august 2, 2004 corporación interamericana de entretenimiento, s.a. de c.v
TRANSCRIPT
August 2, 2004
Business Model & Strategy
Operating Divisions
Financial Results for 2Q2004
Operating Results for 2Q2004 and 2004 Outlook
Content
2
August 2, 2004
Leading “out-of-home” entertainment company in Latin America, Spain and the U.S. Latin markets
51 million customers in 2003
Best of breed entertainment for every budget:
Concerts, theater, sporting, cultural and corporate events
Amusement / educational parks
Sports Books and Gaming
Popular fairs, exhibitions and conventions
Vertical Integration = multiple revenue streams and minimal risks
Significant commercial revenue from proprietary entertainment and advertising properties
Expertise organized by country and business areas = high manager accountability
Free cash flow now increasing after a period of capital intensive growth
CIE today
3
August 2, 2004
Revenues 1H 2004: .5%Live Entertainment Advertising Sponsorships
Revenues 1H 2004: 83%Live EntertainmentLas Americas Center Advertising Sponsorships Amusement Parks
Revenues 1H 2004: 4%Live EntertainmentAdvertising Sponsorships
Revenues 1H 2004: .2%Amusement Parks (Parque El Salitre)
Revenues 1H 2004: 10%Live EntertainmentAdvertising Sponsorships
Revenues 1H 2004: 2%Live EntertainmentBuenos Aires ZooAdvertising SponsorshipsRadio Stations in Buenos Aires
United States (2001)
Mexico (1990)
Argentina & Chile (1997-98)
Spain (1999)
Colombia (1998)
Brazil (1999)
Geographical expansion
4
August 2, 2004
$35 Additional Revenue StreamsUS$100 in Box Office Receipts
ExpensesUS $38
ArtistsUS $40
PromotionUS $10
Venue US $12
SponsorshipUS $27
TicketingUS $7
F&B/MerchandisingUS $1
Food & Beverages
Ticket Sales
Venue Operator
Sponsorship
Promoter+
+
+
+
0% 100%Maximum attendance required to breakeven
49%49%
51%51%
82%82%
54%54%
65%65%
Vertical integration = maximizes revenues / minimizes risksEnables CIE to generate US$35 in additional revenue for every US$100 in box-office receipts
Competitive advantages
5
August 2, 2004
We have become an extraordinary alternative for connecting brands such as Coca-Cola, with segmented markets
Radio
Music
Amusement Parks
Corporate Events
Cineminutos
Ticketing
Naming Rights
Overpasses
Venues
Ability to use an advertising property to
highly target the advertising customer
Audience Measurement
Advertising properties
6
August 2, 2004
Expand target audiences through new entertainment forms and price niches
Mexico, Brazil, Argentina: lower priced fairs / gaming / touring artists
Spain: higher priced musical theater
U.S. market: “real play” parks (introduction of Wannado City™)
Increase utilization of existing venues through new attractions and facility upgrades
Exploit proprietary Sports Book and Gaming opportunities in Mexico
Strengthen commercial sales force
Control production costs through use of local talent and production labor
Leverage strategic partner synergies to increase EBITDA and minimize project risk
Optimize project financing (debt, equity, sponsorships) to maintain healthy balance sheet
Growth and operating strategy
7
August 2, 2004
Content
Business Model & Strategy
Operating Divisions
Financial Results for 2Q2004
Operating Results for 2Q2004 and 2004 Outlook
8
August 2, 2004
The Company has three operating divisions with the following businesses:
Live Entertainment Mexico
Las Américas
Amusement Parks
International
Entertainment
Sponsorships
Cineminutos
Billboard Advertising / Overpasses
Telemarketing
Commercial
Ticketing Mexico
Ticketing Brazil
Ticketing Argentina
Ticketing Chile
Services
3 Divisions
78% 12% 10%
Revenue Contr.
Operating divisions
9
August 2, 2004
Strategic JV with Televisa
Partnerships/JV with renowned groups, thus securing CIE’s leading position.
