RMW Imaging opsRMW VFX
ops
London RMW lab ops (i-lab)RMW VFX
ops
Tokyo Front-end with Imagica
Large Delivery Centers
Image processing 450 people, fully
operational
2D to 3D 450 people fully trained
VFX + Animation 300 people, fully
operational
1,200
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December 2010 established relationship with Russian World Studios and OGK in Russia
Competitive advantage through proprietary tools
RMW has developed and now owns proprietary imaging tools which facilitate :
Image Processing
Standard Definition to High Definition
16 mm to High Definition
3D Alignment
These tools are currently deployed in London, Burbank and Mumbai, and are internationally benchmarked
Leverage the front-end relationship with clients at Burbank :
David Fincher : Zodiac, Benjamin Button, Social Network
Disney : 7-year old relationship, handling Animation Classics such as Fantasia, Alice in Wonderland, Winnie the
Pooh trilogy, Cinderella, Jungle Book, Peter Pan, 101 Dalmatians, Sleeping Beauty, Snow White, Pinocchio
James Cameron : Avatar, 4K restoration of Titanic
4 projects under active discussions (under NDA)
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November 2010: RMW among 4 companies to receive the Creativity and Innovation Hollywood Post Alliance Award
Exhibition
India – a consumption driven economy
Deep Domestic Demand.. Huge growth potential
• Population: 1.2 billion
→ increasing urbanization
→ relatively large youth population
→ 43% of population < 25 years of age; 36%
between 25-50 years
• GDP Growth (Real): ~6.5%
→ second highest growing economy
Key driver of growth is to be consumption
• Consumption Centres
→ spread over 50 cities
• GDP Size (PPP adjusted): US$ 3 trillion
→ fourth largest economy in the world
• Rising Propensity to Spend→ Recreation and education spend doubled
from Rs 1,800/- to Rs 4,120/- ; expected to further double to Rs 8,400/- in 4 years
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Growing opportunity for multiplex business
Box-office collection of Rs 68,500 million in CY 2009, growing @ 8% Growing size of big budget movies, a key revenue driver for multiplexes
Print size of big budget movies has grown significantly Multiplex contribution has gone up from 10% in CY 2006 to around 25 percent of the total domestic theatrical
revenues for the overall Indian film industry and as much as 60% for Hindi films Hollywood : a new source of revenue stream, has grown to 5.5% of Indian box-office from 2% in 2006
2010 2008 Increase Top 10 films NBOC (Rs million) 8,080 6,140 32%
No. of big budget releases 48 35 37%
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Low screen density in top cities (screens per million population)
Mumbai: 23 Delhi: 13 Thane: 14 Kolkata: 8Chennai: 5 Bangalore: 21 Ahmedabad: 19 Hyderabad: 6Surat: 12 Kanpur: 15 Pune: 16 Jaipur: 8Lucknow: 17 Nagpur: 18 Indore: 13 Ludhiana: 11
International benchmarks (screens per million population)
US: 117 France: 77 Denmark: 61 Italy: 52Spain: 46 Germany: 45 Belgium: 43 UK: 30
CY 2009 India (multiplex) India USA Canada Australia Singapore France
Admits (million) 81 3,100 1,420 128 91 19 201
Population (million) 120 1,140 307 33 21 5 62
Movie Freq (yearly) 0.68 2.7 4.6 3.8 4.2 3.9 3.2
ATP (USD) $2.6 $0.5 $7.5 $6.9 $9.4 $6.2 $8.5
BO (million USD) $208 $1,522 $10,650 $882 $849 $118 $1,704
No. of cities 106
Multiplex business : benchmarked globally
Multiplex penetration (admits as a % of population) and spend per head expected to grow : in sync with international benchmarks – as propensity to spend increases in these cities
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BIG Cinemas’ network in India
Schematic representation
268 screens
81 cities
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Circuit% contribution
to all-India Hindi box-office
BIG cities BIG screens
Bombay 40% 21 107
Delhi UP 20-22% 12 43
East Punjab 7.5 -9% 6 22
Rajasthan 5-5.5% 5 9
CP 5-5.5% 10 18
Nizam & Andhra* 5-5.5% 11 26
Bengal 4.5-5% 1 3
Mysore 3.5-4.5% 4 9
CI 3.5% 3 10
TN & Kerala** 1-1.5% 8 21
Assam, Orissa 1.5% - -
100% 81 268
* - Additionally serves the Telugu market** - Additionally serves the Tamil market
Operating performance
Growth in key parameters over last 2 years - India
Apart from current growth, Tier 2/3 cities represent significant opportunity for growth in the next 3-4 years
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Class Financial Year Metro/Tier 1 Tier 2 Tier 3/4
Admits (million)
2009 8.0 6.7 8.4
2011 (9 months) 6.9 6.7 10.6
% increase 16% 34% 70%
ATP (Rs.)
