Download - 2014 Ticker 086980 KS M EDIAPLEX I NVESTOR R ELATIONS 2014 © 2014 Mediaplex Inc. 1

2014Ticker 086980

KS

MEDIAPLEX

INVESTOR

RELATIONS 2014

© 2014 Mediaplex Inc.1

This presentation has been prepared by Mediaplex Inc. (“The Company”)

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Disclaimer


Review 2013: Total movie industry of KoreaGrowth of total

admission

Growth of Korean films’ admission

10%

13%

Share of admission

60% Movie that has more than 5million viewers

9movies

(3 in 2012)

① Korean movies play a leading role for growth of total film industry since 2012

It’s not because of structural growth such as the increase of the number of screens on theatersIt has resulted increasing the competitiveness of Korean movies contents.

② There were 9 movies which had over 5million viewers.

It is 3 times more than 2012.

③ Views per capita – 4.12 times the most watching in

the world

2 3

Increasing of content’s competitiveness of Korean Films brings about the growth of movie

industry in general

Views per capita

4.1times

(#1 in the world)

MOVIE INDUSTRY REVIEW

Average annual of admission per film


0

50

100

150

200

250

2008Y 2009Y 2010Y 2011Y 2012Y 2013Y

Total movies

Korea movies

Foreign movies

1

210

130

Development of box office numbers

REVIEW 2013: COMPETITIVENESS COMPOSITION IN THE MARKET

① Generally, performance of NEW was remarkable in 2013

No. 1 for Korean movie market share (Total market share 18%, No. 2)Average admission per Korean movie was 4,670,000, increased by 2.7 times year on year

② Despite of failure of Mr. Go, Showbox put up a good fight in 2013Total audiences share increased by 1% year on year / Korean movie

audiences share increased by 1.5%p year on year Showbox’s average admission per Korean movie was 3,240,000 which was

50%/130% more than CJ/Lotte

③ CJ E&M was highly deprived of total market share because of frustrated result of

Korean box office

Market share of Korean film decreased by 13%(total market share decreased

by 7%)

Showbox and NEW which have an outstanding content competitiveness obtain better results than CJ and Lotte which have

their own multiplex theatre chain

MOVIE INDUSTRY REVIEW


29%

28%

23%

13%

7%

2013 KOREAN FILM MARKET SHARE (Number of Korean Films/ Total Number of Films)

N.E.W (8/18)

CJ E&M(14/31)

Mediaplex(9/10)

Lotte(9/10)

Etc.

Korea movie Share of admission Korea movie of admission per film

Mediaplex Mediaplex

MEDIAPLEX CORE STRATEGY


① A Market Leader in qualitative aspects, not in quantitative aspects

② A Partner who can make profits to the investors

③ A Partner who can entrust directors and productions with the projects

④ A Brand that distributes the movies which audiences can see and believe

SHOWBOX’S PURSUING VALUES

What is the SHOWBOX’s pursuing appearances as distributors?

What does SHOWBOX want to be as a market leader?

“SHOWBOX focuses more on being the most confidential partner and distribution brand to create ways of our own to achieve the best rate of

return and the most number of audiences from each projects than being a number one distributor which is distributing more films, attaining more audiences and focusing on competition for sales.

Average of Number of audience per film No.1

ROI No.1(Based on Korean films only)


MEDIAPLEX REVIEW


-8%

3% 8%

-25%

-41%

-44%-33%

-9%

26%

-17%

-60%

-43%

2003 2004 2005 2006 2007 2008

Korea movie ROI

Mediaplex ROI

Select Select Focus

MEDIAPLEX REVIEW


-13% -11% -15%

13% 15%15%

-14%

-26%

38% 37%

2009 2010 2011 2012 2013

Korea movie ROI

Mediaplex ROI

Select Select Focus Select Focus

“Average number of Audiences per a movie

3.5 millions(QC, MKT’g Dating, etc, Optimizing is

possible)