Leading live entertainment company in Mexico
Operates 12 live entertainment venues in Mexico; installed capacity 686,00 seats
Musical, theatrical, sporting, family / cultural and corporate events
Diversified array of tailored productions
3,391 live events produced in 2003; 5.6 million attendees
Opportunities:
Utilize assets to build additional revenue streams
New Sporting events: Nautical Racing, Motor Cross, Monster Trucks, Beach
Volleyball, Triathlons, etc
Strongest concert calendar in years (for 2004)
Leverage synergies afforded by Televisa relationship
Auto racing
Entertainment Division – Live entertainment Mexico
10
August 2, 2004
Mexican government concessions
Horse race track 25 years
Surrounding areas 50 years
License to operate 45-off track betting centers / number based games
Horse race track attracted 600,000 fans in 2003
Centro Banamex, the largest exhibition and convention center in Latin America, held 47 expositions in 2003 that attracted over 2.0 M visitors
28 Sports Book / Yaks now open in prime retail locations in Mexico
One of the only companies in Mexico to have multiple gaming licenses
3,391 live events produced in 2003; 5.6 M attendees
Opportunities:
Granja Las Américas children’s park - $7.5 m projected revenues annually
Ten new Sports Books / Yaks ($25 - $30 million total investment, 2004)
Development to be supported by strategic and financial partners
Entertainment Division – Las Américas
11
August 2, 2004
CIE is Latin America’s leading operator / developer of amusement parks
Number of attendants in 2003 reached over 10 million
Selective incorporation of amusement parks, whose facilities and price make them appropriate for low- and medium – level incomes
Operation of 10 amusement parks in 10 cities
Mexico City (5), Acapulco (1), Guadalajara (2)
Bogotá (2)
Development of Wannado City™ in Miami Florida
Opportunities:
Wannado™ is the first “real-play” park in the world, combining entertainment and educational experiences for children with retail, restaurant and sponsor-based attractions
Investigating opportunities for Wannado™ roll-out throughout U.S.
Enhancing Salitre Mágico in Colombia with new attractions and sponsorships
Entertainment Division – Amusement Parks
12
August 2, 2004
Operates live entertainment venues in Brazil (4), Argentina (2) and Spain (3)
1,796 live events produced in 2003; 2.3 M in attendance
Operates the Buenos Aires Zoo and eight radio stations in Argentina
Production of live events in the Latin U.S. market
Achievements:
Formed alliance with Stage Holding in Amsterdam (theatrical rights)
Successful local productions in medium-sized cities in Brazil and Argentina
Healthy attendance at Buenos Aires Zoo and live events in Argentina
Opportunities:
Cats, Phantom of the Opera and Cabaret: major Broadway-type productions
in Madrid, Spain
Evaluate new Spanish markets for theatrical productions
Expand local productions in Brazil and Argentina
Divest AM radio stations in Argentina
Entertainment Division – International
13
August 2, 2004
Sponsorships of CIE live events / naming rights for CIE venues
Dynamic advertising in 1,342 movie theaters (“Cineminutos”)
475 Billboard sponsorships on 132 pedestrian overpasses
Rotating advertising for 12 Mexican soccer teams
Indoor and outdoor advertising at airports
Telemarketing services (in partnership with Sitel Corporation)
Achievements:
Consolidation of all commercial activities into one division= market leverage
141 new movie theaters / 16 new overpasses (58 new billboards)
Opportunities in 2004:
Additional movie theaters / additional overpasses
Advertising space on the uniforms of First Division soccer teams
Expand airport advertising
Promote comprehensive sponsorship packages
Commercial Division – Advertising Properties
14
August 2, 2004
JV w/ Ticketmaster for operations in Mexico (1991), Argentina & Chile (1998) and Brazil (2000)
Leading ticketing business in the region, with medium- to long-term contracts with venues, promoters and events
Operations through call centers, box offices, internet and outlets in the region
* On-line activities are currently carried on in Mexico and Brazil.
