company overviewakamai.vidz.zeecdn.com/zeetele/pdfs/zeeinvestor...digital – ditto tv largest...
TRANSCRIPT
COMPANY OVERVIEW OCTOBER 2015
DISCLAIMER
2
Some of the statements made in this presentation are forward-looking statements and are based on the current beliefs, assumptions, expectations, estimates, objectives and projections of the directors and management of Zee Entertainment Enterprises Limited (ZEE) about its business and the industry and markets in which it operates.
These forward-looking statements include, without limitation, statements relating to revenues and earnings.
The words “believe”, “anticipate”, “expect”, “estimate”, “intend”, “project” and similar expressions are also intended to identify forward looking statements.
These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the Company and are difficult to predict. Consequently, actual results could differ materially from those expressed or forecast in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, changes in the regulatory environment and other business and operational risks. ZEE does not undertake to update these forward-looking statements to reflect events or circumstances that may arise after publication.
ZEE Entertainment
3
Hindi Entertainment
Regional Entertainment
Sports English
Entertainment Music and Lifestyle
Digital – Ditto TV
Largest Indian Content Company in the World
…more than 210,000 hours of content and counting
Leading Hindi Entertainment Network
Consistently Innovating
Leading Sports Network
ZEE MARATHI
Leading Regional Entertainment Network
English Entertainment
9
1992 1995 2002 2010 2011 2014
‒ Flagship channel,
Zee TV, launched
‒ IPO of Zee
Telefilms Limited
‒ Zee TV goes
global
‒ Zee Network
launched in UK
‒ Distribution
partnership with
Turner, a Time
Warner
subsidiary
‒ ZEE acquires the
regional networks
‒ Acquires 45%
stake in Ten
Sports after
acquiring 50% in
2007
‒ Zee, Star, Turner
and Den form a
distribution
alliance –
MediaPro
Enterprise India
‒ Subscription
business
transferred to Taj
Television, a
100% subsidiary
of ZEE
Our Growth Journey
• In 2014, Size of Television sector is estimated at INR 475 bn, constituting 46% of the M&E industry (M&E Iandustry Size: INR 1,026 bn)
• TV sector recorded a growth of 13.8% in 2014
• Subscription revenues contribution to total revenue for Broadcasters is expected to rise from 33% to 40% in the next five years
Indian Media Sector
Source: FICCI-KPMG Report 2015
10
103 116 125 136 155 175
187 213
245 281
320 369
290 329
370 417
475
544
15% 13% 12% 13%
14% 15%
0%
5%
10%
15%
20%
25%
30%
-50
50
150
250
350
450
550
2010 2011 2012 2013 2014E 2015P
Television Industry Revenue (INR Bn)
Ad revenues Sub revenues Growth
155 175 198 226 260 299 75
90 114
145 174
201
230 265
312
371
434
500
33% 34% 37% 39% 40% 40%
0%
20%
40%
60%
80%
100%
-50
50
150
250
350
450
550
2013 2014E 2015P 2016P 2017P 2018P
Broadcasting Industry Revenue (INR Bn)
Ad revenues Sub revenues Subsc. as a % of Total
Indian TV HHs at a Glance
Digital
79 Mn
C&S HHs
149 Mn
TV Owning Households
168 Mn
Total Households
234 Mn
2014
Source: TAM, FICCI KPMG Report 2015
11
Indian – Rapid Digitization
Source: FICCI-KPMG Report 2015
12
• Digital Cable industry is saw a growth of over 15% in 2014
• Both DTH and Digital Cable subscriber growth is expected to accelerate in 2015-2017 given the digitization
timelines
74 69 68 70 55
27 5 5 5
6 19 25 29 45 67
85 90 94
31 34 37
40 48 61 72 74 76
8 9
9 10
11 11 12 12 12
119 130
139 149
158 166 174 181 187
2011 2012 2013 2014E 2015P 2016P 2017P 2018P 2019P
No. of Subscriber (In Million)
Analog Cable Digital Cable DTH Other Digital
13
ZEEL : A leading player in the Indian Television Market
Product Offering
14
Hindi Entertainment Hindi Cinema Regional Entertainment
English Entertainment Music, Lifestyle and Niche Sports
HD Channels Select International Channels
New Launches
Revenue Pie
15
Advertising, 56%
Subscription Domestic, 28%
Subscription International,
7%
Others, 9%
LTM Revenue (30 Sep 2015)
Business Performance
Hindi Entertainment Channels
• Zee TV is the largest Hindi entertainment channel of the world
17
Strong Movie Library
18
Largest Hindi Movie Library in the World
Hindi Movie Channels
19
Source: TAM Media Research; Period: April 2014 to March 2015 TG: CS 4+, HSM; Sony ratings- non-cricket Others include FILMY, B4U Movies and Cinema TV
Star Cinema Channels, 28.0%
Zee Cinema Channels,
32.3%
Sony Cinema Channels, 19.2%
UTV Cinema Channels, 12.5%
Others, 8.0%
Relative Viewership Share
20
Ten Network – Key Properties
21
CRICKET
SOCCER
TENNIS
ATHLETICS
GOLF
OTHER
Ten – Strong Sports Franchise
22
Source: TAM Media Research; Market: All India; TG: CS 15+ M ABC; Period; Apr 2014 - Mar 2015
Star Sports, 62.7%
Ten, 21.8%
Sony, 13.7%
DD Sports, 0.7% Neo, 1.2%
Relative Viewership Share