2014+ core strategy : 2-WHEEL-SYSTEMMEDIAPLEX REVIEW


DistributionInvest DistributionInvestProductior

Distribution fee + ROI & production revenue

(Synergy between selection & focus)(Strengthen Casting Infra )

2015

YOON Sung-hyun

HAN Jae-rim

The Classified File /KWAK Kyung-taek

Detective K : Secret of the Lost Island / KIM Sok-yun

An Impudent Her(w/t) / KIM A-aron

The Mood of the day(w/t) / CHO Kyu-jang

Inside Men /WOO Min-ho

Assassination / CHOI Dong-hoon

KIM Jee-woon

LEE Je-han

Summer Snow(w/t) /JEON Yun-su

King, Father, and Son(w/t) / LEE Joon-ik

YANG Hyo-joo

KIM Seong-hun

15 films and others are on stages of planning and

developing

A man and a woman(w/t) /LEE Yoon-ki

CHANG Hoon

The Huntresses

I, Frankenstein

A Hard Day

Grace of Monaco

The Divine Move

Kundo:Age of the Rampant

We are Brothers

Gangnam 1970

Sangeiwon

The Insufficient Evidence(w/t)/ YOON Jong-seok

A Violent Prosecutor(w/t) /LEE Il-young

The Escape(w/t) / KIM Yong-hwa

The Killer’s memoria technica(w/t) / WON Shin-yun

※ W/T : Working title

2014

MEDIAPLEX MOVIE INFORMATIONSHOWBOX Line-up

10 © 2014 Mediaplex Inc.

Profit Sales ProfitSales

Quantitative

growth

〉Qualitative

growth

Quantitative

growth

〈Qualitative

growth

MEDIAPLEX REVIEW


MEDIAPLEX REVIEW

Business structure change

ROI NO.1 M/S NO.1

Motion 101

Motion 101 liquidation

-Committee on investment establish-Risk managing intension-two Wheel system construction-Distribution prediction system construction

Source: KOFIC, Mediaplex

Entry for film business IPO

establishment

M&A restructuring

Merger DistributionBusiness be Extension of influence

Admission top increase record(3,300 Million )

production establishment

Disposalof Subsidiary

Business structure change2012~2013 OPOf Turn into profit-marking

- Human restructuring- Quality of Films management system building- Oversea market expansion policy through Foreign strategic partnership


Review 2013: Success Movies

<2013 Korea major Distributor M/S> - A basic primary movie -

NEW 6 movies 41 million viewers

(19.5%)

SHOWBOX 4 movies 2,4 million viewers

(11.2%)

CJ E&M 2 movies 1,6 million viewers (7.7%)

LOTTE 2 movies 9 million viewers

(4.1%)

ETC 6 movies 13,1 million viewers

(57.5%)

(ETC is Foreign Distributors)

© 2014 Mediaplex Inc.

Source: CJ CGV Earning release 2014 1Q

SCLN

SHOWBOXCJ E&MLOTTENEW

N

N

N

N

N

N

S

S

S

S

C

C

L

L

MEDIAPLEX CORE STRATEGY

13

Korea movie of admission per film

AVERAGE BOX OFFICE PER KOREAN FILM BY DISTRIBUTORS

2013 FY 2014 1HAverage Box office

per Korean

film(KRW)

RankNumber of releases

Box office(KRW)

Number of releases

Box office(KRW)

NEW 12 268.3 billion 5 67.7 billion19.76

billion1

SHOWBOX

12 208.2 billion 5 42.4 billion14.74

billion2

CJ E&M 25 255.8 billion 11 107.6 billion

10.09 billion

3

LOTTE 16 119.8 billion 11 59 billion 6.62 billion 4*Conversion rate of KRW for USD 1 =1054.5 KRW (Average market rate of 2014. 10. 21)


2014 3Q

Average Box office per

Korean film(KRW)

AverageNumber ofAudience

Per Korean film(10

thousand)

RankNumber of

releasedBox office

(KRW)