Outlets:Mexico
MixUp Liverpool Music&More Mr.CD Farm. Ahorro Discolandia
Argentina Tower Records
Country Community Start-up
Mexico City *MonterreyGuadalajara *
Mexico 199219932001
Buenos Aires Argentina 1998
Santiago 1998Chile
Sao Paulo *Rio de JaneiroSalvador
200020012001
Brazil
Chile Feria del Disco Multitienda
Falabella Almacenes Paris
Brazil Tiendas Levis Riachuelo Librerias FNAC Librerias
Saraiva
www.ticketmaster.com.mx www. ticketmaster.com.br
Services Division – Ticketing
15
August 2, 2004 16
Content
Business Model & Strategy
Operating Divisions
Financial Results for 2Q2004
Operating Results for 2Q2004 and 2004 Outlook
August 2, 2004
Operative Highlights
Events Live Racetrack (racing days)
Ticketmaster Tickets (Mil.) Mexico South America Total
Attendence (Mil. of people) Live Events Amusement Parks Hipódromo de las Américas
Sports Books & Yaks Per capita consumption (Ps.) Shops Pedestrian Overpasses Structures in operation Billboards
Cineminutos Movie Theaters
1,329
52
3.21.24.3
1.6 2.10.2
613 19
123467
1,261
1,42339
3.11.44.5
1.91.90.1
567 28
189667
1,356
2,489
84
5.92.98.8
3.14.20.3
598
2,577
73
6.63.8
10.4
3.33.60.3
634
2Q03
2Q04 1H03 1H04
7.1%(25.0%
)
(1.9%)20.9%4.3%
19.9%(9.0%)(24.2%
)
(7.6%) 47.4%
53.7%42.8%
7.5%
% Chg
3.5%(13.1%
)
12.0%29.8%17.9%
6.1%(15.2%
)(15.0%
)
(5.7%)
%Chg
17
August 2, 2004
Financial Highlights
Revenue
EBITDAEBITDA Margin
Operating Income
CCF
Current Assets Assets L.T. & Other AssetsTotal Assets
DebtTotal Liabilities
Stockholders’ Equity
2Q03 2Q04 1H03 1H04
1,673
38823.2%
273
38
4,41110,13614,547
4,5006,455
8,091
1,932
43722.6%
311
115
4,5559,939
14,494
4,8817,351
7,143
15.5%
12.7%(57 pb)
14.0%
204.8%
3.3%(1.9%)(0.4%)
8.8%13.9%
(11.7%)
3,109
71923.1%
499
89
3,541
79722.5%
545
219
13.9%
10.9%(61 pb)
9.3%
144.8%
% Chg
% Chg
Note: Figures are expressed in millions of Mexican pesos as of June 2004
18
August 2, 2004
Revenue by Division
2Q03 2Q04 1H03 1H04
EntertainmentCommercialServices
75.6%13.8%10.5%
77.5%12.4%10.2%
75.6%13.7%10.7%
76.4%13.1%10.5%
1,266
1,496
232 240176 196
0 .0
2 0 0 .0
4 0 0 .0
6 0 0 .0
8 0 0 .0
1,0 0 0 .0
1,2 0 0 .0
1,4 0 0 .0
1,6 0 0 .0
E ntert. C o mmerc. Servic .
2 Q 0 3 2 Q 0 4
2,350
2,704
426 464333 372
0 .0
50 0 .0
1,0 0 0 .0
1,50 0 .0
2 ,0 0 0 .0
2 ,50 0 .0
3 ,0 0 0 .0
E ntret. C o mmerc. Servic .
1H0 3 1H0 4
Revenue Distribution by Division
Note: Figures are expressed in millions of Mexican pesos as of June 2004
+11%+3%
+18%
+12%+9%
+15%
* The total may not add up to 100% due to rounding
19
August 2, 2004
EBITDA and EBITDA Margin
266
249
282
307316
324317
330
347
334
357 359
423
331
387
398
436
360
437
22.6%
25.9%25.8%
24.8%24.4%
24.4%
24.2%
23.5% 23.2%
23.1%23.5%
23.6%23.1%
23.1%
23.1%23.2%22.9% 22.5%
22.4%
220
270
320
370
420
470
4Q99 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04
Million
s o
f p
esos a
s o
f Ju
n.0
4
0%
5%
10%
15%
20%
25%
30%
EB
ITD
A M
arg
in
EBITDA Margin
Units openedUnits in operation
11
23
14
15
16
39
110
111
415
419
221
223
225
328
Note: Figures are expressed in millions of Mexican pesos as of June 2004
20
August 2, 2004
Debt
As of June 2004, CIE’s debt was Ps.4,881 million. Of this, 54% is in pesos, 43% is in UDIS, and the remainder is in other currencies
Holding75.0%
AMH21.9%
Pa rques1.3%
Int.1.7%
S .T.18.8%
L.T.81.2%
- Allocation -
- Maturities -
Debt Bank Loans Securitized Loans Total
Cash
Net Debt
Interest Paid
Stockholders’ Equity
EBITDA 2Q04EBITDA LTM
Ratios EBITDA-to-Interest Expense Net Debt / Stockholders’ Equity Net Debt / EBITDA LTM