English and Niche Channels
• Tie-ups with leading studios across the world
23
Zee Marathi - Highlights
• Strong market leader in the state of Maharashtra
• Library of over 9,000 hours & rights to over 400 movie titles
• Key properties: Honar Soon Mi Hya Gharchi, Jai Malhar, Ka Re Durava, Chala Hava Yeun Dya
24
Source: TAM, Period: Apr 2014 to Mar 2015, CS 4+, All Maharashtra Others include DD Sahyadri, Maiboli, Mi Marathi and Saam TV
Zee Marathi 49.0%
Star Pravah 20.8%
ETV Marathi 18.6%
Others 11.6%
Relative Viewership Share
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: Sa Re Ga Ma Pa, Raage Anuraage, Rajyotak, Kojagori, Tumi Robe Nirobe, Dwiragaman,
Choker Bali
25
Source: TAM, Period: Apr 2014 to Mar 2015, CS 4+, All WB Others include Aakaash (Bangla), DD Bangla and Rupashi Bangla
Star Jalsha 47.3%
Zee Bangla 35.0%
ETV Bangla 9.6%
Others 8.1%
Relative Viewership Share
Zee Telugu - Highlights
• Leading GEC in Andhra Pradesh
• Library of over 18,000 hours & rights to over 500 movie titles
• Key properties: Varudhini Parinayam, Mangammagaari Manavaraalu, Koncham Ishtam Koncham Kashtam
26
Source: TAM, Period: Apr 2014 to Mar 2015, CS 4+, All AP
Maa Telugu 27.3%
Gemini TV
25.7%
Zee Telugu 23.0%
Eenadu TV
21.5%
Maa GOLD 2.5%
Relative Viewership Share
Zee Kannada - Highlights
• Strong player in Kannada GEC space
• Library of over 14,000 hours & rights to over 225 movie titles
• Key properties: Srirastu Subhamastu, Oggarane Dabbi, Gruhalakshmi
27
Source: TAM, Period: Apr 2014 to Mar 2015, CS 4+, All Karnataka Others include DD Chandana, Kasturi TV and Plus Suvarna
Udaya TV
32.6%
ETV Kannada
23.3%
Suvarna 21.1%
Zee Kannada
13.5%
Others 9.5%
Relative Viewership Share
• Presence across 5 continents through over
37 dedicated channels
• Catering to both South Asian as well as non
South Asian communities
• Recent local language launches in Africa,
Thailand and Indonesia
• International subscription contributed 7.3%
of company top line in Q2FY2016
• Renewed focus on advertising as a source of
revenues
International Operations
28
Focused Investments
Digital Investments Regional Channels
National Channels
29
International Channels
New Initiatives
30
Initiative to preserve and spread
centuries old Indian heritage and
taking its timeless stories to audiences
across the world
Key Financials
Financial Results
32
* Full year numbers are not comparable due to changes in accounting treatment of various items (accounting changes necessitated by change in TRAI’s content aggregator regulation and change in arrangement with various operators across international territories). The absolute EBITDA number however remains comparable
(Rs million) FY14 FY15* Y-o-Y
Growth Q2FY15 Q2FY16
Y-o-Y Growth
Operating Revenues 44,217 48,837 10.4% 11,178 13,849 23.9%
Expenditure 32,174 36,299 12.8% 7,974 10,303 29.2%
Operating Profit (EBITDA) 12,043 12,537 4.1% 3,205 3,546 10.7%
EBITDA Margin 27.2% 25.7% 28.7% 25.6%
PBT before exceptional items 13,190 14,039 6.4% 3,570 3,916 9.7%
Less: Provision for Tax 4,291 4,284 -0.2% 1,314 1,123 -14.5%
PAT before exceptional items 8,900 9,755 9.6% 2,270 2,463 8.5%
Add: Exceptional Items - - -
-
PAT after exceptional items 8,900 9,755 9.6% 2,270 2,463 8.5%
Less: Minority Interest / Share of Associates
(21) (20) (6) (11)
Balance Sheet
33
• Debt free
balance sheet
• Strong net cash
position
(Rs million) As on 31st
March, 2015 As on 30th
September, 2015
Equity & Liabilities Shareholder's Funds 55,503 61,114 Long-term Borrowings 12 9 Other Non Current Liabilities 769 865 Current Liabilities
a) Trade Payables 4,204 5,271 b) Other Current Liabilities 9,571 7,007
Total - Equity and Liabilities 70,059 74,267 Assets Non Currrent Assets
a) Tangible Assets 4,368 4,845 b) Goodwill on Consolidation 7,887 8,225 c) LT Loans & Advances 5,674 7,274 d) Others 2,373 2,793
Current Assets a) Current Investments 8,291 7,822 b) Inventories 11,878 13,743 c) Trade Receivables 10,692 15,653 d) Cash & Bank Balance 7,365 2,938 e) Others 11,531 10,974
Total Assets 70,059 74,267
21,998
30,088 30,406
36,996
44,217
48,837
6,135 8,219 7,396
9,543 12,043 12,537
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015
Revenues and Operating Profit (Rs in mm)
Revenue Operating profit (EBITDA)
Consistent Profitable Growth
34
Consistent dividend payout since 1994
Revenue CAGR: 17.3%
EBITDA CAGR: 15.4% • FY15 equity
dividend of Rs.2.25 per
share (225% of
FV)
• Bonus Issue of
6% Redeemable Preference
Shares
aggregating to over Rs.20 bn
Outlook and Strategy
35
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
36
Pioneer in several entertainment genres
World’s leading Indian TV network with 960 million viewers in over 169 countries
Consistent performer since inception; Shareholder value CAGR of >30% since listing
The global force in entertainment