SHOWBOX 3 68.2 billion 22.73 billion 288.6 1

CJ E&M 8 151.2 billion 18.9 billion 245.5 2

LOTTE 7 97.7 billion 13.95 billion 178.4 3

NEW 2 11.7 billion 5.85 billion 74 4

*Conversion rate of KRW for USD 1 =1054.5 KRW (Average market rate of 2014. 10. 21)

AVERAGE BOX OFFICE PER KOREAN FILM BY DISTRIBUTORS


Mediaplex Global New Business


Action plan : completion the basic form of entry to Chinese market

Import and

Release

Collaboration films

Joint production

in China

Building a capacity to make 100% of Chinese movies than collaboration films• there is no meaning of export Korean films to release in China successful films in Korea such as ‘Thieves’ didn’t do well in China film

market

• It is still possible to make a Joint Korean and Chinese film. However, eventually it is very important thing to be able to plan and produce films which are 100% for Chinese audiences.

1

‘HUAYI BROTHERS” : Based on partnership with Huayi Brothers, Mediaplex strengthen the basics of entry to Chinese film market. 2

Coproduction of Chinese films planned by Showbox• Establishment a process to evaluate the

suitability of scenario and items provided by Showbox

• Coproduction between Showbox and Huayi brothers, Huayi distribute

visitors / SM dance movie projectDirector K.H. Oh’s next movie project “Rich”

• Among Showbox’s domestic line-up, possibility of determining on coproduction in planning stage / distribution in China Director Donghoon Choi, Next movie ‘assassin’ Director Jongbin Yoon, ‘Kundo’

Partial invest a product recommended by each others

• Among the line-up for the year, invite partial invest and recommend a stable project

(reinforcement the partnership)

GLOBAL BUSINESS : JOINT INVESTMENT PRODUCTION PROJECT


Collaboration domestic projects with Chinese company /distribution

Possibility of Chinese film marketThe rapid growth of Chinese film market is rather than

attractive…

It is important that Showbox has an ability to be needed by Chinese film market

Comparison with domestic /overseas movie TOP-10 box office Chinese film TOP-10 average- 60

millions (overseas film average 81.8 million, 79% of overseas film average)

Korean film TOP-10 average- 47.5 millions (overseas film average 25.9 million,184% of overseas film average)

CHINA KOREA

GLOBAL BUSINESS : JOINT INVEST PRODUCTION PROJECT


• 2013 China box office was 3.9 trillion Won / total audiences are 0.6 billion

(Compared with korea Box office, 3time bigger / No.2 in the world)• Views per capita is 10time less than korea• Among the Chinese, only 7% is moviegoers.• In 2018, box office being expected to be 10 trillion won market (CARG 30%)

SectionBox

office Ancillary market

Screens Theatre# of movies produced

Capita per views

Native movie share

Total audiences

China 3.5 trillion 743 billion 18,195 3,200 638 0.7 58.60% 610,000,000

Korea 1.5 trillion 268 billion 2,184 333 183 4.12 59.70% 210,000,000

unit : won　

18

Korean movies global inroad cases

A wedding invitation (CJ China produce / CFG distribute within China)

•Director Oh, Ki-hwan / ‘present(2001)’ Remake•Romantic movie is out of season in Korea but, It is new and fresh in China

Mr. Go (Showbox invest / Huayi distribute within China )

•Director Kim Yong-hwa joint Korean and Chinese film•The result fell short of its expectation because of issue of distribution schedule but, Chinese audiences are very positive about the movie (16.3 million dollar)

Bunshinsaba-1/2(Chinese capital invest/distribute)

•Director Ahn, Byung-Ki / ’Bunshinsaba’ remake•Ghost’ is a censored object by Chinese Government, but changing structures of storytelling builds the new trend of horror movies

Snowpiercer (CJ invest & distribute / the English-speaking world target )

•Director Bong Joon Ho / Song Kang Ho +Chris Evans•It was not able to release in the English-speaking world due to cultural differences

The Last stand (Lions Gate production/ distribution)