2009 144 90 49
2011 (9 months) 163 95 56
% increase 13% 5% 13%
SPH (Rs.)
2009 34 20 12
2011 (9 months) 44 26 19
% increase 30% 26% 60%
Growth in key parameters over last 2 years - India (cont.)
We have registered significant growth – in ticket prices and spend on F&B
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Parameter Current Period YTD Dec 10
Previous Period Apr Dec 09 Growth
Admits (million) 24.32 19.79 23%
Same Store Basis*
Admits (million) 18.16 17.27 5%
ATP Comparable properties (Rs.) 98.82 90.33 9%
SPH Comparable properties (Rs.) 27.63 22.32 24%
* Same Store refers to cinema theatres which have been operational for entire 9 months in the period mentioned
Content flow and programming
Big releases
5 big banners in Hindi (Yashraj, BIG, Dharma, UTV, Eros) slated to release 20 films in next 18 months
Around 13 high-value Hollywood / 3D movies expected in next 12-15 months
A-list stars have 14 films on floor
Neighborhood centric content selection, mapping and scheduling
Regional language films (Gujarati, Marathi, Bhojpuri etc.)
Introduced ‘uninterrupted’ English film shows ; subtitled English films
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1
2
3
typical customer walk-through
baggage drop- off
box office
concessionscreen
entrance
seatinglounge
washrooms
welcomefoyer
exitfoyer
securityfrisking
Customer experience : mapping key touch points
box office
online
screens
F&B
feedback
5 key touch points
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Customer experience : innovative formats
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Awards won over the years
Cine Diner won the award for Most Admired Innovative Concept of the Year at India Retail Forum 2010
Cine Diner also won 2nd place at the IAD – Interior & Architecture Awards 2009 in the Best Interior Design - Hospitality category
‘Most Admired Retailer in Entertainment’ at the India Retail Awards 2009
‘International Exhibitor of the Year’ at the prestigious ‘CineAsia 2008’ at Macau in December 2008
‘Retailer of the Year’ in Entertainment for the second consecutive year at the India Retail Summit in 2007
‘Most Admired Retailer in Entertainment’ at the India Retail Awards 2007
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Mystery audits
Key audit impact areas: Exterior, Box Office, Lobby, Auditoriums, Concession and Restrooms
Carried out by external agencies ( which specialize in hospitality industry )
Audit score mapped against other cinema chains
Periodicity – once in 2 months
Action taken – theatre managers to provide action taken report (ATR) to COOs
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Brand Connect
WOMEN’S DAY (8th March’10 ) MOTHER’S DAY (9th May’10 )
WORLD ENVIRONMENT DAY (5th June’10 ) – global initiative
INDIAN INDEPENDENCE DAY ( 7-15th Aug’10 ) – global initiative
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Marketing : Grassroots , promotions, contests…
3 + 1 Ticket combo offer (Oct 10 to Mar 11)
Launched across 30 cinemas
Hot Ticket festival offer
(May’10)
• 75,000 Unique registrations• Sponsored 1st prizes – i10 car
Customer Loyalty program
(launch Dec’10)
SURE SHOT Winner (Launch Sept’10) • Guaranteed prize won for every transaction at BIG Cinemas• Prizes are coupons/vouchers from local retailers (neighborhood
centric)
Prepaid movie ticket vouchers
(Dec’10)
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Retail micro-orientation
Cinema-wise weekly admits plotted from release schedule: Categorization of movies Historical performance of category
Translated to daily target footfalls
Modified every week for next fortnight, based on: Actual release schedule Verdict of film
Daily sales plan
Movie specific pricing Eg, Tees Maar Khan, Gol3
Idiots, Kites, etc
Day-part pricing
E.g. R-Mulund: Morning: Rs 70/- 1:00 p.m.: Rs 110-130/- Evening: Rs 175-200/- Special pricing of Rs 50/- and
Rs 150/- Food price increase by Rs
10-15/- on big week-ends
Customer-oriented pricing
Electricity management (lights, A/C)
Seasonal staffing (130 increased from Diwali to New Year)
Micro-monitoring of yield efficiency (Popcorn, Pepsi) – to reduce spoilage and wastage
Cost efficiency
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F & B Increasing SPH
- Pepsi deal
- Movie Munchies product mix : kathi rolls / salads/ fresh sandwiches / candy floss , etc