2,2132,6684,881
641
4,240
111
7,143
4371,633
3.92x0.59x2.60x
Jun.04
21
August 2, 2004
Content
Business Model & Strategy
Operating Divisions
Financial Results for 2Q2004
Operating Results for 2Q2004 and 2004 Outlook
22
August 2, 2004
Entertainment Division – Live Entertainment Mexico
Live Events : “Vive Latino” and Latin events (p.e. Chayanne and Bosé) drive 2Q04 New family-style events (p.e. Tiany Circus and Holiday on Ice) Repositioning of multi-annual cultural events:
“España Baila Flamenco”, “Tanguera”, “Carmina Burana”
Theater: renewal of the theatrical offering Joseph and his Amazing Technicolor Dreamcoat premiered in April at the Centro Cultural
Telmex Les Miserables ended its 22 month season in August; will be replaced by Fiddler on the
Roof
Fairs: focused on consumption geared towards the low-income market 2Q04: “La Feria de la Ciudad de Mexico” (April) 3/4Q04: Pachuca and Texcoco in Sept/Oct and Oct/Nov 2004, respectively
Automotive Sports Racing: 2004 Advances “Desafio Corona 2004”: NASCAR-style cars Gran Premio de México Telmex Gigante (Nov. 5-7, 2004);
advanced ticket sales begin in August
23
August 2, 2004
Entertainment Division - Las Américas
Books and Yaks: opening of units in Villahermosa, Querétaro and Torreón for a total of 28 units in 2Q04; six new units in 2H04 Tonalá
Hermosillo Ciudad Neza Morelia
Granja Las Américas: recent opening (July 3, 2004)
1.4 Hectares and 9,000 m2 of construction; an extreme sports area and 21 theme pavillions An investment of Ps.82.3 million, primarily covered by sponsorships Able to receive 3,000 visitors per day in two shifts; 540,000 visitors budgeted for the first
year of operations
Chihuahua Monterrey
24
August 2, 2004
Entertainment Division - Amusement Parks
Wannado City™ Miami initiates operations on August 12, 2004
Eleven confirmed sponsorships by the end of 2Q04; three more in progress.
Divertido Mexico City: closed in October 2004; partial relocation of assets to other parks
Upcoming attractions in parks in Mexico City: the Coca-Cola Tower at La Feria, and Globo Nestlé at Planeta Azul
Naucalli Mágico: negotiations for the park closing completed
25
August 2, 2004
Entertainment Division - International
Argentina:
Exclusive operations for 10 years in the Obras Sanitarias Arena(5,500 seats) in Buenos Aires
Brazil:
Renovation of the theatrical content with the departure of La Flor de mi Buen Querer and the opening of Chicago in Sao Paulo
Spain:
Trend towards a slow recuperation in attendence at theatrical productions after March 11, 2004 Phantom of the Opera ended its season; Cats and Cabaret continue running through
2005; Mama Mía runs through the end of 2004
- Obras Sanitarias -
26
August 2, 2004
Commercial Division - Overpasses
Acquisition of Keenneex, Mexico’s third largest pedestrian overpass operator; Publitop ensures its position as a leader in the country Publitop’s capacity increased 43% to 218 concessions and 189 installed
structures as of June 2004:
Jun.04
Dec.03Publitop Monterrey Tlalnepantla Coacalco Nuevo Laredo Tonalá Puebla S.L.P. Mazatlán Total Keenneex Aguascalientes Cuernavaca Zapopan El Salto Chapala Total
Grand Total
7233
98
13271
145
13
3541
44
189
StructuresJun.04 Dec.03
Concessions
7029
986271
132
------
132
8233
91013
271
157
63
4741
61
218
8233
910
8271
152
------
152
Chg.Chg.
2.9%13.8%
N.A.N.A.
116.7%N.A.N.A.N.A.
9.9%
N.A.N.A.N.A.N.A.N.A.N.A.
43.2%
N.A.N.A.N.A.N.A.
62.5%N.A.N.A.N.A.
3.3%
N.A.N.A.N.A.N.A.N.A.N.A.
43.4%
27