investor presentation - imax china holding inc. · 2018. 8. 7. · investor presentation disclaimer...

Investor Presentation

March 2018

Investor Presentation Disclaimer 2

DisclaimerThis document is not intended to form the basis of any investment decision in connection with IMAX China Holding, Inc. (the "Company", together with its subsidiaries, hereinafter referred to as the "Group"). It does not constitute an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities, in any jurisdiction including but not limited to a jurisdiction in which the making of such offer, invitation, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction or would not otherwise be in compliance with the laws and regulations of such jurisdiction. Nothing contained in this document shall form the basis of any investment decision, contract or commitment whatsoever. The information in this document has been provided by the Company solely for your information. This document does not purport to be comprehensive or to contain all the information that a recipient may need in order to evaluate the Company and/or any of its subsidiaries. Certain factual or predictive statements in this document are derived from external sources and have not been independently verified by the Company. No representation or warranty, express or implied, is given, and so far as is permitted by law and except in the case of fraud, no responsibility or liability (in connection with negligence or otherwise) is accepted by any person or entity (for the avoidance of doubt, including but not limited to, any Group member or any of its directors, officers, employees, affiliates, advisers or representatives), with respect to the accuracy, reliability, truthfulness, fairness or completeness of this document or any of its contents or any oral or written communication in connection with any content contained in this document. In particular, but without limitation, no representation or warranty, express or implied, isgiven as to the achievement or reasonableness of, and no reliance should be placed on, any projections, targets, estimates orforecasts contained in this document. None of the Group members or its directors, officers, employees, affiliates, advisers or representatives shall have any liability in respect of the use of, or reliance upon, or any other handling of, any information contained herein by you or any person or entity to whom the information herein is disclosed in any manner. In all cases, interested parties should conduct their own investigation and analysis of the Group and the information (data or otherwise) contained in this document. In connection with this document, the Group does not undertake any obligation to provide any additional information or to update this document or any additional information or to correct any inaccuracies which may or may not become apparent. This document does not create any obligation on the Company or any of its subsidiaries to consider or make any offer.

IMAX® is a registered trademark of IMAX Corporation.

3Investor Presentation IMAX® is a registered trademark of IMAX Corporation.

Leading Cinematic Technology Provider in Greater China

Exclusive licensee of the IMAX brand in the theatre and films business in Greater China with access to global partnerships

Sole commercial platform for the release of IMAX format films in Greater China, which is the second largest and fastest growing major cinema market in the world

Largest non-conventional theatre network in Greater China and significant ticket price premium

Unique cinematic experience and end-to-end cinematic solution

One of the strongest entertainment brands in Greater China (1)

Note: According to a survey conducted by Milward Brown Research

4

Integral Part of the Greater China Film Industry History

IMAX® is a registered trademark of IMAX Corporation.Investor Presentation

5

Long-Term Partnerships Across the Global Entertainment Ecosystem


6

Strong and Diversified 2017 Slate 30 Foreign Language Titles

Investor Presentation IMAX® is a registered trademark of IMAX Corporation.

7

Strong and Diversified 2017 Slate 14 Local Language Titles


8

Top 10 IMAX GBO Titles

1. Fast &

Furious 8

2. Transformers 5

3. Journey to the

West 2

4. Guardians of the

Galaxy Vol.2

5.

Kong: Skull

Island

6. Justice League

7. Pirates of the Caribbean 5

8. XXX

9. Thor:

Ragnarok

10.

Rogue One: A

Star Wars Story


9

Chinese Titles Are Becoming Increasingly Important

$203

$312 $296 $291

17%

26%

23%24%

0%

5%

10%

15%

20%

25%

30%

$-

$50

$100

$150

$200

$250

$300

$350

$400

$450

2014 2015 2016 2017

Grater China Box Office Chinese Language % in PRC

7 10 9 7

2223 27 29

6

8

1015

2014 2015 2016 2017

Local Language Films-Chinese and Non Chinese Hollywood Films HK Taiwan Only

Number of Titles Played China Box Office Contribution

35

41

46

51


10

Strong China Network Expansion

107 130163

204

73

102

131

195

260

134

25

46

66

80

102

2014 2015 2016 2017 Backlog

Sales Theatres Full Revenue Sharing Theatres

Hybrid Revenue Sharing Theatres

Theatre Network

15%

45%

40%

Tier 1 Tier 2 Tier 3 and lower

• The IMAX China Network spans 179 cities across Mainland China, we have a total network of 544 in Greater Chia, 527 of which are commercial theaters