•Director Kim Jee-woon / Arnold Schwarzenegger •Audiences’ reaction was negative due to B movie•It was not able to collect the production cost due to a box office failure

Stalker(Fox Searchlight production/ distribution)

•Director Park Chan-wook / Nicole Kidman•Some of art film fans gave positive evaluations but, doubtful about the possibility of success as a commercial movie

Expansion to China is more successful than to American film market because China has cultural

similarities with us. Therefore it gives advantages of movie plan/production

<Chinese Market>

<American market>

GLOBAL BUSINESS : JOINT INVEST PRODUCTION PROJECT


MEDIAPLEX INVESTMENT HIGHLIGHTS

A Friendly Government Policy on Movie Industry

Attractive Growth of Korea Film Market & Increased Fundamental

Industrial Trend maker as a leader of Film distribution market

Strong Capital Structure with Significant Liquidity & Free Cash Flow

Well-Organized Management Team and Proven Equity Holder

acquiring profitability and sales due to a successful corporate

restructuring

Oversea Expansion into Movie Business (Utilizing Global Partner

Networks)

INVESTMENT HIGHLIGHTS


Beijing Mega Media Ltd.

Subsidiary : Supreme Star Investment Limited

Beijing Zhongguan Megabox Cinema Film Exhibtion in China

• Capital : RMB 16,800,000

• Ownership: Beijing Mega Media Ltd. 51%

Supreme Star Investment Limited 49%

• Establishment : Dec 13, 2007

• Site open

- 1st Site Beijing Zhongguancun July, 2007

- 2nd Site Beijing Sanlitun July, 2008

- 3rd Site Shenyang Wanxiangcheng June, 2011

Site 3

Location Beijing, Shenyang

■ Partner ■ Theater business

MEDIAPLEX SUBSIDIARY REVIEW

Source: Mediaplex

(Orion 62.66%, Mediaplex 11.23%)


MEDIAPLEX FINANCIAL INFORMATION

Financial Highlights (Consolidate)


Profit and loss status　　　　　 2013Y 2012Y

Net sales 1,081 882

Gross margin 156 176

Operating income 63 97

Non-operating income 3 2

Non-operating expenses 118 40

Financial income 13 12

Financial costs 0 0

Net income before income tax expenses 62 41

Net income 　　　　 57 -7 [Unit O.1 Billion won]

Financial status　　　　　 2013Y 2012Y

Total assets 1,674 1,813

Current assets 1,173 1,329

Non-current assets 501 484

Total liabilities 618 812

Capital stock 313 313

Capital surplus 362 352

Retained earnings 390 335

Total shareholders' equity 　　　 1,055 995 [Unit O.1 Billion won]

22

MEDIAPLEX FINANCIAL INFORMATION

Consolidated statements of comprehensive income


(KRW in Millions) 2Q’14 % QOQ 2Q’13 %

Box office

10,631 70.5% -48.5% ▼

20,653

78.0%

Copyright

4,209 27.9% -25.6% ▼

5,654

21.4%

Distribution

75 0.5% -53.1% ▼

160

0.6%

Sub Investment

44 0.3% 1,000%▲

4

0.0%

Etc. 117

0.8% -1,363% ▼ 8

0.0%

Total Revenue 15,076

100% -43.06% ▼ 26,480

100%

Cost of sales 12,773

-42.20% ▼ 22,097

G&A expenses 1,573

-35.05% ▼ 2,422

Profit before income tax 730

-62.7% ▼ 1,960

Profit for the quarter -1,829

-1406.4% ▼ 140

• Box office: Revenue of main invested films from theater (Including distribution commission)

• Copyright : Overseas secondary market sales except of additional market in 2nd quarter and 4th quarter

• Distribution : Domestic distribution charges and overseas distribution charges

• Investment : Return on investment of partial invest product 23

Download - 2014 Ticker 086980 KS M EDIAPLEX I NVESTOR R ELATIONS 2014 © 2014 Mediaplex Inc. 1

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