- Combo deals :Value meals / 3 product combos, etc
- Seat serve: Mobile Vendors
- Kids specialCombos / merchandise
Path to revenue growth and profitability drivers : F&B
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Off Screen Advertising
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Washrooms Signage
Auditorium doors
Stair Case
Lobby Lounge
Exit Passage
Exhibition overseas
Language US UK/ Europe Far East Others
Hindi 30% 30% 3% 37%
Telugu 85% 2% 5% 8%
Tamil 7% 20% 55% 18%
Indian35%
Hollywood65%
205 screens in US
BIG chain: 35% of Hindi 70% of Tamil / Telugu
English46%
Malay14%
Chinese11%
Tamil25% Others
4%
72 screens in Malaysia
Play mix of content Opened market beyond KL SPH highest among chains Account for 30-33% of Tamil GBOC
Europe
Programming model with Pathe in
Netherlands since June ‘09
Screen branding
40% increase in footfalls
Now expanding to France (Paris
and Lyon) with Pathe and Belgium
(Brussels and Antwerp) with
Kinepolis
International Collections for Indian films
Exhibition – overseas
Total 200 screens: 55 India focused screens, balanced with 145 Hollywood screens (managed locations)
Strong Indian community – 2.6 million population + H1, L1, students
Including other Asians (Pakistani, Bangladeshi) aggregates approximately 3.6 million
US accounts for 30 to 33 % of overseas theatrical revenue for Hindi movies (Rs 2,000 million)
US cinema chains reluctant to carry Indian content :
Hollywood movies are first priority
Cultural mismatch – unable to handle Indian crowds
Indian movies get second-rung theatres :
Poor customer experience
Deals with distributors on MG basis – substantial under-reporting
Highly unorganized distribution pattern for Tamil and Telugu movies
Need for theatrical presence in US
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Chicago
New Jersey
New York
San Jose
Freemont
Los Angeles
Falls Church
Pigeon Forge
Kansas
Herndon
Palm BayGreenacresNorcross
Laughlin
Madisonville
Greenville
Canonsburg
Norfolk
Cleveland
Decatur
CherokeeCorona
BIG Cinemas in US
Growth in Box Office YTD Dec’10 : 10% increase since last year BO contribution
Promotions : Movie specific (star premiers, sweepstakes, social media) and Brand specific (Everyone is a Winner !) Events and Festivals : Green your lifestyle, Independence Day, Diwali Talent Hunt Innovative marketing tools : Print@home, Online Polls, Tag it !
No Movie Market share Total Prints BIG Prints1 Dabangg 27% 61 93 Ravanan - Tamil 56% 34 102 Enthiran - Tamil 54% 54 9
BIG Cinemas in US
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Unlocking the advertisement potential Indian Diaspora median income higher than average American or any other ethnic community Focused access, understanding and reach to community provides greater value to advertisers
Example Spanish, African-American etc. which are now mainstream focus Our focused consumer targeting from this year has begun yielding revenues
Exhibition – Malaysia
English46%
Malay14%
Chinese11%
Tamil25% Others
4%
72 screens in Malaysia
Play mix of content
Opened market beyond KL
Account for significant % of Tamil GBOC
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BIG Synergy
Leader in original format, studio based, interactive shows
Cutting edge shows : Kaun Banega Crorepati, Dus Ka Dum, Jhalak Dikhhla Jaa – Dancing with the Stars, Kya Aap Paanchi Paas Se Tez Hain, Aap Ki Kacheri and India’s Got Talent
Winner of 2009 Indian Telly Awards for “Best Production house of the year “
Snapshot of shows
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Exhibition overseas
Language US UK/ Europe Far East Others
Hindi 30% 30% 3% 37%
Telugu 85% 2% 5% 8%
Tamil 7% 20% 55% 18%
Indian35%
Hollywood65%
205 screens in US
BIG chain: 35% of Hindi 70% of Tamil / Telugu
English46%
Malay14%
Chinese11%
Tamil25% Others
4%
72 screens in Malaysia
Play mix of content Opened market beyond KL SPH highest among chains Account for 30-33% of Tamil GBOC
Europe
Programming model with Pathe in
Netherlands since June ‘09
Screen branding
40% increase in footfalls
Now expanding to France (Paris
and Lyon) with Pathe and Belgium
(Brussels and Antwerp) with
Kinepolis
International Collections for Indian films
Thank you
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