• Roughly 45% of existing screens are in Tier 2 cities

• 40% of our screens are in Tier 3 cities and below, and this particular segment is expanding

• Current backlog has a comparable mix of screens across different cities

Current Network Mix

234

307

424

544

309


11

Robust Theatre Backlog and Continued Signings Momentum

34 29 3755

645

1

40

200

2014 2015 2016 2017

Sales Hybrid JV

2857 59 73

50

95 76

10263

63

199 134

2014 2015 2016 2017

Sales Hybrid JV

20 2533

4115

2120

1427

29

64 65

2014 2015 2016 2017

Sales Hybrid JV

Signings Backlog Installation

40

74

238

95 141

141

334309

62

75

117 120


The Value of Network Growth

Effect of Box Office on our ROI are vastly different under Sales, Hybrid and Full JV’s

Sales Type Hybrid Full JV

Upfront Revenue 1,100 550 0Year 1 Cost of Sales 450 510 60IMAX CAPEX 0 0 450

Exhibitor Take 0 10% 15%Studio Take 10% 10% 12%

Given exhibitors cover all of the IMAX costs, the recurring

Studio and Exhibitor revenue streams are 100% incremental,

regardless of PSAs

Company should be most discerning under the Full JV

model, given IMAX is responsible for the Capex

1) Includes $60K launch marketing expense for Hybrid JV model


Screen Contribution and Returns over Contract Term1

Full JV Rate: 15% ~ 17%Hybrid JV Rate: 10% ~ 12%DMR Rate: Hollywood~9.5% local language~12.5% Full JV Capex: $450K (+$60K Marketing)Full JV Depreciation Term: 10 ~ 12 yearsMaintenance Rev: $35K @ 35% Margin

1) Annual Contribution = Net Income Contribution, excluding year 1 upfront revenues of STL and Hybrids


14

Growth in Revenue and Margin in 2017Data in US$M

$78

$111 $119 $126

59%

65%

59%

61%

2014 2015 2016 2017

40%

45%

50%

55%

60%

65%

70%

$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

2014 2015 2016 2017

Total Revenue Gross Margin

Gross Revenue and Margin

$41

$65 $56 $67

52%

59%

47%

53%

0%

10%

20%

30%

40%

50%

60%

70%

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

2014 2015 2016 2017

Adjusted EBITDA Adjusted EBITDA Margin

Adjusted EBITDA and Margins


15

Growth of Profit and Margin in 2017

$26

$43 $38

$46

33%

39%

32%

36%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

$-

$10

$20

$30

$40

$50

$60

2014 2015 2016 2017

Adjusted Profit Net Margin

Data in US$M

$10

$21

$15 $12

13%

19%

13%

10%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

$-

$5

$10

$15

$20

$25

2014 2015 2016 2017

SG&A ex SBC % of Total Revenue

2017 Adjusted Profit 2017 SG&A ex SBC


16

Revenue Breakdown and Margin

$19 $28 $27 $27

$15

$26 $21 $19

64%

75%

64%

56%

0%

10%

20%

30%

40%

50%

60%

70%

80%

$-

$10

$20

$30

$40

$50

$60

$70

$80

2014 2015 2016 2017

Film Business Revenue Share Margin

$34

$54$48 $46

$29 $37

$47 $56

$8

$11

$10

$7

$7

$9

$12

$15 43% 44%

55%

65%

-5%

5%

15%

25%

35%

45%

55%

65%

$-10

$10

$30

$50

$70

$90

$110

2014 2015 2016 2017

Theatre System Maintenance Revenue Sharing Upfront Fees

Sales Arrangements MarginInvestor Presentation IMAX® is a registered trademark of IMAX Corporation.

Data in US$M

PRESENTATION NAME SECTION NAME 17

investor presentation - imax china holding inc. · 2018. 8. 7. · investor presentation disclaimer...

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